Jolly_Rancher's  Instablog

The last time Mannkind was the subject of a Seekingalpha article was June 22, 2008, when Ahithophel Weissberger penned the final part of his exhaustively detailed six part series entitled "Mannkind: Overlooked Biotech With Excellent Prospects." His series generated numerous, sometimes heated, comment, so I thought Seekingalpha readers might appreciate a follow-up discussion of Mannkind's latest developments.

In June 2008, the stock traded around $2.77. Today it trades around $3.60 which is a 30% return in less than a year -- pretty impressive considering how much the overall market has tanked. But what has the company been up to since then? First, it successfully completed, within 95% confidence, all phase III trials for its lead product, Afresa (then known as Technosphere Insulin). Second, on March 16, 2009, Mannkind filed a new drug application (NDA) with request for priority review, and should receive a letter of acceptance from the FDA around June first. Should the FDA deem that Afresa meets "unmet medical need," priority review will be granted. From one perspective, Afresa, despite that it is insulin, meets "unmet medical need" for two reasons, first because of its effectiveness and second, because of the way it delivers insulin.

Effectiveness

Afresa is an ultra-rapid acting monomeric insulin whose peak biological availability is twelve to fourteen minutes following inhalation. Perhaps more importantly, Afresa leaves no persistent "tail." In other words, after a few hours, it is completely gone from the system, while injectable insulins typically persist. This leads to the hypothesis that Afresa may mimic the kinetic synchronization of the hepatic system, restoring more natural hepatic function by reducing the excess gluconeogenesis. The evidence supporting this hypothesis offered by the company is marked and very significant reduction in post-meal glucose excursions and significant improvements in overall glucose control, as measured by decreases in glycosylated hemoglobin, or A1C, levels, without the weight gain typically associated with insulin therapy. In short, it works fast and goes away fast, and that's how it is more effective than other diabetes therapies on the market.

Inhalable

Afresa, if approved, will be the only inhalable insulin on the market, and there is no other inhalable insulin currently in development by any drug company. Many diabetes patients for one reason or another cannot take injections. The fact that there is no other insuin therapy at present other than injectable insulin leaves these patients with little recourse. As a matter  of fact, after Pfizer discontinued the sale of Exubera (Pfizer's inhalable insulin), the patients that needed Exubera due to problems with injection were allowed to switch to Afresa. If the FDA grants priority review, an approval decision can be expected around November 2009. Otherwise, the FDA's decision can be expected around March 2010.

Insulin Production

In late March 2009, the company purchased an insulin manufacturing facility in Germany from Pfizer. This purchase is subject to Sanofi-aventis' (SNY) right of refusal within sixty days notification. It is interesting that Sanofi-aventis has the right to refuse because it is the top contender for a partnership deal to market Afresa. Sanofi had partnered with Pfizer to bring Exubera to market and was paid by Pfizer $1.3 billion for its 50% share. It is well known that Sanofi did not want to sell its share, so it is logical to put some of that money behind Afresa. I suspect investors will hear one way or another about a Sanofi partnership by the end of the sixty day period, that is, by June 4.

Disclosure: Author bought MNKD at $2.71. Author has no position in any other stock mentioned.