Jolly_Rancher's  Instablog

The last time I hawked Mannkind shares they were trading at $3.60. They are now trading at $5.50, but a funny thing happened on the way to the forum, so to speak. The shares traded all the way past $12 then the company filed an 8K stating that partnership discussion would be tabled until the company's lead product, Afresa, is approved in January 2009 -- which is four months away. That's a pretty severe drop in share price in response to a measly 4 month partnership postponement, and tells me the degree of skepticism among big investors in this company's product. The price today assigns roughly a 30% probability that Al Mann, the company's colorful billionaire Chairman and CEO, will actually be able to finalize a partnership. However, the fact of the matter is that nothing much has changed with this company's prospects. Afresa is on target for approval by its PDUFA date of January 16, 2010. The next generation inhaler, newly developed since my last blog, will probably only be required to undergo by the FDA a three month bioequivalency study before marketing. This new inhaler requires 30% less insulin than the Medtone inhaler, is smaller, and much more stylish. In other words, Afresa will reach blockbuster status not just because it is inhalable, and not just because it is a better insulin, but because the associated device is stylish. Patients will want it. The latest survey of physicians and endocrinologists by an independent marketing firm (paid for by Mannkind) indicated that 25% would prescribe Afresa to their patients making Afresa a blockbuster multi-billion revenue per year product. Don't believe me? Hey, who hawks stocks after a huge sell-off. Think about it. And who has the guts to buy and hold for huge returns?

Anavex Life Sciences Corp. (AVXL.OB) last appeared on Seekingalpha in a March 12, 2008 article by H.S. Ayuob entitled "Anavex Life Sciences Takes Cues from FDA in Combating Major Diseases" detailing how Anavex's then pre-clinical Sigmaceptor ^TM platform compounds work and their potential. Since then there have been several promising developments in the areas of Alzheimers, Cancer, Epilepsy, and Depression.

Central Nervous System: Epilepsy, Alzheimers and Depression - 2-73

Currently, 2-73 is the lead Alzheimers candidate and is entering phase 1 study. Preclinical study completed in September 2008. In mouse studies it was shown to protect neurons in the hippocampus from oxidative stress which Anavex believes is the cause of Alzheimers. There are two theories as to how to treat Alzheimers: 1) reduce oxidative stress; 2) reduce amyloid beta buildup. Anavex has discovered that by reducing oxidative stress, the plaque caused by amyloid beta is prevented, thus concluding that oxidative stress is a precursor to amyloid beta plaque. 2-73 reduced learning deficits and reversed both short and long term memory loss caused by injection of Alzheimers inducing peptides. Furthermore, with respect to epilepsy, 2-73 exhibited extremely significant anticonvulsive action by providing almost complete protection from tonic seizures. This was accomplished without causing any memory deficits (amnesic effect) or mood disturbances (depression). Memory deficits and depressive phenomena are usually observed with the anti-epileptic drugs available today. The company plans to officially begin phase 1 trial in the fourth quarter 2009, and has contracted with Syntagon for that purpose. Of course, other biotechs are developing Alzheimers drugs. Elan (ELN) with Wyeth is developing Bapineuzumab (AAB-001), a monoclonal antibody Amyloid inhibitor in phase 3 trial, which so far has yielded only tepid results and seems a reasonable shoe-in for FDA approval, ostensibly for use in conjunction with existing therapies. Medivation is developing Dimebon which probably isn't useful for anything except duping investors and prying $225 million from a star-struck Pfizer. Pfizer also has many drugs of its own (if you include Wyeth) one of which may become a blockbuster.  Eli Lily has solanezumab, a Amyloid beta inhibitor, in phase III trial, which looks very promising. But presently, there isn't an approved drug which is very useful at fighting Alzheimers.

Cancer 7-1037

7-1037 is the lead cancer compound targeting clear cell carcinoma, a difficult to treat cancer for which there is no effective treatment. 7-1037 reduced tumor mass by 69%, clearly more than the 42% recommended as suggested threshold by the National Cancer Institute. The result is impressive, but the company has not released other results or given a timeline for further development.

Low cash burn, but low cash on hand

The structure of the company has allowed it to develop these compounds with a fairly low cash burn of roughly $3.5 million per year to date. The company anticipates that cash burn will increase to $5 million in 2009, so with only $78,000 in cash on hand, it is logical to assume that it will need to find a partner to continue development of this platform or continue to issue equity. Really, Anavex is a long shot that, if phase 1 results are stellar, may be acquired by a large pharmaceutical company looking to fill out its Alzheimers drug offering in order to remain competitive.

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Abraxis BioScience (ABII) is a global biotech company headquartered in Los Angeles, California, formed on November 14, 2007, as a spin-off from APP Pharmaceuticals. The split gave APP the hospital and healthcare supply business, while Abraxis BioScience got the drug development business.

Abraxane

The company's primary drug is Abraxane which is built upon the nab platform wherein existing chemotherapy drugs, such as paclitaxel, are loaded into albumen, a natural protein that carries water-insoluble molecules such as various nutrients, vitamins, and hormones naturally found in humans. Abraxane has four advantages over traditional chemotherapy delivery methods. First, because many large tumor cells have albumen receptors, Abraxane finds its way more easily into the target tumor by attaching itself to albumen receptors. After attachment, the drug is allowed into the tumor cell where it binds to SPARC which is a tumor specific protein that recruits nutrients. Thus, instead of delivering nutrients to the tumor, SPARC delivers chemotherapy, killing cancer cells and halting tumor growth. Second, Abraxane does not contain chemical solvents, like Cremophor (en.wikipedia.org/wiki/...), which was the standard method of paclitaxel delivery. This eliminates the need for premedication with steroids or antihistamines that treat hypersensitivity reactions caused by these solvents. Third, Abraxane, due to its non-toxicity, is administered in just 30 minutes (compared to 3 hours for solvent-based paclitaxel). Lastly, and probably most importantly, because of its nontoxicity and ability to deliver paclitaxel into the target tumor more effectively, Abraxane delivers 50% more paclitaxel. Currently, Abraxane is approved in the U.S., U.K., China, Canada, Korea, Spain, Italy, Australia, Germany and India, and soon to be approved in Japan, for first and second line treatment of metastatic breast cancer, and has captured 34.5% of this market.

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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

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