Recently, MannKind Corporation (MNKD) received a setback regarding the approval of its much awaited product Afrezza (formerly known as Afresa) − inhaled insulin for the treatment of type I and type II diabetes. While the original Prescription Drug User Fee Act (PDUFA) date was January 16, 2010, the US Food and Drug Administration (FDA) informed MannKind that they will not be able to review the new drug application (NDA) within the time frame since they are yet to complete the inspection of the insulin manufacturing facilities of N.V. Organon, a third-party supplier to MannKind.
The delay comes as a big setback for the company as it has been banking heavily on the approval of Afrezza. Moreover, MannKind has received no intimation about the expected date of the approval. However, discussions between MannKind and the FDA have been quite satisfactory so far regarding pediatric studies of Afrezza. MannKind has agreed to conduct a phase IV study of the drug in 500 pediatric patients of at least four years of age.
Although we believe that Afrezza offers distinct advantages over the traditional needle-based insulin therapy that currently dominates the market, the path to approval is not easy. Many large pharmaceutical companies in the past have already made unsuccessful attempts to launch such a product.
Earlier in 2006, Pfizer’s (PFE) Exubera was the first FDA approved inhaled insulin which failed miserably later on, with the occurrence of lung cancer in some patients who were taking Exubera. While the number of cases was too few to conclusively link Exubera to the development of lung cancer, the results still cast a shadow on the future of other inhaled insulin candidates like Afrezza. Following the failure of Exubera, other players like Novo Nordisk (NVO) and Eli Lilly (LLY) discontinued their inhaled insulin programs, citing the lack of confidence regarding prospects for an inhaled insulin product.
The delay in the FDA approval will further hinder any possibility of a partnership agreement. Being in a tight liquidity position, MannKind needs funds for which a suitable partnership is an option. We have a Neutral recommendation on the stock.
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