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MannKind to settle lawsuit

An executive had said he was fired after alleging the firm gave misleading drug data.

June 06, 2007|Daniel Yi | Times Staff Writer

MannKind Corp. agreed Tuesday to settle a suit brought by a former executive who claimed the Valencia-based pharmaceutical company fired him after he alleged that misleading scientific data had been given to federal regulators.

A Los Angeles County Superior Court jury was dismissed after less than three days of deliberations in the wrongful termination case brought by Wayman Wendell Cheatham, MannKind's former vice president of medical and regulatory affairs.

Neither side would discuss terms of the settlement.

Cheatham alleged that he was forced out of MannKind in 2005 after raising concerns that the firm had presented false and misleading information to the Food and Drug Administration.

His suit sought $4 million in damages.

MannKind denied the allegations, saying Cheatham left because he received a poor job performance review and refused to accept a different position within the company.

Cheatham, a nationally recognized endocrinologist and member of the American Diabetes Assn.'s board of directors, joined MannKind in 2002 to oversee clinical trials on Technosphere, an inhaled form of insulin.

The company, founded by Beverly Hills billionaire Alfred E. Mann, sees Technosphere as a means of grabbing a share of the $21-billion worldwide insulin market.

The drug, which could be available to diabetics as soon as 2010, is faster acting, safer and more convenient than anything else in the market, the company says.

Cheatham does not allege that Technosphere is unsafe.

But he contends that MannKind's management withheld crucial information from the FDA during a key phase of the drug's trial in early 2005.

MannKind says it never tried to deceive federal regulators and that Cheatham is simply disgruntled.

"I came to the conclusion that Wendell was someone who fails to meet his commitments and always blames someone else," Mann testified during the trial.

He personally recruited Cheatham from Takeda Pharmaceuticals North America Inc., based in Deerfield, Ill.

MannKind has spent $700 million developing Technosphere and the tab could reach $1 billion.

It is by far the most promising drug in the company's slim product-development pipeline, which also includes a cancer drug and another diabetes medicine.

MannKind shares fell 33 cents, or 3%, to $10.86. Its shares are down more than 34% this year.

daniel.yi@latimes.com

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