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Inhaled insulin maker upbeat

MannKind, its stock in a slump, says its study shows effectiveness equal to shots and no increased cancer risk.

September 17, 2008|Tiffany Hsu | Times Staff Writer

Valencia biotechnology company MannKind Corp. thought it had encouraging news about its experimental insulin inhaler on Tuesday. But Wall Street wasn't buying it.

For months, skeptical traders have expressed concern that the diabetes drug, if approved by the Food and Drug Administration, might end up with an FDA cancer advisory. Fears that the inhaler would never take off were still lurking Tuesday, even though MannKind said that trials of its Technosphere insulin delivery system showed no elevated cancer risk.

Analysts said those concerns helped push the company's stock down 14% to $2.92 on Tuesday. MannKind shares have fallen 54% since April 1.

MannKind's founder, Los Angeles billionaire Alfred Mann, remains optimistic. He says independent market surveys suggest that, even with an FDA warning, Technosphere will be a "blockbuster product." It could pull in more than $1 billion in annual sales, he said in a phone interview.

And a warning label, which would probably blanket the entire class of insulin inhalers, is unlikely, he said. Technosphere should fly through the approval process and be relatively cheap to produce, he said.

"We fill a really poorly met need," he said. "So we don't understand the negativity."

MannKind said Tuesday that results from a year of study suggested that Technosphere was as effective as traditional injection treatments, according to the company. Patients with Type 1 diabetes experienced stable or lower weight and better blood sugar levels between meals, MannKind said.

The company said the drug had no negative effect on lung function, a problem that had loomed over other inhalers.

The data came with news of a collaboration between MannKind and Pfizer Inc. and anticipation of MannKind's Sept. 23 presentation at the UBS Global Life Sciences Conference.

"These observations confirm the results of earlier studies and build on the important differentiating features of this product, including its positive effects on fasting glucose levels," Dr. Peter Richardson, the company's chief scientific officer, said in a statement.

But for all its promises of producing a super drug, MannKind has been battered by bad buzz for much of the year.

Pfizer stopped selling MannKind's Exubera powder in October after abysmal sales, sparking an exodus from inhaler development by pharmaceutical companies, including Novo Nordisk in January and Eli Lilly & Co. in March.

When Pfizer revealed in April that Exubera may have caused lung cancer in six patients, MannKind's stock promptly plunged nearly 60%.

MannKind and Pfizer said Tuesday that they hoped to transition some Exubera patients -- particularly those with severe fear of needles and negative reactions to insulin injections -- to the Technosphere inhalant.

If approved by the FDA, Technosphere "will find itself in the unenviable position of having to entirely rebuild a decimated market in the wake of the notorious failure of Exubera," Cory Kasimov, an analyst with JP Morgan, said Tuesday in a note to investors.


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