MannKind – A buying opportunity or more selling to come?

MannKind – A buying opportunity or more selling to come?

Diabetic Investor must admit it’s
with some amusement as we watch analysts battle it out over the future of
MannKind (NASDAQ:MNKD). Early this morning an Oppenheimer analyst downgraded
shares of MannKind, later this morning Rodman and Renshaw reiterated their buy
recommendation seeing the recent pullback in MannKind shares as a buying
opportunity. At the moment it appears more investors are siding with
Oppenheimer as shares are down another 4% today.

Of course the real winners here
are any investor who listened to Diabetic Investor as we told investors to take
their money and run back on Tuesday when shares were trading near $12. Perhaps
it’s no accident that since Diabetic Investor published back on Tuesday shares
of MannKind have fallen over 13% going into today’s trading.

The fact remains that the time
for inhaled insulin has come and gone.  Even if Afersa™ is approved by the FDA it will never amount to anything more
than a niche product with sales in the millions not billions. Partner or not,
MannKind faces a major uphill battle marketing Afersa and all the money in the
world won’t change this fact.

Still we must admit we’re
enjoying this tug of war between analysts even though it really doesn’t matter
much what they say as MannKind’s fate was determined long ago. Try as they
might MannKind cannot escape the long shadow of Exubera. Add in the fact that besides
overcoming comparisons to Exubera, Afersa will face stiff competition from
Byetta LAR which will likely come to market within months of Afersa.

For reasons Diabetic Investor
does not understand no one mentions that Afersa, like LAR, is not targeted at
type 1 patients but type 2 patients. The fact is the majority of type 2
patients currently on insulin therapy won’t switch from injections to Afersa
just because it is inhaled. While there will be a small amount of patient
conversion, the real opportunity for any drug targeted at type 2 patients is
replacing their existing therapy option which is not currently working.

Even if Afersa is better than the
insulin’s that are injected the fact remains with type 2 patients it comes down
to two factors, frequency of administration and hypoglycemia. Given the choice
of injecting LAR just once per week versus inhaling Afersa multiple times per
day most physicians prefer LAR. Given the choice between Afersa, which like any
insulin carries the risk of hypoglycemia, and LAR where there is little chance
of hypoglycemia and again LAR wins hands down. Finally add in the fact that
patients on LAR lose weight and at best Afersa is weight neutral and again LAR
comes out on top.

There was a time long ago when inhaled
insulin could have been a blockbuster product. The reality is this time has now
passed and there is nothing anyone can do about it. No amount of money can save
inhaled insulin no matter how patient friendly the delivery device is or how
good the insulin appears to be.

Still Diabetic Investor does
enjoy watching analysts battle it out. If nothing else it makes for some great
copy. As Canada Bill Jones, the famous poker player once said; “It is morally
wrong to allow suckers to keep their money.”