MannKind Reports – Is the inhaled insulin category in a death spiral?
This morning MannKind (NASDAQ:MNKD) reported third quarter earnings and the news wasn’t good. Based on the comments made during the company’s call there are host of issues facing not just MannKind but the entire category.
1. 1. Money or more appropriately lack thereof. While it appears the company has sufficient capital for the near term, long term is more problematic. While the company continues to stress they are aggressively seeking a partnership, they announced today plans to raise additional capital as gaining a partnership agreement is taking longer than expected.
2. 2. Timing – According to the company if things go well they should be able to fill a new drug application by the end of 2008 and if approved launch the product in 2010. This would be about the same time as the long acting version of Byetta would be coming to market. As Diabetic Investor has reported for some time the long acting version of Byetta will be a paradigm changing event in the treatment of diabetes. Given the option of once weekly injections, solid control and weight loss versus daily use of insulin no matter how it is delivered the long acting version of Byetta is the clear winner here.
3. 3. Exubera – As we reported yesterday the problems with Exubera aren’t just hurting Pfizer (NYSE:PFE) and Nektar (NASDAQ:NKTR) they are hurting the entire category of inhaled insulin projects. The fact that MannKind has failed to secure a partnership is direct evidence of this.
4. 4. Glycemic variability vs. HbA1c – Currently HbA1c is considered the gold standard for determining whether a patient is under good control. Recently there have been studies that indicate that controlling glycemic variability may be just as important a measurement as HbA1c. Largely due to the introduction of continuous glucose monitoring systems that can deliver hundreds of glucose readings throughout the day physicians can now see how often the patient is out of their target glucose range. Early studies using glycemic variability appear to draw a correlation between high glycemic variability and adverse cardiovascular events. Given that measuring glycemic variability is a new concept and the expense of continuous glucose monitoring systems it is unlikely the company’s claims that their Technosphere® insulin does a better job of controlling glycemic variability will carry much weight.
5. 5. Regular glucose monitoring – It seems strange that the company is also claiming that patients using Technosphere will not be required to regularly monitor their glucose levels. Stating that a once a month measurement would be sufficient. These comments are framed for the investment community who sees the type 2 market as the biggest users of inhaled insulin. The company pointed to the fact that regular glucose monitoring is an impediment to type 2 patients using insulin and with no need for regular monitoring their product would get around this obstacle. If this sounds like they are talking out of both sides of their mouths, it should. If there is a correlation between high glycemic variability, which requires more monitoring not less, and adverse events what difference does it make if the patient is type 1 or type 2? Are patients with type 2 diabetes somehow immune from the affects of glycemic variability, we think not.
Thankfully the Street is waking up to what Diabetic Investor has been saying all along that inhaled insulin is niche product and the not the blockbuster they once believed it was. Shares of MannKind are sinking currently down almost 14% for the day. Once again Diabetic Investor was on target with our assessment of the inhaled insulin category.