Run don’t walk

Run don’t walk

Yesterday MannKind (NASDAQ:MNKD) announced that it has confirmed with the FDA the design of two clinical studies that evaluate the efficacy and safety of Afrezza®. According to a company issued press release; ”MannKind Corporation (Nasdaq: MNKD) today announced that it has confirmed with the U.S. Food and Drug Administration the design of two clinical studies that evaluate the efficacy and safety of AFREZZA(R) (insulin human [rDNA origin]), an investigational, ultra rapid-acting mealtime insulin therapy, administered using MannKind’s next-generation inhaler. The FDA had previously requested that MannKind conduct two clinical trials with the next-generation inhaler (one in patients with type 1 diabetes and one in patients with type 2 diabetes), with at least one trial including a treatment group using the previously studied MedTone inhaler in order to obtain a head-to-head comparison of the pulmonary safety data for the two devices.”

Not surprisingly shares of MannKind are surging on the news up nearly 27% in trading so far today.

Given the checkered history of MannKind and the numerous issues they had and hurdles they must still overcome, Diabetic Investor has some advice for investors – RUN AWAY AS FAST AS YOU CAN. Yes its good news that the FDA likes the design of the studies but this is just one very small step forward. But this by no means guarantees the studies will be completed and even if they are that the FDA will actually approve Afrezza. The reality is MannKind is running out of money and that while Chairman and Founder Al Mann states that he will continue to fund the company, even Al Mann does not have unlimited resources.

Let’s try to do something new and different and actually look at the reality of the situation rather than the fantasy. Let’s assume for moment that everything goes right, the studies are completed and the FDA actually approves the drug. Let’s further assume that MannKind finds someone dumb enough to partner with them or someone even dumber who is willing to buy the company. Does Afrezza actually stand a chance in the marketplace? Will insurers reimburse this drug, which will surly carry a premium price tag? Will Afrezza find traction in the Type 2 market when it’s likely that Bydureon will be available by time Afrezza gets approved? Will Type 1 patients following multiple daily injection (MDI) therapy all of sudden switch from their routine and use Afrezza? Will physicians feel comfortable using this drug even though it’s inhaled rather than injected?

Keep in mind that that Afrezza is short-acting insulin and the benefits and drawbacks of the existing injectable short-acting insulin’s are well known, whereas Afrezza is still an unknown commodity. It should also be noted that although Afrezza is not injected and that the company claims the inhaler is patient friendly, patients and physicians will need to be trained so they properly dose their insulin. Just how many “puffs” does it take to administer the correct dosage?

Another often ignored fact is Afrezza is very rapid acting, so rapid acting in fact that some researchers are concerned that the drug works too fast. This is one reason they speculate that you see fewer incidences of hypoglycemia with Afrezza. As noted earlier the other short-acting insulin’s are very well known while no one is quite sure how Afrezza will work in a real world setting;  and when it comes to insulin, a drug which can kill a patient if not properly dosed, it’s better not to guess when dosing. For all the talk about the problems of injecting, one problem you don’t have is knowing how much insulin is injected. Since Afrezza is inhaled rather than injected, a patient may inhale the proper amount of insulin but will all this insulin actually be absorbed into the patient’s body.

Suffice it to say there are a host of issues with Afrezza even if it ever reaches the marketplace and did we mention that even with a partner who has millions to spend on marketing the drug there is one more obstacle that must be overcome – can you say Exubera. That drug that cost drug giant Pfizer (NYSE:PFE) a $4 BILLION write down.

The bottom line for Afrezza and MannKind is the time for inhaled insulin has come and gone. Even if everything goes right, and we all know how likely that is, there are just too many hurdles to overcome for this drug to ever reach its over-hyped market potential. Under the best scenario Afrezza is nothing more than a niche product and will NEVER come close to becoming a blockbuster. Diabetic Investor would be surprised if Afrezza even hit $250 million in sales.

Perhaps one day investor will learn their lesson from their Exubera experience – a $4 BILLION mistake and Afrezza – a BILLION dollar mistake.  So for anyone who’s made a little money playing the many ups and down of this stock do yourself a big favor – TAKE YOUR MONEY AND RUN AWAY AS FAST YOU CAN NEVER TO RETURN AS YOU’LL JUST LOSE IT ALL WHEN THIS COMPANY COMES CRASHING DOWN TO EARTH.