You just knew this was coming

You just knew this was coming

Although shares of MannKind (NASDAQ:MNKD) were
off by over 30% today the folks at Rodman and Renshaw continue to drink the
kool-aid. According to a; “Rodman and Renshaw note in an 8-K
filing this morning, MannKind announced that it would not complete a pharma
partnership for Afresa in 2009. Firm says today’s announcement looks like
really bad news short-term, but believe that this could end up actually being
great news for MNKD, come January 2010. Firm says if the FDA ends up approving
Afresa, the company should be able to secure a much better deal. They say
today’s development has a two-fold effect: 1) it makes the next major event for
the stock a regulatory one, which some investors may be less comfortable with,
and 2) if Afresa gets a positive nod from the FDA, it will allow the company
and potential partners to discuss deal terms with a much clearer view of the
product. Firm reits Outperform and $18 tgt.”

This is exactly what Diabetic Investor said
would happen, there would be some firm that would see today’s events as a
buying opportunity. The fact that Rodman and Renshaw continues to set an $18
per share price target for MannKind shares shows the lengths some firms will go
to earn a commission. The folks at R&R probably figure there were investors
foolish enough to buy into the inhaled insulin story once so why not ask them
to double down now that shares are trading at a discount.

While R&R has every right to their opinion,
one has to wonder what rational went into this view. Let’s assume for a moment
that the FDA approves Afersa and let’s further assume that when approved the
label for the product contains no red flags.  Should these events occur will it really change anything? Will it make
it any easier to market Afersa? Will it prevent Afersa from competing with
Byetta LAR? Will it make comparisons to Exubera go away? Will it change the
concerns physicians have regarding hypoglycemia? Will it change the fact that
insulin using patients require greater education? The answer to all of these
questions is no.

The fact is the people at R&R have
fallen into the same trap everyone else has; when it comes to inhaled insulin it’s
all about the “fear of the needle.” If this needle fear was as real as everyone
seems to believe it is why then did Exubera fail? If this needle fear is real,
why then is Lantus so popular with type 2 patients? If this needle fear is real,
how could it be that Byetta is being used by over one million type 2 patients?

The bottom line here is that R&R either
is drunk on the MannKind kool-aid, stupid or greedy. To Diabetic Investor
anyone who could state “that this could end up actually being great news for
MNKD” it must be a combination of all three. This is like a doctor telling a
patient they have cancer but not to worry because their last patient had a more
advanced case.

The fact is Diabetic Investor has been
right all along when it comes to inhaled insulin whether it was Exubera or
Afersa. The reality is the time for inhaled insulin has come and gone. The
reality is inhaled insulin will never be more than a niche product. The reality
is there are too many people out there who don’t live in the real world.

As we had said before Diabetic Investor
holds no sympathy for investors who believe this garbage.  Nor can we blame R&R for perpetuating the
inhaled insulin myth for their own benefit. It’s possible they really believe
the myth themselves. Then again it’s also possible that there are little green
men on Mars and the moon is really made of cheese.