Biotech Values

[DewDiligence]

MNKD Jumps on Afrezza Safety Update

http://blogs.barrons.com/stockstowatchtoday/2010/04/23/mannkind-jumps-as-afrezza-shows-positive-safety-data

›Friday, April 23, 2010 ET
By Tiernan Ray

Shares of biotech MannKind (MNKD) are up 54 cents, or 8.6%, at $6.80, after the company this afternoon issued a press release saying that its inhaled insulin treatment currently in development, “Afrezza,” caused no significant change in the structure of patients’ lungs and were similar to the effect upon pulmonary functioning of other treatments for diabetes.

The results demonstrate the safety of the device, MannKind’s chief scientific officer Peter Richardson said. Today’s announcement follows a March 16 “complete response letter” from the Food & Drug Administration that requested a “routine safety update” for Afrezza prior to approving the drug for sale.

The FDA letter had pushed down Afrezza shares dramatically at the time, and some analysts speculated whether the drug would have to address concerns of it could prompt afflictions, including lung cancer.

Today’s note should put to rest some if not all of those concerns. Rodman & Renshaw analyst Simos Simeonidis, who has a “Buy” rating on the stock, and an $18 price target,†gave me his view on the results in a phone call this afternoon.

“There’s been a lot of doubt on Wall Street this drug can get approved. The other inhalable insulin, Exubera, had a lot of lung function issues and some thought Afrezza might have the same issues come up.”

“The data is important because they’re showing lung function is not an issue but they’re also showing efficacy,” said Simeonidis. “The data show in Type 1 diabetics, Afrezza had the same reduction in HBA1C (hemoglobin) as traditional insulin treatments, with an almost identical reduction.”

That meets the requirement to show Afrezza is “not inferior” to existing treatments, whether or not it’s superior, concludes Simeonidis.

Furthermore, people with Afrezza actually lost weight, rather than gaining weight, as some do with traditional treatments, a positive.

The next step is to hear that the company is meeting with the FDA to discuss the complete response letter. After that, it may take up to six months for the FDA to offer a response.‹