2 Risks That Could Crush MannKind in 2013

MannKind (NASDAQ: MNKD  )  -- one of the most contentious biotech stocks of 2012 -- has kept investors on the edge of their seats. As the company works toward approval from the Food and Drug Administration, investors continue to debate the ultimate commercial potential of MannKind's ultra-rapid inhalable insulin product, Afrezza. Can this company revolutionize the way diabetes is treated and become a blockbuster, or will Afrezza be a massive flop? 

In a brand new premium report on MannKind, we outline every key topic investors have to know with this risky stock. Below is a short sample -- focusing on two risks facing MannKind -- of what you can find in the full version.

2 Risks Investors Can't Ignore

FDA rejection
The FDA has already passed on approval of Afrezza twice. The chance exists that it could do so again. If this happens, the decision would be devastating to MannKind.

How likely is a third rejection? Everything hinges on how well the company's newer Dreamboat inhaler performs as compared against the original MedTone inhaler used in earlier clinical trials. The company believes that the new inhaler works as well as the initial device, and it seems likely that MannKind's design of the upcoming phase 3 studies will be sufficient for proving the company's case. However, the risk of FDA rejection remains a possibility.

Commercial failure
Even if we assume that MannKind sails through phase 3 studies of Afrezza, gains FDA approval, and reaches an agreement with a partner with plenty of money, the company still faces a major hurdle: Patients must actually buy the product.

Pfizer (NYSE: PFE  ) and Nektar Therapeutics (NASDAQ: NKTR  ) weren't able to convince patients that their drug was a better option to the injected insulin they were accustomed to, and sales suffered as a result. MannKind's product is certainly more convenient than Exubera, and the company completed a study in 2011 that suggests patients using Afrezza viewed the therapy more positively than standard insulin therapy. Exubera's failure can serve as a model for what MannKind shouldn't do, and Afrezza will also have to be available at the right price.

We hope you enjoyed this short sample, and you can get the full scoop on MannKind in our premium research report. It also comes with a full year of analyst updates to keep you up-to-date as key news develops, so don't miss out -- simply click here now to claim your copy today.


Read/Post Comments (7) | Recommend This Article (4)

Comments from our Foolish Readers

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  • Report this Comment On January 03, 2013, at 11:32 AM, eagle9753 wrote:

    apparently you didn't pay attention to the SEC charging of the FDA chemist did you? Make this comment with respect to your claim that the FDA hadn't 'yet approved' Alfrezza... A little research into what the SEC revealed with regard to the trades the FDA chemist was making in advance of the FDA announcements may be an eye opener (assuming of course, the SEC documents are valid). Say this because as a writer, it would seem to be pretty important that you discuss all of the facts, not just the speculation.

    But with respect to the rest of your article, WHY did you write this now? What was YOUR goal for these rather obvious 'statements'?

    Sorry, but there hasn't been a lot of commentary from so called stock writers that is worth the effort to read for they do little but state the obvious or 'report' only part of the full story. But there is always the question, WHY NOW isn't there, and WHY a particular stock.

    Just curious.. PS: do agree, there is always the potential the FDA decides against Alfrezza, and that folks won't buy it, and that it won't work for some of those that do try it, that it will cause an unexpected reaction (drug testing being an imperfect science in that it tries to test it 'all', but there are always unanticipated events). Did I miss any??

  • Report this Comment On January 03, 2013, at 12:41 PM, eagle9753 wrote:

    the SEC document regarding the trades made. Note, MNKD appears to have been derailed by a hedge fund managers interaction with the FDA commissioners. Said interaction resulted in first a delay in the announcement and then the CRL for the additional testing. But nary a word about ALFREZZA itself.

    http://www.sec.gov/news/press/2011/2011-76-chart.pdf

    now not saying this pending trial will complete successfully, but MNKD had went to the FDA with this new device the last time around. So yes, its POSSIBLE MNKD could run into an unexpected roadblock like another hedge fund manager or a hiccup in their trial data, but only time will tell. And all companies going before the FDA face this same question, will the drug be safe and acceptable and does it have quantifiable benefits.

    Disclaimer: yes, own positions in MNKD... but only because the data is adding up towards approval.

  • Report this Comment On January 03, 2013, at 5:29 PM, TelsaRowe wrote:

    Excellent article Keith, good timing as well to help keep the pps in check and from trying to add any more value to this frauds mkt cap.

  • Report this Comment On January 04, 2013, at 8:09 AM, 1234rck wrote:

    I'm just guessing, but do you really think MannKind would have insisted on using the Dreamboat device if it wasn't far superior to the MedTone inhaler? How can you still be comparing Pfizer's quart-size inhaler to an inhaler about the size of a quarter? It's one thing giving all sides to an issue, but you have to compare apples to apples.

  • Report this Comment On January 04, 2013, at 9:24 AM, primarywatcher wrote:

    I agree with Ottr76: why on earth waste your readers time with such benign arguments?

    The author apparently opened his Trading for Dummies book, read the first page and posted this ridiculous boast of insight.

  • Report this Comment On January 04, 2013, at 3:08 PM, TMFFishBiz wrote:

    This is only a snippet of a full report about MNKD that I co-wrote. The Fool published this as a preview. A short excerpt such as this unfortunately doesn't do justice to any company. That's why, as Ottr76 aptly noted, this tells only a tiny part of the full story.

    I think if you looked at the entirety of articles that I have written about MNKD, you would find that I treat the company in a fairly balanced way. (Sorry to disappoint, TelsaRowe.)

    And I have never read Trading for Dummies, by the way. If it discusses MNKD, I'll have to take a look, though. :)

    Thanks,

    Keith

  • Report this Comment On January 16, 2013, at 12:29 AM, garifolle wrote:

    Like always morefrequent articles on the Fool, this is written in a way to scare a stock shareholders, so that they will pay for the complete report.

    There are many other free ways to make up your mind: if you trade with a good broker. you will get all the information you need and more, for free.

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