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JPMorgan Healthcare Conference Highlights: MannKind

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The JPMorgan Healthcare Conference just finished up in San Francisco and was arguably the most important event of the entire year for the health care sector. This is one of the rarest opportunities for biotechnology, pharmaceutical, and medical device companies to open up about where they've been and where they're headed, so it pays to take notice.

Very few biotech companies offer the make or break potential like you'll find in MannKind (NASDAQ: MNKD  ) . The company is currently in late-stage trials with its lead drug Afrezza, an inhalable, fast-acting, insulin targeted at both type 1 and type 2 diabetes patients. The market for these drugs is enormous, with the North American insulin market worth $15 billion by itself. The advantages of inhaled insulin are enormous: Patients would get a fast-acting drug that would peak in effectiveness shortly after a meal, and, most important, diabetics would no longer have to inject themselves, as they have to with every insulin currently on the market, including Sanofi's (NYSE: SNY  ) Lantus, the leading insulin product.

With that in mind, I thought it wise to keep a close on CEO Alfred Mann's presentation, if anything to get a clue when new Afrezza data and a resubmitted new drug application would be filed.

We already know that Afrezza's gone before the FDA and failed. In its complete response letter, the FDA has no qualms with the drug's safety of efficacy, but did ask for changes in the type of container delivering the inhaled powder. MannKind delivered by switching from the MedTone inhaler to the newer Dreamboat inhaler, putting the company on pace to once again resubmit to the FDA by September.

According to Mann, his company currently has two ongoing trials -- one for type 1 diabetes known as the MKC-171 trial, and one for early onset type 2 diabetes, known as the MKC-175 trial -- with both trials being focused on comparing the new device to the old device. In addition, Mann noted that the FDA is asking MannKind to run a third trial to hopefully superior A1C levels relative to comparable rapid-acting analogues.

A1C levels have become a sticking point in recent years and are the focus of many new diabetes drugs. Just yesterday, Johnson & Johnson's (NYSE: JNJ  ) Invokana, an SGLT-2 inhibitor that lowered AIC levels by roughly 0.8% in trials, received a favorable 10-5 recommendation for approval from the FDA panel. AstraZeneca (NYSE: AZN  ) and Bristol-Myers Squibb's (NYSE: BMY  ) Forxiga, a first-in-class SGLT-2 inhibitor, gained EU approval in November. In short, A1C may be an afterthought for Mann, but it's becoming a primary focus, so that'll be a key figure to watch moving forward.

That aside, MannKind is expecting to report top-line data from these studies in August with the goal of resubmitting an NDA by September and getting a first-quarter 2014 PDUFA from the FDA. In the meantime, MannKind has received a fresh infusion of cash from its CEO and is burning through only $10 million to $12 million annually, according to Mann.

The three concerns remaining, based on Mann's presentation and the upcoming clinical data, are: How will MannKind ramp up commercial production? Will anyone be brave enough to partner up with MannKind following Pfizer's (NYSE: PFE  ) abysmal failure with its inhaled insulin, Exubera? And what about pricing?

Mann alluded in his presentation that the 190,000-square-foot manufacturing facility will be able to handle 150,000 patients upon launch and up to 2 million with additional equipment. That doesn't, however, solve its problems if Afrezza is a blockbuster.

Second, where are the partners? If this is such a novel drug, why aren't big pharmas clamoring for a chance at blockbuster revenue? Perhaps Exubera's memory is still haunting many of them, or maybe Bristol-Myers, which has made a big bet with Amylin on the diabetes market, is just tired of getting burned by bad acquisitions?

My last qualm was why there again wasn't any talk of Afrezza pricing? If Afrezza is priced too aggressively, it may dissuade physicians from prescribing it. If priced too low, MannKind won't be able to earn enough to cover its development costs.

Following Mann's presentation, I feel more confident in Afrezza moving forward, but I'd still shy away from taking a position in the company without a licensing partner and having already failed to get past the FDA on more than one occasion. Although, I will be looking forward to the company's top line data expected to be released in August.

Editor's note: A previous version of this article referred to Afrezza as "Afreeza." The Fool regrets the error.

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  • Report this Comment On February 18, 2014, at 11:03 AM, CMTMDT wrote:

    Thoughtful summary. The options have gotten very expensive. Seems like a good speculative play though - - especially with Mann at the helm

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