MannKind (MNKD -2.25%) will take a pit stop on the long road to approval of its inhaled insulin Afrezza when the drug is reviewed by a Food and Drug Administration advisory committee on April 1.

Unfortunately, it's hard to know whether this will be a short tune-up before an eventual approval or if the engine is about to blow up.

Normally, I'd say scheduling an advisory committee meeting is a negative for any company. MannKind's top-line data from the most recent phase 3 trials were positive, producing results comparable to Novo Nordisk's (NVO -1.33%) injected insulin Novolog. If the FDA was equally convinced by the larger data set, it wouldn't seem necessary to seek the advice of its outside advisors.

But let's not forget that the FDA didn't schedule advisory committee meetings during Afrezza's last two review cycles and we all know how those turned out. On some level, MannKind is better off with an advisory committee meeting because at least we know the FDA isn't going to enter a summary judgment, rejecting the drug device for a third time.

And, of course, the FDA routinely puts drugs in front of advisory committees that vote overwhelmingly for approval. Sometimes it seems like the FDA just wants someone to hold its hand through the process. In MannKind's case, with Afrezza's new mode of delivery, the FDA may simply be covering its butt. If post-marketing issues were to arise after an FDA approval, the agency could point to the advisory committee that endorsed Afrezza, saying it wasn't the only one that thought the drug should be approved.

What's under the hood?
For any drug approval, it's what investors don't know that's the biggest risk. The most likely issue to trip up Afrezza is safety data. Drugs that are delivered via the lungs -- but don't treat problems there -- will get extra scrutiny.

The FDA will need to make sure the device isn't lowering lung function, and it'll want to be convinced that the insulin isn't adversely affecting lung cells. You'll recall Pfizer (PFE 1.28%) and Nektar Therapeutics' (NKTR -1.82%) inhaled insulin Exubera was linked to lung cancer although the numbers were quite small. That wasn't the reason Pfizer had so much trouble selling Exubera, but it'll be a black mark on Afrezza none the less.

MannKind has released some safety and lung function data, but if there's a devil, he's usually hiding in the details.

Source: MannKind.

The checkered flag
Handicapping the advisory committee meeting is going to be difficult, but it could get a whole lot easier if MannKind signs a marketing deal with a major diabetes drugmaker. Any potential partner is likely to get access to all the data the FDA has, so it would be a great sign if a large pharma is willing to do a licensing deal risking its cash before the committee meeting.

On the other hand, if MannKind signs a deal with little to no up-front investment, it could be a sign to bring out the yellow flag, although that wouldn't necessarily mean Afrezza is done for. Races are occasionally won while under the caution flag.