A disgruntled employee just looking for a way to get back at the company that fired him, or a legitimate claim of scientific misconduct? That's the billion-dollar question that MannKind
Yesterday, news reports said a former employee had filed a lawsuit claiming he was fired in retaliation for raising concerns about clinical trials run in Bulgaria and Russia testing the company's inhaled insulin, Afrezza. MannKind claims the employee was fired for an unrelated reason and it hired an independent investigator, which found no problems with the data coming out of the foreign clinical trial sites.
What's important, though, isn't whether the former employee will win his lawsuit. Rather, it's whether the Food and Drug Administration will come to the same conclusion as the independent investigator or the former employee. Because you know that now, the FDA will be looking closely.
The FDA cited problems with clinical trial sites as the reason for rejecting Johnson & Johnson's
One question I haven't seen answered is whether the FDA has already reviewed this data. Afrezza was already turned down by the agency once, but the company didn't cite problems with clinical trials as being one of the reasons for the rejection.
Afrezza has been through multiple clinical trials with strong results. Even if the data needs to be thrown out, might the trial(s) still be enough to show the drug works? Biodel was in the opposite situation, asking the FDA to throw out data so its insulin product, Linjeta, would reach statistical significance; the FDA didn't go for it.
MannKind was already a risky stock before the recent news. The new news adds additional risk, but also makes the drugmaker cheaper. It remains to be seen whether the two cancel each other out. If you're going to buy, tread lightly, Fools.
Interested in keeping track of MannKind as its PDUFA date for Afrezza approaches? Click here to add it to My Watchlist, which will help you keep track of all our Foolish analysis on MannKind.
