The question of whether Mannkind's (Nasdaq: MNKD) inhaled-insulin product, Afrezza, works hasn't really been an issue for some time. So I was rather shocked when the shares shot up 11% yesterday, after the company released results showing that the drug worked as well as Eli Lilly's (NYSE: LLY) Humalog. I mean, it's great that the drug works, but we've kind of known that for a year and a half.

Instead, it appears that the excitement actually revolved around developments at the company's shareholder meeting. Mannkind's CEO Alfred Mann announced that the company had met with the Food and Drug Administration on Wednesday, and that it would resubmit its marketing application soon -- "probably in July."

Mannkind received a complete response letter from the FDA last March. Among other things, the agency asked about Afrezza's "clinical utility," a query which Mannkind believes its newest data can satisfy.

There's also the issue of which inhaler would eventually be approved: the MedTone, or the smaller next-generation Dreamboat. The company has data demonstrating that the two are bioequivalent, but I unless I missed it, Mann didn't mention whether the FDA would accept the data and approve the Dreamboat, rather than the MedTone, which was used in most of the clinical studies.

In the best-case scenario, Mannkind responds to the FDA next month and gains an approval for the Dreamboat inhaler in early 2011. But then what? Afrezza is clearly a better product than Nektar Therapeutics (Nasdaq: NKTR) and Pfizer's (NYSE: PFE) Exubera, which was a marketing failure. Unfortunately, being better than a flop doesn't guarantee that doctors will prescribe Afrezza. Eli Lilly and Novo Nordisk (NYSE: NVO), which have a lot of marketing experience with diabetics, both pulled out of the inhaled insulin market. Proving that a drug works and getting it approved is only the beginning of a long uphill battle for inhaled insulin.

At a market cap of just more than $700 million, even after the increase yesterday, Mannkind doesn't look all that expensive. If you're going to invest, just realize that there's still a lot of risk involved with the company, even if it gets past the FDA next year.

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Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. Pfizer is a Motley Fool Inside Value recommendation. The Fool has a disclosure policy.