Psst. Hey, buddy. Want to buy a company with the potential to revolutionize how diabetics are treated for the low, low valuation of $500 million?

What's the catch? It's going to be a long wait -- early 2013 at the soonest. And there's going to be dilution along the way.

MannKind's (Nasdaq: MNKD) inhaled insulin, Afrezza, is a nice technology, but management seems to have made a critical error in applying for approval of a new device to deliver the insulin, resulting in a major delay.

After meeting with the Food and Drug Administration, MannKind now thinks it'll take until the "latter half of next year" to complete the two trials required for approval. The first one will compare Afrezza to injected insulin in type 1 diabetics taking Sanofi's (NYSE: SNY) Lantus.

Final details for the second trial in type 2 diabetics haven't been worked out with the agency, but it's clear regulators would like to see the trial in patients early in their disease progression. The comparator will likely end up being an oral medication such as Merck's (NYSE: MRK) Januvia, Takeda's Actos, or Onglyza from Bristol-Myers Squibb (NYSE: BMY) and AstraZeneca (NYSE: AZN).

Going after such early patients might be a good move, but it's a little risky. Afrezza really has to be better than an oral medication to justify its use. Inhaled insulin might trump needle pricks, but it will be hard to justify it over popping a pill once a day.

Assuming MannKind can get started quickly, enroll patients, and be done in the latter half of next year, a new approval decision could come in the first half of 2013. The thing is, MannKind only has cash and credit to last it through the first quarter 2012. The company's namesake billionaire, Chairman and CEO Al Mann, has bankrolled much of the development, but who knows where the remaining cash to get MannKind over the finish line will come from? Selling shares at this deflated price is going to be costly.

Investors could end up with a nice pot of gold. But they'll have to be willing to wait quite awhile and expect to be entitled to a smaller fraction of the pot when it does come.

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