April was a cruel month for drug developer MannKind (Nasdaq: MNKD). Former rivals Pfizer (NYSE: PFE) and Nektar Therapeutics (Nasdaq: NKTR) announced new potential safety issues for their inhaled insulin, which could spell trouble for MannKind's similar lead drug Technosphere.
Yesterday, MannKind defended Technosphere while releasing its first-quarter financial results. During the quarterly conference call, MannKind actually seemed to spend less time discussing Technosphere than it did dissecting recent data linking Pfizer and Nektar's Exubera to a higher risk of lung cancer.
Many investors are worried that the Exubera cancer link could apply to the whole class of inhaled insulin drugs, including Technosphere. Those fears caused MannKind's shares to sink by more than two-thirds during part of last month. The FDA's been concerned for some time about inhaled insulin's potential carcinogenic effects, but MannKind noted yesterday that no other current or former such drug in development from companies like Eli Lilly (NYSE: LLY), Abbott Labs (NYSE: ABT), or others has shown any link to lung cancer.
In its Technosphere studies to date, MannKind says it has also seen, at worst, a possible two incidents of lung cancer -- both from patients who had a history of smoking. There is still more data to come from the Technosphere phase 3 program, but it doesn't look like MannKind will have to worry about its clinical trials showing any particular connection to lung cancer before the company files a marketing application for the drug. That's the good news.
The bad news: Lung cancer is so rare that it often takes long and large multi-thousand-patient studies for trends in a disease like this to become visible. MannKind worries that the FDA may call for a large safety study before it's willing to approve Technosphere, in hopes of more definitely determining a possible health risk.
So far, the negative Exubera news has only hurt MannKind by halting the company's partnering discussions, which probably wouldn't have borne fruit this year anyway. Phase 3 efficacy and safety data for Technosphere is expected to start rolling in this year. MannKind is still guiding for a December 2008 marketing application filing for the drug, which puts a possible FDA approval decision around October of next year, assuming a standard 10-month FDA review.
No matter what happens with Technosphere's competitors, it appears that MannKind is still pressing on with its development.
MannKind is an active Motley Fool Hidden Gems Pay Dirt pick. Sometimes smaller is better. Pick up a 30-day free trial of our small-cap newsletter.
Fool contributor Brian Lawler does not own shares of any company mentioned in this article. Eli Lilly and Pfizer are Income Investor recommendations. Pfizer is also a recommendation of the Inside Value newsletter. The Fool's disclosure policy is non-carcinogenic.
