The Scoop on MannKind's Afresa Partnership Delay

(MoneyWatch)  Last week's news that MannKind will not ink a partnership for inhaled insulin product Afresa by the end of the year, as previously promised, had the company's passionately bullish backers and bearing detractors at each other's throats once again.

Many of the arguments for and against Afresa'a odds at achieving FDA approval and commercial success have been well documented by BNET's David Phillips and Jim Edwards (and in the comments sections on both posts).

But there still seem to be some questions as to why the promised partnership has now been delayed.

In its SEC filing, MannKind made the delay sound strategic and proactive:

We made substantial progress toward a definitive agreement with a lead potential partner; however, as the discussions progressed, we came to believe that it would be more productive to complete a partnership after we have received a response from the United States Food and Drug Administration, or FDA, regarding our new drug application for AFRESA. We believe that we and our potential partners will be better able to address appropriate deal terms and structure once the label for AFRESA is clarified.

Yet Leerink Swann analyst Joshua Schimmer said the company had been left at the altar:

MNKD noted that it was very close to finalization of a deal for Afresa. In fact, negotiations with the partner were so advanced that MNKD ceased talking to other potential partners. Term sheets apparently were set but the partner reportedly withdrew after review with its regional commercial managers, who were not included in the negotiations until the end but ultimately raised objections regarding the deal.

When I interviewed MannKind's president and chief operating officer Hakan Edstrom for my story in BioWorld Today, he admitted that Schimmer's version of events is a "reasonable explanation" of what happened. But he added that MannKind:

--originally planned to partner [Afresa] around approval. This one partner came to us very eager to start negotiations and conclude the deal this year. There was come difference in opinion over the size of the opportunity and how to share the rewards. The partner ran into some internal issues commercially and came to the point where--they were not in a situation to proactively continue discussions.

Edstrom said partnering discussions would resume after the FDA's decision. He also said MannKind's communications with the FDA indicate the agency will not consult an advisory panel regarding Afresa's approval.

So that's the story, straight from the horse's mouth. Whether or not you believe the horse, bulls and bears, is up to you--