The Little Company That Couldn't: Why No One Cares About MannKind's Potential Diabetes Blockbuster

Last Updated May 20, 2010 3:51 PM EDT

Most people have never heard of MannKind (MKND), a small company that's trying to develop a product for diabetics that, if successful, could be huge: inhalable insulin. Drug business investors have waged a civil war with each other over whether this company can pull it off. Skeptics simply don't believe that inhaled insulin will work -- Pfizer (PFE) tried it once with a product called Exubera that it ditched shortly after launch. Bulls believe that if diabetics are offered a choice between an inhaler or needles for taking insulin, they'll choose the inhaler in droves.

The FDA recently asked the company or more data before saying it would approve Afrezza (pictured), and that has focused attention on two separate issues at the company:

  1. Does MannKind actually have data showing an advantage over other drugs in lowering blood glucose levels? (The technical term is A1c, and ideally you want that below 6.5 percent.)
  2. And why hasn't MannKind been able to sign up a Big Pharma partner with the global resources to market this product into a blockbuster?
Hapoalim Securities analyst John LeCroy said recently that he has not seen any data showing that Afrezza has good A1c numbers:
We have only seen efficacy results for the Phase III trials 009, 102 and 103 and none of these trials showed a statistical or even a numerical A1c advantage for Afrezza compared to active controls (MannKind did state that the recent 117 trial showed an HbA1c advantage for Afrezza but we have not seen the results). We have not seen data from trials 010, 014 and in the top-line presentation from the two-year 030 study, MannKind gave no efficacy results.
MannKind's management said repeatedly on their Q1 2010 call that they had good numbers, but did not give details, and promised to report them in the future.

As for the partner, MannKind has been searching for one since 2008. On its conference call and in its 10-Q (see page 21), management reported -- again -- that they were still in talks and no partner had signed on the dotted line.

Are these two events by any chance related?