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Why You Should Not Be Surprised at Further "Surprises" on MannKind's Inhaled Insulin

No one should be surprised that the FDA missed a Jan. 16 deadline to complete its review of MannKind (MNKD)'s new inhaled insulin therapy for diabetics. Why? Because the MannKind story is a narrative about a management that is constantly surprised by events happening around it.

MannKind announced last week that the FDA had not finished inspecting a factory at which its inhaled insulin would be made. If MannKind is to be believed, inhaled insulin will be a blockbuster that can liberate diabetics from painful daily injections. Other companies -- such as Pfizer (PFE) -- have tried and failed to develop such a drug.

Here's a timeline of recent surprises at MannKind:

In May 2008, MannKind "reset" partnership talks with larger companies over a deal to market Afrezza.

In May 2009, in a call with investors that month, CEO Al Mann told investors that talks were ongoing:

I will say as did [COO] Hakan [Edstrom] that we are in serious discussions with a number of companies that we believe would be excellent partners for AFRESA.
But in October 2009, the company said the deal had fallen through. Leerink Swann analyst Joshua Schimmer said:
MNKD noted that it was very close to finalization of a deal for Afresa [the old spelling]. In fact, negotiations with the partner were so advanced that MNKD ceased talking to other potential partners.
In November 2009, COO Hakan Edstrom told investors that the company was no closer to signing up a partner.

Meanwhile, the FDA review continued apace:

Also in November 2009, CFO Matt Pfeffer told BNET that he believed there was no cause for a delay:

The FDA review seems to be proceeding routinely, and we haven't seen anything to give us concern that there might be a delay. We are cautiously optimistic that they [FDA] will meet or beat the PDUFA date, but of course there is no guarantee.
On Jan. 5, Mann told Reuters that he believed there may be a delay:
He conceded, however, that the company may not have wrapped up its discussions with the FDA by Friday next week, in part because MannKind's key executives will be presenting on Jan. 12 at the J.P. Morgan Healthcare conference in San Francisco.
"It may be tricky to get everything finished," he said. "In that case we would request a delay of a week or two."
On Jan. 6, Edstrom told Bloomberg that he thought there would be no delay:
"Based on our success so far I am bold enough to say we will see an approval,"
On Jan. 8, the day MannKind had to admit it did not have a complete FDA inspection in hand, a source at the company told The Street that they believed the inspection was done:
A person close to Mannkind told me Friday night that FDA inspectors, in fact, had already visited the Organon insulin plant, located in France, and no questions or concerns were raised, leading Mannkind to believe that the inspection was done.
Bottom line: You can follow MannKind's various scheduling and partnership difficulties as closely as you like. Just believe them when you see them.