Alfred Mann's $925 million bet on Afrezza--a fast-acting inhaled insulin program that hoped to succeed where Pfizer and Eli Lilly had already thrown in the towel--has run straight into another serious setback at the FDA. After a series of delays pushed the agency's response back by months, regulators are now demanding that MannKind mount two new trials for Type I and Type II diabetes to get a closer look at the performance of a next-gen inhaler used to deliver the insulin formulation.
But that's not all. In a release, MannKind ($MNKD) said that regulators want to see more data on the "performance characteristics, usage, handling, shipment and storage of the next-generation device, an update of safety information related to Afrezza as well as information on proposed user training and changes to the proposed labeling of the device, blister pack, foil wrap and cartons." This is MannKind's second complete response letter demanding more information. The first was delivered last March.
Analysts quickly delivered their verdict, noting that the new trial demands would likely add another year or two of work for a program that has already been dogged by one delay after another. Investors reacted quickly, cutting the share price in half. And the news is likely to add even deeper skepticism in the drug development industry that MannKind has a product that is positioned to change the standard of care for diabetes.
In fact, MannKind's stock plunged 38 percent five hours before yesterday's announcement, leading some experts to speculate that an investor wanted out of the stock fast. Finance professor James Angel told Bloomberg that anyone selling a chunk of stock ahead of the announcement is likely going to need a good attorney. Mann, meanwhile, says he hasn't given up on Afrezza.
"While we are disappointed with the complete response letter, we are encouraged that the FDA is asking for clinical studies only to confirm the bridging and handling of the next-generation device in order to compare it to the device used in our extensive clinical program," he said in a statement. "We remain committed to working with the FDA to make Afrezza available to people with diabetes."