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MannKind Corp. (MNKD)’s inhaled diabetes treatment won the backing of a U.S. advisory panel, moving the company another step closer in its long-running effort get its first product on the market. The shares doubled.
Food and Drug Administration advisers voted 13-1 and 14-0 yesterday that the drug, Afrezza, should be approved for Type 1 and Type 2 diabetes, respectively. The FDA doesn’t have to follow the recommendation. FDA staff raised concerns in a report March 28 that the medicine may affect lung function and questioned missing data from a study of Type 1 patients.
MannKind’s shares surged to $8.06 at 7:48 a.m. New York time. Their price has bounced from a high of $21.70 to a low of $1.60 as Pfizer Inc. (PFE) pulled the only inhaled insulin from the market and the FDA twice rejected MannKind’s therapy, most recently in 2011, after the Valencia, California-based company switched inhalers during the review process. MannKind has spent almost eight years seeking approval since starting late-stage trials.
“We are pleased with the advisory committee’s approval recommendation in support of Afrezza, and we appreciate the thoroughness of their review,” said Alfred Mann, the company’s 88-year-old founder, chairman, chief executive officer and largest shareholder. “Diabetes is a major health problem in the United States, and we are committed to bring Afrezza to the many patients who might benefit from this novel product.”
While some panel members who recommended approval expressed reservations about potential safety risks, they said MannKind demonstrated Afrezza works. The advisers also said the benefit of an alternative to insulin injections outweighed their concerns or could be addressed in the medicine’s labeling.
Sales Estimates
If approved, Afrezza may generate $534 million in 2018, according to the averageestimate of three analysts compiled by Bloomberg. The FDA is expected to decide whether to clear the drug for sale by April 15.
The company declined five straight days leading up to the meeting, including a 17 percent drop to $4.02 at the close March 31, the biggest single-day fall since October 2012, as investors were concerned the panel might react negatively to the diabetes therapy.
About 26 million people in the U.S. had diabetes in 2010, or 8.3 percent of the population, according to the Centers for Disease Control and Prevention. The condition, which is caused when the body doesn’t use insulin properly or doesn’t make the hormone, is the seventh-leading cause of death in the U.S. Insulin is a hormone secreted by the pancreas that helps the body control blood sugar. Type 2 accounts for 90 percent to 95 percent of diabetes cases in the U.S.
Pfizer’s Product
Pfizer made the only other inhaled insulin, Exubera, approved in 2006. The New York-based drugmaker pulled the product after sales were lower than expected, according to the FDA staff report. The drug was associated with a higher risk of lung cancer because insulin is directly deposited in the lungs and the drug is a growth factor. FDA workers said this may be a concern with Afrezza as well.
FDA staff suggested two post-market studies to evaluate lung-cancer risk in MannKind’s product.
Mann has said his company’s drug is different than Pfizer’s earlier product. The insulin is inhaled before a meal and works faster than injectable products, more closely mimicking natural insulin production in healthy people, the company said.
Afrezza would compete with Eli Lilly & Co.’s Humalog and Novo Nordisk A/S (NOVOB)’s Novolog, both injected insulins. Novolog generated $3 billion in sales last year and Humalog brought in $2.6 billion, according to data compiled by Bloomberg. Many diabetics begin treatment on an older drug called metformin, a pill which can lose effectiveness over time.
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