MannKind’s shares tumble; deal unlikely in 2009

MannKind’s share price tumbled by 31 per cent yesterday, just days after it published encouraging safety data for Afresa, because it revealed a partnership deal is unlikely to occur in 2009.

Pfizer’s removal of Exubera from the market, and Eli Lilly’s decision to stop development of its AIR Insulin, has left MannKind as the front runner in the market for inhaled insulin, which was once predicted to be worth billions of dollars.

Despite this strong position doubts remain about the likelihood of Afresa succeeding, with some investors concerned the link between Pfizer’s Exubera use and increased risk of lung cancer will impact on MannKind’s sales.

Since Pfizer updated Exubera’s product labelling MannKind has sought to reassure interested parties of the safety of its inhaled insulin. Most recently it published data showing that patients using Afresa for four years showed no significant changes in pulmonary function.

Four days later the company’s stock fell by 31 per cent. Earlier in the year MannKind had stated it was attempting to secure a marketing partner for Afresa before the end of the year but this goal has been set back to 2010.

In a filing with the US Securities and Exchange Commission (SEC) MannKind explained that, although “substantial progress” has been made with a potential partner, it believes there are benefits to delaying any agreement until 2010.

The deal is now unlikely to go through until January 2010 when the US Food and Drug Administration (FDA) is expected to issue a response to the new drug application for Afresa.

MannKind believes that “once the label for Afresa is clarified” it and its potential partners “will be better able to address appropriate deal terms and structure”, adding that it still believes the product “represents a significant commercial opportunity”.