MannKind's first quarter 2014 net loss of $0.14 per share was
narrower than the year-ago loss by a penny but wider than the Zacks
Consensus Estimate by a penny. In Jun 2014, MannKind's first
product, Afrezza, was approved in the U.S. The company will be
receiving product revenues for the first time with the launch of
Afrezza. Needless to say MannKind badly needed a regular source of
revenues. However, the positive development is already being
reflected in the company's stock-price. Moreover, the approval
comes with several limitations and also a boxed warning. We see
limited scope for appreciation until MannKind is successful in
getting a partner for Afrezza. Hence we retain our Neutral stance
on the stock. Our target price is $7.00 per share.
Valencia, CA-based MannKind is a biopharmaceutical company
focused on the discovery, development, and commercialization of
drugs for diseases such as diabetes. In Jun 2014, the company's
first product, Afrezza was approved for the improvement of glycemic
control in adults suffering from diabetes mellitus. The FDA has
approved the drug for administration in diabetes patients before
each meal or within 20 minutes after its commencement.
Afrezza's approval comes with several limitations. For type I
diabetes patients, Afrezza must be used in combination with
long-acting insulin. Also, the drug is not recommended for the
treatment of diabetic ketoacidosis and for patients who smoke.
Afrezza even carries a boxed warning stating that there is a risk
of acute bronchospasm in patients suffering from chronic lung
disease. Afrezza's approval also comes with a Risk Evaluation and
Mitigation Strategy to ensure that the benefits of Afrezza
overshadow the risks of acute bronchospasm in patients suffering
from chronic lung disease. The FDA has also asked for several
post-marketing studies for the drug.
The pathway to approval was not smooth as the FDA had earlier
issued two complete response letters (CRL) for Afrezza. While
issuing the second CRL, the FDA asked the company to conduct two
phase III trials (Affinity 1 and Affinity 2) with the
Results from the first study (Affinity 1) revealed that
non-inferior decreases in A1c levels were observed in Afrezza
treated patients compared to the insulin aspart group. Afrezza was
found to be well tolerated during the study. Results from the
second study (Affinity 2) revealed that the primary objective of
superior reductions in A1c levels from baseline was observed in the
Afrezza group compared to the comparator oral-therapy group.
Moreover, more patients under the Afrezza group reached specified
A1c target levels compared to those in the comparator oral-therapy
group. The candidate was generally well tolerated in this study as
Afrezza utilizes MannKind's proprietary dry powder Technosphere
formulation of insulin. It is inhaled deep into the lungs using the
company's MedTone inhaler, a small, easy-to-use pulmonary delivery
system. Once inside the lungs, the insulin is rapidly absorbed into
the bloodstream. MannKind has developed Afrezza to produce a
profile of insulin level in the bloodstream that approximates the
insulin level normally seen in healthy individuals following the
beginning of a meal, but absent in diabetic patients.
Apart from Afrezza the company does not have any significant
candidate in its pipeline. In 2012, the company out-licensed two of
its developing oncology programs.
In Jun 2009, MannKind acquired Pfizer's insulin factory at
Frankfurt, Germany for $30 million. The deal involved the purchase
of assets related to the production of bulk insulin, including the
relevant property rights, production equipment, a quantity of bulk
insulin and a license to manufacture bulk insulin for use in
On Nov 13, 2012, MannKind signed a license agreement with Colby
Pharmaceutical Company granting the latter exclusive rights to its
early stage cancer programs. In Apr 2012, MannKind signed an
exclusive agreement with Tolero Pharmaceuticals, enabling the
latter to develop and market compounds from MannKind's novel BTK
(Bruton's tyrosine kinase) program. The BTK program is focused on
the development of treatments for hematological malignancies and
inflammatory diseases. MannKind could receive up to $130 million in
the form of upfront as well as milestone payments from the
MannKind Corporation (MNKD): Read the Full Research
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
MANNKIND CORP (MNKD): Free Stock Analysis
To read this article on Zacks.com click here.