As binary events go, they don't get much bigger than decisions on Food and Drug Administration marketing applications. They can change the fortunes of a company in the blink of an eye, or at least however long it takes to read the letter from the FDA.
Imagine how different MannKind's (Nasdaq: MNKD ) 2011 would have been if it had gotten its inhaled insulin Afrezza approved in January. This article would be about whether the company was hitting its sales figures.
Instead MannKind ends the year down 66%, even more if you measure from the peak of the run-up into the FDA decision. About the only good news is that the stock is up about 20% from the doldrums of August. Maybe investors are gaining confidence that the drug will gain FDA approval on its third attempt.
You'll recall that the complete response letter in January was actually MannKind's second. The first requested more information on the clinical utility of Afrezza; we'll blame that one on the FDA. The second seems to be MannKind's fault. The company switched to a better inhaler and tried to convince the FDA that laboratory tests should be sufficient to approve the new device.
It wasn't. The agency wanted data from actual humans taking the drug.
After a blessing from the FDA on two new clinical trials to prove that the new device works as well or better than the old one, MannKind got the trials started. If the company can enroll the trials quickly, they could be completed by the end of next year.
I don't think the risk here is that the trials won't be a success. Data from trials using Afrezza to date has looked pretty good. The bigger issue is whether MannKind can get the trials enrolled quickly. The current cash and a credit facility should last through the first quarter of 2012. That's not much leeway.
A quick enrollment would also give investors confidence in the commercial prospects for Afrezza; if patients are interested in trying it out in a clinical trial, more are likely to be interested once it's on the market. Pfizer's (NYSE: PFE ) inhaled insulin Exubera was a commercial flop, and while Afrezza is arguably a much better product, there's still a worry that diabetics will shun an inhaled insulin product, being content enough to stick themselves with needles of insulin made by Novo Nordisk (NYSE: NVO ) , Eli Lilly (NYSE: LLY ) , Sanofi (NYSE: SNY ) , and others.
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