MannKind Corporation Slumps After FDA Approval

3
MannKind Corporation Slumps After FDA Approval
Image source: Pixabay

Investors have been excitedly waiting to hear that MannKind Corporation (NASDAQ:MNKD)’s diabetes drug has the approval of the Food and Drug Administration. Now that the news is finally here though, Wall Street doesn’t seem too happy—probably because of the warning the drug will carry when it goes to market.

Play Quizzes 4

FDA announces Afrezza approval

In a press release today, the FDA said it has approved the inhaled powder Afrezza for diabetes treatment in patients who require mealtime insulin. The inhaled insulin acts quickly and is taken at the beginning of a meal or within 20 minutes of beginning a meal.

Cliff Asness Of AQR At Morningstar Investment Conference

InvestOver the years and during times like the volatility that has swept the market year to date, the best hedge fund managers display their adaptability. Being able to move and change with the times is essential when it comes to investment management. AQR co-founder and CIO Cliff Asness joined Ben Johnson of Morningstar to discuss Read More

The agency said Afrezza’s safety was tested in more than 3,000 patients. Researchers noted significant improvements in the blood sugar measurements of type 2 diabetes patients when Afrezza was taken with oral anti-diabetic drugs. In type 1 diabetes patients though, it met “the pre-specified non-inferiority margin of .4 percent.”

The FDA said MannKind’s drug isn’t a substitute for long-acting insulin and must be used with long-acting insulin in patients with type 1 diabetes. The agency now requires that MannKind conduct more post-marketing studies for the drug, including one for pediatric patients, one to study the risk of pulmonary malignancy, and “two pharmacokinetic-pharmacodynamic euglycemic glucose-clamp clinical trials, one to characterize dose-response and one to characterize within-subject variability.”

Why MannKind is falling

The real catch in this approval is the warning MannKind’s drug carries with it. It’s a boxed warning about acute bronchospasm in patients who suffer from chronic obstructive pulmonary disease and asthma. In other words, patients who have chronic lung problems will not be able to take Afrezza.

Investors may also be reacting to all the capital the company will probably need going forward. It’s going to take a lot of cash to cover four more studies. On Thursday, Seeking Alpha contributor Debra Fiakas of Crystal Equity Research raised some concerns about the company’s need for cash. With the FDA approval, now MannKind has to get production up to capacity and also start a sales and marketing campaign for Afrezza. Fiakas doesn’t think the drug maker can do all of this without getting more capital from investors, and she warned about share dilution.

However, the stock is rallying back. In after hours trading, shares are currently up 3.70%.

Updated on

Michelle Jones is editor-in-chief for ValueWalk.com and has been with the site since 2012. Previously, she was a television news producer for eight years. She produced the morning news programs for the NBC affiliates in Evansville, Indiana and Huntsville, Alabama and spent a short time at the CBS affiliate in Huntsville. She has experience as a writer and public relations expert for a wide variety of businesses. Email her at Mjones@valuewalk.com.
Previous article Hewlett-Packard Settles Shareholders’ Lawsuits Related To Autonomy
Next article Nike’s World Cup Advertising Blitz Is Paying Off

No posts to display

3 COMMENTS

  1. @bufny1- Agreed! The technosphere delivery platform has huge potential for delivering other drugs that require fast action –especially analgesics, as you point out. There are others as well, and the market has largely discounted or ignored the potential for this patented technology that can be licensed to other pharmaceutical companies. I agree that a partnership announcement or sale will be announced soon, and contrary to the views of many “observers”, I do not think a savvy large company will blink at the prospect of paying out a premium of 2x current value to acquire this. An amount almost as high was paid recently for an unapproved formulation, and the global market for this is large and continuing to grow. It amazes me that deep pocketed investment companies who pay large sums for informed analysis have missed so badly on this investment. But, the beautiful thing about the U.S. is that stupidity doesn’t prevent people from making money. Wall street is proof of that.

  2. To SarahKnows
    Excellent summation on what happened today–there is no doubt the “shorts” were caught off guard as the approval was not expected until July 15 and now this attempt at market manipulation is to “limit the damage”. My belief now is that Alfred Mann has a partner to market Afrezza and will announce this next week—I think this partnership was on condition of FDA approval and now this has come. In addition this approval validates the “technosphere” technology that is used to carry the insulin and now MNKD will be able to partner with other companies to carry their drugs to the lung (in fact Mr. Mann hinted about this being used for migraine headache analgesics)

  3. What happened immediately after approval was an attempt at market manipulation to enable the large short position to cover. It should be investigated by the SEC. Just another example of a market riddled with unethical miscreants whose practices are now slowly being revealed. With respect to MNKD, this “knee-jerk market reaction” was not related to the value of the medicine, it was a preplanned trading action. For those who are truly informed about the drug and its potential, requirements for post approval studies were widely expected, as was a label regarding pulmonary contraindications for asthmatics. In fact, informed observers expected a more stringent label requirement. Nonetheless, please feel free to continue your uninformed reporting. Those of us who support this drug and know how important it is for diabetics recognize that it will soon become evident how important this new treatment truly is.

Comments are closed.