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] deal, more commentary about Merck [MRK
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] and Schering-Plough [SGP
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] and the extent of the Vytorin/Zetia fallout, Genentech's[DNA
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] biotech bellweather earnings after the closing bell today, just to name a few. But since I was out of pocket yesterday at LaGuardia covering the American Airlines story, I've decided to follow up on the Pfizer [PFE
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] Exubera lung cancer warning and what it means to MannKind [MNKD
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].
MNKD is the only company still developing an inhalable form of diabetic insulin. After PFE pulled Exubera off the market last fall, NovoNordisk[NVO
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] and Eli Lilly [LLY
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] /Alkermes [ALKS
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] gave up on their similar experimental products, but MNKD is not throwing in the towel.
The California company put out a press release this morning saying that in mice, animals and people it has seen no evidence yet of carcinogenicity with its device. Nonetheless, in the wake of the Pfizer announcement yesterday morning, MannKind called a meeting yesterday of its data safety monitoring board (a committee of outside experts picked to keep an eye on danger signals with experimental drugs in human testing) and it concluded "that on the basis of the current information our trials could continue."
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But MNKD, which gets its name from the billionaire Alfred Mann who has staked a good deal of his personal fortune on the inhalable insulin, is giving up hope of finding a big pharma partner for the product. "Given the current market sentiment," the release says, "we have decided to suspend partnership discussions." And in the understatement of the moment the company acknowledges that it "will be unable to achieve an appropriate valuation for Technosphere Insulin until Phase 3 (late-stage) data are available that confirm our belief in the safety and efficacy of TI."
Separately, Nektar Therapeutics, which was Pfizer's partner on Exubera is also abandoning its search for a new buddy.
Leerink Swann analyst Bill Tanner titles a MannKind research note to clients this morning, "TI's challenges potentially insurmountable." He quotes a "regulatory consultant" who believes "the bar has been substantially raised for TI's approvability as this safety concern will likely be treated as a class effect." That means the Food and Drug Administration will look at all inhalable insulin products as having the same potential problems.
Tanner expects MNKD to trade below cash because it's so dependent on TI. Still, he expects it to possibly win FDA approval in 2011 but its peak sales potential will be more modest. Leerink makes a market in MNKD and has co-managed a public offering for the company within the past year.
I haven't seen a note to subscribers from him about this latest development, but I bet David Kliff who writes "The Diabetic Investor" is saying, "I told you so." From the get-go Kliff, a type 2 insulin-dependent diabetic, has been kind of a voice in the wilderness, poo-pooing the idea of inhalable insulin and trying to tell anyone who would listen that diabetics don't fear or dislike needles as much as some people might think.
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