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Mannkind Shares Gain Ground Ahead Of FDA Decision

From Associated Press (January 6, 2010)

NEW YORK--Shares of drug maker MannKind Corp. rose more than 3 percent Wednesday after a Rodman & Renshaw analyst reaffirmed his outlook that the company’s inhaled insulin will gain Food and Drug Administration approval in 2010.

Though the shares have more than doubled in the past 52 weeks, they remain below a $12 peak in September, and they fell 12 percent Tuesday.

The stock has been volatile for several days as the company approaches a key FDA decision on its lead product candidate, Afresa.

Shares of MannKind climbed 36 cents, or 3.6 percent, to close at $8.28 Wednesday on more than triple their average volume.

Rodman & Renshaw analyst Simos Simeonidis, who reaffirmed his positive outlook on Afresa, has maintained a bullish outlook on the drug despite some skepticism in the market. Concern has focused on what is needed for FDA approval.

Several other companies have failed to make inhaled insulin work commercially. In 2007, Pfizer Inc. discontinued its inhaled insulin Exubera after it failed to gain ground on the market. In 2008, Eli Lilly & Co. ended its development program citing regulatory uncertainty.

Meanwhile, MannKind has had difficulty finding a marketing partner for Afresa.

The Food and Drug Administration is scheduled to rule on it by Jan. 16.

"Despite all the noise and speculation on the Street, including the very significant short position, our view on MannKind remains completely unchanged," Simeonidis said, in a note to investors.

He said Afresa will likely be approved in 2010 on the strength of study data and that shares could jump up to $17 if that happens. A request for more studies on the drug could be "catastrophic" and send shares plummeting, he added.

"We believe that the only really bad outcome for MannKind is a Complete Response Letter that would require the company to do trials of significant length in time (and) number of patients," he said.

A call for additional studies could mean another 4 years before the drug makes it back to the FDA for review, but a request for a "minimal" amount of work would be positive move and signal eventual approval. Simeonidis said investors should brush off delays in the FDA’s decision due to a backlog at the agency.


Posted: January 2010