A second complete response letter, a couple of hundred million dollars funding gap and potential two-year set back would understandably deflate even the most determined chief executive. Seemingly not Alfred Mann.
In fact, MannKind's founder and leader even managed to find cause for optimism in the FDA’s second rebuff of Afrezza, the inhaled insulin product in which he has personally invested almost $1bn. Unfortunately, the company’s other shareholders failed to find a bright spot; the stock lost almost half its value on the news to $5.34, close to a 12-month low. Afrezza's arduous trek to market just got a lot longer, and not necessarily any more certain.
As widely expected, the regulator’s main issue is with the new inhaler device, called Dreamboat, which was not used in the pivotal studies supporting the marketing application. An older device, called MedTone, was used at the time and bioequivalency studies submitted to the FDA have apparently not sufficed.
The regulator wants clinical confirmation of bioequivalence, and has asked for two studies, in type 1 and 2 diabetics, to be carried out, one of which must have a MedTone arm, to allow a head-to-head comparison of the two devices.
MannKind has already started these studies, called Affinity 1 and 2, although only the former has actually started dosing. On a conference call the company declined to say how long these might take or cost, although the FDA wants to see 12 weeks of stable glucose levels.
Analysts believe this demand is enough to delay the project by another two years.
Mr Mann took encouragement from the fact the agency has not asked for anything other than these bridging studies, in terms of clinical work. Other issues were raised, including additional information on the new device such as usage and handling, as well as updated safety data.
He also said the new trials might confirm an improved pulmonary profile for the new inhaler, evidence for which has been seen in shorter trials.
However, the hugely important question of whether the FDA is convinced the product – using either the new or old inhaler - is both safe and effective remains largely unanswered.
On the conference call, the company said the wording of the letter suggests the regulator was satisfied with the MedTone device. The request for what are essentially bridging studies would seem to imply the same for the Dreamboat.
But an equivocal answer has yet to be provided. Meaning even after another submission the regulator could still feasibly decide it is simply not comfortable with the safety and efficacy of Afrezza.
Short term concerns
These are long term concerns of course; the company has to come up with a lot more cash in the meantime. With only enough money to last until the third-quarter of this year, analysts at Leerink Swann reckon another $300m might be needed to get to profitability.
Annual results are due early February, and an update on how the company intends to deal with this set back will be awaited.
MannKind and Afrezza has long had its doubters (Event - MannKind holds its breath as FDA decision approaches, December 1, 2010). Mr Mann has been trying to silence his critics for some time now and it seems inconceivable that after all this work and money, he throws in the towel now.
The story of Afrezza now seems likely to drag on for another couple of years; keeping investors interested over that time will be a challenge.