This was published on Seeking Alp[ha on April 14th, 2008
about stocks: GNBT / MNKD / PFE
In the April issue of Diabetes Care, the long running "Atherosclerosis Risk in Communities" [ARIC] study led by Frederick Brancati, M.D., of Johns Hopkins, found that lung function declines faster in type 2 diabetes patients than in those without the disease. Dr. Brancati and his colleagues also said that there may also be implications for the use of inhaled forms of insulin.
The American Diabetes Association, which publishes Diabetes Care, issued a press release titled "Reduced Lung Capacity Accelerates with Diabetes Makers of Inhaled Insulin Should Take Note, Researchers Say". They warn in their article that "...people who have diabetes encounter a faster loss of lung capacity than those who do not have diabetes, a finding that may have implications for the potential use of inhaled insulin, according to a study appearing in the April issue of Diabetes Care."
On April 9th, Pfizer (PFE) said it updated the U.S. product labeling for Exubera Inhalation Powder to include a warning about lung cancer cases observed in patients who used the inhaled insulin treatment. Over the course of Exubera's clinical trial program, 6 of the 4,740 patients treated with Exubera developed lung cancer, compared with 1 of the 4,292 patients not treated with the drug. The six patients with cancer either had been or were current smokers.
In the April 10 Endrocine Today article titled "Inhaled Insulin May Be Associated With Lung Cancer", Editorial Board Member David S. H. Bell, MD noted: "Since insulin is a growth factor, endocrinologists have always been concerned that inhaled insulin would be associated with lung cancer. Because of this and in spite of earlier assurances from clinical trials that there was no such increase in the risk of lung cancer, many endocrinologists, like myself, have never prescribed inhaled insulin. Obviously, our worst fears have been realized. This is the final nail in the inhaled insulin coffin."
On April 10th, MannKind's (MNKD) response to the Pfizer announcement regarding a new warning label to existing packages of Exubera was as follows: "In contrast, the safety profile of Technosphere[R] Insulin has been examined in an extensive preclinical program, including a two-year carcinogenicity study in rats, in which we observed that Technosphere[R] Insulin and Technosphere[R] particles alone were well tolerated after daily inhalations for 104 consecutive weeks. There were no indications that our product or the carrier material alone had carcinogenic potential or caused cellular proliferation in the lungs. We also recently completed a six-month carcinogenicity study in transgenic mice that are prone to cancer. We found no macroscopic indications of carcinogenicity in animals treated with Technosphere[R] Insulin or Technosphere[R] particles for 26 consecutive weeks. The analysis of the histology data is in progress and will be completed later this quarter."
Is it fair to conclude that MannKind's response is based on pre-clinical carcinogenicity safety data in rats and a more recent one in "animals"? The FDA may take a harsh look at that data and say 'let's see carcinogenicity safety data in humans over a longer duration of time than "104 week" mice study or the current "26" week animal study'. Is it plausible the FDA will ask for an additional follow up on the "human" Phase III patients? If MannKind has not made carcinogenicity data part of one of the "human" Phase III protocols, then will the FDA possibly request more safety results requiring added trial time exposure?
From an investor standpoint we need to ask: What is the best case scenario for MannKind after a filing a submission for approval for Technosphere? Would positive efficacy data in the current Phase III's be enough to warrant approval during this disconcerting juncture? Perhaps an "Approvable Letter" could be the outcome instructing MannKind that more safety data is needed. Even with potential approval, would MannKind still face the burden of convincing professionals such as David S. H. Bell, MD of Endrocine Today or Frederick Brancati, M.D., of Johns Hopkins to prescribe MannKind's billion dollar drug?
Natixis Bleichroeder analyst Jon LeCroy downgraded MannKind to "sell" from "hold" after the news. "We view this as an absolute disaster for MannKind and do not see a believable scenario in which the FDA would approve another inhaled insulin," LeCroy said. Leerink Swann analyst Bill Tanner titles a MannKind research note to clients Friday morning"[b]TI's Challenges Potentially Insurmountable[/b]." 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." In essense, that means the Food and Drug Administration will look at all inhalable insulin products as having the same potential problems.
On April 10th, MannKind issued a press release stating: "Given the current market sentiment, we have decided to suspend partnership discussions." MannKind 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."
It may be true after the completion of TI's Phase III and the current "six-month carcinogenicity study in transgenic mice" that MannKind is convinced in the safety and efficacy of Technosphere. But what about the FDA, diabetics and their doctors? Diabetics and physicians have heard earfuls of stories regarding inhalable insulin and decreasing lung function and now whispers of potential cancer. A mouse or animal study will not halt these whispers surrounding inhalable insulin and that is the type of word of mouth never helps a marketing campaign. I would never count out a man as successful as Mr. Al Mann, but I remain unconfident in the future of MannKind.
Last month, an article appeared in Bioworld which informed biotech investors that the FDA issued new draft guidance for diabetes drugs calling for more patients and lengthier trials for companies with certain safety issues. In general, the FDA wants companies to exceed previous expectations considering the growing diabetes population and the increased complexity of treatments, but it will be an absolute stickler with those drugs exhibiting serious side effects.
At the time of the new FDA draft guidance, Aileen Salares of Leerink Swann & Co., would affect MannKind's inhaled Technosphere Insulin, a product she believed could show an advantage over the currently marketed inhaled product, Exubera, because of its reduced antigenicity and a lower hypoglycemia risk. The Pfizer announcement regarding the new arning label for Exubera may be the final nail in all inhalables coffin. I figure that must be news that Aileen Salares did not expect when making her analysis for TI. Surely, I would expect the FDA to now place any inhalable in the category of a drug that may present a serious side effect or, at the least, one that needs further pulmonary safety data.
The good news for MannKind is that we are halfway through April. My mother always told me to take my bad tasting medicine quickly and I would soon feel better. But the problem for MannKind would be that their medicine is simply "perceived" as bad, even if that turns out to be an unfair assesment.
In my first contribution on Seeking Alpha, I expressed my opinion on Generex Biotechnology's (GNBT) Oral-lyn Buccal insulin spray. In the same Bioworld article where I learned of the FDA's new draft guidelines concerning diabetes drugs, Navdeep Jaikaria, an analyst with Rodman & Renshaw, was quoted as telling investors in a research note that negative news of companies developing inhalable insulin has placed "unwarranted pressure on the shares of Generex." If anything, he said, their loss is Generex's gain, as safety issues with inhalable insulin only pave the way for Oral-lyn Buccal therapy as the only viable alternative to injectables. Mr. Jaikaira said there are observations that inhaled insulins lead to a decline in lung function, and there are formulation problems with converting insulin into an inhalable powder while Oral-lyn Buccal is a room tempature liquid formulation that deposits no insulin into the lungs.
My own analysis stems from research which I have conducted independently over the last few years and I am far from an expert. I wanted to share my opinions and gain valuable feedback as I continue to evaluate the sector. My interest stems from a family history of diabetes and the burdens that accompany non-compliance to the (unnatural) insulin injection regimen. Personally, I would rather they all succeed and allow needle resistant diabetics a broad delivery choice. As that does not appear to be the realistic case, I want to make my sentiment clear: I am long on GNBT and will avoid MNKD. Hopefully, we are nearing a time in the US where an improved choice of insulin delivery rests solely with diabetics and their doctors and not with which biotechnology company can successfully navigate the high regulatory and financial hurdles.