We reiterate our BUY recommendation and our 12-month target price of $10 per share.
• Mannkind is entering the homestretch in its efforts to win FDA approval of Afrezza®.
The Company met with the agency last week to finalize its clinical trial designs. The
outcome couldn’t have been better:
o A study of Afrezza with type 1 diabetics must show that two delivery devices are
equivalent. The pivotal trial will compare the performances of the latest inhaler and the
model used in earlier clinical studies. The goal is to demonstrate that the two devices are
equivalent and that drug is not inferior to an approved therapy.
o A type 2 diabetes study must yield evidence that Afrezza is better than placebo for
the drug to be approved for most diabetic individuals. Patients who are not
responding well to metformin and/or another oral therapy will be enrolled and provided
with either Mannkind’s inhalable insulin or a placebo. In other words, Afrezza must
provide better glucose control than an innocuous substance.
• Expenses remain under good control. Mannkind has sufficient funds to support operations
• The Company has numerous financing options that range from partnering Afrezza with
various pharmaceutical companies to more traditional sources of capital.
AFREZZA CLINICAL TRIALS TO COMMENCE SOON
Mannkind met with the FDA on Wednesday, August 10th to finalize the designs of two clinical trials of Afrezza. The type 1 diabetes trial is essential to win regulatory approval, while the type 2 diabetes trial will expand the market for the drug to include the vast majority of diabetes patients.
Type 1 Trial: The goal of this study, designated as the 171 trial, is to demonstrate that two inhalers, a new model and one used in earlier clinical studies, deliver Technosphere-insulin powder in an equivalent manner in a clinical setting. The Company has already conducted extensive laboratory tests of the two devices to show their bioequivalence, and the latest model has been used in a small number of patients.
This trial should enable the FDA to approve Afrezza for any patient who requires basal and prandial insulin therapies to control blood glucose levels. These are patients who have type 1 diabetes or an advanced stage of type 2 diabetes.
Type 2 Trial: This study, designated as the 174 trial, is designed to show that Afrezza is effective in helping to control blood glucose levels in patients who do not depend on basal insulin therapy. In other words, these patients are at an earlier stage of diabetes.