Exuberant? Not So Much

Kinetics notwithstanding, it won't be easy to promote an inhaled insulin in the post-Exubera era. The drug's remarkable failure tainted the category and left physicians, patients, and analysts skeptical about the approach, especially where it pertains to safety.

"Obviously, a way to take insulin that doesn't involve injections appeals to a lot of patients," says Dr. Boyd Metzger, professor of Metabolism and Nutrition in the Division of Endocrinology, Metabolism & Molecular Medicine at Northwestern University's Feinberg School of Medicine. "But any time a new product is not filling a unique kind of therapy, it's best to be cautious. Not everything potentially good or negative about the product is discovered during the clinical trials."

"There is a heavy educational component to introducing this product to the market," says Edstrom. "We want to find a company that has done this successfully in the past."

Moreover, the biotech's pipeline is thin. It has a few cancer products in early-stage development, and Mann believes that the Technosphere platform will show value in enabling pulmonary delivery of a variety of drugs. But with no products currently on the market, a partner with deep pockets isn't just preferable for MannKind, it's necessary.

When Exubera was pulled in 2007, MannKind suspended partnership talks. But this year they're back at the negotiating table, and prospects are promising. "Considering the size of the market opportunity and the thorough data package, we assume that Afresa will attract a major pharmaceutical partner in 2009, despite the controversy that still swirls around inhaled insulin," says Cory Kasimov, a biotech analyst with JPMorgan.

The unknown variable is the product label. "If information about no pulmonary side effects, less hypoglycemia, and significantly less weight gain is on the label, then the sales force would have a lot more ammunition," says Karen Andersen, a senior biotech analyst at Morningstar. Even if MannKind does find a partner, Andersen says, it won't necessarily solve the company's financial woes. "I don't see them getting much of a payment up front from a partner," she says.

But partnership doesn't mean that MannKind is just going to hand over Afresa and sit on the sidelines. Edstrom says MannKind plans to assemble its own sales force for the North American specialty market. "We want to stay in close contact with users because we feel that part of our success has been working with key opinion leaders," says Edstrom. "The timing of a launch of a MannKind sales force depends on the structure of the deal we get, and the market."

Although the company has already invested $200 million in a manufacturing facility (in Danbury, CT) big enough to support at least 200,000 and eventually 2 million patients, MannKind wants to guarantee long term supply at a reasonable price. So on March 9, the biotech struck a $33 million deal to purchase a Pfizer insulin facility at Industriepark Hoechst, Frankfurt am Main, Germany—a factory that until recently was dedicated to producing Exubera. With the acquisition, MannKind obtained "an immediate supply of insulin and the ability to supply our insulin needs for the future, which brings Afresa one step closer to commercial readiness," says Mann.

The Cancer Question

To MannKind, Afresa's key selling point is its clinical superiority. But some analysts aren't sure that will be enough. "I don't think claiming it's clinically more effective will have a positive impact on initial sales," says Grant Zeng, a biotech analyst at Zacks Investment Research. "When Pfizer began to market Exubera, they also said it was a very good product, and it turned out to be a flop."

Patients will need convincing, too, especially after a 2008 report potentially linking Exubera to lung cancer. According to Andrew Mandell, executive director of the Defeat Diabetes Foundation (who also goes by the pseudonym Mr. Diabetes), any company will have to do a lot to prove the efficacy of a new inhaled insulin product. "You can't fool around with insulin," he says. "If it isn't done right, the wrong is absolutely deadly."

But according to Richardson, Afresa's clinical trials have produced no evidence that the drug is carcinogenic. "Our data have shown one case of reported lung cancer, and that was in a smoker of 40 years," he says. MannKind took sequential, high-resolution CT scans of 600 patients and found no changes in lung function in TI patients. "We'll be looking for any signals in a postmarketing situation, but at present, there's no data supporting any concerns about Afresa and lung cancer specifically," says Richardson.

The key to Afresa's success lies in MannKind's ability to distinguish its product from Exubera—and that's not going to be easy. Physicians, patients, and Wall Street are still skeptical, and the small biotech is, well, small. But that hasn't disheartened Mann.

"People looked at TI as just another form of inhaled insulin, but that's not really what it is. We say to people, 'Yes, it's insulin, and yes, it's inhaled. But what's unique about it is its well-synchronized kinetics.' It eliminates almost all of the problems of prandial insulin therapy, or at least substantially reduces them."

MannKind has a product that could change diabetes therapy. But first, it has to persuade FDA, at least one potential partner, a whole lot of doctors, and even more patients that it isn't what it looks like. Sometimes changing perceptions is even harder than curing diseases. If Al Mann can pull this one off, the great inventor and entrepreneur can take credit for his most difficult achievement of all.