NDA Almost Ready, MannKind Exubera(nt) About Chances For Inhaled-Insulin Partner

Despite safer-seeming profile, many skeptical of Afresa after flameout of Pfizer’s product.

As it readies a new drug application for its "ultra rapid acting" inhaled insulin Afresa - and continues to distance its product from Pfizer's failed Exubera - Mannkind signaled hopes of finding a partner by the third quarter of this year.

Valencia, Calif.-based MannKind confirmed in a fourth-quarter earnings call Feb. 17 it is gearing up to submit an NDA for Afresa in type 1 and type 2 diabetes by the month's end. Chairman and CEO Alfred Mann predicted the NDA will lead to Afresa's approval "in a little more than a year at the latest, and possibly sooner."

Approval, though, is not the final hurdle. The company, Mann said, will step up partnership talks as soon as the NDA is filed. Meanwhile, the firm has worked hard to differentiate Afresa from Pfizer/Nektar Therapeutics' doomed Exubera, which has been linked to lung cancer risk. Pfizer terminated the program in Oct. 2007, citing resistance from patients and physicians to earlier initiation of insulin therapy ¹ (Also see "As Pfizer Closes Door On Exubera, Has Window Opened For Others?" - Pink Sheet, 22 Oct, 2007.) p. 4).

Knowing that Afresa was being confused with Exubera, the company has been repositioning Afresa as "ultra rapid-acting" and clarifying the differences between the two products (² (Also see "MannKind Breathing Easier After FDA Diabetes Safety Guidance" - Pink Sheet, 29 Dec, 2008.)).

Eighty percent of Afresa gets used within three hours of eating and the rest disappears within five or six hours. With standard therapies, only about 25 percent to 30 percent of the insulin is used within three hours of eating, which means insulin can accumulate in the blood and increasing risk of hypoglycemia. Lung cancer risk has not shown up in Afresa trials, either.

But the company has yet to escape Exubera's shadow, as Mann's comments during the investors' call showed. "Some of the concerns about the commercial potential of Afresa arise from the unrelated perceptions about Exubera and its failure," he said. The executive added that it's "nonsense to suggest that there is little interest from potential pharma partners."

MannKind believes Pfizer's failure was not due to resistance to earlier use of therapy but to the inconvenient nature of the product's delivery device and high cost, with pricing set at 50 percent higher than insulin (³ (Also see "MannKind: Inhaled Insulin Can Beat ‘Niche’ Rap" - Pink Sheet, 11 Mar, 2008.)). Also, doctors were concerned that there was evidence of residual powder being left in the lung.

For these reasons, it would be difficult to win over existing insulin users, who account for one-third of the diabetes market, let alone those who are not yet at the stage where they need insulin yet, president and chief operating office Hakan Edstrom said in an interview.

In contrast to the Exubera approach, MannKind deploys pH-sensitive particles that dissolve on contact and release insulin monomers that speed into the bloodstream. The powder transforms into a water droplet, or mist, on contact with the lung, minimizing problems with pulmonary function.

MannKind intends to price the product on par with insulin. It will initially target those who are already insulin users and gradually work its way into treating those with earlier stages of disease.

Investors still spooked by Exubera demise

Investor skepticism about the commercial demand for inhaled insulin in the wake of Exubera's demise will "continue to act as an impediment to substantial appreciation for Mannkind shares," wrote J.P. Morgan analyst Cory Kasimov in a Feb. 17 note.

However, unlike investors, prospective partners are likely to see the clear differences between Afresa and Exubera, "despite the controversy that still swirls around inhaled insulin," in Kasimov's view.

MannKind estimates a $1 billion market opportunity for existing insulin users alone, based partly on a 2008 survey of more than 200 prescribers who indicated they would advise Afresa for from 6 percent to 8 percent of insulin prescriptions. In light of Exubera, however, some analysts have predicted a market half that size.

Mann backed up his optimism with a mention of his own, personal and sizeable $919 million investment. "Published projections suggest a misconception of the economics and much lower financial benefits than we expect," he said, and predicted that MannKind's backers "will be very handsomely rewarded for my investment of $1 billion in this company."

Considering the "sheer size of the market opportunity" and the "thorough data package in hand," J.P. Morgan, too, expects the company will be able to attract a major pharmaceutical partner in 2009.

Maybe, but doubts voiced by Leerink Swann analysts in a research note last spring still hold true. At that time, they predicted that although MannKind's Technosphere Insulin is better and safer than other inhaled insulins, physicians and patients will not be able to appreciate the benefits, given the perceived risk about lung cancer.

Edstrom said he believes incidence of lung cancer in the Pfizer trial was coincidental, linked to the inclusion of heavy, long-time smokers rather than the treatment itself. The executive points out that FDA did not withdraw the product.

Participants in the MannKind trials are required to be non-smokers or to have stopped smoking at least six months prior to the study start. And even though the company does not believe Exubera caused lung cancer, it won't be recommending Afresa for smokers to avoid "headaches" and perceptions about risks, Estrom said.

Further data analysis delayed NDA

The Afresa application is supported by two pivotal Phase III trials in type 1 and 2 disease showing Alfresa met a primary endpoint of reducing hemoglobin A1c levels over 52 weeks and had no adverse effects on pulmonary function after two years of treatment.

Following release of top-line results in January, MannKind had been set to file by early February, but FDA was looking for further analysis of some of the data, Estrom explained. The application package also now includes results from a late-stage bioequivalence study.

The Alfresa application is now much bigger than originally anticipated. "What we thought would be a 250,000 page document has grown. We are now dealing with a 450,000 page document," Edstrom said.

Barring more FDA concern than MannKind or Kasimov expects about the link between inhaled insulin and lung cancer, Afresa should be approved based on the efficacy and safety demonstrated in the company's robust clinical program, the J.P. Morgan analyst wrote.

"Our analyses around the pulmonary function have been very reassuring, in terms of there being no generation of a safety signal," said Paul Richardson, chief scientific officer of MannKind. "Of course, this will be a matter of considerable discussion with the agency and I am sure we will have a discussion around how best to manage patients and ensure their safety."

During the investors' call, executives also reassured investors once again that it is well-placed to deal with FDA's new regulatory requirements for cardiovascular safety of type 2 diabetes medications ("⁴ (Also see "MannKind Breathing Easier After FDA Diabetes Safety Guidance" - Pink Sheet, 29 Dec, 2008.)).

In response to a question from an analyst, Richardson said that, based on its discussions with FDA so far, the firm does not expect a post-marketing outcomes trial will be required, either.

- Emily Hayes ([email protected])