Washington Editor

The FDA told MannKind Corp. in a complete response letter that before the agency could approve the firm's inhaled diabetes drug Afrezza (insulin human rDNA origin), regulators needed more information about its clinical utility and comparison data about the newer version of the drug's inhaler device vs. the one tested in pivotal clinical trials.

While Rodman & Renshaw analyst Simos Simeonidis called the complete response letter "the good kind," noting that regulators are not yet requiring any additional clinical studies, investors took a bleaker point of view, driving shares of the Valencia, Calif.-based biotech (NASDAQ:MNKD) down $2.59 Monday, or 24.7 percent, to close at $7.89.

Regulators cited no safety concerns with Afrezza, which previously went under the moniker Afresa before a name change late last year, said Matthew Pfeffer, MannKind's chief financial officer. The agency, however, is asking for updated safety information, which Pfeffer called a "very routine request."

"They almost always will ask for that where you have additional data, and obviously, we do, because we continue to follow these people. So they want an update of that," he told BioWorld Today.

"The key thing is that they haven't asked at this point for a new clinical trial. They are asking us to provide [the safety data] based on our existing trials," Pfeffer noted.

What likely had investors spooked the most was the FDA's request for "clinical utility" information.

"This is the part of the letter that is most ambiguous to us," Simeonidis said.

He said he believed the agency wants clarity on the setting in which the company is proposing Afrezza to be used, such as before, after or instead of other treatments, "which we believe should have been made pretty clear on the NDA.

"The label we proposed was a very broad label for Type I and Type II diabetes," Pfeffer said, noting that the company had not included any proposals about whether the drug should be used in combination with any other products.

Clinical utility, he said, is "not a defined term, so we can't be certain.

"I think they are looking for more specificity," Pfeffer added. "We won't know until we meet with [the FDA] and ask them what they mean by that."

Leerink Swann analyst Joshua Schimmer said it was his impression that MannKind was "still working to get a handle on how to address the issues raised by the FDA."

He said there were a "substantial number" of key unknowns raised by the FDA's letter, which Schimmer said "leave us somewhat uncomfortable," given MannKind's "inability" to rule out a potential requirement for more clinical data on further FDA consideration, the need for a future advisory panel review and the potential that the labeling might restrict use of Afrezza to patients not suitable for insulin.

But on an optimistic note, if MannKind is able to fully address all of the FDA's issues and obtain approval of its next-generation inhaler, the company could remain on track for launching Afrezza in the fourth quarter, Schimmer said.

MannKind always had planned to follow the original NDA for Afrezza with a supplemental application in the second quarter for the next-generation inhaler rather than launch with the MedTone version of the device, Pfeffer said.

He noted that the firm's commercial version inhaler, known in-house as Dreamboat, has "some minor modifications to improve durability and manufacturing ability."

The company has conducted a bioequivalence study to bridge between the older MedTone design and Dreamboat, whose official name likely will be made known when the company submits its response to the agency, Pfeffer said.

While the FDA has signed off on that study, it "had questions regarding some of the assays used," Leerink's Schimmer noted.

MannKind's next-generation inhaler is supposed to be easier to use than the now defunct Pfizer Inc.'s and Nektar Therapeutic Inc.'s Exubera. (See BioWorld Today, Oct. 19, 2007, and April 10, 2008.)

Pfeffer said that rather than addressing the particular concerns bridging from the older version of the device to the commercial version, MannKind's strategy "now would be to file that data as part of the response" to the FDA.

The company first, however, plans to ask the FDA whether that approach would be acceptable. If MannKind is able to file in the second quarter and undergo a six-month review, "we would hope for a final approval of the next-generation product in the fourth quarter now just as we did before," Pfeffer said.

But JP Morgan analyst Cory Kasimov warned that "uncertainty is likely to prevail" until the company has held its meeting with the FDA.

Pfeffer said the name change from Afresa to Afrezza came at the end of last year to address the FDA's concerns that the drug could be confused with another similarly named product, which he said neither the company nor the FDA has publicly identified.

Since the other product is an injectable drug, "it seems like a long shot that it would ever be seriously confused," Pfeffer said.

Nonetheless, the FDA was concerned that a pharmacy might wrongly dispense the similarly named medication instead of the diabetes drug due to a poorly written prescription, he added.

But MannKind was able to easily resolve the issue with a "relatively subtle change."

Afrezza and Afresa, he noted, are pronounced the same, and the names were similar enough that it "helped us from having to change the artwork and the logos and things we developed."

MannKind planned to hold an investor call Tuesday morning, during which company officials would divulge more details about the complete response letter, Pfeffer said.

Rodman's Simeonidis, at least, remains bullish on the stock.

"We continue to believe that Afrezza will be approved, partnered and in the market in 2011," he said.

Published  March 16, 2010