Wall Street speculators once again began to mull Mannkind Corp.'s chances for partnering its inhaled insulin Afrezza, following news that the second-generation Dreamboat device proved just as good as the first gizmo, in terms of forced expiratory volume in 1 second (FEV1) – a matter questioned in the latest complete response letter (CRL) from the FDA.

Valencia, Calif.-based Mannkind reported Phase III results from trials in Type I and Type II diabetes, proving Afrezza non-inferior in efficacy to insulin aspart (NovoLog, Novo Nordisk A/S) in the Type I trial and superior to oral therapy alone in the Type II study, while meeting safety endpoints that included lowered hypoglycemia and weight gain.

Mannkind's stock (NASDAQ:MNKD) closed Wednesday at $7.59, up 73 cents, or 10.6 percent.

The data, wrote PiperJaffray analyst Ian Somaiya in a research report, "will allow Mannkind to significantly progress partnership negotiations, though we continue to believe a deal is unlikely before Afrezza's FDA approval," likely in the second quarter of next year.

In a late-afternoon conference call with investors, CEO Alfred Mann said the two trials "were constructed very carefully to meet the requirements of the FDA," and more work is yet to be done, since "now we want to target some marketing questions. We want to do some trials that will further differentiate us in a significant way in glucose control in both primary and secondary endpoints." He added that the company has "a host of data, and we'll do a considerable post hoc evaluation."

Otherwise, said Matthew Pfeffer, chief financial officer, not much has changed in the company's focus, after the end of the Phase III trials. "Obviously, you've already seen there's been a slight decrease [in spending], but I'm not going to project a lot," he said. "We need to be pretty conservative there. I'd say all in all, it may be shifting a little bit from [research] to [development]" but the picture is "not going to change all that much," Pfeffer said.

Mannkind has enlisted Greenhill & Co. to help with dealmaking prospects, which will include returning to previously interested parties for a possible renewal of talks.

Study 171 in Type I diabetes enrolled 518 patients on basal/bolus insulin therapy at sites in the U.S., Russia, the Ukraine and Brazil. After a four-week run-in period to optimize their basal insulin, patients entered a 24-week treatment period, randomized in one of three ways. Some continued on subcutaneous insulin aspart in combination with basal insulin (170 patients). Others switched to Afrezza out of the new inhaler, in combination with basal insulin (174). A final group got Afrezza with the previous, Medtone inhaler, combined with basal insulin (also 174).

The treatment consisted of 12 weeks of prandial insulin optimization with continued basal titration followed by a 12-week period on stable doses of insulin (prandial and basal). Patients had a follow-up visit four weeks after dosing finished.

Over the 24-week period of this study, A1c levels decreased comparably in the Afrezza Dreamboat group (-0.21 percent) and the insulin aspart group (-0.4 percent). The 95 percent confidence interval (0.02 percent to 0.36 percent) of the between-group difference did not exceed the predetermined threshold of 0.40 percent, establishing non-inferiority between the second-generation Afrezza inhaler and insulin aspart – the primary endpoint of the study.

In Type II diabetes, Study 175 included 353 patients from sites in the same locations as Study 171 whose disease was inadequately controlled on metformin with or without a second or third oral medication. After a six-week run-in, during which all patients received dietary counseling and initiated blood-glucose monitoring while staying on their oral medications, they entered a 24-week treatment period in which they were randomized to one of two groups where, in addition to their oral medication, they received either Afrezza via Dreamboat (177 patients) or placebo power by the same device (176).

Treatment amounted to 12 weeks of prandial insulin titration followed by 12 weeks of relatively stable dosing, and subjects were not allowed to adjust or alter the doses of their oral medications during the study without the go-ahead after talks between the principal investigator and the medical monitor. There was also a safety follow-up visit four weeks after the finish of the treatment period, during which all subjects returned to oral therapy only.

The primary endpoint of the study was the mean change in A1c levels from baseline to week 24 between the two groups. Over the 24 weeks, mean A1c levels decreased by 0.82 percent in the Afrezza group, compared to a decrease of 0.42 percent in the comparator oral-therapy group. The between-group difference in change in mean A1c levels was statistically significant (p < 0.0001), proving the superiority of AFREZZA over the comparator oral therapy.

Among adverse events, the most serious was cough, which turned up in about 30 percent of Dreamboat Afrezza patients in the Type I trial, compared to about 20 percent on the Medtone rig, and none on insulin aspart. Still, the dropout rate was only 5.7 percent for Dreamboat, 2.9 percent for Medtone and none for insulin aspart.

In the Type II trial, cough was a problem, too: 23.7 percent in the Afrezza group, 19.9 percent in placebo. Also, in this experiment, there was a statistically significant difference in weight gain. Afrezza patients added 0.49 kilograms, whereas placebo subjects lost 1.13 kilograms.

Simon Simeonidis, analyst with Cowen and Co., wrote in a research report that there "do not appear to be any red flags in these data that should stand in the way of approval," and he agreed with Somaiya that "barring any unforeseen surprises," the long-struggling Afreza should win FDA clearance at its third attempt, sometime around the middle of next year. (See BioWorld Today, Jan. 11, 2013.)