MannKind: A Breakout Biotechnology Bet
Nov 26, 2013 5:37:15 GMT -5
otherottawaguy and afrezzamiracle like this
Post by liane on Nov 26, 2013 5:37:15 GMT -5
New SA article this morning
MannKind: A Breakout Biotechnology Bet
Stock Whisper
MannKind: A Breakout Biotechnology Bet
Nov 26 2013, 01:59 | 1 comment | about: MNKD
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. (More...)
In my previous reports on MannKind (MNKD), I have discussed the value of the breakthrough diabetics' treatment of MannKind. Its lead diabetes product candidate Afrezza is in the late stage clinical trials and awaiting approval from the FDA. The company is seeking partnership for the further development and commercialization of the product.
The Business
MannKind Corporation (MNKD) is a development stage biopharmaceutical company engaged in discovering, developing and commercializing therapeutic products for diabetes and cancer. It has four product candidates in its pipeline, two each for diabetes and cancer. The lead product candidate Afrezza is in phase III of its trial and has been submitted for new drug application with the FDA. Furthermore, the company has proprietary technology related to inhalation and drug delivery, which complement the product development. The technology and methods of the company are covered under patents some of which extend until 2030.
The company also has manufacturing facility in Danbury, Connecticut, for the commercial production of its candidates when and if they are approved. The offices of the company are located in California and New Jersey, and have a total of 248 employees.
The direct competitors of MannKind include Eli Lily and Company (LLY), GlaxoSmithKline plc. (GSK), and Novo Nordisk A/S (NVO).
Technology
The company's technology has applications in the treatment areas of pain, anti-nausea, migraine, anti-obesity, osteoporosis, diabetes, pulmonary atrial hypertension, GI disorder, immunosuppression, vaccination, adjuvant therapy, respiratory disorder, and reconstituted powders.
The Technosphere® technology is a dry powder delivery system that allows pulmonary administration of therapeutics that are presently being administered via injections. The technology has competitive advantage over other drug delivery systems, as it can be applied to broad range of drugs, mimics intra-arterial delivery allowing for rapid drug absorption, and needle-free administration.
The company also has dry powder inhalers that when used in combination with Technosphere technology, delivers approximately 70% of the powder within respirable range. The inhaler technology includes DreamBoatTM technology for reusable inhalers and CricketTM technology for disposable inhalers.
The BLUHALE® technology, used for inhalation profiling, is a microphone based wireless technology for characterizing patient inhalation, adapted onto the dry powder delivery system.
Candidates
The lead product candidate of the company is Afrezza, in the late stage clinical investigation. It's a meal-time inhaled insulin therapy with rapid action, for treating patients with Type 1 and 2 diabetes mellitus to control hyperglycemia. The product uses drug-device combination consisting of inhalation powder and the Afrezza inhaler. The trials for the product have involved over 5,300 adult patients and 56 different studies involving MannKind Corporation. The most common adverse effects noted in the trials include hypoglycemia, and mild transient nonproductive cough. The trial results showed that the patients using Afrezza experienced better reduction in long term blood sugar levels, known as A1c levels, when compared with those on oral medications.
Another diabetes candidate is MKC253, in the preclinical phase of study. It's a formulation of GLP-1 (glucagon like peptide) on the propriety technology Technosphere® particle delivered using proprietary inhalers. The initial studies demonstrated that with the technology the dose limiting gastrointestinal (GI) intolerance associated with GLP-1 appear to have been avoided. It works by replacing the insulin response, which is can't be replicated by other GLP-1.
The cancer product candidate of MannKind is MKC1106 for immunotherapy through direct intra-lymph node administration of compounds that are immune active. The preclinical study and phase I proof of principle study showed that the intra-lymph node immunization allows for long-term control over the cancer process, with minimal side effects and better anti-tumor immunity. The MKC204 IRE-1α inhibitor, a drug discovery program, aims at exploiting the biochemical signaling pathway, which may have a role in myriad of diseases including cancer and inflammatory disease. The potential applications include treating neurodegenerative diseases, cardiovascular disease, breast, prostate and pancreatic cancers, B cell malignancies and autoimmune diseases.
Market Performance
The company has a year to date performance of 116% as compared to S&P's 25.25%, mostly attributed to the positive trial results that the company announced through the year. Along with this the sentiment regarding the company has remained positive, with an impending partnership expected for the Afrezza.
The target price set by the analysts is a mean of $8.13 with a low price of $5.00 and high of $12.50. The stock is currently trading slightly below its low price target at $4.99 as of November 21, 2013. The mean recommendation at the moment is to hold the stock.
Upcoming Events
The company expects to hear a final decision from FDA regarding the approval of the resubmitted NDA, in the April of next year, with a PDUFA date of April 15, 2014. The event is expected to have a major catalytic impact on the stock prices, as it will take the company a step closer to the launch of Afrezza.
The company is to participate in the PepTalk the Protein Science Week from January 13-17, 2014, and Drug Delivery Partnerships from January 27-29, 2014. Positive news from these events may prove to be catalytic for the stock prices.
Fundamentals and Potential Risks
The company had a dismal third quarter with a net loss of almost $50.8 million, a 10.1% increase from the previous quarter and an 18.7% increase from the third quarter of 2012. There are currently no revenues of the company, since it has no product sales or licensing agreements that could generate revenue. The operations are being funded primarily by sale of equity securities, convertible debt securities and loan from The Mann Group along with a Facility Agreement with Deerfield.
The expenses of the company also increased from the relative period of 2012 - R&D by 7.1% and general and administrative expense by 73.3% largely due to non-cash stock compensation. The company has cash and equivalents of $93.8 million as of September 30, an almost 229% increase from the previous quarter, owing to cash proceeds from certain public offering warrants before their expiration. The company expects the cash resources to be sufficient till the first quarter of 2014.
The company is looking for a strategic collaboration with pharmaceutical companies for the processes of development through to commercialization of its product Afrezza. In case of failure to attain such partnership the activities related to Afrezza will be delayed as the company doesn't have sufficient funds to develop it on its own. This has the potential to harm the business, since it's currently largely depending on Afrezza's success.
The company first filed for NDA approval in 2009 for Afrezza; however FDA didn't approve it and asked for additional clinical studies. The company has successfully met the endpoints of these trial studies and expects to get approved by the FDA. But there is still the risk of disapproval or demand of further studies by FDA, since insulin inhaler is a novel product and has yet to see a long term success. Pfizer's Exubera didn't stay in the market for long, as it was unable to gain patients and doctors acceptance.
Bottom-line
The company's product candidates are indeed promising and have the potential for successful products when and if launched. The lead product candidate Afrezza if approved is expected to have increased demand from patients with needle phobia. However, the market has been slightly skeptical towards the product owing to the previous failure of similar products.
The company's financial condition of the company should not been a worry considering the high interest of company management, Dr. Mann, in ensuring that the product is able to reach the market. The company also has the option to raise equity capital.
Overall the company has the potential to grow and generate revenues if Afrezza is approved and is consequently commercialized. The manufacturing facility for Afrezza is a plus point for the company as it will be able to control and effectively monitor its production. The shares have been range bound during the last couple of months and any news on the resubmitted FDA can result in a huge rally. The insider and institutional interest in the company has also been pretty high with institutional investors increasing their holdings by 6.8% during the last six months and insiders adding a further 39.8 million shares; increasing holdings by 40%. I believe MannKind is ready to breakout and is a very good long term investment at these levels.
MannKind: A Breakout Biotechnology Bet
Stock Whisper
MannKind: A Breakout Biotechnology Bet
Nov 26 2013, 01:59 | 1 comment | about: MNKD
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. (More...)
In my previous reports on MannKind (MNKD), I have discussed the value of the breakthrough diabetics' treatment of MannKind. Its lead diabetes product candidate Afrezza is in the late stage clinical trials and awaiting approval from the FDA. The company is seeking partnership for the further development and commercialization of the product.
The Business
MannKind Corporation (MNKD) is a development stage biopharmaceutical company engaged in discovering, developing and commercializing therapeutic products for diabetes and cancer. It has four product candidates in its pipeline, two each for diabetes and cancer. The lead product candidate Afrezza is in phase III of its trial and has been submitted for new drug application with the FDA. Furthermore, the company has proprietary technology related to inhalation and drug delivery, which complement the product development. The technology and methods of the company are covered under patents some of which extend until 2030.
The company also has manufacturing facility in Danbury, Connecticut, for the commercial production of its candidates when and if they are approved. The offices of the company are located in California and New Jersey, and have a total of 248 employees.
The direct competitors of MannKind include Eli Lily and Company (LLY), GlaxoSmithKline plc. (GSK), and Novo Nordisk A/S (NVO).
Technology
The company's technology has applications in the treatment areas of pain, anti-nausea, migraine, anti-obesity, osteoporosis, diabetes, pulmonary atrial hypertension, GI disorder, immunosuppression, vaccination, adjuvant therapy, respiratory disorder, and reconstituted powders.
The Technosphere® technology is a dry powder delivery system that allows pulmonary administration of therapeutics that are presently being administered via injections. The technology has competitive advantage over other drug delivery systems, as it can be applied to broad range of drugs, mimics intra-arterial delivery allowing for rapid drug absorption, and needle-free administration.
The company also has dry powder inhalers that when used in combination with Technosphere technology, delivers approximately 70% of the powder within respirable range. The inhaler technology includes DreamBoatTM technology for reusable inhalers and CricketTM technology for disposable inhalers.
The BLUHALE® technology, used for inhalation profiling, is a microphone based wireless technology for characterizing patient inhalation, adapted onto the dry powder delivery system.
Candidates
The lead product candidate of the company is Afrezza, in the late stage clinical investigation. It's a meal-time inhaled insulin therapy with rapid action, for treating patients with Type 1 and 2 diabetes mellitus to control hyperglycemia. The product uses drug-device combination consisting of inhalation powder and the Afrezza inhaler. The trials for the product have involved over 5,300 adult patients and 56 different studies involving MannKind Corporation. The most common adverse effects noted in the trials include hypoglycemia, and mild transient nonproductive cough. The trial results showed that the patients using Afrezza experienced better reduction in long term blood sugar levels, known as A1c levels, when compared with those on oral medications.
Another diabetes candidate is MKC253, in the preclinical phase of study. It's a formulation of GLP-1 (glucagon like peptide) on the propriety technology Technosphere® particle delivered using proprietary inhalers. The initial studies demonstrated that with the technology the dose limiting gastrointestinal (GI) intolerance associated with GLP-1 appear to have been avoided. It works by replacing the insulin response, which is can't be replicated by other GLP-1.
The cancer product candidate of MannKind is MKC1106 for immunotherapy through direct intra-lymph node administration of compounds that are immune active. The preclinical study and phase I proof of principle study showed that the intra-lymph node immunization allows for long-term control over the cancer process, with minimal side effects and better anti-tumor immunity. The MKC204 IRE-1α inhibitor, a drug discovery program, aims at exploiting the biochemical signaling pathway, which may have a role in myriad of diseases including cancer and inflammatory disease. The potential applications include treating neurodegenerative diseases, cardiovascular disease, breast, prostate and pancreatic cancers, B cell malignancies and autoimmune diseases.
Market Performance
The company has a year to date performance of 116% as compared to S&P's 25.25%, mostly attributed to the positive trial results that the company announced through the year. Along with this the sentiment regarding the company has remained positive, with an impending partnership expected for the Afrezza.
The target price set by the analysts is a mean of $8.13 with a low price of $5.00 and high of $12.50. The stock is currently trading slightly below its low price target at $4.99 as of November 21, 2013. The mean recommendation at the moment is to hold the stock.
Upcoming Events
The company expects to hear a final decision from FDA regarding the approval of the resubmitted NDA, in the April of next year, with a PDUFA date of April 15, 2014. The event is expected to have a major catalytic impact on the stock prices, as it will take the company a step closer to the launch of Afrezza.
The company is to participate in the PepTalk the Protein Science Week from January 13-17, 2014, and Drug Delivery Partnerships from January 27-29, 2014. Positive news from these events may prove to be catalytic for the stock prices.
Fundamentals and Potential Risks
The company had a dismal third quarter with a net loss of almost $50.8 million, a 10.1% increase from the previous quarter and an 18.7% increase from the third quarter of 2012. There are currently no revenues of the company, since it has no product sales or licensing agreements that could generate revenue. The operations are being funded primarily by sale of equity securities, convertible debt securities and loan from The Mann Group along with a Facility Agreement with Deerfield.
The expenses of the company also increased from the relative period of 2012 - R&D by 7.1% and general and administrative expense by 73.3% largely due to non-cash stock compensation. The company has cash and equivalents of $93.8 million as of September 30, an almost 229% increase from the previous quarter, owing to cash proceeds from certain public offering warrants before their expiration. The company expects the cash resources to be sufficient till the first quarter of 2014.
The company is looking for a strategic collaboration with pharmaceutical companies for the processes of development through to commercialization of its product Afrezza. In case of failure to attain such partnership the activities related to Afrezza will be delayed as the company doesn't have sufficient funds to develop it on its own. This has the potential to harm the business, since it's currently largely depending on Afrezza's success.
The company first filed for NDA approval in 2009 for Afrezza; however FDA didn't approve it and asked for additional clinical studies. The company has successfully met the endpoints of these trial studies and expects to get approved by the FDA. But there is still the risk of disapproval or demand of further studies by FDA, since insulin inhaler is a novel product and has yet to see a long term success. Pfizer's Exubera didn't stay in the market for long, as it was unable to gain patients and doctors acceptance.
Bottom-line
The company's product candidates are indeed promising and have the potential for successful products when and if launched. The lead product candidate Afrezza if approved is expected to have increased demand from patients with needle phobia. However, the market has been slightly skeptical towards the product owing to the previous failure of similar products.
The company's financial condition of the company should not been a worry considering the high interest of company management, Dr. Mann, in ensuring that the product is able to reach the market. The company also has the option to raise equity capital.
Overall the company has the potential to grow and generate revenues if Afrezza is approved and is consequently commercialized. The manufacturing facility for Afrezza is a plus point for the company as it will be able to control and effectively monitor its production. The shares have been range bound during the last couple of months and any news on the resubmitted FDA can result in a huge rally. The insider and institutional interest in the company has also been pretty high with institutional investors increasing their holdings by 6.8% during the last six months and insiders adding a further 39.8 million shares; increasing holdings by 40%. I believe MannKind is ready to breakout and is a very good long term investment at these levels.