MNKD: Advancing toward Commercialization (Griffin Securities

[otherottawaguy]

Just recieved this from Griffin Securities. You may remember Dr Markey the authour asking question at yesterdays CC.

griffin.bluematrix.com/sellside/EmailDocViewer?encrypt=7d5c1d92-cf1f-47fb-8b5b-a82d6b120d33&co=griffin&mime=pdf&id=[e-mail]

MannKind Corp. Buy
Company Update : Pharmaceuticals
Advancing toward Commercialization
Mannkind reported its financial results for 2013. Operating
expenses rose on higher non-cash stock compensation costs
related to a vesting of stock awards and achievement of regulatory
and business milestones. The year closed with $70.8 million of
cash on the balance sheet, which based on a cash burn rate of $10
- $12 million per month, should support operations to mid-year.
Preparations are under way for the FDA Advisory Committee
meeting, tentatively scheduled for April 1st. (The date is tentative
until it is published in the Federal Register.) An outside consulting
firm is working with the Company to prepare for the presentation.
Until the briefing book is submitted, the focus of the meeting
will not be known. But it seems likely the panel will consider
such safety issues as the mild cough that accompanies initial
use of the drug, lung function, and the reduction of hypoglycemic
events noted with Afrezza. Use of the drug by type 2 diabetics will
probably also merit attention to help the FDA ascertain suitable
language for the label.
A partnering agreement will probably come after approval,
unless the Advisory Panel meeting goes exceptionally well.
Mannkind does not have the resources to promote Afrezza in
the hotly contested diabetes market. As a result, it has been
in discussions with potential partners worldwide. We believe
the discussions are far enough along that a deal could be
consummated once the regulatory risk has abated significantly
with a strong backing of the Advisory Panel or entirely by FDA
approval. The PDUFA date is April 15th, but the agency is not
known to adhere to that deadline.
Mannkind is scaling up its manufacturing capacity with two
additional fill and finish lines that should be operational by 2015.
The goal is to have sufficient capacity to produce 375 million
insulin cartridges per annum at launch. Plans call for Afrezza
to debut in two dosage strengths (3- and 6-units per cartridge),
followed by another two doses (9 and 12 units). The higherdose
cartridges, which should enable most diabetics to rely on a
single inhalation, will likely be available about the time insurance
reimbursement is in place. Accordingly, we believe demand will
accelerate in the second half of 2015.
We are encouraged by the ongoing work and are maintaining
our BUY recommendation. Still, we recognize the binary nature
of the FDA review may not suit all investors.

Keith A. Markey, Ph.D., M.B.A.

[otherottawaguy]

Tried to post this yesterday, but it didn't seem to work:

Keith A. Markey, Ph.D., M.B.A.
[e-mail]

MannKind Corp:    Buy
 
Company Update : Pharmaceuticals
FDA Advisory Committee Meeting Is Official

Please click here for full report, including disclosures.
 
Notice of the FDA Endocrinologic and Metabolic Drug Advisory Committee meeting has been published in the Federal Register, which means that the date is now official, April 1st. The meeting is scheduled to open at 8 AM and to close at 5 PM. ​

MannKind has ample data to support its NDA. The Company has conducted numerous studies involving more than 6,500 individuals to assess all aspects of its novel insulin formulation and delivery devices. The results have been consistent - Afrezza delivers insulin in a manner closely resembling the natural release of hormone from the pancreas at mealtime. As a result, the drug improves glucose control as evidenced by reduced HbA1c levels and it does so with less risk of hypoglycemia than alternative forms of insulin therapy. One of most recent trials found that type 1 diabetics had a lower incidence of severe hypoglycemia with Afrezza than with a short-acting insulin analog regardless of the ending HbA1c levels. Another trial showed that the addition of Afrezza to oral drug regimens used by early type 2 diabetics resulted in a significant drop in HbA1c levels and to less than the American Diabetes Association's target of 7% in 38% of the subjects. Finally, the Company has demonstrated Afrezza is not associated with clinically meaningful changes in pulmonary function or with increased risks of cardiovascular disease or cancer.

A partnering agreement should give Afrezza solid marketing support. MannKind is well along in discussions with established drug company's worldwide to gain experienced promotional support for its drug. Terms of the ultimate deal(s) will probably reflect the Company's desire for a sizable upfront fee to expand its manufacturing capacity in 2015 and for attractive back-end compensation based on sales. MannKind had $70.8 million of cash as of December 31st and access to another $30 million via a line of credit from its Chairman and CEO, Alfred Mann. In addition, Deerfield has agreed to provide $40 million upon FDA approval through a debt agreement.

We think the risk-reward balance is quite favorable. While the FDA decision is a binary event, the Company has laid a solid foundation for approval. Accordingly, we expect MannKind's novel insulin therapy to be approved for most of the 18 million diabetics in the United States, and we are maintaining our BUY recommendation and $12.50 price target.