Post by nemzter on Apr 2, 2014 13:11:02 GMT -5
www.forbes.com/sites/samanthasharf/2014/04/02/shares-of-mannkind-intuitive-surgical-soar-on-fda-oks/
The Food and Drug Administration controls the food on your plate and the medication used to treat your ailments. As a result FDA approval can also be the difference between success and failure for medical companies trying to bring new ideas to market. Just this week shares of MannKind MNKD +78.11% Corp and Intuitive Surgical ISRG +4.23% have soared on announcements that the companies have each cleared hurdles en route FDA approval.
“The FDA, for almost all the healthcare companies, is the key gatekeeper that lets them in or keeps them out of the largest healthcare market in the world,” explained Morningstar MORN -0.88% analyst Stefan Quenneville. He noted that the U.S. can account for more than half of a biotech company’s revenue.
Shares of MannKind were up close to 75% Wednesday afternoon. The stock soared as high as $8.08 on news that a panel of advisors recommended the FDA approve Afrezza, an inhaled diabetes treatment the company has been trying to get approved since 2009.
The jump for MannKind comes after the stock suffered steep declines based on worries the drug would fail again. The FDA has declined Afrezza three times, and briefing documents released by the FDA in advance of the advisors’ meeting stoked investors fears. From Friday through Monday shares fell 28.7% from $5.64 to $4.02. Quenneville noted that rigorous FDA reviews are typical, as are drops as investors digest the new information.
The stock’s frequent peaks and valleys have caused billionaire CEO Alfred Mann’s fortune to similarly rise and fall. But Wednesday, Mann, the company’s largest individual shareholder, saw his net worth soar more than $380 million on the pop, up more than 40%.
The committee voted 13 to 1 for the drug to be approved as a treatment for type I diabetes, and unanimously recommended it be approved as a type II diabetes treatment. The FDA is expected to complete its review by around April 15. While the agency is not required to follow the committee’s recommendation it typically does.
In a note on the decision Quenneville wrote, “With the FDA panel behind it, MannKind’s near-term focus remains on the potential signing of a commercialization partner for Afrezza. The news will likely accelerate the partnering process, as well as improve MannKind’s bargaining position, as the uncertainty surrounding the FDA has been largely resolved.” MannKind still has a lot of work to do, so while the near approval is good news impatience and glitches could still cause the stock to lag.
Tuesday Intuitive, maker of minimally invasive surgical technologies, announced that the FDA had give clearance for the U.S. introduction of the da Vinci Xi Surgical System. Intuitive shares gained close to 13% Tuesday, making it the S&P 500′s best performer of the day. Shares continued gaining Wednesday, up about 4% at midday after soaring as high as $513.48.
“Our goal is to develop technology that enhances surgical performance,” said CEO Gary Guthart. Explaining that the next generation product’s “new overhead architecture means that multi-quadrant surgery can be performed without repositioning the system, an innovation long sought by surgeons who perform complex procedures.”
In a note on the Intuative announcement Morningstar’s Alex Morozov wrote, “We anticipate this platform will be well received by several surgical specialties, particularly general and cardiovascular surgeons, and has the potential to reverse the recent trend of the significant growth deceleration in system placements. The Xi rollout also reinforces our assessment of the company’s moat (wide) and moat trend (positive), which is largely predicated on Intuitive extending its technological superiority, penetrating markets previously untapped, and maintaining its monopolistic competitive positioning.”
Quenneville explained that while FDA approval is positive for the more established Intutitive, the news is less dramatic since the stock is already popular.
The Food and Drug Administration controls the food on your plate and the medication used to treat your ailments. As a result FDA approval can also be the difference between success and failure for medical companies trying to bring new ideas to market. Just this week shares of MannKind MNKD +78.11% Corp and Intuitive Surgical ISRG +4.23% have soared on announcements that the companies have each cleared hurdles en route FDA approval.
“The FDA, for almost all the healthcare companies, is the key gatekeeper that lets them in or keeps them out of the largest healthcare market in the world,” explained Morningstar MORN -0.88% analyst Stefan Quenneville. He noted that the U.S. can account for more than half of a biotech company’s revenue.
Shares of MannKind were up close to 75% Wednesday afternoon. The stock soared as high as $8.08 on news that a panel of advisors recommended the FDA approve Afrezza, an inhaled diabetes treatment the company has been trying to get approved since 2009.
The jump for MannKind comes after the stock suffered steep declines based on worries the drug would fail again. The FDA has declined Afrezza three times, and briefing documents released by the FDA in advance of the advisors’ meeting stoked investors fears. From Friday through Monday shares fell 28.7% from $5.64 to $4.02. Quenneville noted that rigorous FDA reviews are typical, as are drops as investors digest the new information.
The stock’s frequent peaks and valleys have caused billionaire CEO Alfred Mann’s fortune to similarly rise and fall. But Wednesday, Mann, the company’s largest individual shareholder, saw his net worth soar more than $380 million on the pop, up more than 40%.
The committee voted 13 to 1 for the drug to be approved as a treatment for type I diabetes, and unanimously recommended it be approved as a type II diabetes treatment. The FDA is expected to complete its review by around April 15. While the agency is not required to follow the committee’s recommendation it typically does.
In a note on the decision Quenneville wrote, “With the FDA panel behind it, MannKind’s near-term focus remains on the potential signing of a commercialization partner for Afrezza. The news will likely accelerate the partnering process, as well as improve MannKind’s bargaining position, as the uncertainty surrounding the FDA has been largely resolved.” MannKind still has a lot of work to do, so while the near approval is good news impatience and glitches could still cause the stock to lag.
Tuesday Intuitive, maker of minimally invasive surgical technologies, announced that the FDA had give clearance for the U.S. introduction of the da Vinci Xi Surgical System. Intuitive shares gained close to 13% Tuesday, making it the S&P 500′s best performer of the day. Shares continued gaining Wednesday, up about 4% at midday after soaring as high as $513.48.
“Our goal is to develop technology that enhances surgical performance,” said CEO Gary Guthart. Explaining that the next generation product’s “new overhead architecture means that multi-quadrant surgery can be performed without repositioning the system, an innovation long sought by surgeons who perform complex procedures.”
In a note on the Intuative announcement Morningstar’s Alex Morozov wrote, “We anticipate this platform will be well received by several surgical specialties, particularly general and cardiovascular surgeons, and has the potential to reverse the recent trend of the significant growth deceleration in system placements. The Xi rollout also reinforces our assessment of the company’s moat (wide) and moat trend (positive), which is largely predicated on Intuitive extending its technological superiority, penetrating markets previously untapped, and maintaining its monopolistic competitive positioning.”
Quenneville explained that while FDA approval is positive for the more established Intutitive, the news is less dramatic since the stock is already popular.
