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The U.S. Food and Drug Administration’s (FDA) Endocrinologic and Metabolic Drugs Advisory Committee will be reviewing MannKind Corporation’s (MNKD - Analyst Report) New Drug Application (NDA) for its lead candidate, Afrezza (inhaled insulin), tentatively on Apr 1, 2014. MannKind’s shares dropped 16.4% on the news.

MannKind is looking to get Afrezza approved for the improvement of glycemic control in adult patients suffering from type I or type II diabetes. We note that MannKind has already received two complete response letters (CRL) for Afrezza from the FDA. While issuing the second CRL in Jan 2011, the FDA asked the company to conduct two phase III trials (study 171 and study 175) with the next-generation inhaler.

In Oct 2013, MannKind resubmitted the NDA for Afrezza on the back of positive results from the phase III studies. Although a final decision from the U.S. regulatory body is expected by Apr 15, 2014, a further delay in approval or even a third CRL cannot be entirely ruled out. MannKind is dependent on the success of Afrezza and an additional delay in gaining approval will weigh heavily on the stock.

The track record of previously approved inhaled insulin drugs like Pfizer’s (PFE - Analyst Report) Exubera (the first inhaled insulin to be approved in the U.S. in 2006) has been pretty disappointing. Pfizer was forced to stop market the drug after disappointing sales of the drug. Exubera accounted for a mere $12 million in the first three quarters after launch. Pfizer also faced severe safety issues while marketing the drug.

Following the failure of Exubera, other big players including Eli Lilly and Company (LLY - Analyst Report) discontinued their inhaled insulin programs citing lack of confidence in the regulatory environment and market prospects of an inhaled insulin product.

Currently, we have low visibility on the questions that will be raised at the FDA advisory panel meeting – we expect investor focus to remain on the outcome of this meeting.

MannKind, a biopharmaceutical company, presently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the biopharmaceutical sector include Actelion Ltd. (ALIOF) with a Zacks Rank #1 (Strong Buy).

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