Another Step Back For MannKind?
11 CommentsBy Ed Silverman // June 11th, 2010 // 9:07 am
The long-running and expensive quest by Alfred Mann, a Los Angeles billionaire and philanthropist, to develop an inhaled insulin device took another odd turn this week. His company, which has the not-so-modest name of MannKind, has already irritated investors by what some Wall Streeters say has been a lot of hype over opportunities for potential marketing partners and, importantly, FDA approval.
Disappointment and skepticism mounted, in fact, last March, when the FDA issued a complete response letter. Given that Mannkind must resubmit a new drug application for its Afrezza inhaler, any meeting with the FDA would be significant, especially since the plan now calls for switching devices. Yet, MannKind execs not only downplayed a recent ‘end-of-review’ meeting, but practically hid it from view when announcing new study results that were received with mixed reviews (the study showed Afrezza worked as well as injectable Humalog in treating Type 1 diabetes).
Take a close look at this press release and see where the notice about a recent meeting with regulators appears. Here’s a hint: all the way at the bottom in the section that otherwise contains boilerplate info about the company. If you think this is unusual, you’re not alone.
“We are disappointed at this approach to disclosure for an important regulatory step and with its vagueness, particularly given recent hits to credibility on areas not visible to investors like regulatory and the partnership front. Investors should expect MannKind to find an appropriate way to provide more detail,” writes RW Baird analyst Tom Russo in an investor note, who also called it “strange” and adds that “meaningful uncertainty” about the FDA’s views remain.
“To gloss over the most important meeting the company has ever held seems a bit odd to us,” writes Hapoalim Securities analyst Jon LeCroy. “At this point we have no idea what will be required in order to re-submit the NDA and are unsure why the company would not provide some insight into what was possibly the most important meeting in the company’s history.” Both analysts, by the way, headlined their notes the same way: ‘Oh, By The Way, We Met With The FDA.’
Just the same, MannKind does have supporters. In his own note, which was called ‘A Good Day for MannKind,’ Rodman & Renshaw analyst Simos Simeonidis continues to remain bullish on Afrezza. “It is obviously good news to have the meeting with FDA behind them, so the company can have a clearer idea on what the agency wants, so they can start putting together their response to the agency, which the company places sometime in July.” He also felt the study results were positive.
The episode is, well, interesting, yes? It’s possible MannKind saw the meeting as a necessary and widely expected procedural step, so there was no need to trumpet the session. On the other hand, given the response to their record, MannKind execs should have sensed a need to use this as an opportunity to regain some confidence. As they say, two steps forward, one step backward. Or maybe this company has this reversed?
silentbob
Fools. They talked about it on the shareholder meeting on the same day. The recording is freely available on the Mannkind website.
Both analysts and the ‘reporter’ fail to mention that.
Ed Silverman
Hi Silent Bob,
Thanks for the note. And I understand your point, but press releases are still widely disseminated and, in this case, was the initial channel used to communicate the information.
Whether the matter was later discussed in a webcast doesn’t obscure the fact that the company buried significant information in its initial dissemination. MannKind may have fulfilled its obligation to disclose material information, but they did so in a way that, under the circumstances, is peculiar.
And that is the point I was trying to make - not that MannKind hadn’t or wouldn’t further discuss the fact that the meeting took place or what may have been discussed.
I hope this helps,
ed
lote
I’m confused by your choice for the title. What is the “step back” you have hinted at? Was an issue rejected, or additional requirements requested? Please clarify.
Karl Icahn
Is the author reading and drawing conclusions based on the body (of the press release) language. Please mention that your analysis is totally based on what kind of message is at what place of the release. Does the author think that that is the company’s way of informing the world that there is a bad news? I thought FDA meeting was well on the cards in early June, as per the company’s earlier releases.
Author should also mention what kind of research there have been where you can draw conclusion from the placement of the kind of of different messages in a press release.
ITELLTHEFUTURE
Your clown bagging is rediculious! I am a long on Mannkind stock, and can say clearly, that Al Manns reputation is better then EF Huttons!
I am 110% confident in the Leadership of Mannkind! I am absolutely convienced that they have the worlds largest selling drug Afrezza in the future. Secondly, their Cancer vaccine is 3X more effective then DNDNs Provenge from what I read! Afrezza is superior to the gold standard and in a small study when used alone had Zero hypoglycemic events on a zero carbohydrate diet..IN ALL CASES! Experts when ask how that was possible said, “Its Obvious! Afrezza may be halting the progression of Diabetes!” imagine that! Halting progresssion towards blindness, amputations, liver, heart and other diabetes related Ailments. Heck even the Mayo clinic says that Inhaled insulin may help with Alzhiemers! Clown bagging Mannkind is getting a little old..don’t you guys have any new material? Like instead of complaining of where the reporter puts things in an article..I do not see anything wrong with the drug! ZERO! ZIP! BOTTOM LINE…SUPERIOR INSULIN ANYWAY YOU SLICE IT!!!!!!
Ed Silverman
Dear Lote, Karl and I Tell The Future,
Thanks for your notes. As I indicated in the post and my earlier reply to another commenter, I was referring to the unusual placement of rather important news in a press release. I was not referring to the drug itself or the prospects for the drug. Please read it again if you’re not sure.
Also, I did not suggest MannKind execs were hiding bad news, as one person was wondering. My choice of wording for the ‘Step Back’ headline was referring to the continual questions the company has raised among some analysts as to their ability to communicate effectively, if not accurately.
By burying this particular event, the company appears not to have helped its cause. Two analysts went on record to that effect, so I thought it was worth noting. Another didn’t think it was issue - the Rodman & Renshaw analyst didn’t raise this point - and so I noted that as well.
And finally, no, unfortunately, there are no studies - at least none that I am aware of - concerning the meaning of placement of information in news releases. That said, important or significant info usually appears higher up rather than lower down. Of course, no one is obliged to take my word for it.
Perhaps MannKind’s next step will be a great leap forward for all concerned.
Regards
ed
pharmavet
Ed: I thought that your title was a play on words on Neil Armstrong’s famous quote.
Condor
Hello all — I think Ed’s points are well-made.
Disclosure: I am, by profession, a practicing securities lawyer, having represented public and private pharma/med device and biotech clients for over 25 years now, in just these sorts of SEC disclosure/FDA interface issues.
It is a very tricky area, as FDA may provide companies (like MannKind) with some pretty important information “in between” the normal time windows (i.e., at or near quarter- or year-ends) for the most orderly dissemination of such disclosures, under the SEC rules.
It appears that MannKind makes ongoing FDA development disclosures in its “About MannKind” paragraph, at the end of at least these four press releases [ One ". . .In March 2010, MannKind received a Complete Response to this NDA from the FDA requesting additional information. Currently, AFREZZA remains under regulatory review. . ." | Two ". . .MannKind has submitted an NDA to the FDA requesting approval of AFREZZA for the treatment of adults with type 1 or type 2 diabetes for the control of hyperglycemia. Its other programs are currently in Phase 1 clinical trials. . ." | Three (same disclosure as Two.) | Four (The disclosure Ed mentions in the above article.) ]
That said, it is — in my considerable experience — unusual, at best, to put NEW FDA complete response, or FDA review meeting outcome disclosures about a material candidate drug or program, AND FOR THE VERY FIRST TIME, ONLY in the “About. . .” paragraph at the end of a press release — for all the reasons Ed mentions.
I note that in March 2010, MannKind did separately press release the request from FDA for additional information, on Afreeza, here. In January 2010, it separately press released the FDA delay in review.
ALL OF THAT renders this latest June 10, 2010 “About. . . footnote” style disclosure rather inconsistent with prior practice — at best.
It seems that MannKind could well be criticized by the SEC Corp. Fin. staff lawyers, in a comment letter (were the matter to be carefully reviewed by staff), based on the inconsistent disclosure styles.
MannKind’s chief explanation — I presume — would be that it did not regard the June 10, 2010 (update from FDA complete review meeting) as being as important as the January 2010, or the March 2010 developments.
The general rule would be to highlight roughly eqal developments — whether positive, or negative — in similar fashion. Finally, I will note that MannKind did not definitively declare ANY of these material to the SEC, by filing a Form 8-K in connection with the press release(s). That judgment might also be suspect, now, with the benefit of 20-20 hindsight.
As I say though, it is a difficult area.
On balance, I think MannKind ought to focus on making it easy for analysts to understand their story — not making it a game of “hide and seek“.
Way more than my $0.02 — I know. . . .
Namaste — great work, Ed!
Condor
Forgive my typos, above — my thumbs are thicker than the iPhone’s keypad. Way. Thicker.
And I too, saw the headline as a sly reference to Armstrong’s own “PR gaffe” (now preserved in perpetuity, no less!), as he set foot on the lunar surface — omitting the “a” in front of “man” — “one small step for A man. . .” — with the rest, as it was.
Namaste
Salmon
FDA changed policies on August 10, 2008 to no longer give approvable letters or nonapprovable letters and instead to give complete response letters. Approvable letters had been issued when there were minor issues that could be taken care of with additional information. (In truth there had never been a legal basis for approvable letters.) It should be noted that end of review meeting are specified in the FD&CA when the drug will not be approved and the sponsor requests a meeting to find out what they need to fix. Consequently the fact that there was an end of review meeting and requirements for additional studies is a clear signal that the drug was not approved and that it may be a few years before they can even submit another NDA.
Salmon
M. Black
Karl!!! So nice to see you!!!
I hope they are giving you meat at least three times a week.
MB