Afrezza’s Outlook on April 1st

As you all may already know shares of MNKD were halted ahead of the AdCom. At Hereitfirst we have been monitoring for the last 4 months. We have come to believe that MNKD will almost certainly be approved for Type 2 diabetes. Type 1 is another story. We also believe that Afrezza’s approval for Type 1 diabetes is not as critical to MNKD’s future compared to Type 2’s approval. Why? It is because Type 1 affects only 10% of diabetics, ( small number). In conclusion, if Afrezza gets approved for Type 2 look for a growth of 30-50% if Afrezza gets approved for Type 1 & Type 2 the sky is the limit for MNKD. 

This Article was Written by Tri Duong of Seeking Alpha. To read the original article click here 



  • MNKD’s first two Complete Response Letters were for the same mistakes.
  • I believe Afrezza will be approved, because it’s safe and has met all primary endpoints.
  • Black Swans don’t exist in the in the FDA.
  • A different proposed dosing regimen is a concern.

MannKind’s (MNKD) Afrezza is a first-in-class, ultra-rapid-acting mealtime insulin therapy being developed to improve glycemic control in adults with type 1 and type 2 diabetes mellitus. The Afrezza clinical program, which has involved more than 6,500 patients, demonstrated the following results:

  1. Proven reductions in HbA1c
  2. A reduced risk of hypoglycemia vs. rapid-acting analogs
  3. Less weight gain vs. rapid-acting analogs
  4. Injection-free insulin delivery

Basically, Afrezza is not meant to replace all insulin therapy treatments on the market. It is being marketed and seeking approval to be an ultra-rapid-acting mealtime insulin treatment via an inhalable device called the Dreamboat.

Two Complete Response Letters

In the first Complete Response Letter, Afrezza was rejected due to MannKind using the different generation Medtone inhalers in the same studies. They were marketing the newer Medtone inhaler, while using the older one as well. The FDA called for further testing to achieve bioequivalence between the inhalers.

The FDA was absolutely right in their judgment. More importantly, it is their policy for every drug. Neither MNKD nor any other entity seeking FDA approval can bypass these strict policies.

In the second CRL, Afrezza was rejected once again for the same reason. MNKD decided to use the latest Medtone inhaler in the clinical studies, along with the Dreamboat inhaler. They also only market the Dreamboat inhaler. Instead of getting into a long explanation, I’ll cut to the chase. Sometimes smart people make some very dumb mistakes, because they are focused on the goal instead of the rules or common sense.

I believe Martin Shrekli’s letter had no impact on the FDA’s decision. Shrekli is a former Seeking Alpha contributor and hedge fund manager, who wrote a letter to the FDA persuading them to reject Afrezza. Shrekli’s letter content (noting the bioequivalence of the two different inhalers) was received by the FDA, and another CRL was issued to MNKD several days later. In Shrekli’s defense, he did disclose his intentions and positions stating that he would benefit financially if the FDA adopts his viewpoints. An investigation by Robert Khuzami, a director of the SEC, was launched, and details released in January 2012. You can view it here, including the letter he sent to the FDA, for more details.

Considering the second CRL is for the same reason as the first CRL, because MNKD made the same mistake, I don’t see how Shrekli’s letter had any impact. In fact, it was obvious that Afrezza was to be rejected. Shrekli may have been unethical to some people, but his observation was correct and he did nothing illegal. Please note that neither of these CRLs mentioned anything about efficacy of the drug itself. The inhalers are in question, not the insulin.

The Phase III trials

MNKD decided to listen and cooperate with the FDA the third time to set up their trials correctly. Results are positive, as expected. What’s more important is that they have a clinical trial that is done correctly.

Click to enlarge images.Image from Study 171 brief linked above.

Finally, MNKD used the same inhaler (Dreamboat/Gen2) throughout the entire study, and compared it to the previous Medtone, as well as another insulin aspart. Bioequivalence is achieved. The Gen2 inhaler showed non-inferior results, with significantly less hypoglycemia.

Image from Study 171 linked above.

The study met its primary endpoints, and MNKD did not make the same mistake of switching inhaler devices in the middle of clinical trials.

Black Swan Myths and Exubera

First, let’s get Exubera out of the way. Exubera is a cumbersome, inconvenient, expensive and difficult-to-operate piece of hardware. There’s no comparison between the Dreamboat and Exubera. Dreamboat with Afrezza is cheaper, smaller, more effective and actually gets better results. I don’t think anyone wants to be seen with Exubera in public, even if they can bear the cost, since most insurance companies did not want to insure it.

There are many analysts predicting there are unpredictable events and even corruption within the FDA. They call it “Black Swans.” Let me stop there and remind you that the type of people on these boards, AdCom and FDA, are scientists first, and their reputation is their life. Scientists don’t normally view their career as just a career. It is a way of life, just like the military. Their published work, which is heavily scrutinized in peer reviews, is like badges of honor equivalent to medals in the military. The bonuses are extremely insignificant. As someone who worked for the USGS with hundreds of world-renowned scientists making global impact on our quality of life and probably saved millions, I can tell you the highest bonus I’ve ever seen is $10k. Most are under $5k.

It doesn’t help that around the time of Shrekli’s case, Chang Yi Liang’s insider trading also unfolded. Liang had bought and sold stocks using information he obtained through his position in the FDA that was not public. He profited by more than $3.7M in over 25 stocks by using names of his friends and relatives, concealing his identity. Liang was investigated by the SEC, and eventually pleaded guilty, with a five-year prison sentence. These two stories strengthened the Black Swans theory, but I think it is just a coincidence, because this is a very rare case.

There’s the argument that most FDA officials, like Liang, are corrupted. I can tell you as someone who worked for all three sides (military, federal, and private) that corruption is everywhere, but there’s very little probability of that happening in the federal government. I think many people are conflating politicians with federal employees, and there’s a massive difference. This is because you need to have a high position to get this kind of information. People in those positions are forced to sign an agreement that they cannot invest in certain equities, or in defined limited amounts. They are also investigated initially and from time to time.

But the most important reason why almost no one will do that is because the risks are too high. After spending decades to get to your high position, you are close to retiring with a large pension plan and nest egg in your Thrifts Savings Plan. Most of these scientists can easily retire and walk in the next day as a consultant or contractor. They can literally make millions, depending on what they want to do. Like most scientists I know, it’s not about the money.

Basically, the Black Swans theory is unfounded. There’s no such thing as a random chance of an unimaginable event that immediately points to rejection. These events can only delay the process, at best, because the direct evidence causing both previous CRLs so far are legitimate, regardless of how you look at it. MannKind simply did not meet their endpoints.

For someone to influence the FDA, they must buy out all the people on the board, which is nearly impossible. If it is about monetary gains, they wouldn’t try to reject the drug anyway. It’s much easier to make hoards of money by selling insider information without getting caught. Then, there’s the problem of the human conscience, especially for medical researchers. As greedy as some of them may be, nobody wants the guilt of rejecting a drug that could save millions of lives. The only logical corruption would be selling insider information, which shouldn’t affect approval decision.

I am not saying there has never been any corruption in the federal government. Obviously, there’s been plenty, because there are also over 800,000 federal employees, and it tends to make the news because it’s the government. The last thing anyone wants is their tax dollars wasted. This is why all expected data, results, and endpoints are expected to be quantifiable. Everything must be in numbers, not feelings. This is the only fair and scientific way to analyzing and assessing data.

Dosage Concerns

The one concern I have after reading the FDA briefing document was dosage. On page 19, you will find this note.

Why they did clinical trials on one dosage and propose a different dosing regimen is beyond me. The FDA reviewer stated that “…we find that the clinical pharmacology data in this submission does not adequately support the new proposed dosing regimen and the respective dosing conversion factors…”

This is a real concern for me, as MannKind seems to ignore the purpose of clinical trials. They should have just kept it the same. This is scary considering they did the same thing with the inhalers and received two CRLs for it. However, I don’t think this is as crucial as a delivery device/inhaler. The FDA can simply make them use the appropriate dosage proven by clinical data.


Combining all the facts and data presented, I am on the side that says Afrezza will be approved. For the third time, they have completed everything on the checklist and followed the FDA’s instructions. The drug itself should have no problems, since there were no problems concerning it in the first and second CRLs — the one minor concern being the proposed dosing regimen.

The bottom line is that the results are positive. All endpoints are met. The drug is relatively safe. Efficacy is not in question. Bridging is achieved. In the conclusion of the briefing document, the reviewers were more concerned with post-marketing study details and long-term pulmonary malignancy (pg. 225 and on). Both of those concerns are not things to reject Afrezza over, as Exubera was approved for both T1 and T2 with the same concerns.


About Mitchell Fung

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6 Responses to Afrezza’s Outlook on April 1st

  1. Very interesting. As a Pharmacist i have kept an eye on this and the trial reaults look good. Diabetes is a massive issue so we have something of value here.

  2. As a Pharmacist i can say this sounds very promising. The trail looks good to me.

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