Next Generation Diabetes Treatments

MannKind's Inhaled Insulin Could Provide A Non-Needle Alternative

Of the companies discussed in this write-up, MannKind Corporation (MNKD) is undoubtedly the best known, but may have just as much a chance at upside as the others, if not more - even after another five percent price spike on Tuesday. That rise followed numerous days of notable upticks since the opening bell of the week prior.

Although MannKind is still considered a speculative play because the Phase III inhaled insulin product Afrezza has already been brought before the FDA and denied, the current trials have been designed in a manner that has the company and investors enthusiastic about its prospects for success. The problem with the trial from a couple of years ago, for example, was not related to the effectiveness of the treatment, rather it was the fact that the company utilized one inhaler for the trial, while intending to market Afrezza with the next-generation device. The FDA requested the additional trials to confirm efficacy with the next-generation device and that is what the company is now doing.

With trial results slated for release over the course of the coming quarters and an NDA filing also expected this year, MNKD has plenty on tap to keep investors interested. Financing is no longer a major concern thanks to a deal struck last fall, so these upcoming milestone events have the potential to allow the MNKD share price to appreciate in value unabated, aside from the expected routine volatility, profit taking and consolidation of the sector. It also helps the financing cause that company CEO and founder Alfred Mann has put his money where his mouth is and invested over a billion dollars of his own personal fortune into the development of Afrezza.

Another aspect that may be a driving force behind the company's fifty percent gain since the post-financing lows is the ongoing speculation of a buyout or partnership. Such discussions could add instant fuel to the fire, as we saw last week, and may become even more heated later in the year around the time results are expected to be released, especially if those results are positive. Big pharma is well aware of the growing need for new and innovative treatments for diabetes, noting the epidemic discussed in the open, and Afrezza could potentially be considered a billion dollar product in itself, if it ever garners approval, based on the size of the target market - that could be enough to attract a buyout offer or two.

Just recently, volume rolled in at roughly five times the trading norm as partnership rumors made their rounds, although the consummation of any deal is unlikely to come before results are slated for release.

That said, there are still quite a few hurdles that Mannkind has to negotiate before investors again become true believers. Not only does Afrezza have to prove it can make it through trials, it then has to prove it can make it through the FDA, and that's been tried twice before. They say the 'third time is a charm,' although a skeptical investing crowd out there feels like it has seen this story before. The recent trading action could be an indication that investors are starting to accumulate positions again, but it's also likely that investors buying in at these levels would be inclined to bank some profits into any major bump higher, which would invite volatility over the coming weeks and months - but that's nothing new to the sector.

Headlines have speculated that MNKD could become one of the better plays of 2013 and there is a good chance that could be the case if the trial results are positive enough to attract big pharma interest. Either way, a pre-results runup is likely, but expect some skepticism to prevail, given the drama surrounding Afrezza's development thus far.

http://seekingalpha.com/article/1270591-mannkind-sanuwave-antriabio-speculatively-investing-in-next-generation-diabetes-treatments?source=yahoo