10-year

10-Year Anniversary Promotion (20% off)

Join GuruFocus Premium Membership Now for Only $279/Year

Once a decade discount

Save up to $500 on Global Membership.

Don't Miss It !

Free 7-day Trial
All Articles and Columns »

Mannkind Corporation: Why Afrezza Would Completely Dominate The Insulin Market

July 16, 2014 | About:

Mannkind Corporation (MNKD) is a small company based in Valencia, California, focusing on the development and commercialization of medicine to treat diabetes. Mannkind's lead drug, Afrezza, was FDA approved on June 27, 2014, as treatment indication for patients with both Type 1 and Type 2 diabetes. The company's proprietary Technosphere is a novel drug delivery system that enabled Afrezza, super rapid acting insulin, to be delivered through a small whistle like device called the Dreamboat immediately prior to mealtime.

Description: Macintosh HD:Users:hungvinhtran:Desktop:cricket.png
Source: Mannkind

Unlike Mr. Market, who had been consistently wrong regarding Afrezza's advisory committee (ADCOM) votes, trials data, and the FDA final approval, I am highly optimistic regarding the drug's commercial success. Moreover, I hope to elucidate and clarify Afrezza superiority over needles injection through the lenses of a physician, patient advocates, researcher, and research analyst.

Despite needles being ultra thin these days, problems associated with prolonged use like inconvenience, scarring, stigma, and psychological fear persist. To self-administered injection, patients usually have to be excused to the bathroom. This does not bode well in modern society, one that is evolving toward increasing technological advancement. As a rule-of-thumb, a successful products necessitates user's friendliness and convenience.

In contrast to injections, Afrezza was ingeniously designed with unparalleled simplicity and convenience. By simply inhaling Afrezza through a tiny inconspicuous Dreamboat, patients could easily have insulin immediately available before mealtime to optimize blood sugar control. Diabetes would be easily as long as blood sugar is well controlled.

It is important to note that tissue scarring indeed occur with prolonged needle-use due to the needle breaking up collagen in subcutaneous tissue, and our body natural tendency to reestablish the tissue's integrity. Also, many patients who just started injection tend to make injecting mistakes that amplify scarring. The needle's aesthetic unappealing hinders patient's compliance, thus, explaining such high rates of diabetes complications.

Though pain associated with injections is real, the psychological anticipation of pain is more painful. This anticipation of pain persists, even if we could develop needles thinner than our hair that are technically "painless." Hence, patients who have not been on insulin injection, commonly referred to as "insulin-naïve" by physicians, would favor Afrezza over conventional insulin injections.

It is imperative for investors to note, needles stigma is real. When using needles in public for insulin injection, patients would fear being labeled as "junkies" and other colorful names. This social pressure has particularly strong impacts on patients with Type 1 diabetes, who tend to be teenage patients. Stigma is a powerful deterrence, hindering patient's compliance, and causing patients to lose their sight, limbs, kidneys, as well as, increasing the risks of heart diseases and hampering the body natural ability to heal itself.

In my prior work as an MD, I witnessed diabetes complications and its devastation not only to the patients but also to their family. Diabetes complications also have consequential economic ramifications as the annual spending tallied up to $245 billion. Hence, it would be reasonable for politicians, clinicians, and advocates to support Afrezza from the economic viewpoint.

Pertaining to the medical and scientific perspectives, conventional rapid acting insulin like Humolog and Novolog do not exhibit the same kinetics as Afrezza. The competitive edge for Afrezza is its super rapid acting pharmacokinetics, enabling it to mimic the action of the natural human pancreas. Hence, this clearly distinguished Afrezza from all competitors ... even the commonly mentioned inhale insulin, Exubera, which is delivered through a bong, because Exubera only exhibits regular RAA kinetics. Furthermore, Afrezza super rapid acting property would enable the drug to work faster, allowing patients to use insulin immediately prior to mealtime, having insulin exiting the body quicker, thus, minimizing the dreaded complication of hypoglycemia.

Nonetheless, Afrezza comes with the price exhibiting slightly less A1c – a marker of how well diabetes is controlled – reductions but it's insignificant when assessing the big picture. Prescribers like doctors, NP, or PA could always increase the prescribing dose of the basal insulin, as Lantus or Levemir, to achieve optimal hemoglobin A1c while enjoying the freedom from hypoglycemia, stigmatization, inconvenience, and tissue scarring.

My informal surveying of physician colleagues and patients indicated that the medical community would highly welcome Afrezza market entry. For instance, patients from "Better Health," which is a nonprofit diabetes support group, were fascinated with the story on Afrezza.

Regarding physicians prescribing pattern, personal preferences and more importantly patient's preferences indeed play significant roles. After all, a medically effective treatment would be obsolete if it does not win the patient's heart. It appeared that the overwhelming majority of patients highly favored Afrezza, forecasting the revolutionary drug's path toward being a blockbuster. Furtheremore, an independent research firm conducted surveys of physicians last year, also, revealed evidence of overwhelming physicians' support for Afrezza.

The bottom line is that Afrezza demonstrates characteristics of a potential blockbuster in the making, but Mr. Market is quoting Mannkind shares in the mid $9, which is highly undervalued versus comparative market analysis valuation of $38 per share. As Afrezza hit the market with increasing success, echoing stories from Main Street physicians and patients, Wall Street will quote the stock at significant premium than its current shares price. According to the Illustrious Investor Peter Lynch, it pays to bet against the pessimistic Mr. Market, as well as, to practice due diligence, patience, and conviction.

Readers could access 360 Biotech research articles on Mannkind by clicking on the referenced links below:

  1. A Featured Presentation On Mannkind Corporation's Revolutionary Diabetes Treatment
  2. Transcending Traditional Security Analysis, Integrated Investing Research Shed Light On Mannkind Corporation True Value
  3. In Al We Trust
  4. Amidst Buyout And Partnership Anticipation - Mannkind Is In Good Hands
  5. Where's Mannkind Heading After The Historical Event Of Afrezza FDA Approval
  6. FDA Advisory Committee Recommends Approval of AFREZZA(R), MannKind Corporation's Investigational Drug to Treat Diabetes
  7. Mannkind Shareholders Focus On These Facts Rather Than Weekend Worrying
  8. Why Rising Obesity Means Blockbuster Revenue For Afrezza
  9. Mannkind Corporation: Catalyzing The Next Revolution In Diabetes Treatment
  10. Mannkind Corporation: The Potential Revolutionary Treatment For Diabetes Delivering Value For Shareholders
  11. Integrated Investing Research: Doctor Tran’s Top Quarterly

About the author:

hvt2107
I have the background as an MD and a researcher. I am currently the Chief Medical Analyst for Retail Investor 360 and I host my internet show 360 Biotech With Doctor Tran. I am also a contributing author for Seeking Alpha.

Visit hvt2107's Website


Rating: 0.0/5 (0 votes)

Comments

habtearagaw
Habtearagaw - 5 months ago

exellent assessment. can you write also objectively about NQ mobile which has bben the subject of some many controversies latey?than you

kiranch2004
Kiranch2004 - 5 months ago

excellent article. More info can be found here http://t.co/qeYNCWofKr

hvt2107
Hvt2107 - 5 months ago

Thanks Habtearagaw! I studied the international mobile industry for a while and last night, I stay up a bit late to research NQ mobile. Based on my phase 1 research, NQ deserves phase 2 to verify the investing thesis. I usually hammer out details and conduct extensive research in phase 2. However, I am currently backed up and constraint by time, so I do not want to give you a definitive answer without doing thorough data and field research. I will keep NQ in mind as my time free up. Thanks for your inputs and have a good weekend. Cheers!

hvt2107
Hvt2107 - 5 months ago

@Kiranch2004,I read that MF article, thanks for sharing!

Please leave your comment:


Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK