MannKind Corp. fell the most in about eight months after a former executive alleged in a lawsuit that the company suppressed potential fraud in clinical trials of a diabetes treatment now pending before U.S. regulators.
The lawsuit, filed in New Jersey state court by John Arditi, MannKind’s former senior director for regulatory affairs, said the company withheld from regulators information about potential “scientific misconduct” at clinical trial sites in Russia and Bulgaria. Arditi’s allegations are “without merit” and MannKind intends to “defend against them vigorously,” the company said in a regulatory filing.
The allegations may further delay action by the U.S. Food and Drug Administration on Valencia, California-based MannKind’s application to clear the drug, Afrezza, said Simos Simeonidis, an analyst for Rodman & Renshaw in New York. The agency is scheduled to rule on the application by Dec. 29.
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