The decision by Pfizer Inc. to pull the first inhalable insulin off the market is turning into the ultimate mixed blessing for MannKind Inc.

The demise of Pfizer's Exubera means one less competitor for the Valencia biotech's own inhalable insulin called Technosphere. But Pfizer's botched launch of its product after billions of dollars in investment is widely feared to have poisoned the well for MannKind and other companies with similar products.

And unlike the competitors, the Valencia biotech is seen as being the most vulnerable because founder Al Mann who already has pumped hundreds of millions of dollars of his personal fortune into the company has yet to sign up a deep-pocketed strategic partner to help bring his product to market.

"It doesn't look like anyone is buying what he's selling," Natixis Bleichroeder analyst Dr. Jon LeCroy said of Mann's efforts. He considers the potential market for inhaled insulin to be overrated.

Pfizer announced Oct. 17 that due to lackluster sales it would take a $2.8 billion charge against its third quarter and pull Exubera off the market, less than two years after obtaining regulatory approval. Exubera failed to gain acceptance among doctors and patients, because its inhaler device was difficult to use and there were concerns the insulin could damage lungs. Insurers also balked at covering the device.

MannKind, which has long proclaimed its product far superior to Exubera, is not in any danger of running out of money immediately, thanks to Mann himself. The billionaire extended and expanded his credit facility to the company to $350 million, due in 2009. And the company has been accessing a $350 million shelf registration, with Mann and institutional parties buying shares. (Mann's stake is now up to 44.5 percent in the company, which has a market cap close to $710 million.)

All that should be enough to get Technosphere to the point where MannKind can submit an application to the Food and Drug Administration for the product's approval. But it would still take an additional hundreds of millions of dollars and more importantly, big marketing muscle to penetrate the insulin market, especially after Pfizer's flop. Technosphere would be MannKind's first product.

"Exubera's withdrawal is very bad for MannKind because it does not have a partner and Technosphere Insulin represents almost 100 percent of its valuation," LeCroy told investors the day after Pfizer's announcement.


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