MannKind’s inhalable insulin device Afrezza.

MannKind’s inhalable insulin device Afrezza. Photo by Courtesy Photo

Renewed investor interest in diabetes drug-maker MannKind Corp. has analysts saying the company’s recent surge is no mere sugar high.

The Valencia firm has seen its stock price spike as Food and Drug Administration approval is anticipated for its Afrezza inhalable insulin product. Shares rose 28 percent in the last week, closing May 15 at $5.13 and making it one of the top gainers on the LABJ Stock Index. (See page 58.)

The rise came as New York investment firm MLV & Co. initiated coverage on MannKind, rating the stock a “buy.” Graig Suvannavejh, a senior analyst at MLV, said the rating was based on the belief that Afrezza will clear the FDA. Although the powder-based insulin, which treats Type I and II diabetes, has had setbacks in the past, he projected the drug could be on the market by early 2014.

“The issues for Afrezza have been around the inhaler device, not the robustness of the efficacy of the drug,” Suvannavejh said. “It’s really about the FDA saying we just need to see the data. I think the agency should now have the info to feel comfortable approving the drug.”

When Afrezza was first submitted for government approval in 2010, it was met with some pushback about the usage of the inhaler. During the trials MannKind used an inhaler that was later replaced with a newer model that the company was planning to use commercially.

The agency requested MannKind redo the Afrezza trials with the newer inhaler, setting the effort back a few years and causing investors to flee temporarily. The company, founded by billionaire entrepreneur Al Mann, makes several cancer drugs, but after the FDA request in 2011 and MannKind’s subsequent stock plunge, the company laid off 41 percent of its workforce and shifted its focus entirely to the potentially more lucrative diabetes drug.

The newest trials are ongoing and the results of the final phase are scheduled for release in late August, with a resubmission of its application to the FDA as early as September.

Although no specific news has fueled MannKind’s stock rise, Suvannavejh said investors’ interest in biotech stocks traditionally gets re-engaged as a drug nears approval.

“If something is two years away investors tend to wander, but as we get closer and closer to a big event they’ll start to pay attention,” he said. “And on the company’s earning calls there is a new sense of confidence about how they’re feeling about prospects.”

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