Disappointment & Delay in Diabetes War (MNKD, LLY, NVO, PFE)
MannKind Corp. (NASDAQ: MNKD) is getting to learn more and more about disappointment, and the rumors and speculation that MannKind would not get its Afresa reviewed on time by a January 16 cut-off date turned out to be true. Afresa is designed to deliver a fast acting inhalable insulin that is supposed to be more effective than the injected products and it would put the company in competition for insulin with Eli Lilly & Co (NYSE: LLY) and Novo Nordisk (NYSE: NVO) for their insulin delivery. Pfizer Inc. (NYSE: PFE) discontinued its Exubera as an inhalable insulin, which is part of the reason for such a negative bias around MannKind’s Afresa.
MannKind’s Alfred Mann noted that the FDA has not yet completed its inspection of the insulin manufacturing facilities of N.V. Organon, a third-party supplier to MannKind; and he also noted that (to its knowledge) all other FDA inspections of third-party suppliers and clinical trial sites are complete and that there are no pending answers to any FDA questions or other deliverables due on MannKind’s part. And by the way, the FDA has accepted the name to now be AFREZZA as the trade name versus AFRESA before. MannKind has not yet been informed about the expected timing for the agency’s final determination on the NDA, which will be provided in an Action Letter.
We had hinted at this possible delay and speculation against MannKind during the week when we noted that the diabetes and insulin wars were about to heat up.
There was a big wave of selling at the end of the day. There have been rumors and reports that the FDA may not meet its deadline, so we won’t blatantly say that this was leaked out first. Still, the drop-off was at least something to be noticed, and you can see below the very active options trading and in the open interest for the JAN-2010 and FEB-2010 CALLS and PUTS.
JAN-2010 CALLS & PUTS
CALL$ Volume OpInt
7.50 5,370 24,648
10.00 1,971 23,608
PUT$ Volume OpInt
5.00 1,195 8,329
7.50 741 8,677
FEB-2010 CALLS & PUTS:
CALL$ Volume OpInt
5.00 2,961 8,845
7.50 1,960 18,475
10.00 8,307 38,668
12.50 771 17,132
15.00 1,035 11,626
PUT$ Volume OpInt
5.00 4,659 15,259
7.50 4,192 14,017
10.00 2,163 12,100
JON C. OGG
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