UPDATE 2-FDA staff review raises questions about MannKind diabetes device

Fri Mar 28, 2014 10:09am EDT

(Updates with safety review, share price)

By Toni Clarke

WASHINGTON, March 28 (Reuters) - An initial review of MannKind Corp's experimental inhaled insulin device by U.S. Food and Drug Administration staff raised questions about its safety and effectiveness but was less damning than some investors had expected, sending the company's shares up as much as 10.6 percent.

The reviewers issued their report before an April 1 meeting of outside advisers to the FDA, who will discuss clinical trial data and advise on whether the product, Afrezza, should be approved.

Afrezza is a whistle-sized inhaler designed to deliver more effective, rapid-acting insulin than injectable products offered by Eli Lilly and Co and Denmark's Novo Nordisk .

The FDA staff review raised questions about dosing, missing data, bronchospasms, and Afrezza's effect on lung function.

In early 2011, the FDA rejected Afrezza and asked for two more clinical trials, one in Type 1 diabetes and one in the more common Type II form of the disease. The FDA wanted MannKind to prove that a second-generation version of the device, known as the Dreamboat, was equivalent to a first-generation inhaler known as MedTone.

Inhaled insulin has a checkered history. In 2006, the FDA approved Exubera, an inhaled insulin device made by Pfizer Inc that had been expected to generate annual sales of $2 billion. But the inhaler was bulky and patients were put off by the need for periodic lung function tests. Pfizer abandoned the product after sales failed to take off.

Lilly and Novo Nordisk also dropped their inhaled insulin products. Subsequently, clinical trials revealed a possible, though unproven, link between Exubera and lung cancer.

The FDA's review of Afrezza found four cases of lung cancer during the development program. In two of the cases the patients had a prior history of heavy tobacco use. The other two did not, but Dr. Lee Pai-Scherf, who is with the FDA's oncology products division, examined the data and said "the available characteristics are consistent with what would be expected in this population".

Pai-Scherf added, however, that "the current available evidence does not allow a meaningful analysis" regarding the risk of lung cancer in patients exposed to Afrezza because of small numbers and other confounding factors.

MannKind's shares rose 5 percent to $5.46 in morning trading on Nasdaq. Earlier they rose as high as $5.75. (Reporting by Toni Clarke; Editing by Doina Chiacu; and Peter Galloway)