(Adds background, analyst comment; update shares)
April 2 MannKind Corp's shares doubled on Wednesday, after an advisory committee to the U.S. health regulator recommended approval of the drug developer's inhaled insulin treatment.
Analysts said the drug, Afrezza, is likely to win approval in its third attempt, but noted that MannKind would still have to conduct postmarket studies to demonstrate its long-term safety profile.
"If approved, Afrezza will require quite extensive post-marketing surveillance to monitor lung cancer and pulmonary function. Given the costs involved, this could keep some (potential partners) at bay," MLV & Co analyst Graig Suvannavejh said in a note.
The advisory panel on Tuesday voted 13-1 to recommend the drug's approval for patients with type 1 diabetes and unanimously backed it for those with type 2, but said longer-term studies would be required to gauge the risk of lung cancer and other potential side-effects.
The U.S. Food and Drug Administration is not obligated to follow the panel's recommendations, but typically does so.
If launched, Afrezza, will be the first inhaled insulin product in the United States since 2006, when the FDA approved Pfizer Inc's Exubera. Pfizer discontinued the product a year later due to weak sales attributed primarily to the bulkiness of its delivery device.
It is expected that whistle-sized inhaler used in Afrezza will make it more acceptable to needle-phobic diabetics and the elderly.
The advisory panel said it accounted for Exubera's history of a potential link to lung cancer when the committee suggested additional safety studies for Afrezza. Earlier, FDA staff reviewers had pointed to four cases of lung cancer in patients enrolled in Afrezza's latest trials.
"Afrezza appears likely to enter the market with less attractive labeling than (Exubera), which became arguably the biggest commercial flop in industry history," Guggenheim Securities analysts said in a note, adding that the MannKind label would likely include a reference to potential cancer risk.
The panel had also raised concerns that the drug did not work any better than traditional insulin in patients with type 1 diabetes, but said it offered a convenient alternative to insulin injections.
Given the efficacy and safety concerns, the FDA's decision on the treatment, scheduled for April 15, is likely to be delayed, analysts noted.
MLV's Suvannavejh said a three-month delay seemed "very reasonable" in this case.
MannKind's shares were up about 83 percent at $7.41 in heavy early trading on the Nasdaq. They touched a high of $8.08. (Reporting by Natalie Grover and Vrinda Manocha in Bangalore; Editing by Saumyadeb Chakrabarty and Maju Samuel)