The Fools(living up to their name).

Possible approval, but not commercially successful

MannKind Corporation (NASDAQ: MNKD) saw gains of more than 220% in 2013, but on Tuesday the stock opened lower with losses of 20%. If you’ve been a biotechnology investor for any period of time, then you know that this kind of volatility is an indication that data is just around the corner.

On Monday, MannKind announced that its Phase 3 trial for Affrezza, treatment for Type 1 and 2 diabetes, is complete. In regards to the product, there’s not much to report. It is insulin, but inhaled. The FDA has already denied it twice, but because MannKind has been given proper recommendations from the FDA, in trial design, I feel pretty confident that it will be approved.

Unfortunately, I don’t have any mind boggling data to present because this product is simply inhaled insulin. The trial has to prove that its insulin is better than other forms by using its delivery technology. Investors are encouraged because it has shown improved glycemic control and that it could target early stage Type 2 diabetes. This fact is the basis for the FDA approval, or why it most likely will be approved.

If approved, I don’t think MannKind can compete with the millions spent by Eli Lilly and Novo Nordisk on brand awareness. MannKind has debt of $330 million and an accumulated deficit of $2.1 billion. Thus, I don’t think it can compete even if approved in a highly competitive and highly crowded market. Therefore, I think its market cap of $2 billion is too high, and that it will eventually trade like Amarin Corporation following its launch as sales disappoint expectations.

http://beta.fool.com/shennie/2013/06/19/2-products-to-earn-fda-approvals-but-only-1-to-be/37714/