The panel voted 13-1 to recommend that the FDA approve the drug, Afrezza, for the treatment of Type 1 diabetes and 14-0 to approve it for the more common Type 2 diabetes.
The FDA doesn't have to follow the panel's recommendation, but the panel's nod was considered a key hurdle for the company.
MannKind shares were up $3.13, or 78%, to $7.15 in midsession trading Wednesday.
MannKind has been working for more than seven years to gain approval for Afrezza. The drug's approval is vital to the future of the company and its nearly 250 employees.
If approved, analysts estimate that Afrezza could generate more than $580 million for MannKind by 2018, Bloomberg News reported.
As a powder that is inhaled, Afrezza would eliminate the need for most insulin injections. The drug-device combination product consists of Afrezza inhalation powder in a single-use dose cartridge.
The FDA told the company in January 2011 that it needed to see more proof of efficacy and safety of the powder using an improved version of the inhaler.
The dream of an inhaled form of insulin treatment dates from the 1920s, when doctors and researchers worried that diabetes patients wouldn't want to subject themselves to regular hypodermic injections.
Pharmaceutical giant Pfizer Inc. tried in 2006 to market its version but gave up about a year later after sales failed to meet expectations.
But MannKind investors are betting that the founder and guiding force, billionaire Alfred E. Mann, may have a good chance to succeed.
Mann is an aerospace and biomedical entrepreneur who founded 17 companies over six decades. As chairman and chief executive, Mann owns 40% of MannKind and hasn't been stingy with his funds when the company has needed infusions of cash.