With the zeal of a young entrepreneur, 82-year-old Los Angeles billionaire and philanthropist Alfred Mann has bet nearly half of his estimated $2.2-billion fortune that he can develop an inhaled version of insulin for the nation’s 5 million diabetics.
But Mann’s gamble is looking increasingly like a long shot, analysts and doctors say, and his huge personal investment may be in jeopardy.
The latest blow came Wednesday when Valencia-based MannKind Corp.'s stock lost almost 60% of its value after pharmaceutical giant Pfizer Inc. said a study showed that its failed version of inhaled insulin might increase the risk of lung cancer.
After dropping much of this year, MannKind shares lost an additional $3.50 on Wednesday, closing at $2.35.
Mann remains undeterred. In an interview, the chief executive was upbeat about his company’s drug Technosphere, which combines a concentrated insulin powder with an inhalation device the size of a deck of playing cards. It is superior to rivals’ efforts and will be a blockbuster when it arrives on the market as early as 2010, he said.
“By no means am I unsure of the scientific and clinical benefits of Technosphere. I have no reason to believe there is any safety issue with our drug,” Mann said. “I admit the business environment has a lot of negativity around the sector right now, but that’s just something we are going to have to reverse.”
Drug companies have long sought new and lucrative ways to deliver insulin to patients but have hit roadblocks at every turn. The drugs have proved hard to develop, and research has shown that inhaled insulin causes slight declines in lung capacity.
Much is at stake. Insulin is a hormone that has traditionally been taken as a shot to help diabetics control their blood sugar. A significant number of diabetics inject themselves too infrequently, partly because the needle sticks are bothersome, research shows.
Despite questions about whether inhaled insulin caused lung problems after prolonged use, the Food and Drug Administration approved Pfizer’s version of inhalable insulin in early 2006.
But in one of the biggest flops in modern pharmaceutical history, Pfizer pulled the drug, Exubera, late last year because of poor sales and took a nearly $3-billion charge.
MannKind has resisted comparisons and fought its own struggles.
Some skeptics have asked whether Mann, a former aerospace entrepreneur who made a fortune setting up and selling medical companies, is too blindly backing an idea whose day may never come.
Mann has invested $566 million in the company and is the controlling shareholder. He has agreed to lend it hundreds of millions more, raising his total stake to $916 million.
As Pfizer’s troubles show, it’s unclear whether patients will ever warm to inhaled insulin even if MannKind’s drug is approved. Because of its size, the company needs a large pharmaceutical company as a partner but hasn’t been able to find one.
The company has also fought legal challenges. In late 2007, it settled a lawsuit by Wendell Cheatham, its former chief medical officer. Cheatham accused the company of making false statements to the Food and Drug Administration and improperly changing the drug’s formulation in a rush to get its Phase 3 clinical trials underway.
The company denied wrongdoing and the case was settled, but details weren’t disclosed
Aileen Salares, a biotech analyst at Boston-based healthcare investment bank Leerink Swann, said that although MannKind has enough cash to continue at least through 2009, the company’s long-term survival may be in doubt.
“They had many challenges before this news and now they have even more,” Salares said.
“It’s very hard for me to see how they do this.”
Pfizer’s study has detractors. Some doctors and analysts point out that the number of patients who developed cancer was small, and they remain unconvinced that inhaled insulin was to blame.
In its trial, Pfizer said six of the 4,740 patients treated with Exubera developed lung cancer, compared with one of 4,292 patients not treated with the drug. All of the Exubera patients who were stricken were former cigarette smokers.
Dr. Glenn Braunstein, an endocrinologist at Cedars- Sinai Medical Center, said it was too early to know whether the entire class of drugs might be dangerous.
But he said Pfizer’s study was a signal that more research was needed.
He doesn’t expect to prescribe the drugs to patients until such questions are resolved and more patients indicate they want the medications. “The simple fact is that we have a pretty easy and proven way of treating diabetes with insulin now,” Braunstein said.
Mann said Pfizer’s data proved little, because the rate of lung cancer found in the study population was nearly the same as the rate found in the general population. Company research hasn’t found any evidence that its drug is dangerous, he said.
“I still very much believe in it,” Mann said. “This is a drug that will help many, many people.”