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DANBURY, Conn. (

TheStreet

) -- In our current effervescent biotech market, a press release from a company with a small market value announcing positive clinical trial results has been usually good for a hefty bump in stock price.

Biodel

(BIOD)

tried following the playbook Monday with a much-anticipated press release touting positive

mid-stage results on its "ultra rapid-acting" mealtime insulin

. The market didn't play along, however, sending Biodel shares down 17 percent to $4.17 at Monday's open.

Now, to be fair to Biodel, the stock had already doubled in value this year, with most of the gains coming this summer in anticipation of the BIOD-123 study results. Still, the lack of a follow through is a disappointment and likely reflects investor ambivalence about the ultimate commercial potential of BIOD-123.

There was a paucity of data announced Monday to differentiate Biodel's mealtime insulin from those already on the market, including

Eli Lilly's

(LLY) - Get Eli Lilly and Company Report

Humalog and

Novo Nordisk's

TheStreet Recommends

(NVO) - Get Novo Nordisk A/S Report

Novolog. In the phase II study,

BIOD-123 looks very much like Humalog

from an efficacy standpoint, which isn't very exciting.

Biodel shares are also likely down Monday because, in the phase II study, 14 percent of diabetes patients found BIOD-123 injections to be painful compared to 1.5 percent of patients treated with Humalog. None of the injection site reactions were characterized as severe, nor did they force patients to discontinue the study.

That's a mild positive, but it's not exactly an encouraging sign for Biodel's future marketing purposes when "Ouch! That shot hurts!" is the most distinguishing characteristics of BIOD-123.

Biodel carried a market cap of about $100 million going into the release of BIOD-123 study results. Bulls argued that market value was unjustifiably low for a company with a product ready for phase III studies. It's not an bad argument to make, particularly with the way investors have generally over-reacted to "positive" data announcement this year.

But for whatever reason, Biodel isn't getting the benefit of the doubt Monday. Not yet, at least. We'll see if sell-side analysts can rally their clients to buy the stock later today.

One more note: If Biodel shares are too cheap, then

MannKind

(MNKD) - Get MannKind Corporation Report

, which is also developing a dodgy rapid-acting mealtime insulin (inhaled rather than injected) is still way too expensive. The valuation gap between the two companies should narrow but mainly by MannKind's stock price falling.

-- Reported by Adam Feuerstein in Boston.

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Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback;

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