VALENCIA, Calif. ( TheStreet) -- Mannkind ( MNKD) shares plunged Tuesday morning after the company said it was delaying efforts to sign a partner for its inhaled insulin Afresa. The disclosure is raising fears that the Food and Drug Administration may delay Afresa's approval. Mannkind disclosed that it would not meet its previously stated goal of signing a partnership for Afrea before the end of the year, according to an 8-K filing with the Securities and Exchange Commission. "We made substantial progress toward a definitive agreement with a lead potential partner; however, as the discussions progressed, we came to believe that it would be more productive to complete a partnership after we have received a response from the United States Food and Drug Administration, or FDA, regarding our new drug application for Afresa," said Mannkind in its SEC filing. Speaking at the JMP Securities conference in New York this morning, Mannkind executives were also cautious when asked if they thought FDA would grant full approval to Afresa on or before the agency's approval decision deadline, or PDUFA date, of Jan. 16, 2010. The risk of the company getting a complete response letter from the FDA is now significantly increased," said JMP analyst Jason Butler, speaking by phone from his firm's conference. "The company said a partner is not willing to sign on before the FDA's PDUFA date." Mannkind has also not indicated whether it will be asked to bring Afresa in front of an FDA advisory panel prior to the agency's approval decision date. Mannkind shares are down 23% to $7.01 in recent trading.
ACR's decision to turn back the abstract submission from UCB and Immunomedics, by contrast, "implies that they did not find the epratuzumab data compelling," added Roy. He has a buy rating on Human Genome Sciences with a $24 price target. Immunomedics' Cheng says the epratuzumab data from the phase II lupus study will be submitted for presentation at a future medical meeting.
Data from these two studies will be used to help design the new, third phase III study. Under the collaboration agreement between the two companies, Biovail is responsible for paying for the new study, which is expected to start in the first half of 2010. In related news, Acadia says it will implement cost-cutting measures in October to reduce operating expenses and extend its cash burn. The company did not specifically say if employees were being laid off. -- Reported by Adam Feuerstein in Boston