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Thursday, Mar 28, 2024

Mannkind Stock Soars on Prospects for New Drug

Even though its highly anticipated insulin inhaler Technosphere is still at least three years away from government approval, the biopharmaceutical company Mannkind Corp. is generating lots of buzz. The Valencia company is one of the highest stock price gainers in the Valley, having soared 73.3 percent year-to-date to a closing price of $19.51 per share as of press time. Mannkind’s 52-week high was $22 per share. Grant Zeng, a biotech industry analyst for Chicago-based Zacks Investment Research, said the Technosphere insulin system has been the primary driver of the stock’s ascension. Used to treat diabetes, the breakthrough inhaler recently moved into Phase 3 trials and could be on the market by 2010. “People have very high expectations for this product and this market,” Zeng said. Despite the hopes, though, Zeng said the product is far from sure-fire. It is the only product being developed by Mannkind, which was founded by billionaire and pharmaceutical industry veteran Alfred Mann to treat diabetes, cancer, inflammatory and autoimmune diseases. Since then, the company has dumped $600 million into Technosphere and has yet to draw a profit. In the first quarter of 2006 alone, it spent $37.3 million, which followed an expenditure of $101.2 million in fiscal 2005. For the first quarter ending March 31, Mannkind reported a net loss of $43.6 million or $0.87 per diluted share. Added to the cash burn, Zeng said, Mannkind’s other obstacle is competition. Five companies are developing similar insulin-market products, many of which are expected to come to market before Technosphere’s expected launch. “The competition is very fierce,” Zeng said. “That is a major concern.” Zeng explained that despite some upcoming catalysts such as data announcements and possible partnership agreements, he thinks the current price for Mannkind reflects expectations while overlooking risks. Mannkind was Zack’s “Bear of the Day” for July 11. “If the insulin product doesn’t perform as well as expected, the company will take a hit,” he said. “This is their only product. The risk is very, very high.” The company is scheduled to release second-quarter earnings July 24. Officials for Mannkind, which has 428 employees at three sites across the country, were not available for comment. Amgen Rival Can Import Drug Thousand Oaks-based biomedical giant Amgen was dealt a blow last week in its bid to squash competitors for its anemia drugs, Epogen and Aranesp. A judge at the U.S. International Trade Commission ruled that the Swiss drug maker Roche Holdings could continue to import an experimental drug called peg-EPO, or Cera, for clinical trials. Amgen contends Cera is similar to Epogen and Aranesp, the company’s two top-selling drugs, and violates six U.S. patents. It filed a complaint with the trade commission to look at whether Roche, one of the largest drug makers in the world, could import Cera, which has not been approved by the Food and Drug Administration. Amgen is also suing Roche in federal court on the patent charge. The suit is not affected by the regulatory decision, Amgen officials said. Valley Bank Expands to West Side The startup California United Bank recently opened a branch at 1640 S. Sepulveda Boulevard in West L.A., its second since the bank launched a little over a year ago. Bank president and CEO David Rainer said the location near the 405 Freeway and Santa Monica Boulevard was selected because many of the investors and customers live or work on the West Side. Rainer would not disclose how much the new branch cost. “For a bank that’s a year old, it’s a big financial commitment,” he said. California United Bank opened in May 2005 with a $35 million initial capitalization and 700 investors. The bank’s first 21-employee location was at 15821Ventura Blvd. in Encino. Hedge Fund Demands Sale of Vitesse Calling its board “grossly negligent,” the largest shareholder of Camarillo-based computer chip manufacturer Vitesse Semiconductor Corp. is demanding that the company be sold. Hedge fund Chapman Capital, which owns 7.3 percent of the company, filed a motion with the Securities and Exchange Commission indicating Vitesse should be sold for at least $4.50 a share, about three times the current stock price. It is the latest controversy for Vitesse, which creates semiconductors for communication and storage networks. In May, its CEO, chief financial officer and a vice president were fired amid an investigation by the SEC and U.S. attorney’s office into alleged irregularities in the treatment of executive stock options. On June 28, the company was de-listed. 1st Commerce Reports Hefty Gains Encino-based First Commerce Bancorp credited recent first half gains to its strong business programs and several increases in the prime rate. Net earnings increased 25 percent for the second quarter ended June 30, with the company generating $760,000, or $0.10 per diluted share on revenues. During the same period in 2005, net income was $610,000, the company reported. The gains come on top of increases during the first quarter. Added together, net income during the first six months of the year stood at $1.4 million or $0.18 per diluted share, a 20 percent boost from 2005. The company also saw a 16 percent increase in assets, tallying $254.8 million as of June 30. Net loans also increased 24 percent to $186.8 million and deposits rose to $233.2 million. The bank was formed in 2004 as the holding company for First Commerce Bank.

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