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MannKind Hires Away Talent as it Moves on Device

With a powerful rival still in the lead, Valencia-based MannKind has hired some talent away from some of the world’s top pharmaceutical businesses to help it push forward in its efforts to get its Technosphere inhaled insulin to market. The new executives come as the first inhaled insulin product, Exubera, developed by Pfizer, Sanofi-Avenits and Nektar Therapeutics has been approved by a key Food and Drug Administration committee, which will likely pave the way for Exubera’s entry into pharmacies. Early last month, Dr. Peter Richardson joined MannKind as corporate vice president and chief scientific officer from Switzerland-based Novartis, Juergen Martens was hired as senior vice president of operations after working for Nektar Therapeutics in San Carlos, John Bedard started as senior vice president, worldwide regulatory affairs after working for Bristol-Myers Squibb and Todd Easley joined as senior director of marketing from Sanofi-Aventis in Paris. Hakan Edstrom, president and chief operating officer at MannKind, said it is a testament to the company’s successful strategy that it has managed to hire such high-caliber biotech veterans. “Except for one person who actually had been working for us on a consulting basis,” said Edstrom, “all of our new employees were hired away from what I would call highly successful positions in successful companies.” Edstrom said that once the FDA approves Exubera, it will pave the way for its Technosphere system to follow behind it. “There is no doubt that it will be very beneficial for the class of drugs because it will signal that the delivery of drugs through the pulmonary route is acceptable by the FDA,” said Edstrom. MannKind is the smallest company among the players making an attempt to introduce inhaled insulin devices, but it has been helped along the way by several analysts who consider its delivery system to be superior to Exubera and others. The company has struggled at certain points to raise enough money to keep on its development schedule. A recent private placement netted the company an additional $175 million, half of which was provided by company founder Alfred Mann. Assuming it can bring Technosphere to market successfully, MannKind may be on the way to making billions of dollars for its stockholders. Wall Street has maintained mixed feelings about MannKind with almost equal number recommending that investors buy, hold and sell the company’s stock. Early in October , Jason Napodano, an analyst with Zacks Investment Research said that he remains relatively positive about the sector overall, but maintained a sell recommendation on MannKind, looking for its stock price to come down to about $9. At the end of last week, it was trading near $13. The problem the company has, Napodano reported, is that MannKind may have to continue to burn cash until 2009 and may end up diluting its value with secondary offerings. He cautioned that if MannKind is the fourth or fifth company to enter the market with an inhaled insulin product, it may be too difficult to make a profit. Edstrom said that although MannKind is behind Pfizer, he thinks the company could still bring Technosphere to market before its other competitors. Edstrom said that the company’s new executives were given some stock options upon joining the company, but no more than any other biotechnology company would offer. “Our offer in terms of equity incentive programs is competitive, but not outstanding compared to other companies,” said Edstrom. “What they looked at, and what we all believe, is the enormous potential in terms of technology that this company possesses.” Having an impact Richardson, who has been working in biotechnology for 15 years, said he’s joining MannKind at a perfect time to help shape the company’s culture. “I was at a really big pharmaceutical company, Swiss-based, and at this point the attraction to join MannKind is actually to take my experiences that I had (at Novartis) and apply them at an organization where I’m going to have a very different impact on basically the culture and the way they do things,” said Richardson. As chief scientific officer, Richardson will be responsible for focusing the company’s research activities around the potential for drug discovery and to find ways to apply technological discoveries to commercial products. Richardson worked as a physician in the United Kingdom for years before joining the pharmaceutical industry where he saw a better opportunity to make a difference in the general population’s health. In Technosphere, Richardson said he saw a similar opportunity to introduce a better product for diabetes patients. The path to the open market is not entirely paved for inhaled insulin devices, however. When the FDA’s Endocrinologic and Metabolic Drugs Advisory Committee recommended approval of Exubera some members noted that there was not yet enough information about the long-term safety of the drug. Still, they decided that the benefits to patients made the possible risks acceptable, as long as diabetes patients did not have pre-existing lung conditions. The committee decided that more information was needed for patients in those circumstances. Any drug under review right now is also dealing with the effect that the Merck trial has had on the drug industry. The New Jersey maker of the arthritis medication Vioxx is facing over 5,000 lawsuits after pulling the drug off the market last year because of new information about increased cardiac risks over the years. The FDA took considerable heat over Vioxx, with many critics complaining that the agency was too quick to approve a medicine with too few improvements over existing treatments like aspirin, especially one that patients are likely to spend years taking. Still, most analysts expect that the committee’s quick approval of Exubera means that full approval is on the way shortly. Further, in clinical studies of Exubera, some patients complained that the device, which is a six-inch inhaler, was slightly awkward. MannKind’s Technosphere system is a more user-friendly design. Although the company will need a distribution partner in order to bring the product to market, Edstrom is focused on getting through all of the necessary clinical studies before worrying about that. “We are in discussions with a number of potential partners, but we have decided to drive our program to a stage where we feel like we have a valuable product to offer and can arrive at an agreement that will be very beneficial to both parties,” he said.

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