BioWorld Insight Contributing Writer

Last week, MannKind Corp. received a complete response letter from the FDA for its inhaled insulin Afrezza. (See BioWorld Today, Jan. 20, 2010.)

Meanwhile, stealthy Dance Pharmaceuticals Inc. was preparing to develop an inhaled insulin product of its own. The small biotech is led by John Patton, a co-founder of Inhale Therapeutic Systems Inc. – now Nektar Therapeutics Inc. – which developed the first FDA-approved inhaled insulin device, Exubera.

Patton, Dance's founder and CEO, doesn't believe there are any companies between MannKind and Dance. Inhaled insulin has been a "pretty dead approach for the last few years," he told BioWorld Insight, "We're quietly mounting an effort to reboot it."

The gap between the companies shrunk last week when MannKind said it will have to run two clinical trials – one in each type of diabetes – in order to gain approval of the company's next-generation inhaler device. One of those trials will need to include the older MedTone inhaler used in previous trials as a head-to-head comparison.

MannKind's management wasn't willing to lay out a timeline for completing the studies since the company hadn't met with the FDA to hash out details of the trials. But that didn't keep analysts from making estimates. J.P. Morgan analyst Cory Kasimov, Avik Roy, an analyst with Moness Crespi Hardt, and Rodman & Renshaw analyst Simos Simeonidis all put the delay at 18 months or longer.

Yet the CRL was the best of both worlds for Dance. "Afrezza still appears to be approvable, and we see this delay as a positive for Dance because it gives us more time to catch up," Patton said. Dance hopes to have a device on the market in 2015.

The company doesn't have a device in the clinic yet, but said earlier this month it had licensed Galway, Ireland-based Aerogen Ltd.'s proprietary OnQ aerosol generator technology. "We have looked at all inhaled insulin technologies, all over the world, and we believe Aerogen has the best of those technologies," said Samantha Miller, Dance's chief business officer and senior vice president of corporate development.

Dance is hoping to speed through clinical development by leveraging the enormous database of data on insulin. Unlike MannKind, which extended its development path by using a novel formula, Dance isn't planning on adding anything new to its insulin formulation, enabling it to use existing efficacy and safety databases.

The largely virtual company is funded by angel investors and has avoided venture capital by choice. Dance hopes to fund some of the development using a sum-of-its-parts method of divvying up rights to sell its product to different regional partners. It's currently in talks with co-development partners outside of Western Europe and the U.S. partners in the larger market might come later in development although the company isn't excluding the idea of signing up a large partner early on.

The global approach gives Patton confidence despite being considerably behind MannKind. "We're not just going for the rich markets. We're going for the world's markets so we need a robust, inexpensive device."

The potential for a low-cost device is the driving force for Dance's exuberance over the inhaled insulin market. In addition to the cumbersome size of Exubera, Patton said cost also was a major factor. The high costs of goods and the royalties due to Nektar led to Pfizer Inc. charging a premium over the costs of injectable products.

Eli Lilly and Co. and Novo Nordisk A/S both dropped their inhaled insulin programs after witnessing Pfizer's troubles, but that doesn't worry Patton. He said those companies' decisions had more to do with a desire to avoid cannibalizing their established pen technology than it did with the potential market for inhaled insulin.

With large pharma out of the picture, it's a two-horse race, but Dance isn't all that anxious about winning. "We're not worried about being first. We're more concerned about being the best on the market," said Miller.