Is Lilly shopping for an inhaled insulin?

[admin]

Is Eli Lilly and Co. back in the market for an inhaled insulin, just three years after pulling the plug on its own experimental compound?

Maybe, according to several news outlets, who are reporting that Indianapolis drugmaker might be interested in buying California biotech MannKind Corp. of Valencia, Calif., for $12.50 a share or $1.65 billion.

Shares of MannKind rose as much as 10 percent in heavy trading today, possibly driven by a rumor published by TheFlyontheWall, saying that Lilly could be an interested buyer, according to Barron’s.

So, Lilly, is it true?

“At Lilly, we do not comment on market rumors and deal speculation,” said company spokesman Mark Taylor in an e-mail.

But the struggling company has said many times in recent months that it was interested in small to medium-sized acquisitions as a way to bolster its pipeline and product mix.

Just this week, Dr. Jan Lundberg, Lilly’s head of R&D told the Wall Street Journal that Lilly was actively seeking to acquire the rights to other companies’ experimental drugs with potential to reach the market in the next few years.

MannKind is seeking federal approved for its inhaled insulin, called Afreeza, which has completed late-stage clinical trials. The company has sunk more than $1 billion into developing the product, touting it as easier to take than frequent injections and medically superior to traditional medicines for controlling blood sugar.

MannKind is trying to do what Lilly and several other major drugmakers have tried with little success: developing and selling a new type of insulin that allows patients to do away with jabbing themselves four or five times a day.

Three years ago, Lilly shelved its inhaled insulin project, following negative comments by analysts and doctors that there wasn’t a big enough market.

Several drug industry analysts batted down the rumor that Lilly might buy MannKind.

“I don’t believe it,” said Bert Hazlett of BMO Capital Markets in New York. “Call me silly, but I am just not a believer in MannKind’s product. I don’t think Lilly would be either.”

Les Funtleyder, an analyst at Miller Tabak & Co in New York, also sounded doubtful.

“It sounds far-fetched to me,” he said. “To think that Lilly would buy MannKind, given the history of this class of drugs, doesn’t make any sense to me.”

Pfizer was the first and only drug maker to actually launch an inhaled insulin, called Exubera. But the company pulled the plug after barely a year, citing disappointing sales. The move threw about 750 people out of work at Pfizer’s factory near Terre Haute. Just months later, Lilly shelved its own work on inhaled insulin.