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LITIGATION

Data Fraud Allegation Decks Mannkind

Lawsuit trims share price as FDA decision approaches.

MICHAEL FITZHUGH

The Burrill Report

“Arditi says that questionable data from the Russian trial site raised the specter of fraudulent study results, including the possibility of fictitious patients.”
EDITOR'S NOTE (11/8/10): The original version of this story misidentified the title of John Arditi while he was an employee of Mannkind. The version below corrects this error. He is the former senior director of regulatory affairs. We regret the error.

Allegations Mannkind wrongfully terminated an executive who red-flagged foreign clinical trial data for its inhaled insulin-and-inhaler combination, Afrezza, are without merit says the company.

A lawsuit filed by John Arditi, Mannkind’s former senior director regulatory affairs, claims that the company terminated his employment in retaliation for his assertion that scientific misconduct marred clinical trials of Afrezza carried out in Russia and Bulgaria.

Arditi says that questionable data from the Russian trial site raised the specter of “fraudulent study results, including the possibility of fictitious patients,” according to Bloomberg, which reviewed the case. After bringing his concerns to light, Arditi says he was fired.

Mannkind reports that both an internal and an outside independent investigation found no basis for Arditi’s claims. “The Company believes that the allegations in the complaint are without merit and intends to defend against them vigorously,” it noted in an October 29 regulatory filing.

Arditi is seeking compensatory and punitive damages, as well as legal fees in relief.

The company has until December 3 to respond to Arditi’s complaint. That leaves plenty of time for investors to evaluate the company’s defense before the U.S. Food and Drug Administration decides whether or not to approve Afrezza, which it is scheduled to do by December 29.

Some anxious investors aren’t waiting for the case’s outcome. In the hours following publication of the lawsuit, Mannkind’s shares fell almost 11 percent, declining from $6.17 per share at the start of trading on November 4 to $5.51 per share at the close of trading that day.

The company says it “does not believe that any liability from any reasonably foreseeable disposition of such claims and litigation, individually or in the aggregate, would have a material adverse effect on its consolidated financial position or results of operations.”

At press time, Mannkind had not yet responded to a request for comment.


November 04, 2010
http://www.burrillreport.com/article-data_fraud_allegation_decks_mannkind.html


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COMMENTS


cornell92 November 07, 2010

Why do poorly written (slanted) "reports" like this appear in the Burrill Report? I've seen too many that jump to conclusions on faulty information. John Arditi was NOT the "Chief Scientific Officer" of MannKind. Shouldn't that be obvious from the rest of his title cited here? VP of Regulatory Affairs (as he was). Peter Richardson is Chief Sci. Officer. To combine CSO and Reg Affairs in one position would be ludicrous, a complete conflict. Also, the article gives too much credence to the "allegation of fraud." MannKind has clearly stated that investigators have determined that they saw nothing fraudulent when they investigated. Note the text above: "Mannkind reports that both an internal and an outside independent investigation found no basis for Arditi’s claims." So why LEAD with the muckraking "guilty before proven" headline?


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