FUNDING FOUND FOR CLINICAL TRIAL RUN MANNKIND TO DO FINAL DIABETES-DRUG TESTING.

Byline: Daily News

VALENCIA - A local biomedical firm developing an insulin inhaler treatment for diabetics said Wednesday it has raised $175 million from a new stock issue and other investment to help finance final clinical trials.

The announcement came as Valencia-based Mannkind reported losses of $49.3 million for the first six months of 2005 - more than the $35.3 million net loss in the same period last year.

Officials attributed the increase to growing expenses from the pivotal Phase 3 trials taking place in the United States and Europe for its Technosphere Insulin product, which delivers a special insulin powder formula through a proprietary inhaler to treat patients with Type 2 diabetes.

Insulin for diabetics is usually injected by needle or through a pump system.

The company reported total assets of $114.8 million as of June 30, including $42.4 million in cash and securities. Of the new cash infusion, half will come from institutional investors, with the rest coming from founder and chief executive officer Alfred E. Mann.

``We are truly pleased that many respected investment firms have participated in this financing,'' Mann said in a statement. ``We believe that these investors recognize that our Technosphere Insulin is a unique and clearly differentiated product.''

The financing deal is scheduled to close Friday. The company will issue about 17.1 million shares of common stock and warrants to purchase up to approximately 3.4 million shares of common stock at $12.228 per share.

Besides product research, the deal's proceeds are also expected to be used for other product development efforts, working capital and general corporate purposes, the company said.

Shares of Mannkind closed Wednesday at $11.43 on the Nasdaq - up $1.20 or 11.7 percent.