"Thus, if MannKind's product manages to both win FDA approval and achieve commercial success, MannKind will truly be treading where no one has gone before.

"Indeed, an inhaled insulin product is one of those ideas that has been around forever, but, for all its promise, has never really resulted in anything but heartache for investors over the years.

"For example, though Pfizer managed to get its inhaled insulin drug (Exubera) approved a few years ago, the product was pulled from the market in late 2007 after generating only $12 million in sales.

"While this implies that MannKind may be facing an uphill battle, it should be kept in mind that Pfizer's product required users to become proficient at loading and 'pressurizing' a cumbersome apparatus – and releasing the powder and inhaling it with precisely the right technique.

"But MannKind has managed to develop a much more compact and discreet device for delivering inhaled insulin.

"AFRESA passed its Phase III clinical trials with what appear to be sufficiently robust results to warrant approval for the control of hyperglycemia in patients with type 1 or type 2 diabetes, a New Drug Application has been filed with the FDA based on those results, and a ruling is expected early next year.

"In anticipation of approval, the company recently acquired an insulin production facility in Germany from Pfizer. If approved, this facility will nicely complement MannKind's existing facility in Danbury, Connecticut.

"An additional 'intangible' value associated with this story is that it is still being led by its founder (and largest stockholder), Aflred E. Mann, who has started -- and then sold -- several biomedical companies.

"We again caution that the stock has already made very nice run in recent months (and thus may be due for a pullback before new highs are set again. In addition, the stock has the potential to be even more volatile than your typical development stage company.

"Further, a delay or denial of approval from the FDA will almost certainly results in a major 'haircut' in the stock price. As such, you do not want to become too overweighted in the stock until after the risk surrounding approval has been removed.

"For now, we would encourage speculative investors to start building a position in the stockso that you at least have a bit of 'skin in the game', as the saying goes. We rate the stock a buy under $10 and a strong buy on any pullbacks under $7."

Steven Halpern's TheStockAdvisors.com offers a free daily overview of the favorite stock picks and investment ideas from the nation's leading financial newsletter advisors.