MannKind Corp said U.S. regulators need an additional four weeks to complete their review of its experimental diabetes treatment, lifting the hopes of some investors who expected the drug to be rejected outright and sending the company's stock up as much as 11.5 percent.

The Valencia, California-based company said it was informed on Monday that the U.S. Food and Drug Administration would not make a decision on whether to approve the product, a whistle-sized inhaled insulin device, by its December 29 deadline.

MannKind, whose founder and biggest shareholder is Alfred Mann, an 85-year-old entrepreneur who made his fortune developing solar cells, insulin pumps and implantable technology to help hearing, has plenty of detractors.

As of November 30, roughly 24 percent of the company's regularly traded shares were held short by investors betting the stock would fall.

The device, known as Afrezza, has already been turned back once by the FDA, which said in March it would not approve the product until it had received more information. The company believes it has provided that information.

In July, the FDA accepted a resubmitted application, and it was due to make its decision by Wednesday.

Analysts said the delay was difficult to interpret.

The bull case: The delay means that the FDA is taking MannKind's application seriously, said Avik Roy, an analyst at Monness Crespi Hardt. The bear case: The FDA doesn't consider the Afrezza application to be urgent.

Michael Tong, an analyst at Wells Fargo Securities, said that the delay should be viewed as a generally neutral outcome.

Additional approval delays could become problematic but we think MannKind should be able to fund operations through 2011 with cash and credit currently available.

MannKind's shares were up 7.5 percent at $8.57 in morning trading on Nasdaq after hitting $8.89 earlier in the session.

(Additional reporting by Esha Dey, editing by Dave Zimmerman)