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MannKind Cheered Despite Lower Afrezza Shipments

MannKind Corp. (NASDAQ: MNKD) reported its second-quarter financial results before the markets opened on Monday. The company had a net loss of $0.07 per share, compared to a consensus estimate of a net loss of $0.08 per share, and the same period from the previous year had a net loss of $0.19 per share.

At the same time MannKind had $5.9 million in deferred product sales of Afrezza, and there was no recognized revenue. The first quarter had $7.1 million in deferred product sales.

For this quarter, MannKind’s portion of the loss sharing arrangement with Sanofi related to Afrezza was $12.8 million. Total operating expenses decreased to $24.1 million from $69.8 million, a 65.5% decline year over year, primarily due to Afrezza having moved out of clinical development into the commercial market. It is worth noting that the company did not recognize any product manufacturing costs in the second quarter because it had not yet commenced commercialization of Afrezza.

Research and development expenses decreased to $7.7 million from $37.3 million, a decrease of 79.4%, reflecting the transition from development to commercial activities.

During this quarter, MannKind received $6.7 million in proceeds from warrant and option exercises, $5.5 million in payments from Sanofi for product shipments, and $2.1 million in proceeds from its at-the-market sales facility.

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At the end of the second quarter, cash and cash equivalents totaled $107.2 million, compared to $120.8 million in the first quarter. Currently, $30.1 million remains available to borrow under MannKind’s amended loan arrangement with The Mann Group.

Mannkind also announced the appointment of Dr. Raymond Urbanski as its chief medical officer (CMO). He has over 25 years of research, clinical and pharmaceutical industry experience developing numerous new drugs and indications across multiple fields. Previously, he held CMO roles at Mylan and Metabolix, as well as other notable positions as vice president at Pfizer and vice president and CMO at Suntory Pharmaceutical

So far for the year MannKind shares have had a less than stellar performance. They are down nearly 24% year to date and down just over 50% for the past 52-weeks.

Ahead of the earnings report a couple of analysts weighed in on MannKind:

  • Piper Jaffray reiterated a Neutral rating with a $3.50 price target.
  • RBC Capital has an Outperform rating with a $9 price target.

With this stock it is worth noting that it is easily one of the most shorted stocks in the Nasdaq. For the most recent settlement date, MannKind saw its short interest back off slightly to 112.8 million shares, with 25.6 days to cover. The previous level was 115.1 million shares short with 21.6 days to cover.

Shares of MannKind closed Friday down 2.2%, at $3.98 in a 52-week trading range of $3.46 to $10.08. Following the release of the earnings report, shares were up 7.5% at $4.28 in early trading indications Monday. The stock has a consensus analyst price target of $7.29.

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By Chris Lange


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