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Mannkind Faces Steep Challenges

Ahead of the Bell: Mannkind Faces Steep Challenges

From Associated Press (May 10, 2011)

Development-stage biopharmaceutical company MannKind Corp. narrowed its first-quarter loss but still faces a very shaky financial and regulatory future, according to a Tuesday morning note from Baird analyst Thomas J. Russo.

The Valencia, Calif., company said Monday it lost $41.5 million, or 34 cents per share, compared to a loss of $44.7 million, or 40 cents per share, in the same quarter a year ago. MannKind's reported revenue of $50,000, compared with zero a year earlier.

MannKind is seeking Food and Drug Administration approval for the inhaled insulin Afrezza, which is in late-stage clinical testing for the treatment of adult patients with type 1 and type 2 diabetes.

The FDA told the company in January to run additional trials on the drug. MannKind Chairman and CEO Alfred Mann said Monday that the company recently held productive meetings with the regulatory agency and expects to initiate clinical studies in the U.S., Europe and Latin America once it meets its requirements.

Russo said in his note the new trials will run through at least late 2012, cash will run out earlier that year, and he sees "no rational basis for non-dilutive financing coming to the rescue."

"We see too many moving parts that have to go flawlessly and see more potential downside than upside," the analyst said.

Russo kept an "Underperform" rating and $2 price target on the stock.

"It is not an overstatement to say that everything is riding on the future regulatory and commercial success of Afrezza," Russo wrote.

MannKind shares fell 63 cents, or more than 14 percent, to $3.77 in premarket trading.


Posted: May 2011