) loss of 22 cents per share in the third quarter of 2012 was
narrower than the Zacks Consensus Estimate of a loss of 23 cents.
Loss during the quarter was also narrower than the year-ago loss
of 31 cents per share.
Quarter in Detail
MannKind generated revenues of $35,000 during the third
quarter of 2012, as against nil revenue in the year-ago
Research and development (R&D) expenses increased 10% to
$25.5 million in the reported quarter. The increase in R&D
expenses was primarily attributable to higher costs for clinical
MannKind is primarily focusing on the development of its lead
pipeline candidate Afrezza. Afrezza, an inhaled insulin, is being
developed for the treatment of type I (MKC-171 study) or type II
(MKC-175 study) diabetes. In October this year, the company
completed the patient recruitment process for both studies.
MannKind believes that it can complete both trials in the second
quarter of 2013 and submit a new drug application in the third
quarter of 2013.
General and administrative expenses increased approximately
5.2% in the reported quarter to $10.1 million. The increase was
primarily attributable to a litigation settlement accrual, which
was recorded during the quarter.
MannKind's cash burn during the third quarter of 2012 was
$29.9 million as compared to $24.7 million spent in the second
quarter of 2012.
In October this year, MannKind closed an underwritten public
offering of 46 million shares along with warrants to purchase
around 34.5 million shares of its common stock. The company also
entered into a purchase agreement with The Mann Group LLC, which
is controlled by MannKind's chief executive officer and principal
shareholder, Alfred E. Mann.
We note that Afrezza received a second complete response
letter (CRL) from the US Food and Drug Administration (FDA) in
January 2011. While issuing the CRL, the US regulatory authority
had asked MannKind to conduct two additional trials.
The requirement of additional trials has pushed up MannKind's
research and development expenses. Following the receipt of the
second CRL, MannKind trimmed its workforce by approximately 41%
and cancelled its insulin supply deal with N.V. Organon, a
Merck & Co. Inc.
Currently, we have a Neutral recommendation on MannKind, which
carries a Zacks #3 Rank (short-term Hold rating). MannKind is
primarily dependent on the successful development of Afrezza and
we expect investor focus to remain on it.
MANNKIND CORP (MNKD): Free Stock Analysis
MERCK & CO INC (MRK): Free Stock Analysis
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