MannKind Narrows Loss - Analyst Blog


MannKind Corporation 's ( MNKD ) fourth quarter 2011 net loss of 30 cents per share was narrower than the Zacks Consensus Estimate of a loss of 32 cents. The company had suffered a loss of 33 cents in the year-ago quarter. The narrower loss was primarily attributable to the lower expenses incurred on research & development (R&D) in the final quarter of 2011.

Quarter in Detail

MannKind did not generate any revenues in the final quarter of 2011 same as in the year-ago quarter. R&D expenses declined 16.5% to $20.2 million in the reported quarter. The decline was primarily attributable to the termination of the insulin supply deal with Merck' s ( MRK ) subsidiary, Organon in the first quarter of 2011. Due to the termination of the deal, MannKind did not buy any insulin in the final quarter of 2011.

We remind investors that MannKind terminated the supply deal with Organon following the complete response letter ( CRL ) issued by the US Food and Drug Administration (FDA) in January 2011 for the company's inhaled insulin candidate Afrezza. The candidate is being developed for treating type I and type II diabetes. It is MannKind's most advanced pipeline candidate.

While issuing the CRL, the second for Afrezza, the US regulatory authority had asked MannKind to conduct two additional trials, one for patients with type I diabetes (MKC-171 study) and the other for type II diabetes patients (MKC-175). Both trials are currently underway. The company intends to seek FDA approval for Afrezza by the first half of 2013.

General and administrative expenses climbed approximately 30.4% in the reported quarter to $10.3 million. Non-payment of 2010 bonuses resulted in lower G&A expenses in the year-ago quarter.

Annual Results

For the full year 2011, MannKind suffered a loss of $1.32, which was 4 cents narrower than the Zacks Consensus Loss Estimate. Moreover,  the 2011 loss was 18 cents narrower than the year-ago loss. The narrower loss was primarily due to the 11% reduction in R&D expenses in 2011 to $100.0 million. The decline was primarily attributable to lower purchases of raw materials following the termination of the insulin supply agreement with Organon. We note that MannKind received the final shipment of recombinant human insulin in the third quarter of 2011.

MANNKIND CORP ( MNKD ): Free Stock Analysis Report
MERCK & CO INC ( MRK ): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: CRL , MNKD , MRK

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