MannKind Corporation
(
MNKD
) reported a loss of 23 cents per share in the second quarter of
2012, narrower than the year-ago loss of 37 cents per share and the
Zacks Consensus Estimate of a loss of 25 cents.
Quarter in Detail
MannKind did not generate any revenues in the second quarter of
2012 as well as in the year-ago period.
Research and development (R&D) expenses declined 12.1% to
$26.6 million in the reported quarter. Despite an increase in
trial-related costs, R&D expenses declined mainly due to the
settlement of the insulin supply agreement with N.V. Organon, a
subsidiary of
Merck & Co. Inc
. (
MRK
), following the termination of the program in June 2011.
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
diabetes (MKC-175 study). The company has completed more than 87%
screening for MKC 171 and 83% screening for MKC 175. MannKind
screened more patients than it expected in both the trials due to a
higher screen failure rate. MannKind expects to finish screening in
both the trials by September 2012. The company believes it can
complete both trials in the second quarter of 2013 and submit a new
drug application by the third quarter of 2013.
General and administrative expenses increased approximately
95.5% in the reported quarter to $17.4 million. The increase was
primarily attributable to a litigation settlement amount of $7.7
million during the reported quarter along with higher legal fees
and financing transaction cost.
MannKind is looking for more financing agreements to fund its
trials. Though the company believes its funds are sufficient to
finance operations into the fourth quarter of 2012, we believe the
company will look to raise funds again later this year. Inability
to raise sufficient funds will jeopardize Afrezza's future.
Our View
Currently, we have a Neutral recommendation on MannKind, which
carries a Zacks #4 Rank (short-term Sell 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
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