We are maintaining our Neutral stance on
) with a target price of $3.50.
Valencia, California-based MannKind is a biopharmaceutical
company focused on the discovery, development and commercialization
of therapeutic products for diabetes, cancer and inflammatory and
autoimmune diseases. The company's lead pipeline candidate Afrezza
is an inhaled insulin for the treatment of type I or type II
We remind investors that in January 2011, MannKind suffered a
setback when the US Food and Drug Administration (FDA) issued a
second complete response letter (
) for Afrezza. While issuing the latest CRL, the FDA asked the
company to conduct two phase III trials with Afrezza. While one
trial (study 171) is being conducted with type I diabetes patients,
the other (study 174) is evaluating type II diabetes patients.
Both studies are underway. The company intends to complete them
by the end of 2012 and seek FDA approval subsequently.
We note that the requirement of additional trials means further
cash outflow for Mankind. Currently management estimates its
current cash balance will last only till the first quarter of 2012.
Consequently, it will have to tap the capital market to raise
additional resources. Inability to raise sufficient funds could
jeopardize MannKind's future.
The magnitude of the setback regarding Afrezza is significant as
all other candidates at MannKind are in early stages of
development. The setback causes us to believe that there is limited
scope for upside from current levels at MannKind. We prefer to
remain on the sidelines until we have more visibility on the
approval process for Afrezza and retain our Neutral stance on
MANNKIND CORP (
): Free Stock Analysis Report
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