MannKind Shares Drop on Wider Loss

Shares of MannKind Corp. on Tuesday slid 10% after the biopharmaceutical firm posted a wider-than-expected loss for the final quarter of the year Monday following the termination of its agreement with its licensing partner for its diabetes treatment Afrezza.

The company's stock, which had already lost about three-quarters of its value over the past 12 months, fell to $1.27.

MannKind produces Afrezza along with partner Sanofi-Aventis. In January, MannKind announced the termination of its licensing pact in the U.S. for the development and sale of the inhaled insulin product and signaled that it might look to sell the drug.

On Monday, MannKind said shipments of Afrezza—which moved out of development into the market in February 2014—were $2.6 million in the latest quarter. The drug has yet to live up to its blockbuster billing.

"Our financial results for 2015 were not what we expected going into the year, but we are looking forward to the next 12 months with optimism and great excitement," Chief Executive Matthew Pfeffer said. "Afrezza will soon be back under our control, and we are all energized about the opportunity to launch a lean, focused commercial effort that highlights the differentiating qualities of our lead product."

Also Monday, the company announced the appointment of Dr. Michael Castagna as chief commercial officer, where he will lead commercialization efforts for Afrezza.

Dr. Castagna, who has more than 20 years of experience in the health-care, pharmaceutical, biotech and specialty pharmacy industries, was most recently with California-based biopharmaceutical Amgen Inc., where he spent more than three years as commercial chief for a portfolio of nine biosimilar drugs and vice president of global life-cycle management.

Mr. Pfeffer indicated "other activities are planned to follow quickly, as we finalize additional hires and line up assets for a variety of roles."

In all for the quarter, MannKind reported a loss of $277 million, or 66 cents a share, compared with a loss of $36.4 million, or 9 cents, a year earlier. The company booked noncash impairment charges of $206.6 million related to Sanofi's decision to return the Afrezza rights to MannKind.

Analysts had expected a per-share loss of four cents, according to FactSet.

Total operating expenses jumped to $272.9 million from $30.1 million as manufacturing costs of $51.8 million slightly offset declines in research and development and overhead. Last year, MannKind didn't pay for manufacturing, when Afrezza was still in development. MannKind also reported charges for a hefty property and equipment impairment and a loss on purchase commitments not recorded in quarter last year.

MannKind said in January that it and Sanofi would begin transition talks to return Afrezza to MannKind over the next three to six months, with the termination effective no later than July 4. As a result of the squashed deal, MannKind said it is reviewing its strategic options for Afrezza. The evaluation of options typically include a full or partial sale.

The company struck the marketing deal with French drug company Sanofi in August 2014. In its most recent quarterly earnings call with analysts and investors, then-Chief Executive Hakan Edstrom said MannKind was "disappointed with the growth of Afrezza sales during the first nine months of the year," pointing to insurance reimbursement issues and slow uptake. Mr. Edstrom stepped down as CEO in November.

Write to Anne Steele at [e-mail]

(END) Dow Jones Newswires

March 15, 2016 10:45 ET (14:45 GMT)

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