MannKind's Q4 Loss Wider than Expected - Analyst Blog

MannKind Corporation’s (MNKD) loss of 16 cents per share in the fourth quarter of 2013 was wider than the Zacks Consensus Estimate of a loss of 14 cents, but narrower than the year-ago loss of 23 cents per share.

MannKind did not generate any revenue in the fourth quarter of 2013, as in the year-ago quarter.

MannKind’s 2013 loss of 64 cents per share was also wider than the Zacks Consensus Estimate of 62 cents, but narrower than the year-ago loss of 94 cents per share. The company did not record any revenue during the year 2013. However, it did generate revenues of $35,000 in 2012.

Quarter in Detail

Research and development (R&D) expenses increased 14.7% to $29.0 million in the reported quarter. The rise in R&D expenses was primarily due to higher non-cash stock compensation expense, which was partially offset by lower clinical trial expenses.

MannKind is primarily focusing on the development of its lead pipeline candidate, Afrezza, which is currently under review in the U.S. Afrezza, an inhaled insulin, is being developed for the treatment of type I and type II diabetes.

General and administrative expenses increased approximately 114.7% in the reported quarter to $17.6 million. The increase was primarily attributable to higher non-cash stock-based compensation expenses and professional legal and financing fees.

Our View

We expect investor focus to remain on the approval of Afrezza. A final decision from the U.S. regulatory body on the approval of the drug is expected by Apr 15, 2014.

Last month MannKind announced that Afrezza will be reviewed by the U.S. Food and Drug Administration’s (FDA) advisory panel tentatively on Apr 1. The setting up of an advisory panel actually gives the company a chance to address any concerns that may be associated with the candidate. The problem in this case is that the advisory panel meeting will be held a mere fortnight before the FDA is expected to deliver a response on the approval status of Afrezza. So, the short gap between the panel date and the FDA action date may make investors jittery as the FDA may very well push out the PDUFA date in order to discuss the panel’s recommendation.

We note that MannKind has already received two complete response letters for Afrezza from the FDA. Further delay in approval or another setback related to this diabetes candidate will be catastrophic for the company.

MannKind, a biopharma stock, presently carries a Zacks Rank #4 (Sell). Some better-ranked stocks in the biopharmaceutical sector include Alexion Pharmaceuticals, Inc. (ALXN), Actelion Ltd. (ALIOF) and Alkermes (ALKS). While Alexion holds a Zacks Rank #1 (Strong Buy), Actelion and Alkermes carry a Zacks Rank #2 (Buy).
 

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