MannKind Corporation announced its first quarter results yesterday. Surprisingly, shares gained about 2% to $6.33, and went up another 0.79% to $6.38 despite widening first quarter losses. The biopharmaceutical company reported a net loss of $52.1 million or 14 cents a share, missing the consensus estimate of 13 cents. MannKind had incurred $41 million or 15 cents a share of losses in the same quarter a year ago.

MannKind

MannKind generates zero revenues

Notably, MannKind Corporation didn’t generate revenues in the latest quarter. The company attributed increased losses to rising expenses. Operating expenses went up from $36 million in Q1, 2013 to $41.4 million in the latest quarter. R&D expenses were almost unchanged at $26.2 million, compared to $26.4 million in the corresponding quarter of 2013. General and administrative expenses skyrocketed from $10 million to $15.2 million. MannKind said the increase in G&A expenses was mainly due to a rise in stock-based compensation expenses of $3.4 million, and consulting and legal fees of $1.2 million.

MannKind Corporation ended the first quarter with $35.8 million in cash and cash equivalents, down from $70.1 million in the fourth quarter of 2013. Though the stock has been highly volatile over the past few months, the volatility has little to do with MannKind’s quarterly results. Shares of the company surge or sink based on reports around its diabetes drug Afrezza.

MannKind’s fate may change dramatically on July 15

The Afrezza is currently awaiting approval from the U.S. Food & Drug Administration. The regulator’s advisory committee unanimously recommended the drug by voting 13-1 and 14-0 for Type-1 and Type-2 diabetes. But shares plummeted more than 12% on April 7 when FDA extended the review date by three months to July 15. MannKind Corporation is seeking approval for Afrezza under the Prescription Drug User Fee Act (PDUFA).

MannKind Corporation has already spent more than $500 million on testing the drug and conducting clinical trials in the past three years. If FDA approves the drug, the company’s stock is expected to rise dramatically. U.S. diabetes market is estimated at more than $245 billion.