MannKind Corporation (NASDAQ:MNKD) released its Q3 results on Monday. The biopharmaceutical company doesn’t yet generate revenues. But it posted a loss of $36.5 million or 9 cents per share. Goldman Sachs analyst Jay Olson said in a research note that the MannKind story is less about third-quarter results and more about Afrezza. Olson was expecting a bigger Q3 loss of 11 cents per share.

MannKind Corporation Q3 Results: The Story Is All About Afrezza

Slow ramp of Afrezza to delay MannKind’s profitability

Olson said the Valencia-based company was able to reduce its expenses during the quarter. R&D expenditure of $19 million was well below Goldman Sachs’ estimate of $25 million. The selling, general and administrative (SG&A) expenses also stood at $19 million, compared to the research firm’s forecast of $28 million. Both expenses declined sequentially from Q2, 2014.

MannKind ended the September quarter with $172.5 million in cash and cash equivalents. The company received $150 million from its partner Sanofi. However, that upfront payment was booked as other income rather than revenue. It received another $40 million as part of its deal with Deerfield. Another $17.3 million came through exercise of stock options and warrants.

Goldman Sachs has a Neutral rating on the stock with $6 price objective. Olson believes MannKind’s profitability will be delayed due to slow ramp of its inhaled insulin drug Afrezza. Further, Afrezza’s patient-driven market dynamics would require significant SG&A expenses. MannKind has racked up close to $2.5 billion in losses over the last 13 years.

Sanofi seems to be serious about Afrezza

Sanofi has what it takes to make Afrezza a success. With its leading position in global diabetes market, the French drugmaker can push Afrezza in countries that are beyond the reach of MannKind. Last Tuesday, Sanofi CEO Chris Viehbacher said at the earnings call that it has new drugs in the pipeline, including Toujeo, Praluent and Afrezza to compensate for the declining sales of its blockbuster drug Lantus. Viehbacher mentioned Afrezza eight times during the call, which emphasizes the importance of MannKind’s drug for the French company.

MannKind shares plunged 2.53% to $5.77 in pre-market trading Tuesday.