MannKind Corporation: Will Q2 Results Reverse The Trend?

MannKind shares have declined more than 23% in the last 30 days and over 42% since early February. The Valencia, California-based company is scheduled to report second-quarter results on Monday, August 10 before the market opens. MannKind generates little revenues and sales of its first inhaled insulin drug Afrezza have been lukewarm at best.

Afrezza falls short of expectations

MannKind’s marketing partner Sanofi reported last week that Afrezza generated only $2.2 million in sales during the April-June quarter. The drug has brought in just $3.3 million in sales since its launch in late January. Analysts on average expect MannKind to report $250,000 in Q2 revenue and 8 cents per share in losses. That may not excite investors who were already disappointed by the company’s debt restructure.

On July 29th, MannKind said it would raise $56.9 million via discounted stock offering and another $27.7 million via convertible notes to help pay off $100 million in debt. Investors were particularly turned off by the company’s decision to dilute stock for debt restructuring. MannKind isn’t expected to turn profits in the second quarter, but the company may make a few announcements to beef up investor confidence.

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MannKind CEO set to make an important announcement

Earlier this week, MannKind CEO Hakan Edstrom told News Times that the company had chosen two treatment areas to expand its Technosphere technology. He has promised to provide more details at the Q2 earnings call. Technosphere could be used to deliver drugs that are toxic to the liver because the technology doesn’t pass through the liver. Analysts have long speculated that the company may expand the use of Technosphere to pain management and pulmonary-related diseases.

Danny Katz of Seeking Alpha points out that Sanofi has been working to get Afrezza approved by the European Medical Agency. Europe has 60 million diabetes patients, according to the World Health Organization. The EMA approval would significantly expand MannKind’s target market. Further, MannKind and Sanofi will start a direct-to-customer advertising campaign soon to raise awareness among consumers about the benefits of Afrezza.

MannKind shares fell 1.84% to $3.99 at 11:41 AM EDT on Friday.