MannKind shares tumbled 18.18% to $1.08 in pre-market trading Tuesday after the company released disappointing Q1 results on Monday. The Valencia-based company reported a net loss of 6 cents per share, worse than the Wall Street projections of 4 cents a share in losses. MannKind’s portion of the loss-sharing under its licensing agreement with Sanofi stood at $5.5 million during March quarter.

MannKind

MannKind’s cash reserves declining rapidly

The biopharmaceutical company’s cash and cash equivalents plunged from $59.1 million at the end of December to $27.7 million at the end of March. In February, the company received $250,000 in upfront fee from Receptor Life Sciences. Under its loan agreement with The Mann Group, MannKind can still borrow up to $30.1 million. Its stock has declined more than 65% in the last 12 months.

There were some positive signs as well. MannKind CEO Matthew Pfeffer said during the earnings call that 7 out of 10 patients are getting approved to take Afrezza through the prior authorization process. That could give Afrezza commercialization a much-needed boost because the inhaled insulin drug cannot take off without the support of insurers. Pfeffer added that the company will be hiring 60-70 salespeople in the next few months to talk to doctors and patients.

Pricing of direct public offering of common stock and warrants

Separately, the company also announced pricing of a direct public offering of up to 48.54 million shares of the common stock and warrants. Each common stock share will be sold with a warrant to buy 0.75 of a share of common stock (A warrants) and a warrant to buy 0.25 of a share of common stock (B warrants) for a price of $1.03. Investors can exercise the A warrants at a price of $1.50 apiece beginning upon issuance. The B warrants will be exercisable starting May 2017 at a price of $1.50 per share.

MannKind expects the offering to close on May 12, 2016, subject to customary closing conditions. The company said it was expecting about $50 million in gross proceeds from the offering. The net proceeds to MannKind are likely to be $47.5 million after taking out the placement agent’s fees. MannKind plans to use the net proceeds for general corporate purposes and working capital.