MannKind Corporation Earnings Preview

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MannKind is scheduled to release its next earnings report tonight after closing bell, and analysts are expecting losses of 4 cents per share on $130,000 in revenue. Expectations have been set extremely low as sales of its inhaled insulin Afrezza have been plunging.

MannKind regains control of Afrezza

When MannKind struck a deal with Sanofi to distribute its inhaled insulin, Wall Street rejoiced because it was expected that the marketing deal would increase sales. Afrezza has been on the market since late 2014, and it has failed to take off. CNA Finance notes that some investors blame Sanofi for the weak Afrezza sales because it has its own product that competes with the inhaled insulin. Many investors believe Sanofi was purposely slow with commercializing the insulin, which resulted in weak sales. MannKind has since gotten the marketing and sales rights for Afrezza back from Sanofi.

CNA Finance founder Joshua Rodriguez points to an announcement the company made in January when it said it would be partnering with specialized Diabetes Care Centers to enable them to treat diabetic patients in real time using Afrezza. He expects this program to help boost sales of the inhaled drug, which MannKind’s future currently hangs on. He also believes the drug company will score another big marketing deal with a better partner than Sanofi.

Other problems with Afrezza

Rodriguez doesn’t address the other challenges that exist in getting Afrezza into the hands of diabetics. One problem that’s received much media coverage is the requirement for lung function testing before the insulin can be prescribed. Insurance companies are also likely to be unwilling to pay for Afrezza not only because of its high cost but also because of the lung function testing, which only increases expenses further. There’s also the issue of education as patients typically take injectable insulin, although many would prefer inhaling their insulin.

Because of all these problems, shares of MannKind have plummeted 50% over the last six months. The stock is down 0.75% at $1.32 per share ahead of tonight’s earnings report.

It should also be noted that as of the middle of last month, short interest in MannKind was extremely high with more than 100 million shares being sold short, representing more than 30% of the float. However, short interest in the insulin maker has been falling since February when it was over 130 million shares.

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