What To Expect After MannKind’s Implosion (MNKD)
MannKind Corporation (NASDAQ: MNKD) is currently not looking kind nor like a very nice man(n). Shares of the already-controversial MannKind are getting crushed after the FDA sent the company a ‘Complete Response Letter’ regarding its inhalable Afrezza for diabetes. The FDA has requested two new clinical trials with its next generation inhaler. One test is for Type I diabetes and the other is for Type II diabetes.
The FDA request also wants more data the performance characteristics, as well as the usage, handling, shipment, and storage.
While MannKind said it remains committed to working with the FDA, it is also disappointed. That is an understatement of the year. At 6:30 PM EST the after-hours reaction had shares down a whopping 43.5% at $5.15 on more than 2 million shares in the after-hours session alone.
So, what now? MannKind already has some late-stage studies underway and it hopes to be able to offer more insight at its fourth quarter report date. Unfortunately, MannKind has declined to comment on when the company can resubmit the application and it is also now going to be far less optimistic about ultimate approval if its legal team gets to have its way. The dream of inhalable insulin is so far more like the Boulevard of Broken Dreams.
With shares at $5.15, the 52-week trading range is $4.76 to $11.12. That will put the new market cap closer to $600 million than the $1.14 billion listed as of the $9.11 last price today.
The company CEO just recently spent $6 million or so to buy shares of the company and it was just about a month ago that the prior delay had been sent to the company without the indication of more tests being needed. Today’s news delays the time line and cuts it cash balances ahead while it has to keep spending money in R&D without any revenues. The company has raised cash but the September 30, 2010 balance sheet showed that it had just under $100 million in cash and investments at the time.
It is safe to assume that the lawyers will have filed class action suits against the company by Thursday morning, and there will almost certainly be some analyst downgrades in the morning as well. Things are not likely going to be much better at MannKind until more clarity is available.
JON C. OGG
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3 Responses to “What To Expect After MannKind’s Implosion (MNKD)”
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Why would there be class action suits file against the company?
For one thing they let 10 million shares (3x ave. vol) trade after having the crl in hand, this included a so called “flash crash” and some small but galling trades by senior management.
Senior Mannkind (MNKD) Officials Sell Stock on Day Complete Response Letter Was Issued
http://www.gekkowire.com/?p=6723
I am sure they have their reasons for the Class Action.