MannKind's Q4 Loss Wider than Expected - Analyst Blog
February 19 2014 - 10:50AM
Zacks
MannKind
Corporation’s (MNKD) loss of 16 cents per share in the
fourth quarter of 2013 was wider than the Zacks Consensus Estimate
of a loss of 14 cents, but narrower than the year-ago loss of 23
cents per share.
MannKind did not generate any revenue in the fourth quarter of
2013, as in the year-ago quarter.
MannKind’s 2013 loss of 64 cents per share was also wider than the
Zacks Consensus Estimate of 62 cents, but narrower than the
year-ago loss of 94 cents per share. The company did not record any
revenue during the year 2013. However, it did generate revenues of
$35,000 in 2012.
Quarter in Detail
Research and development (R&D) expenses increased 14.7% to
$29.0 million in the reported quarter. The rise in R&D expenses
was primarily due to higher non-cash stock compensation expense,
which was partially offset by lower clinical trial expenses.
MannKind is primarily focusing on the development of its lead
pipeline candidate, Afrezza, which is currently under review in the
U.S. Afrezza, an inhaled insulin, is being developed for the
treatment of type I and type II diabetes.
General and administrative expenses increased approximately 114.7%
in the reported quarter to $17.6 million. The increase was
primarily attributable to higher non-cash stock-based compensation
expenses and professional legal and financing fees.
Our View
We expect investor focus to remain on the approval of Afrezza. A
final decision from the U.S. regulatory body on the approval of the
drug is expected by Apr 15, 2014.
Last month MannKind announced that Afrezza will be reviewed by the
U.S. Food and Drug Administration’s (FDA) advisory panel
tentatively on Apr 1. The setting up of an advisory panel actually
gives the company a chance to address any concerns that may be
associated with the candidate. The problem in this case is that the
advisory panel meeting will be held a mere fortnight before the FDA
is expected to deliver a response on the approval status of
Afrezza. So, the short gap between the panel date and the FDA
action date may make investors jittery as the FDA may very well
push out the PDUFA date in order to discuss the panel’s
recommendation.
We note that MannKind has already received two complete response
letters for Afrezza from the FDA. Further delay in approval or
another setback related to this diabetes candidate will be
catastrophic for the company.
MannKind, a biopharma stock, presently carries a Zacks Rank #4
(Sell). Some better-ranked stocks in the biopharmaceutical sector
include Alexion Pharmaceuticals, Inc. (ALXN),
Actelion Ltd. (ALIOF) and
Alkermes (ALKS). While Alexion holds a Zacks Rank
#1 (Strong Buy), Actelion and Alkermes carry a Zacks Rank #2
(Buy).
ACTELION LTD (ALIOF): Get Free Report
ALKERMES INC (ALKS): Free Stock Analysis Report
ALEXION PHARMA (ALXN): Free Stock Analysis Report
MANNKIND CORP (MNKD): Free Stock Analysis Report
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