MannKind Shares Drop on Wider Loss
March 15 2016 - 11:00AM
Dow Jones News
Shares of MannKind Corp. on Tuesday slid 10% after the
biopharmaceutical firm posted a wider-than-expected loss for the
final quarter of the year Monday following the termination of its
agreement with its licensing partner for its diabetes treatment
Afrezza.
The company's stock, which had already lost about three-quarters
of its value over the past 12 months, fell to $1.27.
MannKind produces Afrezza along with partner Sanofi-Aventis. In
January, MannKind announced the termination of its licensing pact
in the U.S. for the development and sale of the inhaled insulin
product and signaled that it might look to sell the drug.
On Monday, MannKind said shipments of Afrezza—which moved out of
development into the market in February 2014—were $2.6 million in
the latest quarter. The drug has yet to live up to its blockbuster
billing.
"Our financial results for 2015 were not what we expected going
into the year, but we are looking forward to the next 12 months
with optimism and great excitement," Chief Executive Matthew
Pfeffer said. "Afrezza will soon be back under our control, and we
are all energized about the opportunity to launch a lean, focused
commercial effort that highlights the differentiating qualities of
our lead product."
Also Monday, the company announced the appointment of Dr.
Michael Castagna as chief commercial officer, where he will lead
commercialization efforts for Afrezza.
Dr. Castagna, who has more than 20 years of experience in the
health-care, pharmaceutical, biotech and specialty pharmacy
industries, was most recently with California-based
biopharmaceutical Amgen Inc., where he spent more than three years
as commercial chief for a portfolio of nine biosimilar drugs and
vice president of global life-cycle management.
Mr. Pfeffer indicated "other activities are planned to follow
quickly, as we finalize additional hires and line up assets for a
variety of roles."
In all for the quarter, MannKind reported a loss of $277
million, or 66 cents a share, compared with a loss of $36.4
million, or 9 cents, a year earlier. The company booked noncash
impairment charges of $206.6 million related to Sanofi's decision
to return the Afrezza rights to MannKind.
Analysts had expected a per-share loss of four cents, according
to FactSet.
Total operating expenses jumped to $272.9 million from $30.1
million as manufacturing costs of $51.8 million slightly offset
declines in research and development and overhead. Last year,
MannKind didn't pay for manufacturing, when Afrezza was still in
development. MannKind also reported charges for a hefty property
and equipment impairment and a loss on purchase commitments not
recorded in quarter last year.
MannKind said in January that it and Sanofi would begin
transition talks to return Afrezza to MannKind over the next three
to six months, with the termination effective no later than July 4.
As a result of the squashed deal, MannKind said it is reviewing its
strategic options for Afrezza. The evaluation of options typically
include a full or partial sale.
The company struck the marketing deal with French drug company
Sanofi in August 2014. In its most recent quarterly earnings call
with analysts and investors, then-Chief Executive Hakan Edstrom
said MannKind was "disappointed with the growth of Afrezza sales
during the first nine months of the year," pointing to insurance
reimbursement issues and slow uptake. Mr. Edstrom stepped down as
CEO in November.
Write to Anne Steele at Anne.Steele@wsj.com
(END) Dow Jones Newswires
March 15, 2016 10:45 ET (14:45 GMT)
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