What’s up at Mannkind?
In an ominous sign that all may not be well at MannKind (NASDAQ:MNKD) the company delayed the release of their second quarter financial results, which were originally scheduled for today, to next Thursday. At the same time the company announced Richard Anderson, the company’s chief financial officer will step down. Taken together it’s not surprising that MannKind shares are taking a beating in early trading, down nearly 19%.
With no strategic partner for their lead drug candidate and a market made more difficult with the failure of Exubera, the company can ill-afford to have any financial issues. A sad situation as many researchers see their Technosphere Insulin as a solid product and superior to the other forms of inhaled insulin on the market or under-development. The company maintains the product will be submitted to the FDA in December 2008.
One has to wonder if there is a connection between Mr. Anderson’s departure and the company’s announcement they have extended their loan arrangement with Al Mann, president and COO. Under terms of agreement the company can borrow up to $150 million at any time prior to August 1, 2008. Diabetic Investor is always a little skeptical when executives say they are retiring to spend more time with their family. This may be the real reason but one can’t help but wonder.
Still with shares approaching a 52 week low and the superiority of Technosphere over its competitors MannKind could be bargain. In an ironic twist the fact that Technosphere is inhaled rather than injected could actually be hurting the company. It appears the dismal failure of Exubera has cast a pall over the entire inhaled insulin market. Diabetic Investor finds this sentiment the ultimate in hypocrisy. The failure of Exubera has nothing do with the fact the insulin is inhaled rather than injected. Exubera failed because Pfizer (NYSE:PFE) had no clue when it came to the difficulty of using the device and the amount of training physicians needed to initiate insulin therapy. For years Diabetic Investor tried to warn everyone that Exubera would never be a commercial success and that analyst sales estimates of $2 billion was pure fantasy. Still the Street continued to buy into this fantasy falsely believing that inhaled insulin would be widely adopted based on the one fact that patients would not have to inject. Diabetic Investor has no sympathy for Pfizer as they have no one but themselves to blame for the Exubera debacle.