MannKind Pharma’s (MNKD) third quarter loss per share came in at 42 cents, better than the Zacks Consensus Estimate of 49 cents and loss of 67 cents reported in the year-ago period. The company does not have any revenue stream at present — its lead product, Afresa (inhaled insulin for the treatment of type I and type II diabetes) is currently under US Food and Drug Administration (FDA) review.
MannKind filed a New Drug Application (NDA) for Afresa with the FDA in March 2009, which was subsequently accepted in May 2009. The company has been assigned a Prescription Drug User Fee Act (PDUFA) date of January 16, 2010.
Operating expenses for the third quarter declined 38% to $42.8 million, primarily due to a huge reduction in R&D expenses. Reduced costs associated with the clinical development of Afresa along with a decline in manufacturing costs brought down R&D expenses by 45% to $30.5 million.
In addition G&A expenses decreased by $1.2 million or 9% to $12.3 million for the third quarter of 2009, compared to $13.4 million in the third quarter of 2008. At the end of the reported quarter, cash, cash equivalents and marketable securities were $56.6 million, up from $46.5 million at the end of December 31, 2008.
MannKind has been trying to strike a suitable partnership for Afresa for quite some time. However, in October, the company stated that it will not be able to enter into a deal by year end, as was expected earlier. During the third quarter conference call, management indicated that uncertainty regarding Afresa’s approval has been making it difficult to find a partner. Hence, it has decided to wait for the approval before entering into any agreement.
The approval of Afresa is significant, not only from the company’s perspective but the medical community as a whole. While there were many late-stage drugs under development in the inhaled insulin field a few years back, competition is virtually absent now.
MannKind announced some positive news with respect to its other pipeline candidates. Preliminary results from two phase I studies demonstrated that the company’s investigative cancer vaccines, MKC1106-MT and MKC1106-PP, are well tolerated and show encouraging immunoresponse rates and objective tumor response in very advanced melanoma and in prostate cancer and other solid malignancies.
Following the encouraging results, the company decided to move these candidates into phase II studies. We have a Neutral recommendation on the stock.
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