MannKind Corporation’s (MNKD) first quarter 2012 net loss of 27 cents per share was narrower than the year-ago loss of 34 cents. First quarter 2012 loss was, however, wider than the Zacks Consensus Estimate of a loss of 23 cents. The narrower year-over-year loss was primarily attributable to lower expenses incurred in the first quarter of 2012.
Quarter in Detail
MannKind did not generate any revenues in the first quarter of 2012, whereas the company generated a revenue of $50,000 in the year-ago quarter.
R&D expenses declined 8.1% to $24.2 million in the reported quarter. Despite an increase in trial-related costs, R&D expenses declined mainly due to lower salary-related costs following the headcount reduction in February 2011.
MannKind is primarily focusing on the development of its lead pipeline candidate Afrezza. The company expects to finish enrollment of both MKC 171 and MKC 175 trials during the second half of 2012. MannKind expects to complete the trials in early 2013 and file the NDA by the first half of 2013.
General and administrative expenses declined approximately 16.9% in the reported quarter to $9.8 million. The decline was primarily due to the decrease in salary-related costs following the headcount reduction in February 2011.
MannKind believes its funds are sufficient to finance operations into the fourth quarter of 2012. MannKind recently signed an exclusive global license agreement with Tolero Pharmaceuticals for the development and marketing of compounds from MannKind’s novel BTK (Bruton’s tyrosine kinase) program. We believe that the agreement will not only provide MannKind with funds in the form of upfront, milestone and other payments (up to $130 million), but also allows the company to share the risks associated with the development of pipeline candidates.
Our View
Currently, we have a Neutral recommendation on MannKind, which carries a Zacks #3 Rank (short-term Hold rating). We expect investor focus to remain on Afrezza.
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