The Future of MannKind

Joshua E. Schimmer is not the first analyst who has highlighted the growing problems with MannKind Corporation; in the past couple of months several analysts and industry experts have raised concerns over the problems faced by the company, especially its difficulty in dealing with its convertible debt. Whereas shareholders of the company were expecting a painless retirement of the $100 million convertible on August 15 as promised by MannKind’s management, the company’s announcement on July 29 that it has reached an agreement with  certain creditors to exchange $27.7 million in 2015 notes with 2018 ones on the same terms and that $56.9 million worth of the 2015 notes would be converted at a different rate than the original $6.80 per share, spooked many of its investors. The company has also been in the limelight in the past few months due to the short selling activity in its shares and allegations of stock manipulation. For the second quarter of fiscal year 2015, MannKind Corporation reported an EPS loss of $0.07, which was better than the EPS loss of $0.08 that analysts were expecting.

Though there was an increase in hedge funds’ holdings in the company during the second quarter and some bulls are still optimistic about Technospace, a proprietary technology developed by the company, with sales of its flagship product Afrezza not showing any improvement and the financial health of the company deteriorating gradually, it doesn’t seems like MannKind Corporation (NASDAQ:MNKD)’s stock will witness a sustainable rally anytime soon. You won’t need shades, as the future for MannKind does not appear to be very bright.

Disclosure: None