MannKind Corporation (MNKD): Should You Buy?

Perennial underdog MannKind Corporation (NASDAQ:MNKD) could be on its countdown to liftoff. The company announced its first-quarter results after the market closed on Thursday. Here is the countdown of the highlights — from least to most important.

3. Financial
At this stage in the game, investors know that the company is still incurring losses. They know there will be little, if any, revenue. There weren’t any surprises on those fronts.

MannKind Corporation (NASDAQ:MNKD) reported a net loss of $41 million, or $0.15 per share. That’s only slightly worse in absolute terms than the $38.2 million, or $0.27 per share, loss reported in the same quarter last year. The difference stemmed largely from an increase in operational expenses related to clinical studies.

No revenue was reported for first quarter. However, MannKind Corporation (NASDAQ:MNKD) does conveniently toss in the cumulative amount of revenue that the company has made since its founding in 1991. That total is just shy of $3.2 million. In case you’re wondering, this calculates to an average of around $143,000 per year. My hunch is CEO Alfred Mann made more than that in interest payments from his savings accounts.

The most important financial figure for the company is its cash balance. MannKind Corporation (NASDAQ:MNKD) announced cash and cash equivalents of $28 million as of the end of the first quarter. That’s down from $61.8 million at the end of 2012 as cash burn rates increase with two clinical studies under way. The company also still has $125.4 million available for future borrowing.

MannKind Corporation (NASDAQ:MNKD) expects that its current cash reserves will take it into the fourth quarter. However, this doesn’t factor in another $90 million of warrants that the company will almost certainly exercise. This added amount should tide MannKind over well into next year.

2. Afrezza clinical studies
Status of the two ongoing clinical studies of Afrezza easily trumps financial results in terms of importance. The news from MannKind is: So far, so good.

Both studies appear to be on track to complete as scheduled, with the first wrapping up in May and the other in June. The company still expects to share data from the studies in mid-August and resubmit the New Drug Application for Afrezza by early October.

While MannKind Corporation (NASDAQ:MNKD)’s Senior Vice President of Clinical Sciences, Robert Baughman, said that the dropout rate in the studies is slightly higher than that of the original protocol in the type 1 diabetes study, there are no real concerns. Baughman noted that the dropout rate is tracking along well with projections and that the company overenrolled patients included in the studies. When asked about how well physicians are adhering to protocols in the studies, Baughman responded that the company is “comfortable” that all is in order.