Why No One Cares About MannKind's Earnings
Feb 12th 2013 9:55AM
Updated Jun 5th 2013 5:25PM
MannKind announced earnings results on Monday, but no one cares. Don't get me wrong. Plenty of people are intensely interested in MannKind. But do they really care one way or the other about the company's earnings results? I don't think so. Here's why.
The results that didn't matter
For the record, MannKind had $0 in revenue for the fourth quarter. That doesn't bother anyone who follows the company, though. Many would have been surprised if the company reported a dime. MannKind did report $35,000 in revenue for the full year. That's well below the median household income in the U.S., but no one cares.
It lost around $51.8 million, or $0.23 per share. The loss is worse than the average analyst estimate of $0.18 per share. I doubt that any of them lift an eyebrow, much less downgrade the stock. Any analyst who believes in the prospects for MannKind won't be phased by a nickel per share miss at this point in the game. And no one is worried about the $0.94 per share loss for the full year, either.
You might expect that some investors would care about the company's cash situation. I'll grant that some might. MannKind ended the quarter and year with $61.8 million in cash and equivalents, by the way. My guess, though, is that most shareholders didn't sweat how much cash the company had. Thanks to CEO Alfred Mann's efforts in the latter part of 2012, we knew that MannKind should be fine on the cash front for a while.
What really counts
Investors aren't apathetic about MannKind, by any stretch of the imagination. It's just that the earnings numbers don't mean as much for the company as they do for most other publicly traded entities. What really counts for MannKind are the two phase 3 trials under way for Afrezza, the company's inhalable insulin product.
The good news on that topic is that everything appears to be on track. The first study, which includes 518 patients with type 1 diabetes, is scheduled to finished in May. The second study, which includes 354 patients with type 2 diabetes, wraps up in June. Mann noted that the trials have more patients than needed, which provides a cushion in case more patients than anticipated drop out.
MannKind expects to share results from both studies in August. The company is already working closely with the Food and Drug Administration on the planned resubmission of the New Drug Application, or NDA, for Afrezza. If all goes well, the NDA will be filed in late September or early October. That would likely translate to an FDA decision by the early second quarter of 2014.
Another thing that investors care about is the likelihood of a partner for MannKind in commercializing Afrezza. President and COO Hakan Edstrom stated that they are in discussion with several interested parties and that "due diligence sessions are under way." Mann also noted that the company is looking for a partner with a primary care sales force but not necessarily in diabetes care. He added, however, that some of the parties with whom discussions are under way are in diabetes care.
The future of MannKind?
To say that the next year will be important to MannKind is an understatement. Mann and his team (as well as many investors) believe that MannKind's disruptive technology will revolutionize the way diabetes is treated around the world. However, there are naysayers who think that the FDA could put the kibosh on this product before it even hits the market.
In a new premium research report on MannKind, these complex issues are made crystal clear, in addition to showing you why to buy or sell the stock today. To find out more -- and get a full year of free updates -- click here to grab your copy today.
The article Why No One Cares About MannKind's Earnings originally appeared on Fool.com.Fool contributor Keith Speights has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.