Hot Stocks: MannKind Corp.
Californian pharmaceutical company MannKind Corp. saw its share price jump by 40% yesterday, up over 120% since the start of the month.
The main reason for the major price jump was that the FDA in the US approved several changes to the product label of their key drug, Afrezza (fast acting insulin) this week. The new labels allow for a clearer view of what the benefits of Afrezza are to consumers over the competition. MannKind CEO Michael Castagna remarked that the label changes constitute a “pivotal moment in the history of the company.”
The firm has suffered throughout the year, reporting a first quarter loss in May of over $16 million. As such, the availability of capital may be a concern for investors. The firm might need to raise funds from a public offering in order to recapitalize and ramp up Afrezza’s commerical launch to boost its exposure in global markets.
MannKind is available to trade in the Invstr Portfolio. Here is a 5-year chart:
MannKind has operated in the pharma-sphere since 1991, but did not release their first FDA approved product until 2014.
The businesses last set of results were a mixed bag. Afrezza net and gross revenues grew 29% and 60% respectively in Q2 of 2017 compared to Q1, while research and development expenses were lower in Q2 2017 at $3.1 million compared to $4.3 million in Q2 2016. Despite these positive changes, the overall net loss for Q2 2017 was $35.3 million. That represented an extra $5 million loss when compared to the same time in 2016.
MannKind seemingly exhausted much of its financial resources bringing its key product to the market, but judging by the market reaction to the label changes from the FDA – investors clearly believe the firms potential is solid.
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