MannKind Plummets; Could It Get Worse?

[Stocks-to-Watch]

Boston Scientific (BSX) wasn’t the only biotech run aground by the Food & Drug Administration today; shares of MannKind (MNKD) are off $2.59, almost 25%, at $7.89, after the company said the FDA requested “additional information” regarding a powder form of insulin and its inhaler device designed to treat diabetes, known as “Afrezza.” That could delay MannKind’s ability to market Afrezza.

It could get worse, says Oppenheimer & Co. analyst John Newman in a phone conversation this afternoon. He has an “Underperform” rating on the stock, and says MannKind could be forced to conduct further tests of Afrezza, after the drug had already been through Phase III clinical trials.

His price target: $2 to $3.

The FDA letter included no safety concerns, MannKind said, but asked for copies of the data from the clinical trials of Afrezza.

“The company has told us that the FDA has not required additional studies,” says Newman. “That doesn’t mean they won’t have to do more [tests]. The FDA has some questions, MannKind will have to answer them, and they may not be able to avoid additional studies.”

Newman, who says he’s surprised MannKind didn’t have a press conference today, but instead decided to wait till tomorrow, warns MannKind’s liquidity is dire, with $275 million in long-term debt and just $32 million in cash, as of the end of last year.



Original Article Source by Barrons.com