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MannKind: The State Of Denmark Isn’t The Only Place Something Is Rotten – MannKind Corporation (NASDAQ:MNKD)


Shakespeare told us there was something rotten in the state of Denmark. MannKind told us this week there was something rotten in Westlake Village, California. MannKind (MNKD) announced another stock placement. Once again, diluting shareholders’ stake in the corporation. Should one review MannKind’s financial data, and the many decades they have attempted to get a viable product on the market, there is one constant in what you find. MannKind has spent about $3.0 billion dollars in developing a product (Afrezza), where they have sold stock shares better than they have been able to sell Afrezza. One example is the fact they spent $23.2 million in cash for the latest quarter, according to the estimates shared in their offering prospectus. And what do we see for the gross revenue generated for this enormous cash burn? Based on their highest estimate, we see $3.0M in gross revenues.

With the projection of $3.0M being the gross revenue for the 3rd quarter, when we consider they spent $23.2 million in cash to achieve this capture amount, this confirms MannKind has a marketing plan reeking like a rotten plan that it is. By spending $23.2 million in the quarter, this translates into MannKind generating $0.129 in gross revenue for each dollar spent. This is a marketing plan generating such miserable results, it can’t be sustained for long.

Last quarter, the CEO constantly told investors they had generated a 60% sequential growth in gross revenues – Q1 to Q2. Now the CEO has seen internal data for Q3 results, we see the 60% sequential growth has dropped to 14% – a mere 76% drop in the growth rate in gross revenue.

Through six months of 2017, two quarters, MannKind had generated $2.7 million in net product revenue. With the latest estimates for the 3rd quarter, when applying the high estimate, we see that MannKind has netted $4.944 million. When we just apply the estimated cash burn for the 3rd quarter, ($23.1M) for every dollar spent, MannKind is netting $0.21 in returns. I don’t have to dig out the cash burn for Q1 and Q2. By applying the cash spent in the 3rd quarter in relation to the net revenue reveals there some very rotten numbers being generated from an office in Westlake Village.



Q3 Est.























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The Facts are in the Details:

This is part of the press release MannKind issued on October 2, 2017, related to the FDA label changes.

“WESTLAKE VILLAGE, California (Globe Newswire) – October 2, 2017 – MannKind Corporation (Nasdaq and TASE: MNKD) today announced that the U.S. Food & Drug Administration (FDA) has approved an update to the Afrezza prescribing information to include new clinical data that was presented at the American Diabetes Association’s 76th Scientific Sessions in June 2016. Afrezza (insulin human) inhalation powder is approved by the FDA to improve glycemic control in adult patients with type 1 and type 2 diabetes mellitus. It is the only inhaled rapid-acting mealtime insulin available in the United States. Afrezza is dosed at the beginning of a meal and begins to appear in the blood in approximately one-minute¹.

For starters, note it states Afrezza is the only inhaled rapid-acting mealtime insulin available in the United States. The keyword allowing this statement to stand is the word — inhaled. MannKind can’t say Afrezza is the only rapid-acting mealtime insulin, simply because Novo Nordisk’s (NVO) FIASP is a rapid-acting mealtime insulin.

The other statement in this press release is the emphasis on Afrezza appearing in the blood in approximately one minute. An earth-shattering claim when you consider each time you take a breath of air, within one minute, the oxygen you just inhaled will appear in your bloodstream. So why make a claim that isn’t unique to how our respiratory system works?

What MannKind doesn’t tell you is the fact only 39% of the Afrezza dose is delivered to your bloodstream. Just think! If every time you take a breath of air, only 39% of the oxygen is delivered to your lungs where it is then delivered immediately to your bloodstream. If this happened in humans, we would constantly be panting like a race horse just finishing a two-mile race.

This is what Novo Nordisk states on their label insert for Fiasp:

FIASP is a rapid-acting human insulin analog indicated to improve glycemic control in adults with diabetes mellitus.

Contrary to claims being made on various internet boards touting Afrezza, the Fiasp label states it’s a rapid-acting insulin. Afrezza uses the same adjective – rapid-acting. Afrezza can’t claim it’s an Ultra Rapid-Acting insulin as many are claiming. Investors in a stock aren’t afforded the opportunity to decide what the FDA will approve for a drug label insert. The system does work this way. MannKind generating a meager 14% sequential growth in gross revenue for Afrezza, seems to confirm this reality. MannKind needs to net around $100M a year to cover their operating expenses. My calculator can’t handle such a large number required to show how much the current gross revenue being 14% needs to increase for MannKind netting $100 million in product revenue.

The Whole Story and Nothing but the Whole Story:

MannKind states Afrezza appears in the bloodstream in approximately one minute. And Novo Nordisk can state Fiasp is detected in the bloodstream in:

“Absorption Pharmacokinetic results from a euglycemic clamp study in adult patients with type 1 diabetes (N=51) showed that insulin as part appeared in the circulation ~ 2.5 minutes after administration of FIASP (Figure 3). Time to maximum insulin concentrations was achieved ~63 minutes after administration of FIASP.”

We are now down to debating approximately one minute versus 2.5 minutes, where one side totally ignores the fact that 61% of their dose never enters the patient’s bloodstream.

This brings us to the position of looking at how well Fiasp works in comparison to another basal insulin comparator:

“Table 8. Results from Study C: 18-Week Trial of Mealtime FIASP in Adults with Type 2 Diabetes Inadequately Controlled at Baseline on Basal Insulin and Metformin FIASP + basal insulin + metformin Basal insulin + metformin Number of subjects randomized (N) 116 120 HbA1c (%) Baseline 7.9 7.9 Adjusted change from baseline -1.16 -0.22 Estimated treatment difference vs. basal insulin+metformin [95%CI] -0.94 [-1.17; -0.72]* Proportion of patients Achieving HbA1c < 7% at Trial End 60.3% 18.3% Baseline is based on the mean of the observed last available values prior to randomization. * p<0.0001, 1-sided p-value evaluated at 2.5% level for superiority. 6.0% of subjects on the mealtime FIASP arm and 3.3% of subjects on the placebo arm were missing the final HbA1c”

Fiasp shows 60.3% of users see their HbA1c drop below 7%. In all the clinical trials run by MannKind, they have never shown that Afrezza achieves better HbA1c levels when compared to a basal insulin product. The only time data generated by MannKind has shown Afrezza results beat a comparator product is when compared to a placebo. A placebo, not another insulin product!

The Real Issue with Afrezza:

Current data on sales for 2.65 years, patient dropout rates are north of 60%. Does anyone think Novo Nordisk has seen anywhere such a dropout rate for Novolog? Look back at the current estimate for Afrezza in the 3rd quarter. Gross revenues for three months is estimated to be $3.0 million. It is estimated that Novo Nordisk spends $8.0 million a month for advertising Victoza. Now with Fiasp approved in the US, I think it safe to consider Novo Nordisk will promote Fiasp with a more aggressive advertising effort, where MannKind can’t compete

Say That Again!

On Afrezza’s drug insert MannKind makes the following statement:

“In a study of 32 healthy subjects, the pharmacodynamic effect of AFREZZA, measured as area under the glucose infusion rate – time curve (AUC-GIR) from an euglycemic clamp, increased in a less than dose-proportional manner. This effect has been observed for subcutaneously administered insulins, but it is unknown if the diminishing pharmacodynamic benefit at a higher dosage of AFREZZA parallels that which is seen with subcutaneously administered insulin.”

The higher the dose of Afrezza, the dose-proportional amount decreases? When you dose higher amount and still lose 61% of the dose due to non-delivery of the drug to the lung, this clearly confirms what Al Mann stated about needing 3X the dose of Afrezza to achieve any semblance of efficacy. Currently, the end data shows that Afrezza can only show better results when compared to a placebo. And MannKind continues insisting they need more time to educate the medical doctors. Such training is going to change all the negative metrics generated by spending $3 billion on clinical trials. And once again, we get another diluting stock offering to keep the doors open and paychecks going out.

This is a link to what MannKind states about their new label insert. Read what MannKind shares in this press release. They constantly talk in their CC about 70% of diabetics can’t get their HbA1c levels below 7%. Please note in this latest press release they once again mention the 70%. What they don’t tell you, or list for you, is how successful Afrezza has been in reaching this desired goal. Note how they deal with generic terms in how the “flexibility” of Afrezza might benefit a patient:

This label update supports Afrezza as a unique fast-acting mealtime insulin that provides doctors and patients with the flexibility necessary to help them achieve glycemic control.”

The Fiasp label states clinical data has shown 60.3% of users see their HbA1c below 7%. Why is MannKind so hesitate to talk or show their clinical data results for this key metric?


In my charts and accounting for the data, I have used the highest estimate for each of the estimated revenue metrics. With such wide difference between their low projection and the high projection, just consider how bad the revenue components will look if they don’t achieve the high projection.

Assuming the placement is completed successfully, these newly generated funds will be depleted in short-order. MannKind is now facing competition from a major competitor. If their sequential growth has dropped to 14% from a previous 60% growth in gross revenues, do investors and MannKind really think Novo Nordisk will not actively use their advertising budget and marketing team to promote Fiasp? Novo Nordisk has been out calling on doctors, telling them Fiasp will be available in the third quarter—and they should wait! What else could have impacted Afrezza’s torrid 2nd quarter growth of 60%, only to see the 3rd quarter drop by 73%?

And surely! Those who have watched the stock trading after the stock offering has seen the stock fall like a cement block tied to the share price. And what did I mention in my previous article about why the stock was trading up in price—leaving the deal makers, for this offering, panting with exhaustion after holding their nose for their effort in such a rotten deal for those who truly believe MannKind will make them rich.

It is my hope and desire, Afrezza will remain available for those patients needing options for dealing with their medical condition!

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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