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MannKind: Playing Poker In A High Stakes Game Holding A Busted Flush Hand

Apr. 03, 2018 2:24 PM ETMannKind Corporation (MNKD)50 Comments
Looking For Diogenes profile picture
Looking For Diogenes


  • Latest prescriptions data will be shared with my readers.
  • I will respectfully give my opinion that is contrary to another SA contributor's latest article.
  • Technosphere continues to be an antiquated technology that hasn't made other drug companies worry about MannKind's patents on their inhaled technology. They continue to develop and get FDA approvals.

(The Poker Player with All the Chips is Calling MannKind's All-In Busted Flush Hand)

The purpose of this article is designed to be respectful of the numerous articles that another SA contributor has made about MannKind (NASDAQ:MNKD). Spencer Osborne has played a major role in creating charts and sharing data that outline the issues that MannKind faces and will continue to face. Many of those who truly believe that Afrezza will be a paradigm change for how we treat the horrible disease of diabetes, in my opinion, will be sorely disappointed. Mr. Osborne's articles have given investors a clear picture of the critical data that proves MannKind is approaching just the next binary event outlining their clear need for another infusion of cash. A need where it will be necessary once again to dilute shareholders' investment in MannKind's stock.

In his latest article, he makes valid use of his detailed and creative charts and graphs. However, I respectfully disagree with some of the issues stated within the article and subsequent comments section about the potential of partnership deals and where they will come from.

But first an update on where MannKind currently stands:

First Q-2018 Results with One Week's Data to Collect:

Now into the fourth calendar year experiment in convincing doctors, patients and third-party payors adopting the use of Afrezza, we see the quarterly results now having one week left in the 1st Q-2018. Twelve weeks into the quarter we see total prescriptions falling below the last 12 weeks of 2017. Unless Afrezza prescription breaks above 600 total prescriptions in this last week of reporting, quarterly sequential growth will show a decline in prescriptions.

2017 Growth Pattern Per Quarter:


%+ or -












This article was written by

Looking For Diogenes profile picture
I'm retired from a near 40 year career in the publishing industry working with an international publishing company. I obtained the position of Vice President and I led the sales efforts in the two largest markets in the textbook industry -California and Texas. My investing experience is over a span of 40 years.Luckily with more winners than losers! My hobbies are traveling , reading good books(non-fiction)--and researching stocks that I have an interest. I teach a continuing education class at our local college each semester. I volunteer my time working in assisting several lawyers with their Child Protective Service cases.Drugs are destroying our society and family structure). Finally, I serve as a reviewer for a national literary prize given each year. No pay, but I get to keep the books and add to my ever growing library. Other than these activities---I'm just plain lazy!

Analyst’s 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.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (50)

Looking For Diogenes profile picture
Stock is down to $0.33 per share based on pre-reverse split. Kastanes thinks he sees ship laden with gold pulling into his dock!! Maybe tomorrow!
MNKD shareholders have been holding a 32 offsuit on a A K10 7 4 rainbow board, and think they have a straight...
Looking For Diogenes profile picture
What a deal! Boy can MNKD skin a cat more than one way. Suckers can buy this $2.00 offering and automatically be $3.40 in the hole in the stock's valuation. And there is no guarantee that the underwriter can do the deal for the full 14,000,000 shares. Typical MNKD cat skinning endeavor.

"You will experience immediate and substantial dilution in the net tangible book value per share of the common stock you purchase.
Since the price per share of our common stock being offered is substantially higher than the net tangible book deficit per share of our common stock, you will suffer immediate and substantial dilution in the net tangible book value of the common stock you purchase in this offering. As of December 31, 2017, our net tangible book deficit was approximately $(214.7) million, or $(1.80) per share. Based on the combined offering price of $2.00 per share of common stock and accompanying warrant offered hereby, and our net tangible book deficit as of December 31, 2017, if you purchase securities in this offering, you will suffer immediate and substantial dilution of $3.42 per share with respect to the net tangible book value of the common stock. "
RisingSKEPTIC profile picture
"What a deal!"???

Speaking of a deal, did you notice in the golden parachute section of the 14A the provision for health insurance costs:

"Continuing health and welfare benefits(1)...

...(1) Represents the estimated cost of providing or paying for continuing medical and dental coverage for 18 months. The amounts for medical and dental insurance coverage are based on rates charged to our employees for post-employment coverage provided in accordance with the Consolidated Omnibus Reconciliation Act of 1985, or COBRA."

For those with the parachute, that number is between 40 and 50 THOUSAND dollars awarded to provide 18 MONTHS of coverage.

For THAT amount of money, I could cover a family of four for three YEARS with an obamacare GOLD plan.
Diogenes, and it never ends. Year after year it's the same excuses. This holiday, that event, this hope, that deal. Meanwhile, the only meaningful deal which was SNY, and, I thought that deal was terrible when announced - and that lasted all of about 18 months. Of course, it's because of the new CEO. Cant' be that they saw the writing on the wall. I like watching zombie movies but mnkd takes the cake and blows the walking dead right out of the water.
Get with it Rising-

What are sales?
Looking For Diogenes profile picture
The classic example of how irrational the true believers see things, on their highly censored Proboard where on dare not make a negative comment, they are now blaming Good Friday for causing the dismal prescriptions data.
It's the same story repeating itself over and over. And yet the true believers still say things like "just wait a few more months", and "this dilution doesn't matter". lol.....Anyone who is still holding shares purchased from the time of FDA approval is sooooo diluted right now. Glad I dumped this company when I did. What a nightmare! When this company's SP goes sub a buck, again, they won't be able to dilute themselves to profitability as some idiot posters believe. Who was it? Adam F from thestreet that called it "death spiral financing"? And he was attacked over and over for saying it. Meanwhile, a few years later - that's exactly what's been playing out. Death spiral financing. I can hear the slurping around the drain. Meanwhile, mnkd management continues to spin their "good news" and the rabble eats it up like it's steak and lobster. Sorry folks, you've been fed gruel.
Looking For Diogenes profile picture
Stock is down 25% today and the CEO comes back from Monaco sporting a nice tan and more money in the till to spend for insider's huge salaries and bonuses for their good work. The believers on Proboard---once again spinning their glee over how savvy their CEO is and moving out their ship docking with their gold---all until TOMORROW.

The CEO brags about more than doubling the net revenue in 2018 from 2017. Doubling! And now with the 1st Q, 2018, they have a sequential quarterly growth in the negative from the previous Q---1/3 of the year gone---so guess what they will now need over the remaining month to see a double in net revenue---! My TI calculator can't even handle such a massive number. Bless those pure True Believers who think if they could only hold on until Tomorrow. Their day will come!
Looking For Diogenes profile picture
This is how desperate MNKD finds themselves.On October 11, 2017, they pumped the stock to $6.96 and got off a secondary for 10,166,000 shares at $6.00.

Now a mere 5 months later they forced to issue another offering--but this time they could pump the shares like they did in October. This time they were forced to increase the offering by 40% more shares and are getting only $2.00 for these shares.
The suckers from the October offering are now suffering a loss of 67% of their investment dollars.
Those foolish enough to once again feed the kitty, with this latest offering--stock is down more than 22% today.

But guess who is making money--the deal makers who short the heck out of the stock like the October deal @$6,00. Those 10,000,000 shares have allowed them to make $40,000,000 merely buy shorting high and cover their short position with one more offering.

Problem is--without the ability to pump the shares--they are now down to $2.00 offering-------slowly, but surely, the money source is dwindling. Look at the reality--October it was 10,000,000 shares to generate $61 million---five months later the $61 million has been spent. The latest it takes 40% more shares, but they are only generating $28m. So with the obvious burn rate--$60 million in 5 months---this current $28 million will be spent by July.

Wake up True Believers---Take off your rose colored glasses!
RisingSKEPTIC profile picture
It's funny! Proboards opening page has a little strip with changing mottos. The latest is:

"''You can avoid reality, but you cannot avoid the consequences of avoiding reality.'

Ayn Rand"

How many times have Mannkind shareholders had to learn THAT lesson!
Looking For Diogenes profile picture
The CEO revealed his busted hand last night and now the True Believers once again get spanked as MNKD trading below $2.00. Down and Down They Go! Below $1.00 within months and then another reverse split! OUCH! When Will They Ever Learn?
Every dog has his day.
“not one hasn’t” where i went to school that means one has. “go figure”
May $10 Calls. Anyone?
Looking For Diogenes profile picture
Let me attempt to simplify the issue about Technosphere being an antiquated technology that has become a White Elephant product. MNKD’s 20-year attempt to make a deal with any other partnership deal has never happened for a simple reason—the process used by MNKD is the most expense process in the market place. With growing use of price controls, drug manufacturers are seeking ways to control their cost. As part of this solution new technology and manufacturing methods have been developed.
I cite the fact about 1,350 inhalation based clinical trials have been initiated over the last four years and none of these trials other than MNKD self-directed efforts has used Technosphere. The core reason is the fact that other companies have developed more cost-effective manufacturing processes and none of them infringe on the vast number of patents that MNKD boast about. One more time—MNKD’s patents are worthless, because there are parties interested in them.
The science of the dated process of drug wetting in the production drugs is complex. However, if one wants to read the massive number of research articles that have been compiled over the last two decades—simply Google the term—drug wetting process.
In one simple explanation of what is involved in this process—the following are laymen terms of the elaborate and costly process:
“Wet granulation is a process of drying mixing, wet mixing, and particle size enlargement and is a process of particle attachment(agglomerati...
It consists of six steps:
1) Dry Mixing
2) Wet Mixing
3) Milling of the Wetted Mass
4) Drying
5) Milling of the Dried Mass
6) Final blending

This is a link for the Liquidia Clinical Trial where if you read in deal you will see that Liquidia is using a Non-Wetting Process in making their Phase 3 treprostinil trials.
Look under the section –Detailed Description and you will find the following claim-
“Liquidia is using Liquidia’s PRINT technology (Particle Replication in Non-Wetting Templates) PRINT.
I’ve shared all the mixing vats and oven used by MNKD—this makes the Danbury plant a White Elephant because it uses outdated methods used for making a dry powder medication. Please understand—Technosphere’s process makes it a process that will always make their product the most expensive manufacture. This is why no one has opted to use their delivery system—and that being over 20 years of rejection. All their claimed patents aren’t worth a plugged nickel!
RisingSKEPTIC profile picture
Speaking of patents not "worth a plug nickel," does anyone recall how the "forlorn hope" of Mannkind used to plug Mannkind's deal with Mintaka Foundation to develop an inhaled oxytocin:


"Heat-Stable Dry Powder Oxytocin Formulations for Delivery by Oral Inhalation"

However, that appears to have gone down in the same flames as the promised TS-epinephrine!

MEANWHILE, back at the ranch, Glaxo/Smith/Kline has its OWN dry powder oxytocin formulation working its way through phase TWO:


"Increasing Access to Oxytocin for the Prevention of Postpartum Hemorrhage"

The thing I found MOST interesting is that they just use their true ANTIQUE "rotohaler" device to deliver the drug and, apparently, it works just FINE! AND it DOESN'T need FDKP! Go FIGURE!

Even MORE interesting is this recent review of all the dry powder inhalers:


Wow! There's a BUNCH of'em, isn't there! But guess who ISN'T on the list! That's right! Not word ONE about "dreamboat" or "cricket" or afrezza or Mannkind! Go figure!

Even BETTER, published only a couple of MONTHS ago, this guy practically GUSHES enthusiasm over dry powder inhaled meds:


"Imagine the Superiority of Dry Powder Inhalers from Carrier Engineering"

Oh, my:

"At last, this continued advancement will benefit clinicians and patients, allowing easy delivery of various therapeutic agents as dry powder inhalers with improved in vivo efficacy, better patient adherence, and reduced adverse effects."

But not ONE word about FDKP! Not ONE word about afrezza! Not ONE word about Mannkind!

Think maybe there's a HINT in there someplace?
RisingSKEPTIC profile picture
Addendum -- the first link to "Review of Dry Powder Inhaler Devices" may not work because it's to some sort of secure server, but if you're interested, you still can google "american pharmaceutical review Review-of-Dry-Powder-I... and that will take you there.
Product is great. Mgmt should align with sale numbers with a payroll.
Interesting article. There’s always 3 sides to every story or opposing opinions and I don’t necessarily disagree with the article cause sales are sales and sales have not ramped up like I prefer to see.

However I used to hear the similar arguments when Sirius and/or XM when they delayed launch of business or had to raise funds to launch new satellites. At least a quarter billion at a time roughly to launch new birds.

The money was always raised whether debt or stock offering. Will be no different with mnkd when needed. The question is at what cost and how much stock dilution or could they work out a more generous debt offering with an investor outside the USA and payoff Deerfield?

To me a potential factor that could have an impact in the long run is if trumps executive order allows insurance companies to start competing across state line. More competition is a win win for everybody especially the consumer. That could impact mnkd and insurance coverage down the road.

As far as cost just like Sirius xm when they started the more you sell the lower your cost but mnkd needs better insurance coverage so they can ramp up sales which definitely wouldn’t hurt the cost to produce. I think people who use the product prefer a afreeza but it’s the cost that’s my personal opinion on the refills. Not all people have a lot of money left over. I know I could not shell out 1,000 month or whatever it cost. I don’t have this health issue.

In my opinion this is a similar story to Sirius Xm except they never did a reverse split to get into compliance. Mnkd is a stock that can definitely be traded. Sirius xm was saved by liberty media. Mnkd could pull a Sirius but just like Sirius odds are against but you never know. Sirius in a matter of 72 hours went from almost having to bankrupt to negotiating a deal
RisingSKEPTIC profile picture
Questions have arisen on proboards about a form:

"Questions raised elsewhere by this form -- afrezza.aspnprograms.c...

Mine [digger]-- what is a Mannkind Cares Pharmacy and are titration packs available only at such a pharmacy?

Peppy -- what is an afrezza approved pharmacy?

Dreamboatcruise -- "The "Start Out Program" with a note that it isn't available to patients covered by state or federal programs... and it appears that the titration packs my only be available within this Start Out Program. Does anyone know what this "Start Out Program" is? and are titration packs really not available to patients covered by Medicare and other government programs?"

The questions arise from a section of the prior approval form that Mannkind Cares uses where it says:

"Request Start Out Program: oYes oNo

AFREZZA Titration Pack (NDC 47918-880-18) 1 pack, 2 refills
AFREZZA Titration Pack (NDC 47918-902 -18) 1 pack 2 refills

(For commercially insured patients only . Not available for Medicare, Medicaid, or other federal or state healthcare programs). Only filled through a MannKind Cares Pharmacy"

My OWN question is that it says the titration packs come with TWO refills. Now bear in mind that the 180 DOSES in EACH pack SHOULD last upwards to TWO MONTHS. So are they implying that it might take SIX months to "titrate" afrezza?

That certainly would agree with the data they presented to the FDA:

whomeshanghai profile picture
The best stretch of trx started oct 2015 over 5 weeks
But that revenue wasn't much different than now
Those same 5 weeks
Looking For Diogenes profile picture
1) They don't have to file a SEC document at this time--but you can bet good money that Deerfield and the Mann Trust knows the situation. They still have a small amount of money in the till, so they ride it out for a few more weeks. As stated before---Deerfield and the Mann group converted worthless debt instruments for common stock. Their stock is the only thing that has an value, but as you can see if that is getting sliced and diced nearly everyday. Deerfield has made a tidy annual return on the interest they have collected, now they are shorting stock received for the face amount of their debt instruments. By shorting and let the stock go to zero they merely cover their short with the stock they got for the debt. Skinning the cat two ways at the expense of those holding the stock. YOU!
2) Can the Saudi government purchase Afrezza for their citizens! I would guess the rulers of this nation could do anything they want--it's not exactly a democracy they have. But, the recent event where many of the royal princes and wealthy operators were all arrested and held in a local hotel, this new kid on the block has shown that they must cut their nation's operating expenses--they no longer can dictate the international oil market. The elaborate and long approval process they have in place would require months or years to get a new drug approved. As stated in my article--Afrezza has the two most critical issues stacked against them. #1 is the cost of Afrezza. MNKD can never make their cost structure for Afrezza being the cheapest insulin product. Simply look at the gross revenues they have in the US--then look at their net revenue. Afrezza price of production and distribution is eating them alive. The Saudis have told you---price control, price controls--and MNKD can't afford to play their game, but Novo can. As the old adage is proven--10% profit on 100% of the pool of money is better than 100% of nothing.
Kastanes--I admit that I rub you wrong on occasions, but please, please don't let the trees get in your way of seeing the forest. Drug products fail everyday--ask Dendreon and consider they have hundreds of million of dollars in revenue, but their manufacturing cost eroded their chance of ever making a profit. Think about that, Kastanes!
RisingSKEPTIC profile picture
"...please don't let the trees..."???

Speaking of TREES, it appears that Receptor Life Sciences is still doing NOTHING but LOOKING at theirs:


Those must be very INTERESTING trees since RLS has been STARING at them for THREE YEARS now!
Got to know when to Holdem and when to foldem son
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