MannKind Corporation (NASDAQ:MNKD) shareholders who were expecting an epic turnaround are disappointed from recent sales figures. The company’s re-launch of Afrezza has not been great. In the last week, the total scripts were nearly 290 with the quarterly sales coming around 3,400. In fact, 3Q2016 has been recorded as the worst full quarter in terms of sales in the last 20 months, almost the same time the product has been in the market.
The highlights
On a QoQ basis, MannKind reported that sales in 3Q2016 were 10.94% lower compared to the sales in 2Q2016. The second quarter had the involvement of Sanofi SA (ADR)(NYSE:SNY), which was not present in the third quarter. Last quarter was the start of the MannKind re-launch with dedicated sales reps. It was hindered by a lack of sample packs, improper codes on goods, lack of titration packs, problems with Medicaid and supply channel issues.
Despite having six months to arrange for the re-launch, there appeared to be weekly glitches with implementation. The bottom line is that the firm has used a full quarter to basically remain where it stood at the start of the quarter in respect of actual sales. The quarter witnessed a 10% jump from beginning to end, however, what was required was a 10% increase every two weeks.
The performance
Year-over-year, it can be noted that the re-launch has halted the downward trend despite 3Q2016 being nearly 50% lower over 3Q2015. The sales comparisons will not seem good, but the financial performance will be a tougher thing to evaluate and compare. In 2015, MannKind was accountable for 35% of the financial performance, and this year it accounts much more, almost 100%.
From a financial viewpoint, the situation remains distressed. MannKind is short on free cash flow and its ability to generate additional funds is dicey. The firm is at a risky point with any method of generating cash would probably result in massive dilution of stock. With cash utilization of around $10 million per month, the firm can hardly get through this year’s end. With no actual leverage, the firm is essentially at the risk of getting money at shark rates.
