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MannKind Corporation’s (MNKD - Analyst Report) loss of 16 cents per share in the second quarter of 2013 was wider than the Zacks Consensus Estimate by a penny, but narrower than the year-ago loss of 23 cents per share.

Quarter in Detail

MannKind did not generate any revenues in the second quarter of 2013 as in the year-ago quarter.

Research and development (R&D) expenses increased 1.6% to $27.1 million in the reported quarter. The increase in R&D expenses was primarily attributable to higher non-cash stock compensation expense, which was offset by lower clinical trial expenses.

MannKind is primarily focusing on the development of its lead pipeline candidate Afrezza. Afrezza, an inhaled insulin, is being developed for the treatment of type I (Affinity 1 study) or type II (Affinity 2 study) diabetes.

The company recently completed enrolment for both its Affinity studies. The analysis of these studies is expected to be completed soon. MannKind plans to resubmit a New Drug Application to the U.S. Food and Drug Administration for Afrezza by year end.

General and administrative expenses decreased approximately 17% in the reported quarter to $14.5 million. The decrease was primarily attributable to higher non-cash stock based compensation expenses in the year-ago quarter.

Our View

We expect investor focus to remain on Afrezza going forward. However, we are concerned about the company’s over dependence on Afrezza. Any setback related to the diabetes candidate will be catastrophic for MannKind.

MannKind, a biopharma stock, presently carries a Zacks Rank #3 (Hold). Other biopharma stocks, such as Actelion Ltd. (ALIOF), Alexion Pharmaceuticals, Inc. (ALXN - Analyst Report) and Amarin Corporation (AMRN - Snapshot Report) are comparatively well placed. While Actelion carries a Zacks Rank #1 (Strong Buy), Alexion and Amarin carry a Zacks Rank #2 (Buy).

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