Why MannKind Corporation Stock Is Sinking Today

MarketsMotley Fool

What happened

Shares of MannKind Corp. (NASDAQ: MNKD) fell by as much as 11% on moderate volume in early-morning trading today. The culprit? The biotech's stock appears to be reacting to the disappointing scrip numbers for its inhaled insulin product, Afrezza, in early December. The key concern is that MannKind appears destined to miss consensus again on revenue when it reports fourth-quarter earnings next year -- that is, unless something dramatic happens in the last few weeks of December.

Continue Reading Below

So what

Despite a favorable label change that breathed new life into the company earlier this year, Afrezza still isn't selling well enough to change MannKind's outlook in the near -- or long -- term. MannKind will probably have to dilute shareholders yet again in early 2018, simply to keep itself afloat. Afrezza, after all, is projected to bring in around a mere $25.7 million in sales next year, while the company burned through over $23 million last quarter alone.

Now what

To be frank, MannKind's day of reckoning seems close at hand. The company can't get Afrezza to gain traction in the marketplace, and it's running out of resources to throw at the effort. In fact, MannKind is at the stage where it's probably going to need to dilute shareholders every other quarter simply to keep up its doors open -- that's not a winning scenario for shareholders. Heading into the end of the year, MannKind comes across as a strong candidate to sell for tax purposes.

10 stocks we like better than MannKind CorporationWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and MannKind Corporation wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of December 4, 2017

George Budwell has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.