MannKind Corporation Sinks: CFO Says 'We're Not There Yet' With Afrezza

MannKind Corporation

fell more than 7 percent after the company acknowledged its hasn't hit the breakeven point for its inhaled insulin product Affrezza. "These low volumes make it painful because the margins aren't there," Chief Financial Officer Matthew J. Pfeffer said at a Goldman Sachs conference Wednesday. Mannkind traded recently at $6.20, down $0.50 cents. "We need to get some of the fixed costs covered. We're clearly not there yet," Pfeffer said. "I have some forecasts that can say we'll get there pretty quickly but beyond that I'm not sure I want to be too open at this point." Mankind and Affrezza partner Sanofi SA

expect to launch consumer advertising for the product next month. "That will help," Pfeffer said. "This is a product that will lend itself to that kind of advertising." "We still see a lot of surveys that show a lot of doctors don't know about Affrezza," Pfeffer said. The drug was launched in February with analysts reportedly expecting annual sales of $182 million. http://www.reuters.com/article/2015/02/03/us-sanofi-diabetes-insulin-idUSKBN0L70CS20150203 But sales of the drug contributed only $1.1 million to Sanofi's first-quarter sales. http://www.valuewalk.com/2015/04/mannkinds-afrezza-q1-sales-sanofi/ MannKind will retain 35 percent of profits or losses from Afrezza and has a remaining $725 million in potential milestone payments from Sanofi relative to the drug. "The remaining milestones are mostly sales oriented," Pfeffer said. "We're confident we'll get all those milestones. The question is how rapidly." Pfeffer said MannKind's $100 million convertible debt due in August might be extended or rolled over into a new instrument. "People worry about dilution, but said the dilution has already been factored in by everybody" according to Pfeffer, who said the company has no plan for a secondary offering.