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What: Shares of MannKind (Nasdaq: MNKD ) fell by as much as 18% in intraday trading after the details of a lawsuit brought by a former employee were made public.
So What: In papers filed with a New Jersey state court, MannKind's former regulatory affairs director, John Arditi, accused executives of withholding evidence of "scientific misconduct" in the testing and development of its signature inhaled insulin treatment, Afrezza, Bloomberg reported. The company had previously dismissed Arditi.
Now What: MannKind has been one of the great insider buying stories of the past year, with founder Alfred Mann spending millions to build up a massive 39% stake in the company, which even with today's sell-off is still worth more than $240 million in market value.
Unfortunately, Mann's buying hasn't been much of a value indicator. And now, with troubling accusations hanging over the company, regulators could be forced to delay a final decision on the feasibility of Afrezza, which had been up for another round of regulatory review no later than Dec. 29. Investors might want to wait for the Food and Drug Administration to weigh in on the implications of Arditi's accusations before taking a chance on this stock.
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