MannKind Gets Mauled: What You Need to Know

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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.

Interested in more info on MannKind? Add it to your watchlist here by clicking here.

Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team. He didn't own shares in any of the companies mentioned in this article at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. You can also get his insights delivered directly to your RSS reader

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  • Report this Comment On November 04, 2010, at 5:15 PM, jdmballm wrote:

    This lawsuit was filed back in September and disclosed in a SEC filing shortly thereafter....yet today all of a sudden it is news. Interestingly, this article does not mention the response from the company on this story, as MannKind Chief Financial Officer Matthew Pfeffer said that they terminated this person for good cause and not in retaliation. Importantly, Mr. Pfeffer said that there has never been any data withheld from FDA and the data upon which he's based these allegaitons has been supplied to FDA and they've not raised any concerns with it. Finally, Mr. Pferrer said that nothing has come up so far that would lead Mannkind to conclude that the FDA will not approve on the 29th.

    Let's try and report all of the news...not one side of it. Thanks.

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10/21/2016 10:50 AM
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