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Here's Why MannKind Corporation Rose 11.5% in January

By Brian Feroldi - Feb 6, 2017 at 10:05AM

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A handful of positive developments caused shares to rally.

Hand holding Afrezza

Image Source: MannKind.

What happened

Shares of MannKind (MNKD 4.89%), a commercial-stage biopharma focused on inhaled insulin delivery, rallied 11.5% during January, according to data from S&P Global Market Intelligence.

MNKD Chart

MNKD data by YCharts.

So what

Shareholders can credit the gains to a series of positive news items released during the month.

Here's a quick recap of the key announcements:

  • MannKind confirmed that it received a $1 million milestone payment from its collaboration agreement with Receptor Life Sciences.
  • The company continues to succeed at poaching talent from Amgen. MannKind announced that it has hired Dr. Stuart Tross to head up the company's HR department. 
  • The company confirmed that it received a $30.6 million payment from Sanofi
  • Management gave a presentation at the J.P. Morgan Healthcare Conference where they provided details for their new sales and marketing strategy for Afrezza. 

When combined, these moves should provide the company with a little bit more breathing room financially, hence the rally in the share price. 

Now what

Unfortunately, the month's double-digit gains proved to be short-lived. MannKind's stock took a tumble in early February after the company announced that it will be holding a special meeting of stockholders on Feb. 24 to vote on a potential one-for-three or one-for-10 reverse stock split. The company made this announcement in response to a letter from the Nasdaq that threatened to delist the company's stock unless it gets its share price above $1 per share for 10 consecutive days between now and March 13.

MannKind CEO Matthew Pfeffer stated that being delisted would be "disastrous for the company on many levels," hence his push for a special vote.

I for one agree with CEO Pfeffer that a reverse stock split would be in the best interest of the shareholders. However, traders do not appear to share that point of view. 

Regardless of the stock's short-term price movements, the company's future remains completely dependent on the successful relaunch of Afrezza. Will the company's recent maneuvers reignite interest from patients and providers? We won't know the answer to that question for several more quarters. 

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

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