The stock market has absolutely been on fire over the trailing 12 months. The broad-based S&P 500 has increased by a whopping 17% over that time span, which is more than double the historical average increase in stocks, including dividend reinvestment, of 7% over a one-year period.

However, not everyone has gotten in on the party. In fact, some companies are in downright terrible shape, and they've seen their stock valuations fall accordingly. While there is no concrete method to accurately predict whether a company will survive and turn its business around, there are a handful of companies that I firmly believe could struggle to avoid bankruptcy over the next two years. In no particular order, here they are.

Businessman pointing toward bankruptcy.

Image source: Getty Images.

Valeant Pharmaceuticals International Inc.

During the summer of 2015, Valeant Pharmaceuticals (BHC -1.50%) was sporting a $90 billion market valuation. Today, it has fallen below $4 billion.

What went wrong, you wonder? Valeant, which had been primarily growing its business through price hikes on mature drugs and through debt-financed mergers and acquisitions, ran into a brick wall when it was caught red-handed passing along exorbitant price hikes of 525% and 212% on two cardiovascular drugs. The admission of pricing mistakes led Valeant to lose much of its pricing power (which was confirmed in its recent fourth-quarter results where pricing actually dragged on its sales), and significantly impeded its core operations.

When Valeant's core businesses began to see weakness and its EBITDA (earnings before interest, taxes, depreciation, and amortization) was adjusted lower, the debt concerns started to mount. While Wall Street had long forgiven Valeant's debt-driven growth, a blind eye could no longer be turned to a company that had more than $30 billion in net debt at one point.

Ultimately, the company's debt could be its undoing. Valeant's secured lenders keep a close eye on its EBITDA-to-interest coverage ratio as a sign of whether the company will be able to repay its loans. In recent quarters, Valeant's EBITDA-to-interest coverage ratio has fallen to an expectation of just 2-to-1, if not lower, for 2017. That's exceptionally low.

A person reaching for money in a mouse trap.

Valeant could be a giant value trap. Image source: Getty Images.

What's more troubling is that Valeant has no quick turnaround catalysts. It needs to receive a premium sale price on its assets in order to reduce its debt and raise its EBITDA-to-interest coverage ratio. A fire sale of its products most likely wouldn't do any good to appeasing the company's creditors and easing concerns about its debt covenants.

This is the crux: Valeant's core business has shown little life, its peers aren't really biting on its assets for a premium valuation, and its debt covenant ratio continues to decline. Valeant's time may be up in less than two years.

Sears Holdings Corp.

Of the three companies listed here, perhaps none has the writing more visibly written on the wall than Sears Holdings (SHLDQ), which appears to have one foot in the proverbial grave.

Sears and Kmart have had a pretty simple strategy over the past couple of years: close lesser profitable and underperforming locations, promote its direct-to-consumer segment, and emphasize the importance of its core brands, such as Kenmore, Craftsman, and Diehard. The problem is that cost-cutting isn't a growth strategy, and Sears may be realizing that a bit too late.

In January, Sears announced that it was divesting its Craftsman brand to Stanley Black & Decker (SWK -0.40%) for what seems like a measly $900 million, plus a 15-year royalty payment of between 2.5% and 3.5%. Estimates last year had suggested that Sears could net up to $2 billion for its Craftsman brand. The issue is that even with this cash infusion, Sears ended the quarter with only $238 million in cash and $4.2 billion in long-term debt. Even closing stores and cutting employees may not save Sears, which is burning through its capital at an incredibly fast rate.

Interior layout of Sears clothing department.

Image source: Sears Holdings.

According to Fitch Ratings, Sears is expected to burn through $1.8 billion in cash in 2017, and this includes an assumption of $250 million in cost savings from store closures and fewer inventory purchases. Even with a recent $500 million real estate loan, a debt restructuring deal, and the initial $525 million received from Stanley Black & Decker following its Craftsman divestment, Sears may not have enough capital to make it through 2017.

Even if Sears manages to survive 2017, it doesn't have a turnaround strategy that's inspiring confidence on Wall Street. It's looking to divest its most valued assets, and consumers are no longer very loyal to the Sears brand. It's probably the most likely of these three companies to meet its demise before 2019.

MannKind Corporation

Finally, we'll end as we began: with a troubled drugmaker. The third company I suspect may have a hard time making it till 2019 is small-cap MannKind (NASDAQ: MNKD).

On paper, MannKind looked like it had a winner with Afrezza, a Food and Drug Administration-approved inhalable diabetes medication for type 1 and 2 patients. According to the Centers for Disease Control and Prevention, there are more than 29 million people suffering from diabetes (mostly type 2) in the U.S., meaning there was an ample market opportunity for Afrezza. Most importantly, it was a fast-acting medication that metabolized through the body faster, and it was inhalable, which meant no needles. It had all the hallmarks of a drug capable of $1 billion or more in annual sales.

Unfortunately, Afrezza's actual results fell laughably short of expectations. After partnering with Sanofi (SNY 1.39%) in 2014, Afrezza sales struggled to cross the $2 million mark per quarter. Sanofi had a clause in its licensing deal that allowed it to walk away if Afrezza wasn't considered economically viable -- and, needless to say, $5 million to $6 million in annual sales wasn't viable for Sanofi. In January 2016, Sanofi walked away from MannKind, leaving the company to market Afrezza by itself.

Afrezza inhaler.

Image source: MannKind.

MannKind responded by utilizing external marketing representatives to sell Afrezza, but announced just weeks ago that it would abandon that idea and begin training in-house sales representatives. It's also managed get Afrezza on the formularies for Aetna and Express Scripts. In some respects, MannKind is doing a lot more than Sanofi ever did.

But there's a major concern: cash. MannKind's decision to use in-house marketing representatives will likely mean an acceleration of its cash usage, since the company continues to lose money. It ended the third quarter with $35.5 million in cash, $30.1 million in credit line access from The Mann Group, and $50 million in at-the-market common stock issuances it could tap. Additionally, it had received a $30.6 million payment from Sanofi and netted $16.7 million from the sale of real estate.

Despite all of this capital added together, there's little assurance that Afrezza sales will ramp up. Its higher cost compared to needle-based insulins remains a concern, and it's going to be incredibly difficult to get physicians and consumers to switch from trusted brand-name insulin products.

It's quite possible that the sun could set on MannKind before the calendar changes over to 2019.