No one expected a miracle from MannKind Corporation (NASDAQ:MNKD) in the fourth quarter. And there wasn't one.

The biotech announced its Q4 and full-year 2017 results after the market closed on Tuesday. MannKind's bottom line still looked horrible, with a fourth-quarter net loss of $32.8 million, or $0.28 per share. For full-year 2017, the company lost $117.3 million, or $1.13 per share. 

Investors didn't like what they heard from MannKind, with the stock sinking close to 10% in after-hours trading. However, it wasn't all bad news for the biotech. Here are three bright spots in the midst of all the negatives in MannKind's Q4 update. 

Three bright spotlights shining down on a dark stage.

Image source: Getty Images.

1. Kept the train on the tracks

MannKind CEO Michael Castagna said that he wasn't happy with the biotech's performance in 2017 and knows the company could have performed better. However, he added that MannKind "kept the train on the tracks" last year, and he's right about that.

When I spoke with Castagna in November, he told me that "the company has been through the worst." It wasn't all that long ago that many wondered if MannKind could even survive. Castagna stressed on the Q4 conference call that MannKind is past the survival stage and was in a stabilization stage in 2017. Now, he says the company is ready for sustained growth.

Under Castagna's leadership, MannKind has taken several important steps to at least set the stage for sustained growth. The company has reduced or restructured over $80 million in debt, clearing the runway for MannKind to focus on growing sales for its inhaled insulin product Afrezza. MannKind has also hired a sales team that is already doing a better job than Sanofi did when it owned rights for Afrezza.

Merely keeping the train on the tracks might not seem like that much of a bright spot, but considering where MannKind was in the past and where it could be right now, I'd say it might be the brightest spot of all.

2. Afrezza is picking up momentum

There's also no question that Afrezza is gaining momentum. MannKind reported Afrezza net revenue totaling $4.5 million in Q4 -- a 238% year-over-year jump and 125% quarter-over-quarter increase. 

Other key metrics also show improvement. MannKind chief commercial officer Pat McCauley said that total prescription volume continued to grow throughout 2017. The number of "new writers" (prescribers of Afrezza) jumped 92% between the first quarter of last year and the fourth quarter.

McCauley also shared that MannKind is already seeing a rebound from the seasonal decline in January. This decline stems in large part from patients starting the new year with new deductibles. The sales drop from the previous sequential quarter for Afrezza in January 2018, though, was only 7% compared to an 18% drop in the prior-year period.

3. Better days ahead

MannKind provided 2018 guidance that projects Afrezza net revenue of $25 million to $30 million. That's a huge improvement from last year. There are several reasons to be optimistic about the company's ability to achieve its guidance.

First, the label update that MannKind talked a lot about in its Q3 conference call should begin to pay off in sales results this year. Second, the company thinks it can apply what it has learned from its top-performing sales reps to improve sales in some of the lower-performing territories. Third, MannKind has better payer coverage now than it has in the past.

One wild card for 2018 is how much MannKind will invest in direct-to-consumer (DTC) marketing of Afrezza. McCauley said that the early results from the company's TV ads in selected markets were encouraging. He noted that the regions where the TV ads aired experienced three times the growth in weekly prescription volume, four times the growth in new writers, and 13 times the growth in average weekly unique writers compared to other markets.

It's still early, and more time will be required to analyze the DTC campaign, but it appears that Afrezza sales could be boosted by more advertising. 

A dark cloud is still hovering

While these were bright spots from MannKind's latest update, there's still one dark cloud hovering over the company. At the end of 2017, MannKind reported cash and cash equivalents of $43.9 million. The biotech expects to use close to $25 million per quarter on average of cash this year. This means that more cash is going to be needed soon. Another dilutive stock offering is probably on the way.

Castagna mentioned several times during the Q4 call that MannKind is "moving in the right direction." Objectively, he's correct in several important ways. However, further dilution is likely to result in MannKind stock moving in the wrong direction -- at least temporarily. 

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