What happened
In response to the company reporting fourth-quarter and full-year 2018 results, shares of MannKind Corporation (NASDAQ: MNKD) jumped 16.6% on Tuesday.
So what
Here are the headline numbers from the quarter:
- Revenue grew 254% to $16 million. That figure was driven by a 28% jump in Afrezza [a type of inhaled insulin] revenue to $5.7 million and $10.3 million in collaboration revenue. Afrezza revenue growth would have been 86% after factoring in certain adjustments. The $10.2 million in collaboration revenue was primarily driven by its agreement with United Therapeutics. This figure greatly exceeded the $5.2 million in revenue that Wall Street was expecting.
- Afrezza generated a gross profit of $2.7 million during the quarter. This was the first time the product line has created a gross profit.
- Net loss was $9.7 million, or $0.06 per share. That was sharply lower than the $32.8 million net loss in the fourth quarter of 2017, and much lower than the $0.17 loss that analysts had predicted.
- Cash balance at quarter-end was $71.7 million.
Zooming out to the full year, here's how the company's numbers shook out in 2018:
- Revenue was $27.9 million. This reflects 88% growth in Afrezza net revenue of $17.3 million and collaborations revenue of $10.6 million.
- Net loss was $87 million, or $0.60 per share. This is down from $117.3 million, or $1.13 per share, in 2017.
Image source: Getty Images.
Michael Castagna, MannKind's CEO, stated:
Our fourth-quarter and full-year 2018 results showed excellent progress in executing against our Afrezza growth plan and recognized for the first time revenues associated with our license and collaboration agreement with United Therapeutics. The fourth quarter of last year was the first time we reported gross profit for Afrezza, and we ended the year with a strong cash position thanks to the United Therapeutics deal, and a public offering of common stock and warrants in December.
Traders cheered the better-than-expected results.
Check out the latest MannKind earnings call transcript.
Now what
MannKind's results show that sales of Afrezza are finally starting to ramp up. That's great to see, but total Afrezza revenue of $17 million is quite small in the grand scheme of things. The company still has a lot of work to do before it can even come close to covering its operating costs.
2019 should be another year of growth for MannKind, but the company's current cash balance of about $72 million won't last very long unless it can sign another lucrative partnership deal.
Overall, MannKind is clearly making progress, but I still have serious questions about this company's long-term prospects. For that reason, I'll be focusing my time and capital on more lucrative opportunities in the healthcare sector.
