On Monday, MannKind (NASDAQ:56400P706) will release its quarterly report, and investors don't expect any immediate positive results from the clinical-stage biotechnology company. The company has been waiting for a long time for FDA approval of its Afrezza inhaled insulin product, but established insulin producers Eli Lilly (NYSE:LLY) and Novo Nordisk (NYSE:NVO) are working hard to protect their competitive advantage, and it's still unclear whether MannKind will convince the FDA that any safety issues with Afrezza are less substantial than the potential benefits.

Dealing with insulin is a big hassle for patients suffering with diabetes, as the need for injections is at best a chore and at worst can cause complications for diabetics. The promise of an inhalable insulin product is attractive to many diabetes sufferers, and that has driven interest in MannKind for years. Yet investors are impatient for FDA approval to see just how big the opportunity will be for MannKind, especially in light of potential competition. Let's take an early look at what's been happening with MannKind over the past quarter and what we're likely to see in its report.

Dreamboat (2nd generation) inhaler. Source: MannKind.

Stats on MannKind

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Earnings Beats in Past 4 Quarters


Source: Yahoo! Finance.

Will MannKind earnings ever appear?
With MannKind earning no revenue, analyst earnings projections all hinge on how much they expect the company to spend. Those loss projections have risen recently, with first-quarter loss estimates widening 30% and full-year 2014 loss projections widening by 40%. Yet the stock is up 22% since early February.

MannKind's fourth-quarter financial report didn't hold any big surprises for investors. Operating expenses rose 39%, with the rise coming largely from stock-based compensation charges. Losses per share fell, but only because the number of shares MannKind had outstanding rose dramatically.

The key event for MannKind during the quarter, though, came in April, when an FDA advisory committee recommended that Afrezza be approved, with a unanimous 14-0 vote for type 2 diabetes and by 13-1 for type 1 diabetes. That news was especially welcome because of a scare among investors when the advisory panel presented its briefing materials, which indicated that MannKind had thrown some curveballs at the FDA.

Unfortunately, MannKind investors haven't gotten everything they wanted, as the FDA announced that it would delay its full approval decision beyond its initial April 15 deadline. Yet even though some investors got nervous about the delay, the fact that the deadline fell so close to the date on which the advisory panel made its recommendation is a good reason for the FDA to give itself more time to evaluate briefing materials and make a more considered decision.

One essential aspect of MannKind's future is whether it will find a partner for distributing Afrezza if it gains FDA approval. Because Eli Lilly and Novo Nordisk compete directly against Afrezza with insulin products of their own, MannKind will likely have to look elsewhere for potential partners. Yet with some other major pharmaceutical companies looking to ramp up their exposure to the diabetes space, MannKind should find little trouble gaining interest -- as long as the product gets approved.

In the MannKind earnings report, investors will want to listen for whether the company has made progress in finding a partner. For the most part, though, investors simply have to wait and see what the FDA has to say before MannKind can come up with a strategy for making the most of the Afrezza opportunity.

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