Shares of MannKind Corporation (MNKD - Analyst Report) were down 1.5% after the company reported a loss of 9 cents per share in the third quarter of 2014, narrower than the year-ago loss of 17 cents per share. The Zacks Consensus Estimate for the quarter was earnings of 9 cents per share.

Mannkind Corporation - Earnings Surprise | FindTheBest

MannKind did not generate any revenue in the third quarter of 2014 as in the year-ago quarter.

Quarterly Highlights

Research and development (R&D) expenses for the third quarter decreased 29.7% to $19.2 million mainly due to lower non-cash stock-based compensation expenses.

General and administrative (G&A) expenses increased 9.2% from the year-ago quarter to $19.1 million. The increase was primarily due to higher professional fees related to the closing of the collaboration and license agreement with Sanofi (SNY - Analyst Report).

During the quarter, MannKind inked a global licensing deal with Sanofi under which Sanofi will be responsible for commercial, regulatory and development activities pertaining to Afrezza across the globe. The companies also inked a supply agreement for the manufacture of Afrezza by MannKind at its manufacturing facility in Danbury, CT.

The company received an upfront payment of $150 million under the deal.

Our Take

MannKind, which gained FDA approval for Afrezza (a rapid-acting inhaled insulin therapy for adults with type I and type II diabetes) in Jun 2014, expects to launch the product in early 2015.

We are positive on the Sanofi deal, which will not only provide MannKind with funds in the form of upfront and milestone payments, Sanofi’s experience in the diabetes market should also come in handy.

We expect investor focus to remain on the commercialization of Afrezza.

MannKind currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the health care sector include AMAG Pharmaceuticals, Inc. (AMAG - Snapshot Report) and Biogen Idec Inc. (BIIB - Analyst Report). Both carry a Zacks Rank #1 (Strong Buy).

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