MannKind Corp. (MNKD) is a healthcare company that specializes in the development and commercialization of therapeutic products for diseases like diabetes, and pulmonary arterial hypertension.
The company sells Afrezza, an inhaled insulin that helps diabetic adults improve their glycemic control.
Let’s take a look at what has changed in the company’s key risk factors that investors should know. (See MNKD stock charts on TipRanks)
MannKind Risk Factors
According to the new Tipranks Risk Factors tool, MannKind’s main risk category is Finance & Corporate, which accounts for 35% of the total 48 risks identified for the stock. The next two major risk factor contributors are Legal & Regulatory, and Tech & Innovation, which stand at 27% and 23%, respectively.
Since June, the company has added one new risk factor under Finance & Corporate.
Under the Debt & Financing sub-category, the company said, “We may need to raise additional capital to fund our operations.”
MannKind had $62.5 million in cash and cash equivalents, $100 million in short-term investments, and $39 million in long-term investments at the end of June 30, 2021. The total outstanding debt was $293.3 million.
Based on this balance sheet data, MannKind points out that the business may need to seek more cash to finance its continuing activities, including the commercialization of Afrezza and developing new product candidates.
MannKind, on the other hand, cautions investors that the firm may not be able to acquire more cash when necessary. This might cause the company’s activities to be disrupted, increasing the risk of insolvency.
In particular, if funds are not received, MannKind may be forced to halt one or more product development programs, scale back commercialization activities, cut costs, sell or enter into agreements with third parties, file for bankruptcy, or liquidate all of its assets, among other possibilities.
The overall sector average for the Finance & Corporate risk factor is 29.3%.
MannKind Financial Performance
MannKind reported Q2 revenue of $23.3 million, a 54% year-over-year increase. Afrezza’s net revenue increased 43% to $10 million, while collaboration and services revenue jumped 64% to $13.3 million.
Research and development (R&D) expenses, on the other hand, increased to $2.3 million from $1.5 million in the year-ago quarter, while Selling, General and Administrative (SG&A) expenses increased 47% year-over-year to $20.1 million.
Analysts’ Take on MNKD
Post Q2 earnings announcement, Leerink Partners analyst Thomas Smith maintained a Buy rating on the stock, with a price target of $5 (11.6% upside potential).
MannKind stock commands a Strong Buy consensus rating based on two Buys. The average MNKD price target is $5.50, reflecting a potential 12-month upside of 22.8% from current levels.
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