MannKind Corp.’s stock dropped nearly 28 percent on Tuesday, the day after the company reported its first quarter financial results followed by a conference call that never mentioned a stock dilution that was announced shortly after. After missing analysts’ estimates by 2 cents, the company announced its equity offering of up to 48.5 million shares of common stock to select institutional investors. Each share is being sold with a warrant to purchase 0.75 of a share as well as a warrant to purchase 0.25 of a share at the total purchase price of $1.03 a share. Both warrants will be exercisable individually at a price of $1.50 a share. However, the 0.75 warrants will be exercisable at the time of issuance and will expire two years later. The 0.25 warrants will begin thereafter and will expire after 18 months. The offering is expected to close within the next few days. The dilution is expected to gross approximately $50 million, leaving MannKind with a net of about $47.5 million, which the company will use for working capital and corporate activities. For the quarter ended March 31, the Valencia biotech reported a net loss of $24.9 million (-6 cents a share) and $27.7 million in cash on hand. During Monday’s conference call, MannKind said the company plans on having a 60 to 70 person sales force to boost sales of Afrezza — an inhalable insulin and the company’s sole commercial product — after French drug giant Sanofi terminated its licensing agreement with MannKind earlier this year. Shares closed down 37 cent, or 27.9 percent, to 95 cents on the Nasdaq.
