MannKind Corp., a biotechnology company with a diabetes drug in late-stage testing, fell the most in almost a year after saying it will sell more shares to raise money.
MannKind dropped 15 percent to $2.70 at the close in New York, the biggest decline since Feb. 11, 2011. The company will offer $50 million worth of units that consist of one share of MannKind and a warrant to purchase 0.6 percent of a second share, the Valencia, California-based drugmaker said today in a statement. Also planned are as much as $161 million of 7-year convertible notes to repay or repurchase debt, MannKind said in a regulatory filing.
“It’s diluted financing,” said Joshua Schimmer, an analyst with Leerink Swann in New York. “They had a $370 million proposed debt offering in September of last year, and instead of updating us on that, they’re doing an equity offering which suggests that they weren’t making enough progress.”
MannKind’s lead drug candidate, Afrezza, needs to complete the last phase of clinical trials, file for U.S. Food and Drug Administration approval and then be introduced in the market, Schimmer said. Unless MannKind can find a commercial partner, it would have to fund product’s introduction, he said.
MannKind shares have fallen 43 percent in the past 12 months.