MannKind axes 179 workers, circles wagons around Afrezza

With its troubled inhaled insulin program stymied at the FDA, MannKind ($MNKD) announced Thursday evening that it will axe 41 percent of its workforce--179 employees--as it circles its remaining wagons around Afrezza. The news capped MannKind's fourth quarter numbers release, which revealed that it had ended the year with about $70 million in cash and securities along with another $98 million available from a loan supplied by company CEO Alfred Mann.

Pink slips were spread throughout the ranks, according to company officials in a call with analysts, but the axe cut deepest in the biotech's oncology program. The company's remaining money and all of MannKind's resources--which CFO Matt Pfeffer said is enough to carry the company to the end of the year--are being earmarked to identify exactly what data the FDA wants to see, restructure two planned trials to obtain that data and resubmit the new information the NDA.

MannKind CSO Peter Richardson said he expected recruitment for the two trials should take six months, dosing of patients will last six months and two to three months would be needed to prepare the new submission. With FDA discussions still to be scheduled, MannKind will have to fill a significant gap between the cash it has and the cash it needs.

Adding it all up, Avik Roy, an equity research analyst at Monness, Crespi, Hardt, estimates that MannKind will need a total of 24 months to gather data and get an answer back from the FDA on Afrezza. The company probably couldn't get the therapy on the market before the middle of 2013, leaving it in need of $250 million in additional capital to make it through the next three years. And Mann was unwilling to commit his own considerable fortune to fueling MannKind through this next big gamble, adding to the odds that MannKind will eventually be forced to abandon the inhaled insulin program.

During the call, Mann and others insisted, though, that there have been continuing discussions with interested partners.

"We have several very significant opportunities," said Mann, who earlier noted that after three weeks to digest the contents of the FDA's complete response letter he felt significantly more optimistic. But neither Mann nor other company executives would provide details of who was interested in partnering or how much money could come from it. MannKind has been harshly criticized in the past about touting potential partnerships, even setting a deadline for a pact which never materialized.

- here's the MannKind release