VALENCIA, Calif. (TheStreet) -- MannKind (MNKD) founder and CEO Al Mann won't commit to pouring any more of his multi-billion dollar fortune into keeping the beleaguered company afloat. Outside investors shouldn't either.
On a conference call Thursday night, Mann insisted he remained optimistic about the eventual approval of MannKind's inhaled insulin delivery device Afrezza despite two rejection letters from the FDA.
MannKind has about 10 months of cash remaining on its books after firing 179 employees, or 41% of its workforce Thursday to cut costs. Under the rosiest scenario, however, Afrezza won't be resubmitted to the FDA for 15-16 months, with a third FDA approval decision date coming six months after that.
Obviously, MannKind needs to raise a lot more money to stay in business, so Mann was asked directly if he would invest more of his personal fortune into the company."I can't make a commitment at this point," he responded. And with that answer, the conference call should have ended. Nothing else needed to be said. If Mann is unwilling or unable to back his stated optimism with cold, hard cash, there is no reason for any other investor -- large or small -- to take a risk owning this stock. By his own admission, Mann has invested almost $1 billion into MannKind and Afrezza. Mann's enduring support for the company and its mission has buoyed the stock to some degree despite two FDA rejections. "In Al we trust" has been the rallying cry of MannKind's most diehard supporters. But even billionaires can't lose money forever. Mann's refusal to commit any more of his money to MannKind suggests common sense has finally set in. That's a message and a valuable lesson that shouldn't be lost on anyone. MannKind shares fell 13% to $4.40 in early Friday trading. --Written by Adam Feuerstein in Boston.
>To contact the writer of this article, click here: Adam Feuerstein. >To follow the writer on Twitter, go to http://twitter.com/adamfeuerstein. >To submit a news tip, send an email to: firstname.lastname@example.org.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV