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.
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