Robbins Arroyo LLP: MannKind Corporation (MNKD) Misled Shareholders According to a Recently Filed Class Action
Robbins Arroyo LLP announces that a class action complaint was filed in the U.S. District Court for the Central District of California. The complaint alleges that officers and directors of MannKind Corporation (NASDAQGM: MNKD) violated the Securities Exchange Act of 1934 between August 10, 2015 and January 5, 2016, by making materially false and misleading statements about MannKind’s business prospects. MannKind, a biopharmaceutical company, focuses on the discovery, development, and commercialization of therapeutic products for diabetes in the United States. Its main product, Afrezza, is a rapid-acting insulin inhaled at mealtimes to help control insulin levels in adults with type 1 and type 2 diabetes.
MannKind Accused of Downplaying Effects of Lung Testing on Sales of Its Product
According to the complaint, the U.S. Food and Drug Administration was concerned for the use of an inhaled insulin with people who suffer from serious pulmonary disease, and therefore, imposed strict guidelines for the prescribing of Afrezza and ongoing monitoring of patients, including testing if a patient has an existing significant pulmonary disease. Among these tests, patients were mandated to have a physical examination and take a spirometry – a lung test to identify any underlying lung disease. Spirometer instruments, however, are not often available in the offices of doctors who treat diabetes, requiring patients to visit multiple doctors and delaying patients’ access to Afrezza.
On September 24, 2014, MannKind announced that it had entered in a worldwide collaboration and licensing agreement with sanofi-aventis U.S. LLC (“Sanofi”) for the development and commercialization of Afrezza. On August 10, 2015, MannKind held a conference call stating that Sanofi had made “excellent moves to address the spirometry requirements and that it was no longer a critical gating item.” However, the complaint alleges, MannKind failed to disclose that contrary to the company’s assurances, the mandated spirometry was still a significant issue impeding sales of Afrezza.
On January 5, 2016, MannKind issued a press release announcing the termination of its license and collaboration agreement with Sanofi. That same day, Bloomberg reported that a Sanofi spokesman, Jack Cox, said that Sanofi terminated the agreement with MannKind due to low level of prescriptions despite Sanofi’s best efforts. StreetInsider reported that Cox said that prescription levels of Afrezza never even met modest expectations. On this news, the company’s stock fell $0.70 per share, or over 48%, to close at $0.75 per share on January 5, 2015. Then, on January 6, 2015, an article published in the LA Times stated that Afrezza was unsuccessful because of the FDA-mandated lung tests, as doctors had no hands-on training with lung testing equipment or with the Afrezza inhalers. On this news, the company’s stock fell further, by approximately 2.67%, to close at $0.73 per share on January 6, 2015.
MannKind Shareholders Have Legal Options
Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.