MNKD: Mannkind Corporation (MNKD) looked to be on a rebound as shares surpassed the three dollar mark recently and some media outlets began predicting a short squeeze, give the huge short interest in the stock over the past months.
Heavy insider ownership also added intrigue to the Mannkind story, which could quickly regain traction once it starts to look as if the latest round of trials requested by the FDA for Afrezza approval will be enough to justify an FDA approval; or at least as the trials evolve to the latter stages and the event-based traders of the sector start to move in.
Afrezza is an inhaled insulin product for diabetics, but the FDA wanted to see it work with the company's next-generation inhaler before again considering an approval.
Any immediate share price recovery was derailed on Tuesday when the company announced plans of a stock offering and sent shares spiraling downward by over ten percent.
The offering expects to bring in nearly fifty million for the company and will boost the cash reserves help see the latest round of Afrezza trials to frution. In addition to the offering, the company announced that, "MannKind intends to issue to The Mann Group LLC, an entity controlled by MannKind’s chief executive officer and principal stockholder, Alfred E. Mann, restricted shares of its common stock in exchange for cancellation of outstanding debt."
Mr. Mann has nearly a billion dollars of his own personal fortune invested in the company.
With the bad news now out of the way, and with the shorts having their way with the MNKD share price over the past months, any scenarios involving short covering might now start to take shape as the shorts cover and go looking for their next target.
One of the more beaten-down stocks in the sector, interest may be again drawn to Mannkind as the trials progress.
GNBT: Like Mannkind, Generex Corp (GNBT.OB) is developing a needless insulin delivery product for diabetics. Oral-lyn, as GNBT's product is known, is an insulin spray that delivers insulin through the inner lining of the cheek, while Mannkind's Afrezza uses the lungs as a delivery system.
Both companies have been neck-and-neck over the past few years trying to bring their respective products to market first to gain immediate market share and stave off potential competition, but it looks like Mannkind has retained the driver's seat and is leading the race to market.
Also like Mannkind, Generex has a battered share price - although an early year run saw GNBT nearly triple from recent lows - and was hammered recently by the announcement of a financing deal.
Last week the company announced that it had secured funding by using certain of its real estate properties as collateral, and this week an announcement of a securities purchase agreement hit the wires.
The funds will be used for the standard "general corporate purposes" and for the restructuring of the company that looks to be geared more towards Antigen Express and AE-37 than Oral-lyn.
Aside from January's prime time trading opportunity, GNBT should still be considered, in my opinion, a 'wait and see' kinda play. Antigen Express looks to hold all the potential short term catalysts at this time.
CVM: Cel-Sci Corp (CVM) had been on the move all month long before a financing deal derailed the run last week. The significant short term move made for a nice trading opportunity, but an investment in CVM is an investment in the potential of Multikine as a standard-of-care immunotherapeutic treatment for head and neck cancers.
The cash raised from last week's deal will be used to fund the ongoing worldwide Phase III trial, for which Orient Europharma and Teva (TEVA) have already come on board as partners.
CVM has had its share of price runs and trading opportunities over the past few years, so it's always one to track for a 'buy the dips' and 'sell the spikes' kind of strategy, while holding a core position based on the potential of Multikine.
Disclosure: Long MNKD, CVM.