MannKind Corp. (NASDAQ: MNKD) reported its third-quarter financial results on Monday morning. 24/7 Wall St. was not expecting any major insight or inflection point from this report because it is effectively still before you get to see any product sales of its Afrezza inhalable insulin. Still, it turned out that many things are starting to take shape as far as what direction investors might expect on general and administrative (G&A) spending, research and development (R&D) spending, and cash management.

While this may not signal any new sales data for 2015 expectations, 24/7 Wall St. is at least encouraged that R&D expenses and operating expenses were lower. There are caveats due to stock-based compensation expenses, but those who were worried about cash burn rates may have slightly less to worry about on the surface.

MannKind’s net loss for the third quarter of 2014 was $36.5 million, or a loss of $0.09 per share. This compared to a net loss for the third quarter of 2013 of $50.8 million, or a loss of $0.17 per share. The number of common shares outstanding at September 30, 2014, was 405,469,034. The latest report was based on 394.2 million weighted average shares outstanding in the third quarter of 2014, versus 296.4 million weighted average shares outstanding in the third quarter of 2013.

Cash and cash equivalents were $172.5 million on September 30, 2014. This is up from $41.2 million in the second quarter of 2014. During the third quarter of 2014, MannKind received a $150 million upfront payment from Sanofi in connection with the closing of the collaboration and licensing agreement. MannKind had also received $40 million from the Tranche 4 notes purchased by Deerfield back in July 2014, and $17.3 million received from warrant and stock option exercises. MannKind further said, “Currently, up to $70.0 million of additional sales of Tranche B notes may be made to Deerfield and $30.1 million of borrowings remain available under the amended loan arrangement with The Mann Group.”

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Total operating expenses in the third quarter were $38.3 million, a $6.5 million drop from the $44.8 million for the third quarter of 2013.

R&D expenses fell by $8.1 million to $19.2 million from $27.3 million for the third quarter of 2013. The 30% drop was primarily due “to decreased non-cash stock compensation expense of $8.2 million resulting from the settlement value of modified performance awards and an overall decrease in stock-based compensation expense related to performance milestones substantially recorded in 2013 but were achieved and settled in 2014.”

G&A expenses were up marginally — by $1.6 million to $19.1 million from $17.5 million a year earlier. This 9% increase in G&A expenses was “primarily due to increased professional fees of $13.6 million associated with the closing of the collaboration and license agreement with Sanofi partially offset by a decrease in non-cash stock compensation expense of $12.5 million resulting from the reduced settlement value of modified performance awards and an overall decrease in stock-based compensation expense related to performance milestones substantially recognized in 2013 but were achieved and settled in 2014.”

The long and short of the matter is that the expense side of the equation seems better. There are of course special items in the expensing of such items tied to stock-based compensation. That being said, MannKind is still a story of 2015 more than a story of 2014. Our own caveat on that front is that investors have yet to get behind MannKind in a meaningful way, if you just look at the stock performance. MannKind shares had a recent peak of $10.08 on August 11, with a close of $8.53 on that same day — and shares have not been back up there since.

Goldman Sachs had recently issued a Neutral rating late in August, but the call seemed harsh enough that it felt like a downgrade — the comments at the bottom of the story indicated some bias based on recent history.

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The post-earnings trading for MannKind was down 2.6% at $5.85, but only on volume of 2.6 million shares. Its 52-week trading range was $3.80 to $11.48, and the consensus analyst price target is nearly $10.00.

Again, this earnings report should not have had much in the way of news that spooked investors. Some of the spending trends were even better. It just seems as though investors are likely going to have to wait for the launch of Afrezza to see how this story pans out now.

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