MannKind Corp. (NASDAQ: MNKD) saw its shares trading lower on Thursday, on what was a day with little or no real news from the company. The culprit may simply be insiders selling more shares. One thing that should be pointed out first and foremost is that these shares sold were part of a scheduled insider share sale under the formal Rule 10B5-1 Plan.

The total proceeds between these two insider sales came to more than $1.4 million — versus a market cap of about $2.3 billion. A second issue to consider is that other insiders also sold over 250,000 shares later in November as well.

Diane Palumbo, Vice President of Human Resources, sold some 183,522 shares on December 1 at a volume weight average price (VWAP) of $5.8943, for just over $1 million in total proceeds. She still has 29,105 shares.

Hakam Edstrom, president, sold some 74,668 shares on December 1 at a VWAP of $5.8937 per share, for a total of about $440,000. Edstrom is shown to have 1.047 million shares remaining.

The logic over insider selling is far more complicated than open market share purchases by corporate insiders. The insiders may be doing estate planning, they may be buying a house or there may be myriad other reasons. Again, these two insider sales were under a Rule 10B5-1 Plan, so they are likely less than ominous on the surface. Still, with MannKind shares having been cut in half, and with so many skeptics fighting optimists here, it is easier to see why some investors might wonder about large blocks of stock being sold.

ALSO READ: Credit Suisse Sees 2 Biotech Stocks That Could Double in 2015

There is still a debate over Sanofi’s involvement, or the terms of that deal, for Afrezza as an inhaled insulin. Our view after the sell-off began taking root was that the deal just might not be good enough for MannKind. That remains a debate to this day, as Thomson Reuters has consensus estimates calling for a loss in 2015 on only $41.55 million in revenues. Still, the most optimistic forecast is $110 million.

Many investors and traders think this is the next great blockbuster — and many are betting against it. To prove a point, the November 14 short interest of 82,431,190 shares was a record for 2014 and represented more than 17 days to cover.

MannKind shares were down 4% at $5.47 in mid-day trading on Thursday. MannKind’s 52-week trading range is $3.80 to $11.48, and the consensus analyst price target remains just under $9.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.