"Historically, unprofitable biopharmaceutical stocks with a considerable debt burden do not perform well. For example, MannKind (MNKD) is currently trading at a market cap of $421MM, has an enterprise value of $822M, has a whopping $494MM in debt ($283.5MM from The Mann Group and $211 worth of notes due 2013 and 2015), and no revenue in 2012. Furthermore, as of 1Q12, MannKind had cash of $56MM, burned through $33MM in cash, and had a net loss of $38MM in 1Q12. At this rate, ManKind will be out of money by the end of this quarter. The stock is currently down greater than 75% since the accumulation of the debt. Most recently, MannKind completed a debt offering of $100MM aggregate principal amount of 5.75% senior convertible notes, which are due 2015."

http://seekingalpha.com/article/750481-debt-burden-makes-horizon-pharma-an-attractive-short