UPDATE 2-MannKind says struggling to find partner; shares fall

(Adds analyst's comments, details)

BANGALORE Aug 3 (Reuters) - MannKind Corp. (MNKD.O) said it is struggling to find a partner for its lead diabetes product and that it extended a loan agreement with its chief executive.

"All things considered, we do not expect to reach a partnership agreement in the near term," Chief Executive Alfred Mann said on a conference call with analysts, referring to the product, Technosphere insulin (TI).

The company's shares were trading almost 15 percent down at $9.04 in afternoon trade on the Nasdaq. They hit a year low of $8.56 earlier in the day.

Oppenheimer and Co. analyst Scott Henry cut his price target on the stock to $15 from $17.50, citing disappointment over the prospect of a delayed and less profitable deal for the product.

Henry said the disappointing launch of TI's competitor product Exubera, an inhaled insulin product from Pfizer (PFE.N), hurt partnership discussions for the company's product.

He, however, maintained a "buy" rating on the stock.

"(MannKind) appears to be executing on what they can control... The problems appear more related to Exubera's launch, and its difficulties attaining appropriate reimbursement," Henry said in a note.

Company CEO Mann said Exubera's reimbursement issues coupled with the wait for TI's trial data was causing the delay in securing a partner.

TI is in late-stage trials, and the company expects to file a marketing application for the product by December 2008.

Valencia, California-based MannKind extended its loan arrangement with CEO Mann and said it can borrow up to $150 million anytime before Aug. 1, 2008 under the deal.

The biopharmaceutical company also said its chief financial officer, Richard Anderson, plans to step down once a successor has been identified.

On Thursday, MannKind had said it had $284 million of cash, cash equivalents and marketable securities in hand at June 30, 2007, down 22 percent from the previous quarter.

It also postponed the release date of its second-quarter results to Aug. 9, citing discovery of an over-accrual of some clinical trial expenses in the quarter. (Reporting by Varsha Tickoo in Bangalore)