On Tuesday, MannKind Corporation (NASDAQ: MNKD) dropped around 7% after having registered a proposed offering with the SEC on Friday to possibly issue up to $500 million in common and preferred stock, warrants and/or debt securities. However and on Wednesday, investors and traders alike seemed to have largely shrugged off the announcement as MannKind Corporation rose 3.95% for a market cap of $524.38 million and around 200 million shares outstanding. So what should you as an individual investor or trader do?

To first put things in perspective, MannKind Corporation is focused on the discovery, development and commercialization of therapeutic products that has AFREZZA® , a novel, ultra rapid-acting mealtime insulin therapy that is the company’s lead investigational product candidate. AFREZZA® is currently in the late stage clinical investigation for the treatment of adults who have type 1 or type 2 diabetes for the control of hyperglycemia and the FDA had requested MannKind Corporation to carry out more trials that are expected to finish in early 2013. MannKind Corporation then expects to resubmit a NDA in the first half of 2013 and if approved, Afrezza will be available sometime by 2014. Hence, a filing should not come as a big surprise as naturally MannKind Corporation will be needing some funds to keep things moving before and after any FDA approval.

As for the filing itself, its a $500 million shelf registration or S-3 registration that will allow the company to release shares in the form of warrants, common stock, preferred stock and debt securities for three years. Moreover and by making the filing now, MannKind Corporation will not need to resubmit all registration related procedures on an individual basis if funding is needed at a later stage. Likewise and just because an S-3 registration was filed, it does not automatically mean MannKind Corporation is going to go out and dilute existing shareholders tomorrow.

In fact, MannKind Corporation basically has two options for Afrezza: 1) It can partner with a much bigger player to help defray some of the costs involved or 2) It can launch the product largely on its own. If MannKind Corporation chooses the later route, keeping an eye on the company’s cash levels will provide an indicator as to when the company might decide to pull the trigger so to speak and raise new capital. Likewise and should MannKind Corporation announce a partnership with a deep pocketed pharma company, the chances of it needing to pull that trigger will diminish greatly.

Likewise and as I have noted in the past, insiders have been buying MannKind Corporation’s stock. Specifically and back in June, Alfred E. Mann, the CEO and chairman of the board, purchased 31,250,000 shares or roughly $77.18 million worth of stock for $2.47 per share plus the Corporate VP and CFO also purchased 1,054 shares for $1.95 to add to his existing holdings of 78,150 shares. Moreover and back in May, the Corporate Vice President of Operations and Chief Technology Officer purchased 21,667 shares at $1.68 per share worth $36,400 plus five directors each acquired 17,011 shares. Hence, its safe to conclude that these insiders are not going to be to excited about diluting their positions with a big share offering or any share offering for that matter unless its absolutely necessary.

For that reason, investors should keep an eye out for more MannKind Corporation insider purchases along its cash position and any news about would-be partnerships but for the mean time, don’t get worked up over the S-3 registration.