MannKind Corporation (NASDAQ:MNKD)
MNKD recently became a drastically shorted stock due to Afrezza’s failure to launch. Consequently, the stock price plummeted. But this low price may entail a glistening opportunity for those willing to take the risk, even if the journey so far has been rough. Mannkind may soon be riding high again if it can maintain its balance with the 35/65 split it has with Sanofi (SNY).
Afrezza’s Anti-Climactic Release
Following the release of Afrezza, there was much excitement from investors and principals alike which caused the stock to shoot up. However, this optimism proved premature and a deflated prelaunch plus later limited IMS scrips caused investors to grow tired of the stock’s inertia which rapidly shorted.
Mannkind Overview
Mannkind launched Afrezza, the world’s first inhaled insulin. Even though initial sales have been scanty compared to expectations, this could rapidly turn around as the benefits of Afrezza become manifest. Compared to competing products, Afrezza dissolves far more quickly in the system, plus it is easy to use. This means it may prove much more convenient and more effective for diabetics.
Mannkind Outlook
Jefferies analyst Shaunak Deepak stated that the launch of Afrezza launch will take time. Even if physicians are aware of the product it will take a while to switch from the usual methods. Physicians have agreed that an inhalable form of insulin product seems much easier to use than injections or pumps. The stock has also suffered from a lack of consumer awareness as during the pre-launch, Mannkind carried out no advertising directed at the general public, focusing only on informing physicians. But now the company has starting marketing to the consumer which should lead to more sales. Another problem was insurance coverage. Unless patients’ insurance companies agree to reimburse them, most people refuse to pay out of pocket. Roughly 80% of major insurance companies plan to cover Afrezza. This should lead to more sales.
MNKD Technical Analysis
Mannkind started out the year at 5.22 and since then the stock has seen real highs and some tough lows. In February the stock saw the year’s highest peak at 7.58 following the announcement of the release of Afrezza but then it shot down to 3.63 only a month later, rising like a phoenix again to 7.23 in June. So it has been quite the ride. As of late shares seem to be hovering between 3.5 and 4. If Afrezza does take off we might expect the stock to shoot up again.
Company profile
MannKind Corporation (Nasdaq:MNKD) is a biopharmaceutical company which specializes in the innovation and production of therapeutic products for diseases such as diabetes. The company’s only approved product is Afrezza, an inhaled insulin powder. The product was approved by the FDA in June of last year. A few months after Mannkind entered into a license and collaboration agreement with Sanofi-Aventis. Sanofi now conducts all sales and marketing activities related to Afrezza. The product became available by prescription in early 2015. Although Afrezza is MannKind’s only approved product at the moment, it plans to use its technosphere technology to create more inhaled treatments. However MannKind is struggling under its eventual obligation to Sanofi (SNY) for Afrezza under its 35/65 split. The company has a loan agreement from Sanofi for $175M due in 2024.
