MannKind Corporation (NASDAQ: MNKD)
The MannKind stock has taken another nasty fall and is currently quivering at around a value of $2.90. It is the second time this year that MNKD has reversed its gains. After peaking at $7.58 in February, investors saw the stock slump into a nadir of $3.63 in May. Yet a month later, the stock shot back up to $7.23. It is fast becoming evident that this stock is not for the faint of heart; only those who are gluttons for risk. Nevertheless, there still remain cogent reasons as to why the stock has not bottomed out.
Inhaled Insulin Fiasco
When MNKD first released Afrezza, the stock momentarily surged upward. There was much investor excitement. After all, Sanofi paid the hefty sum of $925 million in order to acquire global rights. Patients were expected to welcome Afrezza as a hassle-free alternative to injected insulin. Yet it was not to be. Compared to other diabetes drugs, Afrezza is currently underperforming. Many are touting this failure as the result of a poorly planned and executed marketing scheme. There simply is not enough public awareness about Afrezza. This has been compounded by the fact that, according to regulatory requirements, patients must have spirometry tests to evaluate lung function before they can be prescribed the drug. Matthew Pfeffer, MNKD’s CEO has detailed that this test does not fall within the purview of the endocrinologists who must refer patients outside and the process is lengthy. Pfeffer believes the latter is responsible for the slow rate of the drug’s demand. Add to this the fact that many insurance companies are not yet on board as regards reimbursing patients for Afrezza and the immediate future seems far from bright.
Even though initial sales of Afrezza have been sparse, some investors are bullish arguing that this situation could shift dramatically as the benefits of the drug become manifest. Compared to competing products, Afrezza dissolves far more quickly in the system, plus it is painless and uncomplicated to use. It may prove more convenient and effective for diabetics.
Some analysts suggest that it will take time for physicians to switch from the usual methods. Sanofi, which owns 65% of the rights to Afrezza, has also woken up to the fact that marketing is essential to the drug’s future success. At present the company has launched a publicity campaign which targets doctors, ensures tier 2 health insurance status should be approved and lastly educates patients. Furthermore, in the USA, Sanofi will be dispensing fifty thousand free samples, a free first month’s Afrezza prescription for first time users, and a Savings Card for refill prescriptions which is designed to reduce patient costs before Afrezza reaches Tier 2 status among health insurance companies. It is expected that these measures might begin to impact sales figures however this will most certainly not happen overnight. Investors need to be patient, assures Pfeffer.
About MannKind Corporation
MannKind Corporation is a biopharmaceutical company which specializes in the innovation and production of therapeutic products for diseases such as diabetes. Afrezza is currently the company’s only approved product, which became available by prescription in early 2015. Mannkind plans to utilise its technosphere technology to create more inhaled treatments. The company has a loan agreement from Sanofi for $175M due in 2024.