MannKind Corporation (NASDAQ: MNKD) is having a relatively rough start to the trading session this morning as investors seem to be looking to sales reports, which are proving to be somewhat concerning. However, many argue that this is not a concern and that sales will soon pick up. As is normally the case, our partners at Trade Ideas were the first to alert us to the declines. Currently (10:35), MNKD is trading at $4.38 per share after a loss of $0.37 per share (7.77%) thus far today.
MNKD Releases Sales Figures For The Week Ending On October 6th
Q4 has gotten off to an interesting start for MannKind and its investors. During the first week of the quarter, the FDA approved a label change, which many believe will lead to gains in Afrezza sales. Ultimately, this prompted massive gains in the value of the stock. However, the company recently released its most recent sales report. Unfortunately, sales didn’t prove to be what investors wanted to see.
In the week ending on October 6th, MNKD announced that Afrezza prescription sales were just over 400. That proved to be a dip from the previous week. While some will blame the dip on the Columbus Day holiday, this was not included in these figures.
Clearing Up A Misconception
One of the big concerns that seems to be popping up on message boards surrounding MNKD is the recent label change. You see, when the FDA approved the label change for Afrezza, investors expected that this would lead to gains in prescription sales. So, with a dip in sales, investors are starting to become concerned that the label change isn’t doing what they thought it would do. Well, allow me to clear up a bit of a misconception here.
It’s important to remember that the prescription sales releases are somewhat delayed. This is important in this particular case because the new labels that had been approved by the FDA were freshly minted the same week that the sales figures were released for. So, the changes would have absolutely no effect on sales during the week ending October 6th. Essentially, the sales figures are based on the same notions that previous sales figures would have been based on.
Thinking About Time
Another key factor that we have to consider here is time. While Afrezza label changes will likely lead to improved sales relatively soon, this isn’t going to happen overnight. MannKind still has to make physicians aware of these label changes. This is going to take some time. Now, I’m not saying that we won’t see slight improvements in sales in the short term, but I am saying that the true value of the label change will take some time to be realized.
Another factor that can be considered here is finances. Recently, MNKD raised some serious funding; over $60 million was raised. That’s a massive amount of money, and MannKind now has the ability to expand the marketing efforts surrounding Afrezza with this money. Will they do so? While they haven’t released any plans as of yet, it would be foolish for the company not to use this funding to improve the marketing surrounding the Afrezza offering.
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The Bottom Line
The bottom line here is that MNKD has a tremendous opportunity. The company was recently the center of an approved label change surrounding Afrezza, and that alone has the ability to lift sales. This, in combination with increased funding that will likely lead to an improved marketing position, puts MNKD in a prime position for long run growth!
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