MannKind Corporation (NASDAQ: MNKD)
MannKind is an absolutely incredible company. When we talk about MNKD, we’re talking about a company that has been able to turn an injection only medication into a medication that can be inhaled. Unfortunately however, the company has received a bit of a bad reputation in the stock market. Over the past several months, we’ve watched as the stock has fallen like a brick from the Empire State Building. However, more recently, we’ve been seeing a bit of a recovery. Throughout this entire time, I have maintained a bullish opinion on the stock. I’ve received emails from the bulls and the bears telling me how much they agree or how much they disagree. Nonetheless, my opinion on the stock is here to stay, and for good reason. Today, I’ll explain why even after the massive declines we’ve seen on MNKD, I’m still a bull.
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Understanding Why MannKind Fell So Far So Fast
In late 2014, MNKD finally received notice from the United States Food and Drug Administration that Afrezza, its inhaled insulin, had been approved for the treatment of diabetes. At that time, investors cheered, and the stock climbed. After all, there had been no other product like it in the past. So naturally, investors got excited.
After the approval of Afrezza, MannKind contracted the commercialization of the treatment to a company known as Sanofi. Ultimately, it was Sanofi’s job to ensure that Afrezza was a success. However, for the year the contract was open, SNY did nothing more than drag its feet. As a result, Afrezza didn’t reach the sales potential that everyone thought it would, sending MNKD down in the market.
Why I’m Bullish On MNKD
Since the issues with Sanofi, investors have taken a very bearish stance when it comes to MNKD. Unfortunately, many simply don’t believe that Afrezza will sell. While I do, that’s not the only reason I maintain a bullish opinion on MNKD. Here’s why I love this stock:
- Afrezza Plans – In early January, it was announced that the relationship between MannKind and Sanofi was coming to an end. As a result, the commercialization rights to Afrezza would transfer back to MNKD, giving them the ability to properly market Afrezza. While the transfer isn’t quite complete at the moment, MNKD has announced a key plan that I believe will send Afrezza sales through the roof. The company has worked on an agreement with an independent entity known as Specialized Diabetes Care Centers. These centers have agreed to treat diabetes in real time with Afrezza, which will cause Afrezza sales to climb.
- New Management – Alfred Mann was an absolutely amazing man. However, in his old age, he had a hard time properly managing MNKD. Today, MannKind is under new management, and the management team is a team of geniuses. We’ve already seen some of their ideas come to fruition and I’m incredibly excited to see further moves.
- Technosphere – While Afrezza is MannKind’s only approved medication, it’s not their only product. In fact, MNKD is the creator of Technosphere – the technology that allows insulin and other injection only treatments to be inhaled. In fact, MNKD has already contracted the development of new treatments using technosphere out, and this is likely to lead to long-run gains.
- Finances – While finances are a concern to many investors, I have to say that I’m really not too concerned. Early in the year, MNKD said that it had enough money to get it comfortably into the second half of the year, and could possibly stretch that money further. The marketing plans they have with regard to Afrezza will lift sales and give them even more funding to work with. On top of that, I’m expecting more Technosphere agreements down the line that will give MannKind operating funds.
The Bottom Line
The bottom line here is that I can understand the bearishness with regard to MNKD. However, the company is getting things back into place to move forward. The reality is that companies go through hurdles, and MNKD is going to easily clear this one.
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What Do You Think?
Where do you think MNKD is headed moving forward? Let us know your opinion in the comments below!
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