MannKind Corporation (MNKD): Better Off Without Edstrom

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MannKind Corporation (NASDAQ: MNKD)

MannKind recently announced that it would no longer be managed by CEO, Hakan Edstrom. Following pressure from investors, the President and CEO has decided to resign. Today, we’ll talk about why Edstrom has stepped down, who will be taking his place, how investors reacted, and what we can expect to see from MNKD moving forward.

Why Hakan Edstrom Stepped Down From His Position At MNKD

Hakan Edstrom has served as President and CEO of MNKD for quite some time now. However, at this point, he has made the decision to step down and I’m not sure that the decision was entirely his. The reality is that investors have made a drastic turn from supporting MNKD to despising the stock. After Afrezza was released, investors expected to see massive sales. Unfortunately, that didn’t happen. Now, here we are nearly a year later and, while progress has been made, sales are still lackluster at best. As a result, investors have been urging Hakan Edstrom to step down from his position and for MannKind to put a new, more actionable CEO in his place. Following the investor pressure, that’s exactly what happened.

Who Will Be Taking Edstrom’s Place?

Any time a CEO steps down from his post, it leaves a gaping hole in the management of the company. In this particular case, Alfred Mann is acting as the interim CEO and the company hasn’t found a anyone to take on the role as long-term CEO quite yet. At the moment, a committee of the board is working on an immediate search for a successor CEO.

How The Market Reacted To The News

Watching investor reactions is relatively interesting in these types of scenarios. Ultimately, investors wanted Edstrom to step down, and they got exactly what they wanted. As a result, the stock reacted in an overwhelmingly positive way. Yesterday, we saw solid gains in the value of the stock. However, as reality sets in, we’re seeing it about 4% down in pre-market trading today.

What We Can Expect To See Moving Forward

Moving forward I’ve got two conflicting views ultimately depending on how far forward you plan on moving. In the short term, I’m not expecting to see much that’s positive out of MNKD. Unfortunately, as the company works to find a new CEO, Afrezza sales are likely to sit on the back burner. However, in the long run, I have an overwhelmingly bullish opinion of what we can expect to see from the stock. The reality here is that MannKind has invented something incredible – an insulin that can be inhaled rather than injected. This is a big deal for pediatric diabetic patients, those who are afraid of shots, and those who work in areas where there is little to no access to public restrooms.

As we move forward I’m expecting to see more by way of advertising. While the Direct to Consumer phase is in motion, I don’t think that magazine and online ads are going to cut it so I’m expecting to see TV ads at some point. I’m also expecting to hear more about insurance coverage. While MannKind’s Afrezza is being covered by most insurance providers, that coverage is coming with limitations and higher costs to the consumer. Over time, we should see a drastic and positive change to that problem. Finally, at some point, I’m expecting for MNKD to announce regulatory approval in areas outside of the United States, increasing its market and leading to higher sales. While we are still in the midst of an uphill battle here. I haven’t given up on Afrezza and I’m still bullish on MNKD. Ultimately, I believe that revolutionary products may take time to take hold, but when this one does, we’re going to see massive gains!

What Do You Think?

Where do you think MNKD is headed and why? Let us know your opinion in the comments below!

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Hey, Im Joshua, the founder of CNA Finance. I enjoy following the trends in the market and finding the catalysts that are making the moves. If you want to get in contact with me, leave a comment below or email me at CNAFinanceHelp@gmail.com Please keep in mind that I am not an investment advisor and nor is CNA Finance. This is a news and information gathering outlet. We may work directly with some of the companies that we write about. If we have a business relationship with an issuer, we will mention that in the articles. We also have various affiliate relationships with advertisers and may be paid if you sign up for a service that you were referred to through our website.

1 COMMENT

  1. If this product is not advertised on TV the public will never know about it’s existence once people see it on TV they will inquire about it from their doctor then the doctor will inquire about this product. To now i don’t think even doctors know of its existence let alone the general public what Mankind and its partner are waiting for to get the word out over one of the best medias is beyond me. How can a product sell if no one knows about it.

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