MannKind Corporation (NASDAQ: MNKD) is having yet another incredible day in the market today. The stock has been on a strong run since early this week when the FDA approved a label change for Afrezza. As is normally the case, our partners at Trade Ideas were the first to alert us to today’s run in the stock. Currently (9:46), MNKD is trading at $5.20 per share after a gain of $0.24 per share (4.84%), already trading at nearly double its ADV.
A Brief Overview Of The MNKD Afrezza Label Changes
As mentioned above, MannKind Corporation investors have been cheering since the company announced that the FDA approved label changes earlier this week. For those of you who are new to the story, the FDA allowed the company to change its Afrezza label to offer more details with regard to how the treatment should be used. Investors believe that, as a result of the detailed instructions offered, patients will have a better user experience and prescribers will have a better understanding of who should be using the treatment and how. Stronger sales should be the result of the change.
Afrezza’s Interesting History
MNKD, and its flagship treatment (Afrezza), is a topic that I’ve followed for quite some time. Early on, when the treatment was first approved, the company contracted with Sanofi for the commercialization side of the coin. However, commercialization simply didn’t go well. Unfortunately, MNKD and its investors suffered as Sanofi seemed to be dragging its feet. That agreement lasted about a year before it was terminated.
From there, MannKind regained full control of Afrezza and started slow efforts on the sales side. While it took some time, the company began unleashing marketing efforts that started to boost the sales of Afrezza, giving investors a breath of fresh air. However, sales still weren’t as strong as they should have been for such a revolutionary product. Ultimately, many blamed this on product knowledge.
However, fast forward yet another year and we find ourselves here. Ultimately, MNKD just jumped over the biggest marketing hurdle it has had to date – the label on the treatment. Now that the company has a marketing plan in place, the eyeballs are already on the treatment. With the label change, chances of more patients trying the inhaled insulin are far higher.
Where Do We Go From Here… Stock Wise?
At the moment, many are starting to ask the question, “Does MNKD have any more room to run?” It’s a very good one. After all, the stock has been tearing upward for days now, and we’re not talking about minimal gains here.
The reality is that market movements tend to happen through a series of overreactions, and I think we’re likely hitting the peak on this run. However, that doesn’t mean that the opportunity is gone. Soon, MannKind shares are likely to fall in value, finding their way to a valley. With such positive news recently released, chances are that the long-run picture is a well-painted one. So, getting in at the valley may prove to be a great move, allowing you to get a discount on the shares that are likely to find their way upward.
Moving forward, there are a couple of possibilities for MannKind with regard to Afrezza. Here’s how I see it:
- Self-Promotion – The company could decide that it wants to stay on the same track with regard to marketing. Considering the recent label change and the fact that branding is going relatively well, the company may continue to see what they can do on their own to pick up sales.
- Partner – Another venue for MNKD would be to seek a partner in the commercialization of Afrezza. With the new label change, the product is a more appealing one. This could bring in interested parties that simply weren’t interested in the past.
Either way, things are looking up for MannKind at the moment!
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Moving forward, the CNA Finance team will continue to keep a close eye on MNKD. In particular, we’re going to continue following the Afrezza story, as we believe that the label changes that were recently announced are likely to change the game. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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