MannKind Corporation (MNKD): Is Now The Time To Buy?

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MannKind Corporation (NASDAQ: MNKD)

MannKind is a great company with an incredible product. Unfortunately however, the stock hasn’t done very well in the market this year. After receiving FDA approval for Afrezza and pushing the treatment to the market, sales simply didn’t go as planned. As a result, many investors got cold feet, leading to massive declines and increasing short interest. However, over the past 5 trading sessions, the stock has been moving in the positive direction. Now for many, the big question is “Is now the time to buy MNKD?” In my opinion, the answer is yes. Today, we’ll talk about why!

Addressing Afrezza Sales

One of the biggest concerns for MNKD investors has been Afrezza, and I have to admit, I can understand the concern. The reality is that investors expected sales of Afrezza to hit the ground running. However, the start was actually incredibly slow. Nonetheless, I don’t think that slow sales are something we’re going to have to worry about much longer. Here’s why:

  • Advertising – First and foremost, all products need advertising. In the pre-launch there was no advertising, which weighed heavy on sales, however, that is starting to change. In recent announcements from MNKD, we learned that advertising is starting to pick up. Sanofi (SNY), the company contracted by MNKD to handle commercialization has started to make a big online push as well as place magazine advertisements. While TV ads haven’t come yet, I have a feeling that those are on the way soon as well. So, it seems as though we’ve got advertising in the bag.
  • Insurance – Another major issue for MNKD sales has been insurance. While most investors don’t realize it, Afrezza is being covered by many insurance providers. However, the treatment is in tier 3, which comes with limitations and a higher cost to the end consumer. However, SNY has been working in negotiations with insurance companies to push Afrezza to tier 2 – the tier that will reduce co-pays and end restrictions. In a recent presentation by MNKD, we learned that these negotiations seem to be going well, which in turn will lead to better sales numbers. It’s also important to mention that insurance is a rather large topic. I recently wrote an article in detail about what we can expect with regard to insurance coverage. For more details, click here.
  • Regulation – MNKD has achieved regulatory approval in the US for Afrezza, however, it is not yet available abroad. Currently, MNKD and SNY are working to get the treatment approved in Europe and Asia. When this happens, we can expect to see sales climb even further.

Beyond Afrezza

Afrezza is a great product, but it’s important to remember that Afrezza does not define MNKD. In fact, MannKind has made several announcements throughout the past several months with regard to its plans beyond Afrezza. The goal is to use the company’s proprietary technology, technosphere, in an attempt to create more treatments that will reach the market. While we haven’t heard much about these treatments, MNKD has announced that it is working on a treatment for pulmonary conditions as well as others. While these are likely to take a bit of time to reach the market, the company has proven its ability to not only discover treatments, but to get them approved; this is good news for the long run.

What We Can Expect To See From MNKD

First and foremost, I’m expecting to see overwhelmingly positive news as Afrezza sales continue to pick up. Next year, I’m expecting even more growth as insurance companies change the way they cover the treatment. In the long run, I believe that MNKD has quite a bit to offer and investments now will likely lead to incredible long-term growth!

What Do You Think?

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

[Image Courtesy of The Motley Fool]

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