MannKind (MNKD) Earnings: Get Ready For This Catalyst

MannKind Corporation (NASDAQ: MNKD)

MannKind Corporation investors have been working to push the stock up, even in the face of incredible short interest. For the most part, these attempts have worked. In fact, this month has been a relatively good month for the stock. During the month, we’ve seen MNKD climb from a low of $2.93 per share to yesterday’s close of $3.78. Going forward, I believe that the fight to push the stock up is going to become an easier one. That’s because it’s my belief that this quarter’s earnings report is going to be positive. Today, we’ll talk about why I believe the MNKD earnings report is going to beat expectations and what we can expect to see…

What To Expect From The MannKind Earnings Report

MNKD is expected to report earnings on Monday, November 2nd. Overall, analysts are expecting MannKind to produce a loss of $0.06 per share. However, I believe that this quarter’s earnings report is going to produce positive news. Here’s why:

  • Afrezza Sales – Analysts have not changed their opinion with regard to earnings per share or revenue. However, there has been news that should generate revisions. One of those pieces of news is the fact that Afrezza sales were growing. More sales will obviously generate more revenue and more earnings. This news became available recently but no revisions to expectations have happened quite yet.
  • MNKD Has Done Quite A Bit To Trim Costs – We’ve also been seeing stories floating around that MannKind has cut its head count. This is an important move because it allows the company to dial down the cost of running a business. Ultimately, the trimming of costs should be seen clearly through increased earnings.

While I do believe that earnings and revenue are likely to come in higher than analysts are projecting, it’s important to remember that investors care about far more than earnings. In fact, in the case of MNKD, it would be entirely possible for MNKD to miss earnings expectations and still see a positive reaction in the market. It all depends on guidance and future plans.

With regard to MNKD, what investors seem to care about most at the moment is whether or not prescription sales of Afrezza will rise moving forward. Therefore, on the earnings call, I believe that we’re going to hear more details about this. First and foremost, investors are itching to see regulatory approval in Europe and Asia. Aside from regulatory approvals, MNKD investors also want to see more advertising surrounding the inhaled insulin. While advertising is Sanofi’s job, I believe that we’re likely to hear more about the Direct-to-Consumer advertising phase on the earnings call. Even if earnings and revenue are a miss, which I don’t think they will be, positive news with regard to advertising and/or regulatory approval would be likely to send MNKD up in a big way.

Why I Think This Positive News Is Coming

In the case of regulatory approval, I’m not sure that we’re going to see positive news this quarter. After all, regulatory approval takes quite a bit of time. However, in the case of increasing sales, I do believe that we’re going to see positive news on the earnings report. This revolves around a comment made in one of MannKind’s recent presentations. During the presentation, MNKD stated that Sanofi was hard at work negotiating with insurance companies for better placement. This is a key point that is likely going to play a major role in guidance for the company. During the presentation, MNKD announced that Sanofi was not only negotiating with insurance companies, but that those negotiations were going well. If everything does go well, we will see insurance companies lift restrictions and reduce co-pays for Afrezza, moves that would lift prescriptions and send MNKD climbing in the market.

The Bottom Line

The bottom line here is the fact that MannKind has been struggling. However, those struggles are coming to an end, and quickly. The company has worked hard to solve its financial problems, released positive news with regard to Afrezza, and is likely to produce a positive earnings report. With that said, get ready for the catalyst that will be released on Monday.

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