MannKind (MNKD) Runs Into More Afrezza Problems

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Sanofi MannKind Afrezza PartnershipMannKind Corporation (NASDAQ: MNKD)

When you think of MannKind, what’s the first thing that comes to mind? If you’re like most investors, the first thing that comes to mind is Afrezza; the inhaled insulin offered by MannKind. Unfortunately however, Afrezza hasn’t seen the launch that many investors were expecting. As a result, the stock has been struggling, and recently, analysts have started to downgrade the company’s stock. So today, we’ll talk about what Afrezza is, why analysts are downgrading MannKind over it, and why I still have faith in the stock long term. So, lets get right to it…

What Is Afrezza

In my humble opinion, Afrezza is the picture of human innovation in medication. With Afrezza, MannKind created an insulin that doesn’t need to be injected. Instead, they used proprietary technology that allows patients to inhale a powder; which in turn is an insulin delivery vehicle. Afrezza is also known to reduce blood sugar spikes and allow diabetics to live a more normal life.

Then We Get To Sales Of MannKind’s Afrezza

This is where things get a bit sticky. MannKind simply didn’t have a strong launch of Afrezza. The company made a deal with Sanofi (NYSE: SNY); under which Sanofi would be in charge of much of the marketing and distribution of the drug. Unfortunately, Sanofi simply hasn’t done a good job. As a result, sales of Afrezza came in at just over $1 million so far; even though analysts were expecting to see that number range between $3 million and $4 million. As a result, analysts have started to downgrade the stock. Most recently…

  • JPMorgan Chase – Today, JPMorgan Chase downgraded MannKind to an “Underweight” rating and removed the $6 target price from the stock entirely.
  • Piper Jaffray – Piper Jaffray has also recently slashed their target price for MNKD. Bringing it to $3.50 from $7.

Why I Still Have Faith In MNKD For The Long Run

There’s no doubt that MNKD is struggling as a result of poor sales of Afrezza; however, I’ve still got quite a bit of faith in the company. First off, I think Afrezza will take off over time. Although, I can admit that sales growth isn’t happening as fast as I’d like to see, I also understand the underlying road blocks associated with selling the medication at the moment. Also, beyond insulin, I think Afrezza represents something else. It’s expected that the technology used to inhale the insulin can be used to turn other injection only medications into inhalants. This could be incredibly profitable down the road. So, while I am a bit concerned over sales of Afrezza, I do think that MannKind will grow in the long run.

What Do You Think?

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

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