MannKind (MNKD) Stock: And The Struggles Continue

MannKind Corporation (NASDAQ: MNKD)

MannKind is having an incredibly rough time in the market, and it has been for quite some time now. Today, the struggles continue for the stock. However, is this going to change any time soon? In my opinion, the answer is yes! Today, we’ll talk about why!

Understanding Why The Bears Are So Very Bearish

Before we get into why I believe MNKD is going to recover, it’s important that you understand what is leading to the massive declines that we’ve seen on the stock. It all revolves around sales of the company’s drug, Afrezza. Afrezza is a before-meal insulin that, in my opinion, revolutionizes the way we see and treat diabetes. Instead of being delivered to the body through an injection, Afrezza delivers the insulin through a simple inhaler. Considering the innovation behind this product, investors believed that once approved, it would fly off of the shelves. Unfortunately, that’s not exactly what happened.

Once Afrezza was approved by the FDA, MNKD reached out to Sanofi (SNY) to commercialize the drug. This simply didn’t work out. Many believe that due to a conflict of interest, SNY simply hasn’t done all they could to commercialize Afrezza, and I have to agree. While the direct to consumer phase is now in full swing, we haven’t even seen as much as a television ad surrounding the treatment. As a result, we’ve seen relatively low sales volume surrounding the drug. This leads to the rut we’ve seen in the stock over the past several months.

Why I Believe That The Tides Will Change

Those who are still bulls on MNKD believe in the long term growth potential surrounding Afrezza, and I have to say, I’m with them! The bottom line here is that Afrezza is a revolutionary product in the treatment of diabetes, and as more and more people hear about it, we’re likely to see more and more sales. With that said, I’m expecting to see positive news in 2016. Here are 3 main areas of focus that MNKD is likely to have throughout the next year:

  • Advertising – First and foremost, I would love to see MNKD break ties with SNY. However, even if this doesn’t happen, we’ve got to see an advertising push for Afrezza. Investors should be mailing both MNKD and SNY demanding television ads. However, regardless of investor feedback, I believe that we will start to see television ads within the next year. This should pick up sales exponentially.
  • Insurance – When Afrezza was first launched no insurance companies offered coverage on the drug. While that has changed, we’re still not seeing the coverage we want to be seeing. That’s because insurance coverage is tiered-based, and Afrezza isn’t in the right tier. This means that even with insurance coverage, the treatment is expensive and there are limitations in place. I believe that this will change in 2016 leading to higher sales volume.
  • Regulatory Approval Outside Of The US – Currently, Afrezza is only approved in the United States. However, we’ve heard throughout the year that MNKD is working on regulatory approval in Europe and Asia. When approval happens in these regions, we’re going to see sales pick up! It’s only a matter of time.

The Bottom Line

While I still expect to see more declines in the short run, I’m expecting for 2016 to be a positive year for MNKD. As we see more positive information surrounding Afrezza, sales are likely to follow. As a result, I’m expecting to see long term gains on the stock.

What Do You Think?

Where do you think MNKD is headed in both the short and long term views? Let us know your opinion in the comments below!

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