MannKind Corporation (NASDAQ: MNKD)
For more than a year, MannKind has been one of my favorite stocks to follow, and for good reason. The company is working on a product that can revolutionize the diabetes treatment space. Now, keep in mind that revolutionary changes are never easy to make. In fact, MNKD has seen its share of hurdles. After all, there’s a reason the stock has seen such a big year over year loss. Nonetheless, I remain bullish on MNKD. Today, I’ll explain the struggles the company has faced over the past year and why I believe that 2016 is going to be the year of gains for MNKD.
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Why Bears Have Driven MNKD Downward
MannKind is a great company, but if the bears have anything to say about it, you would never think so. I will admit, the bears have a point, but when you dig deeper into the details, you’ll see that the point is actually rather dull. Nonetheless, the bears on MNKD have driven the stock down in a big way, and it is all the result of Afrezza sales. You see, Afrezza was first approved in late 2014. At this time, MannKind contracted the commercialization of the drug with Sanofi. This was a big mistake.
The reality is that Sanofi has directly competing products. As a result, if they were to drive Afrezza up, it would be great for MNKD, but bad for Sanofi. As a result, over the past year, Sanofi has been doing its best to drag its feet on the commercialization of Afrezza. Sadly, this led to poor sales volume, and holding onto that sales volume, the bears have manipulated the stock to show big losses. However, again, when you look into the details, this point is rather dull.
I Understand You Bears… That Doesn’t Mean That You’re Right!
The reality is that the bears have a very strong argument here. Without sales, MNKD is going to have a hard time growing. However, when you dig into the details, it’s easy to see that sales are coming down the line, and that there’s more than Afrezza to MannKind. Here are the reasons I’m bullish on MNKD…
- Sanofi Is Moving Out Of The Picture – As mentioned above, the big reason that we’ve seen poor sales volume on Afrezza is Sanofi. The company didn’t want Afrezza to succeed. In fact, as a result of this, I have started a petition designed to help MNKD investors recover losses. If you haven’t signed it, click here to do so. Nonetheless, it was announced in early January that MNKD and SNY were cutting ties. As Sanofi moves out of the picture, MannKind will have the ability to pick up the pieces and put the puzzle back together on the commercialization front. Not to mention they have already started doing so, which leads me to my next point!
- Specialized Diabetes Care Centers – MannKind is currently working on a partnership with Specialized Diabetes Care Centers. These will be real time diabetes care facilities, and most importantly, the facilities will be centered around Afrezza. This is a strong move and will likely lead to strong Afrezza sales and growth in MNKD.
- Technosphere – As mentioned above, MannKind is far more than Afrezza. While Afrezza is the flagship product, MNKD has a technology that could lead to several products, and they’re working on turning that into a reality. The technology is the technology that allows insulin to be inhaled. It’s called technosphere. MNKD recently partnered with a company to develop other treatments using this technology. Not to mention, they made a smart move in maintaining rights to technosphere outside of the indications covered in the partnership. All in all, this technology is incredible, and will likely lead to strong revenue down the road.
The Bottom Line
The bottom line here is that MNKD is a great company. Sure, they have been dealt a pretty bad hand as of late, but that doesn’t mean that they are out of chips. At this point, MannKind seems to be making the right moves and will likely see strong growth in the second half of 2016.
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What Do You Think?
Where do you think MNKD is headed and why? Let us know your opinion in the comments below!
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