MannKind (MNKD) has had an incredibly tough month in the market. Since February 10th, the stock has fallen from $7.58 per share to today’s (3.5.2015) active price of $5.76 per share; with a good portion of that drop happening this morning as Goldman Sachs downgraded the company’s stock. So, today, we’ll talk about the concerns investors have over prescription sales and possible diabetes product price reductions, discuss what big-time investors have to say about it, and discuss the reaction we saw in the market following an announcement from Goldman Sachs. So, let’s get right to it…
MannKind (MNKD) Prescription Sales Are Becoming A Major Problem
As a BioTech company, MannKind’s ultimate goal is to sell the medicine they produce. Unfortunately, it seems as though they’re struggling in that area of the business. According to Goldman Sachs prescription sales on diabetes products has been down for quite some time. Here’s what they had to say…
“We note that prescription trends for recent diabetes product launches such as Jardiance (3Q14) and Trulicity (4Q14) both fell ~ 75% short of our estimates in 4Q. Finally, with only a few weeks of script data, Afrezza’s launch trajectory has also fallen short of our expectations. These factors lead us to lower our Afrezza sales forecast from $2bn to $1bn in 2025. We still believe MannKind will achieve the targets needed to capture $925mn in milestones from Sanofi (SNY). Although our R&D and G&A spending estimates come down based on management guidance for 2015, our EPS estimates are reduced from 2017 onwards.”
Consumers Pressure MannKind (MNKD) To Reduce Diabetes Drug Costs
Another major issue that’s hitting MannKind (MNKD) right now is the fact that those with diabetes are pressuring the company to reduce the prices of their medications. The bottom line is that many diabetics simply can’t afford the medication at current rates. Goldman Sachs analyst, Jay Olsen was clearly concerned about price targeting for Diabetes drug products. In the downgrade statement released, Olsen noted that risk vs. reward was off balance.
How MannKind (MNKD) Stocks Reacted To The News
Any time bad news comes out about a company, we can expect the value of that company’s stock to fall. That’s exactly what we saw in MannKind (MNKD) stocks this morning. Following the news from Goldman Sachs that they’d be downgrading the stock on concerns of prescription sales and pricing, the company’s stock price went tumbling down. In morning trading, the stock fell from $5.94 to $5.62 by 11:05. While it looked like a recovery might have started directly following the low so far for the day, that wasn’t the case. After climbing back to $5.77 per share by 11:50, the stock went right back on the downtrend. Currently (12:14) MannKind (MNKD) stocks are trading for $5.68 per share and look to be continuing on the downtrend.
What Are Your Thoughts?
Will MannKind (MNKD) stocks continue to fall, or should we buy while it’s low? Let us know in the comments below!