MannKind Corporation (NASDAQ: MNKD)
MannKind stock has gotten a bit of a bad rep in the stock market recently. Over the past 2 months, the company has struggled in the market; driving the price of the stock down. Today, we’ll take a look at why the stock is falling and why I expect to see long run increases…
Why MannKind Stock Is Struggling
The drop can be traced back to the beginning of last month. An analyst from Goldman Sachs made the decision to downgrade the stock based on the following…
- Afrezza – The primary reason for the downgrade was the fact that Afrezza, MannKind’s new inhaled insulin had a bit of a rough start in the market. The analyst claims that the launch didn’t meat Goldman Sachs expectations and reduced expectations for long run sales of the drug.
- Other Sales – The analyst also mentioned that sales of other MNKD products didn’t meet expectations.
- Price Pressure – Finally, the analyst mentioned that price pressure in the medical industry is most likely going to bleed into the diabetes market; harming profitability along the way.
Why I Disagree Entirely!
First off, I’d like to note that investors should do their own research. They shouldn’t trust one analysts word when making investment decisions. With that said, here’s why I completely disagree with the Goldman Sachs analyst…
- Afrezza – I can agree that when the downgrade happened, sales of Afrezza were a bit low. However, what many people seem to be leaving out is the fact that the downgrade came 3 weeks after the product launched. In the medical industry, it takes more than 3 weeks to show impressive sales in new treatments. There has to be time for physician feedback and word of mouth to spread. All in all, I think Afrezza looks great. Just look at what patients are saying in social media about it. Not to mention, since the downgrade, we’ve seen tons of positive feedback from physicians about the drug.
- Other Sales – On this particular case, the analyst hit the nail on the head. MannKind sales of other medications are declining; but I don’t think that’s a major issue as Afrezza should lighten the blow.
- Price Pressure – This one really upsets me because it’s not founded in any truth at all. It’s hog wash my friends, but to give a little back story…Gilead Sciences has received a bit of pressure to reduce the cost of its hepatitis C treatments. However, comparing hepatitis C costs to diabetes costs is like comparing Apples to cars; no not oranges, cars! It just doesn’t make sense.
What We Can Expect From MNKD Moving Forward
Moving forward, I think we will still see a bit of downward movement unfortunately. However, when Afrezza reports start to come out showing how well it’s actually going, I’m expecting to see the value of the stock climb. So, in the short term, get ready for price volatility; but in the long run, get ready for gains!
What Do You Think?
Where do you think MNKD is headed and why? Let us know in the comments below!