MannKind is a stock that I’ve followed for quite some time, and even while the market turned bearish on the stock, I’m glad that I didn’t. The reality is that MannKind is a great company with an incredible product. That product is Afrezza. Although Afrezza has been the reason for the bearish mood surrounding the stock, it’s also a great reason to be bullish on the stock. Today, I’ll talk about why the bears are bears and why the bulls will be happy they maintained their opinions relatively soon…
Why So Many Investors Are Bearish On MNKD
MannKind currently only has one approved product… Afrezza. Afrezza is an inhaled insulin that is in the process of revolutionizing how the diabetic community looks at insulin. However, the revolution is taking far longer than expected. The bottom line is that the bears do have a very valid argument… MannKind seems to be having a hard time selling Afrezza. While the company is still in the pre-market phase with the drug, it doesn’t seem to be taking off quite as well as anyone had hoped, selling just over $3 million in several months. In this industry, that is nothing more than a drop in the bucket.
Bulls Have More To Look Forward To
There’s no doubt that the bears have an incredibly valid argument. However, that doesn’t discount the fact that the bulls also have a valid argument, and in my opinion, their argument is far stronger. The reality is that in the pre-market phase, insurance coverage isn’t quite there, and sales aren’t a major expectation. Instead, the bulls are looking for MNKD to get advertising and coverage in line – and if you’ve been watching the details, you know that they’re doing a great job of it.
First and foremost, insurance coverage is going incredibly well. As Clinically Sound Investor pointed out on Seeking Alpha, MannKind is starting to realize coverage for Afrezza. As a matter of fact, in the article mentioned above, the author pointed out that three of the top five insurers and more than half of the top twenty insurers have some sort of coverage for Afrezza and that only 2 insurers out of the top twenty five have completely left Afrezza out. The bottom line here is that MannKind and its investors know that with insurance will come sales – and insurers are starting to cover the product.
Also, it’s important to remember that marketing is on the way. While sales are down at the moment, one of the biggest reasons for this is lack of consumer awareness. However, consumer awareness of the treatment is going to start spiking in the near future as well. The company has mentioned that the Direct to Consumer phase will be the next step and that this step will be taken relatively soon. So, soon we’ll be seeing Afrezza advertised, which will also likely pick sales up.
Finally, MannKind isn’t just focusing on the United States market. As a matter of fact, the company is now working to achieve regulatory approval in Europe and Asia. Considering the strength behind the product and the company’s ability to get it approved in the United States, approval in other regions is all but guaranteed. As a matter of fact, during the Q2 earnings call, MNKD had great news to offer about the process. Ultimately, MNKD will likely realize regulatory approval, in Europe at the very least, relatively soon.
As mentioned above, there’s no doubt that the bears have an incredibly valid argument. However, looking at the coin from both sides, I still have a very bullish opinion on this stock, and I don’t think I’m alone on this. So, let me know your thoughts.
What Do You Think?
Where do you think MNKD is headed and why? Let us know in the comments below!