MannKind Corporation (NASDAQ: MNKD)
MannKind has been a very interesting stock to watch over the past several months. One of my favorite things about watching the stock is that there are few that can invoke so much emotion. If you’re a bull on the stock, you absolutely love MNKD. However, if you’re a bear, hate doesn’t begin to explain how you feel. Well, I’m here to let you know, I, like many others, am still a bull on MNKD. I know that the bears are asking themselves, “Why?” I have good reason, I’ll explain that today.
MannKind Is Cleaning Up
One of the biggest concerns that investors had with regard to MNKD, outside of sales (I’ll get to that later), was management. Unfortunately, many didn’t believe that the management at MannKind had what it takes to run a successful company. The pressure got to be a bit much and MannKind entered a separation agreement with its president and CEO, Hakan S. Edstrom. At this point, the company will be looking for a new CEO to take his place and clean things up. This is great news for investors no matter how you slice it.
MannKind’s Crucial Mistake Is Reversible
Now that I got the somewhat breaking news out of the way, let’s get to the real story. The big reason MNKD has been declining so much is that they made a crucial mistake, and investors are making them pay for it. What was that crucial mistake? It was Trusting Sanofi (SNY) with Afrezza! The bottom line is that the stock has been falling throughout the year as the result of poor Afrezza sales and that, my friends, is on Sanofi’s hands! The reality is that SNY should have never been contracted for the commercialization of Afrezza given its conflict of interest in the diabetes treatment industry. Of course, this agreement is reversible. So, what mistakes has SNY made? So far, there have been two big mistakes:
- Ineffective Pre-launch – Declines in MNKD started to happen during the pre-launch of Afrezza. Unfortunately, sales simply didn’t add up to what investors expected to see. During this time, Sanofi held Afrezza on the back burner. There wasn’t much outreach to physicians and consumers knew very little as well. We also didn’t see the efforts to gain insurance coverage during this time that we should have. All in all, the pre-launch of Afrezza was botched to say the least.
- Direct To Consumer – During the pre-launch of Afrezza, MNKD bulls held concerns off. After all, the Direct to Consumer marketing phase was on the way. However, SNY did a horrible job with this as well. When the DtC phase launched, SNY launched online ads and magazine ads. However, they failed to put the most effective piece of the puzzle into play: TV ads. Believe it or not, we still haven’t seen not one TV ad.
As a result of these issues, MNKD has been dealing with incredibly poor sales volume, leading to declining share prices. However, the relationship between MNKD and SNY is far from irreversible, and I believe that investors are going to turn up the heat soon in order to make that happen!
The Bottom Line
The bottom line here is that with Afrezza, MNKD has created something incredible. The inhaled insulin doesn’t just represent insulin, it represents a revolutionary change in how diabetes is treated. While MNKD, like most companies, has made some mistakes, I, like many, still have faith that in the long run this stock will climb! After all, with such an incredible product, a little restructuring in plans can go a long way. With that said, I’m proud to say that I’m still a bull with regard to MNKD!
What Do You Think?
Are you a bull or a bear with regard to MNKD and why? Let us know your opinion in the comments below!
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