MannKind (MNKD) Stock Is Up | Will It Last?

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MannKind Corporation (NASDAQ: MNKD)

MannKind has been a very interesting stock to watch over the past several months. After a soft launch of Afrezza didn’t move quite as quickly as Goldman Sachs wanted to see earlier in the year, the company’s stock was downgraded; leading to a swift decline that turned into months long downtrends. However, a few weeks ago, Jefferies published the results of a survey pushing the stock up once again; before reaching resistance at $7.23 per share. Now, the stock seems to have reached support and be moving back in the upward direction. The big question is, how long will the growth last?

I Think We Can Expect To See Long Term Gains

As I’ve mentioned in several posts in the past, I have incredibly bullish opinions when it comes to MannKind. With that said, I’m expecting to see the bullish run last for the long term. However, it’s important to keep in mind that small-cap biotech stocks are known for high volatility. So, we will see pull backs on the way to the top. Nonetheless, I’m expecting to see growth overall. Here’s why…

  • Afrezza Is Likely To Start Taking Off Soon – If you talk to those that are bearish on the stock, most of the reason they’re expecting declines is that they don’t think Afrezza was handled properly. With a poorly executed soft launch, they’re not expecting to see a good reaction to Afrezza when advertising starts. However, I disagree with this idea. First off, any diabetic that takes a before meal insulin shot is going to be interested in something that takes the need for these shots away; and Afrezza does just that. Beyond the shot aspect, it’s also important to keep the results of the Jefferies survey in mind. It showed that 65% of endocrinologists not only know about the inhaled insulin, but plan on prescribing it more in the future. Add a bit of quality advertising into the mix, and Afrezza will be a hit!
  • Technosphere – As a person that is deathly afraid of shots (really, for some reason, it’s my biggest fear) Afrezza represents far more to me than insulin. MannKind has found a way to turn an injection only medication into something that can be inhaled; and more importantly, they are working on expanding the horizons with this technology. While no one with the exception of insiders knows what medications they are testing; we do know that they are testing the technology in other applications. Who knows, maybe several years down the road, some of the most common injection only medications will be able to be inhaled; taking the fear out of going to the doctor for guys like me.
  • Management – Finally, there has been a bit of a debate recently revolving around MannKind’s management. However, I don’t see the reason for this debate. Those on the bearish side say that Afrezza proves that MNKD management isn’t up to par. However, it’s important to remember that MannKind had very little to do with the soft launch as this process was put in place by Sanofi. Nonetheless, MannKind’s management has gotten stronger with the recent addition of a well-respected doctor to the board of directors; Dr. James S. Shannon. All in all, I think MNKD management is incredibly strong.

Keeping all of these factors in mind, I couldn’t imagine a scenario where we’re not likely to see growth from MannKind in the long run.

What Do You Think?

Where do you think MNKD is headed and why? Let us know in the comments below!

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3 COMMENTS

  1. Hi! I am new to this site, so I’m not sure if I’ve missed any sources you’ve provided.
    You mentioned: “Beyond the shot aspect, it’s also important to keep the results of the Jefferies survey in mind. It showed that 65% of endocrinologists not only know about the inhaled insulin, but plan on prescribing it more in the future.”

    Is there a source for this? I’d like to see it, because this could push me to consider this stock.

    Thanks!

    • Most of the doctors in the Jefferies survey stated that they would wait until Afrezza had health insurance cover it . I would think they are talking about tier two coverage. MNKD management stated during their last conference that insurance coverage should start 6 months after launch. (Afrezza launched in Feb. 2015) But I also heard form some people that insurance companies do not add new drugs to their formularies in the middle of the year. So Afrezza mite not takeoff until the beginning of 2016. Also Jefferies has a price target of $37 by 2017. Buying into MNKD around $5 would be a good bet, but only if you hear that insurance companies start talking to Sanofi about covering Afrezza .

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