MannKind (MNKD) Stock: Taking A Beating Or Presenting Opportunity?

MannKind Corporation (NASDAQ: MNKD)

MNKD is a stock that investors either absolutely love or absolutely hate. This is evident by the amount of incredibly bullish posts online along with the amount of incredibly bearish posts. Well, personally, I’m on the bullish side of the equation and have been for quite some time. The bears may argue, I may receive a nasty comment here and there, but there’s a reason for my bullish opinion. With all of that said MannKind is taking a beating in the market today, along with just about every other stock I might add. During these times, the bears cheer alongside the bulls. While the bears are loving their short positions, the bulls are buying more shares! Today, we’ll take a look at why MNKD has been declining for so long, why I maintain my bullish opinion on the stock, what we saw last week and why we’re seeing such a drop today. So, let’s get right to it…

Why MannKind Took A Turn For The Worst

Unfortunately, MNKD has been falling for quite a while at this point. In June, the stock was trading well over $7 per share. Today, it trades at under $4. The reason for the long term decline is simple. It all revolves around Afrezza. MannKind reached the $7 plus per share mark as a result of Afrezza, the world’s first inhaled insulin. Investors expected Afrezza to fly off of the shelves. However, due to several blocks in the road, sales have been incredibly poor. These road blocks include…

  • Poor Physician Awareness – In the beginning, physician awareness was absolutely horrible. When physicians don’t know about a drug, they’re not going to prescribe it!
  • Poor Consumer Awareness – Another factor that plays a role here is consumer awareness. It’s not uncommon for consumers to ask about treatments that they believe with be positive. However, if the consumer doesn’t know about the treatment, they don’t know to ask for it; and thus far, consumer awareness has been lackluster to say the least.
  • Lack Of Insurance Coverage – Finally, insurance plays a major role in whether or not a prescription drug sells. After all, consumers don’t generally pay for their own medicines out of pocket these days. Most have insurance. Therefore, if the insurance doesn’t cover a treatment, consumers will look to competitors for one that insurers will pay for.

Between these three major problems, MannKind’s Afrezza had an incredibly poor pre-market launch. Sales just aren’t what they were expected to be.

Why I Maintain My Bullish Opinion Of MNKD

While Afrezza has had a rough start in the market, it isn’t the end all be all. In fact, I still believe that Afrezza is going to realize solid sales down the road. After all, every issue mentioned above is being addressed, albeit slowly.

  • Physician Awareness – These days, physicians do know about Afrezza. This has been proven time and time again through surveys.
  • Consumer Awareness – Afrezza is currently in the midst of the Direct-to-Consumer phase. An advertising campaign designed to build consumer awareness, ultimately leading to higher sales volume.
  • Insurance Coverage – While insurers aren’t quite yet covering Afrezza, they will be soon. In fact, about 80% of major insurance carriers already have a plan to partially or fully cover the cost of Afrezza on the docket.

It’s also important for investors to think of MannKind as MannKind, not as Afrezza. There’s no doubt that Afrezza was supposed to be a blockbuster out of the gate and there’s no doubt that it’s going slower than expected. However, Afrezza is only a MNKD product, it’s not the company. The reality is that the company is currently working with its proprietary technology to come up with more innovative solutions to more of life’s ailments. Afrezza is a key indication that MNKD is capable of creating a product and is capable of appeasing the FDA. So, we have to imagine that more MannKind brand products will be coming down the road. Ultimately increasing profitability!

What We Saw In The Market Last Week

Last week proved to be a strong week for MannKind. The stock reversed the downtrend we’ve been seeing, finally starting to inch its way upward. Throughout the week, we watched as the stock climbed from $3.33 per share to $3.52 per share. To me, this shows that I can’t be the only person with a bullish opinion on this stock.

What We’re Seeing From MNKD Today

Today, the entire market is falling. No matter where you look, there’s a sea of red prompted by the Federal Reserve’s plans to increase interest rates and solid data backing the idea that it will happen in October. While the bears have already taken to social media to express their contentment with the declines, I don’t think that it’s MNKD sentiment causing this. Ultimately, this is a market wide issue. With that said, MNKD is currently (11:42) trading at $3.12 per share after a loss of 3.86%.

Which Side Are You On?

Are you bullish or bearish on MNKD and why? Let us know in the comments below!

[Image Courtesy of Wikipedia]

One Response

  1. RL Sherman Sep 29, 2015

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