MannKind Corporation has been dealt a tough hand throughout the beginning of the year. After Afrezza came out, investors were incredibly excited. However, as time went on, impatience got the best of investors who simply couldn’t wait for sales. Soon, MNKD became one of the most heavily shorted stocks in the market driving the price down dramatically. Now, the low price is presenting one heck of an opportunity. Today, MannKind is climbing and I believe it’s going to go higher. Below, we’ll talk about why I have so much faith in MNKD and think that it should be in every investment portfolio out there. So, let’s get right to it…
Here’s Why MannKind Has Been Falling
First, before we get into why I believe that MannKind is likely to see gains from here, I think it’s important to discuss why the stock has been falling in the first place. MannKind is the developer of Afrezza – the first ever inhaled insulin. Considering that Afrezza is the first, and that patients don’t have to give themselves injections, investors thought it would fly off of the shelves. However, in the pre-launch, the insulin didn’t sell very well. As a matter of fact, it seemed to have flopped. While few will argue the long term potential involved in Afrezza, the low volume sales have caused many to short the stock driving the stock down for the last several months.
MNKD Is Up Today
While MannKind has had a rough time recently, the stock is doing pretty well today. Currently (12:23), MNKD is trading at $4.02 per share after a gain of 3.47% so far today.
Why I Believe MNKD Has More Room To Run
While there’s no doubt that there is a reason for the declines we’ve seen around MNKD recently, it’s also got plenty of room to run. The reality is that the low sales volume of Afrezza isn’t likely to last long. Here’s why…
- Direct-to-Consumer – During the pre-launch, there was no advertising. Instead, the focus was on informing physicians of the insulin. However, the Direct-to-Consumer phase recently started. This should improve consumer awareness and lead to more sales!
- Insurance Coverage – Another major hindrance for MannKind with regard to the sales of Afrezza was insurance coverage. The reality is that most patients have insurance and refuse to pay out of pocket. Therefore, if a treatment isn’t insured, they choose an alternative option. Well, it takes time to get insurance companies on board. Nonetheless, that time has come. About 80% of major insurance companies plan to cover Afrezza in one way or another. This will lead to more sales as well.
Another thing that we have to remember is that while Afrezza is MannKind’s only approved product at the moment, they have an incredible pipeline. The company plans on using its technosphere technology to create more inhaled treatments which, in the long run, is likely to be incredibly popular. So, in the short term, we have the likelihood of better Afrezza sales and in the long term the sky is the limit.
What Do You Think?
Where do you think MNKD is headed and why? Let us know in the comments below!
[Image Courtesy of Forbes]