MannKind Corporation (NASDAQ: MNKD)
MannKind has had a rough time in the market over the past year or so, and for good reason. The company’s flagship product, Afrezza has seen little advertising, leading to low sales volume. However, many believe that it is still possible for the company to pull itself out of the water and into the profits, even after a concerning statement by the CEO of the company. So, is it possible? Today, we’ll discuss the statement made by the CEO, why I think MNKD can still come out ahead, and what we can expect to see from the stock moving forward.
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MNKD CEO’s Financial Literacy Called Into Question By Sell Side Analyst
Before we get into why I believe MannKind is likely to grow in the long run, let’s talk about the recent news that has been putting fear into the hearts of investors. Recently, the company held an analyst call. This call was incredibly important as investors have been wanting to know about commercialization of Afrezza. However, at the end of the call, commercialization proved to be the last thing on the minds of many. Instead, investors and analysts seemed concerned about Afrezza’s CEO and his financial literacy. This all started when a sell side analyst asked Pfeffer how much money MNKD owed to Sanofi, it’s previous commercialization partner. Responding to the question, Pfeffer had the following to say:
“We don’t owe any money to Sanofi… other than a piece of debt.”
The truth is that MNKD owes Sanofi a total of $62 million for their part in the failed Afrezza joint venture. Because of the answer above, there are several analysts that are starting to question Pfeffer’s financial literacy, and wondering if he should maintain his position as CEO at MannKind. However, when put on the spot, people tend to say things that come off the wrong way. In this particular case, it would be no surprise to me if MannKind were fighting with Sanofi over the amount owed. After all, I would feel like I owed nothing if the other party in a joint venture didn’t do their job. It is also possible that Pfeffer simply stumbled over his words. The truth is that it happens to the best of us. Remember George Bush? You know, the previous President of the United States that led to the coining of the term Bushisms! The reality is that, at this point, I’m not concerned with Pfeffer’s financial literacy, nor his leadership, and you shouldn’t be either!
Why I Believe That MNKD Is Going To Climb From Here
We’ve seen quite a bit from MNKD over the past several months, since the announcement that Sanfoi would no longer remain as a commercialization partner. Personally, I see the situation as positive. You see, just a few months ago, many thought that MannKind would be filing bankruptcy. However, at this point, bankruptcy seems to be completely off of the table. However, that’s not why I’m bullish, after all, not filing bankruptcy is neither good nor bad, it’s what’s supposed to happen. The reason I’m bullish on MNKD is two-fold:
Afrezza – While lack of productive commercialization has led to poor sales volume, I still have quite a bit of faith in Afrezza. The truth is that it is a much needed treatment in the diabetes space. Now that Sanofi is out of the picture, MNKD has the ability to promote Afrezza as it wishes, find new commercialization partners, and send this thing to the top. While it may take some time, I have high hopes for future Afrezza sales picking up in a big way.
Technosphere – Another reason that I maintain a bullish opinion on MannKind is Technosphere, the technology that made Afrezza possible. MNKD has already contracted out for the development of new treatments surrounding technosphere, and has made it clear that it plans on using the technology in new indications moving forward. If used properly, technosphere has the ability to lead to massive profits.
The Bottom Line
The bottom line here is simple. Yes, MNKD has been kicked down. They have dealt with massive amounts of bad news, and their stock price has fallen dramatically as a result. However, I believe that this company can pick up the pieces and move forward with a relatively clean slate. All in all, I have a relatively bullish opinion with regard to the long-term outlook of MannKind.
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What Do You Think?
Where do you think MNKD is headed moving forward and why? Let us know your opinion in the comments below!
[Image Courtesy of Pixabay]