MannKind (MNKD) Stock: Why This David Will Be A Goliath!

MannKind Corporation (NASDAQ: MNKD)

If you follow my writing here or elsewhere, you know that MannKind Corporation is one of my favorite companies out there, and I absolutely love its stock. I know, there are plenty of you that are going to say, “You’re crazy!” However, when we dig into the details, it’s easy to see why I maintain such a bullish opinion on the stock. The reality is that MNKD is the David of the biotech. However, the company is likely to turn into a Goliath, and in my opinion, that’s less than a year away. Today, we’ll discuss why the stock has done so poorly in the market over the past year or so and why I believe it’s going to climb over the next year!

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Why MNKD Has Had Such A Hard Time

The difficulties MannKind has been facing revolve around Afrezza. For those of you who haven’t heard of it yet, Afrezza is an inhaled insulin that was approved in late 2014 and takes away the need for injections. While there is a dire need for this treatment on the market, commercialization of Afrezza has failed miserably. However, MNKD had very little to do with the commercialization. In fact, they contracted the commercialization of Afrezza to Sanofi SA (ADR) (NYSE: SNY).

Unfortunately, SNY wasn’t too keen on moving quickly with Afrezza, even if their delays hurt MNKD and its investors. The reality is that Sanofi has a competing treatment that it makes more money from. So, by pushing Afrezza, they actually take away from their own products. As a result MNKD has declined in a big way thanks to poor sales of the treatment leading to an overall bearish sentiment on the stock.

Why I Believe MannKind Will Climb

The reality is that while there’s only one reason for declines on the stock, there are several reasons to be bullish on MNKD. Here are some of the most important in my opinion:

  • MNKD Is Cutting Ties With SNY – The reality is that when MannKind contracted with Sanofi, it was a big mistake. However, early this year, we learned that MNKD and SNY were canceling the commercialization agreement for Afrezza. This means that SNY will no longer be able to delay the commercialization of the treatment, and that’s big for MNKD. In fact, they are already working on big plans for sales.
  • MannKind’s Plans For Selling Afrezza – Now that the ball is back in MannKind’s court, things are looking much better for Afrezza sales. One of the larger of these plans that really caught my attention is a partnership with Specialized Diabetes Care Centers. These centers will be heavily focused on educating consumers with regard to Afrezza and treating diabetes in real time with the treatment. As a result, I’m expecting to see increasing sales and positive activity out of MNKD.
  • Commercialization Partners – Another thing that can now happen as a result of the cancellation of the agreement between MNKD and SNY is the fact that MannKind can now seek stronger commercialization partners for Afrezza, and they have been very open about the fact that they are already doing so.
  • Technosphere – Finally, another big piece of the puzzle here is technosphere. Technosphere is the technology that made it possible to inhale insulin and has the potential to make it possible to inhale other injection only medications. MNKD has already entered into one agreement for the development of new treatments using technosphere while maintaining rights to the technology outside of the indications mentioned in the agreement. All in all, I’m incredibly impressed with technosphere and believe it will turn into big gains for MNKD in the long run.

The Bottom Line

The bottom line here is that MannKind is a great company with an incredible product. While Sanofi has delayed commercialization of Afrezza, the cancellation of the agreement means that delays are coming to an end. With a core focus on a mix of Afrezza sales and development of new treatments using technosphere, I believe that this stock is going to climb!

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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 Flickr]

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