MannKind Corporation (NASDAQ: MNKD)
MannKind stock had a very rough march. As a matter of fact, throughout the month, the stock fell by more than 20%! Now investors are asking the question, can MNKD recovery? In my personal opinion, the question isn’t “Can they..”, but “When will they recover?” Here’s why…
Let’s Start By Taking A Look At Why MNKD Fell In The First Place
The cause of the drop is easy to spot in this case. In early March, a Goldman Sachs analyst by the name of Jay Olson decided to downgrade MannKind to a sell with a target price of $3; insinuating a 50% or so drop. In my personal opinion, and the opinions of many other investors, traders, and experts, the downgrade was completely unfounded. Here’s why…
- Hepatitis C Is Not Diabetes – Jay Olson believed that because there’s pressure in the hepatitis C market to reduce prices, and reductions were happening, that would bleed into the diabetes market as well. The truth is, if that was the case, all of biotech would be affected, not just diabetes and hep c treatment providers. So, this was more pointless chatter and bashing. It’s like saying that since there’s a potato shortage, we’re going to increase the price of corn…doesn’t quite make sense does it?
- Afrezza Launch – The analyst also stated that the launch of Afrezza was strikingly below Goldman Sachs expectations (whatever that means these days anyway). What wasn’t mentioned is that it had only been on the market for 3 weeks. Fast forward a couple weeks later and analysts are increasing price targets based on physician feedback of the drug. Looks to me like Jay got this one wrong too. Sure, it may take some time, but Afrezza will do well in the long run.
So, Will MannKind Bounce Back?
Absolutely, without a question in my mind, I believe that this one’s going to make a big comeback. Now, I’m not a psychic. I can’t tell you how long it will take for Afrezza to make its way through the market, nor when investors will realize the value in the inhaled insulin. Nonetheless, I do believe that Afrezza will be the goose that lays the golden eggs for MNKD, and that the stock will rise in the long run!
What Do You Think?
Where do you think MNKD is headed in the long run? Let us know in the comments below!