Stock Pick - MNKD

MannKind Corporation (NASDAQ: MNKD)

MannKind has a compelling story at the very least. Here we have a company that’s made amazing medical advancements in the field of diabetes and medicine in all (we’ll get to that lately); however, the company’s stock has been on a steady decline for more than 3 months now; currently in the red when looking at the past year. However, this is a hotly debated topic. Even though the stock is sliding, there are several investors that are still convinced that we’re going to see growth out of this one; and I have to admit, I’m one of them! So today, I’ll explain the argument from both sides below.

Those Who Don’t Like MNKD Point To Afrezza As A Reason

For those who are bearish on MannKind, Afrezza tells the whole story. The bears are looking at Afrezza sales and saying…something isn’t right here. The reality is that in the first quarter, analysts expected Afrezza sales to be between $3 and $4 million. However, the company was only able to generate little more than $1 million in sales. So, essentially, the bears don’t have faith in the fact that MNKD can pick Afrezza sales up. We’ve actually seen this argument pretty commonly since Goldman Sachs downgraded MNKD months ago.

Those Who Like MNKD Point To Afrezza As Well

Bad news isn’t the only news you’re going to find about Afrezza. As a matter of fact, those that are bullish on the stock point to Afrezza as a reason to run with the bulls. The reality is that Afrezza is a great advancement in the world of medication. Before Afrezza, those who needed insulin needed to take it through an injection. However, now that Afrezza is available, patients don’t have to deal with painful shots.

Now, I can understand the reason for the bearish arguments around Afrezza. The reality is that no matter how bulls sugar coat it, sales for the insulin are absolutely horrible. That can be scary to investors. However, it’s important to keep in mind the reason for the low sales. At the moment, MannKind isn’t even marketing Afrezza. There’s no commercials or print ads, it’s all word of mouth. While that won’t always hinder sales, it will play a major role. Another factor that’s playing a major role in the slow growth is the legal hoops patients have to jump through in order to get their hands on an Afrezza prescription. So, while Afrezza is on the market, it can’t be sold like other insulin and the sales shouldn’t be compared. However, MNKD should start marketing soon; and the FDA hoops won’t last forever. So, Afrezza is bound to do well in sales later on.

Another thing to keep in mind is the fact that Afrezza doesn’t simply represent insulin. It represents the ability to deliver medication that was once injection only to the human body through an inhaled powder. MannKind and its investors expect the same technology that delivers insulin in Afrezza to have the ability to deliver a wide range of other medications that are currently injection only medications. In the long run; you have to admit that this technology has value.

So, Can MNKD Recover?

I think it will. However, I also think that it may take some time before it happens. Nonetheless, I have faith in the company’s ability to innovate and I’m sure sales will come down the road.

Your order to buy 100 share(s) of MANNKIND CORP (MNKD) was placed on 5/19/2015 at 2:03:27 PM ET.