2020 has provided a reversal of fortune for MannKind (MNKD). After several difficult years, the diabetes focused biotech’s stock has been on the mend and is up by 77% year-to-date.
However, according to BTIG analyst Robert Hazlett, there’s plenty of upside yet to come. The 5-star analyst has a Buy rating on MNKD shares along with a $4 price target. Investors could be pocketing gains of a hefty 75%, should Hazlett’s thesis play out over the coming months. (To watch Hazlett’s track record, click here)
Hazlett’s confidence in MannKind is based on 2 main drivers; The first is the increasing sales of the company’s flagship product, Afrezza — a portable inhaling device consisting of a dry powder formulation of human insulin for diabetes management.
In Q3, Afrezza’s US net revenue increased by 27% year-over-year to $7.3 million. Hazlett puts Afrezza’s strong performance down to “increased pricing, favorable mix shift toward larger cartridges, and steady Afrezza script demand of +8% yr/yr.”
The analyst paints an optimistic picture regarding its future: “We believe Afrezza’s 3Q performance bodes well for MannKind and its long term commercialization efforts, as the company has stepped on the accelerator a bit in terms of marketing, with more reps to get the Afrezza message out, as it can rely on published data that show good glycemic control for ultrarapid acting Afrezza, among other favorable considerations.”
The other catalyst concerns the company’s partnership with United Therapeutics on the development of Treprostinil Technosphere, a dry powder formulation of the already approved treprostinil (TreT). The medication is currently in a Phase 3 study for the treatment of pulmonary arterial hypertension (PAH), which is expected to wrap before the end of the year. An FDA filing is mooted for early 2021.
MannKind should see a development milestone payment of $12.5 million in Q4, while Hazlett estimates there could be a huge market for the treatment once approved.
“We continue to believe TreT is transformative for MannKind. We model a 2021 launch and peak revenues of ~$1B with a double-digit royalty to MannKind,” Hazlett noted.
Over the past 3 months, only two other analysts have thrown the hat in with a view on the inhaled insulin maker. The two additional Buy ratings provide MNKD with a Strong Buy consensus rating. With an average price target of $3.17, investors stand to take home an 39% gain, should the target be met over the next 12 months. (See MNKD stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
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