MLV Reduced MannKind Price Target On A Detailed Review Of The Capital Structure


In a research report published today, MLV analyst Arlinda Lee maintained a Hold rating on MannKind Corporation (NASDAQ:MNKD), while reducing her price target to $7 (from $11), which still represents a potential upside of 20.5% from where the stock is currently trading.

Lee explained, “We update our model to incorporate earnings reported yesterday as well as the 35-65 profit split between MNKD and partner Sanofi. Our new estimates for Afrezza sales in 2015-2017 of $110M, $280M, and $486M project a more gradual launch but are roughly in line with Bloomberg consensus estimates of $111M, $286M, and $545M. Our review of MNKD’s cap structure reveals more debt-like instruments, detracting from valuation.”

The analyst added, “According to MNKD, due to accounting rules, it cannot book either the $150M upfront or $75M worth of CMCrelated milestone revenues until the SNY partnership becomes cash-flow positive. Due to limited visibility on launch trajectory and costs, as well as accounting rules, we believe investors should not expect to see revenues flowing into MNKD’s P&L until 2016, at the earliest.”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Arlinda Lee has a total average return of -10.2% and a 50.0% success rate. Lee has a average return when recommending MNKD, and is ranked #2730 out of 3358 analysts.