MannKind Corporation (NASDAQ:MNKD)

MannKind stock has had a great beginning to the week so far. After a strong Friday, the gains continued yesterday throughout the day; and today is no different. The simple fact is that the company’s stock seems to have finally reached bottom and is roaring back up to the top. However, is it likely that MNKD keeps the uptrend going? Today, we’ll look at a few reasons why I think the bull trend will last…

Jefferies Analysts Are Incredibly Bullish

Late last week we saw an analyst report that sparked the increase in MannKind’s stock increase. Analysts at Jefferies released a very bullish statement last week. The firm conducted a survey that included answers from more than 50 endocrinologists; with the majority of them stating that not only have they heard of Afrezza, but plan to start using it more in the future. In the research note, here’s what the analysts had to say…

“Only a tenth of doctors screened had written an Afrezza script, we see MNKD’s efforts to expand access to spirometers and begin advertising in 3Q as key catalysts for uptake. With advertising, we expect the eventual rate of non-prescribers will fall closer to 12%. The 2015-2017 Afrezza use numbers implied by our survey suggests penetration rates nearly four times higher than we had previously modeled, and a $37 PT.”

MannKind Competition Got A Swift Kick From The FDA!

Another thing that’s well worth noting is that the Food and Drug Administration recently released a major warning. The warning indicates a higher ketoacidosis risk in those who use SGLT2 diabetes treatments. Here’s what the FDA had to say…

“Diabetic ketoacidosis (DKA) is a serious condition that can lead to diabetic coma or even death.”

The important fact here is that many of MannKind’s competitors including Johnson & Johnson(NYSE:JNJ), AstraZeneca plc (ADR) (NYSE:AZN), and Eli Lilly and Co (NYSE:LLY) all offer SGLT2 diabetic treatments; which are likely to see a decline in sales after the warning from the FDA!

MNKD Looks Great Technically

From a technical standpoint, MNKD is looking great. For the entire month of May, the stock had a RSI of 30; meaning that it was undoubtedly oversold. However, the RSI has recently reached 50 and seems like it will continue to climb. Not to mention, the stock has already broken through it’s 20 day moving average and seems to be getting very close to breaking through the 50 day moving average. All in all the stock looks like a gem from a technical standpoint.

Fundamentally MNKD Also Looks Very Nice

Fundamentally, MNKD is a great company and a great stock. The reality is that MannKind has found a way to deliver insulin, and possibly other injection only medications, through an inhaled powder. This is sure to have long run value. While I will admit that marketing for Afrezza needs to get under way, all in all, I think MannKind is Fundamentally sound.

Final Thoughts

Keeping everything I’ve mentioned above in mind, it simply doesn’t make sense to me that the MannKind bull run will stop any time soon.