MannKind Corporation Beats Earnings Expectations, But Analysts Remain Skeptical

Biopharmaceutical company MannKind Corporation (NASDAQ:MNKD) impressed investors after posting second-quarter earnings yesterday before market open, sending shares up as much as 12% MannKind narrowly beat the Street’s earnings estimate of a loss of ($0.08) per share, posting a loss of ($0.07). The company posted a loss of ($0.19) per share in the same quarter a year prior.

Though MannKind had no recognized revenue for the quarter, it posted $5.9 million in deferred product sales for its pipeline drug, Afrezza, a rapid-acting inhalable insulin for adults with diabetes. This marks almost a 17% drop from $7.1 million in deferred product sales the company posted in the first quarter. MannKind cited this sales figure as deferred product sales due to its collaboration with Sanofi.

The company’s total operating expenses decreased to $24.1 million from $69.8 million year-over-year, mainly due to Afrezza passing into the commercial market. As a result, research and development expenses had a dramatic 79.4% decrease from $37.3 million to $7.7 million year-over-year.

MannKind also announced Dr. Raymond Urbanski, who has more than 25 years of clinical and pharmaceutical industry experience, has stepped into the role of Chief Medical Officer. “Dr. Urbanski is a terrific addition to our team and I am very pleased to have a person of his caliber as part of the organization,” said MannKind’s CEO, Hakan Edstrom. “Ray’s experience in drug development across multiple therapeutic areas, combined with his proven leadership capabilities, will be invaluable to us as we drive growth through our product technology platforms.”

According to SmarterAnalyst, Piper Jaffray analyst Joshua Schimmer weighed in on MannKind following the company’s earnings results on August 10, reiterating a Neutral rating on the stock but raising his price target from $3.50 to $4.00. The analyst highlights that the launch of Afrezza has been slow, but he feels assured because “the company remains optimistic that measures to improve access [to Afrezza] will lead to an acceleration of uptake.” Schimmer’s neutral rating stems from “concerns with the Afrezza trajectory and MNKD’s financial position.” The analyst continued, “If there is not an inflection of prescriptions in the coming months, MNKD may need to re-evaluate its strategy.”

MannKind discussed multiple new strategies to improve Afrezza sales, “including a DTC campaign introduced in July, increased sales effort targeting new physicians, new in-office promotions, launch of expanded websites for patients and physicians and publication of Afrezza trial results in peer reviewed publications,” according to Schimmer. The analyst expects “continued focus on IMS scripts in the coming weeks to assess the effectiveness of these new efforts.”

Overall, Joshua Schimmer has a 54% success rate recommending stocks and a +7.5% average return per recommendation when measured over a one-year horizon and no benchmark. He has rated MannKind 9 times since 2012 with no success and a -3.1% average loss per recommendation.

On the other hand, J.P Morgan analyst Cory Kasimov reiterated an Underperform rating on MannKind with no price target on August 10 following the company’s earnings results. The analyst noted that “Afrezza continues to struggle” and that “significant hurdles to uptake still remain.” Overall, Kasimov is “increasingly skeptical that Rx will gain traction anytime soon, which could put the balance sheet into an increasingly precarious position.” However, Kasimov thinks there is “still significant value reflected in the company’s diluted market cap of [$1.6 billion].” Looking forward, Kasimov believes “Afrezza scipt trends and quarterly sales will be key to monitor.”

On average, Cory Kasimov has a 50% success rate recommending stocks and a +7.1% average return per recommendation when measured over a one-year horizon and no benchmark. He has rated MannKind 8 times since 2010, earning a 50% success rate recommending the stock and a +20.3% average return per recommendation.

Out of 4 analysts polled by TipRanks within the past 3 months, 2 are bullish on MannKind, 1 is neutral, and 1 is bearish. The average 12-month price target for MannKind is $7.33, marking an 81.44% potential upside from where the stock last closed.

Stay Ahead of Everyone Else

Get The Latest Stock News Alerts