Analyst Thinks MannKind’s (MNKD) Afrezza Still Has a Shot, Though Q3 Earnings Hit Below Guidance

Despite MannKind (MNKD) reporting third-quarter revenue for diabetes drug Afrezza below H.C. Wainwright’s Oren Livnat predictions, the analyst is still bullish on the stock. Livnat reiterates a Buy rating on MNKD with a price target of $4,00, implying an upside of 108%. (To watch Livnat’s track record, click here).

Afrezza is a fast-acting inhaler that reaches peak insulin levels far quicker than an insulin injection. It’s also considerably more convenient than an injection, meaning diabetic patient quality of care may improve.

MannKind guided between $22 and $25 million in revenue for 2018 but is so far only at $11.5 million with two months left before the year is out.

Afrezza’s revenue for Q3 is $4.4M (or approximately $4.7M ex-items), which stands nearly $1 million under Livnat’s projection of $5.3 million for the quarter.

“We don’t think investors had put much stock in the target at this point, and are likely relieved to have no guidance until the product—now supported by cash resources and published STAT data—can get onto a consistent growth trend. The company indicated that internal metrics are consistent with at least 10% month-over-month growth in October, and are confident in solid sequential growth in 4Q. We’ve had to take down near-term estimates down on slower growth, dropping our Afrezza Rx volume projections 23% in 4Q18 and 26% in 2019-2020,” Livnat said.

Though the numbers aren’t hitting the roof, the analyst still sees light at the end of the tunnel: “We really do believe in the therapeutic value-proposition of Afrezza, having witnessed, first-hand, dramatic improvement in glucose control in even highly-experienced insulin users. We believe that with enough time, resources, and physician awareness and education, that Afrezza should be a preferred mealtime insulin for diabetics (type 1 or 2) vs. slower-acting injectables. We have little doubt that Afrezza would become a blockbuster if it were sold by a Novo or Lilly  and not highly disadvantaged in the managed-care insulin rebate game. We still project a long-term Afrezza ramp to over $400M peak.”


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