H.C. Wainwright analyst Oren Livnat is out with an upbeat research note on MannKind (NASDAQ:MNKD) and its prospective pulmonary arterial hypertension (PAH) innovation, Technosphere treprostinil. Last Thursday, the biotech player released positive Phase 1 data of its dry powder inhalation designed for PAH and with impressive timing- “months ahead of schedule.” Livnat cheers this as a key indication that MNKD”s inhalation asset delivery platforms pose prospectively vastly “more value” when weighed up against “just” Afrezza inhalable insulin.
Therefore, the analyst reiterates a Buy rating on MNKD stock with a $2 price target, which implies a 5% upside from current levels. (To watch Livnat’s track record, click here)
Though Livnat is not factoring in the PAH asset so far in his expectations, he nonetheless sees a powerhouse drug that could become “transformational.” Consider that United Therapeutics’ PAH treprostinil franchise circles beyond $1.1 billion in sales this year translating to more than $500 million for parenteral Remodulin, $375 million for inhalable Tyvaso, as well as $240 million for oral Orenitram.
The current treprostinil formulations having glaring deficiencies in drug delivery to dosing limitations that take a hit at efficacy, notes the analyst. As such, Livant runs the numbers and sees prostacyclins are merely utilized by roughly 20% of the 30,000 diagnosed U.S. PAH patients- even though a majority of 80% are eligible.
“MannKind will pursue an expedited 505(b)2 bioequivalence pathway now, and could start a pivotal Tyvaso switching study in PAH patients in 2H18. We will wait to see some data first, but theoretically, TreT could be filed by end-2019 and get some credit from the market soon. If successful, we are confident that Technosphere treprostinil, or ‘TreT,’ could represent a material innovation in the PAH prostacyclin space, even with only switching and bioequivalence data. With likely much easier drug administration and possibly higher achievable tolerable therapeutic doses and efficacy, TreT could potentially capture meaningful share or grow the market,” writes Livnat.
Moving forward, the analyst sees opportunity for MannKind’s active to “prove a tantalizing life-cycle extension for UTHR” thanks to its showcases of dosing in under 10 seconds and stronger tolerable maximum doses. Overall, Livnat concludes: “We recognize that MannKind is very resource constrained but believe the opportunity merits funding and should garner interest from potential partners or funders to move it forward, and the pivotal program should only cost $15-20M.”