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MannKind Corporation (NASDAQ:MNKD) Runs On One Drop News, But Is That All?

MannKind Corporation (NASDAQ:MNKD) Runs On One Drop News, But Is That All?
Written by
Chris Sandburg
Published on
May 9, 2017
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MannKind Corporation (NASDAQ:MNKD) ran up to the tune of 28% on Monday, on the back of some news related to a deal we initially got word of last week, and specifically, the inclusion of the entity involved in said deal on the Amazon Prime service. It's a nice little news driven run, but we are not convinced that it is entirely based on the release. Sure, the news is good, but it's hardly worthy of a close to 30% revaluation. There could be something else going on behind the curtain that's driving speculative interest in the stock.Here is a look at the latest news in context, and what we think might be going on elsewhere.Regular readers will know that this is one we have come back to on quite a few occasions recently. For those new to the stock, it's a diabetes play, and the vast majority of its valuation is rooted in the success or failure of a current ongoing marketing effort for its lead asset – an inhalable insulin product called Afrezza.The product initially hit shelves a couple of years ago on the back of a big pharma collaboration deal with Sanofi SA (ADR) (NYSE:SNY), but for reasons we have discussed in the past, basically failed commercially. MannKind has attempted to rectify the reasons for the failure and is currently pushing the product as part of its own solo-driven commercialization run.As things stand, the push is going okay. Not great, but okay. Weekly prescriptions remain below 300, but new prescriptions are at around 155 per week – a new high since the company kicked off its solo commercialization efforts.The latest news details the addition of a service/product called One Drop to Amazon Prime. It follows the company's announcement last week of a memorandum of understanding to enter into a collaborative agreement that will see One Drop’s subscription service and digital health platform add Afrezza as a rapid-acting insulin offering. One Drop is perhaps best known for providing direct-to-doorstep unlimited blood glucose monitoring strips and with Afrezza added to its delivery pack, not only might we see a ramp up in scripts for the product by way of the One Drop service, we might also see an increased awareness among diabetes patients of Afrezza and its benefits over some of the current standard of care assets in the space.Right now, of course, it's just a memorandum of understanding, and any impact on prescriptions and – eventually – top line sales for the company is a longer-term prospect. It's good news, sure, but as we've mentioned, it is not a 30% value driver.So what else could be going on?Well, one thing we mentioned last time was that this company would be a steal for a big pharma entity looking to pick up an entry into the diabetes space or to shore up its existing portfolio in the sector. It is tough to imagine that management hasn't already fielded some offers, and we think that a degree of the upside seen during the last few sessions is rooted in speculative loading ahead of any potential takeover announcement. As such, right now, we are looking to management for any indication that this might be the case. There's an annual meeting slated for next week and earnings are just around the corner. At either the annual meeting of the conference call that accompanies the earnings release, there's a chance we may see some degree of said indication. It's not confirmed, of course, and it's speculative at this point. However, given the potential of the product that any buyer would be gaining, and the price at which said buyer would be doing so, it's notIt's not confirmed, of course, and it's speculative at this point. However, given the potential of the product that any buyer would pick up as part of the transaction, and the price at which said buyer would be doing so, it's not an unreasonable suggestion.Whatever the driver, the recent gains, serve up a degree of much-needed reprieve for shareholders, and we're looking at current levels as potentially forming a bottom from which the company can start to build towards a longer-term recovery, or a takeover, whichever comes first.We will be updating our subscribers as soon as we know more. For the latest updates on MNKD, sign up below!Disclosure: We have no position in MNKD and have not been compensated for this article.

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