Every morning, I start my day with a little bit of reading with regard to the stocks that I follow closely. If you're a fan of my work, you know that one of those stocks is MannKind Corporation (NASDAQ:MNKD). Today, I found a very interesting post. Apparently, another law firm is investigating MNKD and whether or not it misled investors with regard to the effects pulmonary testing would have on Afrezza sales. Personally, I think not... there's far more to the story than that my friends. Nonetheless, with the cases filed against the company and its struggles with regard to sales, some investors see MNKD as a lump of coal. However, with incredible potential stemming from Afrezza and technospher, others see it as a diamond in the rough. Today, we'll discuss the lawsuit and why there is no fundamental grounding to it, why some believe that MNKD is a lump of coal, why others believe its a diamond, and what I think we'll see from the stock moving forward. So, let's get right to it...
MNKD Is Being Investigated By The Law Offices of Howard G. Smith
Earlier this morning, it was announced by the Law Offices of Howard G. Smith that the firm has decided to launch an investigation looking into MannKind and whether or not it violated federal securities laws, leaving investors with financial injuries. The firm states that the investigation into MNKD is with regard to whether the company misled investors with regard to the effects mandated pulmonary testing would have on its lead product Afrezza. However, I don't think this investigation will turn up much. The reality is that the lackluster sales had very little, if anything to do with pulmonary testing. It is the belief of the majority of investors that Sanofi (NYSE:SNY) did what it could to drag its feet with regard to the commercialization of Afrezza, leading to incredibly poor sales. The truth is that without patient and physician knowledge of the treatment, pulmonary testing hasn't been done as often as it should have been. So, this doesn't represent the issue at hand. So, I'm not concerned about the investigation into MNKD as it will likely turn up no wrong doing on the company's part.
Why Some Investors See MannKind As A Lump Of Coal
When it comes to MNKD, there's no arguing that there are plenty of bears on the stock, and I will admit, they have a very valid argument. They argue that we are now over a year past the day when the FDA approved Afrezza, but we have seen virtually nothing by way of sales. As a result, MNKD has become an extremely cash strapped company and will likely struggle to cover the expenses associated with further development of other drugs as well as commercialization of Afrezza. That, in combination with the legal battles that the company is fighting will likely drive MannKind to bankruptcy; or so the bears think.
Why Some Investors See MNKD As A Diamond In The Rough
While MNKD does have its share of bears, it also has its share of bulls, and the bullish argument is also very appealing. This argument has several areas. Here's why the bulls expect to see growth...
- MannKind & Sanofi – As mentioned above, MannKind contracted Sanofi for the commercialization of Afrezza shortly after its approval. However, because of its own interests, Sanofi seemed to drag its feet and the Afrezza commercialization failed. However, it was recently announced that MNKD and SNY would be parting ways. This will give MNKD an opportunity to contract with a commercialization partner that will do something as well as work on its own to boost sales.
- MNKD Has Already Started Commercialization Efforts – In early January, Matthew J. Pfeffer had only been the CEO of MNKD for a total of 3 days before holding his first investor conference. However, at that conference, he made some very big announcements. First, he announced that MNKD was indeed looking for other commercialization partners. On top of that, the company had entered into an agreement with specialized diabetes care centers. These centers will be focused on treating diabetes in real time with Afrezza.
- Technosphere – While much of the focus with regard MNKD has been on Afrezza, it's not the only thing that makes up the company. In fact, the technology behind Afrezza, technosphere is a product on its own. Recently, MNKD announced that it has entered into an agreement for the development and commercialization of new treatments designed using technosphere, which will likely lead to profit in the long run.
What We Can Expect To See From MannKind Moving Forward
While MNKD has been the victim of several attacks recently, I still have faith in the company. I think that the innovation they've accomplished is nothing short of incredible and that in the long run, investors will be surprised at how valuable the stock gets. In the short term, we may see more volatility. However, given the long term outlook on the stock, the volatility is nothing to be concerned about. All in all, I believe that MNKD will skyrocket in the long term view.