MannKind Corporation (NASDAQ:MNKD) shares plunged 5.80% yesterday after Goldman Sachs initiated coverage of the stock with a Neutral rating and $6 price objective. Despite the U.S. FDA approval of its diabetes drug Afrezza and a commercialization deal with Sanofi, shares of the company have tumbled about 50% since June 30. The stock peaked at $10.96 after regulatory approval of Afrezza on June 26.

MannKind Corporation Gets Neutral Rating From Goldman

MannKind likely to suffer from low profitability

Goldman Sachs analyst Jay Olson said in a research note that the close to 50% drop since June has brought down the stock to where it should be. He expects the company to suffer from low profitability. Goldman Sachs’ EPS estimate is about 70% below the consensus estimate for FY2018. Further, the research firm says MannKind is unlikely to post profits before 2018. By comparison, Wall Street expects the company to turn profitable (on an annual basis) by 2017.

Another risk facing MannKind is that the market dynamics will require heavy SG&A expenditure. The research firm is also concerned about the “challenging deal terms” with Sanofi that favored the French company more than MannKind. The picture should get clearer with quarterly results. Due to these factors, Goldman Sachs put a Neutral rating on the stock.

Short interest in MannKind rises to year-high

That’s not all. Short interest in MannKind stock is also piling up. At the end of September 2014, 78.57 million shares of the company were held short, the highest level this year. It would take short sellers more than 14 days to cover their positions. By comparison, only 47.46 million shares of the company were held short at the beginning of this year.

MannKind has a consensus Hold rating from nine research firms covering the stock. Three analysts have assigned the stock a Buy rating, five have rated it with a Hold, and one analyst has a Sell rating. The average price target is $9.47.

MannKind shares inched up 3.36% to $5.54 in pre-market trading Tuesday.