MannKind Corporation: Analysts Turn Increasingly Bearish

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MannKind stock declined more than 20% in March amid a number of analyst downgrades and price target cuts. On top of that came a report from The Medical Letter, revealing that MannKind’s Afrezza offers only limited effectiveness. Analysts have been carefully tracking MannKind stock as well as Afrezza prescriptions. The inhaled insulin drug is the first product from the Valencia-based company, and it will play a crucial role in MannKind’s future.

MannKind’s drug sees slow sales growth

In the first week of March, Goldman Sachs analyst Jay Olson downgraded the stock from Neutral to Sell rating. Olson also slashed his price target to $3 per share. He said diabetes products were facing a growing downward pricing pressure, which would affect Afrezza. Goldman Sachs said MannKind and its marketing partner Sanofi will have to offer up to 40% discount on Afrezza, much higher than 20% discount expected by the research firm.

Further, Goldman noted that Afrezza’s launch was tracking below expectations. So, Jay Olson reduced his peak sales forecast in 2025 from $2 billion to $1 billion. On March 24, Jefferies analyst Shaunak Deepak cut his price target on the stock from $10 to $9, citing a more gradual sales of its inhaled insulin. However, Deepak is optimistic about the drug. He believes that Afrezza could emerge as a strong alternative to mealtime injectable insulin or as a first insulin.

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RBC tracking Afrezza prescriptions

RBC Capital Markets analyst Adnan Butt has been carefully tracking weekly prescriptions and sales of Afrezza. In the 10th week of its launch, Afrezza prescriptions rose 6.2% from the prior week to 171 prescriptions. Butt said Afrezza still trails far behind other drugs with just 0.05% market share. The market is dominated by Novolog with 46.06% and Humalog with 40.49% market share.

RBC Capital Markets expects MannKind to report $46.1 million revenue in 2015 and $5.1 million in the first quarter. To reach the full-year target, Afrezza sales must grow between 9.2% and 9.9% weekly.

MannKind shares fell 0.67% to $5.18 at 12:53 PM EDT on Thursday.

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