Jefferies analysts upgraded shares of MannKind back on May 15, 2015 to a “buy” rating and a $9 price target. Today, Jefferies analysts reiterated their buy rating and price target on the stock following MannKind’s presentation at the Jefferies Global Healthcare Conference. MannKind took the opportunity to continue raising awareness for its Afrezza drug, which is an inhalable treatment for diabetes and its strategic partnerships with Sanofi. Jefferies analyst, Shaunak Deepak said that “We look to advertising efforts in 3Q as a driver for Afrezza awareness and adoption, but we would not be overly concerned if the next few weeks of Afrezza prescription data look choppy”
MannKind’s Afrezza still relatively unknown to doctors, physicians
As analyst Shaunak Deepak noted earlier, MannKind is planning to step up its advertising efforts for its Afezza drug. During Jefferies initial upgrade last month in May, the investment bank took the opportunity to survey 56 different endocrinologists, doctors, physicians, and other health care providers. Their results showed that 35% of those polled by Jefferies did not even know about the drug. However the report found that health care workers that were familiar with Afrezza “expected to use Afrezza more frequently than we had expected,” according to Jefferies analysts (TheStreet). As you can see, this is an important piece of information for the company. On one hand, you have a new way of treating diabetes that is not very well known in the health care community. However, those that are familiar with the new treatments are confident in their abilities and are more likely to prescribe Afrezza, according to Jefferies. This certainly highlights the need for an extensive advertising campaign.
Other financial institutions do not seems to share same bullish prospects on MannKind
On May 11, 2015, MannKind reported first quarter earnings, which gave analysts and investors insight into how Afrezza was selling and the market’s reception for the new treatment. Following the company’s poor Afezza sales, the stock faced a series of downgrades. Goldman Sachs reiterated its “sell” rating on May 11th and cut its price target from $3 to $2. JPMorgan downgraded MannKind the same day from a “neutral” rating to “underweight”. Lastly, MLV & Co. reiterated its “hold” rating on May 11th for MannKind, but trimmed its price target from $7 to $4.
Overall, Wall Street is divided on how MannKind’s Afrezza drug will perform going forward. Goldman Sachs, JPMorgan and MLV & Co have a hard time seeing Afrezza adoption rates rising significantly. Meanwhile, Jefferies is bullish that advertising initiatives will help increase sales. Only time will tell for MannKind.