Griffin Security defends Mnkd, tgt $11.50
Nov 6, 2015 1:35:30 GMT -5
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Post by lakers on Nov 6, 2015 1:35:30 GMT -5
Downgrade hurts MannKind stock
Manufacturing facilities of the Mannkind Corporation of Danbury that are used to produce Afrezza, a new form of inhalable insulin that was released into the market in February. Photo: H John Voorhees III / File Photo / The News-Times
Photo: H John Voorhees III / File Photo
Manufacturing facilities of the Mannkind Corporation of Danbury that are used to produce Afrezza, a new form of inhalable insulin that was released into the market in February.
DANBURY — The stock for local pharmaceutical company MannKind hit a new low during trading Thursday after disappointing comments from both its marketing partner and an analyst with the Royal Bank of Cananda.
On Wednesday, RBC Capital Markets’ Adnan Butt downgraded MannKind to underperform from a market perform rating, citing sluggish growth for Afrezza, an inhalable form of insulin that MannKind brought to the market in February. Butt also reduced his price target on the stock to just $1.
During trading Thursday, the stock dropped nearly 7 percent to close at $2.79 per share. The stock, which has lost more than 25 percent of its value in the past two weeks, had been trading as high as $7.58 in February when the drug was released.
Analysts also pointed to comments made last week by Olivier Brandicourt, the chief executive officer of Sanofi, a France-based pharmaceutical company and MannKind’s marketing partner for Afrezza.
During a call with investors, Brandicourt indicated that the sales of diabetic related drugs will drop from 4 to 8 percent in the coming years, due in part, he said, to reduced sales expectations for Afrezza. Investors, however, have been critical of Sanofi’s marketing efforts for the drug and its efforts to get insurance companies to accept the new treatment.
“Basically the CEO of Sanofi threw Afrezza under the bus as an excuse for the disappointing outlook for their diabetes franchise,” said Kevin Markey, an analyst with Griffin Securities who has a buy rating on the stock. “But how can they say the drug has been disappointing when they haven’t put the kind of support behind it that the drug needs?”
Markey noted that the drug has only been on the market for about six months and it has taken time to educate the medical community about the benefits of Afrezza over other treatments. Sanofi, he added, has only just begun stepping up its efforts to have insurance companies cover the drug.
“The diabetes market is very competitive and it will take some time for Afrezza to be accepted,” he said. “Right now is an excellent opportunity. For those investing in the long term, MannKind will be very attractive and rewarding.”
Markey’s price target for the stock is $11.50.
MannKind is expected to announce its third-quarter results on Monday. Most analysts expect the company, which has yet to record a profit, to report loss per share of about seven cents.
dperrefort@newstimes.com
m.newstimes.com/business/article/Downgrade-hurts-MannKind-stock-6613785.php
Manufacturing facilities of the Mannkind Corporation of Danbury that are used to produce Afrezza, a new form of inhalable insulin that was released into the market in February. Photo: H John Voorhees III / File Photo / The News-Times
Photo: H John Voorhees III / File Photo
Manufacturing facilities of the Mannkind Corporation of Danbury that are used to produce Afrezza, a new form of inhalable insulin that was released into the market in February.
DANBURY — The stock for local pharmaceutical company MannKind hit a new low during trading Thursday after disappointing comments from both its marketing partner and an analyst with the Royal Bank of Cananda.
On Wednesday, RBC Capital Markets’ Adnan Butt downgraded MannKind to underperform from a market perform rating, citing sluggish growth for Afrezza, an inhalable form of insulin that MannKind brought to the market in February. Butt also reduced his price target on the stock to just $1.
During trading Thursday, the stock dropped nearly 7 percent to close at $2.79 per share. The stock, which has lost more than 25 percent of its value in the past two weeks, had been trading as high as $7.58 in February when the drug was released.
Analysts also pointed to comments made last week by Olivier Brandicourt, the chief executive officer of Sanofi, a France-based pharmaceutical company and MannKind’s marketing partner for Afrezza.
During a call with investors, Brandicourt indicated that the sales of diabetic related drugs will drop from 4 to 8 percent in the coming years, due in part, he said, to reduced sales expectations for Afrezza. Investors, however, have been critical of Sanofi’s marketing efforts for the drug and its efforts to get insurance companies to accept the new treatment.
“Basically the CEO of Sanofi threw Afrezza under the bus as an excuse for the disappointing outlook for their diabetes franchise,” said Kevin Markey, an analyst with Griffin Securities who has a buy rating on the stock. “But how can they say the drug has been disappointing when they haven’t put the kind of support behind it that the drug needs?”
Markey noted that the drug has only been on the market for about six months and it has taken time to educate the medical community about the benefits of Afrezza over other treatments. Sanofi, he added, has only just begun stepping up its efforts to have insurance companies cover the drug.
“The diabetes market is very competitive and it will take some time for Afrezza to be accepted,” he said. “Right now is an excellent opportunity. For those investing in the long term, MannKind will be very attractive and rewarding.”
Markey’s price target for the stock is $11.50.
MannKind is expected to announce its third-quarter results on Monday. Most analysts expect the company, which has yet to record a profit, to report loss per share of about seven cents.
dperrefort@newstimes.com
m.newstimes.com/business/article/Downgrade-hurts-MannKind-stock-6613785.php