Goldman Sachs Starts MannKind (MNKD) at Neutral

Goldman Sachs initiates coverage on MannKind (NASDAQ: MNKD) with a Neutral rating and a price target of $6.00. Analyst Jay Olson estimates $1.3 billion in 2020 Afreeza sales, with peak sales of $2.1 billion in 2025.

"Despite FDA approval of Afrezza and the Sanofi commercialization deal, MNKD has fallen by >50% since June. We see shares stabilizing but with limited upside based on our view of: 1) low profitability as we are 70% below 2018E consensus EPS; 2) delayed profits starting in 2018E vs. consensus reaching profitability in 2017E; 3) likely patient-driven market dynamics requiring heavy SG&A spending, and 4) challenging deal terms with Sanofi, which are complex in our view, but should become clearer with quarterly results. These factors keep us on the sidelines for now," said Olson.

The analyst went on to say, ". . . we believe Afrezza should fulfill its promise to offer an important new option for diabetics who prefer not to inject meal-time insulin. However, commercial risk remains as we see slow Afrezza uptake driven by patient demand based on our survey of 50 endocrinologists and 50 diabetes educators. We believe the patient-centric nature of Afrezza has important financial implications:

• "Significant commercial opportunity in geographies where patients influence diabetes treatment decisions (e.g. the US) but limited opportunity in other markets (e.g. ex-US).
• A wait-and-see attitude among healthcare professionals and payers who are relatively more concerned with safety than convenience and must be influenced by patients. Some caregivers may want to wait for long-term safety data from an FDA mandated post-marketing study looking at lung and CV safety.
• Expensive promotional investments required to educate patients and reach healthcare professionals thus creating awareness and providing launch materials (e.g. starter kits) to stimulate demand."

For an analyst ratings summary and ratings history on MannKind click here. For more ratings news on MannKind click here.

Shares of MannKind closed at $5.69 yesterday.

You May Also Be Interested In

• Citi Downgrades Molson Coors (TAP) to Sell, 'Cycling 2023 Could Be a Mountain Too Hard to Climb'
• Kimberly Clark (KMB) PT Raised to $160 at Evercore ISI
• BofA Securities Downgrades CEMEX (CX) to Neutral