Piper Jaffray Downgrades MannKind (MNKD) to Neutral; Slashes PT from $19 to $1.50

Piper Jaffray downgrades MannKind Corp. (Nasdaq: MNKD) from Buy to Neutral and reduces its price target from $19 to $1.50.

After yesterday's announcement of a possible link to Exubera and lung cancer, the firm notes, "This morning, Pfizer (NYSE: PFE) issued a press release stating that the product labeling for Exubera was being amended to include a warning about lung cancer cases observed in Exubera-treated patients." Nektar Therapeutics (Nasdaq: NKTR) was also affected by the data from trials on Exubera, as it is the company that licensed Exubera to Pfizer. Also this morning, Nektar announced that it has discontinued all spending on its inhaled insulin programs and has closed all negotiations with potential partners for the insulin products.

Yesterday and today's developments, according to Piper, have dealt a major blow "to the commercial prospects for Technosphere Insulin", as physicians are now much more likely to take a very risky stance on any inhaled insulin. As MannKind has "developed a potential best-in-class pulmonary insulin", the firm believes its business will be severely impacted.

MannKind's stock performance yesterday certainly reflects a negative change in its fundamental business: its stock price fell nearly 60% from just under $6 to close the day at $2.35. Shares of MannKind have slightly bounced this morning, and are indicated higher by about $0.10, or 4%.

Notably, Piper Jaffray's $1.50 price target on MannKind represents a potential downside of about 39% from current levels.

MannKind Corporation, a development stage company, engages in the discovery, development, and commercialization of therapeutic products for the treatment of diabetes and cancer. [BCS]

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