MannKind (MNKD): Sanofi Management Continues Support for Afrezza; Goldman Sachs Maintains Neutral Rating
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"Sanofi Chairman and interim CEO, Serge Weinberg, has been meeting with investors to address concerns in the wake of leadership changes. Our London Analyst who covers Sanofi, Steve Chesney, met with Mr. Weinberg and came away with a positive message regarding the company’s commitment to Afrezza as an important component of Sanofi’s diabetes portfolio. Recall Sanofi guided to flat to slight growth for its diabetes franchise out to 2018. We note that pricing pressures referenced as a headwind for Sanofi’s outlook on the diabetes market have been discussed in the context of basal insulin, although we suspect those same pressures are likely apply to rapid acting insulins as well," said Olson.
"Within its diabetes guidance, management highlighted optimism for the launch of Afrezza. In our analyst’s recent meeting, Mr. Weinberg continued to express enthusiasm for the commercial potential of Afrezza. With regard to the ongoing CEO search, Mr. Weinberg reinforced the company’s plan to pursue a candidate with international pharma experience including a particular emphasis on the US market, which is critical to the launch of Afrezza in our view," continued the analyst.
"We are encouraged by Mr. Weinberg’s continued support of Afrezza and we believe Sanofi should maintain a steady course of action in diabetes based on the recent discussion. However, as detailed in our 10/19 initiation note, we believe MNKD is facing low profitability and delayed profits based on a slow ramp of Afrezza, patient-driven market dynamics requiring heavy SG&A spending and challenging deal terms with Sanofi," he added.
Shares of MannKind closed at $5.11 yesterday.
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