RBC Capital reaffirms MannKind (Nasdaq: MNKD) at Underperform with a price target of $0.15 following Q4 results and update issued Monday night.

ANalyst Adnan Butt commented, While MNKD has an approved diabetes drug in its hands in Afrezza and technosphere platform could have value in future drug development, we would like to see execution on four fronts before becoming constructive: 1) Afrezza sales ramping up into the tens of millions; 2) technology partnerships or a fast-to-market proprietary drug; 3) path to breakeven; and 4) improved balance sheet.

Butt also noted the following from the company's conference call:

• Plans for Afrezza still undetermined although a CCO is hired. MNKD hired Michael Castagna from Amgen to lead commercialization. However, the company did not shed light on specific strategy for “relaunching” Afrezza and how it plans to address market penetration, doctor and patient education, payor/reimbursement, and other issues related to the brand. Management also did not commit to having plans in place around when Afrezza is reacquired around April 5.
• Afrezza demand trends show declines in market share as Sanofi disengages. Since Oct 2015, Afrezza’s market share ceiling is 0.25% when compared against other fast-acting insulins and had a market penetration of 0.19% based on IMS Rx data through 10/2/15. More recent data through 3/4/16 shows market penetration at ~0.09%, which may reflect Sanofi backing off sales efforts. MNKD may see a pickup in Rx once they “relaunch” although turnarounds are fairly challenging.

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