I am once again making MannKind (MNKD) my Top Pick for the coming year. The company's lead product is Afrezza, an inhalable form of insulin for both Type 1 and Type 2 diabetics, writes Nate Pile, editor of Nate’s Notes.
While it has taken longer for the drug to gain the sort of traction I believe it will eventually achieve – and that many optimists had hoped it would – doctors and insurance companies alike are slowly but surely coming around to recognizing the benefits the product has over the "old school" insulins that currently dominate the market.
Towards this end, there are a number of clinical trials currently underway that have the potential to finally tip the needle (no pun intended) when it comes to demonstrating the superiority of the product. Provided the trials deliver the results I believe they will, I think the odds are good that doctors, insurance companies, and patients will all accelerate their acceptance of the product.
In addition, though MannKind currently retains all rights to the product, it would not surprise me at all if the company decides to license the product (or perhaps even sell it altogether) to a larger pharmaceutical company. The trials would have to be robust enough to justify such an investment, with the overseas market being an obvious direction for such a partner to take things if they chose to go that route.
Along with Afrezza, the company also has a second product on the market (indirectly) via a licensing agreement with their partner United Therapeutics (UTHR). MannKind gets paid “costs plus a mark-up” to manufacture a drug called Tyvaso DPI (inhalable treprostinil) for United Therapeutics, and also receives a 10% royalty on all sales of the drug.
While it remains to be seen whether the trends currently in place will continue through 2024, Tyvaso DPI is currently showing signs of eventually becoming a “blockbuster” for United Therapeutics. Provided things play out in the manner I believe they will, not only will MannKind benefit greatly from the growing revenue stream associated with the product, but its success will also help provide additional validation (and raise awareness) of the underlying drug delivery platform (called Technosphere).
To be sure, 2023 was a rough year for biotech in general. But after following the sector for more than 35 years, I believe things are shaping up nicely for the sector to have a strong 2024. Given how many pieces of the puzzle are finally falling into place for MannKind, I believe the stock has one of the best risk-reward ratios of all the stocks in the sector.
