Why MannKind Is Poised to Pull Back

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, biopharmaceutical company MannKind (NASDAQ: MNKD  ) has received a distressing two-star ranking.

With that in mind, let's take a closer look at MannKind and see what CAPS investors are saying about the stock right now.

MannKind facts

Headquarters (founded)

Valencia, Calif. (1991)

Market Cap

$2.1 billion

Industry

Biotechnology

Trailing-12-Month Revenue

$35 thousand

Management

Founder/Chairman/CEO Alfred Mann

President/COO Hakan Edstrom

Return on Equity (average, past 3 years)

(39.4%)

Cash/Debt

$28.0 million / $332.0 million

Competitors

Eli Lilly
GlaxoSmithKline
Novo Nordisk

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 16% of the 695 members who have rated MannKind believe the stock will underperform the S&P 500 going forward.

Just yesterday, one of those Fools, All-Star zzlangerhans, tapped the stock's recent surge as particularly unsustainable:

At the end of last year I looked over all the stocks in my biopharma database and tried to predict which would be the biggest runner of 2013. My conclusion? Mannkind. But I never bought in or even green thumbed because the run started earlier than I expected and I kept waiting for a pullback that never came. ... And after the company solidified their guidance to topline results of Affinity 1 and Affinity 2 in mid August, the stock went parabolic. The moral: don't be so obsessed with catching a stock at the absolute bottom. ...

Now I'm left with another crummy red thumb. I don't think Mannkind is worth two billion even if the Affinity trials are a resounding success and Afrezza is approved the next time round. I've been a long-term bear on MannKind for years and my reasons are well-documented here. A 300% rise in share price this year is completely unjustified and simply represents traders playing the "greater fool" game. I'm terrible at judging when that game will end but at some inflection point, whether it is positive data or drug approval, this stub is going to tank.

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Read/Post Comments (12) | Recommend This Article (11)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On June 18, 2013, at 10:00 AM, yazzbro wrote:

    This articles a joke. You have one guy on here who is a claimed bear on MNKD and you are quoting him. OK. Afreeza is a game changer. It is hilarious to think that Afreeza wont be that big a deal if the results come back good. You have to be kidding me right?? An inhalable insulin in one of the fastest growing epidemics in history and he thinks Afreeza wont be a big deal?? Yeah ok. LMAO. Yeah people would rather continue with the injections over inhalable insulin that works faster. Too bad they don't have an inhalable medication for stupidity.

  • Report this Comment On June 18, 2013, at 10:05 AM, crt6978 wrote:

    I respectfully disagree about everything you said in your article about MNKD. Afrezza will change the way people take insulin during the day and make diabetics lives a much better experience all around.Share price for MNKD will be much higher once it gains market share of between 30-40%.The joy of use without needles will make it a blockbuster drug with an unlimited upside and share price potential.

  • Report this Comment On June 18, 2013, at 10:49 AM, Zbignu11 wrote:

    So the facts are only 16% of the members think it will underperform the S&P going forward. One member, who claims to be a bear on MNKD, yet predicted it to be the biggest runner of 2013 and only failed to get in because there hasn't been a pullback decides now it's "unsustainable"? Seems contradictory and with a purpose (oh, and just plain wrong). This does not seem to warrant a headline of "Why Mannkind is poised to pullback" does it???

    You should be ashamed for even posting this article.

  • Report this Comment On June 18, 2013, at 11:10 AM, FredFlintrock001 wrote:

    Well, this one guy is a fool and I believe he is hoping his article will cause a pull back so he can buy in at a lower price. Or maybe the readers are the fools for selling.

  • Report this Comment On June 18, 2013, at 11:15 AM, FredFlintrock001 wrote:

    One more thing to add. My wife is an RN, and she says that if the insulin inhaler works, which she can't see why it wouldn't, that it will storm the market. Maybe I should thank the article for bringing down the price, now is a good time to buy more.

  • Report this Comment On June 18, 2013, at 2:51 PM, horticultor wrote:

    Every time I read an article like this from Motley Fool, I'm reminded of why my ill-advised subscription to Hidden Gems a few years ago was such a horrible mistake.

  • Report this Comment On June 18, 2013, at 3:12 PM, xpeng wrote:

    This article is a joke without providing concrete data or evidence to support the "eye-catching" claim. However, I hate to say that it partically did the trick because the MNKD stock price did DROP significantly today. Nice job, fool!

    While there surely is a big risk inherent with investing in this Biotech company without a product to sell yet, I think the reason why the stock price had gone up is because investors are betting on positive results of the two phase 3 studies which may answer the key questions the FDA still has before deciding whether or not to approve AFREZZA. It's a bet with significant risk as well as potential reward. This is for aggressive investors ONLY.

  • Report this Comment On June 18, 2013, at 3:17 PM, BoldDude wrote:

    Is this article a joke or what? Motley Fool must be desperate to even consider posting such a useless article. By the way, my girlfriend is a 20 year RN and she said most people absolute "hate" giving themselves injections and anyone who says otherwise is certainly misinformed! She stated without hesitation that this drug will be a major blockbuster if approved and is convenient to use as MannKind indicates.

  • Report this Comment On June 18, 2013, at 3:47 PM, kthor wrote:

    LOL he's quoting a guy who make big misses a regular thing ...so sad

  • Report this Comment On June 18, 2013, at 3:57 PM, kthor wrote:

    Brian Pacampara are you zzlangerhans ? al quada hopefully gets you! now that's a better story to write about ...

  • Report this Comment On June 18, 2013, at 4:52 PM, yazzbro wrote:

    There you got your pullback all because of a misprint from Flyonthewall associating MNKD and two deaths from an Eli Lilly anti-psychotic med. The two had nothing to do with one another yet this triggered a huge sell off. That or it was a giant tree shake stealing retail investors shares. Either way MNKD is set for a huge rebound hopefully most smart investors took this sell off as a golden buying opportunity as I did. I will take shares of MNKD for under $6 yes, please and thank you.

    If you listened at all to MNKD's CFO Pfeffer today things sound on the up and up. He even totally, totally quashed any balony about MNKD having to dilute shares again. He says they haven't even tapped the ATM yet and have more cash on hand than they originally thought. Plenty of cash to get them through the FDA decision. So that rumor was put to bed. He also talked about a Partnership to launch and market the drug. So things are looking good for MNKD. This is biotech..Volatility is the name of the game. Cheers!!!

  • Report this Comment On June 21, 2013, at 5:42 PM, missjessiecat wrote:

    I'm a subscriber to The Motley Fool, but this article is so wrong that I will cancel my subscription! Articles should have a purpose of helping investors, but this article is not helpful to anyone!

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