Not long ago, some predicted that MannKind (MNKD -0.49%) faced the serious risk of striking out on winning approval for Afrezza. Instead, those predictions swung and missed. The U.S. Food and Drug Administration recently approved the inhaled insulin.

With this regulatory hurdle out of the way, MannKind looks to be in the best position in the company's storied history. Nevertheless, some risks remain.

Source: MannKind. 

Not if but when
The most prominent risk that comes to mind is whether MannKind will secure a partner to commercialize Afrezza. My view is that this isn't really a question of "if," but rather of "when."

Granted, MannKind's management team has frequently stated over the past few years that discussions were under way with potential partners, but no deal was ever struck. I don't doubt that partners were interested -- just not enough to commit. That was then. MannKind now has an approved product in its back pocket.

A handful of big pharmaceutical companies have been frequently mentioned as potential fits. MannKind CFO Matthew Pfeffer's comments at the Wells Fargo Healthcare Conference in June appeared to rule out a couple of big players in the diabetes market: Novo Nordisk (NVO -1.43%) and Eli Lilly (LLY -0.64%). 

Pfeffer bluntly stated that companies with prandial insulin products already on the market "might not be the best partner candidate." Novo Nordisk's Novolog and Lilly's Humalog fit into this category. Both companies also claim solid diabetes pipelines that could decrease any interest in a competing product like Afrezza. 

Merck (MRK -0.11%), though, could easily be on MannKind's short list. The big drugmaker has already exhibited a willingness to shell out money for a midsized acquisition with its $3.85 billion acquisition of Idenix. That price tag stacks up nicely with MannKind's current valuation, and Merck is still sitting on a big cash stockpile. 

More important, the Merck and MannKind seem like a pretty good fit. Merck already has a sales force targeting the diabetes market with Janumet and Januvia. And the company has a global reach, something that Pfeffer indicated MannKind is looking for in a partner.

Regardless of whether it's Merck, I think the risk of MannKind failing to land a partner isn't its greatest concern. It's possible the company won't get everything on its wish list in finding a partner, but that wouldn't be a disaster.

Field of unpleasant dreams?
There's always the possibility that MannKind could encounter a reverse "Field of Dreams" scenario: they build it, but no one comes. Maybe physicians and patients won't go for Afrezza. I suspect this risk could also be overblown, though.

MannKind has already stated that it expects to price Afrezza similarly to Novolog and  Humalog, so cost shouldn't be an impediment for payers to include the product on their formularies. The FDA did place some limitations on which patients can take Afrezza (excluding smokers and people with lung problems), but that still leaves a huge potential market.

Doctors must also perform a lung test before prescribing Afrezza. Some physicians could see this as burdensome, but we're talking about a relatively inexpensive test that is easy to administer. I think it's more likely that physicians will see clear benefits in Afrezza's convenience factor, rapid onset of action, and efficacy for type 2 diabetes. 

Greatest risk?
Another risk for MannKind is the possibility that problems arise in the post-marketing clinical trials that the FDA is requiring. However, a more immediate issue could be even greater -- if not for the company itself, for the stock. What is this danger? Setting expectations too high.

Yes, Afrezza could (and, in my view, should) rack up billions in sales. But it won't happen overnight. Don't be surprised if the commercialization ramp-up and education of physicians goes more slowly than MannKind shareholders would prefer. Afrezza might truly be a game changer for diabetes, but doctors have to first be convinced. That could take some time.

Unrealistic expectations could hurt the stock's performance in 2015 as Afrezza is marketed. The good news for shareholders is that's still well in the future. In the meantime, the announcement of a solid partner should serve as yet another catalyst for this stock that has already soared over 80% this year.

That reminds me of yet another risk with MannKind. At the beginning of 2014, nearly 20% of MannKind's shares were sold short, a figure that grew in the subsequent months. Maybe the biggest risk of all is betting against this biotech.