Shares of MannKind Corporation (NASDAQ: MNKD) were soaring 16.7% higher as of 11:13 a.m. EDT on Wednesday. This marked the second day of double-digit-percentage gains this week following the company's presentation of new positive data from clinical studies for Afrezza at the American Diabetes Association's 80th Scientific Sessions conference.
To be sure, MannKind's ADA presentations were good news. The more data the company gathers on Afrezza, the more attractive the inhaled insulin product looks for physicians and patients. It's not all that surprising that the momentum for the biotech stock would extend over multiple days.
There's also potentially another factor at play, though. MannKind entered into June with around 14% of its outstanding shares sold short. The big jump for the stock on Monday could have caused some of those short-sellers to cover their positions and continue doing so today.
When this scenario unfolds, it can create buying pressure that drives shares up even more than they otherwise would rise. It's too soon to know if there's really a full-fledged short squeeze in progress for MannKind, but it's certainly possible that's what is happening.
MannKind's positive stock momentum and well-received ADA presentations are great. However, the important thing for investors to watch with the company is how Afrezza performs in the marketplace. Sales for the drug continue to climb, but a lot more growth is needed before MannKind will be profitable.