Shares of MannKind Corporation (MNKD -5.06%) are rising sharply on Wednesday thanks to bullish commentary from a Wall Street analyst. As of 2:37 p.m. EST, the biopharmaceutical company's shares were up by 10.8%, after rising by as much as 18.4% earlier in the day.
BTIG analyst Robert Hazlett doubled his price target for MannKind to $8, up from $4. The analyst also kept a buy rating on the stock. As of this writing, the company's shares are changing hands for $5.84 apiece, meaning Hazlett's price target still represents a juicy premium over MannKind Corporation's current levels. Why is the analyst so bullish on this small-cap biopharmaceutical company? One of the main reasons behind Hazlett's enthusiasm is MannKind's Treprostinil Technosphere (also know as Tyvaso DPI), a potential treatment for idiopathic pulmonary fibrosis that the company is developing in collaboration with United Therapeutics.
According to Hazlett, this product could have the potential to generate over $1 billion in sales. MannKind recorded total revenue of $46.7 million during the first three quarters of 2020. A therapy that can rack up $1 billion in sales could indeed be a game changer for the healthcare company.
It's always worth taking analyst recommendations with a grain of salt. In this case, while MannKind Corporation's Treprostinil Technosphere does seem like a promising candidate, it still has important regulatory hurdles to cross. The company's only product on the market at the moment doesn't generate a whole lot of revenue, and its other pipeline candidates are still in their early stages. Investors should keep those risks in mind before buying shares of MannKind Corporation.