MannKind (NASDAQ:56400P706) took one giant leap over the past few days. Shares have soared more than 30% since last week, after the company reported results for the first quarter. Was the news that great? Not really.
It wasn't that there was bad news. Actually, nothing announced by MannKind last week came as a big surprise. The financial results were about where most expected them to be.
Clinical trials for Afrezza are still under way, so there wasn't any significant development on that front. About the only real news to come regarding those trials was that the patient dropout rate was slightly higher than the original protocol. However, MannKind overenrolled those studies, so there isn't a problem to be concerned about.
But still, shares are up a lot in a span of only a few days. Why is that the case? There are a couple of factors at work.
First, MLV Capital initiated coverage on MannKind with a buy rating and a $6 price target. Second, I think investors are beginning to sense some excitement that the time is near for Afrezza to finally shine. That is particularly emphasized by the company's discussion about talks with potential partners for commercializing the drug.
Of course, no one at MannKind is throwing any names around at this point. However, the company is in discussions with multiple interested parties. Some have a global presence, and others are regional players.
My view is that a global company would be the best bet. Plenty of commentators, including Yours Truly, have speculated about which specific company should partner with MannKind. Please forgive me for jumping into those waters yet again.
Eli Lilly (NYSE:LLY) still looks like a solid contender in my view. The company has several insulin products on the market already, notably Humalog. It also has some late-stage diabetes candidates with solid potential.
The fact is, though, that Lilly needs another blockbuster drug to make up for several big-sellers in its portfolio that have lost and will lose patent exclusivity. Al Mann, MannKind's founder and CEO, does a pretty good job of persuading anyone who will listen that Afrezza will be a big blockbuster. It wouldn't surprise me in the least if someone from Lilly has heard Al's pitch in person recently.
I wouldn't rule out the tag team of Bristol-Myers Squibb (NYSE:BMY) and AstraZeneca (NYSE:AZN), either. These two companies have been joined at the hip when it comes to diabetes ever since the Amylin deal last year. They recently merged their diabetes marketing teams into a new headquarters. My hunch is that the companies would at least entertain the idea of partnering with MannKind.
Sanofi (NASDAQ:SNY) is another player with a global reach that would be a good fit. The French drugmaker already has a huge moneymaker insulin with Lantus. However, Lantus goes off-patent in a few years. Sanofi does have other diabetes products on the market and in the pipeline, but I think that an inhalable insulin would make a good addition to the lineup.
There are a number of others who could be in the midst of talks with MannKind. I'll end my speculation for now, since it's nothing but guessing at this point. I don't think, though, that predicting positive results from the clinical trials for Afrezza is too speculative. Good results are likely, in my opinion.
I also think that MannKind's shares will enjoy upward movement as the August date for releasing those clinical results draws near. If the company happens to announce a partnership deal around the same time, then there will be plenty of buzz about a giant leap for MannKind.