Few stocks stir up passionate views quite like MannKind Corporation (NASDAQ: MNKD). Many investors love the small biotech, but there are also many who hate the stock. What drives such strong feelings? Like the Facebook relationship status option says, it's complicated.
Haters gonna hate
Hating MannKind isn't a new phenomenon. Just look at the short interest as a percentage of float over the past few years.
In the past, some of the negative feelings about MannKind stemmed from doubts that the biotech would ever see its inhaled insulin product Afrezza gain approval. Some of the antipathy toward the stock came from skepticism that MannKind would find a solid partner to commercialize the drug. That was then. MannKind did ultimately win FDA approval for Afrezza. And the company picked up a well-heeled partner in French drugmaker Sanofi last year.
There are still plenty of haters for MannKind stock, though. Goldman Sachs downgraded the stock earlier in March, stating that the launch of Afrezza fell short of expectations and that the drug faces pricing challenges ahead.
Concerns about how well Afrezza will do in the marketplace have been at the root of many MannKind naysayers' negative opinions. They categorize MannKind in the same way that sports fans often classify a team with less-than-stellar athletes that climbs in the polls: overrated.
Still got that lovin' feelin'
MannKind still has plenty of supporters, though. Thomson/First Call's survey shows that the median price target for analysts covering the biotech stands at $7 -- more than 30% higher than the current share price.
As for the slow start out of the gate for Afrezza, any investor who has been paying attention shouldn't be surprised. MannKind's CEO Hakan Edstrom reiterated in the company's last earnings call that he expected the ramp-up to be fairly slow.
Many of MannKind's shareholders would likely respond to critics by saying, "Just wait." Those who waited saw Afrezza gain approval and saw the biotech secure a major partner. Fans of MannKind would maintain that waiting for sales of Afrezza to pick up over time as physicians and patients learn about the benefits of the drug is the smart strategy. Even Goldman Sachs noted in its report that MannKind is still likely to hit the requirements to receive a full $925 million in milestone payments from Sanofi.
Some also will take comfort that MannKind's future success could come from more than just Afrezza. The company is exploring ways to use its Technosphere dry powder delivery platform in other drugs, particularly in the areas of pulmonary diseases, pain, and oncology support. All of these areas have several positive factors in common, including relatively short development times and large potential markets.
The proverbial glass of water
The reality is that both lovers and haters of MannKind stock can find reasons to support their views. The biotech's stock is like the proverbial glass of water -- either half-full or half-empty, depending on how you look at it.
MannKind stock seems likely to remain quite volatile, a reflection of investors' love/hate relationship. Ironically, perhaps the most compelling reason to love the stock is that so many hate it. With a short interest of almost 39%, potential future good news about Afrezza's sales could spur covering of those short sales, which in turn would drive the stock price up. If that happens, MannKind stock will continue its emotional roller coaster ride.