MannKind stock has been incredibly volatile for many years, and this isn’t likely to change anytime soon given both the many interest groups that probably don’t want the company to succeed and their ability to disseminate misinformation and disinformation: A large number of news outlets carried the news that Merrill Lynch had slashed its price target for MNKD but not one that we saw mentioned the fact that the action was based on a tiny survey of physicians who were mostly ignorant of Afrezza; Two weeks prior to that, the stock was rocked by a plethora of web-based media outlets that flashed headlines noting that an analyst at a firm named Summer Street had questioned the veracity of MannKind’s reported Phase 3 results, stating that the level of disclosure was “suspicious” and “unprecedented.” Again, not one pointed out that none of the supposedly missing information was even relevant, had been discussed in a conference call, and the analyst hadn’t bother to first call the company to discuss her concerns prior to using the alarmist language.
We think it’s important for stockholders to keep their focus on the company’s fundamentals and to stop reacting to the noise and distraction. The small biotech has cleared the steepest fundamental hurdles and the biggest unknown now is probably the level of Afrezza’s commercial success. And on this count, our view is that the size of the target market, along with Afrezza’s myriad competitive advantages, virtually assures substantial prosperity for MannKind in the years ahead. All in all, we expect MNKD shares to appreciate manifold over the next three to five years. An 18 multiple to our $2.05 earnings estimate for 2018 has the stock reaching $36.90 in that time frame. As well, given the facts that Mr. Mann is 87 years old and has a history of selling his companies, an extraordinary transaction would not surprise us, although we certainly wouldn’t buy the stock for this reason alone.