TLSR: Let’s move on to another name that you like.
AD: The biggest, most prominent and fastest-growing major health condition in the world is diabetes. We’re big fans of MannKind Corp. (MNKD:NASDAQ), which is the brainchild of Alfred Mann, a longtime entrepreneurial pioneer. Al has started and sold numerous companies, and has decided to tackle insulin. He founded insulin pump company MiniMed and sold it to Medtronic Inc. (MDT:NYSE) for $3.7B in 2001. At the end of the day, whether a person is a type 1 diabetic and can’t produce insulin because his or her body destroys hormone-producing cells, or is a type 2 diabetic, so his or her body’s cells are resistant to insulin, the treatment for most diabetics is to take insulin.
MannKind’s inhalable insulin product, Afrezza (human insulin of recombinant DNA [rDNA]) is an ultra fast-acting insulin that peaks 12–14 minutes from the time the patient inhales, versus an hour and a half for injectable insulin. Also, it lasts only 2.5 to 3 hours versus injectable insulin, which lasts five to seven hours, so blood sugar levels are still low many hours later. Afrezza is an excellent tool for managing blood sugar.
TLSR: When do we get the readouts for the two trials, Affinity 1 for type 1 diabetes and Affinity 2 for type 2 diabetes?
AD: We’re expecting the readouts on both in August. That’s going to be the big catalyst for MannKind. If the stock is going to move, that’s going to be the time.
TLSR: MannKind is up about 263% over the past 52 weeks and up about 71% in the past four weeks. Could you envision a selloff in good news?
AD: I don’t see a selloff on good news. Yes, the stock is up significantly, but it’s up from a ludicrous valuation for a market of this size. When we bought into the company it barely had a $600M market cap—and this is a company that has a multibillion-dollar annual opportunity on its hands if successful. Even if Afrezza is only moderately successful, or needs to have some sort of extra health safety label, its annual sales could be as high as that market cap. Since then the stock has increased significantly, even passing our price target. I don’t see a lot more upside left in the stock in the short term, but if the news on Afrezza is good, it will be categorically good.
http://www.trefis.com/stock/alpmf/articles/191586/for-love-and-money-three-growth-stocks-from-caseys-alex-daley/2013-06-13
