MannKind Corporation (NASDAQ:MNKD), a biotech company with a newly released inhalable insulin product, reports fourth-quarter and full-year 2014 financial results Tuesday, February 24 before the opening bell.
While stocks frequently soar or plunge on quarterly results, investors in MNKD stock can safely ignore this earnings report entirely.
That’s because the future of MannKind rests entirely with Afrezza, the inhalable insulin drug approved by the FDA last year and marketed by pharmaceutical powerhouse Sanofi SA (ADR) (NYSE:SNY).
Why Last Quarter Doesn’t Matter for MNKD Stock
It might sound odd to say that investors can safely snooze through the MannKind earnings release tomorrow morning, but it’s true. The quarter, ended December 31, won’t include any sales of the company’s only drug, Afrezza, which just became available in the U.S. on Feb. 3.
So, if you own MNKD stock, don’t be surprised if the company reports little-to-no revenue and a solid loss. That’s been the company’s calling card for years.
What investors should pay attention to tomorrow is the MNKD earnings call, which starts at 5 p.m. EST (listen to the MannKind earnings call live here). You’ll hear executives talking about the most recent quarter, and, more importantly, we should hear about Afrezza’s early sales. The company may not give firm numbers, but investors will have allies in the analysts on the call, who you can count on to ask pointed questions about how the SNY partnership is going.
Analysts expects MNKD stock to report a loss of 9 cents per share on revenue of $3.13 million. If you believe the “whisper number,” which is what Wall Street insiders unofficially expect, MNKD is set to miss earnings by 2 cents per share. It wouldn’t be the first time — MNKD has only beaten EPS estimates one time over the last 15 quarters.
But again, who cares? That’s ancient history as far as MannKind is concerned.
MNKD Stock Bulls Need Afrezza to Dazzle
I myself am bullish on MNKD stock and have written about it several times before. In an article on October 2, “Why MannKind STock (MNKD) Is a Screaming Buy,” I highlighted why MannKind is such a special biotech stock:
“Afrezza is unlike any other insulin product currently on the market. Afrezza is a rapid-acting inhaled insulin product — treating both type 1 and type 2 diabetes — taken at the beginning of each meal. And it can fit in your palm. That’s dramatically different from other products in the market, many of which are not rapid-acting and require needles to inject the insulin.”
MNKD stock closed at $5.56 per share that day. Last week, MNKD closed at $6.90 — 24% higher than it was less than five months ago.
While I’ve read hundreds of diabetics excitedly chatter about Afrezza in the lead-up to its launch, early prescription numbers from RBC Capital’s Adnan Butt, if accurate, reportedly peg the number of Afrezza prescriptions in the first two weeks at a whopping 34.
Let’s hope that either those numbers are incorrect or Sanofi’s Afrezza salesforce does a little bit more to educate doctors on the virtues of the product. With a total of 17.8 million fast-acting insulin prescriptions written in 2014, 1% market share translates to 177,000 prescriptions annually.
In other words, MNKD and Afrezza still have the potential for explosive growth from the 30-scripts-in-two-weeks level. We should get some visibility on how MannKind plans to execute on Afrezza in its earnings call Tuesday afternoon.
As of this writing John Divine was long MNKD stock and Jan 2016 $7 calls. You can follow him on Twitter at @divinebizkid or email him at editor@investorplace.com.
