The ride continues

The ride continues

There are just certain things we can count on in this wacky world with the recent movement in MannKind (NASDAQ:MNKD) being the latest example. After getting a nice upward bounce during the just ended ADA conference shares are once again headed south. Now this really isn’t news as when it comes to shares of MannKind as the roller coaster ride is par for the course. As we have noted in the past smart investors can make a small fortune trading this stock.

This ride will likely continue until it becomes clear that Afrezza is what we said it is, nothing more than a niche product. Yet this won’t stop the MannKind/Afrezza supporters from explaining away every move downward. Nor will it prevent them from claiming victory every time shares move upward. About the only thing Diabetic Investor would like from these folks is a little more creativity. Seriously they really need to find new ways to call Diabetic Investor the world’s biggest idiot.

Yet for those who want to look at the facts and seek answers to how this will likely play out allow us to speculate a little. First with the direct to consumer marketing campaign about to begin the roller coaster will be going full blast. As we have noted unless this is an absolutely awful campaign, keep in mind that Sanofi (NYSE:SNY) is MannKind’s partner so there is a strong possibility it could be awful, the campaign should help raise awareness and some additional scripts. However the campaign cannot change formulary position, the need for pulmonary function tests and the fact the many physicians aren’t exactly thrilled about putting a growth hormone in a blood rich environment like a patient’s lung.

Nor can the ad campaign change the high cost of making Afrezza. The fact is to date Afrezza is trending below how Exubera did back when it was launched. Several of the physicians we spoke with at ADA noted that the Exubera failure did some serious damage. That physicians haven’t forgotten about Exubera and for that reason alone will not prescribe Afrezza, not when they have other proven less costly options available to them. Unlike the Afrezza supporters who believe every patient should be on the drug, these physicians know that’s just not the case.

Yes at some point our wine drinking friends will look at the real numbers and realize with Afrezza they have a choice to make. They will either have to pour even more money into the drug or cut ties. Frankly there is no middle ground here. Should scripts continue to trend as they are, and we suspect they will, even Sanofi management cannot ignore the obvious. Well maybe Sanofi management can.

Right now Diabetic Investor suspects Sanofi will give Afrezza two more quarters to prove itself. The fact is the numbers will likely drive Sanofi’s decision and two more quarters should give them plenty of real data. Until then expect the MannKind roller coaster ride to continue.