Top Picks 2021: MannKind (MNKD)

01/09/2021 5:00 am EST


Nate Pile

Editor, Nate’s Notes and The Wagmore Advisory Letter

MannKind (MNKD) was chosen by Nate Pile — editor of Nate's Notes — as his Top Pick last year, and the stock gained 143%. The advisor continues to recommend the stock as his ongoing favorite idea for 2021.

MannKind a small biopharmaceutical company with cutting-edge technology for delivering drugs directly through the lungs. 

Its lead product is Afrezza, an FDA-approved form of inhalable mealtime insulin that is much faster acting than other insulins and has shown itself to be superior in virtually every way to all of the injectable mealtime insulins currently on the market for people with type 1 and type 2 diabetes. 

Though it has proven to be a slow and challenging process to migrate diabetics from their old ways of managing to diabetes to something new, the company is finally building some nice momentum on this front.

The trend is being helped along in no small part by the fact that as more and more diabetics start using continuous glucose monitors (CGMs) to track their blood sugars in real time, they naturally start to also want an insulin that essentially works in real time – something none of the injectables can do, but Afrezza does with ease once patients have learned how to use it.

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Along with Afrezza (which MannKind has retained full rights to), the company has also licensed its Technosphere drug delivery technology to other companies for other drugs, and the most of exciting of these deals at the moment is one with United Therapeutics (UTHR).

United Therapeutics is developing an improved version of treprostinil, a drug that is used to treat pulmonary arterial hypertension, as well as pulmonary hypertension associated with interstitial lung disease. MannKind will receive royalties on this product if/when United receives approval to begin selling it (the drug will be given a priority review by the FDA this year).

MannKind has also licensed the Technosphere technology to Receptor Life Sciences, a private company that is developing pharmaceutical grade drugs in the cannabinoid space (MannKind will receive royalties on sales here as well).

The company is also working to put a number of other existing drugs onto its Technosphere platform (which tends to speed up onset and improve efficacy for drugs usually taken in pill form, for example) — and these products will then either brought forward by the company itself or licensed/partnered out to others who may be interested in taking them through the regulatory and commercialization process.

After being crushed by a massive wave of short-selling over the past couple of years, short interest was more than cut in half during 2020 — and though still "oversized," short interest is continuing to shrink as the stock continues to rise. MNKD is a strong buy under $5 and a buy under $10.

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