Sell recommendation has recently been issued to biopharmaceutical company MannKind Corporation (MNKD) by Zacks senior biomedical analyst Grant Zeng, CFA. Here's what his latest update had to say about it:
'MannKind is a biopharmaceutical company focused on the discovery, development and commercialization of therapeutic products for diabetes, cancer and inflammatory diseases. Its lead product, the Technosphere Insulin System for the treatment of diabetes, is in phase III trials in the U.S. We believe Technosphere has certain intriguing beneficial characteristics that could make the product a success.
'We are worried about the impact of Pfizer's (PFE) pullout of the only approved insulin product, Exubera, in October 2007 on the sales of Technosphere Insulin upon launch. Exubera sales have been disappointing so far, to say the least. Given the withdrawal of marketing support for Exubera by Pfizer, we are cautiously optimistic about Technosphere as it's still about two years away from reaching the market in a 'best case scenario.'
'We would like to remind investors that competition is fierce in this field. We would like to see more visibility on how the company plans to proceed with the commercialization plans. Additionally, the company has not been able to find a partner for Technosphere. The company is burning cash at too high a rate and lack of partnership will mean that the company will need to raise additional cash to fund operations, leading to further dilution.
'We believe the earliest date for Technosphere to be on the market is at the end of 2009 or early 2010, if all the trials go as planned. Given the lack of near-term growth drivers, we maintain our Sell rating on MannKind shares with a target price of $6.00. Our target price is derived from our estimated total revenue of $112.6 million in 2010, multiplied by a P/S ratio of 10.0x and discounted back at 25% for 3 years (assuming weighted average number of shares of 97 million).'
Read the full analyst report on MNKD.
Read the full analyst report on PFE.
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