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There Is A Tide In The Affairs Of MannKind: When Taken At The Flood, Will Lead To Fortune

|Includes:MannKind Corporation (MNKD), SNY

Published at Retail Investor 360: Wednesday, 13 August 2014 10:32Written by Doctor Hung V. Tran, MD, MS

360 Catalyst Keys

  • The MannKind-Sanofi Partnership is a win-win situation for both firms together with million of patients suffering from diabetes
  • MannKind to receive $150 million up front payment, $175 million in development cost, and $775 million in milestones.
  • MannKind's management held off partnership to the very end was strategic as the strategy enabled the company to press favorable terms.
  • The 65/35 percent (Sanofi/MannKind) profits spilt are actually quite favorable for MannKind as small developmental biopharmaceuticals tend to receive lower than 15 percent.
  • MannKind has little downside and much upside as the Valencia company can now leverage Sanofi's global powerhouse sales and marketing team.
  • Afrezza is Sanofi's chosen drug of choice to replace, and probably outperform, the world's top selling basal insulin Lantus
  • The Sanofi partnership with Regeneron for alirocumab (a cholesterol lowering drug with similar safety but much better efficacy than Lipitor) revealed the Global Diabetes Leader Sanofi's plans to reduce cost of sales/marketing and to synergize revenues for both alirocumab and Afrezza by delivering treatments to same million of patients with comorbid obesity, diabetes, and high cholesterol.
  • Given the American Diabetes Association (ADA) is pushing for early insulin treatment to halt the diseasse process of insulin resistance (underlying continuum of process for prediabetes toward diabetes), as well as, patients who are fearful of needles or deterred by inconvenience and needles stigma, will make physicians prescribe Afrezza en-mass. Sanofi will then file label expansion for Afrezza to capture the often overlooked but vastly expanding and larger prediabetes market.
  • To make money in a market that victimize the unconvinced, shareholders need to take heed of the Legendary Investor Peter Lynch's 3-Cs of investing: complacency, concerns and capitulation

Introduction

On August 11, 2014, investors witnessed MannKind's partnership announcement stating the company has entered into collaboration and a licensing agreement with Sanofi SA (ADR) (NYSE:SNY). By partnering up with the "French Pharmaceutical Powerhouse," MannKind Corporation (NASDAQ: MNKD) believes that they will successfully launch the company's FDA approved diabetic drug, Afrezza, as early as within the next six months.

To read more, please follow this link.

Disclosure: The author is long MNKD.

Stocks: MNKD, SNY