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UPDATE: Bank of America Downgrades on MannKind on Valuation

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In a report published on Friday, analysts from Bank of America Downgraded its rating on MannKind (NASDAQ: MNKD) from Buy to Neutral and raised the price objective on the company from $5 to $8.

In the report, lead analyst Steve Byrne commented that, "We are lowering our rating on MNKD shares to Neutral, given the sharp revaluation in shares over the last month. While we continue to expect favorable phase 3 data in coming months, we now see the shares as fairly valued. Our penetration forecasts for Afrezza in Type 1 and 2 patients are unchanged, but other model adjustments raised our DCF-derived PO to $8 (from $5). While most drug royalty agreements are set early in clinical development (see next page), we viewed our assumed 25% royalty rate for post-phase 3 data as too low. We now assume a 30% rate (net of COGS). We lowered our WACC to 11% (prev. 12%), in line with our models for other late-stage products, and we raised our assumed yearly price increase to 8% (prev. 4%), to be more in line with marketed insulins."

MannKind closed on Thursday at $7.65

Posted-In: Bank of America Steve ByrneAnalyst Color Downgrades Analyst Ratings

 

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