Goldman Says MannKind Has 55% Downside

Goldman Sachs downgraded

to a Sell from Neutral, noting that the risk/reward ratio from selling the stock here is 55 percent to the downside versus just 5 percent to the upside. The analysts placed a price target of $3 on the shares, which closed yesterday at $6.64. The stock is trading 10 percent lower – to $6.02 – at the open.

Goldman said that the biotech company's diabetes product's launch will be slower-than-expected with the firm also experiencing "more difficult pricing." Therefore, the analysts pegged 2019-2021 EPS at a 30 percent discount to consensus estimates, leading them to the $3 price target.

Most concerning, Goldman said, was MannKind's launch of Afrezza, which has "fallen short of our expectations." The analysts halved Afrezza's sales targets to $1 billion in 2025. Simultaneously, other recent diabetes products have fallen 75 percent short of Goldman estimates, leading the firm to conclude that Afrezza's initial hiccups are not temporary.