Shares of MannKind Plummet Prior to Drug Advisory Meeting

Shares of MannKind Corp. MNKD fall as much as 27.105% prior to Tuesday's Endocrinologic and Metabolic Drugs Advisory Committee Meeting.

Piper Jaffray analyst Joshua Schimmer noted that MannKind faces a "number of obstacles" in the U.S. Food and Drug Administration's (FDA) review of the Afrezza Dreamboat insulin inhaler. Schimmer reported that it is "doubtful" for the company to gain positive recommendation from the advisory panel. The analyst commented that a closer read of the FDA staff briefing documents suggest that the agency "has enough concerns that only a cleanly positive vote will enable approval without additional requirements."

Schimmer downgraded MannKind from Underweight to Neutral and drastically lowered the price target from $5.00 to $1.50. Piper sees a 20% chance of clear positive vote, 60% chance of negative vote, 20% of split vote with “wide range of possible stock implications." The analyst added that the timeline with a two-year delay to the partner/ drug introduction "may still be presumptuous."

On Thursday, Summer Street analyst Bart Classen reported on potential problems regarding the Affinity 1 studies. On Monday, Classen continued to voice his concern, noting that the FDA panel will likely recommend against approval.

In addition to the poor glucose control potentially leading to increased complications, the Summer Street analyst highlighted the elevated cost of goods for Afrezza. Classen commented that 2.5 units of injected insulin are the same as 10 units of Afrezza, making the costs unnecessarily high. The analyst concluded that the Afrezza insulin inhaler "offers no real advantage to injectable insulin and is inferior in the control of blood sugar."

Shares of MannKind were down 9.7% in pre-market trading and fell as much as 27.105% to $3.80 Monday morning. The stock is currently down 19.259% at $4.05.