In the healthcare space, it’s all about clearing hurdles, one by one, until a drug can finally make its way to those who need it the most.
Looking at the latest developments at MannKind (MNKD), Leerink analyst Thomas Smith thinks the diabetes-focused company has just cleared another one on the path to bringing Tyvaso DPI to market.
Last week, the FDA accepted United Therapeutics’ new drug application (NDA) for Tyvaso DPI (treprostinil dry powder inhalable) for the treatment of pulmonary arterial hypertension (PAH) and pulmonary hypertension with interstitial lung disease (PH-ILD).
What’s this got to do with MannKind? Well, United Therapeutics is the company testing Tyvaso DPI, but it utilizes MannKind’s Technosphere dry powder formulation technology and Dreamboat inhalation device. MannKind will oversee Tyvaso DPI’s manufacturing and stands to rake in low double-digit royalties from its sales, of which Smith thinks there could be plenty.
In fact, Smith thinks Tyvaso DPI is “the most significant value driver for the company.” The analyst expects that by the end of 2030, Tyvaso DPI could be generating “peak” sales of roughly $1.5 billion, of which MannKind could be pocketing $160 million in royalties.
By October 2021, the NDA review should be completed, ahead of Smith’s previous estimate for a final decision in December. Currently, The FDA has suggested they have yet to encounter any potential review issues.
“We see this as an encouraging regulatory milestone and believe Tyvaso DPI represents an attractive option for patients based on its dry powder formulation and more convenient administration via the Dreamboat inhalation device technology,” the analyst said. “For MNKD, we continue to see increasing investor interest in the UTHR partnership ahead of the Tyvaso DPI approval, with the UTHR collaboration bringing additional validation to the Technosphere technology platform and potential applications beyond Afrezza, key to long-term value creation for MNKD in our view.”
All in all, Smith rates MNKD an Outperform (i.e. Buy) and has a $5 price target for the shares. The implication for investors? Upside of 12%. (To watch Smith’s track record, click here)
Looking at the consensus breakdown, most of Smith’s colleagues agree. The stock has a Strong Buy consensus rating, based on 4 Buys vs. 1 Hold. The average price target is a decent one; at $6.1, the forecast is for one-year gains of ~37%. (See MNKD stock analysis on TipRanks)
To find good ideas for biotech stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment
