A few days ago Gilead Sciences, Inc. (NASDAQ:GILD) made an announcement stating that it would provide more than 40% discount on Sovaldi and Harvoni. It was nothing but an act to bring down the prices of AbbVie Inc (NYSE:ABBV) in the market. Experts thought that it was limited to Hepatitis C treatments only. Now, Jay Olson and his team at Goldman Sachs Group Inc (NYSE:GS) have considered this price reduction to downgrade MannKind Corporation (NASDAQ:MNKD) from hold to sell.
Insights on The Matter:
While explaining their move to downgrade MNKD, they said that the diabetes market had affected negatively by the ever increasing prices and slow lunch uptakes. Both of these facts have been influenced adversely by the consumers. The current discount on the diabetes drugs after the announcement of GILD has touched 40% level, which will also apply to Afrezza. The discount is way more than what GS expected i.e. 20%. The firm has also noticed that prescription trends for a couple of diabetes drug launches such as- Trulicity (4Q2014) and Jardiance (3Q2014) have come down by 75% from the expectations. All of these facts have forced the company to bring down the sales forecast of Afrezza from $2bn to $1bn in year 2025. Even though the sales forecast has come down, but still there are strong chances that MNKD may achieve its target of $925 million in the stipulated time.
As soon as the statement of GS analysts hit the market, the prices of MNKD slashed down to $5.87, 12% lesser than the previous day’s close. The current price of the company suggests that it’s more or less 49% below than its target price. Reporters tried to get in touch with the management of MannKind Corporation (NASDAQ:MNKD), but no one could be contacted. The matter will be clear as soon as someone from MNKD senior management gives comments on company’s performance.