Option Trader Take: Caution In MannKind (MNKD, BIOD)
We were just given a cautious options alert from Joe Kunkle of OptionsHawk.com on shares of MannKind Corp. (NASDAQ: MNKD). After the unexpected meteoric rise earlier this year and then last night’s and this morning’s unexpected implosion of InterMune, it seems that traders and investors are taking a much more cautious take on many of the biotech and biohealth stocks that have a questionable debate about whether a controversial drug will be approved.
Kunkle noted:
- MannKind (MNKD) saw a large bearish synthetic short as 5,000 November $7 calls are sold and the $7 puts are bought in a $0.45 debit. The Street is undecided on MannKind, with Jefferies having a $2 target, and Rodham having an $18 target, shares at $7. Biodel Inc. (NASDAQ: BIOD), noted yesterday with a bullish article, could be a threat to MannKind’s Afrezza and is seen as safer and more effective, potentially a knock out punch for MannKind. MannKind is preparing to meet with the FDA in June to discuss the issues the FDA has with Afrezza. MannKind is also struggling with liquidity, and without some good news, will not make it past Q1 of next year.
MannKind shares are down almost 3% at $6.92 today on rather light trading volume of about 666,000 shares (12:51 PM EST).
JON C. OGG
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6 Responses to “Option Trader Take: Caution In MannKind (MNKD, BIOD)”
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You obvoiusly have no idea what you are talking about. Demonstrate what is more safe about BIOD’s Injected drug to Afrezza? Zero, you have nothing!
To address liquidity MNKD plans to issue 50 MM common shares. FYI notice went out to shareholders this week
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How could an injectable drug be better than an inhaled one? Mannkind’s Afrezza takes less than half the time of Biodel’s Viaject to be absorbed and finally saves diabetics from needles!
Understandably, the FDA would be concerned after Pfizer’s drug failed, but the FDA laid out a set of requirements for Mannkind to meet and Mannkind met all of these. Allowing the scientist and people involved to invest their time, millions of dollars and hang up the hopes of any diabetic looking forward to this drug and then renegging on their word is wrong. If there is something that Mannkind failed to perform during the drug trials then make them go back and do it, but putting them on hold at this point for no justifiable reason is unacceptable.
Inhaled insulin is not as simple as it sounds and hence a major concern to FDA. Major companies have tried this and failed miserably due to less acceptance by patient population and confusing dosage inhalations and potentially adverse side effects. Risks outweigh benefits.
Injection is a more stable and standard of care that has been widely accepted and used for centuries.
I agree with the author in terms of Safety and effective for Viaject. Readily accepted by patients and doctors unlike inhaling insulin which in the past led to lung cancer with Pfizer’s drug.