During a conference call on May 9th, regarding MNKD’s first quarter earnings, Mr. Mann said that he believes Afrezza could end up being the most influential pharmaceutical product in history. The optimism surrounding Afrezza and its expected influence on the health industry, combined with Mr. Mann’s age (he’s currently 87) and history of building up successful companies and then selling them off is why many people believe the MNKD will be bought up by a pharmaceutical giant like Pfizer or Bristol-Meyers. Pfizer is currently in the need for a blockbuster drug since their moneymaker, Lipitor (the highest grossing drug of all time), has seen its sales decline by 59% in the past year since its patent expired. Afrezza could be the answer to Pfizer’s needs if it lives up to expectations.
Glenn Russell Dubin’s Highbridge Capital Management is currently the leading hedge fund in MNKD stock owning 15 million shares, comprising .14% of their total portfolio. Second to Highbridge is Chou Associates Management who despite contracting their holdings by 10% during the last quarter of 2012, still own 8.9 million shares, making up 1.64% of their portfolio. Brian Taylor’s Pine River Capital Management is the third leading holder of MNKD shares with 5.8 million but Aqr Capital Management, after increasing their holdings by 30% last quarter, is hot on their heels at 5.7 million shares.
The Trade: Buying the MNKD Jan 2014 5-9 Call Spread for $1.16
Risk: $116 per 1 lot
Reward: $284 per 1 lot
Breakeven: $6.16
Greeks of this Trade:
Delta: Long
Gamma: Long
Theta: Short
Vega: Long
—
Andrew Keene
President/Founder
Andrew@KeeneOnTheMarket.com