BOSTON (TheStreet) -- Investor sentiment favors MannKind (MNKD) and runs against Vical (VICL) and GTx (GTXI) as each company nears the reporting of results from soon-to-be-completed pivotal clinical trials.
On Friday, I conducted a survey -- promoted via Twitter -- asking investors to predict the outcomes of each company's phase III clinical trials. I wasn't looking for in-depth analysis, just a simple prediction: Would the trial results be positive or negative? A total of 348 people responded to the survey.
I also reached out separately to a dozen institutional healthcare investors, asking them the same question about the MannKind, Vical and GTx studies.
MannKindTwo phase III studies -- one each in type 1 and type 2 diabetics -- of MannKind's rapid-acting, inhaled insulin Afrezza are underway. The company says results will be reported this month. Just over 50 percent of the investors predict positive results from the Afrezza trials, according to my reader survey. Thirty-one percent of respondents say the Afrezza studies will fail, while 19 percent either didn't know enough about the trials or didn't care to make a prediction. I voted along with the majority, predicting positive results. Here's how the survey results look in a pie chart: Of the 12 professional healthcare investors polled separately 10, or 83 percent, predicted a positive outcome from the MannKind studies. The other two investors chose not to make a prediction. [None predicted failure.] The bullish sentiment picked up my surveys makes sense when you consider MannKind's stock price has been a tear for the past six months. If this is a run-up into expected positive results, we could see profit taking or selling on the news once Afrezza results are announced. MNKD data by YCharts
MannKind is also the seventh-most shorted stock in the bio-pharma sector, with just under 29 percent of shares sold short as a percentage of the float. The MannKind short thesis is less about the risk of failed clinical trials and more focused on significant doubts about the company's ability to 1) get Afrezza approved; 2) find a marketing partner; and 3) generate meaningful revenue.
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