The hedge fund manager who has already made a killing betting against biotech company MannKind Corp. now says the stock will soon be worthless.
"After 14 weeks of a disastrous drug launch and with much more data and research, we now believe that MNKD will go to ZERO," Jason Karp and his $2.5 billion Tourbillon Capital Partners wrote in a May 5 letter to investors obtained by CNBC.com.
Karp is referring to the recent rollout of Afrezza, MannKind's signature diabetes treatment product. Afrezza's innovation is the ability to inhale insulin as opposed to injecting it. The drug has a licensing agreement with pharmaceutical giant Sanofi. It's in the early stages of its commercial launch.
The new, more negative thesis rests on what Tourbillon called low levels of prescriptions for Afrezza compared to competitor Exubera, and high spending from operating expenses and additional sales costs.
"We are struggling to envision a turn to profitability for MNKD," the letter said. "Our previous price target of $1 was predicated upon the notion that Afrezza could do better than break even in a few years; a notion that is becoming increasingly far-fetched."