Hedge fund: This 'mania' health-care stock will fall 90%

Afrezza is a rapid-acting, inhaled insulin for the treatment of diabetes.
Damion Edwards Photography

A rising hedge fund star thinks that MannKind Corp. is so over-hyped that the health-care company's stock will fall 90 percent.

"Only in a frothy, retail-driven (and now Tweet-driven) market can a stock like MannKind exist with a $4.3 BILLION valuation and in our view no clear prospects of revenue," Tourbillon Capital Partners wrote in a letter to investors obtained by CNBC.com. Tourbillon manages $1.2 billion and is led by former SAC Capital Advisors portfolio manager Jason Karp.

Karp's thesis relies on his negative assessment of Afrezza, MannKind's main diabetes treatment product that was recently approved by the U.S. Food and Drug Administration. Afrezza's innovation is the ability to inhale insulin as opposed to injecting it, the most common treatment practice.

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