***The following is excerpted from a bulletin that was posted for subscribers of The Wagmore Advisory Letter earlier this morning.***

Well, pffffft…. 8/12/14

Though I am not ready to start writing calls against our MannKind (MNKD – $7.65) position just yet, I know a lot of you are wondering what is going on with the stock in the face of what was very good news for the company a few days ago.

Unfortunately, I don’t have a definitive answer for you (do we every know for sure why stocks do what they do on a short-term basis?), but the best I can tell you is that since the stock didn’t show a nice gain in response to the news, a lot of folks are probably giving up on it “because something must be wrong.”

Add to the mix the fact that there were undoubtedly a number of folks who had bought it in hopes of an outright buyout rather than a partnership (and thus are now moving on as well)… and of course, there is a HUGE short interest in the stock, which means there was a lot of money being thrown at the stock to try and keep it from showing gains (and they were successful!).

As it stands, I don’t think MannKind could have found a better partner for Afrezza than Sanofi (SNY – $51.66), and the terms of the deal are actually somewhat better than I would have expected; however, rather than getting instant gratification from the deal, it looks like we are going to have endure another round of uncertainty while we wait to see what sort of marketing efforts Sanofi actually throws into the situation, etc.

I know it probably doesn’t help you feel much better about your position at this very moment, but I have seen this sort of action a number of times before when it comes to biotech stocks, and though we may be forced to lighten up our position a bit if it looks like it will be dead money for awhile, in the long run, I continue to believe (and am more convinced than ever now that Sanofi has signed on) that in the long run, we are going to make a lot of money with the stock.

I’m going to give the story another day or two to play out before we start to write calls against our position (or perhaps just sell some stock outright in order to move it into other opportunities), but once the dust as settled a bit and we see where the stock actually wants to trade post-partnership announcement, we will definitely take some action with the position.