I asked BeyondProxy to updated & republish article

[mnholdem]

Many folks appreciated this article, published by BeyondProxy's Marcello Zin on Dec.11, 2013. I know I did!

www.beyondproxy.com/mannkind-corporation/

Besides an outstanding presentation of the medical science behind Afrezza, the author included several different sales and partnership deal scenarios for evaluating Mannkind near the end of this piece.

I have contacted BeyondProxy with the request that Zinn update and reprint the article now that the Sanofi 35/65 profit sharing deal has been announced. 

I readily admit that I'm also doing this to try and get some good press out there about the benefits of Afrezza, why it will become a blockbuster and what robust sales could mean for Mannkind Corporation.

Cross your toes!

[otherottawaguy]

Here is the pertinent paragraph giving a valuation of the shares:

Ultra-conservative #2: 30% Royalty fee, 15% Market Share

With a 30% royalty rate, 40% Net Profit Margin and 20 earnings multiple, with 15% market share for AFREZZA in 2019, you get a $20B market capitalization. Discounted back at 10% and divided by 450M shares you get a current intrinsic value of $28 per share.

This scenario is also very conservative as it only assumes a sliver of the Type II market and the majority of the Type I market. A 30% royalty rate also likely under represents what will be agreed upon. However, even with such conservative assumptions we will get a value that is nearly 6x the current price. Since we view this as an absurdly low probability in our analysis, we give this a 5% weighing.

[dreamboatcruise]

Aug 14, 2014 15:11:18 GMT -5 otherottawaguy said:

Here is the pertinent paragraph giving a valuation of the shares:

Ultra-conservative #2: 30% Royalty fee, 15% Market Share

With a 30% royalty rate, 40% Net Profit Margin and 20 earnings multiple, with 15% market share for AFREZZA in 2019, you get a $20B market capitalization. Discounted back at 10% and divided by 450M shares you get a current intrinsic value of $28 per share.

This scenario is also very conservative as it only assumes a sliver of the Type II market and the majority of the Type I market. A 30% royalty rate also likely under represents what will be agreed upon. However, even with such conservative assumptions we will get a value that is nearly 6x the current price. Since we view this as an absurdly low probability in our analysis, we give this a 5% weighing.

Based on what Matt said, the current structure is equivalent to mid 20's % not 30% royalty.  Further this article while listing this as ultra-conservative, has chosen to list their market share based on overall insulin sales, not meal-time.  Their "ultra conservative" 15% market share basically means doing about as well as either of the existing two top selling meal-time insulins.  I'd put that more a solidly as midline projection, not "conservative".  So discounting the $28/sh based on 25% royalty rather than 30% would bring us to $23 per share... or a market cap of around $10B.  I think it possible.  I'd be thrilled.

[mnholdem]

The author provides solid evidence why a Lantus/Afrezza combo would do well in the Type I arena. Sanidine indicates the initial marketing will target pre-diabetics, those just diagnosed as Type II that resist treatment & Type II patients who who prefer an alternative to multiple injections.

Doesn't sound niche to me.

[mnholdem]

That is Sanofi not Sanadine. My iPhone thinks it can spell better than me. LOL

[goyocafe]

Aug 14, 2014 15:11:18 GMT -5 otherottawaguy said:

Here is the pertinent paragraph giving a valuation of the shares:

Ultra-conservative #2: 30% Royalty fee, 15% Market Share

With a 30% royalty rate, 40% Net Profit Margin and 20 earnings multiple, with 15% market share for AFREZZA in 2019, you get a $20B market capitalization. Discounted back at 10% and divided by 450M shares you get a current intrinsic value of $28 per share.

This scenario is also very conservative as it only assumes a sliver of the Type II market and the majority of the Type I market. A 30% royalty rate also likely under represents what will be agreed upon. However, even with such conservative assumptions we will get a value that is nearly 6x the current price. Since we view this as an absurdly low probability in our analysis, we give this a 5% weighing.

... and no mention of Technosphere, which now comes into play since they have an approved drug on the technology platform. 

[vissertrades]

Did BP ever reply to you request?