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Post by Deleted on Sept 16, 2014 18:10:05 GMT -5
Been on the board awhile, but lurking mostly.
A question for those that have been with MNKD for awhile (and because Im a bit lazy to dig for it), but has there ever been a timeline provided by MNKD to acquire, construct, install, and commission a filling line? Im sure its been mentioned in past CC's, but what type of timeline are we talking about here?
The discussion around "controlled launch", the timing required to ramp up lines (and the capital required), all lead me to believe that additional lines would have had to been ordered already, and that it would appear that the whole process (from ordering equipment through commissioning) would take on order of 26 weeks. I think Pfeffer has gone on the record suggesting they will have 3 lines up and running for launch, but good insight into how things are being projected would lie in whether they move forward to expand lines.
It seems that the "controlled launch" is just code for "We are at max production and cant go any faster, anyway". Considering that's around 500,000 patients per year, that may quickly become the limit.
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Post by mannmade on Sept 16, 2014 19:30:25 GMT -5
Not necessarily as they are going to begin commercial production in November if they stay on the currently announced schedule. This will allow them to accumulate inventory for the projected mid 1st Q launch of Afrezza. A bit of a head start in building inventory and supply chain optimization...
Since Afrezza is a brand new first in class drug, not just because it's inhaled (which is what I call a "cosmetic benefit") it is the first as Al reminds us monomeric insulin and as such has a different PK profile much more similar to the production and dissolution of insulin produced by a person with a healthy pancreas. Therefore there will need to be much costumer education and medical community and insurance company education so I would expect a "controlled" launch as you want to make sure all of the kinks are ironed out before you go with a wide launch... Eg: Get initial feed back from early adopters etc...
Think about when a feature film has a very limited release before it gets wide distribution. Gives the studio time to make slight marketing adjustments to the advertising/media content/strategies and the marketing plans. Same principal here should apply. Also helps if you can build up demand for the product and give it a ramped up release over time... Think Apple and the iPhone...
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Post by Deleted on Sept 16, 2014 21:16:02 GMT -5
Thanks for the feedback. What about timing on a production line roll out though?
My fear is controlled launch will just be more FUD for shorts that MNKD is missing sales quotas
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Post by mannmade on Sept 17, 2014 0:52:00 GMT -5
You may be right but now that most longs seem adjusted to the new reality which is geared towards a slow and steady rise in share price as opposed to the thought that with each binary event we would reach new highs I would argue that it will not matter how much FUD is put out there as the truth is now beginning to see the clear light of day and soon enough it will be very bright indeed...
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Post by papihoyos on Sept 17, 2014 8:21:53 GMT -5
As I've stated before, my biggest fear is not that Afrezza will not sell, it's if MNDK can deliver the product. I would like to hear more from Management (including timelines) on how they are doing with getting the production lines up and running producing product. Build it and they will come.
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Post by ezrasfund on Sept 17, 2014 10:35:10 GMT -5
I toured the factory in Danbury after the annual meeting in 2010. One thing I can say is that while the technology is ingenious, manufacturing Afrezza is pretty simple stuff compared to most manufacturing today. The fill machines (which were not installed at the time) seem to be the most complex part of the process, and the first one has been up and running for years, giving them plenty of time to work out any problems.
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Post by daduke38 on Sept 19, 2014 12:12:21 GMT -5
As I've stated before, my biggest fear is not that Afrezza will not sell, it's if MNDK can deliver the product. I would like to hear more from Management (including timelines) on how they are doing with getting the production lines up and running producing product. Build it and they will come. Ironically, that thought has been running through my head the past few days. I am not sure (at this point nobody is) of how much sales can be generated out of Danbury when fully maxed out and by when could they have it maxed out??? Maybe that is part of the short thesis. We can only sell what we can produce. I am actually surprised that expanded production isn't and hasnt been more newsworthy and being acted on.
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Post by bradleysbest on Sept 19, 2014 12:40:02 GMT -5
With the AMPH contract wouldn't they be able to handle supply so we do NOT run out of product?
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Post by mannmade on Sept 19, 2014 13:35:06 GMT -5
With the AMPH contract wouldn't they be able to handle supply so we do NOT run out of product? Not the supply of insulin, at the moment, (as yes Amph will give us enough insulin for now) as much as the mixing and combining with Technosphere and then inserting into cartridges which is done strictly at Danbury...
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Post by computerresearchtech on Sept 19, 2014 18:18:40 GMT -5
Does each production line need FDA approval or just the facility itself?
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Post by Deleted on Sept 19, 2014 18:51:43 GMT -5
As I've stated before, my biggest fear is not that Afrezza will not sell, it's if MNDK can deliver the product. I would like to hear more from Management (including timelines) on how they are doing with getting the production lines up and running producing product. Build it and they will come. Ironically, that thought has been running through my head the past few days. I am not sure (at this point nobody is) of how much sales can be generated out of Danbury when fully maxed out and by when could they have it maxed out??? Maybe that is part of the short thesis. We can only sell what we can produce. I am actually surprised that expanded production isn't and hasnt been more newsworthy and being acted on. That's why I created this thread . Three lines is 500,000 patients per year, 12 lines is 2mil, which has been suggested is max. If we knew how long it took to go from purchase order to commissioning you could make an educated guess at ramp up capability
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Post by mannmade on Sept 19, 2014 20:26:08 GMT -5
A lot of capacity will also depend on demand for what size cartridges. Eg; if larger cartridges sell better and are in demand then as Matt suggested they will be able to produce more cartridges and also each higher dose cartridge will presumably have a premium or at least better margin.
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Post by mnholdem on Sept 20, 2014 7:07:07 GMT -5
The two new lines are faster than the first and are being qualified (CMC) as we speak, which will trigger the first of what will be $775M in Sanofi payments. The 3 lines will support about $800M in sales. Expansion of the plant will be tied to expansion of Afrezza sales into Europe and at full capacity - 12 lines - will support $4B in sales. I got this info from Matt last week, none of which, he wrote, is non-public information. The $ales to capacity figures improve because future production lines will be even faster than the two new ones.
I also learned that as of Thursday, the HSR waiting period had not yet expired, so Sanofi & MannKind are forbidden from even formally meeting to coordinate a sales v production timeline, but Matt is expecting HSR approval very soon. This also explains why Afrezza is not yet on the Sanofi website. I anticipate approval before the EOQ, September 30, since we've all been informed that the full license agreement would be filed with 3Q earnings.
More important, I think, is that with approval we'll see many things happen quickly: EU and Japan application, the immediate commencement of post-approval testing, development, getting the label expanded and a PUBLIC campaign by Sanofi to make known the benefits of Afrezza.
And, as Zacks reported last week, we will see revised earnings estimates and price targets from investment advisors. Exciting times ahead.
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Post by Deleted on Sept 20, 2014 8:45:54 GMT -5
Thanks mn, that's close to the numbers im coming up with. Any idea how much $$ a line costs ?
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Post by mnholdem on Sept 20, 2014 11:46:22 GMT -5
$10 million per line. Seems that Matt will have plenty left of the $150 upfront to cover Mannkind's share of pre-launch marketing expenses.
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