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Post by brentie on Sept 20, 2014 12:56:24 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. Last year, at I believe the Cowen Conference, Matt said $8 or $9 million each.
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Post by computerresearchtech on Sept 21, 2014 4:51:29 GMT -5
Have the Frankfurt facilities been brought up lately?
Here's from an old PR:
"The insulin plant in Frankfurt is a state-of-the-art insulin production facility that would make an excellent counterpart to our formulation, fill and finish facility for AFRESA in Danbury, Connecticut," said Alfred Mann, Chairman and Chief Executive Officer of MannKind Corporation. "Upon the closing of this transaction, we will obtain an immediate supply of insulin and the ability to supply our insulin needs for the future, even if we are unable to acquire the facility itself. We are pleased with this opportunity to secure our insulin supply, which brings AFRESA one step closer to commercial readiness."
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Post by derek2 on Sept 22, 2014 9:12:24 GMT -5
Have the Frankfurt facilities been brought up lately? Here's from an old PR: "The insulin plant in Frankfurt is a state-of-the-art insulin production facility that would make an excellent counterpart to our formulation, fill and finish facility for AFRESA in Danbury, Connecticut," said Alfred Mann, Chairman and Chief Executive Officer of MannKind Corporation. "Upon the closing of this transaction, we will obtain an immediate supply of insulin and the ability to supply our insulin needs for the future, even if we are unable to acquire the facility itself. We are pleased with this opportunity to secure our insulin supply, which brings AFRESA one step closer to commercial readiness." MNKD did not end up acquiring the plant. Mannkind does own those several tons of freeze dried bulk insulin from that transaction, however I question if it will ever be used. They have a contract with Amphastar to supply the same insulin that was used in the trials, and are close to completion of a trial comparing the Amphastar (originally Organon) insulin with SNY insulin, with the goal of gaining FDA approval to use SNY insulin in Afrezza. Where does that leave that supply of Pfizer insulin that they acquired?
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Post by mnholdem on Sept 22, 2014 13:51:10 GMT -5
The FDA testing of two different insulins for use with Afrezza is scheduled to be completed THIS MONTH, according to the latest reports. I thought Matt was suggesting the Pfizer insulin will be used.
Matt from the Morgan Stanley conference:
"One thing I should point out that nobody is surprised by it, we talked about we transfer goods of cost to Sanofi and that’s essentially true but it may not appear that way for a while. To the extent, we have raw materials on our books already, we’ve expensed those as we purchased them including insulin for example. And we will build to recoup those cost as part of our transfer to them.
So -- since those have already been expensed. I’ll show it like we are in margin and lastly we’ll generate some positive cash flow. But once that goes away then it will actually be that cost."
Somebody once posted that MannKind has the equivalent of nearly $2 billion (retail value) in Pfizer insulin frozen in storage that Al got from Pfizer for pennies on the dollar. That's a lot of money to just throw away, don't you think?
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Post by mannmade on Sept 22, 2014 14:08:42 GMT -5
Here are the facts of the Pfizer Insulin that Mannkind purchased and which is in storage currently:
1.) Bought for about 3m 2.) Has a replacement value of about 300m 3.) Has a product value of about 10B (Eg: if used in making Afrezza there would be enough for 10B in Afrezza sales)
Currently it is under review for FDA certification for use in Afrezza, but since no one knows the shelf life of insulin it may ultimately not be used...
In the meantime, Amphastar is FDA certified for use in Afrezza and was the insulin used during trials and Sanofi is now seeking FDA certification of it's insulin for use in Afrezza. With Sanofi as a supplier of insulin it should bring down costs quite a bit...
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Post by brentie on Sept 22, 2014 14:52:03 GMT -5
Matt: Another topic that's frequently been raised since the call this morning was the rationale for contracting with Amphastar for a five-year supply agreement. As we said this morning, Amphastar's facility in France has supplied our insulin for more than 10 years and produces the insulin that is referenced in AFREZZA NDA. Our supply agreement with them will ensure a robust supply of insulin while we work with Sanofi to qualify their insulin as an additional source of insulin for AFREZZA. Qualification of a new source of the insulin involves a certain amount of CMC work, including stability studies and some clinical study to assess bioequivalence. Thus, it takes some time to qualify a new resource of insulin. Amphastar insulin is essential to ensure that we have a sufficient amount of raw API, or active pharmaceutical ingredient, for the first few years of launch until and beyond the point in time when Sanofi insulin is expected to be qualified. At the same time, we have not yet qualified Pfizer insulin as a source of insulin for AFREZZA. The necessary CMC and clinical studies have been performed and supplemental NDA is nearly completed. But with the transfer of the regulatory responsibilities to Sanofi, it will ultimately be their decision as to whether or not that insulin will be used as source of insulin for AFREZZA. The Pfizer insulin represents a potential upside from a supply perspective and in any event, between Amphastar and Sanofi, we should have plenty of insulin to support Sanofi's marketing efforts for AFREZZA. seekingalpha.com/article/2412135-mannkinds-mnkd-ceo-alfred-mann-on-q2-2014-results-earnings-call-transcript?find=insulin&all=false
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Post by goyocafe on Sept 22, 2014 15:30:14 GMT -5
$300 million doesn't seem like a trivial amount to hand over decision making to Sanofi whether to use it or not. There's never a straight answer if you ask me.
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Post by dreamboatcruise on Sept 22, 2014 15:39:26 GMT -5
It seems like they have indicated decisions are made by a board consisting of representatives from both companies.
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Post by Deleted on Sept 22, 2014 15:41:18 GMT -5
$300 million doesn't seem like a trivial amount to hand over decision making to Sanofi whether to use it or not. There's never a straight answer if you ask me. I agree. IMO Matt glossed over this too much (and is one of the reasons I keep dwelling on it). If MNKD is responsible for production, why does SNY have any say in what MNKD uses to manufacture it, especially if all the approvals are in place? I'm wondering, though, how much insulin (AMPH insulin) do they already have in inventory that will make it into the product launch, because that should show as positive cash flow.
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Post by mannmade on Sept 22, 2014 16:06:07 GMT -5
The real issue as I see it is related to the fact that no one knows the exact "shelf life" of insulin. Matt has indicated they are moving forward with getting the Pfizer insulin certified. The real question will be more about how long they think it would be good to "sit" on shelves once produced as it has already been sitting in storage for a number of years. $300m replacement value is offset largely by cost reimbursement from Sanofi, for cost of Amphastar insulin, if the Pfizer insulin is not used in Afrezza production. But there is no amount of money that will reimburse Sanofi nor Mannkind if the Pfizer insulin, after FDA Certification, should for some reason expire before it is used by patients once on shelves. So I think this question needs to be throughly researched and answered first.
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Post by dreamboatcruise on Sept 22, 2014 16:19:23 GMT -5
The real issue as I see it is related to the fact that no one knows the exact "shelf life" of insulin. Matt has indicated they are moving forward with getting the Pfizer insulin certified. The real question will be more about how long they think it would be good to "sit" on shelves once produced as it has already been sitting in storage for a number of years. $300m replacement value is offset largely by cost reimbursement from Sanofi, for cost of Amphastar insulin, if the Pfizer insulin is not used in Afrezza production. But there is no amount of money that will reimburse Sanofi nor Mannkind if the Pfizer insulin, after FDA Certification, should for some reason expire before it is used by patients once on shelves. So I think this question needs to be throughly researched and answered first. And the $300M replacement would be less when replaced by SNY insulin at cost. Considering that MNKD share is 35% of any savings, the value to MNKD of this stored insulin is less than $100M, perhaps significantly less.
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Post by Deleted on Sept 22, 2014 18:07:58 GMT -5
The real issue as I see it is related to the fact that no one knows the exact "shelf life" of insulin. Matt has indicated they are moving forward with getting the Pfizer insulin certified. The real question will be more about how long they think it would be good to "sit" on shelves once produced as it has already been sitting in storage for a number of years. $300m replacement value is offset largely by cost reimbursement from Sanofi, for cost of Amphastar insulin, if the Pfizer insulin is not used in Afrezza production. But there is no amount of money that will reimburse Sanofi nor Mannkind if the Pfizer insulin, after FDA Certification, should for some reason expire before it is used by patients once on shelves. So I think this question needs to be throughly researched and answered first. And the $300M replacement would be less when replaced by SNY insulin at cost. Considering that MNKD share is 35% of any savings, the value to MNKD of this stored insulin is less than $100M, perhaps significantly less. All of that is well and good, but $100MM revenue (tax free) is worth a significant portion of the current PPS. I dont think it be being glossed over by Matt, analysts, etc helps matters.
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Post by mannmade on Sept 22, 2014 18:14:49 GMT -5
My point is that unless they can decide there is very little risk to using the Pfizer insulin after being in storage for so long (not knowing the real shelf life) then using it is likely not worth the risk as you will lose way more than 100m if there is an issue with it when used by patients. The last thing we want is an early distribution recall of a new product.
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