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Post by eddiemoy on May 12, 2015 23:32:05 GMT -5
fug, are you figuring in the discount when you are quoting the $210 rev per box? because i've seen multiple sources show that is it roughly $334 per box in rev not $210. so based on that, rev should be at least $66M. unless there is some kind of discount... so if we accept the COG as $35/box, that would mean ~$0.39 per cartridge... $7.1m of goods only accounts for 18M cartridges, so the plant is not running at 10M a month with 1 line... It's running full. They show it as inventory. The $210 is a swag on all discounts and rebates So you are saying that they produced 30m cartridges in q1, but only shipped 18m and have the rest, 12m cartridges in inventory as finished product not just raw materials? |
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Post by digger63 on May 13, 2015 0:44:39 GMT -5
If $7M in product shipped = $42M in product sales, then MNKD gets $7M (COG) + $10.5M (25% of revenues, based on Matt's comments), for a total of $17.5M - or about 41.5% of sales.
Of that, the gross margin is something like $11.3M ($10.5M from profit split + $800k from recouped costs). That's about 27% of sales revenue.
Am I missing something?
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Post by Deleted on May 13, 2015 5:22:56 GMT -5
It's running full. They show it as inventory. The $210 is a swag on all discounts and rebates So you are saying that they produced 30m cartridges in q1, but only shipped 18m and have the rest, 12m cartridges in inventory as finished product not just raw materials? Yes |
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Post by Deleted on May 13, 2015 5:23:28 GMT -5
If $7M in product shipped = $42M in product sales, then MNKD gets $7M (COG) + $10.5M (25% of revenues, based on Matt's comments), for a total of $17.5M - or about 41.5% of sales. Of that, the gross margin is something like $11.3M ($10.5M from profit split + $800k from recouped costs). That's about 27% of sales revenue. Am I missing something? I don't know? |
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Post by benh on May 13, 2015 9:02:55 GMT -5
+1 ^^^ One thing I have learnt from numerous conversations with the Fugacity, he has a keen eye for numbers. Either that, or he moonlights as a Janitor in Danbury. Pretty sure it's the former, but ego says it's the latter whenever he proves me incorrect. ;o)
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Post by benh on May 13, 2015 12:08:12 GMT -5
Last response appears delayed.
That confusion aside.....
Matt's comments are regarding what MNKD should receive using a "Royalties" model and mid 20's being the estimate. But that ignores the "separate supply agreement". This increases the revenue and a small contribution to profit. Whilst great for napkin math on value, it shouldn't be ignored as this revenue contributes to the expenses we see filed and can throw your numbers.
To do the math, imagine 3 entities, not 2.
1. MNKD
2. SNY
3. Collaboration.
Collaboration is financed by 500MM of which 175 is MNKD's loan facility.
MNKD sell all production to (3) collaboration. Including all samples. - As part of the "separate supply agreement"
Collaboration (3) pays for all the marketing, doc awareness etc etc.
Collaboration then sells the boxes to wholesale.
Now deduct costs from sales and if a negative number it's drawn from the 500MM. If it's positive, 35% is removed and sent to MNKD. 65% is sent to SNY.
With that mindset, use Fuga's numbers he posted.
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Post by mnholdem on May 13, 2015 12:18:28 GMT -5
Hah! It seemed so much simpler when Matt, at the Sanofi Agreement conference, equated the combination of the two Agreements at about a 50/50 split.
All this flowcharting is very useful, however. Because expenses will be disproportionately large at the beginning stages, it can be reassuring to understand how the cash flows. It's just a shame that Matt cannot take the time to create the flow chart for us instead of us having to do it.
Speaking of which, fugacity and benh, you may want to email your work to Matt. He might be willing to fine-tune it for you, eh?
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Post by eddiemoy on May 13, 2015 16:52:53 GMT -5
Hah! It seemed so much simpler when Matt, at the Sanofi Agreement conference, equated the combination of the two Agreements at about a 50/50 split. All this flowcharting is very useful, however. Because expenses will be disproportionately large at the beginning stages, it can be reassuring to understand how the cash flows. It's just a shame that Matt cannot take the time to create the flow chart for us instead of us having to do it. Speaking of which, fugacity and benh, you may want to email your work to Matt. He might be willing to fine-tune it for you, eh? matt mention in webcast that they didn't want to disclose how much COG are now since they are producing too little in the huge factory in danbury. he mention later when sales picks up they will be more willing to disclose COG. he said the fixed cost will disappear really quickly when sales ramps up. |
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Post by mnholdem on May 13, 2015 17:01:42 GMT -5
Last year I had a conversation will Matt about fixed costs and he pointed out that they do NOT want to install new production lines ahead of schedule because even sitting there idle, waiting for EU/Japan or whatever, the lines add to fixed costs. So they have a plan and a timeline to execute it. All very controlled and with an intent to keep costs to a minimum.
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Post by otherottawaguy on Jan 24, 2016 21:57:30 GMT -5
Sorry for dragging out an oldie here, but I am attempting to figure out what the actual variable and fixed costs are for Mannkind. So I have a couple of questions that I am hoping to get consensus on.
Q1: Fixed Costs from what I have been able to discern are in the 8-10M range per month. Am I correct in assuming that this includes debt carrying costs?
Q2: What does it cost to produce a box of 90 cartridges + 2 inhalers + packaging? Is it possible to calculate these costs based upon the 35% Sanofi deal and the estimated low 20% for Mannkind's cut after expenses.
Think in my digging here it has been estimates that a cartridge runs in the 23-28 cent range to produce + packaging. With some estimating that a box ran approx. 28% of the selling price.
Q3: What is the current costs of mealtime insulin replace via Pens on an annual basis? 2600 USD?
Q4: What is the cost of a CGM (initial + annual supplies)?
Q5: What is the ballpark retail mark-up at the pharmacy dispensing?
Q6: Current pricing for Afrezza boxes? 4uX90 = 247, 4uX30,8uX60 = 287? 12uX90 = 327?
Thanks for any short and to the point answers provided,
OOG |
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Post by peppy on Jan 25, 2016 6:19:38 GMT -5
Sorry for dragging out an oldie here, but I am attempting to figure out what the actual variable and fixed costs are for Mannkind. So I have a couple of questions that I am hoping to get consensus on.
Q1: Fixed Costs from what I have been able to discern are in the 8-10M range per month. Am I correct in assuming that this includes debt carrying costs?
Q2: What does it cost to produce a box of 90 cartridges + 2 inhalers + packaging? Is it possible to calculate these costs based upon the 35% Sanofi deal and the estimated low 20% for Mannkind's cut after expenses.
Think in my digging here it has been estimates that a cartridge runs in the 23-28 cent range to produce + packaging. With some estimating that a box ran approx. 28% of the selling price.
Q3: What is the current costs of mealtime insulin replace via Pens on an annual basis? 2600 USD?
Q4: What is the cost of a CGM (initial + annual supplies)?
Q5: What is the ballpark retail mark-up at the pharmacy dispensing?
Q6: Current pricing for Afrezza boxes? 4uX90 = 247, 4uX30,8uX60 = 287? 12uX90 = 327?
Thanks for any short and to the point answers provided,
OOG Q3:
What is the current costs of mealtime insulin replace via Pens on an annual basis? 2600 USD? Reply: by memory Apidra is $3.19 per day cost. $3.19 x 365 = $1,164. Afrezza presently priced around $10 dollars a day. ($7.91 for all 4u)
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Post by agedhippie on Jan 25, 2016 12:18:16 GMT -5
Q3: What is the current costs of mealtime insulin replace via Pens on an annual basis? 2600 USD?
Q4: What is the cost of a CGM (initial + annual supplies)?
Cost of meal time insulin is difficult to estimate because the amount used varies according to condition (insulin resistant Type 2 vs. insulin sensitive Type 1). The only way I can see to do this is on a like for like basis in which case we take a mixed box of Afrezza (60x4u + 30x8u) to be 480u then that would be 1 2/3 pens, call it 2 pens. The total cost of two pens would be $185 in the US (and around $45 in Europe). Those usage numbers are about the same as mine, I use 450u per month on pens. Total cost of a Dexcom would be an initial $600 for the receiver, plus $6,050 in annual consumables ($1,240 for 2 transmitters and $4,810 for 13 sensors). Strictly the receiver should be replaced annually because there is only a one year warranty, insurers will do that because DME have to be kept in warranty. |
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Post by matt on Jan 25, 2016 12:36:20 GMT -5
A few things to keep in mind:
1. The level of automation makes a big difference, a very big difference some times.
2. Plastics are cheap, overhead absorption is not. If you have a line running a 95% of capacity the unit costs will be vastly different than a line running at 25% of capacity.
3. Direct product cost may be a fraction of the fully burdened cost. Quality control, both on inbound materials and finished goods, sterility testing, packaging, and so forth can easily exceed the direct product cost. I was once involved in a product line where the plastic bottle and cardboard box cost more than the drugs inside. MNKD is doing proteins, no not as cheap as small molecules, but it is something to keep in mind.
Few non-generic drugs have a gross margin (selling price minus full production cost) of less than 80%, and highly profitable drugs are in the 90-95% range. While that sounds like a lot the sales and marketing expense at launch can easily run 50% of sales, so if you have an 80% gross profit drug that leaves 30% to cover future R&D, general administrative expenses, and other costs. Good drug companies manage 20% in pretax profit across all their businesses, less profitable ones yield about 15% pretax. Those that consistently make less than 15% pretax do not remain in business or they get acquired.
All of that said, it is hard to estimate unit costs on a new drug like Afrezza until the volume demands start to cause production problems. When the production is so stretched that they have to add to the plant, then you can begin to figure out what the full run rate costs are.
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