Post by mikesmilitaria on Jun 3, 2017 14:30:22 GMT -5
It is no secret that Big Pharma is in desperate need to fill their pipeline to replace the unprecedented number of BlockBuster drugs set to come off patent in the coming years. Sanofi-Aventis (NYSE:SNY) is a top 5 Pharma company that has openly stated they will be looking to do small to mid-size acquisitions (>$15B) to beef up their pipeline. Rumors abound on who the targets are. Analysts point to Allergan (AGN,) Biogen (NASDAQ:BIIB) and Genzyme (GENZ) as likely candidates. What if that target is a relatively unknown company on the verge of releasing the next blockbuster? What if that target is MannKind Corporation (NASDAQ:MNKD)?
It seems outrageous that a company with a market cap under $800M could warrant a premium of more than 100% or so. However, MannKind isn’t your normal public company. Al Mann, founder and CEO of MannKind still owns 44.5% of the outstanding shares of MannKind. Al has previously stated that he won’t invest in a venture unless he can make at minimum 10X his investment. So far, Al Mann has invested $800M+ out of his own pocket to fund MannKind. The company has spent north of $1.6B to develop their Technosphere platform and to bring AFREZZA to market. No acquisition of MannKind will happen without Al Mann’s approval and that number would be $10B or more in my estimation. To learn more about Technosphere and AFREZZA, you can read my previous articles and blogs on the subject.
Rather than use MannKind’s current market capitalization to value a potential takeover price, you must instead look at the Net Present Value of the future revenue stream for AFREZZA. AFREZZA will become the new gold standard for Prandial Insulin therapy given its superiority to rapid acting analogs. I won’t debate the point on why that is the case in this article since I have already written on the subject. If Big Pharma also agrees that AFREZZA will replace drugs such as Humalog based on the wealth of studies available, then expected revenue of $2B a year for AFREZZA in the U.S. alone is a reasonable estimate. Triple that number once AFREZZA is approved in Europe and Asia.
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UPDATE: Amgen's CEO stated a few months ago that they have a war chest of $40B & are actively seeking acquisitions once placed with a cap of $10B which they recently implied could exceed that amount.
IMAGINE WHAT Afrezza and TS could bring to Amgen....a pipeline for decades!
It seems outrageous that a company with a market cap under $800M could warrant a premium of more than 100% or so. However, MannKind isn’t your normal public company. Al Mann, founder and CEO of MannKind still owns 44.5% of the outstanding shares of MannKind. Al has previously stated that he won’t invest in a venture unless he can make at minimum 10X his investment. So far, Al Mann has invested $800M+ out of his own pocket to fund MannKind. The company has spent north of $1.6B to develop their Technosphere platform and to bring AFREZZA to market. No acquisition of MannKind will happen without Al Mann’s approval and that number would be $10B or more in my estimation. To learn more about Technosphere and AFREZZA, you can read my previous articles and blogs on the subject.
Rather than use MannKind’s current market capitalization to value a potential takeover price, you must instead look at the Net Present Value of the future revenue stream for AFREZZA. AFREZZA will become the new gold standard for Prandial Insulin therapy given its superiority to rapid acting analogs. I won’t debate the point on why that is the case in this article since I have already written on the subject. If Big Pharma also agrees that AFREZZA will replace drugs such as Humalog based on the wealth of studies available, then expected revenue of $2B a year for AFREZZA in the U.S. alone is a reasonable estimate. Triple that number once AFREZZA is approved in Europe and Asia.
_____________________________
UPDATE: Amgen's CEO stated a few months ago that they have a war chest of $40B & are actively seeking acquisitions once placed with a cap of $10B which they recently implied could exceed that amount.
IMAGINE WHAT Afrezza and TS could bring to Amgen....a pipeline for decades!