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Post by compound26 on Aug 8, 2017 12:32:46 GMT -5
Based on the 2nd Quarter 2017 conference call, my understanding of the projection is for a 9 to 14 million gross (and 6 to 10 million net) for the second half of 2017.
I think they are basically forecasting a 50% growth quarter over quarter.
So here is the what they are projecting, in terms of net revenue growth:
1.2 (1st quarter)
1.8 (2nd quarter) [this quarter they reported 1.5 million, but says there was a 0.3 million one-time fee that will not occur. So we can deem the actual revenue for the 2nd quarter as 1.8 million, rather than 1.5 milloin].
2.7 (3rd quarter)
4.0 (4th quarter)
And that is 6.7 million (2.7 million + 4.0 million) net revenue for the 2nd half of 2017. Right in between the projection (6-10 million net revenue for the 2nd half of 2017).
If they can do that, I will be pretty happy.
If they can continue to grow 50% quarter over quarter, here is what it will look like for 2018:
6 (1st quarter)
9 (2nd quarter)
13.5 (3rd quarter)
20 (4th quarter)
And if the trend can continue in 2019:
30 (1st quarter)!!! We will be well above the cash break even point if we can reach 30 million a quarter.
And that is 48.5 million net revenue for 2018. Plus 6.7 million for second half of 2017, we will get 55.2 million in net revenue based on the above projections. Based on a cash burn rate of 7 million, that is about 8 months of cash burn. Assume our current cash can last till end of October 2017, there will be 14 months from there till end of 2018. 14-8=6
So excluding any repayment of debt and assuming Mannkind can sustain a 50% quarter over quarter growth on net revenue, we will need to raise cash for 6 months to get through 2018. And 6 months' cash burn is 6 x 7 = 42 million.
And that 42 million can be divided among several sources, debt, equity, partnership of TS pipeline, international licensing of Afrezza, and sale and leaseback of the Danbury facility.
Can Mannkind do that? Let's see!
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Post by mytakeonit on Aug 8, 2017 12:40:07 GMT -5
I may be wrong ... but, I believe that they mentioned that the burn rate is lower and they have enough cash till early 2018.
I will listen to the cc again.
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Post by compound26 on Aug 8, 2017 12:41:34 GMT -5
I may be wrong ... but, I believe that they mentioned that the burn rate is lower and they have enough cash till early 2018. I will listen to the cc again. The management said the cash burn rate for the 2nd quarter was 6.9 million per month, if I remember correctly. So I use 7 million as the baseline. And the management projected the future burn rate for the 2nd half of 2017 will be 18-24 million per quarter, which translates into 6-8 million per month. So I think a 7 million/month burn rate assumption is about right. |
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Post by therealisaching on Aug 8, 2017 12:53:39 GMT -5
I may be wrong ... but, I believe that they mentioned that the burn rate is lower and they have enough cash till early 2018. I will listen to the cc again. The management said the cash burn rate for the 2nd quarter was 6.9 million per month, if I remember correctly. So I use 7 million as the baseline. And the management projected the future burn rate for the 2nd half of 2017 will be 18-24 million per quarter, which translates into 6-8 million per month. So I think a 7 million/month burn rate assumption is about right. Per Mike C:
"We expect our current capital depending on which we handle the Deerfield debt to get us pretty close and into 2018"
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Post by compound26 on Aug 8, 2017 12:55:51 GMT -5
The management said the cash burn rate for the 2nd quarter was 6.9 million per month, if I remember correctly. So I use 7 million as the baseline. And the management projected the future burn rate for the 2nd half of 2017 will be 18-24 million per quarter, which translates into 6-8 million per month. So I think a 7 million/month burn rate assumption is about right. Per Mike C:
"We expect our current capital depending on which we handle the Deerfield debt to get us pretty close and into 2018"
Yes, I remember Mike's discussion about that. So, to be conservative, I have assumed that we need to raise cash to cover the last two months of 2017. |
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Post by dg1111 on Aug 8, 2017 13:11:29 GMT -5
Based on my pretty rough calculation, this equates to trx numbers of about 3250 each week. $30 million over the quarter = $2.5 million per week. I averaged the past 4 weeks to determine that each trx is $767. 3250 is a ways from where we are, but it isn't inconceivable that we could get there in a year or so.
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Post by peppy on Aug 8, 2017 13:31:12 GMT -5
Per Mike C:
"We expect our current capital depending on which we handle the Deerfield debt to get us pretty close and into 2018"
Yes, I remember Mike's discussion about that. So, to be conservative, I have assumed that we need to raise cash to cover the last two months of 2017. thank you compound and all. from no way out, to, come on, this way....
If Afrezza gets that new label this September.... 30 days away....
43 million, is doable. Mentions of capital raise talks/negotiation all over the conference call.
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Post by dreamboatcruise on Aug 8, 2017 14:01:38 GMT -5
Based on the 2nd Quarter 2017 conference call, my understanding of the projection is for a 9 to 14 million gross (and 6 to 10 million net) for the second half of 2017. I think they are basically forecasting a 50% growth quarter over quarter. So here is the what they are projecting, in terms of net revenue growth: 1.2 (1st quarter) 1.8 (2nd quarter) [this quarter they reported 1.5 million, but says there was a 0.3 million one-time fee that will not occur. So we can deem the actual revenue for the 2nd quarter as 1.8 million, rather than 1.5 milloin]. 2.7 (3rd quarter) 4.0 (4th quarter) And that is 6.7 million (2.7 million + 4.0 million) net revenue for the 2nd half of 2017. Right in between the projection (6-10 million net revenue for the 2nd half of 2017). If they can do that, I will be pretty happy. If they can continue to grow 50% quarter over quarter, here is what it will look like for 2018: 6 (1st quarter) 9 (2nd quarter) 13.5 (3rd quarter) 20 (4th quarter) And if the trend can continue in 2019:30 (1st quarter)!!! We will be well above the cash break even point if we can reach 30 million a quarter.And that is 48.5 million net revenue for 2018. Plus 6.7 million for second half of 2017, we will get 55.2 million in net revenue based on the above projections. Based on a cash burn rate of 7 million, that is about 8 months of cash burn. Assume our current cash can last till end of October 2017, there will be 14 months from there till end of 2018. 14-8=6 So excluding any repayment of debt and assuming Mannkind can sustain a 50% quarter over quarter growth on net revenue, we will need to raise cash for 6 months to get through 2018. And 6 months' cash burn is 6 x 7 = 42 million. And that 42 million can be divided among several sources, debt, equity, partnership of TS pipeline, international licensing of Afrezza, and sale and leaseback of the Danbury facility. Can Mannkind do that? Let's see! Not long ago I had posted a rough prediction (I stated a range, my actual calc was somewhere between) saying $50 - $100M to break even. I was using a 10% growth per month which is what I was thinking might be the curve that is forming that I see in my excel sheet tracking sales. 10% per month is 33% quarterly, so your break even should be less than what I calculated. 50% quarterly is above what the current sales curve would justify, but I don't think we're yet seeing results of advertising fully and management is hopefully getting some meaningful feedback from sales team that we're not privy to. Caveat here is that whether that predicted jump for 2H that management has made is sustainable. There are a lot of moving parts to increasing sales... patient awareness, doctor acceptance and insurance coverage. We know for instance that there were doctors that initially wrote prescriptions and then stopped... some perhaps from poor titration experiences and some thinking Afrezza would be pulled from the market. Perhaps we are currently getting many or most of them back... great... but perhaps harder to get ones that never wrote on board. I'm encouraged that management for the first time presented the number of writers. At least we're being given more transparency to try to interpret the numbers. The long term prospects will indeed be great if we see the number of docs continue to grow, especially if it looks like a compounding curve (even if only at 26% per quarter  . Now question is how they come up with $42M or more and what it means for current shareholders given their current market cap... and fingers crossed there is no black swan sort of thing like an economy wide shock that makes raising money near impossible (lived through two of those as business exec). |
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Post by me on Aug 8, 2017 14:32:15 GMT -5
Based on my pretty rough calculation, this equates to trx numbers of about 3250 each week. $30 million over the quarter = $2.5 million per week. I averaged the past 4 weeks to determine that each trx is $767. 3250 is a ways from where we are, but it isn't inconceivable that we could get there in a year or so. Based upon your rough numbers, that would be about 5400 per week. The revenue/script you are using is Gross revenue. On the cc, Mike said the GP% was 60% to 65%. |
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Post by peppy on Aug 8, 2017 14:59:48 GMT -5
Based on my pretty rough calculation, this equates to trx numbers of about 3250 each week. $30 million over the quarter = $2.5 million per week. I averaged the past 4 weeks to determine that each trx is $767. 3250 is a ways from where we are, but it isn't inconceivable that we could get there in a year or so. Based upon your rough numbers, that would be about 5400 per week. The revenue/script you are using is Gross revenue. On the cc, Mike said the GP% was 60% to 65%. what calculation did you use in determining each trx is $767? for a 4 week rx? not even the largest unit titration pack was showing up on good rx at that price. if that price per month... is the calculation result? something is wrong? Did I miss understand?
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Post by compound26 on Aug 8, 2017 15:10:43 GMT -5
Based upon your rough numbers, that would be about 5400 per week. The revenue/script you are using is Gross revenue. On the cc, Mike said the GP% was 60% to 65%. what calculation did you use in determining each trx is $767? for a 4 week rx? not even the largest unit titration pack was showing up on good rx at that price. if that price per month... is the calculation result? something is wrong? Did I miss understand?
a prescription often time is for several packs of Afrezza. Did you ever see people post pictures about their prescriptions?  |
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Post by me on Aug 8, 2017 15:13:49 GMT -5
Based upon your rough numbers, that would be about 5400 per week. The revenue/script you are using is Gross revenue. On the cc, Mike said the GP% was 60% to 65%. what calculation did you use in determining each trx is $767? for a 4 week rx? not even the largest unit titration pack was showing up on good rx at that price. if that price per month... is the calculation result? something is wrong? Did I miss understand?
I believe dg1111 arrived at his pricing of $767 by calculating the weighted average price per script for the four weeks ending 7/21/2017 in Liane's spreadsheet. |
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Post by oldfishtowner on Aug 8, 2017 15:25:18 GMT -5
Based on the 2nd Quarter 2017 conference call, my understanding of the projection is for a 9 to 14 million gross (and 6 to 10 million net) for the second half of 2017. I think they are basically forecasting a 50% growth quarter over quarter. So here is the what they are projecting, in terms of net revenue growth: 1.2 (1st quarter) 1.8 (2nd quarter) [this quarter they reported 1.5 million, but says there was a 0.3 million one-time fee that will not occur. So we can deem the actual revenue for the 2nd quarter as 1.8 million, rather than 1.5 milloin]. 2.7 (3rd quarter) 4.0 (4th quarter) And that is 6.7 million (2.7 million + 4.0 million) net revenue for the 2nd half of 2017. Right in between the projection (6-10 million net revenue for the 2nd half of 2017). If they can do that, I will be pretty happy. If they can continue to grow 50% quarter over quarter, here is what it will look like for 2018: 6 (1st quarter) 9 (2nd quarter) 13.5 (3rd quarter) 20 (4th quarter) And if the trend can continue in 2019:30 (1st quarter)!!! We will be well above the cash break even point if we can reach 30 million a quarter.And that is 48.5 million net revenue for 2018. Plus 6.7 million for second half of 2017, we will get 55.2 million in net revenue based on the above projections. Based on a cash burn rate of 7 million, that is about 8 months of cash burn. Assume our current cash can last till end of October 2017, there will be 14 months from there till end of 2018. 14-8=6 So excluding any repayment of debt and assuming Mannkind can sustain a 50% quarter over quarter growth on net revenue, we will need to raise cash for 6 months to get through 2018. And 6 months' cash burn is 6 x 7 = 42 million. And that 42 million can be divided among several sources, debt, equity, partnership of TS pipeline, international licensing of Afrezza, and sale and leaseback of the Danbury facility. Can Mannkind do that? Let's see! Don't over fixate on achieving profitability in 2018. It likely will not happen. The reason is that Mike C.'s major point is that he can scale up sales of Afrezza if he spends more money on marketing - additional sales reps and educators, more advertising. Depending on how MNKD obtains the cash it needs, only a part or even none of those funds may be treated as income. Yet it might allow MNKD to increase spending, i.e., even though revenue may rise, expenses could increase faster in the short term than revenue. Time is money in the pharma business. Stuff happens. Competition pops out from nowhere. If you have a great product, you have to run with it. And I believe that's what Castagna will do, as soon as he has enough cash to do it. Frankly, if I were an analyst I would scoff at $42 million for a full year's revenue in 2018. I would be looking for more like $100 million if Afrezza is successful at turning the corner on sales - especially with a label change. Hopefully, MNKD can exceed even that. If a domestic partner does not come along to help carry the weight, I believe that MNKD will be spending every penny it can not only to increase market share for Afrezza, but also to develop the pipeline. And do not forget the pediatric studies and the long term safety study that have to be conducted. So I am not looking for profitability next year. If it happens, I will take it. But I think 2019 is a better prospect. |
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Post by dg1111 on Aug 8, 2017 15:27:01 GMT -5
Yes. I took the total trx and total for revenue for the last 4 weeks and used that to calculate the average. That seems high, but I think we have been told that a lot people are renewing in 3 month supplies, thus driving the price per script up.
Yeah, I calculated quickly, and forgot to account for the reported numbers being retail. 5400 trx per week seems more like it. Still, it seems like an attainable goal. |
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Post by compound26 on Aug 8, 2017 15:39:36 GMT -5
oldfishtowner agree with your comments. I was just playing with the numbers a bit to show that: 1. if Mannkind can get sustained script growth at current rate, there is a clear path to break even in the near future;
2. additional capital raise can be quite limited if we achieve goal number 1 above;
3. the needed dilution probably will not be that worrisome to shareholders if we achieve goal number 1 above; and
4. if we achieve goal number 1 above, as we move much closer to breaking even (or the ability of breaking even), our PPS will be much higher and therefore making fund-raise much easier and less painful to shareholders.
Therefore, at some point, even though we do not break even, if our PPS is much higher and we have pretty good cash reserve, it is not that important whether we break even or not.
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