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Post by peppy on Aug 8, 2017 15:41:35 GMT -5
the thing that is stopping afrezza, besides the endo's is insurance.
Quote; United Healthcare, Oxford, OptumRX and Briova tell me that they know what is better for me.
kevinnicholasgavit.com/2017/08/08/stop-united-healthcare/
Hmmm, the label change.
This man, sweedee's dad, demand is here.
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Post by sportsrancho on Aug 8, 2017 17:57:21 GMT -5
the thing that is stopping afrezza, besides the endo's is insurance.
Quote; United Healthcare, Oxford, OptumRX and Briova tell me that they know what is better for me.
kevinnicholasgavit.com/2017/08/08/stop-united-healthcare/
Hmmm, the label change.
This man, sweedee's dad, demand is here. Yes, and it also has a lot to do with the re-fills. You get a script and the insurance denies it. Reps working hard on this. It takes up so much time that could be spent selling new doc's on Afrezza. They are getting a lot done with the limited resources! It's a sad state of affairs what these company's do to people's lives:-(
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Post by dreamboatcruise on Aug 8, 2017 18:06:01 GMT -5
the thing that is stopping afrezza, besides the endo's is insurance.
Quote; United Healthcare, Oxford, OptumRX and Briova tell me that they know what is better for me.
kevinnicholasgavit.com/2017/08/08/stop-united-healthcare/
Hmmm, the label change.
This man, sweedee's dad, demand is here. Yes, and it also has a lot to do with the re-fills. You get a script and the insurance denies it. Reps working hard on this. It takes up so much time that could be spent selling new doc's on Afrezza. They are getting a lot done with the limited resources! It's a sad state of affairs what these company's do to people's lives:-( Is management working to shift the effort of dealing with insurance away from sales reps? Shouldn't that be done with the dedicated staff of Mannkind Cares? I do realize a good sales person would want to stay on top of the first few patients a new doctor is trying to get on Afrezza.
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Post by sportsrancho on Aug 8, 2017 18:24:21 GMT -5
It's a joint effort I guess.
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Post by celo on Aug 8, 2017 18:38:25 GMT -5
If Mannkind over the next 6 weeks, can continue to show the continuing rate of increase in scripts and revenue growth that has occurred over the last 6 weeks, than Afrezza will have passed Sanofi’s launch and will be making considerable headway into markets. Mannkind can then get the funding they need from multiple sources because the drug has been shown to be a winner and will eventually payoff with positive cash flow. The share price in 6 weeks will be high enough that Mannkind can easily do a modest dilution and cover itself through the first part of 2018. During 2018 the trend of scripts and revenue will most likely solidify itself and Mannkind will getting closer to being profitable.
If the uptake is flat or the recent trend slows down, the possibility of financing because much more difficult. We do know that they will need money from somewhere before Halloween.
Mike and I have something in common. I like Mannkind’s chances. Mannkind has done a great job on knowing how to get the most benefit for patients. With the proper guidance on dosing and timing of the doses there is an incredible benefit to diabetics. He is not worried about finances because he believes most diabetics will eventually see those benefits.
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Post by dreamboatcruise on Aug 8, 2017 19:08:04 GMT -5
If Mannkind over the next 6 weeks, can continue to show the continuing rate of increase in scripts and revenue growth that has occurred over the last 6 weeks, than Afrezza will have passed Sanofi’s launch and will be making considerable headway into markets. Mannkind can then get the funding they need from multiple sources because the drug has been shown to be a winner and will eventually payoff with positive cash flow. The share price in 6 weeks will be high enough that Mannkind can easily do a modest dilution and cover itself through the first part of 2018. During 2018 the trend of scripts and revenue will most likely solidify itself and Mannkind will getting closer to being profitable. If the uptake is flat or the recent trend slows down, the possibility of financing because much more difficult. We do know that they will need money from somewhere before Halloween. Mike and I have something in common. I like Mannkind’s chances. Mannkind has done a great job on knowing how to get the most benefit for patients. With the proper guidance on dosing and timing of the doses there is an incredible benefit to diabetics. He is not worried about finances because he believes most diabetics will eventually see those benefits. I agree with the assessment. Scripts are key. It seems management is projecting a steeper compounding rate than yet appears in the data, so that is very encouraging. If MNKD can surpass SNY's NRx with a much smaller sales force that will be truly impressive. Only slight disagreement would be the assertion that Mike is not worried about finances. I sure hope he is worried. I would say he's not doing his job if he is not 1) quite worried, but 2) not showing that to shareholders. No CEO should be comfortable with that little cash in the bank. Things totally beyond his best efforts and intentions can cause problems. I don't think wise old Al Mann would be comfortable at all. Quoting him, the 3 most important things for a growing company are "capital, capital, capital".
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bac
Lab Rat
Posts: 37
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Post by bac on Aug 9, 2017 12:08:12 GMT -5
“We will be well above the cash break even point if we can reach $30 million (net revenue) a quarter.”
I take issue with the use of “cash break even” in compound26 statement above. What he calls “cash break even” is simply when net revenue will exceed the burn rate. “Break even” is defined as when profit is zero (or losses transition to profits). To calculate “break even”, you have to know the cost to produce each subscription at the time of “break even”. This is unknown now.
From the Q2 conference call “The cost of goods sold for the quarter ended June 30, 2017, was $5.1 million.” If we assume the net revenue from Afrezza sales for Q2 is $1.8M, then we can infer the cost of the average prescription is 5.1/1.8 = 2.8x the net revenue from each prescription. (Ouch!)
Profit = X*(R – C) – BR reference: Accounting for Dummies Where: X = number of units, or in our case number of Afrezza prescriptions R = revenue to MannKind per Afrezza prescription C = Afrezza production cost per prescription (unknown) BR = fixed cost to run MannKind Corporation (Burn Rate)
Setting Profit = 0 and solving for X gives: X = BR/(R – C) at break even (BR and X over same time interval)
To further this analysis we need to project C versus X. We know from the Q2 conference call, C = 2.8*R (I think). How to further this analysis? How does the 2.8 factor reduce with increasing X? Anyone?
Disclaimer: I have never taken an accounting class and know even less about financials.
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Post by dreamboatcruise on Aug 9, 2017 12:26:02 GMT -5
“We will be well above the cash break even point if we can reach $30 million (net revenue) a quarter.” I take issue with the use of “cash break even” in compound26 statement above. What he calls “cash break even” is simply when net revenue will exceed the burn rate. “Break even” is defined as when profit is zero (or losses transition to profits). To calculate “break even”, you have to know the cost to produce each subscription at the time of “break even”. This is unknown now. From the Q2 conference call “The cost of goods sold for the quarter ended June 30, 2017, was $5.1 million.” If we assume the net revenue from Afrezza sales for Q2 is $1.8M, then we can infer the cost of the average prescription is 5.1/1.8 = 2.8x the net revenue from each prescription. (Ouch!) Profit = X*(R – C) – BR reference: Accounting for Dummies Where: X = number of units, or in our case number of Afrezza prescriptions R = revenue to MannKind per Afrezza prescription C = Afrezza production cost per prescription (unknown) BR = fixed cost to run MannKind Corporation (Burn Rate) Setting Profit = 0 and solving for X gives: X = BR/(R – C) at break even (BR and X over same time interval) To further this analysis we need to project C versus X. We know from the Q2 conference call, C = 2.8*R (I think). How to further this analysis? How does the 2.8 factor reduce with increasing X? Anyone? Disclaimer: I have never taken an accounting class and know even less about financials. You should consider what portion of the production costs scale with volume. Do we need more floor space than is available in Danbury to reach break even? Do we need another production line? Do we need more production workers? Do we need more quality inspectors? etc. You may find for many of these things we are already have roughly the costs that we would have to reach break even. The variable costs would then be bulk ingredients and parts for inhaler. Those costs are likely quite low compared to revenue.
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Post by compound26 on Sept 29, 2017 9:31:25 GMT -5
An update on the sales numbers vs Mannkind projections as of today (September 29, 2017).
Based on the Afrezza sales data as reported by Symphony and maintained on this site, the 2nd quarter Afrezza gross sales is about $2,871,000.
For the third quarter, with another week's number to be added (and assuming that week's numbers is similar to the numbers reported this morning for the last week), Mannkind looks like to be on track to hit somewhere around $4,000,000. That will represent about a 40% increase vs 2nd quarter.
Assuming they can maintain this 40% growth rate, the 4th quarter Afrezza gross sales will be around $5,600,000.
Based on these assumptions, in total, they will be doing around $9.56 million for 2nd half of 2017.
As for net sales, if we reduce the gross sales by 35% as noted by Steven, the 2nd half net sales will be around $6.2 million.
These numbers, while not stellar numbers, fall right within the projections made by Steven during the Mannkind second quarter conference call.
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Post by compound26 on Sept 29, 2017 9:40:42 GMT -5
An update on the third quarter TRx growth rate vs 2nd quarter as of today (September 29, 2017). During the Mannkind second quarter conference call, Mannkind's Chief Commercial Officer, Patrick McCauley noted: In addition our TRx prescriptions grew 23% in the second quarter compared to the first quarter of 2017. seekingalpha.com/article/4096149-mannkinds-mnkd-ceo-michael-castagna-q2-2017-results-earnings-call-transcript?part=singleBased on the Afrezza sales data as reported by Symphony and maintained on this site, the 2nd quarter Afrezza TRx is 3,836. For the third quarter, with another week's number to be added (and assuming that week's numbers is similar to the numbers reported this morning for the last week), Mannkind looks like to be on track to hit somewhere around 4,850. That will be around a 26% growth rate in TRx vs 2nd quarter. Based on the above, it appears the growth rate of TRx in the 2nd and third quarters have been very consistent.
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Post by mnholdem on Sept 29, 2017 10:22:46 GMT -5
It takes months before physicians get on board after being introduced to a new drug. It seems to me that the efforts of MannKind's sales force for months to cultivate new accounts is starting to bear fruit.
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Post by cjm18 on Sept 29, 2017 10:34:41 GMT -5
To reach 6m net afrezza sales (bottom of guidance)for 17h2 we need just 30% growth in 17q4 over 17q3. Assuming this growth rate all of next year ... we will cover 42% of burn rate in 18q4. (The burn rate will be 4.4m per month) But there is about 47m of debt due in the middle of 2018.
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Post by compound26 on Sept 29, 2017 10:41:05 GMT -5
It takes months before physicians get on board after being introduced to a new drug. It seems to me that the efforts of MannKind's sales force for months to cultivate new accounts is starting to bear fruit. mnholdem Absolutely agree. I think many on this board probably underestimated the challenges Mannkind sales representatives are facing. Here are a few that I can imagine that they are facing. 1. out-numbered. Mannkind vs Sanofi (about 1:5).
That probably means larger area to cover and more time spent on the road. As Mannkind noted, before the current expansion of sales force, Mannkind sales force often have to spend several hours driving from one appointment to another.
2. less budget.
Mannkind sales force apparently have much less resources to spend. That will likely limit their access to the doctors.
3. less swag.
I can imagine it will be much easier to get an appointment with the doctors if the sales rep is from Sanofi (or for that matter, any other BP) vs from Mannkind.
4. cross selling
In addition to resources and swag, a doctor may also be prescribing other drugs of a big BP (like Sanofi) and therefore is more likely to be influenced by a sales rep from Sanofi (or for that matter, any other BP) vs from Mannkind.
5. Financial standing
Some prescribers may be worried about Mannkind's financial standing, which will not be the case if they are dealing with Sanofi. What the above shows is that what Michael said (that had Sanofi kept on going for it, Afrezza sales will be $30 million to $50 million a year drug in the first 12 to 18 months of launch) is very reasonable and most likely would have been be the case. I kindly of think if Sanofi hadn't had the CEO switch, these may be the numbers we were looking at.
Here is what Michael said on the 2nd quarter conference call:
If Sanofi just had kept the foot on the gas with Afrezza, you'll see when you look at Pat section, the success trends over Afrezza would have continued to grow throughout 2016 and 2017. This would have been easily if $30 million to $50 million a year drug in the first 12 to 18 months of launch had we just cut executing.
seekingalpha.com/article/4096149-mannkinds-mnkd-ceo-michael-castagna-q2-2017-results-earnings-call-transcript?part=single
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Post by sportsrancho on Sept 29, 2017 10:50:07 GMT -5
It takes months before physicians get on board after being introduced to a new drug. It seems to me that the efforts of MannKind's sales force for months to cultivate new accounts is starting to bear fruit. mnholdem Absolutely agree. I think many on this board probably underestimated the challenges Mannkind sales representatives are facing. Here are a few that I can imagine that they are facing. 1. out-numbered. Mannkind vs Sanofi (about 1:5).
That probably means larger area to cover and more time spent on the road. As Mannkind noted, before the current expansion of sales force, Mannkind sales force often have to spend several hours driving from one appointment to another.
2. less budget.
Mannkind sales force apparently have much less resources to spend. That will likely limit their access to the doctors.
3. less swag.
I can imagine it will be much easier to get an appointment with the doctors if the sales rep is from Sanofi (or for that matter, any other BP) vs from Mannkind.
4. cross selling
In addition to resources and swag, a doctor may also be prescribing other drugs of a big BP (like Sanofi) and therefore is more likely to be influenced by a sales rep from Sanofi (or for that matter, any other BP) vs from Mannkind.
5. Financial standing
Some prescribers may be worried about Mannkind's financial standing, which will not be the case if they are dealing with Sanofi.
10 thumbs up! You are so clear headed, and logical and consistent. Much appreciated!
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Post by dreamboatcruise on Sept 29, 2017 11:21:41 GMT -5
compound26... some valid points. I'd add in the challenge that more and more doctors offices have "no rep" policies. That works against a newcomer. And of course being a newcomer with one drug makes getting formulary placement an issue, so doctors know some of their patients can't get Afrezza at all and others will require the doc to deal with PA. It is interesting... Sports gives you 10 thumbs up. If I'd posted the exact same list of "challenges" hindering sales, I think I would have gotten attacked for "soft bashing".
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