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Post by phantomfj on Jun 3, 2018 12:04:42 GMT -5
1. There is variable costs associated with packaging, shipping overseas, and at some point using more insulin than the guaranteed levels of the amphastar contract. The average per capita income in India is $1861 per tradingeconomics.com/india/gdp-per-capita . $100 per year equates to over 5% of their yearly income as a yearly recurring expense. Income alone would eliminate 50% of the bottom earning income from receiving Afrezza. India's healthcare is not a socialistic model and does not have a single payer. Why must people twist the numbers to fit their own agenda? India's population is about 1.3 billion people! If only 10% could afford Afrezza, that is 130 million, even just 1% is 13 million...............to me that is a lot of people.........
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Post by agedhippie on Jun 3, 2018 12:22:09 GMT -5
Agree we don't know the terms. However, for purposes of my post i have made two assumptions as follows: 1. We will have minimal if any additional expenses on our end in these deals since the upfront money is so little to non exstent, and; 2. The $100.00 per patient per year is a guess but is it was meant to be net to mnkd. So the the total revenue is based on a net number to mnkd no matter what the split is for purposes of my post. I am not sure $100 per year net revenue is practical. Roughly speaking the 12u x 90 pack of Afrezza is 1000u which equates to 10mL of RAA (leaving aside that Afrezza is weaker). In India that costs around $22 if you are using a pen, and $15 if you are using a syringe and vial. So you would have to be selling Afrezza for around $25 a box to be competitive, as opposed to $900 in the US. Both the Indian and US prices are retail. Working backwards and assuming a similar distribution cost (although Indian distribution costs are far higher) we will say the revenue Mannkind sees is 60% of retail. That gives $15 revenue, subtract a profit of $8 to hit the annual profit target, and we get to $7 to produce that box of Afrezza. I don't believe we are anywhere near that production cost and at a wild guess I would say it is probably an order of magnitude out. My guess would be that to hit the target we would have to sell at around retail $150 per pack.
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Post by dreamboatcruise on Jun 3, 2018 12:50:11 GMT -5
Why must people twist the numbers to fit their own agenda? India's population is about 1.3 billion people! If only 10% could afford Afrezza, that is 130 million, even just 1% is 13 million...............to me that is a lot of people......... Actually he seems to have been generous with his assessment. The median income is actually considerably lower than the average since there is growing professional class making near first world salaries that raises the average. The median is $616 per year (source: quick google). So would you really think it twisting anything to say that at least half the population wouldn't be able to afford Afrezza? In fact a quick read of en.wikipedia.org/wiki/Healthcare_in_India turns up a figure that 63% lack access to needed medications. Bottom line, however, is captured by the fact that US pharma market is over 10x what India's is despite India having much larger population. One would expect MNKDs revenue potential in India compared to its potential in US to roughly be the same ratio as the overall pharma markets in the two countries. Or maybe even more relevant would be to look at revenue for Novolog in India vs US if those figures are available.
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Post by phantomfj on Jun 3, 2018 14:35:49 GMT -5
Actually he seems to have been generous with his assessment. The median income is actually considerably lower than the average since there is growing professional class making near first world salaries that raises the average. The median is $616 per year (source: quick google). So would you really think it twisting anything to say that at least half the population wouldn't be able to afford Afrezza? In fact a quick read of en.wikipedia.org/wiki/Healthcare_in_India turns up a figure that 63% lack access to needed medications. Bottom line, however, is captured by the fact that US pharma market is over 10x what India's is despite India having much larger population. One would expect MNKDs revenue potential in India compared to its potential in US to roughly be the same ratio as the overall pharma markets in the two countries. Or maybe even more relevant would be to look at revenue for Novolog in India vs US if those figures are available. It's simply a matter of scale......look at it this way, I can place a Mercedes dealership in a city of 10,000 or a city of 1,000,000. If only the top 1% of the population can afford to buy one of my cars, where am I better to place it? It makes no difference what the "median" income is, the top 1% total number is far more in the city of 1,000,000.........
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Post by dreamboatcruise on Jun 3, 2018 14:48:12 GMT -5
Actually he seems to have been generous with his assessment. The median income is actually considerably lower than the average since there is growing professional class making near first world salaries that raises the average. The median is $616 per year (source: quick google). So would you really think it twisting anything to say that at least half the population wouldn't be able to afford Afrezza? In fact a quick read of en.wikipedia.org/wiki/Healthcare_in_India turns up a figure that 63% lack access to needed medications. Bottom line, however, is captured by the fact that US pharma market is over 10x what India's is despite India having much larger population. One would expect MNKDs revenue potential in India compared to its potential in US to roughly be the same ratio as the overall pharma markets in the two countries. Or maybe even more relevant would be to look at revenue for Novolog in India vs US if those figures are available. It's simply a matter of scale......look at it this way, I can place a Mercedes dealership in a city of 10,000 or a city of 1,000,000. If only the top 1% of the population can afford to buy one of my cars, where am I better to place it? It makes no difference what the "median" income is, the top 1% total number is far more in the city of 1,000,000......... Well, a Mercedes dealership in most US cities with 100,000 would undoubtedly be better than most Indian cities with 1,000,000. A city of 10,000 probably wouldn't support a Mercedes dealership anywhere unless it's short drive to larger population base. But not really sure what point we're driving towards. I think one could dig up prandial insulin sales figures for India if one really wanted to estimate what revenue could look like for Afrezza. Undoubtedly there is potential to make money, just not nearly as much as in US.
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Post by Deleted on Jun 3, 2018 14:58:44 GMT -5
Since it hasn't been mentioned for a while, I just thought I'd throw this out there. Could the stockpile of insulin that MNKD purchased some time ago, figure into international sales? For those new to the Board see: www.youtube.com/watch?v=8PcEHw5P71Y&t=41m17sI was at the ASM in 2017 and MNKD said they have to validate the stored insulin a couple times a year. They had to write off some insulin but it was a nominal amount. I believe they will use this insulin in the low cost international markets like India, China and Brazil. Also I'm not sure of the restrictions with Amphastar's insulin....can they use it for int'l markets?
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Post by dreamboatcruise on Jun 3, 2018 15:01:04 GMT -5
Since it hasn't been mentioned for a while, I just thought I'd throw this out there. Could the stockpile of insulin that MNKD purchased some time ago, figure into international sales? For those new to the Board see: www.youtube.com/watch?v=8PcEHw5P71Y&t=41m17sI was at the ASM in 2017 and MNKD said they have to validate the stored insulin a couple times a year. They had to write off some insulin but it was a nominal amount. I believe they will use this insulin in the low cost international markets like India, China and Brazil. Also I'm not sure of the restrictions with Amphastar's insulin....can they use it for int'l markets? There are apparently some countries where MNKD cannot use Amphastar insulin per the agreement, but these excluded countries are redacted, so investors do not know what they are.
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Post by agedhippie on Jun 3, 2018 19:56:06 GMT -5
Since it hasn't been mentioned for a while, I just thought I'd throw this out there. Could the stockpile of insulin that MNKD purchased some time ago, figure into international sales? For those new to the Board see: www.youtube.com/watch?v=8PcEHw5P71Y&t=41m17sI was at the ASM in 2017 and MNKD said they have to validate the stored insulin a couple times a year. They had to write off some insulin but it was a nominal amount. I believe they will use this insulin in the low cost international markets like India, China and Brazil. Also I'm not sure of the restrictions with Amphastar's insulin....can they use it for int'l markets? This has been discussed before, they cannot do that without creating major problems for their US production. The FDA have to approve ingredients as well as the product so if they use unapproved insulin they will contaminate the production line. I think there are some reasons to do with the insulin itself as well.
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Post by mango on Jun 3, 2018 20:11:46 GMT -5
MannKind sold $1.7 million of surplus bulk Pfizer insulin to a third party in Q1 2017.
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Post by dreamboatcruise on Jun 3, 2018 22:52:54 GMT -5
I was at the ASM in 2017 and MNKD said they have to validate the stored insulin a couple times a year. They had to write off some insulin but it was a nominal amount. I believe they will use this insulin in the low cost international markets like India, China and Brazil. Also I'm not sure of the restrictions with Amphastar's insulin....can they use it for int'l markets? This has been discussed before, they cannot do that without creating major problems for their US production. The FDA have to approve ingredients as well as the product so if they use unapproved insulin they will contaminate the production line. I think there are some reasons to do with the insulin itself as well. Hate to question, but really using a different insulin you think contaminates the production line? or you've seen FDA taking that position?
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Post by agedhippie on Jun 4, 2018 7:19:51 GMT -5
This has been discussed before, they cannot do that without creating major problems for their US production. The FDA have to approve ingredients as well as the product so if they use unapproved insulin they will contaminate the production line. I think there are some reasons to do with the insulin itself as well. Hate to question, but really using a different insulin you think contaminates the production line? or you've seen FDA taking that position? The person who could really answer this is matt as he has the experience with the FDA, but I believe that the FDA approves the sources of the ingredients in a drug. If toy run an unapproved ingredient through the production line you would leave traces of the drug in the line. That's as I understand it.
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Post by casualinvestor on Jun 4, 2018 9:03:52 GMT -5
Much like in the US, in India and other countries Afrezza will go to the privileged first, then work it's way out to others as acceptance is gained. The median/average income isn't a limit we should be worried about. Afrezza in India might only be affordable for the top 20% to start with. But...
Quote from a June 2016 article. My search puts a crore at about $150,000. So thats $75M per year in all of India for the most popular insulin (it's a pen). That's less than the weekly sales of Novalog in the US. MNKD will need to shoot for more than 1% of the market in India.
(Disclaimer: pulled all this from some quick googling)
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Post by Deleted on Jun 4, 2018 10:34:13 GMT -5
Hate to question, but really using a different insulin you think contaminates the production line? or you've seen FDA taking that position? The person who could really answer this is matt as he has the experience with the FDA, but I believe that the FDA approves the sources of the ingredients in a drug. If toy run an unapproved ingredient through the production line you would leave traces of the drug in the line. That's as I understand it. I'm pretty sure MNKD will follow proper protocol on how to use the insulin that is in storage. And I'm pretty sure the FDA does not inspect every shipment of insulin coming into MNKD before they process it via TS. I remember hearing from Matt they have total control over their insulin. It's in their best interest to do whats best or else face the consequences. FDA just sets the guidelines but its up to the company.
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Post by agedhippie on Jun 4, 2018 11:38:55 GMT -5
The person who could really answer this is matt as he has the experience with the FDA, but I believe that the FDA approves the sources of the ingredients in a drug. If toy run an unapproved ingredient through the production line you would leave traces of the drug in the line. That's as I understand it. I'm pretty sure MNKD will follow proper protocol on how to use the insulin that is in storage. And I'm pretty sure the FDA does not inspect every shipment of insulin coming into MNKD before they process it via TS. I remember hearing from Matt they have total control over their insulin. It's in their best interest to do whats best or else face the consequences. FDA just sets the guidelines but its up to the company. I have no doubt that Mannkind will follow proper protocol on how to use the insulin in storage. I am also sure that the FDA does not inspect every shipment before it is convert into Afrezza, but rather the FDA will audit the paperwork for all shipments periodically to ensure compliance. It is possible to swap ingredients without notifying the FDA, however when they audit and find that you did that unpleasantness will ensue. By my reading it's not a guideline. Section 506A of the Federal Food, Drug, and Cosmetic Act, says that if a change has the potential to alter the identity, strength, quality, purity, or potency of the drug product it must be reported and approved. Your NDA is conditioned on multiple parameters including manufacturing location and process, and sources of the raw materials since they comprise the approved drug.
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Post by matt on Jun 4, 2018 12:25:31 GMT -5
A drug that is illegal to sell in the US is also illegal to export, period full stop. There are no exceptions to this rule even if the drug would meet regulatory requirements at its intended destination. If MNKD had segregated production lines they could use insulin raw material from two different suppliers (so long as both were approved), but if the company wanted to use insulin from two different suppliers on the same production line they would either need to shut down the line for cleaning between batches to avoid cross-contamination, or else MNKD would have to prove that the two insulins were identical in every way. Proving identity for a large protein produced by different methods by different companies is probably an impossible task. As for India and China, stop thinking of those as markets. They are not markets, they are countries on a map that happen to be occupied by a lot of people, most of whom are still poor by world standards. There is a market for the upper class, which may account for 10% of the population, that is covered by private medical insurance and which has considerable disposable income. The opportunity is to sell to to the 10% because the other 90% struggle to buy food and can't afford much medicine at all. The other thing to keep in mind is that most countries in the world are used to paying FAR LESS than US prices for drugs. Here are a few examples of current approved government prices for rapid acting human insulins: Germany, 100U/ML, 30 ML vials (3,000 units) Euro 86.96 = US$101.67 United Kingdom, 100U/ML, 10ML vials (1,000 units) Pounds 14.08 = US$18.75 New Zealand, 100U/ML, 10ML vials (1,000 units) NZ$ 30.03 = US$21.11 India (State of Tamil Nadu), 40U/ML, 10 ML vials (400 units) INR 51.20 = US$0.76 Oman, 100U/ML, 5X3ML Cartridges (1500 units), OMR 19.84 = $23.19 Canada (Ontario), 100U/ML, 10ML vials (1,000) CA$29.64 = US$22.91You can work out the cost per unit for yourself to make the comparisons apples to apples, but consider that the 4U / 90 cartridge pack of Afrezza (360 total units) retails for about $300 in the US. Government health authorities used to paying far less for RAI are simply not going to pay for Afrezza. If you can't make money selling to the German government, then it is nearly hopeless trying to sell to any other government in the world other than the US. There is a reason US health insurance costs are so high. Which is why I say that shareholders need to quit looking at raw population numbers and maps of the world and start looking at income distributions and the number of actually wealthy consumers in the international markets. That will make the potential readily visible since it is only the few that do not rely on government healthcare that constitute a viable opportunity. Here is a good list of links to official price lists at various government ministries around the world maintained by the World Health Organization, the numbers may surprise you: www.who.int/medicines/areas/access/sources_prices/national_medicine_price_sources.pdf.
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