|
|
Post by MnkdWASmyRtrmntPlan on Aug 14, 2018 12:25:44 GMT -5
Sum of the Parts >$975 million Mike C said in the conference call: “I believe we are undervalued when I look at the sum of the parts. We have over 800 patents as well as hard assets such as our Danbury infrastructure that alone are worth close to $200 million. We have over $2 billion of nonoperating losses on our balance sheet, which will save us over $400 million in future taxes. Additionally, the market has put a valuation on an improved Treprostinil program when you look at the IPO last week of Liquidia via a single product immolation company at $175 million. And to top it off, we have an FDA-approved asset in Afrezza, which is shaping up to likely become the next standard of care for mealtime insulin. Al Mann was a true visionary, and I believe the sum of the parts will start to reflect the true market value once we finish up the recapitalization, which I will provide some clarity on today.” Read more: mnkd.proboards.com/thread/10350/question-conference-call#ixzz5O9RFyrEN Let's figure out what this means: 800 patents $ ? Danbury infrastructure and other hard assets $200 million Non-operating losses of $2B $400 million TreT (valuation per Liquidia) $175 million Afrezza * $200 million Sum of the parts > $975 million *gross sales in 2018 = $40 million. Ratio of price to gross sales equals 5. Did he provide the clarification as promised? If so, did you catch it? "which I will provide some clarity on today." |
|
|
|
Post by MnkdWASmyRtrmntPlan on Aug 14, 2018 12:31:08 GMT -5
Yes, he did provide clarity as promised. Mike was referring to providing clarity to the recapitalization ... not the SP or Market Value.
Mike’s quote:
Al Mann was a true visionary, and I believe the sum of the parts will start to reflect the true market value once we finish up the recapitalization, which I will provide some clarity on today.”
|
|
|
|
Post by madog365 on Aug 14, 2018 13:32:17 GMT -5
The term recapitalization has been thrown around for about a year now at every conference call. The problem has been every time they recapitalize it's only enough to last them a few months BUT at the same time they also restructure and eliminate debt with deerfield. Perhaps they have been clearing the roadblocks for one big recap effort that will fund the company through the next year and eliminate these month to month small raises that keep the stock price fluctuating in no man's land. One can only hope all of this has been part of the master plan.
|
|
|
|
Post by Omega on Aug 14, 2018 14:34:43 GMT -5
The only thing that matters to me at this time is that, at the current price of $1.10, apparently the world thinks it's worth only about 170 million dollars. Only 170 million dollars if 100% of the share holders sold at the current bid/ask. Very few would sell near these prices. If a big player came in and started buying share on the open market the price would quickly move up as the cheap shares were bought up. |
|
|
|
Post by pat on Aug 14, 2018 16:57:57 GMT -5
I think the only way the short interests make money from this years long trade is if the company goes bankrupt. The costs they’ve incurred to hedge and finance the short probably outweigh the profit if they cover now at increasingly higher levels. I have no evidence to back this up.
I don’t think we’ll go out of business. But I do think they’ll be successful in driving further dilution. Mike was very vague on what the recap is going to be. Unfortunately, I think it’s another 25% of the company “given” away.
I’ll keep buying. Cuz I’m stubborn.
|
|
|
|
Post by awesomo on Aug 14, 2018 17:18:57 GMT -5
We're down 40+% in the last month and a half and the cost to borrow has gone way down, I'm pretty sure shorts have been doing just fine and have been doing just fine since Sanofi happened.
|
|
|
|
Post by pat on Aug 14, 2018 19:09:21 GMT -5
Yes. On Paper. They have to close the position.
|
|
|
|
Post by sayhey24 on Aug 14, 2018 19:11:03 GMT -5
The flaw in that argument is that the whole is not equal to the sum of the pieces. For example, Danbury would cost $200 million to replace but the fire sale value to an unrelated third-party that did not own Afrezza is in the $20-30 million range (most pharmaceutical plants have a resale value that is a small percentage of the replacement cost so this is not unusual). Similarly, the operating loss carryforwards cannot be sold or transferred due to the operation of Internal Revenue Code section 380 except in the case of a Type G reorganization which only happens in bankruptcy; that is not helpful to current shareholders. I could go on, but the sum of the pieces approach does not work because it is not possible to sell off key assets and still have the business running. Sell Danbury and the company can no longer make Afrezza (or TreT for that matter), but if you tie the hands of the party purchasing Danbury so that they have an obligation to make Afrezza then they are not going to pay $200 million for the assets. Whatever the sum of the parts is worth, don't forget that the first $270 million belongs to the creditors and not the shareholders. That puts the enterprise value at $270 + $175 = $445 million, which is probably not too far from reality as a going concern. I would say in the case of MNKD/afrezza the whole is worth significantly more than the value of the pieces. How much is a toe, or finger or foot worth compared to the life?
If you believe we are in a $20B+ market and if you believe afrezza works as well as guys like Joey are saying and if you believe the results of the 25 studies on the MNKD site then you would have to believe afrezza can go head to head with the SGLT2s and the GLP1s and metformin and beat them all. Between the SGLT2s and GLP1s annual sales is approaching $10B.
I recently had a back and forth with a "Professor" at Thomas Jefferson. Granted its not the best medical school but its currently ranked #46 in primary care. I asked him what he thought if there was a pill which would be taken at each meal and would stop the spike and mimic the PK of first phase release but would only last 2 hours? But, if you did not take a big enough dose you could take another pill 90 minutes after eating and that would allow you to stay in a very tight range 100% of the time between 8am and 8pm. The response was that would be a miracle drug but will never exist.
When I asked if he has ever heard of afrezza and those were the "miracle" results from the STAT study he told me afrezza was junk. On one hand we have the pill which is a "miracle" and on the other afrezza which is junk while both have the exact same results.
What I know is Mike has a lot of work to do to get the word out that afrezza is the "Professors" miracle drug and the "Whole" of MNKD is worth a hell of a lot more than the parts. Right now, based on results, we have a "miracle" drug with failed marketing and sales. After 2 1/2 years of being in charge of marketing MNKD's marketing effort based on the good doctor's perception of afrezza as junk is clearly a failure. Hopefully Mike has some things going on behind the curtain so he can close some deals real soon. If he does MNKD will start to reflect its true value while Dr. Kendall is working on the standard of care.
|
|
|
|
Post by gareaudan on Aug 14, 2018 19:21:02 GMT -5
The flaw in that argument is that the whole is not equal to the sum of the pieces. For example, Danbury would cost $200 million to replace but the fire sale value to an unrelated third-party that did not own Afrezza is in the $20-30 million range (most pharmaceutical plants have a resale value that is a small percentage of the replacement cost so this is not unusual). Similarly, the operating loss carryforwards cannot be sold or transferred due to the operation of Internal Revenue Code section 380 except in the case of a Type G reorganization which only happens in bankruptcy; that is not helpful to current shareholders. I could go on, but the sum of the pieces approach does not work because it is not possible to sell off key assets and still have the business running. Sell Danbury and the company can no longer make Afrezza (or TreT for that matter), but if you tie the hands of the party purchasing Danbury so that they have an obligation to make Afrezza then they are not going to pay $200 million for the assets. Whatever the sum of the parts is worth, don't forget that the first $270 million belongs to the creditors and not the shareholders. That puts the enterprise value at $270 + $175 = $445 million, which is probably not too far from reality as a going concern. I would say in the case of MNKD/afrezza the whole is worth significantly more than the value of the pieces. How much is a toe, or finger or foot worth compared to the life?
If you believe we are in a $20B+ market and if you believe afrezza works as well as guys like Joey are saying and if you believe the results of the 25 studies on the MNKD site then you would have to believe afrezza can go head to head with the SGLT2s and the GLP1s and metformin and beat them all. Between the SGLT2s and GLP1s annual sales is approaching $10B.
I recently had a back and forth with a "Professor" at Thomas Jefferson. Granted its not the best medical school but its currently ranked #46 in primary care. I asked him what he thought if there was a pill which would be taken at each meal and would stop the spike and mimic the PK of first phase release but would only last 2 hours? But, if you did not take a big enough dose you could take another pill 90 minutes after eating and that would allow you to stay in a very tight range 100% of the time between 8am and 8pm. The response was that would be a miracle drug but will never exist.
When I asked if he has ever heard of afrezza and those were the "miracle" results from the STAT study he told me afrezza was junk. On one hand we have the pill which is a "miracle" and on the other afrezza which is junk while both have the exact same results.
What I know is Mike has a lot of work to do to get the word out that afrezza is the "Professors" miracle drug and the "Whole" of MNKD is worth a hell of a lot more than the parts. Right now, based on results, we have a "miracle" drug with failed marketing and sales. After 2 1/2 years of being in charge of marketing MNKD's marketing effort based on the good doctor's perception of afrezza as junk is clearly a failure. Hopefully Mike has some things going on behind the curtain so he can close some deals real soon. If he does MNKD will start to reflect its true value while Dr. Kendall is working on the standard of care.
did the "professor" said why he think Afrezza is junk. Did he read the studies or did he just believe the Sanofi reps? |
|
|
|
Post by golfeveryday on Aug 14, 2018 19:39:19 GMT -5
The flaw in that argument is that the whole is not equal to the sum of the pieces. For example, Danbury would cost $200 million to replace but the fire sale value to an unrelated third-party that did not own Afrezza is in the $20-30 million range (most pharmaceutical plants have a resale value that is a small percentage of the replacement cost so this is not unusual). Similarly, the operating loss carryforwards cannot be sold or transferred due to the operation of Internal Revenue Code section 380 except in the case of a Type G reorganization which only happens in bankruptcy; that is not helpful to current shareholders. I could go on, but the sum of the pieces approach does not work because it is not possible to sell off key assets and still have the business running. Sell Danbury and the company can no longer make Afrezza (or TreT for that matter), but if you tie the hands of the party purchasing Danbury so that they have an obligation to make Afrezza then they are not going to pay $200 million for the assets. Whatever the sum of the parts is worth, don't forget that the first $270 million belongs to the creditors and not the shareholders. That puts the enterprise value at $270 + $175 = $445 million, which is probably not too far from reality as a going concern. I would say in the case of MNKD/afrezza the whole is worth significantly more than the value of the pieces. How much is a toe, or finger or foot worth compared to the life?
If you believe we are in a $20B+ market and if you believe afrezza works as well as guys like Joey are saying and if you believe the results of the 25 studies on the MNKD site then you would have to believe afrezza can go head to head with the SGLT2s and the GLP1s and metformin and beat them all. Between the SGLT2s and GLP1s annual sales is approaching $10B.
I recently had a back and forth with a "Professor" at Thomas Jefferson. Granted its not the best medical school but its currently ranked #46 in primary care. I asked him what he thought if there was a pill which would be taken at each meal and would stop the spike and mimic the PK of first phase release but would only last 2 hours? But, if you did not take a big enough dose you could take another pill 90 minutes after eating and that would allow you to stay in a very tight range 100% of the time between 8am and 8pm. The response was that would be a miracle drug but will never exist.
When I asked if he has ever heard of afrezza and those were the "miracle" results from the STAT study he told me afrezza was junk. On one hand we have the pill which is a "miracle" and on the other afrezza which is junk while both have the exact same results.
What I know is Mike has a lot of work to do to get the word out that afrezza is the "Professors" miracle drug and the "Whole" of MNKD is worth a hell of a lot more than the parts. Right now, based on results, we have a "miracle" drug with failed marketing and sales. After 2 1/2 years of being in charge of marketing MNKD's marketing effort based on the good doctor's perception of afrezza as junk is clearly a failure. Hopefully Mike has some things going on behind the curtain so he can close some deals real soon. If he does MNKD will start to reflect its true value while Dr. Kendall is working on the standard of care.
Prandin worked like you describe but was launched well before anyone was taking notice of PPG when Actos and Avandia were controllling the insulin resistance message. |
|
|
|
Post by sayhey24 on Aug 14, 2018 20:26:50 GMT -5
Prandin? Good Grief, while not lasting as long as glyburide it basically has the same effect of burning out the beta cells. I would be interested in seeing some CGM PPG using Prandin if you have some. As far as Actos and Avandia they both worked out great, not. How many people died from Actos during the Accord study until they cancelled that arm? Here is my favorite quote on glyburide “The most waste in type 2 diabetes is to continuously put people on metformin and sulfonylureas (glyburide, glimepiride, etc.). These drugs have no protective effect on the beta cell, and by the time you figure out what you’re doing, there are no beta cells left to save.” – Dr. Ralph DeFronzo (University of Texas Health Science Center) diatribe.org/the-diatribe-foundation-and-tcoyd-11th-annual-forum |
|
|
|
Post by golfeveryday on Aug 14, 2018 20:45:04 GMT -5
Prandin? Good Grief, while not lasting as long as glyburide it basically has the same effect of burning out the beta cells. I would be interested in seeing some CGM PPG using Prandin if you have some. As far as Actos and Avandia they both worked out great, not. How many people died from Actos during the Accord study until they cancelled that arm? Here is my favorite quote on glyburide “The most waste in type 2 diabetes is to continuously put people on metformin and sulfonylureas (glyburide, glimepiride, etc.). These drugs have no protective effect on the beta cell, and by the time you figure out what you’re doing, there are no beta cells left to save.” – Dr. Ralph DeFronzo (University of Texas Health Science Center) diatribe.org/the-diatribe-foundation-and-tcoyd-11th-annual-forum I wasn’t singing the praises of actos and avandia. |
|
|
|
Post by straightly on Aug 14, 2018 22:37:43 GMT -5
Fire Sale valuation is for Bankruptcies, which is not currently under consideration. But for the sake of argument, whether you place that Fire Sale value at a $Billion, $800, $600, or even $400M, it is still more than today’s market cap of $152M. And once the Capitalization is worked out, and the rest of the world realizes that we are a going concern, a $billion will be the basement valuation. By my quick calculation, a billion would be a little over $7 SP. And when we approach breakeven, the SP rocket will launch 🚀 Didn't you want to add debt? |
|
|
|
Post by MnkdWASmyRtrmntPlan on Aug 15, 2018 14:59:17 GMT -5
Sure, you can add the tax-write-off for the debt (I assume that's what you meant). However, my post (and this entire thread since Clement started it) is just a very high-level, big-picture, ball-park analysis (or, point of view) and far from complete - it is just pointing out another perspective, or way of looking at things.
So, if you want to "add in" the loss write-off tax advantage, you probably should also "subtract" the debt liability itself. Again, I am not trying to play Spencer Osborne here. He puts in much more details with his numbers ... however, he seems to intentionally miss, or at least "neglect", the big picture. Mike and his team are executing their market growth and financial capitalization plans very well. I can't wait to hear the upcoming details, but we may have to wait for the Quarter 3 call for that.
Another quick and crude calculation that I did estimated that at 600 scripts/week, we are at about 25% to breakeven (assuming a burn-rate of $8,000/month). Which implies that we need 2400 scripts/week as the BIG BREAKEVEN GOAL!!!
Also, if you look at Spencer's latest forecast, our projected Net Revenue will go from about $300,000/week at the beginning of 2018 to $600,000/week at the end ... so we are approximately doubling sales $ this year. Extrapolating with linear regression analysis on Spencer's model would easily show breakeven in 2 years (by end of 2020). Factoring in some of the upcoming good news and using some non-linear analysis could easily speed that timeframe up to 1-1/2 years. Accounting for ALL the expected/potential good news (like being dubbed by the ADA as the Standard of Care for Type-1 relatively soon) could put the trend more like an exponential curve and get us closer to a year. OK, I had to polish my rose-colored glasses for that one, but again, this is a big picture look from some guy (me) on the side-lines - I'm not a Mannkind financial analyst, but I'm also not Spencer. The high-level, big-picture, ball-park conclusion I would like to throw against the wall here is that we can achieve breakeven in 1 to 2 years (end of 2019 or 2020).
Now, we'll see if Spencer uses my moniker or references guys in rose-colored glasses in his next article. I don't care if he does. Actually, I would just like to inspire (or, challenge) him to put his pencil/calculator/spreadsheet to this breakeven calculation using his nice graphs. Hey Spencer, how long do you forecast it will take to reach breakeven?
|
|
