|
|
Post by seanismorris on Jul 14, 2019 12:39:29 GMT -5
Michael E. Castagna (hired)
March 14th, 2016 (Chief Commercial Officer)
May 25th, 2017 (CEO)
The question is not, does he deserve his pay...
The question is how much rope?
I haven’t been impressed with the commercialization of Afrezza, he’s had 3 years + 5 months (as of today). You can make all the excuses you want, that’s a lot of time to right the ship.
You can argue through 2018 that there was progress (slowly increasing scripts).
What you can’t argue, is that 2019 has been a dumpster fire. Marketing efforts bombed! And, Mike looks completely and utterly out of ideas for Afrezza.
So, how much rope?
|
|
|
|
Post by seanismorris on Jul 14, 2019 12:45:10 GMT -5
Refresher...note the date
Interview with Michael E. Castagna (November 19, 2017)
Speights: You've mentioned before about the recent label change for Afrezza being a pivotal moment for the company. When do you think we'll really start to see the impact of that label change on Afrezza sales?
Castagna: In general, changes take two to six months, depending on what type of change you're making, to show impact. For example, with a new rep in a new territory, you typically don't see impact until the first four to six months. The first three to four months they're learning to meet the customers. Some reps are faster. I hate to say averages, but in general it takes about two months to start to see impact of a sales force, of what they're doing. Now, we turned on TV, so that might accelerate some demand in local markets.
Speights: You mentioned the TV spots. How do you respond to people who say, "Hey, why is MannKind spending money on TV commercials?" Is that a better approach than hiring more sales reps to target more physicians?
Castagna: Well, the fastest way you can scale up is TV. We've grown the sales force for a little over a year now. If I wanted to scale up the sales force, it would take about three to four months to remap the territories, hire the people, get them trained, and get them out there. So you can see a four-month lag, a three-month lag, from just the decision to the hiring to the implementation, and then another two months in terms of impact starting to happen. So we sat there and looked and said, "It doesn't make sense for us to wait for three, four, five, or six months. When you brought this cash in, you should be putting it to use." We know the drug is very promotion responsive. We know consumers aren't aware of it. They want to be aware of it, and they want to take the drug.
This is the right strategy. This is a very consumer-friendly drug, and it will be very consumer-driven in our mind.
Speights: How long do you think it will take for you to know if the TV campaign is really working effectively?
Castagna: I think in terms of turning into prescriptions, it will take about two months to start to see a meaningful lift. We'll measure every week, but in general, you think about a patient has a visit six to eight weeks out, maybe 12 weeks out, so you've got to see the TV [commercial] probably three to five times, and then they're reminded for the next doctor's appointment. We can tell you in the first week of the TV ad, Google search AdWords are up, website hits are up fourfold, copay downloads are up. So we can tell you all the early metrics that would indicate it's working are up, but the real metric to me is going to be prescriptions and people taking the drug. And that will just take some time, but the early metrics are positive so far.
.......
With the financing we got, it gave us extra breathing room to turn on TV and make some bigger decisions as we go forward. But at this point, it's purely an investment of scale-up discussion. This isn't about will the drug succeed or not, will the company be in bankruptcy or not. I don't see those things happening at this point. The drug will succeed. The company is not heading for bankruptcy. So it's really a matter of are we going to be $50 million, $100 million, or $500 million. And I think those trends over the next six months will really start to show people what can happen.
|
|
|
|
Post by sportsrancho on Jul 14, 2019 12:55:12 GMT -5
The next question is..is this Mike’s fault? could anybody have done it better, any Big Pharma, I doubt it. People are getting on it and getting off it just like Charles Lacey said, they take 4 unit and it doesn’t work, they don’t understand how to use it. The Endo’s are not educated and un-informed and if they do understand it they don’t want to take the time. So the drop rate is high. Mike says this will just take time but do we have that time...
|
|
|
|
Post by seanismorris on Jul 14, 2019 13:44:10 GMT -5
The next question is..is this Mike’s fault? could anybody have done it better, any Big Pharma, I doubt it. People are getting on it and getting off it just like Charles Lacey said, they take 4 unit and it doesn’t work, they don’t understand how to use it. The Endo’s are not educated and un-informed and if they do understand it they don’t want to take the time. So the drop rate is high. Mike says this will just take time but do we have that time... The marketing (or lack there of, on the internet) is 100% Mike’s fault. The sales teams job is to educate... Who do you blame but the guy that was hired as commercialization officer? It’s not like you can argue Mike didn’t have enough authority, now that he’s CEO. The sales team is Mike’s baby... they even got a trip to Hawaii. |
|
bac
Lab Rat
Posts: 37
|
Post by bac on Jul 14, 2019 14:09:10 GMT -5
In response to my reply yesterday,
radgray68 said “Failed to deliver? Numbers are up steady on all key metrics. Haven't gone parabolic yet but the base is building. You are correct, it's been 2 & 1/2 years. But it's going to take another 2 & 1/2. That's just a fact.
-------------------------------------------------------------------------------------------
I beg to differ regarding “take another 2 & & 1/2. That's just a fact.”
The concern I am responding to is that continuing with the current scripts increase rate (about 5.3 additional scripts per week), it will take much more that 2.5 years for Afrezza profits to cover the burn rate. How much longer?
In my thread titled “When Will MNKD Breakeven?" I evaluate 5 script increase scenarios. See March 1, 2019 entry, second table. As you can see from the top line results, if we do nothing and stay with linear scripts increase as in 2018, Afrezza profit does not equal the burn rate until February 2025! That’s what we are facing if scripts don’t meaningfully increase.
Inspection of this line in the table is shown “Script Cost C(w) at Cross”. For this case (projecting out 5+ years) the fab cost is projected to be only $27 per script. If this turns out to be too low, the breakeven date gets pushed out further.
It is way past time to ramp Afrezza scripts. MC has had years to influence scripts and he has FAILED TO DELIVER!
|
|
|
|
Post by hellodolly on Jul 15, 2019 6:30:15 GMT -5
In response to my reply yesterday, radgray68 said “Failed to deliver? Numbers are up steady on all key metrics. Haven't gone parabolic yet but the base is building. You are correct, it's been 2 & 1/2 years. But it's going to take another 2 & 1/2. That's just a fact. ------------------------------------------------------------------------------------------- I beg to differ regarding “take another 2 & & 1/2. That's just a fact.” The concern I am responding to is that continuing with the current scripts increase rate (about 5.3 additional scripts per week), it will take much more that 2.5 years for Afrezza profits to cover the burn rate. How much longer? In my thread titled “ When Will MNKD Breakeven?" I evaluate 5 script increase scenarios. See March 1, 2019 entry, second table. As you can see from the top line results, if we do nothing and stay with linear scripts increase as in 2018, Afrezza profit does not equal the burn rate until February 2025! That’s what we are facing if scripts don’t meaningfully increase. Inspection of this line in the table is shown “Script Cost C(w) at Cross”. For this case (projecting out 5+ years) the fab cost is projected to be only $27 per script. If this turns out to be too low, the breakeven date gets pushed out further. It is way past time to ramp Afrezza scripts. MC has had years to influence scripts and he has FAILED TO DELIVER! Thanks Bill. |
|
|
|
Post by agedhippie on Jul 15, 2019 8:09:57 GMT -5
Realistically the answer to does he deserve his pay doesn't matter. Only the BOD can fire him (there is no way this gets done as a shareholder revolt - the trackers hold to many shares) and the BOD is utterly ineffectual. Al did not want a strong BOD because it could have constrained him so he chose accordingly. For me the bigger question is whether the BOD deserves their pay and all I can say is that if they do they hide it well.
Mike is a long way out of his depth and that is quite clear. The board should fix that by either providing better support for Mike such as a strong COO, or by replacing him.
|
|
|
|
Post by longandstrong on Jul 15, 2019 15:47:47 GMT -5
Very well said (printed) and exactly how I feel. GLTAL
|
|
|
|
Post by falconquest on Jul 15, 2019 16:52:03 GMT -5
The measure of a CEO of a publicly traded company is the return provided to the shareholders. You can argue details all you want but that's the bottom line. Paying down debt, making deals that may bear fruit at some future date, dilution financing are all means to an end and not how CEO's are rewarded. The return to shareholders is what it's all about, bottom line end, of discussion. You need only check the share price to understand how Mike has performed.
|
|
|
|
Post by mytakeonit on Jul 15, 2019 18:06:04 GMT -5
Return to shareholders was not allowing MNKD to go bankrupt. Setting up a partnership with UTHR to put out Afrezza and other molecules. ETC. You all know the story, don't let these shorts twist your mind. Wait for the quarterly CC.
But, that's mytakeonit
|
|
|
|
Post by sportsrancho on Jul 15, 2019 18:18:57 GMT -5
Gary Lutin, a former investment banker, said it was crucial for investors to assess whether their companies were generating more wealth for management than for shareholders. As overseer of the Shareholder Forum, an independent creator of programs to provide information investors need to make astute decisions, he has convened a workshop to focus investor attention on basic measures of corporate performance that generate long-term shareholder wealth.
“Both investors and corporate directors need to measure performance based on the profits a company generates from its competitively successful production of goods and services,” Mr. Lutin said. “That’s the only real foundation there is for investment value, and for national prosperity.”
|
|
|
|
Post by mnkdfann on Jul 15, 2019 18:45:36 GMT -5
Gary Lutin, a former investment banker, said it was crucial for investors to assess whether their companies were generating more wealth for management than for shareholders. As overseer of the Shareholder Forum, an independent creator of programs to provide information investors need to make astute decisions, he has convened a workshop to focus investor attention on basic measures of corporate performance that generate long-term shareholder wealth. “Both investors and corporate directors need to measure performance based on the profits a company generates from its competitively successful production of goods and services,” Mr. Lutin said. “That’s the only real foundation there is for investment value, and for national prosperity.” That's a good article. "How to Gauge a C.E.O.’s Value? Hint: It’s Not the Share Price" www.nytimes.com/2016/06/19/business/how-to-gauge-a-ceos-value-hint-its-not-the-share-price.html"Everybody knows that chief executives receive bounteous pay as a matter of course ... Less discernible, though, is who actually earned their pay the most by increasing the value of the companies they run by a commensurate amount. Such performers are not to be confused with executives who work to propel their company’s stock price. This pursuit can have fleeting benefits and disastrous consequences, as Valeant International, the beleaguered drug company, has shown." "Companies love total shareholder return in part because it is easy to calculate. But a company’s stock can rocket even when its operations are being run into the ground. So basing pay on total shareholder return can encourage an executive to manage more for a company’s share price than for its overall health." The takeaway there is that share price is NOT a good measure of a CEO's value. |
|
|
|
Post by falconquest on Jul 15, 2019 18:48:09 GMT -5
Gary Lutin, a former investment banker, said it was crucial for investors to assess whether their companies were generating more wealth for management than for shareholders. As overseer of the Shareholder Forum, an independent creator of programs to provide information investors need to make astute decisions, he has convened a workshop to focus investor attention on basic measures of corporate performance that generate long-term shareholder wealth. “Both investors and corporate directors need to measure performance based on the profits a company generates from its competitively successful production of goods and services,” Mr. Lutin said. “That’s the only real foundation there is for investment value, and for national prosperity.” As a commissioned salesperson, I need to generate revenue for the company. Because of that, I am duly compensated. Absent of that.....I'm gone. As it should be for a CEO. Their job is to set strategic vision for the future of the company that leads to greater profitability and shareholder value. I have no remorse for Mike. If you aspire to run with the big dogs then........ |
|
|
|
Post by wgreystone on Jul 15, 2019 19:05:56 GMT -5
Return to shareholders was not allowing MNKD to go bankrupt. Setting up a partnership with UTHR to put out Afrezza and other molecules. ETC. You all know the story, don't let these shorts twist your mind. Wait for the quarterly CC. But, that's mytakeonit It's very rare for small biotech to go bankrupt. I have a failed investment. The company failed Phase 3 trial due to poor trial design about 5 years ago. After that, the company started a new P3 trial. It's expected to complete in 7 years. It has very little cash on hand, but each year it could sell a bunch shares (each round at lower price) and then do a reverse split periodically. It's still alive, though my original good amount of shares are now only in a few hundreds. You can't claim MC saved this company because it didn't go to bankrupt. Any CEO can sell a lot of shares in this market to pay down the debt. |
|
|
|
Post by falconquest on Jul 15, 2019 20:44:57 GMT -5
Gary Lutin, a former investment banker, said it was crucial for investors to assess whether their companies were generating more wealth for management than for shareholders. As overseer of the Shareholder Forum, an independent creator of programs to provide information investors need to make astute decisions, he has convened a workshop to focus investor attention on basic measures of corporate performance that generate long-term shareholder wealth. “Both investors and corporate directors need to measure performance based on the profits a company generates from its competitively successful production of goods and services,” Mr. Lutin said. “That’s the only real foundation there is for investment value, and for national prosperity.” That's a good article. "How to Gauge a C.E.O.’s Value? Hint: It’s Not the Share Price" www.nytimes.com/2016/06/19/business/how-to-gauge-a-ceos-value-hint-its-not-the-share-price.html"Everybody knows that chief executives receive bounteous pay as a matter of course ... Less discernible, though, is who actually earned their pay the most by increasing the value of the companies they run by a commensurate amount. Such performers are not to be confused with executives who work to propel their company’s stock price. This pursuit can have fleeting benefits and disastrous consequences, as Valeant International, the beleaguered drug company, has shown." "Companies love total shareholder return in part because it is easy to calculate. But a company’s stock can rocket even when its operations are being run into the ground. So basing pay on total shareholder return can encourage an executive to manage more for a company’s share price than for its overall health." The takeaway there is that share price is NOT a good measure of a CEO's value. Perhaps you didn't read far enough? Here is what else it says.....
A better way to measure whether a C.E.O. has created value at a company is to look at its return on capital over a period of years. This reveals how effectively a company is using its own money to generate profit in its operations.
When you compare these returns to an executive’s compensation, you see where pay is justified and where it isn’t.
Ok, so let's take a look at Mannkind's return on invested capital (ROIC)
So what is Mike worth?
|
|
