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Post by ezrasfund on Aug 11, 2014 22:06:38 GMT -5
Remember that everything is just speculation until the sales and profits (we hope) start rolling in. DNDN is a good example of plenty of speculation and not much in the way of sales. So is Exubera. Everyone imagines buying DNDN at $2 and selling at $50 and making a pile of money regardless of whether Provenge ever sells. The market priced DNDN incorrectly for a long time, and plenty of traders made money (including me). I think a few lost some money on DNDN too.
Is MNKD worth more than $4 Billion today? Who knows? I am betting that Afrezza will be a blockbuster drug, and MNKD will be worth a lot more than $4 Billion in a few years, based on sales, profits and positive cash flow. It will take some very good execution on the part of the sales and marketing team. Sanofi is the best company for the job.
Meanwhile the shorts can keep "averaging up" their selling price, and some will make money, in the same way some longs made money in spite of the Provenge belly flop. My opinion is that the biggest risks are behind us. I am putting aside the bulk of my shares for the long term, including converting some deep in the money calls. And, yes, I'm lending those shares out for a bit of extra income, as I don't think MNKD will need to raise any capital, so share price in the near term is not a concern. If the shorts want to buy more rope, I'm selling it to them.
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Post by notamnkdmillionaire on Aug 11, 2014 22:25:09 GMT -5
Remember that everything is just speculation until the sales and profits (we hope) start rolling in. DNDN is a good example of plenty of speculation and not much in the way of sales. So is Exubera. Everyone imagines buying DNDN at $2 and selling at $50 and making a pile of money regardless of whether Provenge ever sells. The market priced DNDN incorrectly for a long time, and plenty of traders made money (including me). I think a few lost some money on DNDN too. Is MNKD worth more than $4 Billion today? Who knows? I am betting that Afrezza will be a blockbuster drug, and MNKD will be worth a lot more than $4 Billion in a few years, based on sales, profits and positive cash flow. It will take some very good execution on the part of the sales and marketing team. Sanofi is the best company for the job. Meanwhile the shorts can keep "averaging up" their selling price, and some will make money, in the same way some longs made money in spite of the Provenge belly flop. My opinion is that the biggest risks are behind us. I am putting aside the bulk of my shares for the long term, including converting some deep in the money calls. And, yes, I'm lending those shares out for a bit of extra income, as I don't think MNKD will need to raise any capital, so share price in the near term is not a concern. If the shorts want to buy more rope, I'm selling it to them. Very true. But two distinct things that I know you are aware of but I want to point out. Unfortunately, MNKD never had the love affair, at least not yet, with the street that pushed the stock to a lofty pps AND DNDN never had the backing of one of the most diligent and successful BPs in the world. Sanofi is throwing their entire weight behind Afrezza. They obviously see it as something that can change the face of diabetes care. At least that's how I interpret the deal. |
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Post by ezrasfund on Aug 11, 2014 23:21:19 GMT -5
The idea of modeling it like a licensing deal makes sense to me. Sanofi mentioned Japan this morning as a possible market after the US, as they are needle phobic (who knew?). Are Hakan and Co. really going to set up a factory and insulin supply for Japan? I don't think so. Sanofi must have the expertise on hand to do that in a blink. But as MSFT and others have shown licensing, not selling, can lead to some bigger profits down the road.
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Post by typeonedad on Aug 12, 2014 1:07:16 GMT -5
It is pretty clear that the marketplace still considers Afrezza just one more product among a bevy of choices. No different than Exubera, no different than existing fast acting analogs. We all know otherwise. Even with the exhaustive studies and input from diabetics like Afrezzauser, there is still a lot of mystery surrounding just how much Afrezza will improve the lives of those with type 1. I still believe it's going to have dramatic impact. Type ones who regularly have post prandial blood glucose levels above 200 (or 300) like my son are going to find themselves quickly controlling excursions, bringing down BG's in less than a half hour and without residual insulin on board, something which complicates the rest of a type 1's day or evening.
I believe in Afrezza for this one function alone. Add to that a significant reduction in hypo's (dead in bed) and you've got a tool that a large number of 1's will embrace. I don't think these benefits are easily understood (or truly believed) until they can be experienced. The proof is coming with each user that praises the benefits after having their own firsthand aha!.
But to be a blockbuster, type 2's will need to see the benefits as well. I understand the discreteness, portability, lack of needles and of course improved management. But type 2's seem to be a crowd often in denial about treatment (this will no doubt get me trouble). I think it's much harder to judge in what kind of numbers type 2's will embrace Afrezza.
Afrezza may end up being a revolutionary product and just a good investment considering the risk involved. But I still like the prospects for both a great drug and a great stock. Given time, widespread adoption by type 2's and other drugs or licensing through the technosphere platform sound like a very solid 3 legged stool to me. As a poster said earlier in this thread, slow money. I can live with that.
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Post by saeedabroad on Aug 12, 2014 2:00:22 GMT -5
Hi all, my first post here, so be gentle... Here's my 2 cents. During the second CC, MNKD mgmt mentioned that one of the MOST ASKED QUESTIONS (from analysts following the 0830 call) related to future sales potential under the partnership. That's also WHY the analysts were very interested to learn about Sanofi's seriousness or intent to push Afrezza through a better understanding of marketing spend, etc. Unfortunately, MNKD mgmt wasn't able to answer this (not surprisingly), nor where they able to give a ballpark estimate on Sanofi's marketing & sales spend (which in the absence of actual sales, could have been used as a proxy to future sales estimates). As a result, neither Mannkind nor Sanofi were able to provide credible data on which the analysts could formulate "forward guidance" on future sales. Without this, analysts are possibly left thinking: OK great global partnership in the making here, "congrats to the team" - but we'll kinda wait until either mgmt is more forthcoming with marketing spend / sales guidance or see actual sales Q1-Q2 next year. So as far as the future is concerned, analysts could take a similar "wait and see" position as they were doing prior to the partnership announcement. Analysts are very important to early stage growth companies (including biotech). As an analogy, companies that have milked the analysts very well (aka Tesla and others), have done so on the back of dangling carrots (Giga factory is a 5-10 yr project!). Its what analysts base their recommendations on, when their bosses and fund managers ask: what the hell were you thinking? Had we had any of the above, we may have seen more buying activity AH. On a separate note, I noticed Pierre mentioned "focus first on the US market". He or Al's team only needed to expand on that a little more, with amazing numbers/potential and brief details of execution / timeframes, and many people would have felt more comfortable. I understand confidentiality etc, but I can't imagine a competitor getting in quickly with an inhalable insulin product as a result of any revelation. OK, I'm done. I'm long MNKD, just hoped for more meat in the 2 CCs. Good luck all  |
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Post by Deleted on Aug 16, 2014 10:54:15 GMT -5
That question has flown through my mind too. Anyone think there is any chance Sanofi is not genuine? MannKind surely negotiated strong commercialization obligations into the deal in order to protect itself from a lethargic partner. However, the best protection exists in the choice of partner. It's been well established that SNY is one of the best choices in terms of the symbiosis that exists with respect to its existing product line. Afrezza compliments and fits into Sanofi's existing line. Accordingly, it is in Sanofi's interest to sell Afrezza rather than shelve it. or anybody else The following was written by priceiskingno on OPC's board: "Swing, your point regarding SNY's commitment would be one of my bigger concerns if I were long. SNY's U300 will be SNY's big push next year. The NDA has been accepted by the FDA and will likely be approved by the time Lantus goes off patent next year. From all indications, SNY expects U300 to replace the $7.5 billion in sales/yr Lantus was providing. SNY will do nothing nothing to upset this apple cart. All of U300's trials were done using RAAs. The endos are familiar with Lantus's use with Humalog/Novolog. SNY will try to maintain this relationship with U300. If Afrezza's titration learning curve, lung function tests, video / coaching / education starts to become a distraction to SNY's U300 business, it will quickly take a back seat and be sandbagged. But what the $150 million investment in MNKD does give SNY is another reason to get into the "inner sanctum" of the physician office . . . , which you correctly point out is not an easy thing to do. Any add'l reason to be there is a plus. Once in, Afrezza can be discussed and quickly dismissed if need be. It has already paid for itself by opening the door to sell U300. $150 million is a small price to pay to help maintain a $7.5 billion basal empire. In other words, SNY doesn't need to be committed nor motivated to sell one single blister pack of Afrezza to pay off it's $150 million investment a hundred times over. Afrezza's novelty and buzz factor will pay for itself simply by giving the reps one more reason to get into the door." Your Thoughts? |
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Post by jpg on Aug 16, 2014 13:21:45 GMT -5
MannKind surely negotiated strong commercialization obligations into the deal in order to protect itself from a lethargic partner. However, the best protection exists in the choice of partner. It's been well established that SNY is one of the best choices in terms of the symbiosis that exists with respect to its existing product line. Afrezza compliments and fits into Sanofi's existing line. Accordingly, it is in Sanofi's interest to sell Afrezza rather than shelve it. or anybody else The following was written by priceiskingno on OPC's board: "Swing, your point regarding SNY's commitment would be one of my bigger concerns if I were long. SNY's U300 will be SNY's big push next year. The NDA has been accepted by the FDA and will likely be approved by the time Lantus goes off patent next year. From all indications, SNY expects U300 to replace the $7.5 billion in sales/yr Lantus was providing. SNY will do nothing nothing to upset this apple cart. All of U300's trials were done using RAAs. The endos are familiar with Lantus's use with Humalog/Novolog. SNY will try to maintain this relationship with U300. If Afrezza's titration learning curve, lung function tests, video / coaching / education starts to become a distraction to SNY's U300 business, it will quickly take a back seat and be sandbagged. But what the $150 million investment in MNKD does give SNY is another reason to get into the "inner sanctum" of the physician office . . . , which you correctly point out is not an easy thing to do. Any add'l reason to be there is a plus. Once in, Afrezza can be discussed and quickly dismissed if need be. It has already paid for itself by opening the door to sell U300. $150 million is a small price to pay to help maintain a $7.5 billion basal empire. In other words, SNY doesn't need to be committed nor motivated to sell one single blister pack of Afrezza to pay off it's $150 million investment a hundred times over. Afrezza's novelty and buzz factor will pay for itself simply by giving the reps one more reason to get into the door." Your Thoughts? I guess I qualify for anyone else... First of all who ever wrote this is disregarding the very significant financial commitments/ obligations Sanofi has taken on when signing this deal or they are, for whatever reason, selectively acknowledging only the money Sanofi is directly giving Mannkind upfront in 2014. Milestones, phase 4 studies, fillings in other countries etc are conviniently disregarded. Basically the logical inputs to the statement are flawed. Secondly I agree there is always a risk that our partner could drag their feet on this. Iit could therefor have made sense to get one regional BP for the US, one for Europe, one for Japan, one for Asia etc. I, unlike many if not most on OPCs board, trust Mann (and his upper management as long as Mann is alive) and that he has obviously thought of this dilemma (which Mannkind has mentioned it in the past) but prefered to go with one global partner. this comes down to trust in management. Investing in a company when you don't trust management is hard on the nerves. I never understand those who do that. I have sold many promising companies because I lost faith in management. Most of the times I have been right. A few time management has been much wiser and more patient then I and proved me wrong. I suspect many of the Mann bashers will be once again proven wrong and Sanofi will prove to be a remarkable choice. They were by far my favorite choice after Novartis. The financial split of profits is another wise compromise by Mann. Accepting a 35-65% split is a powerful incentive for Sanofi not to drag it's feet. 35% of a huge pie is a lot better then 50 or 100% of a small pie in 10 years. As to Sanofi committing hundreds of millions just to get into an MDs office to sell another drug. That doesn't sound like a wise investment if that is part of the master plan... Nervous investors looking at share price tanking come up with 'unusual ideas' when investing in areas they don't know much about maybe? JPG |
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Post by dreamboatcruise on Aug 16, 2014 14:27:04 GMT -5
_@savzak or anybody else The following was written by priceiskingno on OPC's board: "Swing, your point regarding SNY's commitment would be one of my bigger concerns if I were long. SNY's U300 will be SNY's big push next year. The NDA has been accepted by the FDA and will likely be approved by the time Lantus goes off patent next year. From all indications, SNY expects U300 to replace the $7.5 billion in sales/yr Lantus was providing. SNY will do nothing nothing to upset this apple cart. All of U300's trials were done using RAAs. The endos are familiar with Lantus's use with Humalog/Novolog. SNY will try to maintain this relationship with U300. If Afrezza's titration learning curve, lung function tests, video / coaching / education starts to become a distraction to SNY's U300 business, it will quickly take a back seat and be sandbagged. But what the $150 million investment in MNKD does give SNY is another reason to get into the "inner sanctum" of the physician office . . . , which you correctly point out is not an easy thing to do. Any add'l reason to be there is a plus. Once in, Afrezza can be discussed and quickly dismissed if need be. It has already paid for itself by opening the door to sell U300. $150 million is a small price to pay to help maintain a $7.5 billion basal empire. In other words, SNY doesn't need to be committed nor motivated to sell one single blister pack of Afrezza to pay off it's $150 million investment a hundred times over. Afrezza's novelty and buzz factor will pay for itself simply by giving the reps one more reason to get into the door." Your Thoughts? I think that is a plausible if not likely scenario. I think it unlikely because it is basically a concern that was well known and undoubtedly a significant focus of management while evaluating potential partnerships. Mannkind had the option of selecting a partner without a franchise diabetes drug to protect. I would think it highly unlikely that they would have gotten into a partnership with Sanofi if the agreement's details don't provide a high degree of assurance that Sanofi is going to be fully behind Afrezza. Perhaps this question will be answered when we see the deal less than three months from now. As stated I don't share the concern that Al and company would allow the scenario you've presented. However, I do wonder whether Sanofi will push for what could be a game changer for Afrezza... that convenient, patient friendly, ultra-rapid acting mealtime insulin may be clinically superior as a first line treatment for diabetes rather than daily pills or long acting insulin. Off hand, one would guess Sanofi would want to protect Lantus franchise by not pushing for this sea change in diabetes treatment. However... perhaps... maybe... a 65% cut of Afrezza profits gives them enough of an incentive that they will push for this change even if in the long run it comes at the expense of Lantus (and follow on drugs) sales. I'm not counting on that happening quickly, but to me I'd give it a higher probability compared to Sanofi trying to sandbag Afrezza. Sanofi got a good deal in this... I think they we'll at a minimum push this as strongly as possible against rapid acting pens. If we see Sanofi doing new clinical trials comparing Afrezza as a first line treatment for type 2s... wow! |
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Post by mannmade on Aug 16, 2014 14:45:18 GMT -5
I also take a respectful disagreement to the above and think Sanofi is a great partner with plenty of incentive to sell Afrezza as follows:
1.) No need to use Afrezza to get in the door as most sales reps know their docs very well and don't need a gimmick to make an appt
2.) U300/Replacement as discussed on conf call by Sanofi EVP seems to be an improved version or superior insulin than Lantus, as noted in the conf call, may last longer, keep Blood sugar more stable, may only require one dose per day and may also have less hypo events (so why confuse this conversation with Afrezza)
3.) But the new insulin is also a risk that it may not replace Lantus revenue and as I posted in another post previously, even if it does, where does Sanofi's overall growth come from? The logical answer would be the additional sales revenue provided by Afrezza.
4.) Financially I agree if the 150m were just slotted as a marketing cost for U300 it would be a drop in the bucket, but aside from cash payments to mnkd, Sanofi is taking on all the marketing, sales related and further testing costs (post approval studies) which is 100's of millions more and let's not forget the value of its staff's time and effort that will be diverted to Afrezza, which would make no sense if not serious about the product.
5.) If Afrezza is as good a product as the Adcom testimonies indicated (and personally, one big reason I am such a believer in the science is from such testimony) then Sanofi has everything to gain by pushing Afrezza hard. With the success of both U300 and Afrezza you will have a standard of care for diabetics and establish Sanofi as the world's undisputed leader in diabetes care. Add in there relationship with Medtronics and I don't think anyone can touch them in this space for years...
All drug companies face the cyclical timing of drugs going off patent and a period of possible revenue loss. By partnering w/ mnkd I think Sanofi has protected against this issue for the reasons stated above.
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Post by 4Balance on Aug 16, 2014 14:56:31 GMT -5
I also take a respectful disagreement to the above and think Sanofi is a great partner with plenty of incentive to sell Afrezza as follows: 1.) No need to use Afrezza to get in the door as most sales reps know their docs very well and don't need a gimmick to make an appt 2.) U300/Replacement as discussed on conf call by Sanofi EVP seems to be an improved version or superior insulin than Lantus, as noted in the conf call, may last longer, keep Blood sugar more stable, may only require one dose per day and may also have less hypo events (so why confuse this conversation with Afrezza) 3.) But the new insulin is also a risk that it may not replace Lantus revenue and as I posted in another post previously, even if it does, where does Sanofi's overall growth come from? The logical answer would be the additional sales revenue provided by Afrezza. 4.) Financially I agree if the 150m were just slotted as a marketing cost for U300 it would be a drop in the bucket, but aside from cash payments to mnkd, Sanofi is taking on all the marketing, sales related and further testing costs (post approval studies) which is 100's of millions more and let's not forget the value of its staff's time and effort that will be diverted to Afrezza, which would make no sense if not serious about the product. 5.) If Afrezza is as good a product as the Adcom testimonies indicated (and personally, one big reason I am such a believer in the science is from such testimony) then Sanofi has everything to gain by pushing Afrezza hard. With the success of both U300 and Afrezza you will have a standard of care for diabetics and establish Sanofi as the world's undisputed leader in diabetes care. Add in there relationship with Medtronics and I don't think anyone can touch them in this space for years... All drug companies face the cyclical timing of drugs going off patent and a period of possible revenue loss. By partnering w/ mnkd I think Sanofi has protected against this issue for the reasons stated above. So, what would be a good price for buying SNY..??  |
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