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Post by seanismorris on Aug 13, 2014 17:24:29 GMT -5
I can find no where in the transcripts that would suggest this is true. Granted we don't have the complete partnership document.
But, the language that we do have suggests (for example) if Sanofi spent 500M marketing Afrezza Mannkind would be responsible for 35% of that. That's why the loan agreement from Sanofi exists, because they know that there is no way Mannkind could cover it. But, Sanofi does expect that if would eventually be covered by Afrezzas sales.
The upfront payment size from Sanofi is there to cover the expected costs to keep Mannkinds doors open, because the first year Afrezza is on the market there probably won't be anything left over to cover Mannkinds overhead (no related to Afrezza, which will be past on at cost).
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Post by BD on Aug 13, 2014 17:29:32 GMT -5
It's still business hours in Valencia. Maybe someone who feels comfortable calling could see if we can get the scoop from the company directly?
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Post by dreamboatcruise on Aug 13, 2014 17:50:40 GMT -5
It's still business hours in Valencia. Maybe someone who feels comfortable calling could see if we can get the scoop from the company directly? The North bound 405 is already clogged; otherwise I could rush up there and have them diagram it on a white board for me  |
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Post by BD on Aug 13, 2014 17:52:22 GMT -5
LOL, lizard. Well, here are some more data points courtesy of Jeff Eiseman. I'll let someone else check 'em out: (Another reply to Derek from Eiseman): "Your use of the word "polite" signaled to me that you didn't think I was adequately response, so I re-read your question. You asked for a reference for my assertion and I see that I did not provide one. It is based on the joint press conference with Sanofi. Unfortunately, I do not have access to a transcript. However, you can listen to it by clicking here: bit.ly/1vJFDcS . Listen especially to the portion from 28:23 to 30:00 and 33:00 to 36:00. If you interpret what you hear differently, let me know." |
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Post by daduke38 on Aug 13, 2014 17:54:54 GMT -5
I just called and Roberta's voicemail picked up, so I tried to leave Matt a voice mail, but his mailbox was full. If Jeff is right, maybe this is what was missing that I refered to in my thread. I never thought I would say this but OPC's question to Jeff was the best and most concise.
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retailinvestor360
Newbie
I am highly open to questions, inputs, advices, as I learn tremendously from readers/friends
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Post by retailinvestor360 on Aug 13, 2014 18:03:28 GMT -5
I agreed with Professor Eiseman that the partnerships indeed made the balance sheet healthier due to the upfront cash of $150 million and I appreciate the Professor's alternate views. My takes on the partnerships is that the 35/65 is actually highly favorable given that other companies in similar boats to MannKind would have got much less. So I don't see why the critics are all looking down on this deal. With Sanofi's elite experts in diabetes/pharmaceuticals, seeing true merits in Afrezza, which enables the company to choose Afrezza is a replacement for Lantus' +$6B annual revenues when Lantus goes generic soon. Sanofi also partnered up with Regeneron for another disruptive LDL-cholesterol lowering drug alirocumab (which showed its phase 3 data having better efficacy and similar safety profile to Lipitor --a blockbuster that brought +$12B for Pfizer. Today, a Bloomberg article stated that that Sanofi is bidding for InterMune, again the company is another one of 360's 4 stars picks (only slightly less favorable than MannKind). InterMune was one of the earlier biotech that I follow over five years and I am highly confident/optimistic in its lead drug, Pirfenidone, as treatment indication for idiopathic pulmonary fibrosis (IPF) -- a condition we currently have no effective treatment. The MannKind-Sanofi deal gives Sanofi the final key (Afrezza) to catalyze the French Pharmaceutical Powerhouse's next growth phase. By having multiple drugs for the same patients, Sanofi's elite sales/marketing team will cut down sales/marketing costs. Patients with obesity tend to also have high cholesterol, high blood pressure, and insulin resistance (prediabetes/diabetes). So there's much synergistic or additive growth with this complementary sales/market strategy treat the same patients with multiple diseases. But the key that I am really excited for Afrezza is that Sanofi is the only company with this global/robust infrastructure to enable Afrezza to capture the prediabetes market that is even larger than the market for diabetes itself. Obesity is a highly prevalent condition that often causes "insulin resistance," which includes both prediabetes and diabetes. Without treatment, patients with prediabetes have increasing insulin resistance and eventually have full-blown diabetes. The problem is that there's no drug better than insulin but most patients who never had insulin shot are afraid and do not want to get insulin injection. Those who have been on it for years do not say the pain bother them; rather, the needles stigma and inconvenience of carrying needles/insulin around that's cumbersome. Without early insulin treatment as recommending by the ADA, patients will progress to diabetes and eventually their pancreatic Beta cells stop making insulin (i.e. these B-cells got too tired and die). Only Afrezza could stop this insulin resistance train, because Afrezza removes fear, inconvenience, and stigma. Afrezza is also quite easy to use so it'd take much less training/education than what shorts are touting. The lung test (PFT conducts via spirometer) is simple, painless, and also enables docs to bill for the test to offset their declining compensation. Most clinics or docs office already have a spirometer b/c primary care docs treat asthma and other lung diseases that require testing with spirometry. Those who are not familiar with it might think that it's tough but I can even build one from scratch b/c it's a simple device to make as well as to use. So where does this put Afrezza 35:65 deal? Actually it's more like 75% for MannKind because now we are accounting the revenues from prediabetes label expansion (a much larger market than diabetes in general). This is will be the wave of the future b/c the ADA want docs to prescribe Afrezza early in treating diabetes and since prediabetes in just up ahead in the continuum of insulin resistance so why not treat prediabetes too? Well the reason is that currently patients who never have insulin are afraid and to take it mentioned. Why not treat insulin resistance even early to save the pancreas B-cell from its death? There is currently no drug in the market or in development that can compete with Afrezza in this realm ... the super rapid acting insulin Afrezza will take complete dominance in this diabetes/prediabetes market! It's highly likely that Sanofi sees this and chose Afrezza rather than other or anti-diabetes drug or other formulation of injection insulin that is not likely to replace Lantus! Sanofi is the historical leader in diabetes and the company has deep resources/brain power/ expertise to recognize upcoming leaders in this market. That's why Sanofi partnered with great companies like MannKind, Regeneron, or InterMune (if it secures the deal) to collect all "cream of the crops" drugs. If Sanofi-MannKind deal has not impressed the critics, so be it! Naysayers will always be pessimistic but when Afrezza hits Main Street and being prescribed en-mass or more than even Lipitor/Lantus, there's no denying MannKind shareholders, Dr. Mann or Afrezza's merits. Pertaining to current calculations, I got ... $150M upfront + $175M commercialization cost + $775 milestones = $1,100M (upfront, commercialization costs, milestones). The Professor did an excellent job and I concurred that the up front $150 million indeed shaped up the MannKind's balance sheet, and that's a great move by MannKind. The other $175 million is for launch/commercial cost which also adds more financial strength to the company. While I'll reserve Professor Eiseman the honor to answer his question regarding the $1B but what I'll say is ... when Afrezza hits the market, $1 billion or $2 billion would be spare change! Read more: mnkd.proboards.com/thread/1177?page=2&scrollTo=8553#ixzz3AJmTP517 |
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Post by mnkdd on Aug 13, 2014 18:12:50 GMT -5
Wow, interesting. I just listened to the CC again (pertaining to Eismann's article). It sounds like the Prof. has some ground to stand on... unless Matt misspoke... which is often the case.
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Post by dreamboatcruise on Aug 13, 2014 18:19:40 GMT -5
LOL, lizard. Well, here are some more data points courtesy of Jeff Eiseman. I'll let someone else check 'em out: (Another reply to Derek from Eiseman): "Your use of the word "polite" signaled to me that you didn't think I was adequately response, so I re-read your question. You asked for a reference for my assertion and I see that I did not provide one. It is based on the joint press conference with Sanofi. Unfortunately, I do not have access to a transcript. However, you can listen to it by clicking here: bit.ly/1vJFDcS . Listen especially to the portion from 28:23 to 30:00 and 33:00 to 36:00. If you interpret what you hear differently, let me know." I listened to those sections and certainly didn't hear what Eiseman did. Granted, Chameleons have no ears. To be honest, it appears that it is merely the straight forward cost of the manufacturing plant itself that will be included in COGS and thus passed to the "joint venture". The cost of the facility to date have been counted as R&D because it was being run to support the development, not actual sales. That was the context of the mention of R&D expenses moving to COGS... but that would be future costs, and only regarding the manufacturing facility and its operation. Then it is also stated that R&D (no longer including the manufacturing) that is Afrezza related moving forward gets to be included as part of what the "joint venture" is responsible for. No where did I hear anything about the huge sunk costs of development and clinical trials. I think Eiseman is suffering from wishful thinking. |
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Post by BD on Aug 13, 2014 18:20:53 GMT -5
Everybody loves a mystery! (Especially when we have nothing to lose and perhaps something to gain if Eiseman's right. I'm just not currently holding a high degree of confidence that he is...)
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Post by daduke38 on Aug 13, 2014 18:28:14 GMT -5
Lizard, I sure didn't hear what he did either.
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Post by dreamboatcruise on Aug 13, 2014 18:34:48 GMT -5
CAn anyone find the source of this quote from a commenter? "The partnership between Sanofi (NYSE:SNY) and MannKind (NASDAQ:MNKD) calls for all of each company's relevant present and prior costs to be counted when calculating net profits." In this learned lizard's opinion the source of this quote is a shareholder having reached the 3rd stage of the Kübler-Ross process of dealing with grief... 1) Denial 2) Anger 3) Bargaining Someone seems to have wishful delusions of writing new clauses into the agreement with Sanofi. "Please Sanofi, maybe we could just throw all our sunk costs on you?" |
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Post by Chris-C on Aug 13, 2014 18:35:38 GMT -5
mattm: Thanks for sharing this. Unfortunately, the author recited the unfounded and misinformed mantras of the shorts. For doing this, she gets placed in the "working for the syndicate" column. Can you believe she recommends a buy only if the stock is in the $3's? And how does she arrive at the conclusion that the stock is high risk at that entry point? I wonder what she has to say about Puma,(PBYI) a biotech startup without an approved drug still completing its clinical trials?? At $3, Mnkd is at high risk for a hostile takeover by a large pharma. GLTAL Chris-C
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Post by brentie on Aug 13, 2014 18:35:53 GMT -5
From the comments section...
Psycho Analyst , Contributor
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Jeff,
I'm sorry, but I carefully listened to the CC again at the times you cited, and you are misinterpreting what was said.
The costs until now have been expensed, and that means they aren't part of the cost of the insulin that SNY will be purchasing. What was stated was that a large portion of the non-administrative FUTURE costs of running the factory will be going into Cost of Goods Sold, and that is what SNY will be paying for when it buys the insulin.
This is a big difference from what you claim in this article.
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Post by gamblerjag on Aug 13, 2014 18:41:17 GMT -5
Can't someone clarify with Matt if Eisman's interpetaton is corret.. I'm sure he would respond.. since it's not a secret.
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Post by ezrasfund on Aug 13, 2014 18:42:06 GMT -5
Without going back and listening I think that Eiseman could be correct. Put it this way. My understanding is that Sanofi will be compensated for all similar costs going forward, including the running of clinical trials and regulatory submissions. So why would MannKind's similar costs thus far be treated differently? I guess Matt will have to answer the question himself.
BTW I agree with 360 that "insulin naive" patients will be the first target population for Afrezza.
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