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Post by mnholdem on Aug 15, 2014 14:21:51 GMT -5
I hate to ask, but how long until we see $7 or $8 again? Does anyone else think if Al had hit the media circuit with the Sanofi VP for a week or two after the partnership that this would be happening? Could they have disclosed more details of the partnership agreement to have prevented this? I don't know. I sold 20% of my shares at $7.48 which was at 100% over average cost. I'm gravely disappointed and will hold the other 80% for at least 12 months. Am I wrong to think the bleeding this week might have been preventable? Manipulation aside, the real "problem" with pps movement, as I see it, is simply that MNKD catalysts are out of order.
We've all seen it time & again with other biotech stocks. Big Pharma partners up before approval, begins marketing and reports forecasts, and the share price SOARS when FDA approval occurs. A common order of catalysts is:
Partnership announcement Marketing push FDA approval Sales
If catalysts had happened in order, MNKD would be trading 3-4x today's price. But for reasons unknown, this deal couldn't get done before FDA approval.
So what should this mean for shareholders? Simply that the best is yet to come. I think Sanofi is going to stun the market with initial sales.
- - - - - - - - - This will not be received well by shareholders, but there are valid strategic reasons why Sanofi will not release sales forecasts, nor allow MannKind to publish them. Foremost among those reasons is that Sanofi does not want competing BP's to have knowledge or be able to counter their marketing strategy until after Afrezza has become entrenched in the market and cannot be dislodged.
There is NOTHING like testimonies to sell a drug to skeptics.
I think Sanofi may be planning to capitalize on physicians frustrations that pre-diabetics at a high rate initially refuse treatment by injection. Perhaps it's denial that their condition is serious enough to warrant a life-style changing regimen of daily injections, but it could also be fear of needles. Afrezza is an option physicians cannot offer at this time. Even Exubera had a 65% acceptance, as cumbersome as it was.
I also wouldn't be surprised it Sanofi goes right for the throat, marketing the efficacy of treating both Type I and Type II with a Lantus/Afrezza combo.
Yep. No doubt in my mind. Afrezza will be very popular... and very soon.
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Post by 4Balance on Aug 15, 2014 14:29:18 GMT -5
Could Mannkind Managment handled things better along the way? Yes quite possibly... But honestly I doubt even they saw this coming... Let's remember for all of Al Mann's accomplishments and for what Mannkind has overcome it took a great deal of character to get here... And these guys are not sharks, the sharks are on Wall Street. Where is the lawsuit against Mr. Tourbillion or Cramer or AF? I mean in all honestly whether you think Afrezza is a 1B or 5B a year drug, the stock is worth much more than it's current value... There is almost no risk to an investment in this stock at this point, (in getting Afrezza to market and seeing sales revenue, except perhaps for adoption by patients,) but the current share price does not reflect this... All I personally hear is that it is overvalued by the bears/shorts (which is BS, notice how the initials seem to fit Bears/Shorts...) Well let's do a quick estimated valuation of Mannkind Corp., (Valuations are my own rough estimations) as follows: A. Assets/Revenue: 1.) 500m for the Danbury Facility (owned outright with no debt) 2.) 200m to 300m in raw insulin (owned outright, not currently certified for use in Afrezza by FDA) 3.) 100m Ownership of Business Park in Valencia, CA where Mnkd HQ (again owned outright w no debt) 4.) 500m in Patents (over 550 registered patents registered) 5.) 300m value of technosphere (my guess which I believe is extremely Low) 6.) 150m in upfront cash from Sanofi 7.) 200m in easily achievable milestones, (EU, Japan approval and first sales milestone) (am not counting remaining 540m in milestone payments possible) 8.) 245m in expected revenue for first 12 months Afrezza is on the market. (Number 8 above results from the following off the top of my head evaluation: a.) 1B in Sales for first 12 months, b.) assume 30% COG, c.) leaves a operating profit of 700m, d.) 35% of 700m is 245m 9.) Little or no taxes on the first two to three years or more on income as 1.4B in carry forward losses plus Danbury depreciation. 10.) 130m in milestone payments from Oncology licenses done two years ago Please see my previous postings on this subject if you are looking for my reasoning. GLTA! Thank you for spelling out your thought process. I'm not sure where to find your previous posts on this subject, so pls forgive me if I ask a question you've already answered. Given Sanofi's cautious approach to marketing, how do you figure $1B in sales for the first year...??
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Post by 4Balance on Aug 15, 2014 14:35:30 GMT -5
I hate to ask, but how long until we see $7 or $8 again? Does anyone else think if Al had hit the media circuit with the Sanofi VP for a week or two after the partnership that this would be happening? Could they have disclosed more details of the partnership agreement to have prevented this? I don't know. I sold 20% of my shares at $7.48 which was at 100% over average cost. I'm gravely disappointed and will hold the other 80% for at least 12 months. Am I wrong to think the bleeding this week might have been preventable? Manipulation aside, the real "problem" with pps movement, as I see it, is simply that MNKD catalysts are out of order.
We've all seen it time & again with other biotech stocks. Big Pharma partners up before approval, begins marketing and reports forecasts, and the share price SOARS when FDA approval occurs. A common order of catalysts is:
Partnership announcement Marketing push FDA approval Sales
If catalysts had happened in order, MNKD would be trading 3-4x today's price. But for reasons unknown, this deal couldn't get done before FDA approval.
So what should this mean for shareholders? Simply that the best is yet to come. I think Sanofi is going to stun the market with initial sales.
- - - - - - - - - This will not be received well by shareholders, but there are valid strategic reasons why Sanofi will not release sales forecasts, nor allow MannKind to publish them. Foremost among those reasons is that Sanofi does not want competing BP's to have knowledge or be able to counter their marketing strategy until after Afrezza has become entrenched in the market and cannot be dislodged.
There is NOTHING like testimonies to sell a drug to skeptics.
I think Sanofi may be planning to capitalize on physicians frustrations that pre-diabetics at a high rate initially refuse treatment by injection. Perhaps it's denial that their condition is serious enough to warrant a life-style changing regimen of daily injections, but it could also be fear of needles. Afrezza is an option physicians cannot offer at this time. Even Exubera had a 65% acceptance, as cumbersome as it was.
I also wouldn't be surprised it Sanofi goes right for the throat, marketing the efficacy of treating both Type I and Type II with a Lantus/Afrezza combo.
Yep. No doubt in my mind. Afrezza will be very popular... and very soon.
I, too, am active on OPC's board...it's a useful counter to the general tenor of this group. As my name implies, I try to find the truth....and in a complex situation, one needs multiple sources. That said, I can respect Sanofi's discretion in protecting its competitive advantage. My main question would be, if the agreement will be exposed during the 3Q earnings release, why not now? And the main answer I drum up is, the advantage of time. Time is a resource...timing the flow of information is a form of "information warfare"...pertinent in a host of situations!
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Post by mannmade on Aug 15, 2014 16:14:54 GMT -5
4balance, I can only tell you that I think the 1B is a fair middle level number against sales for the first full 12 months that Afrezza is on the market. It is purely an estimate on my part but here is my reasoning, (most if not all is in one post or another and has already been previously stated, by others and myself, on this board: 1.) Current Prandial Insulin Sales in US only are about 4B to 6B 2.) Growth opportunity for prandial market thru attacking noncompliance and early adoption of prandial insulin in T2 market, also for many it will replace taking GLP 1's or SGLP-2's (sp?) 3.) Sanofi has #1 Basal Insulin in Lantus and a Far Superior Replacement due to market soon (Superior in that may last longer, require only 1 injection a day instead of 2, and reduce sever hypo events according to EVP from Sanofi) 4.) Sanofi is 5th leading Global BP by sales revenue and #1 in Diabetes care by same standard 5.) However, as we all know Lantus is coming off patent next year, which places Sanofi's leadership in diabetes care in jeopardy. 6.) Sanofi's current prandial insulin (injectable) does not sell well so no competition to Afrezza 7.) Sanofi has a global sales force of 50,000 staff who are well trained and well connected and I assure you will be well paid with bonus's to launch Afrezza 8.) Sanofi has a great need for Afrezza's success which is part of why it makes them a great partner 9.) By combing Lantus (or it's replacement) w Afrezza we should have the T1 state of the art or standard in care moving forward 10.) There is much talk about putting people on prandial before basal as a better way to control BP 11.) We have not yet seen or heard form the ADA who backs Afrezza, nor the National Association of Endocrinologists 12.) Having spent 30 years in advertising and marketing I will tell you that once Dr. Nancy Snyderman of the Today Show starts to speak about Afrezza and all the other media doctors, some of whom I personally know, people will be asking their MD's all about it. I think 1B in first year sales which is conservatively 25% of the US Prandial market at 4B in sales is a reasonable figure given the above, which I know are not objective nor empirical data points. On a personal note I just ran into a diabetes drug rep in the elevator at my doctor's office today. She did not know about Afrezza, but told me one of the doctors in the building who is a diabetes specialist just asked her about it. He had heard of it but though you had to sniff through your nose. Yes I know, Baba... At any rate when I explained everything to her including the PK profile she told me that she was actually going to call Sanofi to see if they were hiring... Read into it what you like, but my take is that when a sales rep (and all the ones I have ever known are motivated by one thing... $) tells you she is going to call about a job, it lets me know she sees the sales advantages... And that is what everyone, aside from the diabetics and doctors, seems to ultimately care about...
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Post by babaoriley on Aug 15, 2014 18:44:43 GMT -5
mannmade wrote:
"I am still very bullish on Mannkind for all the reasons above and for which I previously wrote to WB (and previously posted) about why I think it is a "unorthodox" value stock at the moment. Only now so more then ever. I personally bought 30,000 shs over the last two days."
I need to start using the ATM that you use!!
I discount almost completely the risk of poor sales. The risks I see are: first, due to all the sales and usage we will enjoy, if there are reports of people getting ill and ascribing it to Afrezza; second, the continued hounding of shorts who will not leave this alone - fabulous sales numbers? No problem for the shorts -MNKD isn't making any money, cuz of cogs, poor pricing power, we hear Sanofi is not pleased, etc.; and third, a new competitor or competitors come along.
Even I, the great short lover according to my Greek friend, could not see them being this successful in the wake of such a tidal wave of really good news for MNKD. So I have to think they will be effective until at least sales are looked on as great or we prove we are or will be quite profitable given the sales curve.
Margin calls have been tough on may of us, I had to sell some shares of one of my other favorite stocks (don't ask, MNKD is the best dream you ever had in comparison!), but didn't sell any of this beaten down stock. Did roll some puts, as I did not want more stock put to me, rolled from August to January, at least that pushed the day of reckoning off some.
Many of us swore we'd sell some upon approval and/or upon partnership, yours truly included, but I didn't sell anything, cuz my brain froze, when it should have been obvious that the $11 in pre-market was going to be the high of the day. And especially as the cc went on, nothing so special there as to give it a second boost, so what a dope!! Oh, I did sell some long calls that morning fairly early, fortunately, as those are in the toilet now, and were there by Monday afternoon, really; mostly November and January, $9 to $12 vintage - nice!!
It's like the ponies, after the race, it all seems so obvious!
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Post by 4Balance on Aug 15, 2014 19:09:21 GMT -5
Mannmade and Baba, thank you for taking the time to elaborate!
It might be helpful to refine that $4b to 6b figure...looking at which prandial insulin products account for, say, the top 3 sales...and homing on the real annual sales figure. Sometimes it's easier to have a more focused target. Then...for the top 3...wherever a break makes sense....look at patient satisfaction and any other factor that might influence patients to switch.
But...I think one of the biggest factors will be Sanofi's pace. They clearly want Afrezza to succeed, and plan to be picky about the initial patients. For how long...?? What would be their plan for expanding the population? (HOW careful? What will they try to manage...??)
I think Sales will have the biggest effect on PPS. So, coming up with an estimate that really does seem to fall within the ball park could be useful.
I don't have the expertise to do this...or to refine this approach. But perhaps you or someone else will see the value.
Thx to both of you for your insightful contributions!
--4Balance
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Post by dreamboatcruise on Aug 15, 2014 20:08:01 GMT -5
A. Assets/Revenue: 1.) 500m for the Danbury Facility (owned outright with no debt) 2.) 200m to 300m in raw insulin (owned outright, not currently certified for use in Afrezza by FDA) 3.) 100m Ownership of Business Park in Valencia, CA where Mnkd HQ (again owned outright w no debt) 4.) 500m in Patents (over 550 registered patents registered) 5.) 300m value of technosphere (my guess which I believe is extremely Low) 6.) 150m in upfront cash from Sanofi 7.) 200m in easily achievable milestones, (EU, Japan approval and first sales milestone) (am not counting remaining 540m in milestone payments possible) 8.) 245m in expected revenue for first 12 months Afrezza is on the market. (Number 8 above results from the following off the top of my head evaluation: a.) 1B in Sales for first 12 months, b.) assume 30% COG, c.) leaves a operating profit of 700m, d.) 35% of 700m is 245m 9.) Little or no taxes on the first two to three years or more on income as 1.4B in carry forward losses plus Danbury depreciation. 10.) 130m in milestone payments from Oncology licenses done two years ago Though the assets you list are not reflected at anywhere near those values on their balance sheet. We know the insulin was expensed so it isn't represented at all. Is that how much they paid for the insulin or was it quite a bit less... quite frankly I've forgotten? If they use it I believe they will only be able to pass through to the Afrezza JV only what they paid for it.
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Post by mannmade on Aug 15, 2014 20:10:02 GMT -5
Thank 4balance... Just trying to get the ball rolling on a positive discussion... There 4 to 6 B number I used for prandial sales is what I have seen mentioned at various times. Would be interested to see a more accurate number...
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Post by dreamboatcruise on Aug 15, 2014 20:23:16 GMT -5
Given Sanofi's cautious approach to marketing, how do you figure $1B in sales for the first year...?? I'm curious what you mean by "Sanofi's cautious approach to marketing". Is that based on knowledge of past drug roll outs, or are you equating their hesitancy to reveal information now as an indicator they will not be aggressive? If the latter, I think that might be unfoundedly pessimistic.
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Post by dreamboatcruise on Aug 15, 2014 20:48:59 GMT -5
It might be helpful to refine that $4b to 6b figure...looking at which prandial insulin products account for, say, the top 3 sales...and homing on the real annual sales figure. Sometimes it's easier to have a more focused target. Then...for the top 3...wherever a break makes sense....look at patient satisfaction and any other factor that might influence patients to switch. I just looked up earnings reports for 2013 and got the following for worldwide sales... Novolog $3.0B with 7% growth over 2012 Humalog $2.6B with 9% growth Apidra $0.1B (using today's exchange rates, which really isn't valid) So this year it should be over $6B
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Post by mannmade on Aug 15, 2014 21:04:42 GMT -5
A. Assets/Revenue: 1.) 500m for the Danbury Facility (owned outright with no debt) 2.) 200m to 300m in raw insulin (owned outright, not currently certified for use in Afrezza by FDA) 3.) 100m Ownership of Business Park in Valencia, CA where Mnkd HQ (again owned outright w no debt) 4.) 500m in Patents (over 550 registered patents registered) 5.) 300m value of technosphere (my guess which I believe is extremely Low) 6.) 150m in upfront cash from Sanofi 7.) 200m in easily achievable milestones, (EU, Japan approval and first sales milestone) (am not counting remaining 540m in milestone payments possible) 8.) 245m in expected revenue for first 12 months Afrezza is on the market. (Number 8 above results from the following off the top of my head evaluation: a.) 1B in Sales for first 12 months, b.) assume 30% COG, c.) leaves a operating profit of 700m, d.) 35% of 700m is 245m 9.) Little or no taxes on the first two to three years or more on income as 1.4B in carry forward losses plus Danbury depreciation. 10.) 130m in milestone payments from Oncology licenses done two years ago Though the assets you list are not reflected at anywhere near those values on their balance sheet. We know the insulin was expensed so it isn't represented at all. Is that how much they paid for the insulin or was it quite a bit less... quite frankly I've forgotten? If they use it I believe they will only be able to pass through to the Afrezza JV only what they paid for it. Actually I believe they picked the insulin up for far less, as i recall several million only (3m?), someone else may be able to confirm. However I do recall it being valued at one point by mnkd at 200m to 300m if necessary to replace. Remember the valuations are just off the top of my head as am trying to point out that this is a company with substantial assets, future revenue way in excess of long term debt and expenses.
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Post by dreamboatcruise on Aug 15, 2014 21:08:53 GMT -5
10.) There is much talk about putting people on prandial before basal as a better way to control BP Being buried in a lot of other great points... I thought I'd pull this one out as particularly game changing. And being wishfully speculative, as lizard's are want to do, maybe this was addressed as part of the negotiation with Sanofi. Maybe the reason we have a 35% cut has something to do with getting Sanofi to a point where they will push to make this happen quickly even if it means their bread and butter, basal, gets cannibalized by Afrezza. Hopefully if that is true we might get some clues in the full details of the partnership coming in a few months, planned future clinical trials or something. Mannmade... Do you think clinical trials specifically addressing this might be done? Obviously the holy grail would be if early intervention with ultra-rapid prandial actually has solid evidence to show it slows the progression of the disease compared with current protocols.
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Post by 4Balance on Aug 16, 2014 2:04:04 GMT -5
Given Sanofi's cautious approach to marketing, how do you figure $1B in sales for the first year...?? I'm curious what you mean by "Sanofi's cautious approach to marketing". Is that based on knowledge of past drug roll outs, or are you equating their hesitancy to reveal information now as an indicator they will not be aggressive? If the latter, I think that might be unfoundedly pessimistic. Cautious approach--I have seen this in several places...will try to find good sources. Perhaps "marketing" is not the best term...I'm talking about their strategy for rolling out the drug in such a way as to breed successful experiences. Does that make more sense..?? For starters, this article speaks to Sanofi's approach to rolling out the drug in #9: seekingalpha.com/article/2424625-10-known-unknowns-that-matter-for-mannkind-investors?uprof=44 I have looked and looked, and cannot find a good reference....LOTS of posts on the financials...very little on the roll-out strategy. Something might have been mentioned during the announcement CC on Aug 11...I was unable to locate a transcript. Perhaps Pierre described a careful approach to educating docs and patients...and possibly cherry picking the initial patients in order to generate the results that breed success stories and avoid failure. Afrezza is a different animal and we need some early success stories. The "cherry picking", by definition, means a smaller group up front...and for an undefined time. Here's another take on the corelation between sales and profits...MNKD profit seems awfully low...doesn't make sense to me: lastfinancier.com/mannkind-mnkd-sanofi-sny-agreement-diabetes-treatment-afrezza/
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Post by jpg on Aug 16, 2014 3:17:35 GMT -5
I'm curious what you mean by "Sanofi's cautious approach to marketing". Is that based on knowledge of past drug roll outs, or are you equating their hesitancy to reveal information now as an indicator they will not be aggressive? If the latter, I think that might be unfoundedly pessimistic. Cautious approach--I have seen this in several places...will try to find good sources. Perhaps "marketing" is not the best term...I'm talking about their strategy for rolling out the drug in such a way as to breed successful experiences. Does that make more sense..?? For starters, this article speaks to Sanofi's approach to rolling out the drug in #9: seekingalpha.com/article/2424625-10-known-unknowns-that-matter-for-mannkind-investors?uprof=44 I have looked and looked, and cannot find a good reference....LOTS of posts on the financials...very little on the roll-out strategy. Something might have been mentioned during the announcement CC on Aug 11...I was unable to locate a transcript. Perhaps Pierre described a careful approach to educating docs and patients...and possibly cherry picking the initial patients in order to generate the results that breed success stories and avoid failure. Afrezza is a different animal and we need some early success stories. The "cherry picking", by definition, means a smaller group up front...and for an undefined time. Here's another take on the corelation between sales and profits...MNKD profit seems awfully low...doesn't make sense to me: lastfinancier.com/mannkind-mnkd-sanofi-sny-agreement-diabetes-treatment-afrezza/Hi 4balance, I think you are referring to the way Sanofi briefly and vaguely described who they would target and why? Sanofi, for obvious reasons was purposefully vague and the marketing strategy will be one of the most closely guarded secrets of the whole deal till marketing actually starts. Then we will get a drip by drip view of what they are doing. Every smart BP with a significant diabetic presence is now drawing up different scenarios and thinking of counter measures to deal with this potentially disruptive new drug. Hopefully Sanofi and Mannkind will not tip their hand to please computer driven algos, day traders and option holders (sorry but option holders are obviously not shareholders...). Long term shareholders deserve a management that can do things without looking at the stock price before every decision. Management obsession with share price probably kills more companies then shorts ever will... I certainly agree with you that there are a lot of financial articles (to a carpenter every fix involves a nail and hammer). The way I see it most of the sales/ profit modeling done so far is radically at odds with what Sanofi briefly hinted at during the CC. From my maybe flawed, partial and subjective analysis of how they will market this to MDs and patients the vast majority of models are using the wrong inputs and looking at diabetic patients/ prescribing MDs in a way that makes little clinical sense to me. The models are looking at the wrong parts of the iceberg. Garbage in... My interpretation of what Sanofi said about marketing during the CC is one of the things which, even after this share price blood bath keeps me smiling and happy to be a Mannkind shareholder and hope the price drops a bit more so I can pick up a few more shares. Again if I was a holder of time sensitive synthetic instruments and using leverage I would be very nervous. I say this because my interpretation of who Sanofi will target (and why) seems to me to demonstrate that Sanofi is very 'MD and patient wise'. At the same time I think I understand why markets and analysts have so much difficulty dealing with the lack of clarity and certainty and don't know how long it will take for the market to get it. As some other MD posters have politely written (an MD from 360 and/or Dr. Tran I think?) or posted in comment sections: non MDs don't get it (I am paraphrasing less politely...) because they don't see these patients day in day out and they don't have to prescribe pills we honestly think don't work well and potentially do more harm then good. Till now there were no other options. How do you put that in a model? You can't... That is a paradigm shift. Sanofi gets it. The market obviously doesn't yet. JPG
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Post by ezrasfund on Aug 16, 2014 10:22:30 GMT -5
"I think 1B in first year sales which is conservatively 25% of the US Prandial market at 4B in sales is a reasonable figure given the above, which I know are not objective nor empirical data points." I am re-posting this because it didn't generate much interest before, but I think you folks have unrealistic expectations about first year sales. Now you know why the price crashes after every bit of good news. Expectations are just too high. If Afrezza sells 50% more than Januvia, Celebrex, or Prilosec in its first year it will still fall short of $1 Billion in sales. So as you can see, this thread is setting us up for the scenario that Afrezza has the most successful roll out of all time of a new drug, but the share price crashes after the announcement. (Except of course, Solvaldi, which is priced like an specialty medication but has much wider use.) This NY Times article is about the launch of the Hepatitis C drug Sovaldi, but the graphs have some good information about first year sales and market penetration for blockbuster drugs. Scroll down to see info about number of patients treated, annual cost per patient and first year revenues. We are setting our sights pretty high. Januvia, Celebrex and Prilosec all had first year revenues of about $600 million, and none treated more than 500,000 patients in the first year. www.nytimes.com/2014/08/07/upshot/why-the-price-of-sovaldi-is-a-shock-to-the-system.html?hp&action=click&pgtype=Homepage&version=HpSum&module=second-column-region®ion=top-news&WT.nav=top-news
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