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Post by prcgorman2 on Jul 1, 2020 22:16:30 GMT -5
The last time I checked (and that was a few years ago), the average P/E ratio on BP was 40-ish and as high as 70-ish in a few not average instances. The last time I checked the average P/E on NASDAQ listed equities, the ratio was 27-ish. Since BP was higher than the exchange average, I used a relatively conservative P/E ratio of 30 as an example. 13 cents times 30 is $3.99 per share. Assuming profit and access to reasonable debt financing, then Mannkind can invest in expanding sales of Rx based on all of the things I listed above. If Mannkind can manage even a modest proportion of the prandial insulin market, the EPS should be significantly better than 13 cents a share. Add TreT, maybe Tadalafil, maybe Sumatriptan, and little old Mannkind might manage a respectable stock price. According to data online, as of March 2015, the overall drugs sector had an average P/E ratio of about 24.10. According to Yahoo Finance, currently (as of today) Eli Lilly, Merck, Sanofi, UTHR, have PEs of, respectively, about 27, 19, 26, 10. So using a PE of 30 is arguably not conservative at all. It may be a little over optimistic. Of course some BP firms have much higher PEs. But (from what I've read), those are usually atypical and more often or not viewed as bubbles. And Mnkd might hit over $100 even with negative earnings, if it only could capture the imagine of people the way, say, NVAX, did. I won't say that will never happen. Markets are crazy. Thank you mnkdfann. I can easiliy believe you found different estimates of P/E for the BP sector. It’s not an exact science, and the number you gave is less than the NASDAQ average, but still believable. I don’t have a problem with that. It means my 13 cents EPS estimate has to go as high as 17 cents EPS to remain “conservative”. 4 cents earnings per share is not something I will quibble about. Mannkind needs to triple their sales of Afrezza to reach $200M-ish annual revenue. That doesn’t actually sound like an amazing feat. I think they can do far better than that (given time). And, that ignores revenue from TreT, and whatever other sources Mannkind can manage such as Tadalafil, Sumatriptan, et cetera. Once MNKD gets close to cash flow break even, things get much more interesting in my opinion. |
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Post by goyocafe on Jul 1, 2020 22:22:11 GMT -5
Point taken. We seem to have two camps here, at least in general terms; those that are long time longs that have grown cynical as the share price has declined and witnessed nearly stagnant prescription growth and more recent longs who are still quite hopeful and like the current direction of the company. The problem the cynical long timers have is that we have seen this positive "vibe" if you will, before. It was us at one time. That is just the way it is. Whether you and other positive longs like it or not the cynical nature of some was certainly something the company earned. Quite frankly it's unfortunate because we all believe in the science and had such high expectations for the company. This is a revolutionary insulin product and yet.......we can't sell it! We fought tooth and nail to get this FDA approved only to see it fall flat on its face. So bottom line, if you want to be positive then good on ya. For me, the company has to prove it can generate enough sales to be cash flow positive before I ever invest another dime. I have always felt that if it can break even it will take off but until then, I'll stay out thank you. Now there is (another) post I can respect. You’ve had others too. A skeptical cynic I have no issue with, and I actually think I am one too, but I’ve got experience spending money on expensive projects and Mannkind is working with peanuts. This is why the Sanofi debacle looms so large. It was literally catastrophic. That fact that they’re still here and have given me reason to hope just amazes me. I’m not sure if I’m in the long timers camp. I’ve been invested since about a year before the FDA approval. I think 2013, but certainly no later than 2014. Is that a long timer? Along with a bunch of us, I would call that an unfortunate timer. |
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Post by prcgorman2 on Jul 2, 2020 6:19:07 GMT -5
True! How much more fortunate to be investing now below two dollars shortly before their fortunes may change! Oh wait, that was me back in 2013 or 2014 before FDA approval, and the signing of the $1B+ global marketing deal with one of the big 3 BP insulin giants.
Still, there are several reasons to be optimistic, but very few reasons to be impatient; because there is no magic. I’m grateful there are reasons to be optimistic.
Back in early 2016, I just thought I was going to eat a huge loss. And, back then I did believe there could be magic. If only Mannkind would do X, I thought. If they would do that, then they would be very successful. If only they would market Afrezza themselves. If only they made a real investment in national DTC advertising. Who says they have to conduct immense clinical trials? Who says they have to kneel and bargain with PBMs? Who says?
Well, 4 years later I have seen the success enjoyed with self-marketing, national DTC advertitising, without large scale trials (other than pre-FDA approval), and without genuflecting at the alter of PBMs. It’s between 700 and 800 prescriptions per week. The saving grace? UTHR and TreT.
Hope lies in growth of sales of Afrezza (because it is that good), Dr. Kendall exploiting and exposing data, UTHR’s focus on TreT, and testing applications for TS for future molecules and deals. There’s a pretty big list of reasons to be hopeful in another thread. I do not assume our management are lazy idiots. I assume quite the opposite. And to Nate Pile’s main admonition, that helps me sleep at night.
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Post by matt on Jul 2, 2020 7:50:36 GMT -5
According to data online, as of March 2015, the overall drugs sector had an average P/E ratio of about 24.10. According to Yahoo Finance, currently (as of today) Eli Lilly, Merck, Sanofi, UTHR, have PEs of, respectively, about 27, 19, 26, 10. So using a PE of 30 is arguably not conservative at all. It may be a little over optimistic. Of course some BP firms have much higher PEs. But (from what I've read), those are usually atypical and more often or not viewed as bubbles. And Mnkd might hit over $100 even with negative earnings, if it only could capture the imagine of people the way, say, NVAX, did. I won't say that will never happen. Markets are crazy. P/E ratios move over time and tend to be higher for developmental stage companies. During the 2008 financial crisis, the P/E for major pharmas was more in the 15X range and smallish drug companies without a lot of pipeline struggled to manage 8X. In recent years the numbers have been much more attractive for companies with good pipelines. Tiny pharmas with potential blockbuster drug and almost no earnings can come up with multiples in the nosebleed range because with tiny net incomes (assuming they have any income at all) the multiple goes high just because dividing any number by a much smaller number yields a large quotient. However, no pharma company can maintain a P/E is the stratosphere for more than a year or two. Mannkind's issue is that it is still a one-trick pony. The big pharmas all have huge portfolios of drugs and tend not to be overly dependent on a single drug (Pfizer was the exception when Lipitor was still on-patent). The market rewards the broad portfolio with a better P/E because of the inherent stability, and punishes those companies without a broad offering with lower P/E ratios. Don't confuse TS delivery with Mannkind having a deep pipeline; Mannkind is supporting somebody else's pipeline drugs but not their own. If Mannkind wants the kind of respect and P/E that comes from being a diversified drug company then they need to have a pipeline of proprietary molecules. If the company wants to spin the story that they are a great drug delivery partner, then they need to have a portfolio of unique drug delivery technologies and not just TS. Right now Mannkind is neither a broad line drug company with a deep pipeline nor an established drug delivery partner, and the market is not going to reward the company with a big pharma-type P/E ratio. That can change of course, but not with the current business strategy. |
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Post by morfu on Jul 2, 2020 9:18:42 GMT -5
According to data online, as of March 2015, the overall drugs sector had an average P/E ratio of about 24.10. According to Yahoo Finance, currently (as of today) Eli Lilly, Merck, Sanofi, UTHR, have PEs of, respectively, about 27, 19, 26, 10. So using a PE of 30 is arguably not conservative at all. It may be a little over optimistic. Of course some BP firms have much higher PEs. But (from what I've read), those are usually atypical and more often or not viewed as bubbles. And Mnkd might hit over $100 even with negative earnings, if it only could capture the imagine of people the way, say, NVAX, did. I won't say that will never happen. Markets are crazy. P/E ratios move over time and tend to be higher for developmental stage companies. During the 2008 financial crisis, the P/E for major pharmas was more in the 15X range and smallish drug companies without a lot of pipeline struggled to manage 8X. In recent years the numbers have been much more attractive for companies with good pipelines. Tiny pharmas with potential blockbuster drug and almost no earnings can come up with multiples in the nosebleed range because with tiny net incomes (assuming they have any income at all) the multiple goes high just because dividing any number by a much smaller number yields a large quotient. However, no pharma company can maintain a P/E is the stratosphere for more than a year or two. Mannkind's issue is that it is still a one-trick pony. The big pharmas all have huge portfolios of drugs and tend not to be overly dependent on a single drug (Pfizer was the exception when Lipitor was still on-patent). The market rewards the broad portfolio with a better P/E because of the inherent stability, and punishes those companies without a broad offering with lower P/E ratios. Don't confuse TS delivery with Mannkind having a deep pipeline; Mannkind is supporting somebody else's pipeline drugs but not their own. If Mannkind wants the kind of respect and P/E that comes from being a diversified drug company then they need to have a pipeline of proprietary molecules. If the company wants to spin the story that they are a great drug delivery partner, then they need to have a portfolio of unique drug delivery technologies and not just TS. Right now Mannkind is neither a broad line drug company with a deep pipeline nor an established drug delivery partner, and the market is not going to reward the company with a big pharma-type P/E ratio. That can change of course, but not with the current business strategy. Well, the P/E is an indication of earnings to come, not a measure of product palette. If it happens that your one trick pony knows a really good and unique trick, it is a money making machine!
To that almost emotional longs and long-timer discussion up here I say I am touched, almost shed a tear.. it is really sad that investments do not care much about the past, only the prospect!
(and the past might give an indication for that) If the prospect seemed right in 2008 or 2014, the decision to invest in this risky stock was the right one and hey, we are still here! Right now the numbers say this can be a very profitable investment and to me the chances that it goes belly up seems lower than some years ago, so all crocodile tears aside, it seems like a hell of an investment right now!
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Post by radgray68 on Jul 2, 2020 10:56:51 GMT -5
Tre-T should quickly net us 10% of the current sales for UTHR or $40 million. They expect it to triple but let's stay with that figure for now. Even fully diluted that's around 10 cents a share. I use a 15 P/E as a guide for reasonable value and.........crap.......that's only $1.50 share price in a couple years. Not helpful.
However, Afrezza's sales are on pace to double in that time and Tre-T could triple. If both just increased half of that, we start to profit and earn maybe .25 from Tre-T and .05 from Afrezza for about 30 cents a share. That's my thesis in a nutshell $4.50 a share in 3 years while never getting above 15X P/E with no new partners. I don't know everyone's investing goals but a triple, even in 5 years is good enough for me.
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Post by awesomo on Jul 2, 2020 11:01:39 GMT -5
Tre-T should quickly net us 10% of the current sales for UTHR or $40 million. They expect it to triple but let's stay with that figure for now. Even fully diluted that's around 10 cents a share. I use a 15 P/E as a guide for reasonable value and.........crap.......that's only $1.50 share price in a couple years. Not helpful. However, Afrezza's sales are on pace to double in that time and Tre-T could triple. If both just increased half of that, we start to profit and earn maybe .25 from Tre-T and .05 from Afrezza for about 30 cents a share. That's my thesis in a nutshell $4.50 a share in 3 years while never getting above 15X P/E with no new partners. I don't know everyone's investing goals but a triple, even in 5 years is good enough for me. Revenue is not earnings, you can’t use revenue for P/E calculations. |
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Post by prcgorman2 on Jul 2, 2020 11:04:29 GMT -5
According to data online, as of March 2015, the overall drugs sector had an average P/E ratio of about 24.10. According to Yahoo Finance, currently (as of today) Eli Lilly, Merck, Sanofi, UTHR, have PEs of, respectively, about 27, 19, 26, 10. So using a PE of 30 is arguably not conservative at all. It may be a little over optimistic. Of course some BP firms have much higher PEs. But (from what I've read), those are usually atypical and more often or not viewed as bubbles. And Mnkd might hit over $100 even with negative earnings, if it only could capture the imagine of people the way, say, NVAX, did. I won't say that will never happen. Markets are crazy. P/E ratios move over time and tend to be higher for developmental stage companies. During the 2008 financial crisis, the P/E for major pharmas was more in the 15X range and smallish drug companies without a lot of pipeline struggled to manage 8X. In recent years the numbers have been much more attractive for companies with good pipelines. Tiny pharmas with potential blockbuster drug and almost no earnings can come up with multiples in the nosebleed range because with tiny net incomes (assuming they have any income at all) the multiple goes high just because dividing any number by a much smaller number yields a large quotient. However, no pharma company can maintain a P/E is the stratosphere for more than a year or two. Mannkind's issue is that it is still a one-trick pony. The big pharmas all have huge portfolios of drugs and tend not to be overly dependent on a single drug (Pfizer was the exception when Lipitor was still on-patent). The market rewards the broad portfolio with a better P/E because of the inherent stability, and punishes those companies without a broad offering with lower P/E ratios. Don't confuse TS delivery with Mannkind having a deep pipeline; Mannkind is supporting somebody else's pipeline drugs but not their own. If Mannkind wants the kind of respect and P/E that comes from being a diversified drug company then they need to have a pipeline of proprietary molecules. If the company wants to spin the story that they are a great drug delivery partner, then they need to have a portfolio of unique drug delivery technologies and not just TS. Right now Mannkind is neither a broad line drug company with a deep pipeline nor an established drug delivery partner, and the market is not going to reward the company with a big pharma-type P/E ratio. That can change of course, but not with the current business strategy. Hmmm, I garee with most of what you say, but I do think Mannkind is necessarily more similar to Pfizer in terms of sitting on top of a single important drug, but also capable of delivering other commercially important drugs. And when I say delivering, I mean using TS as an inert inhalable carrier molecule coupled with a wonderfully cheap, disposable, and increasingly, smart, device. I remember comments from Matt Pfeffer mentioning that Afrezza was just the first application of TS, but that they could have picked others. The pipeline work on TreT, cannabinoids, Tadalafil, et cetera are real-live proof. TreT is the most visible, and is very important for establishing the reputation of a commercially valuable delivery platform. The important upside potential is Afrezza inhalable human insulin, but eventually, it has to be the pipeline. Cash flow break even and profit are critical to getting access to cheaper capital, and with capital comes acceleration of effort and results. We’re years behind where we would have been because of Sanofi. Tough. The opportunities are unrealized but still there. |
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Post by radgray68 on Jul 2, 2020 18:34:24 GMT -5
Tre-T should quickly net us 10% of the current sales for UTHR or $40 million. They expect it to triple but let's stay with that figure for now. Even fully diluted that's around 10 cents a share. I use a 15 P/E as a guide for reasonable value and.........crap.......that's only $1.50 share price in a couple years. Not helpful. However, Afrezza's sales are on pace to double in that time and Tre-T could triple. If both just increased half of that, we start to profit and earn maybe .25 from Tre-T and .05 from Afrezza for about 30 cents a share. That's my thesis in a nutshell $4.50 a share in 3 years while never getting above 15X P/E with no new partners. I don't know everyone's investing goals but a triple, even in 5 years is good enough for me. Revenue is not earnings, you can’t use revenue for P/E calculations. Yeah, thanks for the tip. Truth is, I hate P/E for valuing a stock. Especially this stock. That's for large, established companies with regular earnings streams. EBITDA? TTM? Forward earnings? We're talking about something that hasn't happened yet so it's impossible to predict accurately anyway. Whichever metric you want to use, It'll be pure profits for Mannkind because of the economy of scale coming soon for Afrezza. Royalties are going to be so sweet and cost so little over what we already spend to kkeep the lights on. Split hairs on the COGS as you see fit. Besides, the PEG ratio is more important for Mannkind for the next few years. |
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Post by bthomas55ep on Jul 2, 2020 20:29:50 GMT -5
Revenue is not earnings, you can’t use revenue for P/E calculations. Yeah, thanks for the tip. Truth is, I hate P/E for valuing a stock. Especially this stock. That's for large, established companies with regular earnings streams. EBITDA? TTM? Forward earnings? We're talking about something that hasn't happened yet so it's impossible to predict accurately anyway. Whichever metric you want to use, It'll be pure profits for Mannkind because of the economy of scale coming soon for Afrezza. Royalties are going to be so sweet and cost so little over what we already spend to kkeep the lights on. Split hairs on the COGS as you see fit. Besides, the PEG ratio is more important for Mannkind for the next few years. When Mnkd achieves cash flow break even and the spector of bankruptcy and more dilution fades, the intense selling pressure will subside and the price should begin to acknowledge the peg and p/e with optimism. By that time, should the company see multiple revenue streams developing as well as the promise of the future undeveloped t/s pipeline, it would be nice to start seeing a share price that ignores p/e and overvalues the company based on potential and promise. That would be fun/nice. Maybe late 2021 or 2022? Good luck. |
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