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Post by buyitonsale on Aug 2, 2020 22:53:23 GMT -5
Novel treatments require massive ad campaigns. MNKD failed to choose an effective ad and wasted the little money they had to spend last year. This is ultimately CEOs fault for not recognizing that the ad was too soft and forgettable. There is no money at the moment to create another TV ad, I actually liked the billboards and inhalemyinsulin.com campaign, why has that stalled ? Outside of the effective ad campaign, the only way to faster adoption is adding new prescribers that are willing to put more patients on Afrezza. That also takes a lot of resources and throwing money at them, the same way big pharma does every year (hundreds of millions). The new CCO and Kendall successor better think hard about how to work the provider angle more effectively. That is a tough one, as few prescribers are willing to admit or learn that there is a better way to treat blood sugars... the same as it is hard for most T2 diabetics to admit or learn that they can actually cure themselves from diabetes if they simply changed their diet. Instead, treatment results are getting worse and T2 population is growing out of control. To me, all this CEO blaming basically is around his failure to effectively market the drug, and so the saga continues. |
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Post by sportsrancho on Aug 2, 2020 23:07:19 GMT -5
Very good points and I also loved the billboards.
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brut
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Post by brut on Aug 3, 2020 0:03:21 GMT -5
Long time lurker but had to post on this topic.
My issue with Mike is that his strategy and change of strategy every year just doesn’t seem to make sense to me. Here is a short list of what bugs me —
1. He said they will focus on reducing the territory and focus on regions that are more successful - why wasn’t this the strategy in the first place? #1 reason for a small business to fail is if they focus on growing too fast. Focus on key areas first.
2. He said they will now focus on type 1 more - Al mann 10 years ago had said they should focus on T1 first. Follow the script of the founder who has worked on this for years. Why has it taken so long to get to this strategy?
3. He said they will now focus on retention - this bugs me the most. We know that the doctors are not prescribing Afrezza as much as we would like to and the insurance coverage is not that great. So what do you do? Make sure that the patients who do try the drug get the best in class support system and hand holding to be successful. Do everything you can to increase retention to 80-90%. If he just really spent all the money on this, we would already have great sales numbers - effect of compounding looks slow but if patient can do wonders.
These seem so basic to me ... a company’s CEO should be able to focus on the basics and know what he has and hasn’t and execute against. The problem is he is coming to these conclusions too late or just changing stories to cover up for lack of growth.
The reality is also that it will be hard to replace Mike. We don’t have a better option so I guess we are just in wait and watch mode.
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Post by prcgorman2 on Aug 3, 2020 6:50:57 GMT -5
To me it is all about capital. It takes money to make money. I appreciate that so far (and I know this could change any day) we’ve not seen substantial dilution from the newly minted shares. I expect Dr. Castagna is trying to eek out a path to cash flow break even. COVID-19 may have actually helped. The Rx numbers have been reasonably steady although it’s clearly not going to meet the requirements of the last loan’s covenants so we still have to face whatever happens from that. But operating the company in a near coma might sustain it through the pandemic and bring it to the point in time when TreT and possibly the pediatric application for Afrezza approvals come to fruition. Getting to that point may have actually been more expensive and therefore more difficult if COVID-19 had not occurred. TreT and pediatric approvals are important milestones. And while they are the most visible, it doesn’t mean they will be the only important achievements during this difficult time. I’m not counting on those approvals because the Mannkind experience has been what it has been, but if they do happen, and it is not unreasonable to hope for that to happen, I expect to see it baked into the share price, at least modestly if not outright doubling it, and of course, it should also translate to royalties and revenue too. The combinations of these accomplishments, if they happen, should put Mannkind in a much better place with regard to raising capital. Adding capital brings the possibility of a larger salesforce, enhanced marketing possibly including TV DTC again, more pipeline development, bigger insurance rebates, and what I would most like to see is a large clinical trial proving superiority of Afrezza as the best prandial insulin available on the market, period.
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Post by babaoriley on Aug 3, 2020 9:23:13 GMT -5
Let me summarize: Affreza dog don’t hunt.
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Post by agedhippie on Aug 3, 2020 9:48:18 GMT -5
Let me summarize: Affreza dog don’t hunt. ROFL - my candidate for the all time best post.  |
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Post by agedhippie on Aug 3, 2020 10:13:00 GMT -5
DTC has not worked. They have tried TV adverts, sponsorship, billboards (cool outside the box idea), Youtube, and social media. The only way this gets done is if the doctors are onboard with Afrezza - VDEX has shown this.
People typically go with what the doctor says so when a Type 2 patient turns up and says they want to try Afrezza I am willing to bet the doctor's immediate reaction are that things are not so bad they have to go to prandial insulin. End of story. As for Type 1 there your are more usually dealing with an endo and they tend to be data driven - articles from big trials. Other than that you need to persist (most don't), and your endo needs to fight with the insurers which they view as taking time away from treating people.
You will get some endos who are more open to new ideas than others - my endo often has his Type 1 patients on Type 2 drugs (I take SGLT2) despite this being off-label. But even with these endos they are not going into new areas unless they can see a lot of data to support the idea. The current sales approach is not going to change things because there is no compelling trials data to get these endos to move. Once these endos move though the others will follow.
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Post by matt on Aug 3, 2020 10:45:10 GMT -5
The reality is also that it will be hard to replace Mike. We don’t have a better option so I guess we are just in wait and watch mode. Any good executive recruiter will have a list of ten fully-vetted candidates that can replace Mike within 45-60 days. There is plenty of talent out there. The problem is lack of capital and, as agedhippie noted, a lack of comprehensive trials that proves the value of the drug. You cannot charge a premium price for a drug unless you have the data and you can't generate the data without capital. Unfortunately, at this point the company is not producing enough revenue to self-fund the necessary trials and the balance sheet was too impaired to have any realistic hope of raising the necessary capital, and that was before COVID took its toll on the financial markets. Absent a handful of tech stocks, nobody is raising serious money at the moment. It is not that hard to replace Mike, but any successor will run up against the exact same hurdles that Mike has to deal with. If anybody thinks the US financial markets can simply be charmed out of a few hundred million dollar by a new face then you need to think again. I don't think Mike is particularly stupid, lazy, or inept at raising money; he is just trying to bluff his way through a poker tournament with nothing more than a pair of twos in his hand. Mike inherited a business model that is inherently broken and has been unable to fix it, and any replacement executive will not be in any better position. The choice is to abandon the business model or watch the company run in circles indefinitely. |
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brut
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Post by brut on Aug 3, 2020 11:17:55 GMT -5
Any good executive recruiter will have a list of ten fully-vetted candidates that can replace Mike within 45-60 days. There is plenty of talent out there. The problem is lack of capital and, as agedhippie noted, a lack of comprehensive trials that proves the value of the drug. You cannot charge a premium price for a drug unless you have the data and you can't generate the data without capital. Unfortunately, at this point the company is not producing enough revenue to self-fund the necessary trials and the balance sheet was too impaired to have any realistic hope of raising the necessary capital, and that was before COVID took its toll on the financial markets. Absent a handful of tech stocks, nobody is raising serious money at the moment. It is not that hard to replace Mike, but any successor will run up against the exact same hurdles that Mike has to deal with. If anybody thinks the US financial markets can simply be charmed out of a few hundred million dollar by a new face then you need to think again. I don't think Mike is particularly stupid, lazy, or inept at raising money; he is just trying to bluff his way through a poker tournament with nothing more than a pair of twos in his hand. Mike inherited a business model that is inherently broken and has been unable to fix it, and any replacement executive will not be in any better position. The choice is to abandon the business model or watch the company run in circles indefinitely. Well said. If the doctors are not prescribing and insurance is a hurdle primarily because of the capital/lack of trial results you and others have mentioned, what choice does the company have? I think a great CEO needs to allocate limited capital to maximize the output. In this case, instead of spending millions on tv campaigns etc, a better strategy is to have relentless focus on having incredible retention rates to enable strong patient following who are willing to give referrals to their family and friends. Given where we are at, I don’t see any other choice until the capital situation or trial results situation changes. If the drug is as great as we all think it is, retention should be the least of our problems. And if we looked at all the patients who tried this, our retention rates doesn’t seem to be all that great. (I don’t have the data on this, some can correct me if I am wrong). Mike has done some great things - UTHR, recapitalization etc will probably keep the company afloat hopefully but I think his strategy was flawed on commercializing afrezza. Remains to be seen if it is too late or there is still time and capital to refocus. |
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Post by sportsrancho on Aug 3, 2020 11:40:54 GMT -5
DTC has not worked. They have tried TV adverts, sponsorship, billboards (cool outside the box idea), Youtube, and social media. The only way this gets done is if the doctors are onboard with Afrezza - VDEX has shown this. People typically go with what the doctor says so when a Type 2 patient turns up and says they want to try Afrezza I am willing to bet the doctor's immediate reaction are that things are not so bad they have to go to prandial insulin. End of story. As for Type 1 there your are more usually dealing with an endo and they tend to be data driven - articles from big trials. Other than that you need to persist (most don't), and your endo needs to fight with the insurers which they view as taking time away from treating people. You will get some endos who are more open to new ideas than others - my endo often has his Type 1 patients on Type 2 drugs (I take SGLT2) despite this being off-label. But even with these endos they are not going into new areas unless they can see a lot of data to support the idea. The current sales approach is not going to change things because there is no compelling trials data to get these endos to move. Once these endos move though the others will follow. Word for word truth. I’m going to clarify something.. my intuition tells me matts post it’s very close to being accurate... my life experience tells me aged’s post is 100% correct. |
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Post by prcgorman2 on Aug 3, 2020 12:09:39 GMT -5
Let me summarize: Affreza dog don’t hunt. Let me rejoin: Al Mann was not a fool. |
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Post by morfu on Aug 3, 2020 12:34:49 GMT -5
Diluting is the worst thing he could have done for the financing, every shareholder lost value there!
Particularly selling a lot of shares when the price is low.. he could have done his job and get a decent loan, how about 500mil$ over the next 20 years for lets say 10% per year, thus removing any financial problem and avoid dilution... It is easy to say that, but it is well nigh impossible to find such a loan. Lenders loan to the borrowers with the least default risk and MNKD does not have the financial ratios or business results to be characterized as low risk. Simply put, most lenders would rather buy treasury bills that yield a fraction of a percent rather then make a 20 year loan to a company with no operating earnings. I have been critical of Mike on a host of issues where I think he is out of his depth, but you can't fault him for diluting shareholders when the financial markets are not offering alternative instruments that are less painful to existing shareholders. Just think about what you are proposing here; a $500 million loan at 10% interest means that the company would have to pay $50 million in interest per year. Where does that money come from given that the enterprise remains far from cash flow breakeven even without a $50 million interest nut to cover. If your answer is that it would be a subordinated zero coupon bond, then you are talking an eventual repayment of roughly $3.4 billion on top of the already existing liabilities. If you know a lender willing to swallow such terms I am sure Mike would appreciate the introduction. It is not easy to get a loan in this situation? You must live on a different planet! Even before Corona the banks were giving money out for cheap! Other managers managed to get loans, the management before MC did get loans.. but you are right, not getting a loan and dilute instead got him and his management a big perfornace review for 2019 and a big bonus.. which would be laughable if it would be a such a big waste of our money!
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Post by morfu on Aug 3, 2020 12:56:27 GMT -5
Afrezza sales are GROWING 55% YOY. What insulin maker is growing sales 55% a year? We all know how difficult it has been for MNKD. If you want to blame someone blame AL MANN (May he RIP). He had 2 CRLs and decided to take the weakest approach for approval. Now MNKD is suffering from that decision. Any CEO coming in would have had a tough time. You guys want to bitch about the negative. Why don't you talk about the TURNAROUND Mike has completed. You seem to be becoming the minority in sentiment here Casper. 55% year over year sounds good until you look at the actual numbers. 55% of a small number is still a small number. As I said, it sounds good but you cannot legitimately compare Mannkind to the major players in the diabetes market. "The weakest approach" as you call it, was a point where the FDA had Al Mann backed into a corner. In my opinion he took whatever course of action he could to get it approved and then he could go on to prove Afrezza in the end. So blaming the current CEO's lack of success on Al Mann is near blasphemy here. Care to try again? Oh, and maybe you can elucidate us with this big turn around you mention. It sure isn't reflected in the share price! What do you mean by small numbers? Do you mean that Mannkind is a smaller company than Eli Lilly, Novo Nordisk, and Sanofi? Who cares? This relative gain in relation to the year before represents non-linear growth if you look at it over many years, not sure why we would expect that.
The only relevant number in my opinion is the potential return on the investment. I am guessing that the EPS will be about 0.1$ less negative than last year. If such a trend would continue for a few years, we will see 1$ per share.. now that is a number I really like! (kind of a benchmark for me when I first decided to buy this stock)
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Post by prcgorman2 on Aug 3, 2020 13:44:09 GMT -5
Matt makes many good posts, but I disagree. Saying “abandon the business model” is easy to post but what does it really mean? I’ll summarize agedhippie as having said “clinical studies to persuade or expect the same lack of traction with endos”. I addressed both of these by saying cash flow break even makes raising capital on reasonable terms possible and opens the possibility to improving insurance coverage via bigger discounts, clinical trials, advertising, increasing salesforce, and investing in the pipeline. I think I covered every plausible base with respect to the business models that make sense for Mannkind. Witihout snearing and sarcasm, tell me what I missed.
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Post by sayhey24 on Aug 3, 2020 13:57:07 GMT -5
DTC has not worked. They have tried TV adverts, sponsorship, billboards (cool outside the box idea), Youtube, and social media. The only way this gets done is if the doctors are onboard with Afrezza - VDEX has shown this. People typically go with what the doctor says so when a Type 2 patient turns up and says they want to try Afrezza I am willing to bet the doctor's immediate reaction are that things are not so bad they have to go to prandial insulin. End of story. As for Type 1 there your are more usually dealing with an endo and they tend to be data driven - articles from big trials. Other than that you need to persist (most don't), and your endo needs to fight with the insurers which they view as taking time away from treating people. You will get some endos who are more open to new ideas than others - my endo often has his Type 1 patients on Type 2 drugs (I take SGLT2) despite this being off-label. But even with these endos they are not going into new areas unless they can see a lot of data to support the idea. The current sales approach is not going to change things because there is no compelling trials data to get these endos to move. Once these endos move though the others will follow. Word for word truth. I’m going to clarify something.. my intuition tells me matts post it’s very close to being accurate... my life experience tells me aged’s post is 100% correct. Sports - I see it some what different. MNKD can continue doing large studies and they will continue to get the exact same results. With T1s, A1c will be about the same as using an RAA with significantly better post prandial numbers and a significant reduction in hypos. We saw it with the Affinity 1. We saw it with STAT. We see it with Intell's posting today of onlinelibrary.wiley.com/doi/abs/10.1111/1753-0407.13099?af=R. Without second dosing and/or a change in basal dosage little A1c change will be seen. Then again we know the FDA's position on second dosing from the ADCON. The called out the doctor who did it and had significantly better A1c numbers as cheating. For T2s the Affintity II study says it all. Use the afrezza and you will have better numbers. In fact Dr. Kendall saw so much study data all saying afrezza was the greatest improvement in diabetic care in 100 years he said this would be the easiest job he ever had. At the same times Aged is now taking an SGLT2 and not afrezza says it all. Any half way decent endo should be prescribing afrezza every day of the week and twice on Sunday instead of an SGLT2. How many insulin studies do we need to show early intervention with insulin stops T2 progression? Nothing is going to change until the PWDs can see and understand their numbers. The last time I talked with Bill, VDex was still using the Libre Pro and the PWDs were blinded from their numbers. Hopefully this has changed. By now I had expected CGMs would be in more widespread use. I went to a training course for T2s not long ago and few T2s meter tested let alone after meals and none had a CGM. What we are facing is a marketing problem which includes who is going to pay for this stuff. We have Karen Bass (who might be your congressman) running off to Cuba in search of an ulcer medication when afrezza can stop the root cause of the ulcers. Galindo shows up tomorrow and hope springs eternal. This guy's Medtonic plan is a perfect fit for afrezza. Hopefully he can get a big partnership which can move the market. I bet IBM would love to see Sugar IQ become mainstream. Hopefully Bill has already given Galindo a call. |
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