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Post by obamayoumama on Apr 21, 2021 14:54:25 GMT -5
Revenue- cost of goods sold- sales expense-management expense=ebita Royalty- zero expense= ebita. This royalty stream is worth a 20+ Multiple 100 million in revenue would be at least in my opinion worth over 2 billion. That alone should put MNKD at $8.00+. Add in the other possibilities for approval and worldwide sales of Afrezza and you can see why the potential is huge in my opinion Yes, you are correct with your difference between Revenue and Royalty.. I have seen numbers between 40% and 50% for the cost/sales expense for Afrezza (getting lower with increasing sales) IMHO further reduced as Mannkind can claim taxes credits against these costs. Either way, I think we can treat Royalties+ x*Revenue as one number in that model!? Can you elaborate a bit more what "20+ Multiple 100 million" means?
Celo´s model was talking about roughly $200mil extra and more than $120mil in 2023 as expected Royalty + some Revenue and a PSR of maximal 7.
Now I see two points from there,
- take these $200Mil as a net worth increase as I did and estimate the resulting gain per share. BTW this neglects any costs over the next 2.5 years offsetting that value, I say that is already priced into the current share value  - Or -and I think that is more important and follows your argument (somewhat)- argue that this extra value has the possibility to transform Mannkind into a stable green $$$ state, which seems priceless!
What would an investor pay for 100 million in royalty payments. Those payments go straight to the bottom line. My guess is the market would value that royalty stream at a multiple of the annual royalty stream. My guess it would command 20+ multiple, hence 2 billion, not including Afrezza worldwide potential and other drugs added to the pipeline in the future. |
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Post by bthomas55ep on Apr 21, 2021 15:11:10 GMT -5
Yes, you are correct with your difference between Revenue and Royalty.. I have seen numbers between 40% and 50% for the cost/sales expense for Afrezza (getting lower with increasing sales) IMHO further reduced as Mannkind can claim taxes credits against these costs. Either way, I think we can treat Royalties+ x*Revenue as one number in that model!? Can you elaborate a bit more what "20+ Multiple 100 million" means?
Celo´s model was talking about roughly $200mil extra and more than $120mil in 2023 as expected Royalty + some Revenue and a PSR of maximal 7.
Now I see two points from there,
- take these $200Mil as a net worth increase as I did and estimate the resulting gain per share. BTW this neglects any costs over the next 2.5 years offsetting that value, I say that is already priced into the current share value - Or -and I think that is more important and follows your argument (somewhat)- argue that this extra value has the possibility to transform Mannkind into a stable green $$$ state, which seems priceless!
What would an investor pay for 100 million in royalty payments. Those payments go straight to the bottom line. My guess is the market would value that royalty stream at a multiple of the annual royalty stream. My guess it would command 20+ multiple, hence 2 billion, not including Afrezza worldwide potential and other drugs added to the pipeline in the future. Today's market cap at a close today of $4.62 is $1.04B. fwiw |
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Post by celo on Apr 21, 2021 15:17:16 GMT -5
Yes, you are correct with your difference between Revenue and Royalty.. I have seen numbers between 40% and 50% for the cost/sales expense for Afrezza (getting lower with increasing sales) IMHO further reduced as Mannkind can claim taxes credits against these costs. Either way, I think we can treat Royalties+ x*Revenue as one number in that model!? Can you elaborate a bit more what "20+ Multiple 100 million" means?
Celo´s model was talking about roughly $200mil extra and more than $120mil in 2023 as expected Royalty + some Revenue and a PSR of maximal 7.
Now I see two points from there,
- take these $200Mil as a net worth increase as I did and estimate the resulting gain per share. BTW this neglects any costs over the next 2.5 years offsetting that value, I say that is already priced into the current share value - Or -and I think that is more important and follows your argument (somewhat)- argue that this extra value has the possibility to transform Mannkind into a stable green $$$ state, which seems priceless!
What would an investor pay for 100 million in royalty payments. Those payments go straight to the bottom line. My guess is the market would value that royalty stream at a multiple of the annual royalty stream. My guess it would command 20+ multiple, hence 2 billion, not including Afrezza worldwide potential and other drugs added to the pipeline in the future. I am not sure how the agreement works between UTHR and Mannkind. I have tried to find it. Mannkind will manufacture Tyvaso DPI at their facility. Does United pay for all cost to manufacture Tyvaso DPI at the mannkind facility? If that is the case, then the royalty is a pure profit. If part of the manufacturing process is paid for by mannkind, then it would be deducted from the profits. And that could be anything, from the employees needed, utilities for the facility, etc...So the question is, will United give x amount of dollars to manufacture Tyvaso DPI and then another low double digit royalty after that? This is the same facility that manufacturers Afrezza so parsing up the overhead for manufacturing each drug may be difficult. If true, my calculus would have to be changed, and Tyvaso DPI would be a true royalty profit. Instead of negative earnings there could be positive. But let's be clear, this is not a royalty as in music, where a musician receives 10 percent on his music, sits on his ass all day, smokes a ton of weed and lives like there's no tomorrow. Mannkind has a facility to manage and a company to run. I will add one more item, from what I've read, the facility will be used by united to manufacture Tyvaso DPI. The royalty payment is paid for use of the facility. Therefore, united will supply all the individuals necessary to manufacture. On a side note, it really is a great time for Mannkind to do a lease back because they now have a long term, stable company also using the facility (United). Price of the facility went way up when the renter became United and mannkind instead of just mannkind and it's puny afrezza. |
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Post by robbmo on Apr 21, 2021 17:03:03 GMT -5
What would an investor pay for 100 million in royalty payments. Those payments go straight to the bottom line. My guess is the market would value that royalty stream at a multiple of the annual royalty stream. My guess it would command 20+ multiple, hence 2 billion, not including Afrezza worldwide potential and other drugs added to the pipeline in the future. I am not sure how the agreement works between UTHR and Mannkind. I have tried to find it. Mannkind will manufacture Tyvaso DPI at their facility. Does United pay for all cost to manufacture Tyvaso DPI at the mannkind facility? If that is the case, then the royalty is a pure profit. If part of the manufacturing process is paid for by mannkind, then it would be deducted from the profits. And that could be anything, from the employees needed, utilities for the facility, etc...So the question is, will United give x amount of dollars to manufacture Tyvaso DPI and then another low double digit royalty after that? This is the same facility that manufacturers Afrezza so parsing up the overhead for manufacturing each drug may be difficult. If true, my calculus would have to be changed, and Tyvaso DPI would be a true royalty profit. Instead of negative earnings there could be positive. But let's be clear, this is not a royalty as in music, where a musician receives 10 percent on his music, sits on his ass all day, smokes a ton of weed and lives like there's no tomorrow. Mannkind has a facility to manage and a company to run. I will add one more item, from what I've read, the facility will be used by united to manufacture Tyvaso DPI. The royalty payment is paid for use of the facility. Therefore, united will supply all the individuals necessary to manufacture. On a side note, it really is a great time for Mannkind to do a lease back because they now have a long term, stable company also using the facility (United). Price of the facility went way up when the renter became United and mannkind instead of just mannkind and it's puny afrezza. My understanding is, the manufacturing will be done at something like cost + 10%, and the royalty is separate. Mike stated this on one of the more recent virtual calls/presentations. |
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Post by obamayoumama on Apr 21, 2021 17:33:06 GMT -5
I am not sure how the agreement works between UTHR and Mannkind. I have tried to find it. Mannkind will manufacture Tyvaso DPI at their facility. Does United pay for all cost to manufacture Tyvaso DPI at the mannkind facility? If that is the case, then the royalty is a pure profit. If part of the manufacturing process is paid for by mannkind, then it would be deducted from the profits. And that could be anything, from the employees needed, utilities for the facility, etc...So the question is, will United give x amount of dollars to manufacture Tyvaso DPI and then another low double digit royalty after that? This is the same facility that manufacturers Afrezza so parsing up the overhead for manufacturing each drug may be difficult. If true, my calculus would have to be changed, and Tyvaso DPI would be a true royalty profit. Instead of negative earnings there could be positive. But let's be clear, this is not a royalty as in music, where a musician receives 10 percent on his music, sits on his ass all day, smokes a ton of weed and lives like there's no tomorrow. Mannkind has a facility to manage and a company to run. I will add one more item, from what I've read, the facility will be used by united to manufacture Tyvaso DPI. The royalty payment is paid for use of the facility. Therefore, united will supply all the individuals necessary to manufacture. On a side note, it really is a great time for Mannkind to do a lease back because they now have a long term, stable company also using the facility (United). Price of the facility went way up when the renter became United and mannkind instead of just mannkind and it's puny afrezza. My understanding is, the manufacturing will be done at something like cost + 10%, and the royalty is separate. Mike stated this on one of the more recent virtual calls/presentations. This Royalty is pure profit, plus they get additional monies (profit) from the Cost plus arrangement to manufacture the product for UTHR. By using Danbury, MNKD also makes Danbury more efficient by lowering the cost to manufacture Afrezza by spreading the cost of Danbury between the 2 products vs. only AFREZZA. This is a huge win for MNKD. |
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Post by neil36 on Apr 21, 2021 17:35:12 GMT -5
I am not sure how the agreement works between UTHR and Mannkind. I have tried to find it. Mannkind will manufacture Tyvaso DPI at their facility. Does United pay for all cost to manufacture Tyvaso DPI at the mannkind facility? If that is the case, then the royalty is a pure profit. If part of the manufacturing process is paid for by mannkind, then it would be deducted from the profits. And that could be anything, from the employees needed, utilities for the facility, etc...So the question is, will United give x amount of dollars to manufacture Tyvaso DPI and then another low double digit royalty after that? This is the same facility that manufacturers Afrezza so parsing up the overhead for manufacturing each drug may be difficult. If true, my calculus would have to be changed, and Tyvaso DPI would be a true royalty profit. Instead of negative earnings there could be positive. But let's be clear, this is not a royalty as in music, where a musician receives 10 percent on his music, sits on his ass all day, smokes a ton of weed and lives like there's no tomorrow. Mannkind has a facility to manage and a company to run. I will add one more item, from what I've read, the facility will be used by united to manufacture Tyvaso DPI. The royalty payment is paid for use of the facility. Therefore, united will supply all the individuals necessary to manufacture. On a side note, it really is a great time for Mannkind to do a lease back because they now have a long term, stable company also using the facility (United). Price of the facility went way up when the renter became United and mannkind instead of just mannkind and it's puny afrezza. My understanding is, the manufacturing will be done at something like cost + 10%, and the royalty is separate. Mike stated this on one of the more recent virtual calls/presentations. That’s my recollection as well. I also remember in a recent fireside chat, the analyst said that for the royalties and cost of good sold reimbursement he was using 12.5%. He asked Mike if that was in the ballpark and MC replied “that sounds about right”. |
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Post by mcbone on Apr 21, 2021 17:53:45 GMT -5
I am not a big fan of MC. But it seems that he negotiated a good deal with UTHR at a time when MNKD was desperate and had no leverage. The deal was announced at a low point for MNKD when the "hit" articles declaring imminent bankruptcy kept popping up. On the other hand, MC seems to have been resting on his laurels since then and I am especially disappointed with his awful performance on Afrezza sales. I would get over it if he closed a deal similar to Tyvaso on an additional molecule, with UTHR or another company. If that happens, and it's what I am hoping for, the share price is going to balloon.
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Post by boca1girl on Apr 21, 2021 18:21:57 GMT -5
My understanding is, the manufacturing will be done at something like cost + 10%, and the royalty is separate. Mike stated this on one of the more recent virtual calls/presentations. That’s my recollection as well. I also remember in a recent fireside chat, the analyst said that for the royalties and cost of good sold reimbursement he was using 12.5%. He asked Mike if that was in the ballpark and MC replied “that sounds about right”. MC’s words from the conference-transcript: (Sounds like cost + 12.5% profit for manufacturing AND low double digit royalty to me. I always assumed the royalty was 10%). The deal was $105 million in upfront plus milestones. Those have all been met as of Q4 of 2020. And then from there, once it's approved, we get royalties, we get double-digit royalties, on that sales of Tyvaso. So last year it did roughly $500 million. And Steve, I think you got projections, this can get to $1.6 billion, roughly and so we will get low double-digit royalties and we expect most Tyvaso as I’ll talk about in second, it should switch over to our platform. There is really no clinical reasons why that patients wouldn't want to try the dry powder from a nebulizer. The other part of the deal is manufacturing. So we originally were open to other UT manufactured or we manufacture the commercial scale, we will be the commercial manufacturing for the foreseeable future. In fact, we're building scaled up facility within Danbury to handle future indications and future demand. So that's where we're excited about this asset, and we think it's going to be a great opportunity to help patients. And we will make - I think we put in 12.5% COGS, plus 12.5% in your model Steve, and I'd say that's in the ballpark. We've not disclosed that publicly. But I think you're close enough for people to see and we'll get clarity as we finalize our supply agreement and give you some clarity as we get to Q4. But we’ll be making Tyvaso here are Q3 and Q4, and getting ready for launch. And that's exciting. And then and then don't really stop there on the deal terms. So that's what it looks like. So royalties, plus manufacturing. And as you know, Danbury is a very large facility and Tyvaso we run in 24/7 there. So it'll be very exciting to get this manufactured and get that team really up to speed in the factory and running full speed ahead there. seekingalpha.com/article/4414655-mannkind-corporation-mnkd-ceo-mike-castagna-presents-oppenheimers-31st-annual-healthcare?mail_subject=mnkd-mannkind-corporation-mnkd-ceo-mike-castagna-presents-at-oppenheimer-s-31st-annual-healthcare-brokers-conference-transcript&utm_campaign=rta-stock-article&utm_content=link-2&utm_medium=email&utm_source=seeking_alpha |
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Post by celo on Apr 21, 2021 19:34:26 GMT -5
Wow thanks everybody. It really is a sweet deal for mannkind. They get a 75 to 100 million (based on current tyvaso sales) annual royalty and on top of that they get an additional 12.5% over cost of manufacturing the molecule, dreamboat, crickets and all else...I smell a dividend. I'm kidding but I'm kinda not. That's a lot of cash building up if annual sales become 1.6 billion. That's 200 million to the bottom line and there is currently 250 million shares. A dollar a year for a 4 dollar stock. Not including Afrezza, RLS, other United molecules...The stock is CHEEP.
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Post by mytakeonit on Apr 21, 2021 19:48:33 GMT -5
Maybe so, but it was REALLY CHEEEEEEP at 82 cents.
But, that's mytakeonit
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Post by casualinvestor on Apr 22, 2021 11:12:54 GMT -5
It's a bit odd to see Mike say Danbury is a very large facility, that will run 24/7, when it's going to be making Tyvaso DPI for such a small number of patients. Even including the ILD group, it's only ~30-40k patients? And the PAH Group 1 is much smaller if memory serves.
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rebby
Researcher
Posts: 73
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Post by rebby on Apr 22, 2021 11:45:04 GMT -5
It's a bit odd to see Mike say Danbury is a very large facility, that will run 24/7, when it's going to be making Tyvaso DPI for such a small number of patients. Even including the ILD group, it's only ~30-40k patients? And the PAH Group 1 is much smaller if memory serves. If the production line(s) is right-sized, good floor space utilization would be to run multiple shifts vs having multiple lines running 1-2 shifts. Not sure if that is the direction of the comment but with the right context I can see the use of 24/7 and not mean that the facility is fully utilized |
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Post by harryx1 on Apr 22, 2021 12:01:41 GMT -5
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Post by peppy on Apr 22, 2021 12:06:12 GMT -5
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Post by mytakeonit on Apr 22, 2021 14:11:07 GMT -5
And I believe that MNKD is supposed to supply the world.
But, that's mytakeonit
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