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Post by ronw77077 on Nov 4, 2021 13:35:41 GMT -5
Predicting MNKD Stock Price at end of 2022
UT reported:
Q3 Tyvaso revenue of $164.2 million.
Tyvaso application for PH-ILD was approved on March 31 and sales efforts began in April, which was the primary driver for the increase in users from 3,000 to 4,000 at quarter end.
They project 6,000 users by the end of 2022.
Note that there are 30,000 U.S. patients with PH-ILD, for which Tyvaso is the only approved drug.
Anecdotally, trials are underway for the application of Tyvaso for people with PH-COPD, of which there are 100,000 in the U.S., with no approved drug therapy.
Now, to the predictions.
Assume the average number of Tyvaso users in Q3 was 3,500 (i.e., the average of the beginning and ending quarter users).
Using 3,500 users, the average sales revenue per user in Q3 was $46,914 ($164.2 mil / 3,500).
Projecting to 6,000 users yields quarterly revenue of $281.5 million, annualized to $1,125.9 million.
Assuming MNKD gets a royalty of 12% (my guess as to what “low double digits” means), MNKD will receive $135.1 million annually. All of this goes directly to the bottom line.
MNKD also gets reimbursed for manufacturing costs plus a markup, which has not been revealed. MNKD’s manufacturing costs in Q2 were 44% of net revenue for commercial product sales. This percentage will be reduced, probably significantly, when its costs are amortized over a much larger combined manufacturing cost. Whatever the manufacturing cost of Tyvaso DPI, the amount MNKD receives will either be recognized as revenue or a contra cost – in either event it will not directly affect the bottom line. However, it will make Afrezza more profitable.
I assume a WAG of 10% as the markup on the Tyvaso CGS (cost of good sold). UT’s product manufacturing costs were 8.3% in Q2 and 6.2% in Q3. This compares to MNKD’s 44%, which makes this a guessing game, but we need to make some assumptions, though the impact of the assumption is not terribly material. I assume the manufacturing cost is 15% of Tyvaso sales (i.e., 15% of the $1,125.9 million annualized revenues projected above). Then, the markup is my assumed WAG of 10% on the 15% cost or $1,125.9 million X 15% x 10% = $16.9 million. This markup also goes directly to the bottom line.
Thus, we have $135.1 million in revenue and $16.9 million in cost markup for a total annualized revenue from UT of $152.0 million (measured in Q4 2022).
With the reduced manufacturing cost to Afrezza and its increased sales, and whatever else happens to MNKD I am going to simply posit that MNKD reaches breakeven for all its operations other than Tyvaso DPI.
Because of MNKD’s large tax loss carry forward the $152.0 million is, therefore, the after-tax earnings. There are currently 242 million MNKD shares outstanding, which means that the EPS (earnings per share) is $.63/ share.
Now we have to speculate on what the appropriate P/E (price/earnings) multiple will be. With the average P/E for all U.S. stocks ranging from 20 to 25, I’ll posit a P/E of 25, which, therefore, suggests that MNKD’s stock price will be $15.75. at year-end 2022.
Obviously, one can disagree with any of the assumptions, but I offer the foregoing analysis as a basis for a reasoned dialogue.
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Post by peppy on Nov 4, 2021 13:54:49 GMT -5
Thank you ronw77077 . Nice work. added, Pulmonary hypertension in COPD Mild-to-moderate pulmonary hypertension is a common complication of chronic obstructive pulmonary disease (COPD); such a complication is associated with increased risks of exacerbation and decreased survival. Pulmonary hypertension usually worsens during exercise, sleep and exacerbation. Pulmonary vascular remodelling in COPD is the main cause of increase in pulmonary artery pressure and is thought to result from the combined effects of hypoxia, inflammation and loss of capillaries in severe emphysema. A small proportion of COPD patients may present with “out-of-proportion” pulmonary hypertension, defined by a mean pulmonary artery pressure >35–40 mmHg (normal is no more than 20 mmHg) and a relatively preserved lung function (with low to normal arterial carbon dioxide tension) that cannot explain prominent dyspnoea and fatigue. The prevalence of out-of-proportion pulmonary hypertension in COPD is estimated to be very close to the prevalence of idiopathic pulmonary arterial hypertension. erj.ersjournals.com/content/32/5/1371(If you have a job and health insurance) |
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Post by hellodolly on Nov 4, 2021 14:12:09 GMT -5
Predicting MNKD Stock Price at end of 2022 UT reported: Q3 Tyvaso revenue of $164.2 million. Tyvaso application for PH-ILD was approved on March 31 and sales efforts began in April, which was the primary driver for the increase in users from 3,000 to 4,000 at quarter end. They project 6,000 users by the end of 2022. Note that there are 30,000 U.S. patients with PH-ILD, for which Tyvaso is the only approved drug. Anecdotally, trials are underway for the application of Tyvaso for people with PH-COPD, of which there are 100,000 in the U.S., with no approved drug therapy. Now, to the predictions. Assume the average number of Tyvaso users in Q3 was 3,500 (i.e., the average of the beginning and ending quarter users). Using 3,500 users, the average sales revenue per user in Q3 was $46,914 ($164.2 mil / 3,500). Projecting to 6,000 users yields quarterly revenue of $281.5 million, annualized to $1,125.9 million. Assuming MNKD gets a royalty of 12% (my guess as to what “low double digits” means), MNKD will receive $135.1 million annually. All of this goes directly to the bottom line. MNKD also gets reimbursed for manufacturing costs plus a markup, which has not been revealed. MNKD’s manufacturing costs in Q2 were 44% of net revenue for commercial product sales. This percentage will be reduced, probably significantly, when its costs are amortized over a much larger combined manufacturing cost. Whatever the manufacturing cost of Tyvaso DPI, the amount MNKD receives will either be recognized as revenue or a contra cost – in either event it will not directly affect the bottom line. However, it will make Afrezza more profitable. I assume a WAG of 10% as the markup on the Tyvaso CGS (cost of good sold). UT’s product manufacturing costs were 8.3% in Q2 and 6.2% in Q3. This compares to MNKD’s 44%, which makes this a guessing game, but we need to make some assumptions, though the impact of the assumption is not terribly material. I assume the manufacturing cost is 15% of Tyvaso sales (i.e., 15% of the $1,125.9 million annualized revenues projected above). Then, the markup is my assumed WAG of 10% on the 15% cost or $1,125.9 million X 15% x 10% = $16.9 million. This markup also goes directly to the bottom line. Thus, we have $135.1 million in revenue and $16.9 million in cost markup for a total annualized revenue from UT of $152.0 million (measured in Q4 2022). With the reduced manufacturing cost to Afrezza and its increased sales, and whatever else happens to MNKD I am going to simply posit that MNKD reaches breakeven for all its operations other than Tyvaso DPI. Because of MNKD’s large tax loss carry forward the $152.0 million is, therefore, the after-tax earnings. There are currently 242 million MNKD shares outstanding, which means that the EPS (earnings per share) is $.63/ share. Now we have to speculate on what the appropriate P/E (price/earnings) multiple will be. With the average P/E for all U.S. stocks ranging from 20 to 25, I’ll posit a P/E of 25, which, therefore, suggests that MNKD’s stock price will be $15.75. at year-end 2022. Obviously, one can disagree with any of the assumptions, but I offer the foregoing analysis as a basis for a reasoned dialogue. The nag for me with this sort of thoughtful 'back of the paper napkin projection' comes the question: When will the insiders start buying if this is remotely close to accurate? My question is directed at management and I thank you for putting in the effort and posting it. Bravo! |
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Post by peppy on Nov 4, 2021 14:14:04 GMT -5
Predicting MNKD Stock Price at end of 2022 UT reported: Q3 Tyvaso revenue of $164.2 million. Tyvaso application for PH-ILD was approved on March 31 and sales efforts began in April, which was the primary driver for the increase in users from 3,000 to 4,000 at quarter end. They project 6,000 users by the end of 2022. Note that there are 30,000 U.S. patients with PH-ILD, for which Tyvaso is the only approved drug. Anecdotally, trials are underway for the application of Tyvaso for people with PH-COPD, of which there are 100,000 in the U.S., with no approved drug therapy. Now, to the predictions. Assume the average number of Tyvaso users in Q3 was 3,500 (i.e., the average of the beginning and ending quarter users). Using 3,500 users, the average sales revenue per user in Q3 was $46,914 ($164.2 mil / 3,500). Projecting to 6,000 users yields quarterly revenue of $281.5 million, annualized to $1,125.9 million. Assuming MNKD gets a royalty of 12% (my guess as to what “low double digits” means), MNKD will receive $135.1 million annually. All of this goes directly to the bottom line. MNKD also gets reimbursed for manufacturing costs plus a markup, which has not been revealed. MNKD’s manufacturing costs in Q2 were 44% of net revenue for commercial product sales. This percentage will be reduced, probably significantly, when its costs are amortized over a much larger combined manufacturing cost. Whatever the manufacturing cost of Tyvaso DPI, the amount MNKD receives will either be recognized as revenue or a contra cost – in either event it will not directly affect the bottom line. However, it will make Afrezza more profitable. I assume a WAG of 10% as the markup on the Tyvaso CGS (cost of good sold). UT’s product manufacturing costs were 8.3% in Q2 and 6.2% in Q3. This compares to MNKD’s 44%, which makes this a guessing game, but we need to make some assumptions, though the impact of the assumption is not terribly material. I assume the manufacturing cost is 15% of Tyvaso sales (i.e., 15% of the $1,125.9 million annualized revenues projected above). Then, the markup is my assumed WAG of 10% on the 15% cost or $1,125.9 million X 15% x 10% = $16.9 million. This markup also goes directly to the bottom line. Thus, we have $135.1 million in revenue and $16.9 million in cost markup for a total annualized revenue from UT of $152.0 million (measured in Q4 2022). With the reduced manufacturing cost to Afrezza and its increased sales, and whatever else happens to MNKD I am going to simply posit that MNKD reaches breakeven for all its operations other than Tyvaso DPI. Because of MNKD’s large tax loss carry forward the $152.0 million is, therefore, the after-tax earnings. There are currently 242 million MNKD shares outstanding, which means that the EPS (earnings per share) is $.63/ share. Now we have to speculate on what the appropriate P/E (price/earnings) multiple will be. With the average P/E for all U.S. stocks ranging from 20 to 25, I’ll posit a P/E of 25, which, therefore, suggests that MNKD’s stock price will be $15.75. at year-end 2022. Obviously, one can disagree with any of the assumptions, but I offer the foregoing analysis as a basis for a reasoned dialogue. The nag for me with this sort of thoughtful 'back of the paper napkin projection' comes the question: When will the insiders start buying if this is remotely close to accurate? My question is directed at management and I thank you for putting in the effort and posting it. Bravo! Didn't they just give themselves a ton of shares a few months ago? |
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Post by mnkdfann on Nov 4, 2021 14:47:01 GMT -5
Now we have to speculate on what the appropriate P/E (price/earnings) multiple will be. With the average P/E for all U.S. stocks ranging from 20 to 25, I’ll posit a P/E of 25, which, therefore, suggests that MNKD’s stock price will be $15.75. at year-end 2022. Obviously, one can disagree with any of the assumptions, but I offer the foregoing analysis as a basis for a reasoned dialogue. Overall not a bad analysis, but ... A few months ago, an article in Forbes noted: "Major pharmaceutical companies trade for an average of 13 times projected 2021 earnings, against a price/earnings ratio of 22 for the S&P" I'm not certain what the situation is today, but I have doubts that a P/E of 25 is realistic (once MNKD starts turning a profit and settles down). I suspect it would be quite a bit less. E.g., UTHR's is only about 13 (according to one finance site). |
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Post by Clement on Nov 4, 2021 14:59:22 GMT -5
P/E ratio
LLY 41
MRK 31
JNJ 24
NVO 38
BIIB 27
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Post by mnkdfann on Nov 4, 2021 15:28:16 GMT -5
P/E ratio LLY 41 MRK 31 JNJ 24 NVO 38 BIIB 27 You screened for P/E >= 24? Of course then you will find some. But they are the exceptions, and the overall average for Pharma is much less. PFE 15.6 TEVA 3.7 UTHR 15.8 Also, it makes a difference if you are looking at TTM or Forward looking P/Es. For example, BIIB certainly is 27, looking back. Current expectations going forward are 15.6. |
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Post by buyitonsale on Nov 4, 2021 16:02:40 GMT -5
"Thus, we have $135.1 million in revenue"
This may only happen after 100% of Tyvaso patients switch to Tyvaso DPI.
Conversion will not be automatic, it will be driven by patient demand and UTHR sales force.
I am hoping for 70% + conversion within 12 months after Tyvaso DPI is approved.
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Post by ronw77077 on Nov 4, 2021 17:01:15 GMT -5
The following is from a reply I received from Nate Pile. But first, let me note that I have subscribed to Nate's newsletter since 2014. His incisive recommendations have been nothing short of remarkable. Aside from my personal financial gains, the Hulbert Financial Digest calculates that Nate's Notes is the top performing U.S. investment newsletter when measured for 3 year, 5 year, 10 year and 15 year periods. So when Nate speaks, pay attention!
From Nate:
"Thanks for the email and write-up!
Though I don't incorporate such things into my analysis, it looks like you made some reasonable assumptions and arrived at some reasonable conclusions - nice work!
And, just in case we haven't discussed it before, part of why I don't bother with such things anymore is that I've learned over the years that up-and-coming biotech stocks typically only spend 10-15% of their time (at most) trading for "fair value" based on traditional models, and the other 85-90% of the time is spent cycling back and forth between undervalued and overvalued levels (relative to "what the models say").
In addition, one of the things that makes the MannKind situation so special is that history also suggests that the more oversold a stock gets during the cycle (and the more time it spends at the "extreme" valuation - hard to believe we were given so much time to buy so much stock at a sub-$200M valuation, eh?!), the more likely it is to also overshoot by an exceptionally wide margin on the upside once Wall Street finally returns to the story (and having a still sizable unhedged short position in the stock should also help accelerate any move to the upside that might get underway in the months ahead).
Finally, be it a year from now are five years from now... and with a recognition that everybody likes to hate on Afrezza these days and seems to have written it off despite what's actually going on... don't forget that the odds are good that it will eventually be doing over $1B/year in revenue (and likely quite a bit more as time goes by)... and adding those numbers into your calculations (along with the rate of growth we are likely to see for the product) certainly suggests that the stock still has plenty of room to run on the upside."
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Post by oldfishtowner on Nov 4, 2021 17:05:15 GMT -5
Predicting MNKD Stock Price at end of 2022 UT reported: Q3 Tyvaso revenue of $164.2 million. Tyvaso application for PH-ILD was approved on March 31 and sales efforts began in April, which was the primary driver for the increase in users from 3,000 to 4,000 at quarter end. They project 6,000 users by the end of 2022. Note that there are 30,000 U.S. patients with PH-ILD, for which Tyvaso is the only approved drug. Anecdotally, trials are underway for the application of Tyvaso for people with PH-COPD, of which there are 100,000 in the U.S., with no approved drug therapy. Now, to the predictions. Assume the average number of Tyvaso users in Q3 was 3,500 (i.e., the average of the beginning and ending quarter users). Using 3,500 users, the average sales revenue per user in Q3 was $46,914 ($164.2 mil / 3,500). Projecting to 6,000 users yields quarterly revenue of $281.5 million, annualized to $1,125.9 million. Assuming MNKD gets a royalty of 12% (my guess as to what “low double digits” means), MNKD will receive $135.1 million annually. All of this goes directly to the bottom line. MNKD also gets reimbursed for manufacturing costs plus a markup, which has not been revealed. MNKD’s manufacturing costs in Q2 were 44% of net revenue for commercial product sales. This percentage will be reduced, probably significantly, when its costs are amortized over a much larger combined manufacturing cost. Whatever the manufacturing cost of Tyvaso DPI, the amount MNKD receives will either be recognized as revenue or a contra cost – in either event it will not directly affect the bottom line. However, it will make Afrezza more profitable. I assume a WAG of 10% as the markup on the Tyvaso CGS (cost of good sold). UT’s product manufacturing costs were 8.3% in Q2 and 6.2% in Q3. This compares to MNKD’s 44%, which makes this a guessing game, but we need to make some assumptions, though the impact of the assumption is not terribly material. I assume the manufacturing cost is 15% of Tyvaso sales (i.e., 15% of the $1,125.9 million annualized revenues projected above). Then, the markup is my assumed WAG of 10% on the 15% cost or $1,125.9 million X 15% x 10% = $16.9 million. This markup also goes directly to the bottom line. Thus, we have $135.1 million in revenue and $16.9 million in cost markup for a total annualized revenue from UT of $152.0 million (measured in Q4 2022). With the reduced manufacturing cost to Afrezza and its increased sales, and whatever else happens to MNKD I am going to simply posit that MNKD reaches breakeven for all its operations other than Tyvaso DPI. Because of MNKD’s large tax loss carry forward the $152.0 million is, therefore, the after-tax earnings. There are currently 242 million MNKD shares outstanding, which means that the EPS (earnings per share) is $.63/ share. Now we have to speculate on what the appropriate P/E (price/earnings) multiple will be. With the average P/E for all U.S. stocks ranging from 20 to 25, I’ll posit a P/E of 25, which, therefore, suggests that MNKD’s stock price will be $15.75. at year-end 2022. Obviously, one can disagree with any of the assumptions, but I offer the foregoing analysis as a basis for a reasoned dialogue.
"Although there is little debate about the use of supplemental oxygen and diuretic therapy in the treatment of PH-ILD, treatment with pulmonary vasodilator therapy remains controversial. Although several studies have been terminated prematurely for harm, the recently completed INCREASE trial of inhaled treprostinil appears to validate the concept of treating PH-ILD with pulmonary vasodilators and, we hope, will serve as a foundation from which future studies can be developed."
I would infer from this statement and MNKD's experience with Afrezza, that the results of the INCREASE study notwithstanding, there might be some resistance, the penetration of Tyvaso DPI in the PH-ILD market might meet with some resistance. Also assuming an eventual conversion of about 80% of Tyvaso patients to Tyvaso DPI the number of PAH patients on Tyvaso DPI by 4Q22 may depend heavily on when Tyvaso DPI is approves and UTHR can start marketing the drug in earnest.
While Tyvaso is a known drug there still might be some hesitancy in moving to the DPI version. And as our experience with Afrezza, it may be that physicians move slowly with moving their patients to Tyvaso DPI, trying it on a few patients and waiting until they see how these patients do before proceeding with a majority of patients.
So, I would be more conservative in estimates for 2022, especially until we know more precisely when Tyvaso DPI will be approved.
As for the tax loss carry forward, my understanding is that this is not a refundable tax credit, which is what I think you are using it as, but is to be used to reduce taxable income. Therefore, the tax loss carry forward will produce no income in and of itself, but only reduces the tax liability. If MNDK only breaks even, there is no profit, no tax and therefore no benefit resulting from the tax loss carry forward.
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Post by porkini on Nov 4, 2021 17:12:06 GMT -5
The following is from a reply I received from Nate Pile. But first, let me note that I have subscribed to Nate's newsletter since 2014. His incisive recommendations have been nothing short of remarkable. Aside from my personal financial gains, the Hulbert Financial Digest calculates that Nate's Notes is the top performing U.S. investment newsletter when measured for 3 year, 5 year, 10 year and 15 year periods. So when Nate speaks, pay attention! From Nate: "Thanks for the email and write-up! Though I don't incorporate such things into my analysis, it looks like you made some reasonable assumptions and arrived at some reasonable conclusions - nice work! And, just in case we haven't discussed it before, part of why I don't bother with such things anymore is that I've learned over the years that up-and-coming biotech stocks typically only spend 10-15% of their time (at most) trading for "fair value" based on traditional models, and the other 85-90% of the time is spent cycling back and forth between undervalued and overvalued levels (relative to "what the models say"). In addition, one of the things that makes the MannKind situation so special is that history also suggests that the more oversold a stock gets during the cycle (and the more time it spends at the "extreme" valuation - hard to believe we were given so much time to buy so much stock at a sub-$200M valuation, eh?!), the more likely it is to also overshoot by an exceptionally wide margin on the upside once Wall Street finally returns to the story (and having a still sizable unhedged short position in the stock should also help accelerate any move to the upside that might get underway in the months ahead). Finally, be it a year from now are five years from now... and with a recognition that everybody likes to hate on Afrezza these days and seems to have written it off despite what's actually going on... don't forget that the odds are good that it will eventually be doing over $1B/year in revenue (and likely quite a bit more as time goes by)... and adding those numbers into your calculations (along with the rate of growth we are likely to see for the product) certainly suggests that the stock still has plenty of room to run on the upside." I do appreciate your input, thank you. I've seen stuffs he posts on ST about PB, now for the entertainment...    |
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Post by georgethenight2 on Nov 4, 2021 20:37:39 GMT -5
Predicting MNKD Stock Price at end of 2022 UT reported: Q3 Tyvaso revenue of $164.2 million. Tyvaso application for PH-ILD was approved on March 31 and sales efforts began in April, which was the primary driver for the increase in users from 3,000 to 4,000 at quarter end. They project 6,000 users by the end of 2022. Note that there are 30,000 U.S. patients with PH-ILD, for which Tyvaso is the only approved drug. Anecdotally, trials are underway for the application of Tyvaso for people with PH-COPD, of which there are 100,000 in the U.S., with no approved drug therapy. Now, to the predictions. Assume the average number of Tyvaso users in Q3 was 3,500 (i.e., the average of the beginning and ending quarter users). Using 3,500 users, the average sales revenue per user in Q3 was $46,914 ($164.2 mil / 3,500). Projecting to 6,000 users yields quarterly revenue of $281.5 million, annualized to $1,125.9 million. Assuming MNKD gets a royalty of 12% (my guess as to what “low double digits” means), MNKD will receive $135.1 million annually. All of this goes directly to the bottom line. MNKD also gets reimbursed for manufacturing costs plus a markup, which has not been revealed. MNKD’s manufacturing costs in Q2 were 44% of net revenue for commercial product sales. This percentage will be reduced, probably significantly, when its costs are amortized over a much larger combined manufacturing cost. Whatever the manufacturing cost of Tyvaso DPI, the amount MNKD receives will either be recognized as revenue or a contra cost – in either event it will not directly affect the bottom line. However, it will make Afrezza more profitable. I assume a WAG of 10% as the markup on the Tyvaso CGS (cost of good sold). UT’s product manufacturing costs were 8.3% in Q2 and 6.2% in Q3. This compares to MNKD’s 44%, which makes this a guessing game, but we need to make some assumptions, though the impact of the assumption is not terribly material. I assume the manufacturing cost is 15% of Tyvaso sales (i.e., 15% of the $1,125.9 million annualized revenues projected above). Then, the markup is my assumed WAG of 10% on the 15% cost or $1,125.9 million X 15% x 10% = $16.9 million. This markup also goes directly to the bottom line. Thus, we have $135.1 million in revenue and $16.9 million in cost markup for a total annualized revenue from UT of $152.0 million (measured in Q4 2022). With the reduced manufacturing cost to Afrezza and its increased sales, and whatever else happens to MNKD I am going to simply posit that MNKD reaches breakeven for all its operations other than Tyvaso DPI. Because of MNKD’s large tax loss carry forward the $152.0 million is, therefore, the after-tax earnings. There are currently 242 million MNKD shares outstanding, which means that the EPS (earnings per share) is $.63/ share. Now we have to speculate on what the appropriate P/E (price/earnings) multiple will be. With the average P/E for all U.S. stocks ranging from 20 to 25, I’ll posit a P/E of 25, which, therefore, suggests that MNKD’s stock price will be $15.75. at year-end 2022. Obviously, one can disagree with any of the assumptions, but I offer the foregoing analysis as a basis for a reasoned dialogue. The nag for me with this sort of thoughtful 'back of the paper napkin projection' comes the question: When will the insiders start buying if this is remotely close to accurate? My question is directed at management and I thank you for putting in the effort and posting it. Bravo! And that is my question ⁉️ Jesus, how long does the common share holder have to believe before MC and his holigans start making open market purchases. Such BS. |
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Post by prcgorman2 on Nov 4, 2021 21:37:07 GMT -5
Predicting MNKD Stock Price at end of 2022 UT reported: Q3 Tyvaso revenue of $164.2 million. Tyvaso application for PH-ILD was approved on March 31 and sales efforts began in April, which was the primary driver for the increase in users from 3,000 to 4,000 at quarter end. They project 6,000 users by the end of 2022. Note that there are 30,000 U.S. patients with PH-ILD, for which Tyvaso is the only approved drug. Anecdotally, trials are underway for the application of Tyvaso for people with PH-COPD, of which there are 100,000 in the U.S., with no approved drug therapy. Now, to the predictions. Assume the average number of Tyvaso users in Q3 was 3,500 (i.e., the average of the beginning and ending quarter users). Using 3,500 users, the average sales revenue per user in Q3 was $46,914 ($164.2 mil / 3,500). Projecting to 6,000 users yields quarterly revenue of $281.5 million, annualized to $1,125.9 million. Assuming MNKD gets a royalty of 12% (my guess as to what “low double digits” means), MNKD will receive $135.1 million annually. All of this goes directly to the bottom line. MNKD also gets reimbursed for manufacturing costs plus a markup, which has not been revealed. MNKD’s manufacturing costs in Q2 were 44% of net revenue for commercial product sales. This percentage will be reduced, probably significantly, when its costs are amortized over a much larger combined manufacturing cost. Whatever the manufacturing cost of Tyvaso DPI, the amount MNKD receives will either be recognized as revenue or a contra cost – in either event it will not directly affect the bottom line. However, it will make Afrezza more profitable. I assume a WAG of 10% as the markup on the Tyvaso CGS (cost of good sold). UT’s product manufacturing costs were 8.3% in Q2 and 6.2% in Q3. This compares to MNKD’s 44%, which makes this a guessing game, but we need to make some assumptions, though the impact of the assumption is not terribly material. I assume the manufacturing cost is 15% of Tyvaso sales (i.e., 15% of the $1,125.9 million annualized revenues projected above). Then, the markup is my assumed WAG of 10% on the 15% cost or $1,125.9 million X 15% x 10% = $16.9 million. This markup also goes directly to the bottom line. Thus, we have $135.1 million in revenue and $16.9 million in cost markup for a total annualized revenue from UT of $152.0 million (measured in Q4 2022). With the reduced manufacturing cost to Afrezza and its increased sales, and whatever else happens to MNKD I am going to simply posit that MNKD reaches breakeven for all its operations other than Tyvaso DPI. Because of MNKD’s large tax loss carry forward the $152.0 million is, therefore, the after-tax earnings. There are currently 242 million MNKD shares outstanding, which means that the EPS (earnings per share) is $.63/ share. Now we have to speculate on what the appropriate P/E (price/earnings) multiple will be. With the average P/E for all U.S. stocks ranging from 20 to 25, I’ll posit a P/E of 25, which, therefore, suggests that MNKD’s stock price will be $15.75. at year-end 2022. Obviously, one can disagree with any of the assumptions, but I offer the foregoing analysis as a basis for a reasoned dialogue. Very reasonable analysis. Nate’s comments are interesting and show more optimism in Afrezza sales than I currently share (although I want to be that optimistic still, this stock’s history robbed me of some of it). I thought the observation of running below or above a conventional valuation was interesting too. I’ve done similar analysis before but focused on marketshare estimates of mealtime insulin revenue of competitors and P/E and it’s probably the #1 reason I’m still here, a buy-and-hold long. I think I know what I own. As for average P/E, estimates differ, but mid 20s is reasonable for any stock in the market as a whole. Last time I looked some years ago at market sector, what I read was BP ranged between 40 and 70. I don’t know how that number was arrived at and when I did spot checking it seemed very generous, so I’ve preferred the 25:1 as a more realistic ratio. My best guess based on EPS and P/E made me think $8 to $12 in 2022 was possible. I like your well considered estimate better.  |
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Post by Clement on Nov 5, 2021 6:54:06 GMT -5
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Post by MnkdWASmyRtrmntPlan on Nov 5, 2021 8:28:37 GMT -5
The nag for me with this sort of thoughtful 'back of the paper napkin projection' comes the question: When will the insiders start buying if this is remotely close to accurate? My question is directed at management and I thank you for putting in the effort and posting it. Bravo! Didn't they just give themselves a ton of shares a few months ago? Right, Peppy. Why giveth when you can just taketh away  |
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