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Post by ronw77077 on Nov 8, 2022 15:42:01 GMT -5
After so much attention to the DPI royalty rate, it turns out to be much less significant than revenue from manufacturing costs!
We all see the disconnect between UT's reporting that the nebulizer/DPI revenue split is 50%/50% and MNKD's royalty revenue -- since UT reported combined Tyvaso revenue of $258M - and MNKD reported $6.2M royalty revenue. I can only speculate that by quarter's end the split got to 50/50, but that bore no relationship to their experience for the quarter as a whole.
Since the royalty of $6.2M can be no lower than 10% of the associated revenue, we can deduce that UT's DPI revenue was about $62M. We have also seen that MNKD's revenue from manufacturing DPI was $9.9M. This is 16% of $62M. So, it appears that, for Q3, MNKD's revenue from UT was 26% of UT's DPI revenue - and that the larger effect on MNKD's revenue was and will be from manufacturing.
So, let me make an initial speculation about Q4 revenue. UT has reported Tyvaso sales of $201M and $258M for Q2 and Q3, respectively. Reasonably, their Q4 combined Tyvasso revenue should exceed $300M. Accepting UT's comment that they are at a 50/50 split, then Q4 DPI revenue will be at least $150M. Using 26% as MNKD's revenue, we can predict combined manufacturing and royalty revenue of $39M. This compares to $16.5M for Q3.
Add:
Afrezza 11 (Q3 + 10%)
V-go 6
to get to a total of $56M, which would be a 70% increase over Q3. And, it will compare rather nicely to 2021 Q4 revenue of $11M.
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Post by celo on Nov 8, 2022 16:05:40 GMT -5
Manufacturing revenue is in front of royalty payments. You have to manufacture before you can sell. I don't think manufacturing and royalty is based on the same amount of DPI for this quarter.
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Post by cjm18 on Nov 8, 2022 16:30:52 GMT -5
Math checks out if half of tyvaso patients were already on dpi. My understanding is half of patients that get a check up change to dpi. How often do they go see a doctor? At least once per year.
If the royalty rate is 10% and the dpi was priced the same then 24% already converted. (62/258).
Also royalties and manufacturing don’t necessarily move together in lockstep.
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Post by Thundersnow on Nov 8, 2022 16:37:43 GMT -5
Math checks out if half of tyvaso patients were already on dpi. My understanding is half of patients that get a check up change to dpi. How often do they go see a doctor? At least once per year. If the royalty rate is 10% and the dpi was priced the same then 24% already converted. (62/258). Also royalties and manufacturing don’t necessarily move together in lockstep. They don't plus the Deferred Revenue of $32.2M will be amortized over the next 37 Qtrs which equates to $870K per qtr. |
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Post by ronw77077 on Nov 9, 2022 9:59:53 GMT -5
As to "Also royalties and manufacturing don’t necessarily move together in lockstep."
I think this is partially correct. Per Note 10 in the 10Q:
The Manufacturing Services performance obligation will be recognized as control of manufactured products is transferred to UT. The Company will sell product to UT under individual purchase orders, which represent distinct performance obligations. The ultimate cash flows may vary as manufacturing purchase orders are received.
When each purchase order is received by MNKD it ships DPI to UT and recognizes the manufacturing revenue in that period. I don't know how long the time is between UT's receipt of product and its sale to customers. One would think it would be not very long. In any event, the royalty revenue and the manufacturing revenue would be in synch but not simultaneous.
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Post by sayhey24 on Nov 9, 2022 14:29:30 GMT -5
My understanding is the manufacturing is cost+. Do we know what the plus up is, 5%
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Post by ronw77077 on Nov 9, 2022 16:10:47 GMT -5
Good question. I don't know but it may well be included in the mfg cost percentage.
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Post by anderson on Nov 10, 2022 2:42:07 GMT -5
Good question. I don't know but it may well be included in the mfg cost percentage. $6.2 Mil is Royalties only. The cost+ would be in product sales:
Net revenue (in thousands) Product sales(1) $26,175 Services(2) $430 Royalties(3) $6,220 (1) Amounts represent the sales of Afrezza and V-Go to wholesalers and specialty pharmacies and Tyvaso DPI to UT. (2) Amounts represent revenue generated from our collaboration arrangements, including Next-Gen R&D Services (as defined in Note 10) for UT as well as arrangements with other collaboration partners. See Note 10 – Collaboration, Licensing and Other Arrangements. (3) Amounts represent royalties on UT’s net sales of Tyvaso DPI. |
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Post by veritasfiliatemporis on Nov 10, 2022 3:43:38 GMT -5
I think half of patients that have been in contact with their doctor switched to Tyvaso DPI, half of overall patient switch in 3 months is impossible.
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Post by ronw77077 on Nov 10, 2022 10:54:04 GMT -5
Great observation. What's your guess for percentage on DPI in Q4?
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Post by phdedieu12 on Nov 10, 2022 19:27:53 GMT -5
Manufacturing revenue eventually levels off. Equipment, labor stabilizes and only the product cost (packaging, powder, cartridges) grows as demand grows. Without specifics on the cost of the raw material and packaging it's tough to say. However royalties will continue to go up and I suspect the two wouldn't be in synch.
The difference in quality of life is so drastic that it's hard to believe that most would choose to remain on the nebulizer, and as more patients get to share their experience most if not all of the patient population is likely to switch, the only question in my opinion is simply how long does it take. It sounds like it will take a quarter or two to get to full capacity and I anticipate 2023 is a monster year for MNKD
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Post by veritasfiliatemporis on Nov 11, 2022 7:49:14 GMT -5
I think Tyvaso DPI in one year will be at 80/90% of Tyvaso overall scripts, next quarter I expect 15 to 20 M$ royalties. Why? Tyvaso is way too good for patients...
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Post by solicurance on Nov 11, 2022 7:58:32 GMT -5
Tyvaso DPI will be $20 million + in revenue…
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Post by celo on Dec 6, 2022 15:53:21 GMT -5
26.1 total sales for 3Q
16.2 was for Afrezza and V-go leaving ~10 million for Tyvaso DPI to United
6.2 million in royalties
4Q sales of Tyvaso DPI to United ~ 15 million
IF the royalty amounts can be based on the symphony data which is a stretch, royalties could be 4x what they were in the 3Q or ~24 million
That would put total revs at ~ 55 million for the qtr for Afrezza, Tyvaso and V-go
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Post by peppy on Dec 6, 2022 16:06:52 GMT -5
26.1 total sales for 3Q 16.2 was for Afrezza and V-go leaving ~10 million for Tyvaso DPI to United 6.2 million in royalties 4Q sales of Tyvaso DPI to United ~ 15 million IF the royalty amounts can be based on the symphony data which is a stretch, royalties could be 4x what they were in the 3Q or ~24 million That would put total revs at ~ 55 million for the qtr for Afrezza, Tyvaso and V-go can someone calculate the EPS on celo's work please? |
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