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Post by alethea on May 3, 2023 13:18:51 GMT -5
I just listened to today's UTHR 1st Qtr earnings call, and am now more confident than ever on Mannkind's short and midterm prospects. Current production of Tyvaso DPI is sufficient to meet patient demand, but is not enough to allow UTHR's specialty pharmacies to be fully stocked.Martine also stated that additional manufacturing capacity at Danbury may come online yet this quarter, and additional expansion there to begin production next year.Not to mention the construction of UTHR's much larger Tyvaso DPI facility in North Carolina, from which product sales (beginning 2024?) will result in pure royalty profit to the bottom line for Mannkind. Apparently Wall Street sees it too, since MNKD is up 6% right now for the day. This takes away part of the sting of authorized shares being doubled later this month.  |
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Post by robbmo on May 3, 2023 15:11:31 GMT -5
I just listened to today's UTHR 1st Qtr earnings call, and am now more confident than ever on Mannkind's short and midterm prospects. Current production of Tyvaso DPI is sufficient to meet patient demand, but is not enough to allow UTHR's specialty pharmacies to be fully stocked. Martine also stated that additional manufacturing capacity at Danbury may come online yet this quarter, and additional expansion there to begin production next year. Not to mention the construction of UTHR's much larger Tyvaso DPI facility in North Carolina, from which product sales (beginning 2024?) will result in pure royalty profit to the bottom line for Mannkind. Apparently Wall Street sees it too, since MNKD is up 6% right now for the day. This takes away part of the sting of authorized shares being doubled later this month. The most notable part to me, was when Mike Benkowitz said the specialty pharmacies liked to have a minimum of 30 days of inventory on hand, but due to the demand, they were not able to meet that need. That, and they expect it to continue throughout this year. |
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Post by cedafuntennis on May 3, 2023 15:16:42 GMT -5
I just listened to today's UTHR 1st Qtr earnings call, and am now more confident than ever on Mannkind's short and midterm prospects. Current production of Tyvaso DPI is sufficient to meet patient demand, but is not enough to allow UTHR's specialty pharmacies to be fully stocked. Martine also stated that additional manufacturing capacity at Danbury may come online yet this quarter, and additional expansion there to begin production next year. Not to mention the construction of UTHR's much larger Tyvaso DPI facility in North Carolina, from which product sales (beginning 2024?) will result in pure royalty profit to the bottom line for Mannkind. Apparently Wall Street sees it too, since MNKD is up 6% right now for the day. This takes away part of the sting of authorized shares being doubled later this month. The most notable part to me, was when Mike Benkowitz said the specialty pharmacies liked to have a minimum of 30 days of inventory on hand, but due to the demand, they were not able to meet that need. That, and they expect it to continue throughout this year. I think WS knew that all along but they were shaking the tree desperately. Some fell for it and never ceases to amaze me why some still sell low over and over again |
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Post by cppoly on May 4, 2023 6:10:07 GMT -5
Based on UTHR's earnings, any thoughts on where this puts MNKD at Tuesday's earnings?
Above or below estimates?
Much closer to break even?
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Post by Clement on May 4, 2023 6:23:35 GMT -5
The average analyst estimate for MNKD Q1 2023 is $37.4M in total net revenue. I think the UTHR call supports the idea that MNKD will exceed this average estimate from the five analysts covering MNKD. $37.4M is more than 3X the revenue of same quarter prior year! finance.yahoo.com/quote/MNKD/analysis?p=MNKD |
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Post by cppoly on May 4, 2023 6:36:41 GMT -5
Awesome!
How much does this accelerate break even?
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Post by Clement on May 4, 2023 8:05:13 GMT -5
MNKD BOD's "mandate" concerning breakeven pertains to the diabetes business.* The EBU (Endocrine Business Unit) is only indirectly affected by T-DPI and UTHR, ie, more utilization of the manufacturing plant in Danbury helps reduce cost of manufacture of Afrezza. * mnkd.proboards.com/post/250723/thread |
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Post by tarheelblue004 on May 5, 2023 18:39:49 GMT -5
I thought it was a great call. I really liked the lack of ambiguity of UTHR being all-in on Tyvaso DPI as their growth driver for this decade. Hard to know what it will take for Wall Street to price this in to MNKD. Break even will probably help!
Re: MNKD Q1 results, $40-$41M still seems reasonable assuming ~$3M growth in Tyvaso DPI from Q4 2022. The only wild card could be the comment about drawdown of Tyvaso nebulizar from pharmacies reducing revenue for the quarter. This could mean Tyvaso DPI is an even larger % of Q1 sales than the numbers show. But UTHR said this was also true in Q4, so that could be baked into our Q4 comparables.
As always, excited about our earnings call this Tuesday. Not to mention the massive growth in our royalty stream over the next 5-6 years!
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Post by bthomas55ep on May 6, 2023 9:05:22 GMT -5
I thought it was a great call. I really liked the lack of ambiguity of UTHR being all-in on Tyvaso DPI as their growth driver for this decade. Hard to know what it will take for Wall Street to price this in to MNKD. Break even will probably help! Re: MNKD Q1 results, $40-$41M still seems reasonable assuming ~$3M growth in Tyvaso DPI from Q4 2022. The only wild card could be the comment about drawdown of Tyvaso nebulizar from pharmacies reducing revenue for the quarter. This could mean Tyvaso DPI is an even larger % of Q1 sales than the numbers show. But UTHR said this was also true in Q4, so that could be baked into our Q4 comparables. As always, excited about our earnings call this Tuesday. Not to mention the massive growth in our royalty stream over the next 5-6 years! Yes, you know every $4 a share is approx $1 Billion in market cap (at current outstanding share count). 2022 saw revenue of $100 Million and without profit. To that end, at $4 the company is getting a 10 times revenue valuation. As they authorize the additional 400 million shares (which I vote for), this dynamic will surely change. It is not enough to think the share price might be too low without calculating the market valuation based on the outstanding shares. With that, if revenue goes to $37 Million this quarter, that would project to $148 Million in annualized revenue. We would also have the supposition that revenue will continue to grow with Tyvaso DPI and also ultimately with Afrezza pediatrics. So, pragmatically, if we had $1 Billion dollars, would we buy the whole company today personally? With no profit yet, how long / how many years would it take to get our money back? I guess that all depends on how quickly they get to profitability... Once the company can get to $100 Million in profit (not just revenue), it would take 10 years. When we buy shares today at $4, we are essentially buying our shares of the company for $1 Billion. I think the answer to the question is yes under the supposition of hockey stick growth and at some point profit starts falling to the bottom line. However, when you are on royalty vs owning the drug, for every billion the drug does, you get $100 Million in revenue. Will Tyvaso DPI, over the next few years, get to $2 Billion on its own (meaning approx $200 Million for Mankind). Today, total revenue at United Therapeutics is $2 Billion. At $2 Billion in revenue, United now harnesses a $10 Billion market cap (5 times revenue), whereas Mannkind today is already being given a market cap of 10 times revenue. Not sure where I am going with all this, other than to try to put into perspective what the share price means. I think we all believe the share price should be higher based on future potential and I do believe it will respond to growth, but because of the number of shares outstanding and the likelihood of that growing, it will probably work its way up versus jump up (unless somebody wants to own the whole thing for a premium). I look at United Therapeutics at $2 Billion in revenue today, even they probably aren't in a position to acquire Mannkind at a valuation we would want - here's what an acquirer would have to pay ($4/sh for a $1 Billion price, $8/sh for a $2 Billion price, $12 a share for $3 Billion, $16 a share for $4 Billion, and $20 a share for $5 Billion). So, what revenue does the company need to have to garner a $2 Billion valuation ($8 a share) - $200 Million (or still 10 times revenue)? A $50 Million dollar quarter puts the company at a revenue run rate of $200 Million annually. Or will they ultimately move back toward a United type valuation of 5 Times revenue? If so, at that multiple, $200 Million in revenue, that would project right back to $1 Billion valuation - right where the company is today - $4/share. Does Mannkind deserve a higher multiple that United? I hope so! But, for now, in a strategy to keep my hopes from getting too high on these earnings calls, until I see annualized revenue projecting out to somewhere between $200 and $300 million in revenue, the price somewhere under $5 is probably appropriate. Once we get there (and can see clear growth) I can see things lining up with analyst estimates of $6.50 or so and then trying to work towards $7 / $8. Almost feels like we'll need to see that $400 Million revenue projection (i.e. $100 Million in quarterly revenue) to crest the $8pps and $2 Billion market cap valuation. I will patiently wait, but with only getting 10% or so of Tyvaso DPI, it's still going to take some time. When Tyvaso reaches $2 Billion, Mannkind will reach $200 Million in that product. When will there be $200 Million in Mannkinds other products? If Tyvaso sucks up all the rest of the plant capacity, will Mannkind need to build another plant (at a cost of $500 Million) to handle a future Afrezza growth before revenue could get there Or do the Afrezza lines at the current plant have enough bandwidth to get to $200 Million annually...? Today Afrezza production is somewhere between $40 and $50 Million annually Hope these musings helped. GLTA. |
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Post by tarheelblue004 on May 6, 2023 10:34:03 GMT -5
Thanks a lot bthomas55ep for the note. I appreciate well thought-out view points and admire your strategy of keeping your hopes from getting up. The reason I have much higher expectations around share price growth is that earnings - and earnings growth - drive share price more than revenue / revenue multiples do. UTHR's earnings growth over the next four years ranges from 15% to 18% (I stopped at four years because after that point it turns negative). As a result, their forward PE is currently around 10. MNKD's earnings growth over the next three years ranges from 62% to 132%. But our PE ratio is somewhere around 30 (hard to say with negative earnings). Companies with earnings growth >100% command huge premiums in PE ratio - we have seen 40X to 80X and even higher. For context, $100M earnings x 40X PE ratio is a $4B company or $16 / share with today's outstanding shares. Breakeven will help by providing us positive earnings for this calculation, but even before then the Street will have their own models for calculating the earnings growth that MannKind is seeing and will see over the next few years. This is why I firmly believe we are undervalued but do not know when it will be baked it. |
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Post by boca1girl on May 6, 2023 11:03:44 GMT -5
Nice discussion points and comparative analysis bth.
The only thing that contradicts your analysis are companies that are purchased for billions with no revenue.
Also there are times of market craziness like we experienced a few years ago. That was fueled by free money (0%) and we won’t see that again. I don’t believe that and there are times when the market trades on emotions.
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Post by cretin11 on May 6, 2023 15:07:02 GMT -5
Good post bthomas, the more realistic perspective on our valuation is appreciated.
And you’re right boca, we see companies sometimes valued really high with no revenue to support it. I think those tend to be because of unknown (and overhyped or as you said “on emotions”) potential, a la MNKD after Afrezza approval when almost everyone had an overly optimistic opinion of the market share we could capture. Now MNKD is way past that stage and the market has the data to more wisely peg the value, like bthomas does above.
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Post by cppoly on May 9, 2023 9:33:46 GMT -5
Predictions for today?
Something to keep us entertained until the call.
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Post by cjm18 on May 9, 2023 9:46:51 GMT -5
Predictions for today? Something to keep us entertained until the call. Everyone here will think it’s a great call and sky’s the limit. |
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Post by cretin11 on May 9, 2023 10:19:31 GMT -5
Will mike knock it out of the park? Hope springs eternal!
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