2023 Annual J.P. Morgan Healthcare Conference

[sayhey24]

Jan 13, 2023 9:57:37 GMT -5 akemp3000 said:

No way. Mike has not thrown in the towel at all nor is Afrezza not as good as thought. Review the transcript carefully. He overhauled the business plan several years ago based on insufficient funding at the time to try to disrupt a hundred years of the giant diabetes industry. Continuing investments down that path would have bankrupted the company. His revised business plan transitioned the company to instead focus on expanding the developmental pipeline to pursue orphan drug opportunities and unmet needs. This was a more realistic and strategic path to bring in life saving funds quicker, which is exactly what is happening. While there's still a focus on Afrezza, especially with pediatrics, the focus will increase at such time it makes better financial sense to battle the giant diabetes cartel. Hopefully this begins sooner rather than later but only with a lot more funding or if a partner comes to the game. I agree the current status of Afrezza is frustrating but hearing the J.P. Morgan presentation, MC now has this company heading in a very good direction. IMO this is the bigger picture.

What I said is, Mike said, afrezza is for the T1 market and V-Go is for the T2 market.  From the transcript

"but we are going to be more focused on type 1 [with afrezza] in the future as we pivot and proposition V-Go for type 2 diabetes"

I am not sure what you mean by this "This was a more realistic and strategic path to bring in life saving funds quicker".  MNKD was doomed.  The closed sign was going up on the door and Al Mann's old friend threw MNKD a life line.  From a call Mike said "Martine called and asked how she could help".  Tyvaso DPI is IMO the greatest thing which has happened with MNKD.  As Mike said yesterday  - now we can pay the bills.  I really don't think there was a lot of planning or strategy on Mike's side.  When you are drowning and someone throws you a rope, you grab on.  At that point MNKD was a cult company with some diehard supporters but we could not pay the bills with Mike's sales.  We were doomed.  Now, Tyvaso DPI is a great success and has demonstrated how great TS is but its not in a $40B market.  Afrezza is but we put it on the shelf.

I totally disagree that continuing investments in afrezza would bankrupt the company.  However, continuing to do the same thing over and over and always failing absolutely would.  How many times have we sent out a couple of platoons - a "company" of sales reps only to see them mowed down???  I will hope for the best but putting V-Go in the reps "bag" I hold little hope for in making real money.   Now we are going to send out a new group but they will have the "secret weapon" in the "bag", V-Go.  We will see how that works out.  What we do know is it did not work out well for the last 16 V-Go sales reps but hope springs eternal. 

IMO - MNKD needs to make the correct investments in the T2 market now not next year or 5 years from now.  He needs a plan today, not tomorrow.  Is it not better money spent investing in a $40B market with an afrezza/GLP1 pilot than spending $15M+ on V-Go?  IMO V-Go should have been left in the dumpster and now its more expensive for the medicare patients than afrezza is.  How does a sales rep sell that?  What do they say "Don't use afrezza which is cheaper, easier and provides better control than V-Go and you may not even need the basal, buy the V-Go instead?  And, Oh BTW, if your doctor had prescribed afrezza years ago for you  you may not have progressed and have all the health issues you have."

If he doesn't want to spend the money - find a partner who will be willing to go up against BP.  How about a Mark Cuban and his "Costplusdrugs" effort?  Maybe he is not the best but who knows.  Maybe his current model is not a great fit but maybe you develop a new model.  Maybe Mike negotiates a deal?   There are zillion's of $$$ in the diet space.  Talking about orphan drugs, how about our own orphan - TS GLP1.  Mounjaro might be the greatest selling drug of all time because of weight loss and we have TS GLP1 sitting in the freezer. 

Here is the deal for 2023 - afrezza is focused on the T1 market.  V-Go is for the T2 market and the reps are getting it in their "bags" in a few weeks.  I hope that changes but thats it.  The kids trial is 1/2 enrolled and results will be in for 2024 submission.  At this point afrezza is dead to the T2 market and no work will be done for the T2 SoC.  Thats our current afrezza T2 plan.

Do I like it - NO but thats what it is.  I would be going after the $40B market and the GLP1 diet market.  Thats the difference between Mike and me.  I would manage the risk.  Mike seems to be risk averse.  Just the fact that Martine kept going with the Tyvaso DPI study seemed concerning to him- from the transcript "and every week the trial kept going as another $200,000, $300,000 [was spent]."  Hell yeah - Martine made the right call.  Was it risky sure but you manage it.  Seven years ago I told Mike the only thing which could save afrezza was technology.  If it wasn't for the CGMs and TIR afrezza would be dead.   Will I continue to bug Mike about an afrezza T2 plan, absolutely. For right now, for 2023 afrezza is in some what of a holding pattern waiting for the kids to land in 2024.  

[sayhey24]

Jan 13, 2023 14:57:50 GMT -5 tarheelblue004 said:

akemp3000 , I don't think you understand. Everything bad that happens to MannKind is Mike's fault. Everything good that happens is thanks to Martine, Al, or pure luck. Once you realize this, you will stop writing such reasonable summaries of information that was provided yesterday. You'll realize that Mike hasn't transformed the cash position, revenue diversity, growth rate or pipeline of MannKind over the past 5 years. He definitely hasn't done his one single job he was hired to do of selling Afrezza during the global pandemic, going up against an oligopoly of BP companies and doctor's habits without the right trial data. Did I mention GLP, Type 2 strategy, V-Go being a terrible acquisition, and that the shorts are not trapped? You will learn akemp

What has he transformed?  Please, help me appreciated this transformation.  

He sold the factory and he now has Tyvaso DPI revenue.  I would not call that some great "transforming the cash position".  Both IMO great moves but don't you think you could have done the same?  Doing a lease buy-back is not rocket science nor is letting another companywho call you use TS.   Aside from that, I am listening. What's the revenue diversity?  Better yet what is making money?  Tyvaso DPI is and afrezza is break even.   The best part of Tyvaso DPI is we have a company who knows how to sell it.

BTW - There was no pandemic in 2016, 2017, 2018, 2019 and 1Q2020.  Are you telling me the pandemic is why afrezza sales have not improved in 7 years?

Did you look at the slide from yesterday???  MNKD-101 has some potential but not anywhere near TS GLP1.  MNKD-201, MNKD-301 and MNKD-501 at this point are pipe dreams.  The last company that had V-Go couldn't make any money so what are we doing which is so much smarter aside from competing against our own afrezza?  I think Mike said his plan was - to put it in the reps bags next week. This is revenue diversity???  Wait I have to go, the "Fuller Brush man" is ringing my doorbell.

[akemp3000]

It doesn't take financial or technical expertise to recognize that this company, not long ago, was at the door of bankruptcy with the stock selling for $1 with a singular focus on Afrezza that was not succeeding. Regardless of how the transformation of the business plan, personnel, financials and pipeline expansion occurred, it has been done under Michael Castagna's direction and leadership. It doesn't take details to recognize the company is so much stronger today with a ton of upside potential. It's fine to think luck was involved, but to suggest MC does not deserve credit is just wrong.

Deep diving into the weeds of what could of or should of been done differently is what makes this message board especially interesting and educational and all perspectives are appreciated. That said, no one here knows the full gauntlet of what MC has faced and continues to face so Monday morning quarterbacking continues along without the hits, bruises or playbook. This should be recognized, and appreciated, as just an opinion and most likely is. I enjoy all these posts. Without them, it would be quite boring until the upcoming 4Q report

[radgray68]

I really think you all will be surprised at how close Afrezza is to breaking out. The numbers ARE still climbing. Pediatric trials are a year out but the India trial results are almost here. Sometime in Q2, those results should seriously open eyes, especially for your much-desired T2 market.
Mike said it in this presentation. I’m paraphrasing because I’ve only listened to it 4 or 5 times but something to the effect of “We are 12 months from proving why we’ve spent so much on Afrezza and developing the platform over 30 years.”
He basically acknowledged your frustration at the 17 minute mark by saying we haven’t spent as much as we could on Afrezza because we had to preserve the company as a going concern with this pesky Orphan Lung pipeline.

Long story short: patience grasshopper, he’s heard you.

[caesar]

For everybody who posts on this board - much appreciated.

Considering that everybody has an opinion about the how and why "SHIT" happens. I'll compare a growing concern (business entity) to becoming a world class Tennis player.

1st. Your first quantifiable playing experience is the High School Tennis Team.
2nd); and if you have any desire to be recruited by a University/College

[caesar]

Sorry - will post later

[tarheelblue004]

@sayhey, in all of what you said...what did you actually say? That the CEO shouldn't get credit for turning around a company with 1 revenue stream, bleeding cash, on the way to bankruptcy, into a thriving business with 4 revenue streams, rapid QoQ growth, about to be profitable, with a strong pipeline, and cash to invest? Oooooook, you think that. Why you and your crew choose to focus on 'what Mike should get credit for' rather than the fundamental changes happening to the business is beyond me...it's not something I spend any time on.

Also, you should understand something about your "Science" and "Grandiose Vision" content that makes up most of your posts. How because we have a revolutionary drug, we should easily be able to disrupt the insulin cartel with the right strategy. We need to focus on Afrezza, grow Afrezza, who needs a pipeline, who needs other products, we have the one mega-blockbuster we need. And so clearly we've blown that so far, right? But there's a chance we can bring it back, we just need a strategy for XYZ.

The problem is you are talking like the rest of us MannKind investors talked...7 years ago. We didn't talk about boring business realities like cash, revenue, earnings, growth, insurance coverage, business decisions and trade-offs. We talked about the amazing things that MannKind could and should do to make Afrezza a blockbuster. But we were blind to the realities that MannKind was facing, and we paid the price. Fortunately for us, Mike was fixing those boring business challenges and we are now greatly benefitting from that. Sorry, I mean these things fixed themselves. Or anyone fixed them. I don't know anymore who did what, just that they were done and MannKind is now better for it.

I have learned hard, amazing lessons over the past 10+ years - about the importance of clinical trial design, KOL strategy, insurance coverage, going up against entrenched competition, and financial success (note to previous self: potential is good, earnings are everything!). Now MannKind is kicking butt and taking names in so many ways thanks to business decisions and trade-offs that Mike and team made 4+ years ago, that did not quickly progress Afrezza but did put us in the position we're in today. It doesn't matter to me who you credit today's position to. I do hope you have learned from your MannKind experience more than just "Afrezza not selling, Mike bad." MannKind is a company, not a drug.

Have a good and hopefully long weekend.

[sayhey24]

Tarheel - what are the 4 revenue streams? When I look at Mikes slide I see 3.

1. Tyvaso DPI - we are all in violent agreement this is the greatest thing which happened for MNKD. Is it going to make $$$ for MNKD yes. Its going to pay the bills. I don't know what UTHR is projecting for this. Do I give Mike credit, some but this is Martine's gig and her sales force selling and they know how to sell.

2. afrezza - T1 market - market size $4B. Will it make money? Yes, its currently break even. How much of this market can afrezza capture? After the kids are approved, maybe 10% by 2027. We are all in violent agreement this is a great thing but the kids study should have been started in 2016. Do I blame Mike for that, yes. Waiting 5 years made no sense. How long was Sports telling us it was "all about the kids". We all knew how Al sold his pumps.

3. V-Go - T2 - market size? maybe $500M - assuming 10% capture $50M. Will MNKD ever make any money with this - probably not. The previous company failed.

4. Fourth Revenue source ?

Not in the plan -

1. afrezza for T2 - market size $40B - if properly marketed and sold at least 10% market capture

2. GLP1 for Diet - market size $20B+ - if TS GLP1 did as Peter Richardson predicted it would remove the needle and nausea - the nausea is a big issue and so is the needle in the diet world - 10% capture seems reasonable

3. Receptor Life - I had/have high hopes for this and still do but its going on forever

Do you see the problem here??? Its a problem of focus. The orphan drugs on Mikes slide have the potential of peanuts when we have real opportunities to make $$$Bs. Am I happy with a $5 stock, NO. What would MNKD be if we captured 10% of the T2 market??? How about 10% of the diet market???

If this was a baseball game it would be like the manager benching Babe Ruth and Willie Mays and sending Phil Rizzuto up to the plate to bunt.  We know Phil has the greatest potential of having the bat make contact with the ball. Its the most risk averse thing we can do.  Phil was probably the greatest bunter of all time.  Just saying, thats our 2023 plan and it is what it is.  The good news is the Babe and Willie are still on the bench.

[uvula]

Glp1 for diet. Maybe if you eliminate the nausea you also eliminate the weight loss?

[sayhey24]

Jan 14, 2023 8:26:59 GMT -5 uvula said:

Glp1 for diet. Maybe if you eliminate the nausea you also eliminate the weight loss?

Nope - thats not how it works - you eliminate the nausea and you increase sales potential.

Then again we never did any follow-up studies so who knows.  The 2023 plan is to keep it in the freezer.  We are putting V-Go in the sales reps "bag" this year.

[agedhippie]

Jan 14, 2023 8:26:59 GMT -5 uvula said:

Glp1 for diet. Maybe if you eliminate the nausea you also eliminate the weight loss?

Nobody knows, they weren't looking for weight loss in the trial. There is definitely potential there if the elimination of nausea can be shown in a larger trial. An explanation of why there is no nausea would be nice as well because currently they don't know ("The absence of an effect on gastric motility was a surprising finding.")

[hopingandwilling]

I love the chatter here on this board as the back and forth is exciting reading where posters give their opinion on what course the CEO should take to resolve MannKind's dilemma. I'm not an expert on the issues, but I have noted one issue that baffles me, so I hope someone can give me a 25-word or less explanation. Don't confuse me with multisyllabic words.

In the CEO's JP Morgan presentation, he showed a slide that indicated that Mannkind had secured 125,000 prescriptions with Afrezza. Since diabetes is a disease that requires patients to dose their prescripted medication constantly, this means the prescriptions must be refilled. Using a rudimentary application of math, these 125,000 prescriptions must be replenished constantly. Since the significant reporting agency issues weekly data for new prescriptions and refills, on the back of a napkin calculation, this would be 52 weeks in a year. Dividing the 125,000 by 52 weeks that would indicate that to refill the 125,000 prescriptions, the weekly average would be about 2,400 refills. Instead, it is reported that the average weekly refills are in the 400 range. Why aren't we seeing the other 2,000 being refilled?

[liane]

I'm guessing it refers to any Rx for Afrezza ever written over the past 8 years - including ones that have since discontinued.

[uvula]

Your napkin is broken. I used an envelope. 125k prescriptions would mean 125k refills per month or 32k per week. Or 10k per week if everyone gets a 3 month supply per pharmacy visit. If everyone who ever got a rx is still using it, and we know the retention rate is horrible.

[agedhippie]

Jan 14, 2023 10:53:46 GMT -5 hopingandwilling said:

I love the chatter here on this board as the back and forth is exciting reading where posters give their opinion on what course the CEO should take to resolve MannKind's dilemma. I'm not an expert on the issues, but I have noted one issue that baffles me, so I hope someone can give me a 25-word or less explanation. Don't confuse me with multisyllabic words.

In the CEO's JP Morgan presentation, he showed a slide that indicated that Mannkind had secured 125,000 prescriptions with Afrezza. Since diabetes is a disease that requires patients to dose their prescripted medication constantly, this means the prescriptions must be refilled. Using a rudimentary application of math, these 125,000 prescriptions must be replenished constantly. Since the significant reporting agency issues weekly data for new prescriptions and refills, on the back of a napkin calculation, this would be 52 weeks in a year. Dividing the 125,000 by 52 weeks that would indicate that to refill the 125,000 prescriptions, the weekly average would be about 2,400 refills. Instead, it is reported that the average weekly refills are in the 400 range. Why aren't we seeing the other 2,000 being refilled?

Liane is right, that's every prescription that has been written ever!

The refill math is tricky. Based on my experience in the T1 world the usual pattern is each prescription being written for four quarterly refills, so an NRx followed by 3 refills. I suspect that for commercial insurances most will be handled like that because the PBMs pretty much force you down the quarterly refill path (typically with their mail order pharmacy). When you see an NRx there is a probability that it's really a refill (an existing person getting their next years perscription), or a real new patient. What a model for that would look like I am not sure, I would need to go away and think about that.