Production lines (again)

[Deleted]

Anyone hear hakan on the call state an additional 2 lines to be brought online first half of 2015.

Million dollar question: does this make 5 or is it merely the 3 we already knew about?

[obamayoumama]

Each line needs FDA's approval and as such, that would bring them to three.

[Deleted]

Nov 3, 2014 22:38:41 GMT -5 obamayoumama said:

Each line needs FDA's approval and as such, that would bring them to three.

I dunno about that considering 3 lines were suppossed to be online for launch.

[mnholdem]

3 are in currently in production was my understanding. It takes about six months from ordering new equipment to becoming operational, so if Sanofi instructed MannKind to further increase production back when the agreement was completed, then 1Q15 would be about six months lead time. I think there will be 5 lines and Sanofi may instruct management to add even more if initial feedback indicates Afrezza will be in larger demand than originally expected.

[daduke38]

Nov 3, 2014 22:51:00 GMT -5 mnholdem said:

3 are in currently in production was my understanding. It takes about six months from ordering new equipment to becoming operational, so if Sanofi instructed MannKind to further increase production back when the agreement was completed, then 1Q15 would be about six months lead time. I think there will be 5 lines and Sanofi may instruct management to add even more if initial feedback indicates Afrezza will be in larger demand than originally expected.

I hope you are right.  I had a thread on here awhile back expressong concern over production capabilities.  We are all looking forward to 1st quarter launch, but I am starting to think it will be at the middle to end of 1st quarter.  I really think that if we are up to 5 by next quarter, they should already be ordering more.  In the scope of billions of dollars, I would rather have idle lines just waiting to go.  "A" is going to be big in my mind, and don't understand why we don't have expanded production ready to go.
Also, what happens when we get EU approval?  You are looking at at least a 2 year lead time to even start production.

[hammer]

Nov 3, 2014 22:21:08 GMT -5 @fugacity said:

Anyone hear hakan on the call state an additional 2 lines to be brought online first half of 2015.

Million dollar question: does this make 5 or is it merely the 3 we already knew about?

I asked this same question at YMB. By my accounting this should make 5 lines since we were directed that 3 lines would be available for launch. I was a bit disappointed since I perceive demand for 3 additional lines needed in 2016 for afrezza and a fourth for future technosphere applications. I also would have liked to hear plans for the brown field site near the current Danbury facility. All in due time of course.

[liane]

The way I understood it (I may be wrong - the transcript is not up last I checked a few minutes ago) is 3 lines at launch and 2 more lines 1st half of 2015.

[hammer]

Nov 4, 2014 8:27:53 GMT -5 liane said:

The way I understood it (I may be wrong - the transcript is not up last I checked a few minutes ago) is 3 lines at launch and 2 more lines 1st half of 2015.

I concur. Based upon the slowest initial line being able to support 167,000 patients then 5 lines should support at least 835,000 patients or more. If installed and validated mid 2015 to meet demand then SNY is ceratianly expecting blockbuster status within the first year. At 5 line capacity 835,000 x 2000 DWAC=1.67 billion sales. I suspect at 25% royalty that's 418mil to MNKD with all expenses paid 150+75 million in deferred income and potential future milestones. I like it! Although not fully profitable I think fiscal 2015 sales will support about 500,000 patients 2016 over the 835,000. 

[bradleysbest]

Any update on the insulin Al bought from Pfizer, is it FDA approved & can we use it at launch?

[ezrasfund]

Nov 4, 2014 10:27:44 GMT -5 bradleysbest said:

Any update on the insulin Al bought from Pfizer, is it FDA approved & can we use it at launch?

The Pfizer insulin is still in the deep freeze and will remain there for the foreseeable future.

[dt]

So I have a question about plant capacity vs number of patients that can be served.
This is not a complete list (or probably not even a complete thought!) but my observation is that their must be 'leakage' in how many patients can be served.

I imagine....

In order to start a patient on Afrezza, the doctor will need assurance as to availability of supply. And it wont be clear how much Afrezza each patient needs.
In order to start a doctor prescribing Afrezza, he will want to have the ability to prescribe to as many of his/her patients as appropriate to their condition. And it wont be clear how many patients in a practice go for Afrezza.
In order to supply an area, there must be a semi-regional depot to store the medication.
There might be variability in manufacturing capacity (ie, quality assurance variability?)

In each of these cases, there is uncertainty. Therefore if the most important aspect is to not run out of supply to the patient, then slack needs to be built into the supply chain at each point.

Just curious if any of us have any idea - therefore - of what would constitute a strong rollout? (ie at capacity) (By the way, I have no idea!)

(I caveat the above with my opinion that the above is not the most important aspect but I bet will be a complicated puzzle to operate. Market acceptance and positive feedback - social media, doctors, etc - will drive the initial rise in PPS. Way ahead of ramped up revenues)

Cheers
dt

PS I thought the call was good. Not great and not disastrous. I have Jan 2015 options with a strike of 7 and an average cost of $0.40. Need to the stock to go to 8 for Jan. Here's hoping!

[dreamboatcruise]

I would imagine most docs take supply for granted... right up until they hear from some of their patients that they couldn't get something. That would be a very bad thing as I imagine docs would then pull back on recommending to new patients for awhile... potentially longer than an actual shortage exists. SNY/MNKD would do well to not let a shortage occur.

[dt]

DBC thanks for that. I agree that we do not want a shortage to existing patients, which is why I am thinking about this.

The flip side is that it might be hard to get doctors to focus and prescribe if they can only put 1 or 2 patients on the medication...

This is not my expertise, so it is more of a question than a statement. 

My vote would be that MNKD push supply aggressively. At this point, after $2B and 15 years, why get conservative?!

dt

[jpg]

As a physician I can tell you we know a lot about shortages of medications. We live with it on a daily basis. The drugs being discontinued, on BO, difficult to source etc. are all the cheaper generic stuff though. I can remember of a few cases of new drugs being difficult to obtain for various reasons (Tamoxifen comes to mind but there have been others) but this is not something MDs spend a lot of time worrying about when pulling out the prescription script. Then again the perceived shortage of iPhones (everyone ends up getting one...) seemed to have done wonders for Apple. Not saying the drug business has much in common with the consumer electronics business but a bit of perceived scarcity does provide some buzz and desire.

JPG

[hammer]

Well you know what they say about ass_u_me.

I contacted Matt today just for clarification on this issue. Sorry to tell you that the 2 additional lines which were discussed at the CC were in reference to the original lines. So there will only be 1 line at launch and 2 other lines brought on later for the total of 3 lines. The only bright spot was that the newer lines are faster by something greater than 10%. He did not have the actually percentage.