I couldn't resist. Order filled at $5.18. Who else added ?

[mnholdem]

I'm glad for two things today

One - those damned snowflakes are no longer cluttering up my screen, and;

Two - that the comment about spiro in a Speedo was made last year. That is one image I want to leave behind. ?

[spiro]

robsacher,

i wouldn't give the Sanofi Sales Rep that much influence on the bottom line. I think diabetics will be a driving force on Afrezza's sales success. But let's not stop there, advertising, diabetic forums, diabetes association meetings and internet blogs will also be a factor. My sources tell me that Sanofi reps are salivating at the thought of detailing Afrezza. Now, back to reality, three lines can only treat about 360,000 patients. That would generate over $700 million in yearly revenue. I would think that by the end of the second quarter of 2015 after a successful launch SNY and MNKD will be able to forecast projected revenue of over $160 million for the 3rd quarter. i would not focus on the revenue, but rather what else we learn during the next 6 months. Items such as Foreign country drug applications, Danbury factory expansion, European factory ground breaking and of course the big prize, Technosphere licensing deals. Also, let us not forget the analyst upgrades and institutional hunger to buy more MNKD.shares. Wait until the word gets out that Sanofi starts acquiring MNKD shares. So, the battle resumes tomorrow, it's Vanguard, Fidelity, Blackrock, Al Mann and others, against the shorts. Spiro bets with Vanguard and Al Mann. My rally hat is on, let the games begin again.

Spiro here

[Deleted]

Jan 1, 2015 11:57:16 GMT -5 robsacher said:

Spiro,

I have a question for you and the other good folks here.

My thought is that Afrezza will have to post gross sales numbers after the second quarter that can reasonably be projected to amount to 500 million dollars by the end of 2015 in order to equal where the value of the stock is today. From that 500M, MannKind keeps 35% which comes to 175 million dollars. 

Multiply the 175M by a factor of 15 and we get a 2.6 Billion dollar company market cap. Multiply the 175 by a factor of 10 and we get a 1.75B market cap. Or, multiply the 175 by a factor of 20 and we get a market cap of 3.5 billion dollars.

Right now, MannKind has a 2B market cap. The share price is $5.22.

Does my logic make sense to you guys?  

By the end of the second quarter in June, I believe that we will need to see completed sales totaling no less than 200 million dollars which would still mean that Afrezza would have to continue to gain additional market share by the end of 2015 in order to reach 500 M. 

I believe that I read somewhere that Sanofi has 8,000 sales reps in America. Please correct me if I am wrong. Can 8,000 sales rep sell $200M worth of Afrezza in five months?  That comes to $25,000 per sales rep over those five months.

Divide that 25K by five months of work selling Afrezza (Feb 2015-June 2015) and we get $5000 per sales rep, per month (Feb-June).

That breaks down to 8000 Sanofi sales reps each selling around $1200 worth of Afrezza every week from February 1st through June 30th, 2015.

If Afrezza is priced around $200 per month, per customer, then that comes to 6 customers per Sanofi sales rep, per week.

Does this seem logical and possible?

Will all Sanofi sales rep be selling Afrezza?

It really chaffs me to see people already parroting Fool.com numbers and saying that $500M is priced in already. Frankly, thats a complete load of bull$hit.

$500MM sales is $125MM profit. 125MM/450MM * 50 = ~$14PPS. Not $5. If they even come close to selling out Danbury (which $500M is coming close to selling out Danbury), MNKD should be double digits. 

[harshal1981]

Jan 1, 2015 13:08:03 GMT -5 @fugacity said:

Jan 1, 2015 11:57:16 GMT -5 robsacher said:

Spiro,

I have a question for you and the other good folks here.

My thought is that Afrezza will have to post gross sales numbers after the second quarter that can reasonably be projected to amount to 500 million dollars by the end of 2015 in order to equal where the value of the stock is today. From that 500M, MannKind keeps 35% which comes to 175 million dollars. 

Multiply the 175M by a factor of 15 and we get a 2.6 Billion dollar company market cap. Multiply the 175 by a factor of 10 and we get a 1.75B market cap. Or, multiply the 175 by a factor of 20 and we get a market cap of 3.5 billion dollars.

Right now, MannKind has a 2B market cap. The share price is $5.22.

Does my logic make sense to you guys?  

By the end of the second quarter in June, I believe that we will need to see completed sales totaling no less than 200 million dollars which would still mean that Afrezza would have to continue to gain additional market share by the end of 2015 in order to reach 500 M. 

I believe that I read somewhere that Sanofi has 8,000 sales reps in America. Please correct me if I am wrong. Can 8,000 sales rep sell $200M worth of Afrezza in five months?  That comes to $25,000 per sales rep over those five months.

Divide that 25K by five months of work selling Afrezza (Feb 2015-June 2015) and we get $5000 per sales rep, per month (Feb-June).

That breaks down to 8000 Sanofi sales reps each selling around $1200 worth of Afrezza every week from February 1st through June 30th, 2015.

If Afrezza is priced around $200 per month, per customer, then that comes to 6 customers per Sanofi sales rep, per week.

Does this seem logical and possible?

Will all Sanofi sales rep be selling Afrezza?

It really chaffs me to see people already parroting Fool.com numbers and saying that $500M is priced in already. Frankly, thats a complete load of bull$hit.

$500MM sales is $125MM profit. 125MM/450MM * 50 = ~$14PPS. Not $5. If they even come close to selling out Danbury (which $500M is coming close to selling out Danbury), MNKD should be double digits. 

Frugality:

Can you elaborate on your math here why $50 multiple and how $125 profit on $500 mil rev ?

[dreamboatcruise]

It does seem as though in the first year(s) of Afrezza roll out MNKD could trade at high P/E. Whether you assign a 10 P/E as robsacher gave as an option that would mean the current pps is somewhat overpriced or a 50 P/E as @fugacity just suggested is a large unknown that would probably depend on wall street sentiment and whether MNKD's perceived failures of the past (and Exubera's real failure) are finally put behind us. However, for perspective, looking on Yahoo at XBI spdr biotec ETF it shows a 40 P/E for the sector. Given that biotec P/E are significantly higher than other sectors and given that in the latter half of this year a 40 P/E for MNKD would probably result in a PEG ratio that would seem very low, I tend to see the @fugacity scenario as much more likely, but it is likewise nice to know that a much more conservative (pessimistic) analysis such as robsacher still results in limited downside. Seems the range is skewed to a very favorable risk/reward ratio.

Happy New Year to all!

[Deleted]

Which part? The P/E or the profit?

A P/E of 50 is normal for a biotech initiating sales, especially when in the first year the manuf capacity is nearly outran. Look at REGN, it has P/E in the 50-60's. Puma had a P/E of near infinity. I chose 50 to be semi-conservative.

The profit is easy. Listen to every conference since the SNY deal. It equates to a mid20s royalty. I use the milestone payments to take care of the cash burn over the next few years of things outside afrezza.

Danbury sold out is worth 2-3x from today's price. As I've said, now what you'll see is the FUD shift towards an expectation of a large sales number to start the process of brain wash. Orelli just started yesterday. More is coming. Don't beleive that $500mm in sales is the current valuation, because again, that's flat out lying BS

[mnholdem]

Hah! Gotta love the bash that was posted today at YMB. The poster claimed to be looking at resumes of two MannKind IT employees who were let go because MannKind is going broke... Desperate but clever. He even offers to mail you the resumes. I told the basher (Rec: Sell) that I need some IT people on the east coast and to send me copies. Too funny!

Shorts aren't done spreading despair to shake out some more shares before this gets away from them. But it will get away, even without significant news. January is investment month, typically the largest numbers of new investments in small companies comes in January. Plus this is the 3rd year of the President's term. Roh-roh 'raggy!

PPS rally begins in two weeks, followed by launch news late January or early February will kick in the afterburners. Hold on to your butts! If I can recall where I read up on the January of the 3rd term being a big new investments month, I'll post the link.

Good fortune all

[afrizzle]

Here's my calculation, please poke holes in it if I've been too aggressive or missed anything

Sanofi initial target of 3.1 million patients
10% arbitrary initial success factor
$2000/year per patient revenue
Or $620 mil total revenue
20% net profit to MannKind
Or 124 million annual
18 multiple and 400 mil shares
Or $5.58 PPS for each 10% chunk of Sanofis goal
Not counting technosphere, or other JDA

So to me, bearing something catastrophic it's a ramp rate issue with limited risk. Does anyone think Sanofis is going to give Wall Street a number it can't hit? How long before they get their full target? That's $56 PPS based on Afrezza alone, assuming production capacity.

[mrhaigs]

Jan 1, 2015 15:10:23 GMT -5 @fugacity said:

Which part? The P/E or the profit?

A P/E of 50 is normal for a biotech initiating sales, especially when in the first year the manuf capacity is nearly outran. Look at REGN, it has P/E in the 50-60's. Puma had a P/E of near infinity. I chose 50 to be semi-conservative.

The profit is easy. Listen to every conference since the SNY deal. It equates to a mid20s royalty. I use the milestone payments to take care of the cash burn over the next few years of things outside afrezza.

Danbury sold out is worth 2-3x from today's price. As I've said, now what you'll see is the FUD shift towards an expectation of a large sales number to start the process of brain wash. Orelli just started yesterday. More is coming. Don't beleive that $500mm in sales is the current valuation, because again, that's flat out lying BS

Regn also has a pipeline. We have none of that.

[ezmit]

Jan 1, 2015 20:25:53 GMT -5 mrhaigs said:

Jan 1, 2015 15:10:23 GMT -5 @fugacity said:

Which part? The P/E or the profit?

A P/E of 50 is normal for a biotech initiating sales, especially when in the first year the manuf capacity is nearly outran. Look at REGN, it has P/E in the 50-60's. Puma had a P/E of near infinity. I chose 50 to be semi-conservative.

The profit is easy. Listen to every conference since the SNY deal. It equates to a mid20s royalty. I use the milestone payments to take care of the cash burn over the next few years of things outside afrezza.

Danbury sold out is worth 2-3x from today's price. As I've said, now what you'll see is the FUD shift towards an expectation of a large sales number to start the process of brain wash. Orelli just started yesterday. More is coming. Don't beleive that $500mm in sales is the current valuation, because again, that's flat out lying BS

Regn also has a pipeline. We have none of that.

Technosphere will create our pipeline. Hopefully something in pain management.

[spiro]

MNKD's potential pipeline with future Technosphere platforms literally dwarfs REGN's limited pipeline. I think Matt called it an embarrassment of riches. MNKD longs just need to sit back and enjoy the next couple of years and stop with the whining. We will wake up one morning and find out that MNKD has been acquired.

[mrhaigs]

I hope you're right but right now mnkd is afrezza. There are 0 drugs in any type of phase 1,2 or 3 testing besides afrezza. The pipeline just is not there... Yet.

And how am I whining by pointing this fact out?

[rak5555]

Jan 1, 2015 11:57:16 GMT -5 robsacher said:

Spiro,

I have a question for you and the other good folks here.

My thought is that Afrezza will have to post gross sales numbers after the second quarter that can reasonably be projected to amount to 500 million dollars by the end of 2015 in order to equal where the value of the stock is today. From that 500M, MannKind keeps 35% which comes to 175 million dollars. 

Multiply the 175M by a factor of 15 and we get a 2.6 Billion dollar company market cap. Multiply the 175 by a factor of 10 and we get a 1.75B market cap. Or, multiply the 175 by a factor of 20 and we get a market cap of 3.5 billion dollars.

Right now, MannKind has a 2B market cap. The share price is $5.22.

Does my logic make sense to you guys?  

By the end of the second quarter in June, I believe that we will need to see completed sales totaling no less than 200 million dollars which would still mean that Afrezza would have to continue to gain additional market share by the end of 2015 in order to reach 500 M. 

I believe that I read somewhere that Sanofi has 8,000 sales reps in America. Please correct me if I am wrong. Can 8,000 sales rep sell $200M worth of Afrezza in five months?  That comes to $25,000 per sales rep over those five months.

Divide that 25K by five months of work selling Afrezza (Feb 2015-June 2015) and we get $5000 per sales rep, per month (Feb-June).

That breaks down to 8000 Sanofi sales reps each selling around $1200 worth of Afrezza every week from February 1st through June 30th, 2015.

If Afrezza is priced around $200 per month, per customer, then that comes to 6 customers per Sanofi sales rep, per week.

Does this seem logical and possible?

Will all Sanofi sales rep be selling Afrezza?


I don't believe you can apply typical PE ratios to an emerging biotech company whose sales and earnings are likely to double in each of next several sequential years. Most likely, the analysts will run 5 and 10 year cash flow projections and discount them back at appropriate risk adjusted rate.

[mnholdem]

Jan 1, 2015 20:57:03 GMT -5 mrhaigs said:

I hope you're right but right now mnkd is afrezza. There are 0 drugs in any type of phase 1,2 or 3 testing besides afrezza. The pipeline just is not there... Yet.

And how am I whining by pointing this fact out?

Somebody is going to have to help me here, but I think one company has already made an Agreement with MannKind to license Technosphere for development and their own trials. I cannot recall, but I think it was Rose Pharma or something like that? They paid MannKind $10 million. It's been months since I've seen anything posted on this company, but I think Phase I trials were expected to be completed in late 2014 or early 2015.

I think there is possibly another Agreement that was reached several years ago. It's possible that the unexpected 2nd CRL also put these companies on hold as well, but I don't think so. I'm pretty sure that there is another Technosphere drug out there that has been under development for a couple years.

[robsacher]

Hi Spiro,

Thank you for your reply. I think you are quite correct in your analysis.  

Another MannKind long with extensive knowledge in the pharmaceutical world expressed a similar line of thought yesterday.  She also wrote that there are a number of pharmaceutical trade association blogs that will have a lot of information about how Afrezza is doing beyond the launch. She wrote that the entire industry will know what's going on as there are no secrets among pharmaceutical sales reps. Interesting to consider...


She also wrote that Afrezza will be somewhat of a slow roll out as the reps will be speaking doctor to doctor as they build awareness for the drug. It will take six to eight weeks after launch to complete the process so sales will be very low in the the first quarter of 2015.

As I write this to you, MNKD is up 5.85% today.  

I raise my glass to you, Baba, KT, and all the folks here who have kept my spirits up over the last year. I have always enjoyed your posts.  Let's go 2015!

RS