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Post by shortslaver on Jan 21, 2015 10:52:21 GMT -5
Lets say that they have programmed production to match estimated sales.
We know that by the end of 2015 there will be a min of 3 lines firing, 24 /7.
We can safely assume that 1 line is currently working.
Old line capability = 2M /12 = 166K annual (as per Dr Mann's Danbury max output comment) New Lines = 110% of old line = 183K
Max Production = 167 + 183 + 183 = 533 K
Average production = (167 * 12) + (183 * 6) + (183 * 3) = 3651 / 12 = 304K * 11/12 (sales start in Feb) = 278K - 20% (estimated surplus production but hopefully less) = 223K (final answer, but hopefully higher)
223000 * 287 (monthly cost) * 12 * 23% (what mnkd gets) * 18 (conservative P/E) / 450M (share count) = 7.06 conservative pps (end of 2015) = 8.40 (if max supply matches demand)
But...If all machines are running for launch date in Feb 2015: 533000 * 287 (monthly cost) * 12 * 23% (what mnkd gets) * 18 (conservative P/E) / 450M (share count) = 16.88 pps (supply = demand)
Some may want to argue a higher P/E, and should adjust the numbers accordingly...
OOG
Using classical value metrics such as PE will be useless when determining what share price MNKD will be in 1 years time. If prescriptions are actually happening and people are buying this and its well more than what analysts believe, the price will reflect that. If they're selling everything they're making, regardless of production right now, and have to keep ramping production then the share price will reflect that. Especially as the pipeline begins to get filled up starting next month and they get approvals in other countries. A PE of 80+ would be in line if not more, using traditional value metrics.
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Post by Deleted on Jan 21, 2015 10:53:37 GMT -5
Thanks oog, always appreciate when someone besides me does math!
Obviously I'm in the 40-60 PE camp, but your data looks very conservative.
I'd add that they are using typical MTBF data which would suggest accounting for this downtime and routine maintenance that run rate is based off of 16 hours per day. Also, lines 2/3 were built together, so it stands to reason that your second case is more "real world".
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Post by dt on Jan 21, 2015 11:53:40 GMT -5
Lets say that they have programmed production to match estimated sales.
We know that by the end of 2015 there will be a min of 3 lines firing, 24 /7.
We can safely assume that 1 line is currently working.
Old line capability = 2M /12 = 166K annual (as per Dr Mann's Danbury max output comment) New Lines = 110% of old line = 183K
Max Production = 167 + 183 + 183 = 533 K
Average production = (167 * 12) + (183 * 6) + (183 * 3) = 3651 / 12 = 304K * 11/12 (sales start in Feb) = 278K - 20% (estimated surplus production but hopefully less) = 223K (final answer, but hopefully higher)
223000 * 287 (monthly cost) * 12 * 23% (what mnkd gets) * 18 (conservative P/E) / 450M (share count) = 7.06 conservative pps (end of 2015) = 8.40 (if max supply matches demand)
But...If all machines are running for launch date in Feb 2015: 533000 * 287 (monthly cost) * 12 * 23% (what mnkd gets) * 18 (conservative P/E) / 450M (share count) = 16.88 pps (supply = demand)
Some may want to argue a higher P/E, and should adjust the numbers accordingly...
OOG
Hi OOG - By my maths 223000*287*12 => $768,000,000. We have been hearing yr 1 sales estimates of circa $100,000,000. Therefore there is quite a lot of room for beating estimates based on current production capabilities. dt
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Post by dreamboatcruise on Jan 21, 2015 13:23:51 GMT -5
Sanofi will not get all of the retail price of Afrezza. Unfortunately, we don't know what they will get.
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Post by mnholdem on Jan 21, 2015 18:01:07 GMT -5
What otherottawaguy has done, in effect, is to establish a baseline. The MINIMUM we can expect.
Is Sanofi ramping up an overseas facility? We don't know and they are NOT going to tell us. Has MannKind ordered equipment for more lines? We don't know and Sanofi is NOT going to let them tell us.
Sanofi getting rights in the Agreement to manufacture Afrezza is a big key. Remember when Al said that even if Danbury were to run at capacity (12 lines) it would supply only a fraction of worldwide demand?
That statement was made AFTER he put his signature on the MannKind-Sanofi Agreement. Folks need to pay attention, because that was a long-term forecast.
I, for one, believe that Mann is speaking the truth.
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Post by ezrasfund on Jan 21, 2015 18:26:25 GMT -5
IMO price/earnings ratios are not useful when earning numbers are volatile because of so many one off accounting events and changes to the classification of expenses. Also during ramp up the earnings number can be very small making the ratio even more volatile. I would suggest looking at price to sales ratios for the first few years until the trajectory becomes clearer. Wall Street should be focused on top line revenues and revenue growth. We know margins are huge and COGS small, so revenues will tell the story. Profit will swing wildly up and down as milestone payments are recognized, previously expensed items are shifted to COGS and so forth. Wait until things settle down in the accounting department.
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Post by dreamboatcruise on Jan 21, 2015 18:41:07 GMT -5
mnholdem... Does not seem that Sanofi is likely to be ramping up manufacturing. Here is what the agreement says about it, and I would hope that to avoid under utilization of Danbury that the % would be 50% or greater, not 25%. If it were just the initial 3 lines then it seems they would have simply written the agreement to allow Sanofi the option immediately. ------ (ii) Sanofi Option. Notwithstanding the foregoing, the Parties acknowledge and agree that Sanofi shall have the option (the “Sanofi Option”), exercisable at Sanofi’s sole discretion upon written notice to MannKind, to establish another facility of Sanofi or its Affiliate in which Product will be Manufactured (such facility, the “Sanofi Site”), it being understood that such Sanofi Option shall not be exercised before MannKind has committed the capital investment required to bring the MannKind Facility to a level of capacity representing approximately […***…] percent ([…***…]%) of its maximum capacity (corresponding under MannKind’s current investment plan to the Manufacture of approximately […***…] cartridges of Product annually). For the avoidance of doubt, development of capacity at the MannKind Facility and/or the Sanofi Site shall be submitted to the approval of the JAC.
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Post by babaoriley on Jan 21, 2015 20:12:44 GMT -5
"Sanofi getting rights in the Agreement to manufacture Afrezza is a big key," also, referencing the "Sanofi Option" in DBC's post immediately above - coincidentally, I was talking with mannkind (the poster, not the company) today and this was one of our topics of discussion. What do people think in terms of the manufacture of Afrezza? It would seem that after reaching a certain percentage of utilization in the Danbury plant, Sanofi will be allowed to manufacture it. Does this mean that the process by which the Technosphere particles are bound to the insulin is something that MannKind is willing to share with others (with, of course, the proper confidentiality agreements in place)? Does anyone have any thoughts about how "special" this technology is? Can it be easily reverse-engineered by others? Not that copying the technology would be legal, just whether it would be not too difficult to achieve.
Does anyone think that if MNKD does a deal with a big pharma for pain medication delivery through Technosphere that allowing the big pharma or whoever it is, to work on binding their drug to the Technosphere particles is an issue? Will MNKD insist that it be the one to develop that method?
Any thoughts would be appreciated.
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Post by biotec on Jan 21, 2015 21:00:46 GMT -5
"Sanofi getting rights in the Agreement to manufacture Afrezza is a big key," also, referencing the "Sanofi Option" in DBC's post immediately above - coincidentally, I was talking with mannkind (the poster, not the company) today and this was one of our topics of discussion. What do people think in terms of the manufacture of Afrezza? It would seem that after reaching a certain percentage of utilization in the Danbury plant, Sanofi will be allowed to manufacture it. Does this mean that the process by which the Technosphere particles are bound to the insulin is something that MannKind is willing to share with others (with, of course, the proper confidentiality agreements in place)? Does anyone have any thoughts about how "special" this technology is? Can it be easily reverse-engineered by others? Not that copying the technology would be legal, just whether it would be not too difficult to achieve. Does anyone think that if MNKD does a deal with a big pharma for pain medication delivery through Technosphere that allowing the big pharma or whoever it is, to work on binding their drug to the Technosphere particles is an issue? Will MNKD insist that it be the one to develop that method? Any thoughts would be appreciated. My thoughts, Lets see if technoshere works with Afrezza first, If it has low sales technoshere is history!
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Post by jpg on Jan 21, 2015 21:36:01 GMT -5
"Sanofi getting rights in the Agreement to manufacture Afrezza is a big key," also, referencing the "Sanofi Option" in DBC's post immediately above - coincidentally, I was talking with mannkind (the poster, not the company) today and this was one of our topics of discussion. What do people think in terms of the manufacture of Afrezza? It would seem that after reaching a certain percentage of utilization in the Danbury plant, Sanofi will be allowed to manufacture it. Does this mean that the process by which the Technosphere particles are bound to the insulin is something that MannKind is willing to share with others (with, of course, the proper confidentiality agreements in place)? Does anyone have any thoughts about how "special" this technology is? Can it be easily reverse-engineered by others? Not that copying the technology would be legal, just whether it would be not too difficult to achieve. Does anyone think that if MNKD does a deal with a big pharma for pain medication delivery through Technosphere that allowing the big pharma or whoever it is, to work on binding their drug to the Technosphere particles is an issue? Will MNKD insist that it be the one to develop that method? Any thoughts would be appreciated. My thoughts, Lets see if technoshere works with Afrezza first, If it has low sales technoshere is history! Hi Biotec, I intellectually don't see a clear path between the commercial success of Afrezza and other technical uses for Technosphere. I do not see Technosphere as being history. In the world of risk averse CEOs maybe you are right but I doubt it. It's to good an idea not to get used again. FDA approval of Technosphere is a big deal regardless of the commercial viability of it using Technosphere as an insulin carrier. This being said I agree that the buck for us as near, medium and long term Mannkind shareholders gets decided by Afrezza. Technosphere is a bonus (and potentially a very very big bonus) to the success of Afrezza. JPG
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Post by mrhaigs on Jan 21, 2015 21:43:11 GMT -5
If afrezza flops the market cap of this company will be back in the $500mm range. Technosphere has been around for about 10 years now while afrezza has been trying to get to market. If a drug like afrezza that has potential for massive amounts of recurring revenue flops, what in the world makes you think others will not? You are years and years away from any other potential TI application even Having chance to be on the market. Let's face it. It's all about afrezza. The sales projections are sub $200mm for this year. I'm calling $450mm.
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Post by jpg on Jan 21, 2015 21:59:01 GMT -5
If afrezza flops the market cap of this company will be back in the $500mm range. Technosphere has been around for about 10 years now while afrezza has been trying to get to market. If a drug like afrezza that has potential for massive amounts of recurring revenue flops, what in the world makes you think others will not? You are years and years away from any other potential TI application even Having chance to be on the market. Let's face it. It's all about afrezza. The sales projections are sub $200mm for this year. I'm calling $450mm. Agreed we sink or swim on Afrezza. Don't agree Afrezza has much to do with,as an example, a fast migraine inhalation using Technosphere though. Like I said above after FDA approval Technosphere is significantly 'derisked' and there are a lot of companies with drugs that would do very well with Technosphere. JPG
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Post by obamayoumama on Jan 21, 2015 22:00:25 GMT -5
Keeping it simple. The Danbury plant can handle 2 million patients a year or 4 billion dollars worth of product using 12 lines. We are starting with with 3 lines or 1/4 the capacity. Simple math says that management is preparing for 1 billion in sales, and if they add more lines, they are forecasting more than 1 billion a year. Matt had said that it takes about six months from the order time to production on any additional lines. We do anything close to a billion the first year, I doubt the shorts will be happy.
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Post by Deleted on Jan 21, 2015 22:01:44 GMT -5
If afrezza flops the market cap of this company will be back in the $500mm range. Technosphere has been around for about 10 years now while afrezza has been trying to get to market. If a drug like afrezza that has potential for massive amounts of recurring revenue flops, what in the world makes you think others will not? You are years and years away from any other potential TI application even Having chance to be on the market. Let's face it. It's all about afrezza. The sales projections are sub $200mm for this year. I'm calling $450mm. 200mil? What analyst is sayin that? I haven't seen over $100mil, with one or two around 50. Let's not set the bar that high and make it easy for the shorts, k?
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Post by lynn on Jan 21, 2015 22:13:17 GMT -5
Undiagnosed: Of the 29.1 million, 21.0 million were diagnosed, and 8.1 million were undiagnosed. In 2010 the figures were 18.8 million and 7.0 million. Prevalence in Seniors: The percentage of Americans age 65 and older remains high, at 25.9%, or 11.8 million seniors (diagnosed and undiagnosed). New Cases: The incidence of diabetes in 2012 was 1.7 million new diagnoses/year; in 2010 it was 1.9 million. Prediabetes: In 2012, 86 million Americans age 20 and older had prediabetes; this is up from 79 million in 2010. Deaths: Diabetes remains the 7th leading cause of death in the United States in 2010, with 69,071 death certificates listing it as the underlying cause of death, and a total of 234,051 death certificates listing diabetes as an underlying or contributing cause of death. - See more at: www.diabetes.org/diabetes-basics/statistics/#sthash.qXqmKslY.dpufSorry I'm on my IPhone & just pasted what I found by googling " how many Diabetics & Pre Diabetics are in the US" Afrezza is already listed at every ( maybe that's an exaggeration but it seems like it is ) pharmacy across the country , it mimics the way the Pancreas works in healthy individuals better than any Prandial Insulin on the Market , it will Succeed , tho perhaps not as Soon as some would like , 29 million plus potential patients ... We don't need to capture many to have a Blockbuster , we Don't want to capture many at this point as we don't have the Supply to meet that kind of Demand ... My main concern is that people typically only take the time to share about an Experience if it's Really Good or more so Really BAD , I'm remaining Optimistic re : this but I hope to see a ton of Affrezausers blogging bc that might be the one thing that can screw us (& the way most blog sights are anonymous ) I wouldn't be surprised to see fake Diabetic ( Shorts ) pop up to scare potential Patients .... Other than that this drug will sell & better the Lives of Millions of Diabetics eventually , and Technosphere will further more Gratify those of us who are now expecting "instant gratification" .. . pain ? puff this ( non addictive med ) & relief in Minutes ... This has been a Painful journey but it will be well worth it ... Oh & take note of this being the 7th leading cause of Death in the US alone ... I'd love to see this # decrease bc of Afrezza I may not post much , but I read everything , I'm blessed / cursed to have the time to do so ./ Lynn
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