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Post by benh on Apr 23, 2015 11:11:09 GMT -5
Oog and others have worked out there is on average 1.5boxes going out per Rx. That's ~60k. (Although I think Oog just said in a more recent post it might be 1 sample box + 2 x 90 boxes)
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Post by otherottawaguy on Apr 23, 2015 12:10:32 GMT -5
90 k / (12 * 1.5)
= 90 / 18
= 5000 (beginning to wonder if that 900M or even 9M boxes)
Line 1 is capable of producing
166k * 12
= 1992000 per year
= 38,307 boxes a week
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Post by otherottawaguy on Apr 23, 2015 12:13:54 GMT -5
I suggested that the first box (90 units) was the freebie and that the other two boxes made up the 480ish average per prescription. Trying to work out a model that shows demand and capacity curves, accounting for when lines come into full scale production while negating the effects on capacity that the sample might have.
Will try to push it to my post on TRx and NRx calcs once I gt the warm and fuzzies that I know how the two count towards the others reported numbers.
OOOG
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Post by yossarian on Apr 23, 2015 12:21:56 GMT -5
If there are 1.5 boxes per script on average and you say 90000 boxes needed to break even, that comes to 60000 scripts (90000boxes/1.5boxes per script). That's close to the 54000 scripts I originally estimated. But that depends on the production cost per box so we can figure the markup on cost to user, which Symphony gives at $470 per script at the end of April 10, 2015.
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Post by Deleted on Apr 23, 2015 12:50:42 GMT -5
lots of variables and assumptions here..
How do we know the dispensed rx per script? One month supply or two months supply or three months? This would affect the per month calculation..
Boxes produced would be constant, but not usage..
I think calculations all over the place , but may not be far from the final real number
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Post by yossarian on Apr 23, 2015 14:26:50 GMT -5
Yes there are lots and lots of assumptions, but was looking at scripts and not monthly supply. Using Symphony data on average cost of script, which changes weekly, and assuming a a cost of product anywhere from 50% to 10% of average cost of script (an admittedly imprecise and changing number)there seems to be a consensus that break even is more than 50,000 scripts and less than 70,000 scripts. It at least gives some context to the Symphony and IMS numbers. At a minimum suggests that AFREZZA is a sustainable product even if not a blockbuster and gives a context for what a blockbuster might be. If we start to get more than a 900 scripts a week, MNKD should fly.
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Post by yossarian on May 1, 2015 9:56:50 GMT -5
Had some errors in the scripts necessary for MNKD to make a penny a share. Microsoft's built in calculator does not have a percent key so I keep screwing up the decimals But here is updated script count for MNKD to breakeven. Note there are many assumptions here and it is only a very very rough approximate guess.
April 24 Symphony data says average cost of script is $475. I am assuming that 50% of that is profit (that is wildly optimistic I know but don't have any real data to suggest another number). So of the $475, 50% is assumed to be profit i.e, 237.50. Under the partnership agreement MNKD gets 35%, i.e, $83.12. Assume that eventually MNKD will have 450,000,000 shares outstanding, roughly 50,000,000 more than have been issued. Thus for MNKD to make a penny a share, must under my assumptions have revenue of $4,500,000. This translates into 54139 scripts (4,500,000/83.12). That comes to 1041 scripts a week (54139/52). So far using April 24 Symphony data, AFREZZA has a total of 2223 scripts or 4.1% of script needed to break even (2223/54139 x 100). Again this is just a very rough approximate figure and does NOT figure in MNKD overhead such as salaries, depreciation, etc. But provides some kind of benchmark against which to measure script counts. Or maybe not.
If anyone has a better calculation, please let me know.
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Post by BlueCat on May 1, 2015 10:06:34 GMT -5
Another way to calculate MNKD take may be to go with the number they provided for profit which was mid-20's%. Say, 25%. So cost is already factored, rather than going with a 50% cost … ? Not that I like that number, 119 at 25% of 475 …. but perhaps more accurate?
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Post by yossarian on May 2, 2015 7:47:09 GMT -5
Another follower of MANNKIND has given me an estimate of 122400 script counts a year as necessary. That comes to 2353 a week. Even if you take my 900 weekly script estimate as too low, and I think it may well be, even triple that, i.e, 2700 weekly scripts is certainly doable. Some insulins have script counts of 4000+ a week.
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Post by yossarian on May 2, 2015 10:19:31 GMT -5
The follower of MANNKIND I mentioned earlier informs me I should have said the weekly number of scripts he thought MANNKIND needed to break even was 23500. I personally think that is way too high and once AFREZZA prices normalize, discounting ends, free samples diminish, a script count of 2700 to 3000 should be sufficient. I will know more after seeing the next MNKD quarterly report.
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Post by Deleted on May 2, 2015 11:23:17 GMT -5
Exactly what are you trying to accomplish yoss?
200 mil sales = 50 mil profit for MNKD. 50M divided by 450M x 40 P/E gives today's share price. 200 mil sales at $2000 per year is 100,000 scripts. So when cumulative TRx hits 100k, we are breakeven.
Use whatever weekly growth you want and you'll find the time they will "breakeven"
As others have said, if people use 1.5 boxes on average then When cumulative TRx hits 66k, You have your number
Where you guys are getting confused is in the weekly NRx number. You need to understand it to use it appropriately. Here's a question as a test: If week 12 is 200 NRx and week 13 NRx was also 200 NRx, what was the increase? If you think the answer is "there was no increase" then you're incorrect, because scripts actually doubled. Thought about another way, 200 people in week 12 gets scripts, then in week 13 200 NEW people get scripts. The cumulative TRx is 400. Obviously people want to see two things when looking at weekly data, 1) what's the NRx growth and 2) what percentage of previous users are renewing scripts, because these both will influence total scripts and total sales going forward
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Post by james on May 2, 2015 17:23:42 GMT -5
For napkin work, I think breakeven by TRx is at least 500K (annually), or >10K per week and probably still higher.
Per Symphony data, current average $$ / TRx is $475 (but trending up, so I'll use $500). Note this is also exempting discounts.
500K * $500 = $250M
I doubt that full efficiency has been reached at this level of sales, nevertheless using 25% to MNKD yields $62M. Monthly expenses have been ~$15M the last couple of years, this can be expected to decrease for a number of reasons, but I don't imagine the company can reduce costs below $5M per month (interest is running $1.5M).
That would be a breakeven level, but we need higher than this to start thinking about P/E.
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Post by yossarian on May 9, 2015 15:16:10 GMT -5
Time to get hard nosed and do some financial analysis
Based on the just released quarter, Mannkind has approximately $32,074,000 in fixed costs, i.e, general and administrative, research and development, product manufacturing, and interest on debt. According to Symphony data each script has an average selling price of $478. Let's assume that all $478 gets split between Mannkind and Sanofi. Mannkind gets 35% of it or $167.30 ($478 x .35). Assuming those fixed costs are relatively fixed, that means to break even in a quarter, AFREZZA needs to sell 191,715 scripts ($32,074,000/$167.30). That comes to 14,747 scripts a week (191,715/13weeks). Even if we assume product manufacturing gets folded into $478 script cost, that only reduces the total fixed costs by $1,882,000 or down to $30,192,000. That puts the quarterly script count to break even at 180,466 or 13,882 per week.
I hope I'm missing something here.
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Post by compound26 on May 9, 2015 17:59:32 GMT -5
Time to get hard nosed and do some financial analysis Based on the just released quarter, Mannkind has approximately $32,074,000 in fixed costs, i.e, general and administrative, research and development, product manufacturing, and interest on debt. According to Symphony data each script has an average selling price of $478. Let's assume that all $478 gets split between Mannkind and Sanofi. Mannkind gets 35% of it or $167.30 ($478 x .35). Assuming those fixed costs are relatively fixed, that means to break even in a quarter, AFREZZA needs to sell 191,715 scripts ($32,074,000/$167.30). That comes to 14,747 scripts a week (191,715/13weeks). Even if we assume product manufacturing gets folded into $478 script cost, that only reduces the total fixed costs by $1,882,000 or down to $30,192,000. That puts the quarterly script count to break even at 180,466 or 13,882 per week. I hope I'm missing something here. I think Mannkind is getting more than 35% of $478 or $167.30 ($478 x .35). The analysis above would suggest Mannkind is assuming all the costs of the products and then only get 1/3 of the sales. More likely Mannkind is selling the products at cost to Sanofi and then in addition takes 1/3 of the profits that Sanofi books. Disclaimer: haven't done any research on this. Just my guess. |
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Post by Deleted on May 9, 2015 18:13:06 GMT -5
I'm working on some of this offline. I'll share when I have something worth while. I have a good feel for the flow now, just need the 10Q which should be avail Monday .
What id really like is to speak with an accountant in the forum to clarify some things.
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