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Post by mnholdem on Oct 18, 2015 21:04:04 GMT -5
I recall a discussion last year about the proper meaning of the word "aggregate" written into the agreement in regard to the 24 million euros. In one interpretation, it was argued that aggregate is similar to the word "average". In other words, if you had a three year contract and you ordered 5 million euros of insulin in year one, 10 million in year two, and 15 million euros at year three, that could be considered to have fulfilled a contract requiring an order of 10 million euros annually in aggregate.
If this is the correct interpretation of "aggregate", then MannKind can place small orders initially and large order late in the 5-year purchase agreement, as long as it works out to an aggregate of 24 million euros per year. Could this be possible? Any contract lawyers here?
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Post by petech on Oct 18, 2015 21:20:13 GMT -5
From the most recent conference call by amphastar: So, right now, as you know, our biggest customer there is MannKind and they’re purchasing insulin for their Afrezza product. Now, they have an annual commitment. So, it’s not a quarterly commitment. And if you took their annual commitment and divided by four, you get something pretty close to that five million or so, a quarter that we had from them in the first quarter. However, they purchased less than that this quarter. And some of the timing of some of those sales are somewhat based on us, somewhat on their needs. So, but I will say that because they did purchase less in the first half of the year or less than half of their annual commitment, then they will be purchasing more than half the commitment in the second half of the year. The timing of that is not; there is no contractual obligation for them to take it, half of that remaining thing in the third and half and the fourth. So, the timing is variable. It could come in the third or the fourth. Mostly like it will not be all one quarter or the other quarter, most likely we will be shipping to them in both quarters. However it’s probably more likely that amount that was short in this quarter is more likely to be made up in the fourth quarter than the third quarter. Full transcript at www.seekingalpha.com |
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Post by rrtzmd on Oct 18, 2015 23:06:35 GMT -5
From the most recent conference call by amphastar: So, right now, as you know, our biggest customer there is MannKind and they’re purchasing insulin for their Afrezza product. Now, they have an annual commitment. So, it’s not a quarterly commitment. And if you took their annual commitment and divided by four, you get something pretty close to that five million or so, a quarter that we had from them in the first quarter. However, they purchased less than that this quarter. And some of the timing of some of those sales are somewhat based on us, somewhat on their needs. So, but I will say that because they did purchase less in the first half of the year or less than half of their annual commitment, then they will be purchasing more than half the commitment in the second half of the year. The timing of that is not; there is no contractual obligation for them to take it, half of that remaining thing in the third and half and the fourth. So, the timing is variable. It could come in the third or the fourth. Mostly like it will not be all one quarter or the other quarter, most likely we will be shipping to them in both quarters. However it’s probably more likely that amount that was short in this quarter is more likely to be made up in the fourth quarter than the third quarter. Full transcript at www.seekingalpha.comThat definitely sounds like MNKD must buy 24 million euros worth a year one way or another. So, any guesses as to how much insulin that is? How much afrezza could be manufactured? |
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Post by gwb on Oct 19, 2015 0:06:26 GMT -5
From the most recent conference call by amphastar: So, right now, as you know, our biggest customer there is MannKind and they’re purchasing insulin for their Afrezza product. Now, they have an annual commitment. So, it’s not a quarterly commitment. And if you took their annual commitment and divided by four, you get something pretty close to that five million or so, a quarter that we had from them in the first quarter. However, they purchased less than that this quarter. And some of the timing of some of those sales are somewhat based on us, somewhat on their needs. So, but I will say that because they did purchase less in the first half of the year or less than half of their annual commitment, then they will be purchasing more than half the commitment in the second half of the year. The timing of that is not; there is no contractual obligation for them to take it, half of that remaining thing in the third and half and the fourth. So, the timing is variable. It could come in the third or the fourth. Mostly like it will not be all one quarter or the other quarter, most likely we will be shipping to them in both quarters. However it’s probably more likely that amount that was short in this quarter is more likely to be made up in the fourth quarter than the third quarter. Full transcript at www.seekingalpha.comThat definitely sounds like MNKD must buy 24 million euros worth a year one way or another. So, any guesses as to how much insulin that is? How much afrezza could be manufactured? The PFE insulin MNKD purchased years ago , had a replacement cost of approx. 250 million dollars . The estimated sales value was 10 Billion . These numbers are six to seven years old . If using these 2008/2009 figures of 2.5 cents for every dollar in sales . So 24 million Euro X 1.135=27.24 Million dollars/ .025 cents = Aprox 1.1 Billion US. |
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Post by mnholdem on Oct 19, 2015 4:45:10 GMT -5
Apples and oranges. Al got the Pfizer insulin for pennies on the dollar as a concession when Sanofi excercised its first rights to acquire the insulin plant Al was planning to buy. The replacement cost of the AMPH insulin is 1:1.
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Post by gwb on Oct 19, 2015 12:01:14 GMT -5
Apples and oranges. Al got the Pfizer insulin for pennies on the dollar as a concession when Sanofi excercised its first rights to acquire the insulin plant Al was planning to buy. The replacement cost of the AMPH insulin is 1:1. Show a better calculation and explanation, O wise one ! |
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Post by gwb on Oct 19, 2015 12:05:34 GMT -5
Apples and oranges. Al got the Pfizer insulin for pennies on the dollar as a concession when Sanofi excercised its first rights to acquire the insulin plant Al was planning to buy. The replacement cost of the AMPH insulin is 1:1. The PFE insulin had a cost of 3 million to MNKD and a REPLACEMENT ( MARKET VALUE ) of approx. 250 MILLION . Do you read before you respond ? |
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Post by mnholdem on Oct 19, 2015 12:09:05 GMT -5
I thought question was how much Afrezza can be produced with 24 million euros of Amphistar insulin...
Unless Hakan is willing to reveal the volume of Amphastar insulin a million euros buys or how many units of Afrezza it will produce, the dollar amount(s) mean nothing (hence "apples and oranges"). MannKind won't give out that info to anyone except Sanofi. I cannot think of a way to cross reference the Pfizer insulin to the Amphastar insulin by volume or yield. To the original question, we simply don't know how many units of Afrezza can be produced by a million euros worth of insulin. Management will keep that a trade secret, although Sanofi has made it known that their insulin will not cost as much as Amphastar's.
I get your calculation, but I thought Matt's remarks about the sales value of the Pfizer insulin was only the value of the insulin itself, not how many $$$ of Afrezza it would produce... sorry. |
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Post by rrtzmd on Oct 19, 2015 12:45:06 GMT -5
What I was trying to get at in my original post was more along the lines of trying to estimate the original expectations as to afrezza sales. I felt the requirement that the contract couldn't be cancelled without 2 years notice was pretty extreme, and MNKD agreeing to it meant it must have been pretty confident about its estimated need at the time. So I just wondered how many afrezza cartridges could be produced with 24 million euros worth of insulin and how that compares with the number of cartridges they are actually selling.
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Post by babaoriley on Oct 21, 2015 9:52:51 GMT -5
What I was trying to get at in my original post was more along the lines of trying to estimate the original expectations as to afrezza sales. I felt the requirement that the contract couldn't be cancelled without 2 years notice was pretty extreme, and MNKD agreeing to it meant it must have been pretty confident about its estimated need at the time. So I just wondered how many afrezza cartridges could be produced with 24 million euros worth of insulin and how that compares with the number of cartridges they are actually selling. I'm pretty sure I know what you trying to get at, rrtzmd. |
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Post by mnholdem on Oct 21, 2015 11:38:08 GMT -5
Back to the original discussion, this was published Oct 12 in CNA Finance, following the Aegis Conference:
"Afrezza Regulation – Afrezza has only been approved in the United States. However, MNKD is working with regulatory agencies in Asia and Europe to get the inhaled insulin approved in these regions as well. The company is expecting to release more updates with regard to regulatory approval abroad next year."
I hope Sanofi/MannKind give us some news about planned Afrezza launches Europe, Japan and/or the middle east before next year. |
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Post by cathode on Oct 21, 2015 11:55:13 GMT -5
Back to the original discussion, this was published Oct 12 in CNA Finance, following the Aegis Conference:
"Afrezza Regulation – Afrezza has only been approved in the United States. However, MNKD is working with regulatory agencies in Asia and Europe to get the inhaled insulin approved in these regions as well. The company is expecting to release more updates with regard to regulatory approval abroad next year."
I hope Sanofi/MannKind give us some news about planned Afrezza launches Europe, Japan and/or the middle east before next year. I don't put much weight on CNA Finance's statements or articles. Joshua has the same information as all of us. This is a bad interpretation anyways, as it is Sanofi that is working with regulatory agencies not MannKind. |
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Post by bradleysbest on Oct 21, 2015 12:55:18 GMT -5
I believe everyone in the pharma field realizes SNY/MNKD is aggressively (behind the scenes) trying to gain EU & Japan aprroval for Afrezza. Why would they not be trying especially with $50 million in milestone payments waiting for MNKD & BIG profits for SNY. The question is if everyone knows this, why is SNY/MNKD so quiet about releasing ANY info in regards to approval in those regions. Not sure how it would hurt their "competitive advantage" ?
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Post by peppy on Oct 21, 2015 12:58:50 GMT -5
I believe everyone in the pharma field realizes SNY/MNKD is aggressively (behind the scenes) trying to gain EU & Japan aprroval for Afrezza. Why would they not be trying especially with $50 million in milestone payments waiting for MNKD & BIG profits for SNY. The question is if everyone knows this, why is SNY/MNKD so quiet about releasing ANY info in regards to approval in those regions. Not sure how it would hurt their "competitive advantage" ? at this moment, SNY and MNKD both are in quiet periods prior to earnings. (What ever that means.) |
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Post by mnholdem on Oct 21, 2015 13:42:30 GMT -5
I believe everyone in the pharma field realizes SNY/MNKD is aggressively (behind the scenes) trying to gain EU & Japan aprroval for Afrezza. Why would they not be trying especially with $50 million in milestone payments waiting for MNKD & BIG profits for SNY. The question is if everyone knows this, why is SNY/MNKD so quiet about releasing ANY info in regards to approval in those regions. Not sure how it would hurt their "competitive advantage" ?
I just read this post by anims515 in another thread (link below) that I think could be one possible reason.
NOTE: the thread topic was about the existence of a cost-barrier in European countries.
"This would go hand in hand with the delayed launch in Europe. If sanofi applied with the studies done to show non inferiority then why would Europe approve a higher cost option other than for needle phobic patients? Wait for the data to show superiority then get the regulatory agencies to approve the higher cost with no prior authorization needed.
edit: just thinking about it...in the us you can constantly change who what and where drugs are discounted covered etc. in other countries around the world it seems you have one shot to set your price and then it's either a yes or no. This would be another reason to delay world launch for more data and achieving approval of a higher price point."
Read more: mnkd.proboards.com/thread/3776/evidence-maa-chmp-oct-agenda?page=3#ixzz3pEHDB9lG
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