|
|
Post by lorcan458 on Dec 15, 2015 0:18:06 GMT -5
1. Go look at the blood glucose monitoring graphs from real patients (many are on the Afrezza twitter feed).
2. Get a job as the CEO of a major pharma company.
3. Call a meeting with your scientists and ask them how much money it would cost to develop a drug that can match or exceed the performance of Afrezza.
4. Call a meeting with your lawyers and marketing team and ask how much money it would cost to bring the new drug to market.
5. Are you up to 4 billion, 6 billion?
6. How much of a premium would the CEO pay to be 100% certain that the drug would have no serious side effects in the real world after 30,000 people have tried it? Are you at 8 billion?
Mannkind already has the drug that is giving all-time best performance for many diabetics AND you can discretely administer it at the table of a nice restaurant after you've ordered your food AND you don't have to shove a needle through your skin.
That's the real valuation of Mannkind. They've already done the hardest, most expensive part. Now, it's just education and marketing.
|
|
|
|
Post by lorcan458 on Dec 15, 2015 1:14:08 GMT -5
In case you missed it on the YMB, Fragslap said this: "You honestly think any of those graphs is fake?"  Uhhhhhhhhhhhhhhhh...yeah! Or at least they didn't come from any REAL diabetics! That is, of course, unless Jesus returned to earth and laid hands on each and every one's PANCREAS! And I wouldn't rank that as all that likely now -- would you? HAW!" So, the most infamous basher on the Mannkind YMB admitted that if the graphs aren't fake, Afrezza is a miracle drug. Given his posting behavior, that is an astounding admission. |
|
|
|
Post by chuck on Dec 15, 2015 1:16:52 GMT -5
i can assure you that no one with even the more basic understanding of valuation techniques would be using the method you contemplate under the circumstances but appreciate the effort regardless.
|
|
|
|
Post by EveningOfTheDay on Dec 15, 2015 1:20:42 GMT -5
Your valuation does not really follow reality, but point taken.
|
|
|
|
Post by dreamboatcruise on Dec 15, 2015 2:20:59 GMT -5
1. Go look at the blood glucose monitoring graphs from real patients ( many are on the Afrezza twitter feed). 2. Get a job as the CEO of a major pharma company. 3. Call a meeting with your scientists and ask them how much money it would cost to develop a drug that can match or exceed the performance of Afrezza. 4. Call a meeting with your lawyers and marketing team and ask how much money it would cost to bring the new drug to market. 5. Are you up to 4 billion, 6 billion? 6. How much of a premium would the CEO pay to be 100% certain that the drug would have no serious side effects in the real world after 30,000 people have tried it? Are you at 8 billion? Mannkind already has the drug that is giving all-time best performance for many diabetics AND you can discretely administer it at the table of a nice restaurant after you've ordered your food AND you don't have to shove a needle through your skin. That's the real valuation of Mannkind. They've already done the hardest, most expensive part. Now, it's just education and marketing. The fly in the ointment seems to be that those "many" so far are only a dozen or two. #2-#4 seem to be the money already sunk in Afrezza, which no, is not 4 to 6 billion, and you have to factor that there were missteps in getting FDA approval which were not typical. Certainly, getting a drug approved and launched isn't cheap these days... but it is not typically anywhere close to $4 to $6B. |
|
|
|
Post by figglebird on Dec 15, 2015 6:09:26 GMT -5
|
|
|
|
Post by mnkdfann on Dec 15, 2015 8:29:51 GMT -5
Yeah, but also take a look at the various points raised in the study discussed by the Slate article it cites (at least some of the points seem valid to me). I suspect that the truth, as it so often does, lies somewhere in the middle. |
|
topcard
Newbie
Posts: 23 
Sentiment: Long
|
Post by topcard on Dec 15, 2015 9:03:09 GMT -5
I don't remember where I read this, but I seem to recall that, in biopharma, the general rule is that the "value" is comparable to 5 years worth of projected profit, (no P/E factor).
So - how should we project the next 5 years of profit?
We are forced to make assumptions - which is, of course, the case for any such 'valuation'.
I would think that for 2016, we could expect to reach 200,000 patients.
By the end of 2017, let's say it grows to 1 million...
By December of 2018, 2 million... 3 million by 2019...
At the end of 5 years, I would (hope) that the patient total is at or near 4 million (globally).
Now - using Matt's 25% royalty equivalency, and assuming $5000/year for each patient, we can compute the "5 year projected profit":
2016 - 200K x 5000 x 25% = $250 million.
2017 - 5 x the 2016 number = $1.25 billion
2018 - 2 x the 2017 number = $2.5 billion
2019 - 1.33 x the 2018 number = $3.3 billion
2020 - 2 x the 2018 number = $5 billion
Total profit = $9.8 billion... divide that by, oh, let's say with some dilution, 500 million shares = $19.60 PPS
I personally think that's low, but that's what I seem to recall reading...somewhere!
|
|
|
|
Post by silentknight on Dec 15, 2015 9:23:51 GMT -5
It's fine to speculate on what MNKD's valuations SHOULD be, but the market values MNKD on sentiment and what the daily bid/ask actually IS. Currently, both are in the toilet so we have a share price south of $1.50, making the company's current market cap around $575 million. Should it be more? Of course it should, based on their patents alone but we are where we are.
It's hard to calculate valuation on a still speculative biotech company with no profits that the street suspects may not make it through the next year. I'd certainly like for it to be higher to correct my significant paper losses, but thus far neither MNKD nor SNY has given any rationale to justify a higher one. Properly marketed, Afrezza could generate billions. We haven't seen that, so we the stock sinks further into the red every day. It's cause and effect, action/reaction plain and simple. Until the market has a reason to value the company at a higher level, I expect we will continue to see price erosion, valuing the company at an increasingly lower level.
|
|
|
|
Post by parrerob on Dec 15, 2015 9:30:33 GMT -5
I don't remember where I read this, but I seem to recall that, in biopharma, the general rule is that the "value" is comparable to 5 years worth of projected profit, (no P/E factor). So - how should we project the next 5 years of profit? We are forced to make assumptions - which is, of course, the case for any such 'valuation'. I would think that for 2016, we could expect to reach 200,000 patients. By the end of 2017, let's say it grows to 1 million... By December of 2018, 2 million... 3 million by 2019... At the end of 5 years, I would (hope) that the patient total is at or near 4 million (globally). Now - using Matt's 25% royalty equivalency, and assuming $5000/year for each patient, we can compute the "5 year projected profit": 2016 - 200K x 5000 x 25% = $250 million. 2017 - 5 x the 2016 number = $1.25 billion 2018 - 2 x the 2017 number = $2.5 billion 2019 - 1.33 x the 2018 number = $3.3 billion 2020 - 2 x the 2018 number = $5 billion Total profit = $9.8 billion... divide that by, oh, let's say with some dilution, 500 million shares = $19.60 PPS I personally think that's low, but that's what I seem to recall reading... somewhere! I like Your post even if I think that numbers are a little bit pumped. We saw from Lantus that reaching 1 Billion sales takes 5 years. Also if We can consider 250 million $ profit from Afrezza next year it means We don't need any cash from now to the eternity. Unfortunately I don't think so. But thinking about a more prudent picture We could have something similar to..... 30 m$ 2016 100 m$ 2017 250 m$ 2018 600 m$ 2019 and 1 Billion$ 2020 This will bring to a 2 Billion$ total profit in 5 years divided 430 million (today) shares We have 4,65$ per share (Today)
Only from Afrezza.
But finally, I am sure We will never need to wait. Afrezza or more then Afrezza will be sold soon It is a new technology and, if succesfull, can be in the market and increasing position for 15-20 years. No one will push Afrezza so high without owning the drug. Just my opinion.
|
|
|
|
Post by compound26 on Dec 15, 2015 9:34:37 GMT -5
I don't remember where I read this, but I seem to recall that, in biopharma, the general rule is that the "value" is comparable to 5 years worth of projected profit, (no P/E factor). So - how should we project the next 5 years of profit? We are forced to make assumptions - which is, of course, the case for any such 'valuation'. I would think that for 2016, we could expect to reach 200,000 patients. By the end of 2017, let's say it grows to 1 million... By December of 2018, 2 million... 3 million by 2019... At the end of 5 years, I would (hope) that the patient total is at or near 4 million (globally). Now - using Matt's 25% royalty equivalency, and assuming $5000/year for each patient, we can compute the "5 year projected profit": 2016 - 200K x 5000 x 25% = $250 million. 2017 - 5 x the 2016 number = $1.25 billion 2018 - 2 x the 2017 number = $2.5 billion 2019 - 1.33 x the 2018 number = $3.3 billion 2020 - 2 x the 2018 number = $5 billion Total profit = $9.8 billion... divide that by, oh, let's say with some dilution, 500 million shares = $19.60 PPS I personally think that's low, but that's what I seem to recall reading... somewhere! I like Your post even if I think that numbers are a little bit pumped. We saw from Lantus that reaching 1 Billion sales takes 5 years. Also if We can consider 250 million $ profit from Afrezza next year it means We don't need any cash from now to the eternity. Unfortunately I don't think so. But thinking about a more prudent picture We could have something similar to..... 30 m$ 2016 100 m$ 2017 250 m$ 2018 600 m$ 2019 and 1 Billion$ 2020 This will bring to a 2 Billion$ total profit in 5 years divided 430 million (today) shares We have 4,65$ per share (Today)
Only from Afrezza.
But finally, I am sure We will never need to wait. Afrezza or more then Afrezza will be sold soon It is a new technology and, if succesfull, can be in the market and increasing position for 15-20 years. No one will push Afrezza so high without owning the drug. Just my opinion.
parrerob, agree. That's also my (conservative) assumption of the grown curve for Afrezza. I basically have the same projections as you laid out above. Of course, if we get EU and Japan approval and superiority study done in the near future, the growth curve can be much better. |
|
|
|
Post by parrerob on Dec 15, 2015 9:34:44 GMT -5
30 m$ 2016 100 m$ 2017 250 m$ 2018 600 m$ 2019 and 1 Billion$ 2020 This will bring to a 2 Billion$ total profit in 5 years divided 430 million (today) shares We have 4,65$ per share (Today)
Obviously all numbers, here, are meaningless until Afrezza is kept in the freezer (slow or not, planned or not launch). We still have to demonstrate now the 30 million income from a "first year" sales !
|
|
topcard
Newbie
Posts: 23
Sentiment: Long
|
Post by topcard on Dec 15, 2015 10:06:40 GMT -5
Look guys - the "25% royalty" equivalent/comparison is not mine - that's Matt's...the $5000/per patient annually seems to be the general cost concensus for Afrezza.
So, the only thing that's speculative is the number of Afrezza patients & patient growth over the next 5 years.
200K patients is only about 0.7% of the US diabetic market. I think MNKD/SNY can easily get there by the end of 2016.
Getting to 4 million by the end of 2020? Yeah, that's more of a challenge, but with tier 2, a "superior" label, approval for children & in the EU, China, India & Japan?
Even that 4 million is very "do-able" in my view.
I get being skeptical - I really do. Certainly, the company hasn't given us much of reason to be anything but.
The question is - do you think the patient growth will be anything like I speculated? If not, that's fine...but what is your guess?
|
|
|
|
Post by parrerob on Dec 15, 2015 10:57:10 GMT -5
Look guys - the "25% royalty" equivalent/comparison is not mine - that's Matt's...the $5000/per patient annually seems to be the general cost concensus for Afrezza. So, the only thing that's speculative is the number of Afrezza patients & patient growth over the next 5 years. 200K patients is only about 0.7% of the US diabetic market. I think MNKD/SNY can easily get there by the end of 2016. Getting to 4 million by the end of 2020? Yeah, that's more of a challenge, but with tier 2, a "superior" label, approval for children & in the EU, China, India & Japan? Even that 4 million is very "do-able" in my view. I get being skeptical - I really do. Certainly, the company hasn't given us much of reason to be anything but.
The question is - do you think the patient growth will be anything like I speculated? If not, that's fine...but what is your guess? Now it is quite January 2016. And with the actual rate we can have around 15.000 new patients per year. (Just counting 350-400 scrpits / week, not all really new patients, not all adopting etc etc) Every body here expect scripts moving after this astonishing period, but We will start 2016 with THIS growing rate. So this is the reason why I think it will be impossible 200.000 patients by next 12 months.
But, believe me, We don't really need 200.000 patients in 2016. What We need is just scripts growing to start (one reason or another). In fact You can find posts on this board, dated one year ago, with the same numbers and assumption......
|
|
|
|
Post by traderdennis on Dec 15, 2015 12:20:47 GMT -5
I don't remember where I read this, but I seem to recall that, in biopharma, the general rule is that the "value" is comparable to 5 years worth of projected profit, (no P/E factor). So - how should we project the next 5 years of profit? We are forced to make assumptions - which is, of course, the case for any such 'valuation'. I would think that for 2016, we could expect to reach 200,000 patients. By the end of 2017, let's say it grows to 1 million... By December of 2018, 2 million... 3 million by 2019... At the end of 5 years, I would (hope) that the patient total is at or near 4 million (globally). Now - using Matt's 25% royalty equivalency, and assuming $5000/year for each patient, we can compute the "5 year projected profit": 2016 - 200K x 5000 x 25% = $250 million. 2017 - 5 x the 2016 number = $1.25 billion 2018 - 2 x the 2017 number = $2.5 billion 2019 - 1.33 x the 2018 number = $3.3 billion 2020 - 2 x the 2018 number = $5 billion Total profit = $9.8 billion... divide that by, oh, let's say with some dilution, 500 million shares = $19.60 PPS I personally think that's low, but that's what I seem to recall reading... somewhere! First 5K is an unrealistic number per RX. With discounting, rx cards, etc that number will be closer to 3K. Second I don't see how on earth we get to 200K full rx's next year, and 5x, 2x, etc the following years. |
|
Uhhhhhhhhhhhhhhhh...yeah! Or at least they didn't come from any REAL diabetics! That is, of course, unless Jesus returned to earth and laid hands on each and every one's PANCREAS! And I wouldn't rank that as all that likely now -- would you? HAW!"
