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Post by u1682002 on Jan 6, 2016 18:30:33 GMT -5
to break even assuming MNKD can price similar to other injection type products? Does anyone have idea?
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Post by bill on Jan 6, 2016 18:45:55 GMT -5
to break even assuming MNKD can price similar to other injection type products? Does anyone have idea? If MNKD is burning $30M / quarter that's about $2.5M / week. If you price Afrezza so you average a profit of $100 / prescription then you'd need about 25,000 prescriptions per week, assuming a prescription was for 3 months. If you got $200 profit per prescription then you'd only need to get to 12,500 prescriptions to break even. Very crude estimates on my part, but its a way to get a handle on the numbers. I don't know how much profit one can expect from each prescription--just guesses on my part. |
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Post by mnkdfann on Jan 6, 2016 20:21:06 GMT -5
to break even assuming MNKD can price similar to other injection type products? Even IF that could be done profitably, what stops the others from lowering THEIR prices further in response to protect market share? |
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Post by dreamboatcruise on Jan 6, 2016 20:36:22 GMT -5
to break even assuming MNKD can price similar to other injection type products? Even IF that could be done profitably, what stops the others from lowering THEIR prices further in response to protect market share? I don't think they will perceive Afrezza as a credible market threat for a LONG time to come. Though maybe there is a vanishingly small chance Novo or Lilly would bid something for Afrezza if MNKD were to make a move that looked like it would seriously erode prandial prices. Wonder how long it is before they'd face bio-similar prandials... does anyone know offhand when those fall off patent? |
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Post by curiousdoc on Jan 6, 2016 20:52:06 GMT -5
I have no idea how they get out of this mess. Even conservative estimates are close to orders of magnitude away from where we currently stand.
If the new CEO can pull something off to save this company he will deserve a case study in every future MBA book written...
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Post by bill on Jan 6, 2016 22:01:29 GMT -5
I have no idea how they get out of this mess. Even conservative estimates are close to orders of magnitude away from where we currently stand. If the new CEO can pull something off to save this company he will deserve a case study in every future MBA book written... The number of prescriptions being written per week right now are absurdly small, less than 10 new prescriptions on average per state. Increasing those values by an order of magnitude or more might be trivial. Let's play just suppose again... Suppose you could create a targeted Google and Bing ad campaign for diabetics that redirected prospective patients to a revamped Afrezza.com web site. Suppose that web site provided educational material + prescribing physicians in your area + a search of insurance carriers supporting Afrezza along with restrictions and pricing. I suspect you'd reach the break even point for prescriptions pretty easily as long as there was reasonable insurance coverage and a decent suite of prescribing physicians. If I were building the campaign, I'd start by inverting the process. I'd find the highest population areas where there was decent insurance coverage and a reasonable number of Afrezza prescribing physicians, e.g., CA and FL. Once I knew those areas I'd target my Google / Bing ads to PWDs in those geographical areas. If I got a good return on that investment in terms of new prescriptions in those zip codes, I'd start other campaigns to increase the number of prescribing physicians in areas where they were absent, but where there was already good insurance coverage by running a similar campaign to educate and enroll more endos and physicians. Then I'd target PWDs in those areas; rinse and repeat until I had the entire country covered. During that period I'd work on getting better insurance coverage to match increases in prescribing physicians. All this doesn't seem that hard to me. Just have to apply oneself to the task at hand and instrument the heck out of the ad campaigns and web sites. You'd have to do some legwork to get the geographical areas covered by the insurance carriers and some additional work to find the Afrezza prescribing physicians. All that data exists, it just has to be mined. Doesn't the above make sense in a 21st century world? |
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Post by tayl5 on Jan 6, 2016 23:35:51 GMT -5
to break even assuming MNKD can price similar to other injection type products? Does anyone have idea? If MNKD is burning $30M / quarter that's about $2.5M / week. If you price Afrezza so you average a profit of $100 / prescription then you'd need about 25,000 prescriptions per week, assuming a prescription was for 3 months. If you got $200 profit per prescription then you'd only need to get to 12,500 prescriptions to break even. Very crude estimates on my part, but its a way to get a handle on the numbers. I don't know how much profit one can expect from each prescription--just guesses on my part. It's important here to separate the number of patients needed to break even on the Afrezza part of the business from what's needed to maintain progress on other Technosphere applications. Worst case, MannKind could suspend all new product development and just sell Afrezza. Since the production lines are in place and they likely have an excess of both raw material and finished product, the cost should be relatively minimal and the number of patients needed to sustain the operation relatively low. Anyone know if the Amphastar agreement had a contingency clause that lets MannKind off the hook if the partnership ends? If it didn't, it should have. |
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Post by iclaudius on Jan 7, 2016 0:03:37 GMT -5
If MNKD is burning $30M / quarter that's about $2.5M / week. If you price Afrezza so you average a profit of $100 / prescription then you'd need about 25,000 prescriptions per week, assuming a prescription was for 3 months. If you got $200 profit per prescription then you'd only need to get to 12,500 prescriptions to break even. Very crude estimates on my part, but its a way to get a handle on the numbers. I don't know how much profit one can expect from each prescription--just guesses on my part. It's important here to separate the number of patients needed to break even on the Afrezza part of the business from what's needed to maintain progress on other Technosphere applications. Worst case, MannKind could suspend all new product development and just sell Afrezza. Since the production lines are in place and they likely have an excess of both raw material and finished product, the cost should be relatively minimal and the number of patients needed to sustain the operation relatively low. Anyone know if the Amphastar agreement had a contingency clause that lets MannKind off the hook if the partnership ends? If it didn't, it should have. Amphastar agreement requires two years written notice of intent to terminate from Mannkind. |
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Post by tripoley on Jan 7, 2016 9:12:02 GMT -5
to break even assuming MNKD can price similar to other injection type products? Does anyone have idea? If MNKD is burning $30M / quarter that's about $2.5M / week. If you price Afrezza so you average a profit of $100 / prescription then you'd need about 25,000 prescriptions per week, assuming a prescription was for 3 months. If you got $200 profit per prescription then you'd only need to get to 12,500 prescriptions to break even. Very crude estimates on my part, but its a way to get a handle on the numbers. I don't know how much profit one can expect from each prescription--just guesses on my part. $30M a quarter might be to high. Remember $5-$7M of that was manufacturing Afrezza. Plus I'm sure they are cutting anything unnecessary unless they have financing lined up we are unaware of. Wishing they would have converted that $100M in notes in the low $4s when hey had the chance and conserved cash, but hindsight is 20/20. |
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Post by therealisaching on Jan 7, 2016 9:48:47 GMT -5
If MNKD is burning $30M / quarter that's about $2.5M / week. If you price Afrezza so you average a profit of $100 / prescription then you'd need about 25,000 prescriptions per week, assuming a prescription was for 3 months. If you got $200 profit per prescription then you'd only need to get to 12,500 prescriptions to break even. Very crude estimates on my part, but its a way to get a handle on the numbers. I don't know how much profit one can expect from each prescription--just guesses on my part. $30M a quarter might be to high. Remember $5-$7M of that was manufacturing Afrezza. Plus I'm sure they are cutting anything unnecessary unless they have financing lined up we are unaware of. Wishing they would have converted that $100M in notes in the low $4s when hey had the chance and conserved cash, but hindsight is 20/20. per Matt on q3 earnings call:
Keith, I know you're asking that question a bunch of times, and I think I have always answered 10 million to 12 million a month
It's not apart from that this time, because I think it will go down, it's really more like 8 million to 10 million a month going forward, but a lot of it depends on timing of raw material purchases, and where our production levels are, quite frankly, because you saw with us the manufacturing production costs
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Post by mnkdmorelong on Jan 7, 2016 10:54:53 GMT -5
to break even assuming MNKD can price similar to other injection type products? Does anyone have idea? I did some computations last night and I estimated that MNKD needed to get Afrezza sales up to $500 mln/yr to break even. SNY priced Afrezza over twice that of Aprida, another prandial. We know that pricing must go down so let's use the Aprida number of $3.14/day per diabetic. Crank the math and you come up with 450k Afrezza users per year to achieve breakeven. This is very possible given the market size. But we're less than 10k now so there is a lot of road to travel. However, if Afrezza stays as a niche product, it will be difficult to grow to this size. What would keep it a niche? Spirometry, fear of inhalation, the great unknown, smokers, docs hating on it. I am assuming that once the price is lowered, Afrezza gets Tier 2 rating everywhere. |
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Post by sccrbrg on Jan 7, 2016 11:02:24 GMT -5
to break even assuming MNKD can price similar to other injection type products? Does anyone have idea? I did some computations last night and I estimated that MNKD needed to get Afrezza sales up to $500 mln/yr to break even. SNY priced Afrezza over twice that of Aprida, another prandial. We know that pricing must go down so let's use the Aprida number of $3.14/day per diabetic. Crank the math and you come up with 450k Afrezza users per year to achieve breakeven. This is very possible given the market size. But we're less than 10k now so there is a lot of road to travel. However, if Afrezza stays as a niche product, it will be difficult to grow to this size. What would keep it a niche? Spirometry, fear of inhalation, the great unknown, smokers, docs hating on it. I am assuming that once the price is lowered, Afrezza gets Tier 2 rating everywhere. Anyone know of a way to monitor for pricing changes? Short of actually buying it? |
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Post by Deleted on Jan 7, 2016 11:02:32 GMT -5
to break even assuming MNKD can price similar to other injection type products? Does anyone have idea? I did some computations last night and I estimated that MNKD needed to get Afrezza sales up to $500 mln/yr to break even. SNY priced Afrezza over twice that of Aprida, another prandial. We know that pricing must go down so let's use the Aprida number of $3.14/day per diabetic. Crank the math and you come up with 450k Afrezza users per year to achieve breakeven. This is very possible given the market size. But we're less than 10k now so there is a lot of road to travel. However, if Afrezza stays as a niche product, it will be difficult to grow to this size. What would keep it a niche? Spirometry, fear of inhalation, the great unknown, smokers, docs hating on it. I am assuming that once the price is lowered, Afrezza gets Tier 2 rating everywhere. you will have to take 35% of that if you still are basing on SNY/MNKD partnershsip and you are waay offf and SNY might have bben charging a lot of personnel to JAC.. international expansion studies and blah blah and they dont come to cheap...in big pharamaa...cut all of that dead weight and recalculate please |
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Post by mnkdmorelong on Jan 7, 2016 11:13:49 GMT -5
I did some computations last night and I estimated that MNKD needed to get Afrezza sales up to $500 mln/yr to break even. SNY priced Afrezza over twice that of Aprida, another prandial. We know that pricing must go down so let's use the Aprida number of $3.14/day per diabetic. Crank the math and you come up with 450k Afrezza users per year to achieve breakeven. This is very possible given the market size. But we're less than 10k now so there is a lot of road to travel. However, if Afrezza stays as a niche product, it will be difficult to grow to this size. What would keep it a niche? Spirometry, fear of inhalation, the great unknown, smokers, docs hating on it. I am assuming that once the price is lowered, Afrezza gets Tier 2 rating everywhere. you will have to take 35% of that if you still are basing on SNY/MNKD partnershsip and you are waay offf and SNY might have bben charging a lot of personnel to JAC.. international expansion studies and blah blah and they dont come to cheap...in big pharamaa...cut all of that dead weight and recalculate please My model is based on MNKD having its own distributional resources. That was factored (estimated) into the $500 mln/yr estimate. We don't know if SNY was sandbagging the numbers. If anything, there is more costs in the future for the safety study and DTC. If a new partner were found then the break even point goes up. But MNKD avoids the cost of building a sales and marketing operation. |
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Post by greg on Jan 7, 2016 11:14:36 GMT -5
I did some computations last night and I estimated that MNKD needed to get Afrezza sales up to $500 mln/yr to break even. SNY priced Afrezza over twice that of Aprida, another prandial. We know that pricing must go down so let's use the Aprida number of $3.14/day per diabetic. Crank the math and you come up with 450k Afrezza users per year to achieve breakeven. This is very possible given the market size. But we're less than 10k now so there is a lot of road to travel. However, if Afrezza stays as a niche product, it will be difficult to grow to this size. What would keep it a niche? Spirometry, fear of inhalation, the great unknown, smokers, docs hating on it. I am assuming that once the price is lowered, Afrezza gets Tier 2 rating everywhere. you will have to take 35% of that if you still are basing on SNY/MNKD partnershsip and you are waay offf I agreeeee, mnkdmorelong is waay off. Gross margins for drugs are huge so the number of patients needed for breakeven depends so much on SG&A. At this point, we have zero idea what that's going to be so your $500 million estimate is all but meaningless. The launch phase is always most expensive and the jv probably lost roughly $175 million in 2015 with virtually no sales. This included lots of free samples. If sales had been around $175 million, losses would've been modest. This means, even with a sharp price reduction, sales could be much less than $500 million for earnings to move into positive territory. But, at the end of the day, without knowing who will be doing the selling, and so much more, all estimates are worth the time put into making the calculation. And that's not much. |
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