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Post by james on Jan 11, 2016 22:18:41 GMT -5
Previously I discussed the likelihood that Afrezza could be on a track for profitability given current expectations for sales and expenses. My estimate for NPV of a US Afrezza venture (on it's own merits - apart from other considerations of MNKD finances) come out between $300 - $500M. You might consider doubling that value to add in global rights for $600-$1B total. I wouldn't expect anyone to pay that outright, but they may very well be willing to pay 50% or perhaps a bit more of that.
Certainly, one question to be asked is why Sanofi wouldn't also continue to place a value on that venture if there is actual potential profit? For certain, they faced $750M in milestone payments to go with only a 65% royalty; so they're situation under the terms of the contract would definitely have been in the red. In addition, there are the many suggestions of the potential for Afrezza damaging sales of basal insulin and/or cannibalizing Apidra, Lixilan, etc. So, it should not be so surprising for another company to find value where Sanofi did not.
Meanwhile, the book value of MNKD's tangible assets vs liabilities can be seen to roughly (roughly mind you) offset. Consider $210M in long term debt vs. $60M cash + ~$100M facilities (50% of the $194M on the balance sheet) + NOL value ($50M?) + some value for the insulin in storage as well as current Afrezza inventory, etc. I do not count the $160M in deferred payments from Sanofi as it is only an accounting mirage; this amount will likely be recognized in the current quarter (a basically meaningless profit that will show up on 1Q earnings). There is also some current liabilities for accounts payable and whatever. Nevertheless, I am washing this all to zero for the sake of valuing the buyout.
Lastly, there is the value of TS. This is harder to factor as there is no hard data on sales, but I would take a guess at between $2-500M for the TS rights as there should be positive value to this franchise. I am very interested to hear how the CMO (we have never hear him speak that I know of - that has the potential for some enlightenment) presents the topic of TS opportunities on Wednesday.
So, I would put the valuation between $800M and $1,500M; with the possibility of receiving bids for equity value between $500 and $1B. That roughly translates to $1.25 and $2.5 per share. Given today's share price at $0.67, I think we may be seeing a market discount on that sort of bid. This is not to say that I think MNKD won't make an attempt at continuing operations, but there should be a floor here due to the potential value of liquidation. Your criticisms welcome.
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nsmyth
Lab Rat
Posts: 43 
Sentiment: Long
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Post by nsmyth on Jan 11, 2016 22:37:30 GMT -5
I don't see a scenario where Mannkind can continue as a company. They don't have enough cash. Sell off is the only viable scenario I see, whether in whole or parts. though I have been wrong before (I did buy a lot of MNKD shares)
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Post by ricguy on Jan 11, 2016 22:40:35 GMT -5
Previously I discussed the likelihood that Afrezza could be on a track for profitability given current expectations for sales and expenses. My estimate for NPV of a US Afrezza venture (on it's own merits - apart from other considerations of MNKD finances) come out between $300 - $500M. You might consider doubling that value to add in global rights for $600-$1B total. I wouldn't expect anyone to pay that outright, but they may very well be willing to pay 50% or perhaps a bit more of that. Certainly, one question to be asked is why Sanofi wouldn't also continue to place a value on that venture if there is actual potential profit? For certain, they faced $750M in milestone payments to go with only a 65% royalty; so they're situation under the terms of the contract would definitely have been in the red. In addition, there are the many suggestions of the potential for Afrezza damaging sales of basal insulin and/or cannibalizing Apidra, Lixilan, etc. So, it should not be so surprising for another company to find value where Sanofi did not. Meanwhile, the book value of MNKD's tangible assets vs liabilities can be seen to roughly (roughly mind you) offset. Consider $210M in long term debt vs. $60M cash + ~$100M facilities (50% of the $194M on the balance sheet) + NOL value ($50M?) + some value for the insulin in storage as well as current Afrezza inventory, etc. I do not count the $160M in deferred payments from Sanofi as it is only an accounting mirage; this amount will likely be recognized in the current quarter (a basically meaningless profit that will show up on 1Q earnings). There is also some current liabilities for accounts payable and whatever. Nevertheless, I am washing this all to zero for the sake of valuing the buyout. Lastly, there is the value of TS. This is harder to factor as there is no hard data on sales, but I would take a guess at between $2-500M for the TS rights as there should be positive value to this franchise. I am very interested to hear how the CMO (we have never hear him speak that I know of - that has the potential for some enlightenment) presents the topic of TS opportunities on Wednesday. So, I would put the valuation between $800M and $1,500M; with the possibility of receiving bids for equity value between $500 and $1B. That roughly translates to $1.25 and $2.5 per share. Given today's share price at $0.67, I think we may be seeing a market discount on that sort of bid. This is not to say that I think MNKD won't make an attempt at continuing operations, but there should be a floor here due to the potential value of liquidation. Your criticisms welcome. I think your #s look good (but sh*tty for us) if we sell and don't go bkrpt. $1.25-$2.5 pps-embarrassement of riches. |
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Post by james on Jan 11, 2016 22:48:08 GMT -5
nsmyth - This would have a lot to do with the ability of Al to extend his line of credit. Folks continue to discount that Matt has brought this up multiple times as an option. In succession to that would be a TS development deal, and then probably dilution. $50-100M from Al may be all it takes to get that ball rolling and bring cash (+LOC) to $200M or more, extending the operating window through 2017. The outlook could change significantly between now and end of year if some cash can be found and a new partner (under whatever terms).
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Deleted
Deleted Member
Posts: 0
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Post by Deleted on Jan 11, 2016 22:48:51 GMT -5
Techno sphere is currently worth nothing. How can you give it any value? There is no partner or product. It's a fairy tale until then. Afrezza is currently worth nothing bc scripts are so poor.
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Post by james on Jan 11, 2016 22:58:00 GMT -5
Techno sphere is currently worth nothing. How can you give it any value? There is no partner or product. It's a fairy tale until then. Afrezza is currently worth nothing bc scripts are so poor. I'm trying to put out numbers without blowing smoke. Is $200M for a novel drug delivery platform a fairy tale? How did MNKD have a value in it's early stages of development? And yet there were investors... We do not know how far along the product development really is. We only know that there is at least 2 or 3 years of work on potential formulations and that trials have not begun. The suggestion has been that 2 TS formulations are near to entering a clinical stage. Apparently, we may hear from the CMO this Wednesday with more detail about this very topic. My contention on Afrezza is that many folks are writing off the value of Afrezza without committing numbers to paper. With due respect, they may lack the tools to perform that kind of analysis properly. Sales are growing and as such, we can make extrapolations, estimate likely expenses and discount future value. Certainly my valuations may be off as well, but I would like to see additional informed attempts at this. |
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Post by james on Jan 11, 2016 23:01:14 GMT -5
Techno sphere is currently worth nothing. How can you give it any value? There is no partner or product. It's a fairy tale until then. Afrezza is currently worth nothing bc scripts are so poor. Bear in mind that the market is valuing MNKD at $285M today. As I suggested, this may very well be a reflection of discount to it's likely value in buyout. Since we are all talking about a buyout scenario so actively, more informed market players are certainly doing the same. Please keep the comments coming! |
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Deleted
Deleted Member
Posts: 0
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Post by Deleted on Jan 11, 2016 23:16:07 GMT -5
Mnkd could be worth less. 35% of shit sales
While we were all screaming manipulation this and that God knows how much money institutions invested figuring out this would never gain traction. Shorting it based on real data while we were investing based on Twitter reviews
I'm just so mad at myself cause all of this was right in front of my face and I ignored it
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Post by mnkdmorelong on Jan 12, 2016 5:00:46 GMT -5
Techno sphere is currently worth nothing. How can you give it any value? There is no partner or product. It's a fairy tale until then. Afrezza is currently worth nothing bc scripts are so poor. I'm trying to put out numbers without blowing smoke. Is $200M for a novel drug delivery platform a fairy tale? How did MNKD have a value in it's early stages of development? And yet there were investors... We do not know how far along the product development really is. We only know that there is at least 2 or 3 years of work on potential formulations and that trials have not begun. The suggestion has been that 2 TS formulations are near to entering a clinical stage. Apparently, we may hear from the CMO this Wednesday with more detail about this very topic. My contention on Afrezza is that many folks are writing off the value of Afrezza without committing numbers to paper. With due respect, they may lack the tools to perform that kind of analysis properly. Sales are growing and as such, we can make extrapolations, estimate likely expenses and discount future value. Certainly my valuations may be off as well, but I would like to see additional informed attempts at this. MNKD is like a baseball phenom who came on the scene having a 100 mph fastball. The kid was sure to succeed and was worth a lot. Today, the same kid is 30 yo and everybody can hit his fastball that has degraded to 88 mph. His baseball worth is far lower and consequently investors have shied away. As I have written before, the key to the NPV analysis is how fast can Afrezza sales rise due to a price decrease. This is guesswork which means the NPV model for Afrezza is guesswork. Even using the early adopter model, neither Exubera nor Afrezza gained early traction. Perhaps inhaled insulin is not a "gotta have" product. As for TS: What company will want to burn a billion dollars in drug development after seeing the Afrezza and Exubera debacle? There is value to Afrezza and TS. It will not be $5 ps. |
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Post by mindovermatter on Jan 12, 2016 5:41:02 GMT -5
I'm trying to put out numbers without blowing smoke. Is $200M for a novel drug delivery platform a fairy tale? How did MNKD have a value in it's early stages of development? And yet there were investors... We do not know how far along the product development really is. We only know that there is at least 2 or 3 years of work on potential formulations and that trials have not begun. The suggestion has been that 2 TS formulations are near to entering a clinical stage. Apparently, we may hear from the CMO this Wednesday with more detail about this very topic. My contention on Afrezza is that many folks are writing off the value of Afrezza without committing numbers to paper. With due respect, they may lack the tools to perform that kind of analysis properly. Sales are growing and as such, we can make extrapolations, estimate likely expenses and discount future value. Certainly my valuations may be off as well, but I would like to see additional informed attempts at this. MNKD is like a baseball phenom who came on the scene having a 100 mph fastball. The kid was sure to succeed and was worth a lot. Today, the same kid is 30 yo and everybody can hit his fastball that has degraded to 88 mph. His baseball worth is far lower and consequently investors have shied away. As I have written before, the key to the NPV analysis is how fast can Afrezza sales rise due to a price decrease. This is guesswork which means the NPV model for Afrezza is guesswork. Even using the early adopter model, neither Exubera nor Afrezza gained early traction. Perhaps inhaled insulin is not a "gotta have" product. As for TS: What company will want to burn a billion dollars in drug development after seeing the Afrezza and Exubera debacle? There is value to Afrezza and TS. It will not be $5 ps. Or you could say MNKD is like OJ Howard, the TE of Alabama. He only garnered 394 yards all season with no TDs and wasn't really used to his potential. But in the NC game, he was correctly used and had a banner night with 208 receiving yds and 2 TDs to help Alabama win the game. Or you could more aptly say he was Jake Rudock of Michigan, who under the tutelage of Jim Harbaugh, had the best year ever as a QB after being replaced as a 2 year starter at Iowa. Mannkind and Afrezza might never make it in the market place but it might be that Sanofi was entirely inept in being able to correctly market it. Maybe, just maybe, Mannkind needs a more adept partner. The question now is if they can find one? Duane Matt and the BOD will have their hands full in identifying the next partner if they haven't already. This is one they can't mess up, again. |
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Post by parrerob on Jan 12, 2016 5:55:31 GMT -5
Techno sphere is currently worth nothing. How can you give it any value? There is no partner or product. It's a fairy tale until then. Afrezza is currently worth nothing bc scripts are so poor.
Yes and what about the value of the NBI index ? I am following other companies too and shocked about today MNKD value. KYTH with an approved drug (obesity), far from the market and much more far then Afrezza for beeing a blockbuster: sold recently just after FDA approval for 2,1 Billion $ (no pipeline; only 1 drug) OMER another company I am following. 1 product recently approved (200-300 million forecast sales in 3 years... then no increase as the market is limited here) and actually with problems to start selling: 420 million (PS OMER has a pipeline but the other products are very far from FDA approval) ADMS a good product quite concluded its phase 3: 430 Million INO a very promised technology (I believe everyone knows INO): 386 Million
I believe the list can be much and much higher !
Now think about MNKD: 1 approved product; difficulties to penetrate the market but not because the product is not good/appreciated; just only because too much income from the basal and so not the first choice to sell from a sales force with basal in their portfolio too. 1 pipeline that can, in 3-4 years, produce products each one in a blockbuster market. around 67 cents / around 280 million.
Even shorters are silent now ! Crazy thread ! Crazy situation !
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Post by silentknight on Jan 12, 2016 6:25:04 GMT -5
MNKD is like a baseball phenom who came on the scene having a 100 mph fastball. The kid was sure to succeed and was worth a lot. Today, the same kid is 30 yo and everybody can hit his fastball that has degraded to 88 mph. His baseball worth is far lower and consequently investors have shied away. As I have written before, the key to the NPV analysis is how fast can Afrezza sales rise due to a price decrease. This is guesswork which means the NPV model for Afrezza is guesswork. Even using the early adopter model, neither Exubera nor Afrezza gained early traction. Perhaps inhaled insulin is not a "gotta have" product. As for TS: What company will want to burn a billion dollars in drug development after seeing the Afrezza and Exubera debacle? There is value to Afrezza and TS. It will not be $5 ps. Or you could say MNKD is like OJ Howard, the TE of Alabama. He only garnered 394 yards all season with no TDs and wasn't really used to his potential. But in the NC game, he was correctly used and had a banner night with 208 receiving yds and 2 TDs to help Alabama win the game. Or you could more aptly say he was Jake Rudock of Michigan, who under the tutelage of Jim Harbaugh, had the best year ever as a QB after being replaced as a 2 year starter at Iowa. Mannkind and Afrezza might never make it in the market place but it might be that Sanofi was entirely inept in being able to correctly market it. Maybe, just maybe, Mannkind needs a more adept partner. The question now is if they can find one? Duane Matt and the BOD will have their hands full in identifying the next partner if they haven't already. This is one they can't mess up, again. But I'm willing to bet you they will. We have no reason to believe otherwise. They've messed up everything for going on two years now. They've proven themselves to be inept through every decision they've made. I don't want a partner. I want a buyout. If the BOD or management had one iota about how to run a business, I'd be optimistic about a partner. That's not the case, sadly. MNKD has demonstrated themselves to be incapable of making sound decisions that create shareholder value or realizing the potential of their products. If Afrezza or any other TS application is to succeed, it will have to be done by purchasing it away from MNKD's in order to save it. Give me $3.50 per share and I'll gladly accept it and never look back. |
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Post by peppy on Jan 12, 2016 6:50:35 GMT -5
Regarding valuing Mannkind;
Waiting in the wings a company like TEVA. A low cost Generic provider? Consider: If Afrezza is priced the same as fast acting, the demand for afrezza from users could take over the fast acting insulin market. I am not talking label, label improvement. I am talking product, the long term study and demand. The demand will happen word of mouth and at the physicians office. once the physicians have a few improved HGA1c and compliance, the physicians will prescribe it more because their patients are happy.
Additionally, TS. I wonder if TEVA is the migraine pain partner.
The right partner could take over the world with this. Just sayin. The world has seen the evidence. screencast.com/t/Ae0RBKtMZD screencast.com/t/FCB6F8Sij screencast.com/t/Elk1SZ7B
price, --->demand---> physicians will see results---->
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Post by novafett on Jan 12, 2016 9:57:25 GMT -5
Is there any chance that Al is just as pissed as we are that he's been screwed at every turn and is going to fund this thing (or buy it outright) until it is the success we all know it can be? Considering he most likely doesn't have many years of life left and this is his 'swan song' so to speak, even named after him, I'd think he'd do everything to make it a success. Go out with a bang not a whimper. I'm just speculating obviously but something to think about.
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Post by peppy on Jan 12, 2016 10:07:32 GMT -5
Is there any chance that Al is just as pissed as we are that he's been screwed at every turn and is going to fund this thing (or buy it outright) until it is the success we all know it can be? Considering he most likely doesn't have many years of life left and this is his 'swan song' so to speak, even named after him, I'd think he'd do everything to make it a success. Go out with a bang not a whimper. I'm just speculating obviously but something to think about. screencast.com/t/xmMzn0x0cNs
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