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Post by mnkdmorelong on Jan 16, 2016 18:00:11 GMT -5
You do not realize that it no longer 2014. Afrezza is no longer the fresh product that everyone wants. The marketing of Afrezza failed in the US under SNY's control. The economics for the next partner has changed. MNKD is no longer selling in Neiman Marcus. ROW markets are Wal-Mart types. MNKD will not get the huge up front payments you are expecting. You are only guessing on COGS. Why would you create a model based on this? One question. How can Afrezza no longer be a fresh product that everyone wanted as you state when the vast majority of doctors and diabetics don't even KNOW IT EXISTS to this day? For example, today I asked a pharmacist at a major grocery store if she had heard of Afrezza, the inhaled insulin. She said it sounded familiar and "is it even approved yet?" I laughed. Only those who follow the stock seem to know it exists but many in the medical community still don't. If they don't, you can bet many diabetics don't. Look at it from the perspective of BP. They have seen a MNKD/SNY enter into a partnership to market Afrezza. Given the caliber of the product and the market size, both parties had expectations for first year sales. Actual sales for the first year will come in less than $10 mln which is way below anyone's expectations. What is a BP to think? SNY sucks and anyone else can do better? SNY spent $400 mln and walked away from a partnership. They may suck but not that much. If I were the person at the BP who is thinking about being the next man up, I would not even contemplate high offer. This bias will be in play whatever BP they approach. I know that Afrezza awareness is not 100%. I think after the failed DTC, SNY gave up and just went through the motions. It does not take much to create $50 mln in Afrezza sales. This works out to about 2% of the diabetic population in the US. Not everyone needed to be aware of Afrezza to achieve a modest sales goal. The actual number came in less than $10 mln for the full year. These are the numbers a prospective new BP partner is looking at. |
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Post by bthomas55ep on Jan 16, 2016 18:36:29 GMT -5
Mnkdlongmore, giving you the benefit of the doubt, is not $250 Million a year in the Eurozone annual sales not Wal-Mart pricing? I personally think the Eurozone could still reach blockbuster status, but will avoid being overly optimistic for this discussion.
What is being suggested is in no way a 2014 charmed valuation. In fact, it is the opposite - I am suggesting that you sell part of the Golden Goose to re-establish your survival. In 2014, you would not have dreamed of offering rights to ROW territories. We are not talking about a partnership here - we are talking about selling full ownership of the Afrezza franchise for an exclusive territory. While you are de-bunking that the hypothesis is too rich, I am surprised that other board members haven't run me out for suggesting what I have. Al Mann did not conceive of giving these Afrezza markets away.
So, you are a BP in Europe or Asia - you research and agree inhaled insulin has a place in the future of realtime treatment of diabetes. If this is where you and I are breaking down and you don't believe that when people find out about Afrezza and learn how to use it that sales will continue to build, then there-in lies our difference in opinion. The BP Choice - build it yourself ( to the tune of $1 to $2 Billion) or make a deal to own an existing product for a fraction of the cost. Simply start paying for the manufacturing of it as you sell it without having to maintain any manufacturing infrastructure. Would you not pay $350 Million one time for a product you could sell at $250 Million in annual sales for 10+ years? Are you saying, it would only reach $100 Million a Year for 10 years? And what if you could sell $500 Million to $1 Billion in your highest year instead? Again, I am not suggesting Afrezza partnerships for these three territories - I am suggesting an outright sale of the franchise to these areas. Is it not a no brainer for BP to forgo the product development costs and avoid time to market delays and pay a measly $350 Million to get from point A to point B in an instant. Mannkind is the big loser in the long run, but these deals give the company the $500M to $1B needed to extend the Afrezza U.S. and T/S runway out long enough to give it a chance to succeed.
I think we are going to agree to disagree, but each of your responses seem to work to discredit a partnership when in fact we are discussing a sale.
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Post by dreamboatcruise on Jan 16, 2016 18:54:14 GMT -5
One question. How can Afrezza no longer be a fresh product that everyone wanted as you state when the vast majority of doctors and diabetics don't even KNOW IT EXISTS to this day? For example, today I asked a pharmacist at a major grocery store if she had heard of Afrezza, the inhaled insulin. She said it sounded familiar and "is it even approved yet?" I laughed. Only those who follow the stock seem to know it exists but many in the medical community still don't. If they don't, you can bet many diabetics don't. Look at it from the perspective of BP. They have seen a MNKD/SNY enter into a partnership to market Afrezza. Given the caliber of the product and the market size, both parties had expectations for first year sales. Actual sales for the first year will come in less than $10 mln which is way below anyone's expectations. What is a BP to think? SNY sucks and anyone else can do better? SNY spent $400 mln and walked away from a partnership. They may suck but not that much. If I were the person at the BP who is thinking about being the next man up, I would not even contemplate high offer. This bias will be in play whatever BP they approach. I know that Afrezza awareness is not 100%. I think after the failed DTC, SNY gave up and just went through the motions. It does not take much to create $50 mln in Afrezza sales. This works out to about 2% of the diabetic population in the US. Not everyone needed to be aware of Afrezza to achieve a modest sales goal. The actual number came in less than $10 mln for the full year. These are the numbers a prospective new BP partner is looking at. I disagree with this analysis. Any pharma that doesn't look at the underlying issues isn't even one worth considering. SNY's marketing obviously was modest at best. Lot's of people, including many MNKD investors here made the point that huge expense in marketing similar to what SNY spent on Toujeo would have been misspent given how few patients had insurance plans that really covered it. Pointing at "failed DTC" in a few magazines as if anyone would expect sales to take off without payers willing to pay and doctors receptive to prescribing is silly. SNY failed in these other areas (and we have little real insight into how committed they were to not failing) and the DTC they did do was likely just a cover their butt exercise. The notion that "failed DTC" lead to SNY giving up is simply in the realm of unbelievable. An alternative partner is going to evaluate this based on their understanding of what it would take to get on formulary and subsequently to grow base of prescribing doctors. |
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Post by Deleted on Jan 16, 2016 18:58:00 GMT -5
Look at it from the perspective of BP. They have seen a MNKD/SNY enter into a partnership to market Afrezza. Given the caliber of the product and the market size, both parties had expectations for first year sales. Actual sales for the first year will come in less than $10 mln which is way below anyone's expectations. What is a BP to think? SNY sucks and anyone else can do better? SNY spent $400 mln and walked away from a partnership. They may suck but not that much. If I were the person at the BP who is thinking about being the next man up, I would not even contemplate high offer. This bias will be in play whatever BP they approach. I know that Afrezza awareness is not 100%. I think after the failed DTC, SNY gave up and just went through the motions. It does not take much to create $50 mln in Afrezza sales. This works out to about 2% of the diabetic population in the US. Not everyone needed to be aware of Afrezza to achieve a modest sales goal. The actual number came in less than $10 mln for the full year. These are the numbers a prospective new BP partner is looking at. I disagree with this analysis. Any pharma that doesn't look at the underlying issues isn't even one worth considering. SNY's marketing obviously was modest at best. Lot's of people, including many MNKD investors here made the point that huge expense in marketing similar to what SNY spent on Toujeo would have been misspent given how few patients had insurance plans that really covered it. Pointing at "failed DTC" in a few magazines as if anyone would expect sales to take off without payers willing to pay and doctors receptive to prescribing is silly. SNY failed in these other areas (and we have little real insight into how committed they were to not failing) and the DTC they did do was likely just a cover their butt exercise. The notion that "failed DTC" lead to SNY giving up is simply in the realm of unbelievable. An alternative partner is going to evaluate this based on their understanding of what it would take to get on formulary and subsequently to grow base of prescribing doctors. no point for some one who doesnt get it..save your analysis.. some people will find what they want in everything |
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Post by mindovermatter on Jan 16, 2016 19:03:29 GMT -5
One question. How can Afrezza no longer be a fresh product that everyone wanted as you state when the vast majority of doctors and diabetics don't even KNOW IT EXISTS to this day? For example, today I asked a pharmacist at a major grocery store if she had heard of Afrezza, the inhaled insulin. She said it sounded familiar and "is it even approved yet?" I laughed. Only those who follow the stock seem to know it exists but many in the medical community still don't. If they don't, you can bet many diabetics don't. Look at it from the perspective of BP. They have seen a MNKD/SNY enter into a partnership to market Afrezza. Given the caliber of the product and the market size, both parties had expectations for first year sales. Actual sales for the first year will come in less than $10 mln which is way below anyone's expectations. What is a BP to think? SNY sucks and anyone else can do better? SNY spent $400 mln and walked away from a partnership. They may suck but not that much. If I were the person at the BP who is thinking about being the next man up, I would not even contemplate high offer. This bias will be in play whatever BP they approach. I know that Afrezza awareness is not 100%. I think after the failed DTC, SNY gave up and just went through the motions. It does not take much to create $50 mln in Afrezza sales. This works out to about 2% of the diabetic population in the US. Not everyone needed to be aware of Afrezza to achieve a modest sales goal. The actual number came in less than $10 mln for the full year. These are the numbers a prospective new BP partner is looking at. We can agree that Sanofi, for what ever reason, was unsuccessful in marketing and selling Afrezza. Now that it is out of the picture, Mannkind thinks it has learned enough in about a year to do a better job than Sanofi. It's time to close the Sanofi chapter and now sit back and watch how Mannkind does and evaluate 6-9 months from now. Add to the story that there might be another player to help Mannkind. Time will tell. |
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Post by agedhippie on Jan 16, 2016 20:11:04 GMT -5
Mnkdlongmore, giving you the benefit of the doubt, is not $250 Million a year in the Eurozone annual sales not Wal-Mart pricing? I personally think the Eurozone could still reach blockbuster status, but will avoid being overly optimistic for this discussion. $250 million sales in Europe is the equivalent of $1.25 billion sales in the US. You have to adjust for the different pricing. Europe only pays 20% of the US price. We are a long way from those sales in the US. I do not think Europe is a good place to look for partners. There is a lot of overlap between US and EU pharmas, Sanofi being a prime example, and I do not see there being any appetite from them. Asia would be a better choice as the pharmas there are more aggressive. The revenue would be lower but the volumes compensate. The biggest problem is that you may only reach the self-funding market as the national health services will want to contain insulin costs and you end up competing with old insulin at $3 a vial. |
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Post by bill on Jan 16, 2016 22:07:05 GMT -5
One question. How can Afrezza no longer be a fresh product that everyone wanted as you state when the vast majority of doctors and diabetics don't even KNOW IT EXISTS to this day? For example, today I asked a pharmacist at a major grocery store if she had heard of Afrezza, the inhaled insulin. She said it sounded familiar and "is it even approved yet?" I laughed. Only those who follow the stock seem to know it exists but many in the medical community still don't. If they don't, you can bet many diabetics don't. Look at it from the perspective of BP. They have seen a MNKD/SNY enter into a partnership to market Afrezza. Given the caliber of the product and the market size, both parties had expectations for first year sales. Actual sales for the first year will come in less than $10 mln which is way below anyone's expectations. What is a BP to think? SNY sucks and anyone else can do better? SNY spent $400 mln and walked away from a partnership. They may suck but not that much. If I were the person at the BP who is thinking about being the next man up, I would not even contemplate high offer. This bias will be in play whatever BP they approach. I know that Afrezza awareness is not 100%. I think after the failed DTC, SNY gave up and just went through the motions. It does not take much to create $50 mln in Afrezza sales. This works out to about 2% of the diabetic population in the US. Not everyone needed to be aware of Afrezza to achieve a modest sales goal. The actual number came in less than $10 mln for the full year. These are the numbers a prospective new BP partner is looking at. Your comments about other BP's shying away from Afrezza because of SNY's lack of success is utter nonsense based on your own logic. SNY did spend hundreds of millions and walked away. If another BP thought SNY spent that money wisely executing a solid marketing plan that failed they would indeed shy away from Afrezza. If they thought that SNY executed a poorly conceived marketing scheme with little enthusiasm, why would another BP shy away? Your comments imply that other BPs will look no further than SNY dollars spent against revenue. I'm pretty sure other BP's are a little more insightful than that. Obviously by your own logic a smart BP would be convinced that SNY's efforts meant very little with regards to Afrezza's future. However, they at least know one marketing technique that won't work, and they have a lot of feedback from early adopters that should lead to successful marketing campaigns in the future--given appropriate pricing and insurance coverage. SNY's marketing plan was based on the "just breathe" theme. Their marketing said very little about the remarkable characteristics of Afrezza's monomer insulin. Furthermore, I've never seen an Afrezza message board post or tweet that said the primary reason someone chose for staying on Afrezza was because it was inhalable versus injectable. Instead, they talk about the fast on/off properties of Afrezza, the flat CGM readings, improved quality of life, realtime BG corrections, and lower hypos. It's pretty clear to me that SNY chose a really poor DTC marketing theme. In their defense, it may not have been obvious a year ago just how successful Afrezza would really be as a mealtime insulin. I believe SNY was either too stubborn or too bureaucratic to change directions once it became clear that the "just breathe" marketing campaign wasn't working. It may have become too embarrassing and too expensive to admit they messed up, particularly if MNKD had lobbied against their strategy from the beginning. |
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Post by bthomas55ep on Jan 16, 2016 22:29:04 GMT -5
Mnkdlongmore, giving you the benefit of the doubt, is not $250 Million a year in the Eurozone annual sales not Wal-Mart pricing? I personally think the Eurozone could still reach blockbuster status, but will avoid being overly optimistic for this discussion. $250 million sales in Europe is the equivalent of $1.25 billion sales in the US. You have to adjust for the different pricing. Europe only pays 20% of the US price. We are a long way from those sales in the US. I do not think Europe is a good place to look for partners. There is a lot of overlap between US and EU pharmas, Sanofi being a prime example, and I do not see there being any appetite from them. Asia would be a better choice as the pharmas there are more aggressive. The revenue would be lower but the volumes compensate. The biggest problem is that you may only reach the self-funding market as the national health services will want to contain insulin costs and you end up competing with old insulin at $3 a vial. AgedHippie - the example was hypothetical. My original point was that I believe that T/S partnerships were not the thing that was going to allow Mannkind to survive this period. They will be nice and demonstrate momentum and give the company a little short term boost, however, because of the dire situation the company is in, the outright sale of the Afrezza franchise to ROW partners would bring the most immediate cash into 2016 and buy the company the most time to allow them to demonstrate Afrezza U.S. and the T/S Pipeline. Regardless of whether or not the EU is as weak of a market as you think it is, they still need to sell full distribution rights to at least three players. One for the Eurozone, one for Asia, and one for the Middle East. Between the three of these ROW deals/sales, up front cash should fetch at least $500M to $1B for Mannkind proper (IMO). If you want to say Asia is the best, maybe it looks like this - ASIA(Takeda) $350M, Eurozone(Merck) $150M, and MiddleEast(Teva) $150M. Then perhaps your financial picture looks like $650M new to the coffers from the Afrezza ROW sales, plus a small T/S deal or two ($50M), plus the sale of the CA Facility($20M), plus the roughly $90M available on the current books, plus any Sanofi parting cash booby prizes (say $50M). Gives you $850M+ versus a $10M month burn rate. Gives you four years to realize Afrezza U.S. and T/S potential. In the meantime, it also gives much needed relief for longsuffering long shareholders who may wish to finish the journey or simply get off the bus when their market value more closely resembles their cost basis. All IMHO. |
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Post by sportsrancho on Jan 17, 2016 13:19:45 GMT -5
You do not realize that it no longer 2014. Afrezza is no longer the fresh product that everyone wants. The marketing of Afrezza failed in the US under SNY's control. The economics for the next partner has changed. MNKD is no longer selling in Neiman Marcus. ROW markets are Wal-Mart types. MNKD will not get the huge up front payments you are expecting. You are only guessing on COGS. Why would you create a model based on this? One question. How can Afrezza no longer be a fresh product that everyone wanted as you state when the vast majority of doctors and diabetics don't even KNOW IT EXISTS to this day? For example, today I asked a pharmacist at a major grocery store if she had heard of Afrezza, the inhaled insulin. She said it sounded familiar and "is it even approved yet?" I laughed. Only those who follow the stock seem to know it exists but many in the medical community still don't. If they don't, you can bet many diabetics don't. Agree! Most do not know it exists!! |
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Post by suebeeee1 on Jan 17, 2016 13:43:45 GMT -5
Look at it from the perspective of BP. They have seen a MNKD/SNY enter into a partnership to market Afrezza. Given the caliber of the product and the market size, both parties had expectations for first year sales. Actual sales for the first year will come in less than $10 mln which is way below anyone's expectations. What is a BP to think? SNY sucks and anyone else can do better? SNY spent $400 mln and walked away from a partnership. They may suck but not that much. If I were the person at the BP who is thinking about being the next man up, I would not even contemplate high offer. This bias will be in play whatever BP they approach. I know that Afrezza awareness is not 100%. I think after the failed DTC, SNY gave up and just went through the motions. It does not take much to create $50 mln in Afrezza sales. This works out to about 2% of the diabetic population in the US. Not everyone needed to be aware of Afrezza to achieve a modest sales goal. The actual number came in less than $10 mln for the full year. These are the numbers a prospective new BP partner is looking at. Your comments about other BP's shying away from Afrezza because of SNY's lack of success is utter nonsense based on your own logic. SNY did spend hundreds of millions and walked away. If another BP thought SNY spent that money wisely executing a solid marketing plan that failed they would indeed shy away from Afrezza. If they thought that SNY executed a poorly conceived marketing scheme with little enthusiasm, why would another BP shy away? Your comments imply that other BPs will look no further than SNY dollars spent against revenue. I'm pretty sure other BP's are a little more insightful than that. Obviously by your own logic a smart BP would be convinced that SNY's efforts meant very little with regards to Afrezza's future. However, they at least know one marketing technique that won't work, and they have a lot of feedback from early adopters that should lead to successful marketing campaigns in the future--given appropriate pricing and insurance coverage. SNY's marketing plan was based on the "just breathe" theme. Their marketing said very little about the remarkable characteristics of Afrezza's monomer insulin. Furthermore, I've never seen an Afrezza message board post or tweet that said the primary reason someone chose for staying on Afrezza was because it was inhalable versus injectable. Instead, they talk about the fast on/off properties of Afrezza, the flat CGM readings, improved quality of life, realtime BG corrections, and lower hypos. It's pretty clear to me that SNY chose a really poor DTC marketing theme. In their defense, it may not have been obvious a year ago just how successful Afrezza would really be as a mealtime insulin. I believe SNY was either too stubborn or too bureaucratic to change directions once it became clear that the "just breathe" marketing campaign wasn't working. It may have become too embarrassing and too expensive to admit they messed up, particularly if MNKD had lobbied against their strategy from the beginning. Bill, Maybe this post really belongs in its own topic under "advertising strategies", but I disagree with your assessment of the "just breathe" marketing campaign. Many, many new type 2 diabetics, who either need to change from oral anti diabetes drugs to insulin or have been postponing that move for years, would be drawn in by that advertising line. Why didn't it work??? Sanofi never advertised sufficiently. Never got or to the public or really out to doctors. Plain and simple, the did the minimum that they felt any court would expect so that they wouldn't be sued. Not nearly enough in my estimation and not nearly enough in many people's estimation. |
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