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Post by ripano on Feb 2, 2016 10:35:49 GMT -5
I believe MNKD cash flow will also improve somewhat in May 2016. They should be getting almost a years worth of prescriptions renewing and also new scripts going forward.
I haven't read this fact in any of the doom and gloom write ups being released.
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Post by esstan2001 on Feb 2, 2016 10:43:43 GMT -5
I believe MNKD cash flow will also improve somewhat in May 2016. They should be getting almost a years worth of prescriptions renewing and also new scripts going forward. I haven't read this fact in any of the doom and gloom write ups being released. If mnkd can really get the scripts ramping, then this will be of help. If we are back down to price parity with injected RAA's, and Mannkind can show a (limited sample) history of patients with reduced complications once on Afrezza (and throw in the effect of the new clinic), it is my hope that they can get insurance companies on board at a substantially faster rate than SNY has been able to achieve. Hence, some respectable ramping of scripts. That, along with doc / PWD awareness, should hopefully get the snowball rolling... |
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Post by dreamboatcruise on Feb 2, 2016 10:50:12 GMT -5
I believe MNKD cash flow will also improve somewhat in May 2016. They should be getting almost a years worth of prescriptions renewing and also new scripts going forward. I haven't read this fact in any of the doom and gloom write ups being released. In your opposite of doom and gloom write up... you should at least keep things a bit more real and say that you haven't read that "speculation"... it is far from an established "fact" that what you state will mean improved cash flow. Right now Afrezza related activities are almost certainly cash flow negative and MNKD is currently not seeing any of that on a cash basis because they are only responsible for 35% of those losses and they are loaned the money to cover that portion, therefore currently they are cash flow neutral regarding the Afrezza activities that will transition back to them. So the only way the cash flow "improves" based on the transition is if the Afrezza activities start being cash flow positive. The script numbers seem to have kinda plateaued, and even being generous it comes to only $350k a week or around $18M a year (and this would be reduced by the amount of all those discount cards, and reduced if the price is lowered). I seriously doubt we will be cash flow positive on these script numbers anytime soon. MNKD has to be out there doing something to try to turn sales around... and they have to pick up expenses of pediatric trials. So bottom line, I'm sure this transition of Afrezza back will be cash flow drag and MNKD will be looking for whatever other savings they can make to offset it. |
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Post by kball on Feb 2, 2016 10:51:15 GMT -5
I would think then that Mannkind would have to do another big round of 10 day sample packs to doctors that might dwarf the initial efforts that sanofi tried (and purchased).
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Post by dreamboatcruise on Feb 2, 2016 11:01:41 GMT -5
I would think then that Mannkind would have to do another big round of 10 day sample packs to doctors that might dwarf the initial efforts that sanofi tried (and purchased). Until they either get a partner that already has sales or a LARGE infusion of capital, they can't afford to do a big national roll out. In the meantime, if they are doing it alone, they will have to be very targeted. Unfortunately from the outside that may look/sound like they are doing nothing more than SNY did. Hopefully there is some way of targeting where they can get docs, payers and patient awareness to all come together, whether that be some large integrated health care provider/insurance systems or smaller states where they might be able to get Medicaid on board along with a majority of other payers. Success in a targeting setting would need to show far less attrition of patients trying Afrezza and more of the same great A1c results we've seen. Then Afrezza will begin to be perceived and valued the way it should be. |
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Post by Deleted on Feb 2, 2016 12:36:42 GMT -5
What is your reasoning behind this?
SNY hands over drug in April so I understand anything after that point is credited to MNKD. I don't see how cash flow is going to improve if they are going to lower the price of Afrezza in order to get better insurance coverage. If anything wouldn't cash flow decrease until you add more scripts to off set the decrease in price?
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Post by Deleted on Feb 2, 2016 12:37:10 GMT -5
I believe MNKD cash flow will also improve somewhat in May 2016. They should be getting almost a years worth of prescriptions renewing and also new scripts going forward. I haven't read this fact in any of the doom and gloom write ups being released. In your opposite of doom and gloom write up... you should at least keep things a bit more real and say that you haven't read that "speculation"... it is far from an established "fact" that what you state will mean improved cash flow. Right now Afrezza related activities are almost certainly cash flow negative and MNKD is currently not seeing any of that on a cash basis because they are only responsible for 35% of those losses and they are loaned the money to cover that portion, therefore currently they are cash flow neutral regarding the Afrezza activities that will transition back to them. So the only way the cash flow "improves" based on the transition is if the Afrezza activities start being cash flow positive. The script numbers seem to have kinda plateaued, and even being generous it comes to only $350k a week or around $18M a year (and this would be reduced by the amount of all those discount cards, and reduced if the price is lowered). I seriously doubt we will be cash flow positive on these script numbers anytime soon. MNKD has to be out there doing something to try to turn sales around... and they have to pick up expenses of pediatric trials. So bottom line, I'm sure this transition of Afrezza back will be cash flow drag and MNKD will be looking for whatever other savings they can make to offset it. You havent been a real long lately!!! |
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Post by matt on Feb 2, 2016 15:05:18 GMT -5
You don't have to guess at the negative cash impact. As of the last 10Q, the Sanofi loan facility stood at $43.7 million, and increase from the prior quarter when it was $28.4, a difference for the three months of $15.3. That represents Mannkind's share of the partnership losses which is 35% of the total, implying that 100% of the loss was $43.71 million for the third quarter, or about $14 million a month.
We know that Mannkind is going to be hitting the brakes on all forms of spending, so the burn rate will not approach that of Sanofi, but it will be negative. I leave it to you to estimate how much of a spending reduction is possible, but the popular narrative is that Sanofi didn't do enough to promote Afrezza despite a $14 million a month in spending. Scripts are running about 550 Trx which yields, at best, about $1.5 million (not counting the cost of sales). Production cost was $15.7 million for the first nine months, and unless scripts skyrocket the unabsorbed factory overhead will likely keep sales and cost of sales about a wash, maybe even a bit negative. Meanwhile, MNKD spent $55 million on non-product expenses (R&D and general administrative) through nine months, or about $6 million a month.
So the expense side looks to be $20 million a month minus whatever MNKD can squeeze out of what Sanofi was spending. Sales will be offset by product cost at these volumes so having 100% of the sales revenue won't help. Also recall that working capital for accounts receivable and inventory, which was on Sanofi's balance sheet now gets funded by MNKD as well (net of any increase in payables). On a net basis there is a good reason to be skeptical that the company has enough cash to kept all its programs going.
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Post by dreamboatcruise on Feb 2, 2016 17:32:27 GMT -5
You havent been a real long lately!!! I'm painfully long. Though often I do self medicate with Scotch to try to deny the reality of my longness. |
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Post by bradleysbest on Feb 2, 2016 18:05:52 GMT -5
I would think then that Mannkind would have to do another big round of 10 day sample packs to doctors that might dwarf the initial efforts that sanofi tried (and purchased). Are 10 day supplies enough to convince patients that Afrezza is the real deal? |
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Post by Deleted on Feb 2, 2016 19:06:54 GMT -5
Afrezza clinics will be opening up late this month, hopefully they will be able to generate an increase in scripts this year to offset price reduction for better coverage.
I hope Matt addresses this issue tomorrow.
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Post by od on Feb 2, 2016 19:16:40 GMT -5
Afrezza clinics will be opening up late this month, hopefully they will be able to generate an increase in scripts this year to offset price reduction for better coverage. I hope Matt addresses this issue tomorrow. K - I think the clinics are a good idea. Your recent comments sound like you think they will be a short term catalyst. I agree that we need to learn more about the clinics tomorrow, but I suspect we are looking at a cautious pilot/rollout (as it should be). |
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Post by Deleted on Feb 2, 2016 19:33:23 GMT -5
My understanding, these clinics have been discussed sufficiently and long enough with MannKind to understand the risk / reward profile. If these clinics are truly independent of MannKind, regardless of ownership, clinics could open as quickly as investor's money would allow.
With 100% of Afrezza revenue going to MannKind, this could be the inflection point Wall Street is looking for.
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Post by od on Feb 2, 2016 19:55:35 GMT -5
My understanding, these clinics have been discussed sufficiently and long enough with MannKind to understand the risk / reward profile. If these clinics are truly independent of MannKind, regardless of ownership, clinics could open as quickly as investor's money would allow. With 100% of Afrezza revenue going to MannKind, this could be the inflection point Wall Street is looking for. I hope you are correct. Having been an early mover in the introduction of Convenient Care facilities (with significant funding from first class investors), I like the idea of Diabetes clinics within clinics, but know it is not the same as rolling out additional Starbucks. It will take time. |
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Post by kc on Feb 2, 2016 20:14:14 GMT -5
I would think then that Mannkind would have to do another big round of 10 day sample packs to doctors that might dwarf the initial efforts that sanofi tried (and purchased). We should be giving them 30 day supply sample pack. Get them started on the product. Give them a real test drive with a personal 800 number to call if they have questions or problems. During this time they can get their insurance issues worked out. We have more supply then we have customers be generous to get them started on Afrezza. |
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