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Post by anderson on Aug 7, 2016 11:08:21 GMT -5
It use to be earlier this year ~10 million a month to run all of MNKD. How does this go to spending $10 million on just 70 sales people? Wow I must have missed that somewhere, can you link the document, or video that says this? I kinda remember Mike saying a number slightly higher for the yearly cost of the sales force but it is 1am right now and I dont feel like going through the archives and digging it up, so I am just going to take my word for it.
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Post by tarheelblue004 on Aug 7, 2016 12:09:42 GMT -5
Matt, you are off on the numbers but I agree with your sentiment.
Matt (Pfeffer) on the Q1 earnings call on May 9th, 2016: Our commercial organization will cost in the range of 20 million to 22 million through the remainder of the year [~$3 M per month]. As you'll hear in Rose's presentation of our first quarter financials in just a moment, we've continued to realize cost savings in other areas and anticipate offsetting some of these increased expenses with the reductions in these areas. In addition, with the full value of product sales of our own branded product coming to mankind during the fourth quarter we're in a better position to benefit from a ramp up of sales. As a result of all of the above we expect our cash burn rate to remain approximately 10 million to 12 million per month for the remainder of the year more or less the same ratio of burn as we've been reporting for about as long as I can remember.
Buried in the CEO speak is that we need sales to ramp up to help support us as we enter 2017. So to your point Matt, we need weekly scripts to increase quickly, although break-even at this cash-burn is in the 5,000 - 6,000 per week range (varies according to the $10M - $12M monthly burn rate).
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Post by LosingMyBullishness on Aug 7, 2016 12:38:19 GMT -5
Matt stated:
Production cost averaged $5.6 million a month in 2015, and $2.5 million in the first quarter. That was to support very limited sales volumes; if the company is successful with relaunch the cost per month will scale up accordingly. It will not be linear, due to production economies of scale, but the number will substantially larger.
You stated that it would not be linear but substantially higher. I disagree. The productions facility is running very much lower than design and this has huge implications:
If you have an overdesigned facility you have a lot of fixed costs (personnel, maintenance) and a suboptimal level of utilities to keep the processes at minimum level. Sometimes, especially with relatively small costs of feedstock you even have higher absolute costs with lower production rate because certain processes run so much less efficiently or you have ditch valuable stream/side products that would be otherwise part of an integrated plant setup.
Therefore it could be cheaper in absolute terms to produce for 500-1000 scripts per week than for 100-150. within the design range you are correct that the production costs increase with production rate.
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Post by nylefty on Aug 7, 2016 12:55:55 GMT -5
It use to be earlier this year ~10 million a month to run all of MNKD. How does this go to spending $10 million on just 70 sales people? Wow I must have missed that somewhere, can you link the document, or video that says this? I kinda remember Mike saying a number slightly higher for the yearly cost of the sales force but it is 1am right now and I dont feel like going through the archives and digging it up, so I am just going to take my word for it. Clearly any claim that a 70 person sales force costs $10 million "a month" is absurd. Even assuming that each sales rep cost $14,285 a month ($171,420 a year!) that would only total $ 1 million a month for 70 reps, not "$10 million." |
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Post by jonny80s on Aug 7, 2016 13:31:25 GMT -5
I thought GS stopped covering mnkd.
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Post by mannmade on Aug 7, 2016 15:43:03 GMT -5
My understanding is that Matt said on last cc that new force and rest of costs for mnkd 2.0 were somewhere between $1m to $2m per month and that the additional costs were being offset with other internal savings/cost cutting such that it was a net neutral effect on monthly expenses. And that such costs were and remain about $10m to $12m per month.
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Post by babaoriley on Aug 7, 2016 18:41:45 GMT -5
I think that's correct, mannmade, but look at how much ink has been wasted on a completely off the wall statement. Unless, unless, the other $8 million a month is being split up between Matt and Mike!! Don't know about the rest of you guys, but I would love to receive and accept an offer of $1 billion for 51% of the company - sign me up immediately! Half billion for 51%, well, a little cheap, but I wouldn't laugh at it. I'm going to go way out on a limb here and say nothing too exciting will be said in tomorrow's cc, at least not by management - there may well be exciting things said by those listening.  |
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Post by brentie on Aug 7, 2016 19:01:04 GMT -5
My understanding is that Matt said on last cc that new force and rest of costs for mnkd 2.0 were somewhere between $1m to $2m per month and that the additional costs were being offset with other internal savings/cost cutting such that it was a net neutral effect on monthly expenses. And that such costs were and remain about $10m to $12m per month. Matt: Our commercial organization will cost in the range of 20 million to 22 million through the remainder of the year. As you'll hear in Rose's presentation of our first quarter financials in just a moment, we've continued to realize cost savings in other areas and anticipate offsetting some of these increased expenses with the reductions in these areas. In addition, with the full value of product sales of our own branded product coming to mankind during the fourth quarter we're in a better position to benefit from a ramp up of sales. As a result of all of the above we expect our cash burn rate to remain approximately 10 million to 12 million per month for the remainder of the year more or less the same ratio of burn as we've been reporting for about as long as I can remember. seekingalpha.com/article/3973315-mannkind-corporations-mnkd-ceo-matthew-pfeffer-q1-2016-results-earnings-call-transcript |
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Post by Deleted on Aug 7, 2016 22:15:56 GMT -5
"The contract sales force which we know costs around $10 million per month". I certainly don't know that. Perhaps you can explain? And the monthly cash burn rate of $10-$12 million Matt stated is a lie? I think Matt's numbers above are misleading. I could argue lower expenses/cash burn but his overall point is correct... we need a lot more scripts to break even! I honestly think 600 scripts is the most important number! Why? Think about it, if mnkd can reach scripts equal to Sanofi in the same amount of time or less then Sanofi better watch out! Settlement coming! Sanofi has 1200-1500? reps in US and Mnkd does it with 60! You tell me how that looks for Sanofi in court?? I also believe we need DTC advertising like TV commercials to reach large script counts to break even. PTs must ask doctors for afrezza. If you come to the understanding that the overall point is correct then how can the numbers be misleading? The point of doing the math is to come to an overall conclusion about the financial picture and what it takes to be solvent and profitable. Serious question btw, no sarcasm. Taking sny to court? If memory serves it would be arbitration not the court system. Agreed tho on ads. I wish they had the funds to do a blitz for say a month to get the ball rolling. |
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Post by compound26 on Aug 9, 2016 10:55:51 GMT -5
You're out of your tree. Who do you think you're fooling??? 5000 scripts per week before November would not only bring us close to cash flow even, the share price would skyrocket and fincaning would thus not be any issue if needed. Like davinci said, you need to do the numbers. Scripts drive revenue, which is a single line on a set of financial statements. I said that 10,000 would be cash flow break-even, and I stand by that number. Why? If we take the trending price per Rx of 533 (off the chart that Liane updates weekly) 10,000 scripts would yield $21 million a month in revenue. What does that $21 million need to cover? 1. The contract sales force, which we know costs around $10 million / month.2. R&D. Everyone talks about how great Technosphere will be, but it will be worthless without further research. R&D has been averaging $2 million / month. 3. General & Administrative expenses averaged $3.3 million a month in 2015, $2.5 million for the first quarter. Call it $3 million / month. 4. Production cost averaged $5.6 million a month in 2015, and $2.5 million in the first quarter. That was to support very limited sales volumes; if the company is successful with relaunch the cost per month will scale up accordingly. It will not be linear, due to production economies of scale, but the number will substantially larger. 5. Working capital, like accounts receivable, was Sanofi's problem. Now that has to be financed by Mannkind's balance sheet and that is a use of cash that doesn't hit the income statement. 6. The company booked $5.5 million in losses per month on the Amphastar contract in 2015. That contract has not gone away and the current year exposure based on the last 10Q was $13 million. So add all of that up, and you will see that it might take substantially more than 10,000 scripts to reach cash flow break even. In the meantime, the company will burn cash, the balance sheet will deteriorate, and that is what Wall Street will be looking at. Any decent financial analyst would do the same calculation I just outlined and come to a similar conclusion on the revenue needed to support the organization as it is today, and 5,000 scripts per week just isn't enough. Many on this forum advocate dropping the unit selling price to drive penetration, but that would require even more scripts to make up the shortfall in revenue so that really isn't a feasible solution either. With 5,000 scripts the share price would move up, no doubt about that, but the financing terms will still be tough until the company can prove that it can generate enough cash to meet its maturing commitments and that will cost dearly in dilution. That level of sales buys time and loosens up the financial markets, but it is still not enough to fix the overall financial situation. , could you kindly elaborate a bit on the source of your following statement: "The contract sales force, which we know costs around $10 million / month."Why do you say " we know"? Is this a known fact or is there some specific statement in Mannkind's filings or presentation that points to this number? At least I do not know this as a fact and I am really curious about the source of your statement. If indeed the contract sales force costs $10 million / month, then they are really expensive. $10 million a month will result in $120 million in a year. Since we understand there are about 70 contact sales people (this 70 number has been mentioned quite a few times by Mike. So let's assume it is the case). Let's divide $120 million by 70, which results in $1.71 million per contract sales person per year. So, based on your statement above, it will cost about $1.71 million per year to hire one contact sales person. Wow, if that is the case, it appears, for Mannkind, the cost of hiring a contract sales person is comparable to the cost of hiring hire its CEO (Matt P.) or COO (Mike C.). If that is the case, I am seriously considering quitting my job and applying for the position of a contact sales person for Mannkind.  |
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Post by mnkdnewb on Aug 9, 2016 14:39:54 GMT -5
Just sold the last of my shares. 5,953 for $0.9125. It feels so good to be finished with this. Worst decision of my life and still can't believe I lost $65,350 in 9 months. It may go up from here, but I can honestly say I can already think a whole lot more clearly. Do what you want and feel is best. It could go up from here, but I'm not looking back.
I really do wish you all the best but to be honest, I wish I never read any posts here or ymb. So many people with unrealistic expectations that can and did keep me holding much longer than I would have. If you get in now or lower good for you, but IMHO it still isn't in the clear yet.
Nobody's fault but mine and it was and always will be all in God's perfect plan. Take care!
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Post by Deleted on Aug 9, 2016 15:02:55 GMT -5
Just sold the last of my shares. 5,953 for $0.9125. It feels so good to be finished with this. Worst decision of my life and still can't believe I lost $65,350 in 9 months. It may go up from here, but I can honestly say I can already think a whole lot more clearly. Do what you want and feel is best. It could go up from here, but I'm not looking back. I really do wish you all the best but to be honest, I wish I never read any posts here or ymb. So many people with unrealistic expectations that can and did keep me holding much longer than I would have. If you get in now or lower good for you, but IMHO it still isn't in the clear yet. Nobody's fault but mine and it was and always will be all in God's perfect plan. Take care! I have been where you are and its a shitty feeling. The one thing that I take away from my learning experience in this stock is that you should never listen to what anyone has to say on any social media platform and use it as an investment thesis. That was my fault then and that is your fault now and its hard not to get wrapped up in the emotion of it when there is a website for a community that feel the same way you do. Good Luck |
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Post by sluggobear on Aug 9, 2016 15:18:35 GMT -5
My friend sold all his shares recently at $1.00 for a 25k loss. We bought in about the same time. I have double the shares he had. I'm holding and maybe that will prove to be the wrong decision. But I think we're in the thick of it now. While the chance that the sp could come back is low - a significant spike in TRx could generate interest in this company again. If the TRx number goes nowhere in the next 2 to 3 months then I will likely lose the rest of this very speculative bet. I'm usually very logical but I know I'm playing in the metaphysical world now. I.e. looking for miracles!
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Post by brotherm1 on Aug 9, 2016 15:19:04 GMT -5
Just sold the last of my shares. 5,953 for $0.9125. It feels so good to be finished with this. Worst decision of my life and still can't believe I lost $65,350 in 9 months. It may go up from here, but I can honestly say I can already think a whole lot more clearly. Do what you want and feel is best. It could go up from here, but I'm not looking back. I really do wish you all the best but to be honest, I wish I never read any posts here or ymb. So many people with unrealistic expectations that can and did keep me holding much longer than I would have. If you get in now or lower good for you, but IMHO it still isn't in the clear yet. Nobody's fault but mine and it was and always will be all in God's perfect plan. Take care! I have been where you are and its a shitty feeling. The one thing that I take away from my learning experience in this stock is that you should never listen to what anyone has to say on any social media platform and use it as an investment thesis. That was my fault then and that is your fault now and its hard not to get wrapped up in the emotion of it when there is a website for a community that feel the same way you do. Good Luck Hence deducting from your assertions, it would only be logical and proper that you neither read nor post here anymore. |
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Post by Deleted on Aug 9, 2016 15:49:27 GMT -5
Just sold the last of my shares. 5,953 for $0.9125. It feels so good to be finished with this. Worst decision of my life and still can't believe I lost $65,350 in 9 months. It may go up from here, but I can honestly say I can already think a whole lot more clearly. Do what you want and feel is best. It could go up from here, but I'm not looking back. I really do wish you all the best but to be honest, I wish I never read any posts here or ymb. So many people with unrealistic expectations that can and did keep me holding much longer than I would have. If you get in now or lower good for you, but IMHO it still isn't in the clear yet. Nobody's fault but mine and it was and always will be all in God's perfect plan. Take care! I have been where you are and its a shitty feeling. The one thing that I take away from my learning experience in this stock is that you should never listen to what anyone has to say on any social media platform and use it as an investment thesis. That was my fault then and that is your fault now and its hard not to get wrapped up in the emotion of it when there is a website for a community that feel the same way you do. Good Luck I'm not embarrassed to say in my early days I lost north of 100k doing exactly what you describe. From those losses I learned to separate emotion and hope and exuberance and put my laser focus on what matters most when i have my money in the line. If you've learned the lesson then it's well worth the cost. If not, you're in for moe losses. Approaching every investment as a massive risk not worth my money til proven otherwise at which point i pounce and pounce hard turned around my fortunes and I've never looked back. Afrezza as a drug is amazing on so many fronts. As an investment, mnkd stinks to high heaven. Corporate law forces mnkd to always be sunny till the fat lady sings which is too late for retail. Everything they say must be looked at through that lense otherwise you focus on everything that doesn't matter such as tone, hopeful speeches, promises over and over but always in the future etc. best of luck in your future investments. |
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