MNKD cost of raw RHI

[tripoley]

Interesting, that company referred to in the article I linked to actually had an option contract with MNKD at one time (they let it lapse):

www.albertafarmexpress.ca/2009/04/13/safflower-insulin-option-lapses/

[art606a]

Nov 18, 2016 7:29:21 GMT -5 tripoley said:

Adam Feuerstein's new line of attack is the cost of raw insulin citing NVO dropping oral insulin because it requires 50x the insulin as injectable.  Afrezza requires 2.5-3x as injectable.  Walmart sells Novolin (RHI) at $25 for 1000 units or $0.025/unit.  A four unit cartridge has 10 units of RHI so 90 carts = 900 units of RHI = $22.50 at retail.  Does anyone know what MNKD actually pays for a unit of RHI?

Does anyone know the answer to tripoley's question about "Does anyone know what MNKD actually pays for a unit of RHI?"

[derek2]

Here's a stab: www.zauba.com/import-insulin-crystals/hs-code-29371200-hs-code.html

Lists American sourced crystalline RHI at $2.5M / kg

Insulin has 28.8 IU/mg

So, 1M mg / kg = 28.8 M IU / kg

($2.5M / kg) / (28.8M IU / kg) =  $0.086 / IU

8.6 cents per IU


Man! It's tough to find credible numbers. This is one data point, anyway. Given MNKD had a $190M US purchase agreement, they probably pay significantly less per kg.

[tripoley]

Nov 23, 2016 20:34:27 GMT -5 derek2 said:

Here's a stab: www.zauba.com/import-insulin-crystals/hs-code-29371200-hs-code.html

Lists American sourced crystalline RHI at $2.5M / kg

Insulin has 28.8 IU/mg

So, 1M mg / kg = 28.8 M IU / kg

($2.5M / kg) / (28.8M IU / kg) =  $0.086 / IU

8.6 cents per IU


Man! It's tough to find credible numbers. This is one data point, anyway. Given MNKD had a $190M US purchase agreement, they probably pay significantly less per kg.

That can't be right. Walmart insulin would cost $86 just for the raw RHI. I didn't check your math. Off by a decimal point perhaps?

[rockstarrick]

Nov 23, 2016 20:34:27 GMT -5 derek2 said:

Here's a stab: www.zauba.com/import-insulin-crystals/hs-code-29371200-hs-code.html

Lists American sourced crystalline RHI at $2.5M / kg

Insulin has 28.8 IU/mg

So, 1M mg / kg = 28.8 M IU / kg

($2.5M / kg) / (28.8M IU / kg) =  $0.086 / IU

8.6 cents per IU


Man! It's tough to find credible numbers. This is one data point, anyway. Given MNKD had a $190M US purchase agreement, they probably pay significantly less per kg.

Isn't dimensional analysis cool !!
nicely done derek 

[agedhippie]

Nov 23, 2016 20:34:27 GMT -5 derek2 said:

Here's a stab: www.zauba.com/import-insulin-crystals/hs-code-29371200-hs-code.html

Lists American sourced crystalline RHI at $2.5M / kg

Insulin has 28.8 IU/mg

So, 1M mg / kg = 28.8 M IU / kg

($2.5M / kg) / (28.8M IU / kg) =  $0.086 / IU

8.6 cents per IU


Man! It's tough to find credible numbers. This is one data point, anyway. Given MNKD had a $190M US purchase agreement, they probably pay significantly less per kg.

Not quite

Lets go with the Danish insulin since that looks like Regular to me and should be good quality (it is almost certainly Novo Nordisk sourced).

RHI is sourced at INR 4,648,525 per Kg, convert to dollars gives $67,650 / Kg
Insulin is 0.03846 mg to IU, that gives 26 IU/kg

$67650 / 26 M = $0.0026 /IU

that makes 0.26 cents per IU which matches the $25 Walmart charge (Walmart rebrands Novo Nordisk insulin)

The reference was a good find, I would never have got anywhere without that.



                                                                                                                                                                                        

[derek2]

Nov 24, 2016 11:15:27 GMT -5 agedhippie said:

Nov 23, 2016 20:34:27 GMT -5 derek2 said:

Here's a stab: www.zauba.com/import-insulin-crystals/hs-code-29371200-hs-code.html

Lists American sourced crystalline RHI at $2.5M / kg

Insulin has 28.8 IU/mg

So, 1M mg / kg = 28.8 M IU / kg

($2.5M / kg) / (28.8M IU / kg) =  $0.086 / IU

8.6 cents per IU


Man! It's tough to find credible numbers. This is one data point, anyway. Given MNKD had a $190M US purchase agreement, they probably pay significantly less per kg.

Not quite

Lets go with the Danish insulin since that looks like Regular to me and should be good quality (it is almost certainly Novo Nordisk sourced).

RHI is sourced at INR 4,648,525 per Kg, convert to dollars gives $67,650 / Kg
Insulin is 0.03846 mg to IU, that gives 26 IU/kg

$67650 / 26 M = $0.0026 /IU

that makes 0.26 cents per IU which matches the $25 Walmart charge (Walmart rebrands Novo Nordisk insulin)

The reference was a good find, I would never have got anywhere without that.



                                                                                                                                                                                        

Ah! I assumed it was dollars instead of Kroner! Thanks for the correction.

so at 1/4 cent per IU, even using 3X as much as SC insulin wouldn't be a huge cost driver.

[agedhippie]

Nov 24, 2016 11:50:28 GMT -5 derek2 said:

Ah! I assumed it was dollars instead of Kroner! Thanks for the correction.

so at 1/4 cent per IU, even using 3X as much as SC insulin wouldn't be a huge cost driver.

Actually it's Indian Rupees!

[art606a]

Nov 24, 2016 11:15:27 GMT -5 agedhippie said:

Nov 23, 2016 20:34:27 GMT -5 derek2 said:

Here's a stab: www.zauba.com/import-insulin-crystals/hs-code-29371200-hs-code.html

Lists American sourced crystalline RHI at $2.5M / kg

Insulin has 28.8 IU/mg

So, 1M mg / kg = 28.8 M IU / kg

($2.5M / kg) / (28.8M IU / kg) =  $0.086 / IU

8.6 cents per IU


Man! It's tough to find credible numbers. This is one data point, anyway. Given MNKD had a $190M US purchase agreement, they probably pay significantly less per kg.

Not quite

Lets go with the Danish insulin since that looks like Regular to me and should be good quality (it is almost certainly Novo Nordisk sourced).

RHI is sourced at INR 4,648,525 per Kg, convert to dollars gives $67,650 / Kg
Insulin is 0.03846 mg to IU, that gives 26 IU/kg

$67650 / 26 M = $0.0026 /IU

that makes 0.26 cents per IU which matches the $25 Walmart charge (Walmart rebrands Novo Nordisk insulin)

The reference was a good find, I would never have got anywhere without that.



                                                                                                                                                                                        

One thing I don't understand was in the 10-K : "As a result of this assessment, we recorded a charge of $39.3 million to record the inventory raw materials on hand at the lower of cost or market, inventory expiry, and write-off other inventory related assets." 39 million seems like an awfully big number. Was this all insulin or did it include afrezza inventory as well?  Did it include insulin they purchased from Pfizer or from Amphastar? If it was all insulin, then it must have been -- using the above numbers -- about 580 kiliograms of insulin.

[agedhippie]

Nov 25, 2016 16:47:13 GMT -5 art606a said:

Nov 24, 2016 11:15:27 GMT -5 agedhippie said:

Not quite

Lets go with the Danish insulin since that looks like Regular to me and should be good quality (it is almost certainly Novo Nordisk sourced).

RHI is sourced at INR 4,648,525 per Kg, convert to dollars gives $67,650 / Kg
Insulin is 0.03846 mg to IU, that gives 26 IU/kg

$67650 / 26 M = $0.0026 /IU

that makes 0.26 cents per IU which matches the $25 Walmart charge (Walmart rebrands Novo Nordisk insulin)

The reference was a good find, I would never have got anywhere without that.

One thing I don't understand was in the 10-K : "As a result of this assessment, we recorded a charge of $39.3 million to record the inventory raw materials on hand at the lower of cost or market, inventory expiry, and write-off other inventory related assets." 39 million seems like an awfully big number. Was this all insulin or did it include afrezza inventory as well?  Did it include insulin they purchased from Pfizer or from Amphastar? If it was all insulin, then it must have been -- using the above numbers -- about 580 kiliograms of insulin.

Remember that Afrezza uses a lot of insulin to create a 1 IU dose (I am to lazy to check the ratio). 580kg is still a lot of insulin though.

[derek2]

At the 2009 shareholders meeting, Al Mann stated the MNKD had acquired 8 tons of insulin from Pfizer for $30M

Note, however, that this insulin would have to be certified as bioequivalent to the Amphastar insulin in order for MNKD to use it as an API.

[art606a]

Nov 26, 2016 10:59:38 GMT -5 derek2 said:

At the 2009 shareholders meeting, Al Mann stated the MNKD had acquired 8 tons of insulin from Pfizer for $30M

Note, however, that this insulin would have to be certified as bioequivalent to the Amphastar insulin in order for MNKD to use it as an API.

Eight tons? Where on earth would they store eight tons for seven years? For that matter, why wouldn't they just get it certified and use it or else sell it? Was that what they wrote down? If anything it seems like it would be worth even more now.

[derek2]

Nov 26, 2016 12:16:08 GMT -5 art606a said:

Nov 26, 2016 10:59:38 GMT -5 derek2 said:

At the 2009 shareholders meeting, Al Mann stated the MNKD had acquired 8 tons of insulin from Pfizer for $30M

Note, however, that this insulin would have to be certified as bioequivalent to the Amphastar insulin in order for MNKD to use it as an API.

Eight tons? Where on earth would they store eight tons for seven years? For that matter, why wouldn't they just get it certified and use it or else sell it? Was that what they wrote down? If anything it seems like it would be worth even more now.

It has remained in cold storage in Germany. It is indeed the insulin that they wrote off the books. Valuation is problematic, since there were covenants against re-sale, and  the insulin was only to be used for Afrezza.

Why not get it certified? Your guess is as good as mine. I wouldn't think it would cost much - certainly less that Hakan's and Diane Palumbo's salary continuation. Priorities, I guess. (Okay, that was kind of snarky, but still - I have no idea)