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Post by straightly on Jul 12, 2017 1:26:52 GMT -5
Every time I play with compounding, it amazes me. For your entertainment, I present you with the results of my playing MNKD numbers.
Assumptions:
Growth rate: 5% weekly. Retention rate on new prescription: 50% of new prescriptions after 4 weeks. Retention rate on existing refills: 50% of new prescriptions after 4 weeks.
So, my new prescription is 5% higher than the previous week. My refill is the sum of 50% of total prescriptions 4 weeks ago.
Facts:
new prescriptions: 184.75 (4 week average up to 6/30) refill prescriptions: 152.75 (4 week average up to 6/30) price: 773.33 (4 week average up to 6/30) -- Surprise#1 We are NOT cheap at all.
Rough facts:
Cash on hand at 6/30: 30M (?) Cash burn: $7M a quarter amounts to $7M/13 weeks. Add back $261,000 weekly revenue now, expenses is $799,462 per week.
With these numbers, I was trying to find out when we will run out of cash.
To my surprise, I could not. My spreadsheet tells me that Surprise#2 WE WILL NEVER RUN OUT CASH! In fact, our cash balance will reach its lowest point on week of 12/22/2017 at $21,753,908.50. Our maximum cash draw down was only $8.2M. We start to clime after that, just ready for Xmas.
Surprise#3: Our cashflow positive point can be achieved by selling only 1034 prescription.
My questions for these interested: Do you think this is a realistic scenario? If not, which number will you challenge? Suggestions, critical ones included, are welcome.
Merry Xmas! Have a feast, but don't forget your Afrezza.
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Post by straightly on Jul 12, 2017 1:32:24 GMT -5
This also re-enforced my other point: please do not burn our cash on TV. Trying the ground work and get our scripts up the hard way will be hard and take a long time, but we will get there. If the TV is not a splash, our money will be gone and so will be our chance, we will not have time and second chances to right and improve our games.
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Post by akemp3000 on Jul 12, 2017 3:51:39 GMT -5
Gotta love this thread that's sure to light up all those bashing and pushing doomsday scenarios. Looking forward to the responses. If accurate, the 1034 scripts per week will soon be a slam dunk considering the promotional activity that's just now beginning in the U.S., i.e. reality show, DDN, One Drop, etc., plus Brazil, Middle East and other foreign opportunities.
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Post by derek2 on Jul 12, 2017 6:17:18 GMT -5
Every time I play with compounding, it amazes me. For your entertainment, I present you with the results of my playing MNKD numbers.
Assumptions:
Growth rate: 5% weekly. Retention rate on new prescription: 50% of new prescriptions after 4 weeks. Retention rate on existing refills: 50% of new prescriptions after 4 weeks.
So, my new prescription is 5% higher than the previous week. My refill is the sum of 50% of total prescriptions 4 weeks ago.
Facts:
new prescriptions: 184.75 (4 week average up to 6/30) refill prescriptions: 152.75 (4 week average up to 6/30) price: 773.33 (4 week average up to 6/30) -- Surprise#1 We are NOT cheap at all.
Rough facts:
Cash on hand at 6/30: 30M (?) Cash burn: $7M a quarter amounts to $7M/13 weeks. Add back $261,000 weekly revenue now, expenses is $799,462 per week.
With these numbers, I was trying to find out when we will run out of cash.
To my surprise, I could not. My spreadsheet tells me that Surprise#2 WE WILL NEVER RUN OUT CASH! In fact, our cash balance will reach its lowest point on week of 12/22/2017 at $21,753,908.50. Our maximum cash draw down was only $8.2M. We start to clime after that, just ready for Xmas.
Surprise#3: Our cashflow positive point can be achieved by selling only 1034 prescription.
My questions for these interested: Do you think this is a realistic scenario? If not, which number will you challenge? Suggestions, critical ones included, are welcome.
Merry Xmas! Have a feast, but don't forget your Afrezza.
If your assumptions were valid, then this would be great news. They aren't. #1 - Your key mistake is assuming a 50% retention rate. It's closer to 15%. I've done the math and shown it many times, based on fact, not an assumption. #2 - The "assuming eternal x% growth rate" assumption has never managed to get off the ground in 2 & 1/2 years. |
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Post by sportsrancho on Jul 12, 2017 6:29:01 GMT -5
I would love for compound to weigh in on this:-)
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Post by lennymnkd on Jul 12, 2017 6:44:01 GMT -5
I would love for compound to weigh in on this:-) Would have loved this thread , this morning , except for the fact : THE SO MANY PROMISES ARTICLE ! On SA TOOK A LITTLE OF THE WIND OUT OF MY SAILS ... hope good proboards DD PUTS IT RIGH BACK .😀 |
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Post by silentknight on Jul 12, 2017 7:05:48 GMT -5
If this were true, then MNKD would have no need to restructure debt with Deerfield or find additional sources of financing, which the CEO indicated they were currently doing. If we'll be cash flow positive by Christmas, then based on your calculations, we should be able to just keep plugging along right?
I think you're also incorrect in assuming the gross revenue reported in scripts is all going to MNKD. As others have noted, that figure is an estimated gross revenue figure for the pharmacies reporting script sales I believe, and not a revenue figure for the company itself. Their Afrezza revenue is likely considerably less at and not a full retail pricing. Look at the last quarters report for an idea on where Afrezza revenue is.
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Post by traderdennis on Jul 12, 2017 7:54:24 GMT -5
Every time I play with compounding, it amazes me. For your entertainment, I present you with the results of my playing MNKD numbers.
Assumptions:
Growth rate: 5% weekly. Retention rate on new prescription: 50% of new prescriptions after 4 weeks. Retention rate on existing refills: 50% of new prescriptions after 4 weeks.
So, my new prescription is 5% higher than the previous week. My refill is the sum of 50% of total prescriptions 4 weeks ago.
Facts:
new prescriptions: 184.75 (4 week average up to 6/30) refill prescriptions: 152.75 (4 week average up to 6/30) price: 773.33 (4 week average up to 6/30) -- Surprise#1 We are NOT cheap at all.
Rough facts:
Cash on hand at 6/30: 30M (?) Cash burn: $7M a quarter amounts to $7M/13 weeks. Add back $261,000 weekly revenue now, expenses is $799,462 per week.
With these numbers, I was trying to find out when we will run out of cash.
To my surprise, I could not. My spreadsheet tells me that Surprise#2 WE WILL NEVER RUN OUT CASH! In fact, our cash balance will reach its lowest point on week of 12/22/2017 at $21,753,908.50. Our maximum cash draw down was only $8.2M. We start to clime after that, just ready for Xmas.
Surprise#3: Our cashflow positive point can be achieved by selling only 1034 prescription.
My questions for these interested: Do you think this is a realistic scenario? If not, which number will you challenge? Suggestions, critical ones included, are welcome.
Merry Xmas! Have a feast, but don't forget your Afrezza.
Cash burn rate is 7M per month, not per quarter. |
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Post by kbrion77 on Jul 12, 2017 8:01:26 GMT -5
Every time I play with compounding, it amazes me. For your entertainment, I present you with the results of my playing MNKD numbers.
Assumptions:
Growth rate: 5% weekly. Retention rate on new prescription: 50% of new prescriptions after 4 weeks. Retention rate on existing refills: 50% of new prescriptions after 4 weeks.
So, my new prescription is 5% higher than the previous week. My refill is the sum of 50% of total prescriptions 4 weeks ago.
Facts:
new prescriptions: 184.75 (4 week average up to 6/30) refill prescriptions: 152.75 (4 week average up to 6/30) price: 773.33 (4 week average up to 6/30) -- Surprise#1 We are NOT cheap at all.
Rough facts:
Cash on hand at 6/30: 30M (?) Cash burn: $7M a quarter amounts to $7M/13 weeks. Add back $261,000 weekly revenue now, expenses is $799,462 per week.
With these numbers, I was trying to find out when we will run out of cash.
To my surprise, I could not. My spreadsheet tells me that Surprise#2 WE WILL NEVER RUN OUT CASH! In fact, our cash balance will reach its lowest point on week of 12/22/2017 at $21,753,908.50. Our maximum cash draw down was only $8.2M. We start to clime after that, just ready for Xmas.
Surprise#3: Our cashflow positive point can be achieved by selling only 1034 prescription.
My questions for these interested: Do you think this is a realistic scenario? If not, which number will you challenge? Suggestions, critical ones included, are welcome.
Merry Xmas! Have a feast, but don't forget your Afrezza.
Cash burn rate is 7M per month, not per quarter. True facts don't really apply here lately. If s&$# hits the fan it will be funny to see how you will never hear from a majority of these posters again. |
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Post by thall on Jul 12, 2017 8:01:28 GMT -5
Does the scenario include the 10 million dollar payment to Deerfield and the 3 million dollars MNKD has to spend in November to buy insulin from Amphastar?
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Post by InvesterSam on Jul 12, 2017 8:01:48 GMT -5
Here is my analysis results and projection.
NRx
2/17 - 5/12/2017
: 3.1/week increase (linear trend)
5/19 - 6/23/2017
: 11.2/week increase (linear trend)
(Combining two segments or linear rates may represent an exponential increase trend. We do not have enough data to be certain.)
Net Refill Rate (= Refill - Dropout) based on simulation to match the data with 4-week refill rates
Before 4/21/17: about 1% (linear trend)
After 4/21/17: about 12% (linear trend)
(Again, combining two linear rates may represent an exponential increase trend. We do not have enough data to be certain.)
TRx Projection based on TRx trend (not very certain due to extensive extrapolation)
End of 2017: about 700
End of 2018: about 2,000
Projection numbers and refill rate may be drastically improved with the upcoming positive events. Getting 2,000 TRx by the end of 2018 seems not too bad.
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Post by babaoriley on Jul 12, 2017 10:14:33 GMT -5
Straightly, interesting try, but your conclusion can't be correct - it's way, way too optimistic - the world of mnkd does not work that way at all. I say this without going tedious mathematical exercises.
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Post by compound26 on Jul 12, 2017 10:20:38 GMT -5
Every time I play with compounding, it amazes me. For your entertainment, I present you with the results of my playing MNKD numbers.
Assumptions:
Growth rate: 5% weekly. Retention rate on new prescription: 50% of new prescriptions after 4 weeks. Retention rate on existing refills: 50% of new prescriptions after 4 weeks.
So, my new prescription is 5% higher than the previous week. My refill is the sum of 50% of total prescriptions 4 weeks ago.
Facts:
new prescriptions: 184.75 (4 week average up to 6/30) refill prescriptions: 152.75 (4 week average up to 6/30) price: 773.33 (4 week average up to 6/30) -- Surprise#1 We are NOT cheap at all.
Rough facts:
Cash on hand at 6/30: 30M (?) Cash burn: $7M a quarter amounts to $7M/13 weeks. Add back $261,000 weekly revenue now, expenses is $799,462 per week.
With these numbers, I was trying to find out when we will run out of cash.
To my surprise, I could not. My spreadsheet tells me that Surprise#2 WE WILL NEVER RUN OUT CASH! In fact, our cash balance will reach its lowest point on week of 12/22/2017 at $21,753,908.50. Our maximum cash draw down was only $8.2M. We start to clime after that, just ready for Xmas.
Surprise#3: Our cashflow positive point can be achieved by selling only 1034 prescription.
My questions for these interested: Do you think this is a realistic scenario? If not, which number will you challenge? Suggestions, critical ones included, are welcome.
Merry Xmas! Have a feast, but don't forget your Afrezza.
@sportsrancho since you asked, here are my thoughts. My understanding is that the sales amount reported by Symphony and IMS is not the real revenue that Mannkind receives. At least, the sales amount they report does not take out rebates that Mannkind has to be pay the payors. See this Forbes article for more detail. So I would prefer use the net revenue reported by Mannkind. I do not know what constitutes "net revenue" for Mannkind's case. But seems like this explanation makes senses to me. Assuming this is true, this means the net revenue reported by Mannkind already takes into account all the discounts it offered to users. Per Mannkind's 1st quarter conference call transcripts, "our total net revenue for the first quarter of 2017 was $3 million which included $1.8 million from the sale of surplus bulk insulin to a third-party and $1.2 million of recognized Afrezza product dispensed to patients, after giving effect to gross to net adjustments of $0.4 million." So my understanding is that Mannkind's net revenue for selling Afrezza in the first quarter was $1.2 million, after taking out $0.4 million rebates to the payors. Based on the Symphony reported scripts numbers maintained on this site, we note that the TRx for the 1st quarter is 3,203. A total net revenue divided by 3,203 results in $375. So we can assume Mannkind gets $375 out of each script. Based on a cash burn of $7.5 million/month and $90 million/year, it appears we will need 4,615 TRx per week to break even. However, even though we are currently pretty off from break even right now, I am pretty optimistic about Mannkind's future. Since Mannkind is only using 1/5 of the sales force of Sanofi and with Mannkind having a far less swagger than Sanofi (in terms of its influence on the behavior of doctors), a TRx above the Sanofi high watermark (627/week, with a weekly revenue of $370,000) will represent a meaningful success and milestone. I think we are not that far from reaching that point. As we approach 1,000 and 2,000 scripts a week, the revenues we get from the sales will meaningfully extend our runway and reduce the burden for future financing to extend the runway. Also at that point of time, PPS will be meaningfully higher, which makes future financing much easier. Additionally, any sales of Afrezza overseas, though may be at a lower price level, will also meaningfully reduce the required break even U.S. domestic weekly TRx stated above. |
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Post by jay1ajay1a on Jul 12, 2017 15:24:59 GMT -5
Compound, thanks for your thoughts.
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Post by jay1ajay1a on Jul 12, 2017 15:25:45 GMT -5
Straightly, interesting try, but your conclusion can't be correct - it's way, way too optimistic - the world of mnkd does not work that way at all. I say this without going tedious mathematical exercises. Baba, I would like to see your math skills. |
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