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Post by sf1981 on Apr 12, 2018 7:23:41 GMT -5
Does anyone have the rough number of what level of gross sales (as indicated in the weekly scripts of currently around 500k USD per week) translate into what level of net revenue?
I thought it was something like 50-60% net sales. I don't want to revisit the Spencer Osborne articles on SA as I believe he has been elaborating on this, but seems quite biased.
In order to make the USD 25-30m revenue guidance, what kind of gross revenue does that require? Is 50-60% net / gross still the right way to think about it?
Thanks for any feedback.
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Post by oldfishtowner on Apr 12, 2018 9:19:14 GMT -5
Looks like the shorts have calculated that MNKD will not get a substantial enough boost from script increases, the STAT study, and any partnerships to avoid more dilution. Therefore, they feel very safe in driving the share price even lower to increase the number of shares that will have to be issued in the next round of dilution so they can easily borrow more shares to short. This is a pattern we've seen played out many times over the years. MNKD management employs a minimum dilution strategy based on a series of assumptions that turn out to be optimistic when the share price drops more than expected and other positives take longer than expected or have less of an impact than they anticipated. The question here is whether Mike C has fallen into the same trap / pattern with the latest round of dilution. Will he actually see enough of an increase in script revenue, the STAT study, and partnerships to cause an increase in share price, or will the shorts be successful in holding down the share price to where even more shares need to be issued at a future date at an even lower price? What may be interesting is to ponder the following: 1. The STAT study isn't going to magically increase scripts overnight; we know that any change will likely take months to effect scripts 2. Partnerships aren't likely to include more than a month of two of operating cash Therefore, how does MNKD avoid another round of dramatically larger dilution post-June as the shorts successfully drive the share price down to half of what we had this time around? Thoughts? STAT doesn't bring in cash in any way. Scripts certainly aren't going up at a rate that will meaningfully cover the burn anytime this year. Given that burn is $90 to $100 million this year, even if there are some upfront payment for international deals there will still be a need for significant further raise of money using dilution. I would think longs as well as shorts would have calculated this. Wish I had a crystal ball to give you an answer on the direction of share price. Bill has accurately summarized the downside, or even what we may consider to be the status quo. But even though the STAT study results may not result in an immediate acceleration in scripts, it may give investors a reason to buy MNKD stock. The market is forward looking. It's the story that counts. And if the story changes, so will the market's attitude toward MNKD. If at some point there is any good news that changes the story, either shorts capitulate or someone will take a position to force a short squeeze. That's just the reality of the market. There is no guarantee the story will change. If only 25% of the STAT study patients maintained time in range for any significant amount of time then I doubt there will be a phase change in physicians' attitudes toward Afrezza. If the script growth of the past few weeks is not maintained or accelerated, then Mike C's story of a sales turnaround loses credibility. If a partnership is not finalized with a decent upfront cash payment this quarter, then the MNKD story deteriorates even more. However, if 80% or 90% of the STAT study subjects were able to dial-in Afrezza and stay in range for a significant period of time with no significant hypoglycemia or hyperglycemia, then I think physicians will take notice. So will institutions and investors with deep pockets. If scripts maintain the latest growth rate or the growth rate accelerates so that TRx break 600 and in May or June exceed Sanofi's highest number, then I think there is some support for the pps. If the partnership promised for this quarter comes through with an upfront cash payment of 20 - 50 million, then I think we see the pps bounce back. If Kendall takes to the road with a compelling story for Afrezza based on the STAT study and those 60 prior studies, then maybe the whole mindset changes about Afrezza and MNKD. If more than one of the above comes to fruition, then I think we and MNKD win, shorts lose. Game over. We have to remember that the longer Mike C is able to execute his strategic plan the more potential positives like the Levin study and Brazil and TreT come into play. Also, we tend to think of the non-US market as simply lowering per-unit COG. But in a situation where the uptake in the US is slow, additional clinical experience elsewhere could impact what is happening here as well. Obviously we do not know how any of this will turn out. But there are so many potential positives in play, I find it difficult to give up now. |
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Post by sportsrancho on Apr 12, 2018 9:26:00 GMT -5
Great summary fish!
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Post by casualinvestor on Apr 12, 2018 9:59:51 GMT -5
50%-60% applies right now. A large increase in sales would bring down the cost/unit.
Gross revenue in 2017 was about $12.5M, Net commercial sales revenue was 9.2M and total revenue was 11.7M. I think any kind of milestone payment or "deal" would fall under revenue, so it's tough to extrapolate sales expected for that guidance.
From memory, Q4 was going to end up being $4M revenue, and extrapolating those sales units could work. My napkin math showed that 25M-30M guidance maps out to linearly doubling weekly sales by the end of the year. Aka $1M gross sales/week
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Post by akemp3000 on Apr 12, 2018 10:17:53 GMT -5
Superb summary fish! Some believe the STAT study results will take time to have an effect because it's a small study that needs time to evolve to a larger study or to another label change. IMO there could be an immediate effect if the endos and ADA's most influential representatives have their eyes finally opened to never before seen results proving Afrezza can keep diabetics in-range. Add to this strong and credible peer support from Dr. Kendall. Add the push that will come from CGM promotions. Discussion will spread. There will be follow-up articles and stories. Endos who have resisted in the past or believed the false negativity will finally be open to prescribing Afrezza. The hope is that scripts begin climbing leading up to the ADA then jump significantly in the weeks following. Some will say this is wishful thinking. Frankly, it's harder to see how this won't happen.
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Post by rockstarrick on Apr 12, 2018 10:52:38 GMT -5
STAT doesn't bring in cash in any way. Scripts certainly aren't going up at a rate that will meaningfully cover the burn anytime this year. Given that burn is $90 to $100 million this year, even if there are some upfront payment for international deals there will still be a need for significant further raise of money using dilution. I would think longs as well as shorts would have calculated this. Wish I had a crystal ball to give you an answer on the direction of share price. Bill has accurately summarized the downside, or even what we may consider to be the status quo. But even though the STAT study results may not result in an immediate acceleration in scripts, it may give investors a reason to buy MNKD stock. The market is forward looking. It's the story that counts. And if the story changes, so will the market's attitude toward MNKD. If at some point there is any good news that changes the story, either shorts capitulate or someone will take a position to force a short squeeze. That's just the reality of the market. There is no guarantee the story will change. If only 25% of the STAT study patients maintained time in range for any significant amount of time then I doubt there will be a phase change in physicians' attitudes toward Afrezza. If the script growth of the past few weeks is not maintained or accelerated, then Mike C's story of a sales turnaround loses credibility. If a partnership is not finalized with a decent upfront cash payment this quarter, then the MNKD story deteriorates even more. However, if 80% or 90% of the STAT study subjects were able to dial-in Afrezza and stay in range for a significant period of time with no significant hypoglycemia or hyperglycemia, then I think physicians will take notice. So will institutions and investors with deep pockets. If scripts maintain the latest growth rate or the growth rate accelerates so that TRx break 600 and in May or June exceed Sanofi's highest number, then I think there is some support for the pps. If the partnership promised for this quarter comes through with an upfront cash payment of 20 - 50 million, then I think we see the pps bounce back. If Kendall takes to the road with a compelling story for Afrezza based on the STAT study and those 60 prior studies, then maybe the whole mindset changes about Afrezza and MNKD. If more than one of the above comes to fruition, then I think we and MNKD win, shorts lose. Game over. We have to remember that the longer Mike C is able to execute his strategic plan the more potential positives like the Levin study and Brazil and TreT come into play. Also, we tend to think of the non-US market as simply lowering per-unit COG. But in a situation where the uptake in the US is slow, additional clinical experience elsewhere could impact what is happening here as well. Obviously we do not know how any of this will turn out. But there are so many potential positives in play, I find it difficult to give up now. “If a partnership is not finalized with a decent upfront cash payment this quarter, then the MNKD story deteriorates even more” If the STAT studies are anything but bad, why would Mike sign any partnership before the results are released ?? I think any partnership will be signed after the STAT study results are revealed. And I also believe this is why we just raised the $$$ that some shareholders are disappointed about, other than the obvious reasons of keeping the lights on. I think getting by as we have been for a few more months is smart, as long as the STAT results are medium good to great. Limp along, release the study results, then look at finalizing any partnership deals they may have pending. Just my opinion, but I sure hope I’m right. |
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Post by kimi on Apr 12, 2018 10:59:53 GMT -5
ask 1.68 x 249000
several seconds ago
ideas?
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Post by compound26 on Apr 12, 2018 11:59:26 GMT -5
oldfishtowner great post, fish. On the international deal with upfront money, I think Mike has already expressly lowered the expectation on upfront money. Assuming the signed term sheet is for India, my expectation of the upfront money is $10 million. So anything above that will be a bonus from my perspective. Also, I do not think announcement of a deal with upfront money less than $20 million will be a huge disappointment, especially given that Mike has indicated that we won't be getting that much upfront cash anyway. I think most likely is that in such a situation, the announcement of such a deal won't have much impact on the PPS, which will be similar to what the announcement of the Brazil deal did to the PPS. But that is okay to me. A deal is a deal and will always help to improve the chance of Mannkind's success in the long term. On the sales front, do not forgot that Mike mentioned in his last two presentations that Mannkind has once against revamped its marketing message and strategy in March/April timeframe, reshuffled its sales force and updated its incentives policies recently. I do expect these actions will have a positive impact on the sales front in the coming weeks/months. Additionally, there are many other catalysts that may kick in over time. The one-drop partnership with cash subscription model, filings in countries like Mexico and Canada, and partnerships for countries like Japan and EU (for which we may get some serious upfront money $25-50 million each), studies other than STAT (ADD 1, Levin, Pediatric, etc.). The thing I like Mike and the current management team is that they are constantly tinkering and keep fighting. This is the number one factor to me that will contribute to Mannkind’s success over time. If you think about it, Mike and his team has tweaked the sales strategies a couple of times already, first they used someone else’s sales force for about half a year, then they started their own sales force, and now they are revamping again with new marketing message. It is obvious that the management does not just sit idle watching the sales team doing the work. They are keeping measuring and analyzing and adjusting the strategy. Additionally, Mike has also done a lot in other areas. Hired Steve, Pat and Dr. Kendall. Made progress in pipeline (treprostinil). Filed in Brazil. Partnered with One Drop. Completed STAT and advanced in other trials. Partnered with Charles and Damon. Restructured the packaging and pricing. Restructured the debt and cleared the debt overhang. Made the commercial ad and test ran the TV commercial. And I understand they are also updating the Afrezza website. In short, Mike indeed has a plan and is executing (and adjusting as necessary) diligently. I really appreciate what he and his team are doing for us. I also appreciate what Matt has done for us (saved the company when Sanofi returned Afrezza to us, raised cash, partnered with Receptor, hired Mike and settled with Sanofi). And as for Hakan, I really can’t think of anything that he has done for us shareholders over his entire tenor. If you compare Mike with Hakan, you will see how much an upgrade we have had in the position of CEO. I hope we will be equally or more positively surprised soon over how much an upgrade we have had in the position of CMO pretty soon. 
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Post by esstan2001 on Apr 12, 2018 12:07:29 GMT -5
oldfishtowner great post, fish. On the international deal with upfront money, I think Mike has already expressly lowered the expectation on upfront money. Assuming the signed term sheet is for India, my expectation of the upfront money is $10 million. So anything above that will be a bonus from my perspective. Also, I do not think announcement of a deal with upfront money less than $20 million will be a huge disappointment, especially given that Mike has indicated that we won't be getting that much upfront cash anyway. I think most likely is that in such a situation, the announcement of such a deal won't have much impact on the PPS, which will be similar to what the announcement of the Brazil deal did to the PPS. But that is okay to me. A deal is a deal and will always help to improve the chance of Mannkind's success in the long term. On the sales front, do not forgot that Mike mentioned in his last two presentations that Mannkind has once against revamped its marketing message and strategy in March/April timeframe, reshuffled its sales force and updated its incentives policies recently. I do expect these actions will have a positive impact on the sales front in the coming weeks/months. Additionally, there are many other catalysts that may kick in over time. The one-drop partnership with cash subscription model, filings in countries like Mexico and Canada, and partnerships for countries like Japan and EU (for which we may get some serious upfront money $25-50 million each), studies other than STAT (ADD 1, Levin, Pediatric, etc.). The thing I like Mike and the current management team is that they are constantly tinkering and keep fighting. This is the number one factor to me that will contribute to Mannkind’s success over time. If you think about it, Mike and his team has tweaked the sales strategies a couple of times already, first they used someone else’s sales force for about half a year, then they started their own sales force, and now they are revamping again with new marketing message. It is obvious that the management does not just sit idle watching the sales team doing the work. They are keeping measuring and analyzing and adjusting the strategy. Additionally, Mike has also done a lot in other areas. Hired Steve, Pat and Dr. Kendall. Made progress in pipeline (treprostinil). Filed in Brazil. Partnered with One Drop. Completed STAT and advanced in other trials. Partnered with Charles and Damon. Restructured the packaging and pricing. Restructured the debt and cleared the debt overhang. Made the commercial ad and test ran the TV commercial. And I understand they are also updating the Afrezza website. In short, Mike indeed has a plan and is executing (and adjusting as necessary) diligently. I really appreciate what he and his team are doing for us. I also appreciate what Matt has done for us (saved the company when Sanofi returned Afrezza to us, raised cash, partnered with Receptor, hired Mike and settled with Sanofi). And as for Hakan, I really can’t think of anything that he has done for us shareholders over his entire tenor. If you compare Mike with Hakan, you will see how much an upgrade we have had in the position of CEO. I hope we will be equally or more positively surprised soon over how much an upgrade we have had in the position of CMO pretty soon. Great posts- Both! |
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Post by akemp3000 on Apr 12, 2018 12:33:18 GMT -5
With regard to expectations of the STAT study success, don't forget Mike's words at the recent Oppenheimer presentation, "Doctors can't believe the results of Afrezza". While this doesn't guarantee the STAT study success rate, it's doubtful Mike would have used these words if he and Dr. Kendall didn't believe this to be factual. Hearing Mike say this in public convinced me of the turning point in the paradigm shift to Afrezza becoming the standard of care. This should accelerate at the ADA when the story finally changes and moves forward.
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Post by dreamboatcruise on Apr 12, 2018 12:42:38 GMT -5
Bill has accurately summarized the downside, or even what we may consider to be the status quo. But even though the STAT study results may not result in an immediate acceleration in scripts, it may give investors a reason to buy MNKD stock. The market is forward looking. It's the story that counts. And if the story changes, so will the market's attitude toward MNKD. If at some point there is any good news that changes the story, either shorts capitulate or someone will take a position to force a short squeeze. That's just the reality of the market. There is no guarantee the story will change. If only 25% of the STAT study patients maintained time in range for any significant amount of time then I doubt there will be a phase change in physicians' attitudes toward Afrezza. If the script growth of the past few weeks is not maintained or accelerated, then Mike C's story of a sales turnaround loses credibility. If a partnership is not finalized with a decent upfront cash payment this quarter, then the MNKD story deteriorates even more. However, if 80% or 90% of the STAT study subjects were able to dial-in Afrezza and stay in range for a significant period of time with no significant hypoglycemia or hyperglycemia, then I think physicians will take notice. So will institutions and investors with deep pockets. If scripts maintain the latest growth rate or the growth rate accelerates so that TRx break 600 and in May or June exceed Sanofi's highest number, then I think there is some support for the pps. If the partnership promised for this quarter comes through with an upfront cash payment of 20 - 50 million, then I think we see the pps bounce back. If Kendall takes to the road with a compelling story for Afrezza based on the STAT study and those 60 prior studies, then maybe the whole mindset changes about Afrezza and MNKD. If more than one of the above comes to fruition, then I think we and MNKD win, shorts lose. Game over. We have to remember that the longer Mike C is able to execute his strategic plan the more potential positives like the Levin study and Brazil and TreT come into play. Also, we tend to think of the non-US market as simply lowering per-unit COG. But in a situation where the uptake in the US is slow, additional clinical experience elsewhere could impact what is happening here as well. Obviously we do not know how any of this will turn out. But there are so many potential positives in play, I find it difficult to give up now. “If a partnership is not finalized with a decent upfront cash payment this quarter, then the MNKD story deteriorates even more” If the STAT studies are anything but bad, why would Mike sign any partnership before the results are released ?? I think any partnership will be signed after the STAT study results are revealed. And I also believe this is why we just raised the $$$ that some shareholders are disappointed about, other than the obvious reasons of keeping the lights on. I think getting by as we have been for a few more months is smart, as long as the STAT results are medium good to great. Limp along, release the study results, then look at finalizing any partnership deals they may have pending. Just my opinion, but I sure hope I’m right. One deal supposedly already has a signed term sheet. What's the rationale for waiting on STAT presentation? |
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Post by peppy on Apr 12, 2018 12:47:07 GMT -5
quote from above: What's the rationale for waiting on STAT presentation? reply: what the heck dreamboat, what are you talking about now? clinicaltrials.gov/ct2/show/NCT03143816Sponsor: University of Colorado Denver School of Medicine Barbara Davis Center Collaborators: Atlanta Diabetes Associates University of Southern California Rainier Clinical Research Center Mannkind Corporation Information provided by (Responsible Party): Satish K. Garg, University of Colorado Denver School of Medicine Barbara Davis Center |
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Post by rockstarrick on Apr 12, 2018 12:49:14 GMT -5
“If a partnership is not finalized with a decent upfront cash payment this quarter, then the MNKD story deteriorates even more” If the STAT studies are anything but bad, why would Mike sign any partnership before the results are released ?? I think any partnership will be signed after the STAT study results are revealed. And I also believe this is why we just raised the $$$ that some shareholders are disappointed about, other than the obvious reasons of keeping the lights on. I think getting by as we have been for a few more months is smart, as long as the STAT results are medium good to great. Limp along, release the study results, then look at finalizing any partnership deals they may have pending. Just my opinion, but I sure hope I’m right. One deal supposedly already has a signed term sheet. What's the rationale for waiting on STAT presentation? I wasn’t aware of that, I guess if we don’t know for sure, (supposedly), then I may be closer to right than wrong. And my reason would be a more favorable deal after the results are revealed, if they are indeed good. |
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Post by babaoriley on Apr 12, 2018 12:50:22 GMT -5
"If you compare Mike with Hakan or Matt, you will see how much an upgrade we have had in the position of CEO. I hope (eliminate "I hope") We will be equally or more positively surprised soon over how much an upgrade we have had in the position of CMO pretty soon."
With just a couple of changes noted above, it would be impossible for me to agree with you any more, Compound!
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Post by mytakeonit on Apr 12, 2018 13:33:25 GMT -5
I was looking for that $1.50, but we had a huge buyer mid day that closed that possibility. So, now we look to see how high we can go ...
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