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Post by otherottawaguy on Aug 22, 2014 12:08:23 GMT -5
Sorry for posting this as "Obamayoumama" was the original author and a few of us believe this should be a posted on its own.
"I spoke to Matt yesterday. He clarified the sell at cost issue. They will be able to include all the cost associated with the plant and equipment into the " cost" of the product. He also reminded me that besides the frozen insulin they have quite a bit of insulin from the Orgegon contract that they were previously contracted to buy. That cost of insulin, even thou expensed will be part of the cost. They will not be including any cost to develop the product. Still the plant and equipment is north of a quarter billion dollars, I memory serves me. One thing that stood out was that Sanofi wanted them to secure their insulin contract before they would sign, because even with all the insulin previously purchased, Sanofi wanted to make sure they had enough product. I bought another 3,200 shares today"
Read more: mnkd.proboards.com/thread/1187/pfeffers-royalty-rate-comparison?page=2#ixzz3B8pnxVrI
Credit on this one goes out again to Obamayoumama.
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Post by otherottawaguy on Aug 22, 2014 9:09:37 GMT -5
Hate to point this out, but the 40M received from Deerfield sounds to me like they accepted this to make the purchases of the equipment back in June just after approval.
Why else would you take money that you knew looking forward you wouldn't need due to the impending Sanofi partnership?
Think we were told that each line runs about 10M to install. Could they maybe looking at additional lines in 2015?
OOG
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Post by otherottawaguy on Aug 22, 2014 8:49:44 GMT -5
Obym:
This probably is worthy of a "New Subject" post.
OOG
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Post by otherottawaguy on Aug 21, 2014 7:41:39 GMT -5
Hammer:
I sent off last week an email to Matt on the subject of capacity and the potential for expanding next year. I knew about the three lines for this year, just wondered if there might be more planned for 2015. No response yet.
This might be a tell for expected sales levels going forward.
OOG
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Post by otherottawaguy on Aug 20, 2014 8:52:13 GMT -5
no one should doubt Al.. until he is proven wrong. Don't want to throw cold water on the party, one word will be used but naysayers to prove their point: "Ultra"
Hopefully time will tell with an adjusted label. Seems like the concept is starting to stick in the write-ups on the product, just need to make it "Official"
OOG
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Post by otherottawaguy on Aug 19, 2014 14:11:47 GMT -5
Just posting what I received via email from my Broker.
I have not exactly been relying on them as from what I can tell it is just an automated opinion based upon a computer reading of the financials.
I even went so far as to complain to my broker about the Ford "Opinions" and how it was a load of Crapola. If I had been following their advice, I would have headed for the exits at somewhere south of 3 dollars.
Its just interesting that they popped that out today with no new financials being generated. Wonder if we might see a target price in the near future.
OOG
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Post by otherottawaguy on Aug 19, 2014 13:59:48 GMT -5
alcc: addressing each of your points and adding few additional faults that I have observed with my valuation: P1 29% is the numbers that seem to have been provided by Matt during one of the CC's, if I am wrong then its an adjustment to be made. P2: Pen cost is based upon it being priced at 15% premium to old school inject regime which I have costed as $2300 * 1.15 = $2645 again if this incorrect, an adjustment can be made. Using the formula and my inputs I have noted some errors: 1M (patients) * (2600- (29%* (2600) [COGS])) * 35% [Royalty Rate] / 450M [Share Count w Warrants] * (1/(1.085 ^ 1.5)( [discount to end of 2015] = 1,000,000 * 1846 * 0.35 / 450,000,000 * 0.8848 Q1: Royalty Rate, is that based upon the Annual Cost to the user, or the supply cost to the pharmacy? What is the pharmacy markup, 20%? Market Size contributors Q2: As noted, I did not remove the COPD from the Type 2, nor did I remove the smokers from either population (don't think it will matter to smokers anyway, they don't listen to the Surgeon Generals advice ). Assume a further reduction of the T2 to remove COPD, and what the hell, another for our smoking population as well. Neither of these affect the formula, just the numbers for calculating market size. Q3: How do we accommodate a change in the Pre-Diabetic treatment regiment. I have seen forecasts that this may double or even triple the size of the T2 population. I have decided to leave this out of the population calculations. Q4: Anyone care to discuss Type 3s (Alzheimer's)? best we leave that one for another thread. Q5: Not mentioning any other potential deals until they are announced and approved. Under current Dandbury max production of 3 lines using your COGS and not discounting for time we get: 375K (patients) * (2600- (45%* (2600) [COGS])) *.80[after pharma markup removed] * 35% [Royalty Rate] / 450M [Share Count w Warrants] * (1/(1.085 ^ 1.5)( [discount to end of 2015] =375k * 2600 * 0.55 * .80 * 0.35 / 450M * 18[P/E] =375k * $400 / 450M * 18 =375K * $0.000016 =$6 pps For max Dandbury (2M) 2M * $0.000016 =$32 If anyone can site anything else that should be considered, or provided differing numbers (with substantiation) I am all ears. OOG
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Post by otherottawaguy on Aug 19, 2014 13:21:10 GMT -5
Just received this from Ford Equity Research - Upgraded MNKD to HOLD (seen this as a STRONG SELL before FDA giving the nod)
Stock Security Description Source Rating Date Previous Rating Current Rating Price Date Previous Target Price Current Target Price
MNKD MANNKIND Ford Equity Research 15/08/2014 SELL HOLD
Sorry folks, no target prices.
OOG
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Post by otherottawaguy on Aug 18, 2014 9:55:17 GMT -5
Populations: T1/T2 (and growing) US/CAN: 3M/ 27M Euro: 4M / 36M ROW: 21M / 190M (but lets say only 20% can afford the treatment) = 4M / 36M Potential Market: 11M / 99M Need to remove thoseT1s on pumps and those with COPD:10% Lowered Potential Market: 10M / 99M Need to remove T2 currently managing via methodsother than Insulin: 75% (as you state treatment may need over haul when Afrezza is incorporated) Lower Potential Market 2:10M / 25M Net Market: 35M --------------------------------------------------------- Annual Cost (will be close to Pens): $2600 --------------------------------------------------------- Sobuilding the formula based on 1M patients (will allow us then to extrapolate for varying market share: 1M (patients) * (2600- (29%* (2600) [COGS])) * 35% [Royalty Rate] / 450M [Share Count w Warrants] * (1/(1.085 ^ 1.5)( [discount to end of 2015] = 1,000,000 * 1846 * 0.35 / 450,000,000 * 0.8848 = 646M / 450M * 0.8848 =1.27 EBITD Using a P/E of 18 = $22.86 PPS per million served Using Current Danbury Max Production of 375 = 22.86 / 1000k * 375K = 6.09 pps today. Looking to potential market shares in the future (no discounting: = 1M * 1846 * 0.35 / 450M) * 18 [PE] = 25.83 pps 2.0M = 5.7% of Potential Market = $51.68 pps (max capacity at Danbury) 3.5M = 10% of Potential Market = $90.45 pps 8.7M = 25% of Potential Market = $224.84 pps Just for laughs 17.5M = 50% of potential market = 452.27 pps These numbers do not include any other potential revenues from additional licensing or applications of Technosphere. Any additional feedback on numbers (ie population sizes and revenue calculation)would be appreciated. Enjoy the ride, OOG
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Post by otherottawaguy on Aug 14, 2014 15:11:18 GMT -5
Here is the pertinent paragraph giving a valuation of the shares:
Ultra-conservative #2: 30% Royalty fee, 15% Market Share
With a 30% royalty rate, 40% Net Profit Margin and 20 earnings multiple, with 15% market share for AFREZZA in 2019, you get a $20B market capitalization. Discounted back at 10% and divided by 450M shares you get a current intrinsic value of $28 per share.
This scenario is also very conservative as it only assumes a sliver of the Type II market and the majority of the Type I market. A 30% royalty rate also likely under represents what will be agreed upon. However, even with such conservative assumptions we will get a value that is nearly 6x the current price. Since we view this as an absurdly low probability in our analysis, we give this a 5% weighing.
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Post by otherottawaguy on Aug 14, 2014 15:05:31 GMT -5
Paying off my credit cards, earns me a cool 21%.
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Post by otherottawaguy on Aug 12, 2014 7:56:26 GMT -5
I saw it last night come across the scrolling news ticker on Business News Network BNN) last night here in Canada (first mention of it that I have seen north of the 49th).
OOG
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Post by otherottawaguy on Aug 11, 2014 15:33:20 GMT -5
Keith A. Markey, Ph.D., M.B.A. kmarkey@griffinsecurities.com
Stock Symbol NASDAQ: MNKD Current Price $8.59 12 mos. Target Price $16.25 Market Cap $3,259.4 mln Shares O/S 388.6 mln Avg Daily Vol. (3 mos.) 10,522,488 shs. 52-Week Price Low/High $3.80 - $11.48
Fiscal Year End Dec EPS FY 13A FY 14E FY 15E Q1 (Mar) $(0.15)A $(0.14)A $(0.14)E Q2 (Jun) (0.16)A (0.19)A (0.11)E Q3 (Sep) (0.17)A 0.16E (0.06)E Q4 (Dec) (0.16)A (0.19)E 0.06E $(0.64)A $(0.36)E $(0.25)E
August 11, 2014 MannKind Corp. BUY Target Price Change : Pharmaceuticals MannKind Partners with Sanofi Worldwide Sanofi brings the right mix of diabetes drugs and marketing experience. MannKind’s partner has an established presence in the diabetes space with its long-acting basal insulin Lantus® and a small number of other medicines that control blood glucose levels. These drugs are sold in 122 countries with the support of a salesforce numbering more than 1832,000. As a result, the selection of Sanofi to market Afrezza® greatly reduces the commercialization risk, in our opinion. Then, too, the company has an established track record for introducing innovative drug delivery systems, as evidenced by its introduction of the first prefilled needle/syringe combination with its anti-thrombotic agent Lovenox®. This also shows that its salesforce is comfortable selling a product based on both its therapeutic value and the simplicity of the delivery system.
We like the financial implications of the deal for MannKind. The terms include an upfront payment of $150 million, $775 million of milestones, and 35% of the profits from Afrezza. Commercial launch is targeted for the March quarter, but MannKind will likely book the first of many milestones before that. Triggers for the milestones include manufacturing achievements, product launches in Europe and Japan, and annual sales. (The first sales milestone is at $250 million in business.) The Company will be responsible for its share of the losses in the drug’s first days on the market, but a loan facility will cover that expense probably until profits from Afrezza are sufficient to repay the loan. Meanwhile, Sanofi will assume responsibility for conducting clinical trials and regulatory submissions.
MannKind is reviewing its options. With the signing of the Afrezza marketing agreement, the Company has ample cash to finance operations into 2016, based on its present structure and projected obligations. Accordingly, management has already begun to consider other opportunities, including expanding the use of its Technosphere® particle technology internally and through agreements with other companies. Approval of Afrezza has already shown that regulators are comfortable with the inhalable delivery system, thereby opening the door for other medicines.
This stock’s risk-reward balance has just improved once again. By partnering with Sanofi, MannKind has engaged a proven marketer in the global diabetes arena and one that can leverage the very attractive combination of Afrezza and a long-acting basal insulin. We are maintaining our BUY recommendation and have raised our price target to $16.25.
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Post by otherottawaguy on Aug 11, 2014 15:22:13 GMT -5
After that shite today, my exit strategy is out the door, down to street to the first bar I find...after the call of course. CC at 5pm will dictate how fast I move.
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Post by otherottawaguy on Aug 11, 2014 13:46:43 GMT -5
Griffin Securities (Keith Markey) who was on the call asking questions about other things, just sent a note blessing the union. He reitterated his 12 month estimare at 16.25. Will repost the note when i get home.
OOG
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