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Post by compound26 on Oct 12, 2015 15:08:29 GMT -5
I'm still long. But increasingly concerned. Any catalysts on the horizon? Well, yesterday I went to my Midwestern small town library and saw at least four popular magazines with catalysts in them. A full twenty views (average) is now required for a single sale. So, even though the catalysts are already here, the effect of the catalysts is indeed on the horizon. mssciguy, interesting, where did you get that "twenty views (average) is now required for a single sale" data? I would like to take a look at that study/survey. |
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Post by compound26 on Oct 8, 2015 23:11:32 GMT -5
If my memory serves me right I believe Minimed SP was driven down to sub $2's before Medtronic BO , no idea re: insurance adoption but since it was a new technology I'd imagine they had similar hurdles to overcome . Just my 02 cents  Lynn Sales started out slow, from $40 million in sales in 1994 to nearly $400 million anticipated sales in 2001 when it was sold. Shares of MiniMed rose $2.77 to $46.77 on news of the sale.
Medtronic to Buy MiniMed and AffiliateDeals: The No. 1 medical device maker agreed to pay $3.28 billion for the diabetes management concern in buying spree. May 31, 2001|KAREN ROBINSON-JACOBS | TIMES STAFF WRITER Moving its aggressive acquisition campaign into the field of diabetes management, Medtronic Inc., the world's biggest medical device maker, agreed to buy Northridge-based MiniMed Inc. and an affiliated company for $3.7 billion, the companies said Wednesday. As part of the deal, MiniMed's founder, Alfred E. Mann, will step down as chairman and chief executive to devote attention to his other medical start-ups. If approved by shareholders and regulators, the $3.28 billion cash purchase of MiniMed would be the third $3 billion-plus acquisition by Minneapolis-based Medtronic in three years. In addition to MiniMed, a leader in the development and sale of diabetes management devices including insulin pumps, Medtronic agreed to purchase Mann's closely held Medical Research Group Inc. for $420 million in cash and stock. Medtronic said it will pay $48 a share for MiniMed, a 9.1% premium over Tuesday's closing stock price, but a near doubling of the $25-per-share price seen in April, before rumors of a MiniMed sale began circulating.
Shares of MiniMed rose $2.77 to $46.77 Wednesday on Nasdaq on news of the sale. Medtronic, which has a $51 billion market capitalization and is known largely for its cardiac and neurological product lines, gained a nickel to close at $43 on the Big Board. MiniMed will remain at its new Northridge headquarters and no layoffs are planned, according to Medtronic President and Chief Executive Art Collins. Company officials and analysts said the deal, hammered out in round-the-clock sessions that ended at 4 a.m. Wednesday, gives both companies a shot in the arm. For MiniMed, which has grown from $40 million in sales in 1994 to nearly $400 million anticipated for this year, Medtronic offers marketing muscle and distribution possibilities in the 120 countries where Medtronic is an established presence. It also opens the possibility for use of MiniMed's pumps to treat illness other than diabetes. And it offers a friendly harbor for a company that's seen its share price drop from nearly $93 last September. For Medtronic, MiniMed offers a beachhead into the field of technological management of diabetes, one of the fastest-growing chronic diseases in the country and one that affects an estimated 16 million Americans. The devices produced by MiniMed help patients manage their insulin needs and monitor glucose levels. "It makes sense for both sides," said Ryan Rauch, senior analyst on the medical device team of Adams, Harkness & Hill. MiniMed, he said, is facing increasing competition in its franchise external insulin pump business. And he said there were questions about when the consumer version of the company's continuous glucose monitor will be ready for scrutiny by the Food and Drug Administration and ultimately for the marketplace. At $3.28 billion, the price is more than 14 times 2000 sales, Rauch said, noting that the average for medical device companies has been about six to eight times sales. On the other hand, he said, Medtronic reported stagnant sales for its cardio-defibrillator implants, a core product line. "What Medtronic bought was top-line growth," Rauch said. "Now they're in the fast-moving, $3 billion to $5 billion diabetes marketplace. And MiniMed offers them the best diabetes franchise." |
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Post by compound26 on Oct 8, 2015 15:09:47 GMT -5
If you go back and listen to the presentation from earlier today you will hear Matt use the words "real world". What is going on in the real world is very important. Patients are loving Afrezza. Practitioners that are using Afrezza are loving it. It is still my opinion that the biggest issue is that the marketing by Sanofi has been weak. In my opinion patients will push the initial sales by requesting Afrezza from their practitioners but as of this time many do not even know that it exists. Later, practitioners will use Afrezza because of the results they see in their practices, much like I have seen in my practice. That is the real world. Well said. It would be great that you can share with us some of the real world observations you have from time to time. |
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Post by compound26 on Oct 8, 2015 14:41:44 GMT -5
Didn't listen, so i appreciate peoples opinions of the presentation from this board. But my g-d, If matt only had about 15 minutes instead of 30, why didn't he open with "Instead of half an hour, I only have about 15 minutes... which most of you are aware is also the time it takes for Afrezza to start working, faster than all other available mealtime insulins".Now that you said it, next time Matt will open his presentation like this: "I only have about 30 minutes...while it is not a lot time... most of you are aware it takes only about half that time for Afrezza to start working, faster than all other available mealtime insulins". |
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Post by compound26 on Oct 8, 2015 12:05:24 GMT -5
It appears about 50% of the $100 million convertible debt (so around $50 million) was paid off with cash.
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Post by compound26 on Oct 8, 2015 10:21:46 GMT -5
The author(s) disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: DCK is a consultant to Google .... very very niche!  compound26 is he a prescribing physician, did not see him on afrezzajustbreathe.... Do not know whether he is a prescribing physician for Afrezza. |
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Post by compound26 on Oct 5, 2015 18:52:05 GMT -5
I have compiled my responses to AF's article together as follows for your easier reading (apology for the repetition as I hate a misleading piece like this by AF): Compared with a debt for equity swap at a low price for the equity, I would much prefer a repayment of the existing debt with cash. Here is what I wrote in Why Piper Jaffray is Wrong on Mannkind in regarding to the debt issue. This situation has not changed at all and my assessment remains the same. HERE IS MY ASSESSMENT OF THE DEBT SITUATION USING THE NUMBERS FROM MANNKIND'S LAST CONFERENCE CALL:Per Mannkind’s last conference call, Mannkind has $107 million cash, $30 million credit line with Al Mann, $147 million available under the credit line with Sanofi, totally $284 million. According to this article, Mannkind will like receive $25 million manufacturing milestone this year. It is also expected that Mannkind will get $50 million in total approval milestone for approval in EU and Japan. One would expect the EU and Japan approval to be cleared within two years. Adding this additional $75 million to the $284 million, that’s $359 million. Per Mannkind’s last conference call, Mannkind’s quarterly loss was $28.9 million last quarter. So at this rate, Mannkind has enough cash to go through the next three years without capital raise. Even if we assume Mannkind does not refinance some of the notes that were due in 2015 (say $60 million) and pay that part off with available cash, Mannkind still have enough cash to go through two and half years without the need of raising cash. This does not take into account sales ramp, additional milestone payments from Sanofi and potential partner payments for other Technosphere applications. ALTERNATIVELY, HERE IS MY ASSESSMENT OF THE DEBT SITUATION GOING BY AF’S CASH BURN RATE, WITHOUT CONSIDERING THE SANOFI FACILITY:Per Mannkind’s last conference call, Mannkind has $107 million cash, and according to this article, Mannkind will like receive $25 million manufacturing milestone this year. That will lead to a total available cash of $132 million. Even if Mannk paid off $64 million with cash and burned another $13 million cash in the third quarter, that will leave Mannkind with $55 million available cash, plus $30 million credit line with Al Mann, at the end of the third quarter, and $42 million available cash, plus $30 million credit line with Al Mann, at the end of the fourth quarter. At $13 million per quarter, Mannkind needs not worry about raising additional cash for 2016.
And most likely, within 2016 or at the beginning of 2017, Mannkind will receive either all or part of the milestone payments for EU and/or Japan approval. That will support Mannkind’s operation through 2017. This does not take into account sales ramp, additional milestone payments from Sanofi and potential partner payments for other Technosphere applications. By that time, what will be Afrezza’s ramp-up, quarterly sales income, and sales-related milestone payments? And milestone payments for other Technoshere applications? Let’s wait and see.
ADDITIONALLY, NOTE THAT IN THE LANGUAGE QUOTED BELOW, AF SNEAKILY AND MISLEADINGLY TOOK AWAY $25 MILLION FROM MANNKIND'S CASH BALANCE. "The problem for MannKind is that it can't really afford to spend cash to settle old debts. The company had $107 million in cash on hand as of June 30, of which $25 million is restricted and cannot be touched due to other outstanding debt obligations. Subtract another $64 million to satisfy current debt holders reduces MannKind's cash balance to $18 million." Even if we assume that $25 million is restricted and can not touched, it is still in the balance book of Mannkind. So that, if we subtract $64 million from Mannkind's cash balance, MannKind's cash balance is not reduced to $18 million as AF claimed, but $43 million (with $25 million restricted, assuming what AF claims is true). There is huge difference between $18 million and $43 million. Adding in the $25 million manufacturing milestone payment that Mannkind is expected to receive, then it is $18 million [the picture AF paints] vs $68 million [the reality] (18 million +25 million (restricted) +25 million (milestone)) million. You see the difference between what AF claims and the reality? I think your interpretation of AF article is off base. As much as I disagree with most of what AF says, he is 100% correct about the restricted cash; MNKD cant spend it. Therefore if you cant spend it, it's pretty much useless cash sitting in a bank earning maybe 1% interest and you cant count it as cash available to fund operations. The items you refer to such as ramp up in sales, additional milestones, technosphere advances are all highly speculative events (none of which will have a very significant impact to cash over the next year or two and as such have to be significantly discounted as an investor. Therefore its seems to me that unless Big Al wants to lend some more money, MNKD is going to have to raise additional capital in 2016. I'm hoping that Sanofi or management can get more proactive with this insurance coverage issue. Because unless the insurance problem is solved, the best we can hope for is for sales of Afrezza to just muddle along. Its just too bad the way things turned out with this inept management team of Hakan and Matt.
Trend
First, we do not know whether AF is correct or not about the restricted nature of the $25 million cash. Second, if it is restricted, we do not know when and how the restriction can be lifted and the cash therefore becomes available. Third, if the cash has zero value, then how can Mannkind publicly claim its cash balance is $107 million? Should it say $82 million? I just pointed out that, assuming what AF said in his article is true, then Mannkind's cash balance will be reduced to $43 million (with $25 million restricted if AF's claim on restricted nature of such money is true). But AF should not say Mannkind's cash balance is reduced to $18 million. That is a misleading statement. If, however, he says that Mannkind's freely useable cash is reduced to $18 million. That's different. Further, Mannkind has sold certain amount of Afrezza and has not recognized revenue on these sales yet. At some point, Mannkind will be able to book recognized revenue on these sales. So it is not speculative that Mannkind will be able to recognize some sales at some point. Even at $20 or $30 million, that's not a small number. "At the same time MannKind had $5.9 million in deferred product sales of Afrezza, and there was no recognized revenue. The first quarter had $7.1 million in deferred product sales." ( 247wallst.com/healthcare-business/2015/08/10/mannkind-cheered-despite-lower-afrezza-shipments/#ixzz3nk0oiU). |
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Post by compound26 on Oct 5, 2015 17:15:00 GMT -5
Could it be that Mannkind is waiting for booking the $25 million manufacturing milestone payment so that they can announce the debt settlement together with the booking? According to this article, "the Goldman Sachs team thinks the insulin maker could receive another $25 million milestone payment from Sanofi at some point during the third quarter in connection with the manufacturing of Afrezza." |
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Post by compound26 on Oct 5, 2015 15:04:30 GMT -5
I have compiled my responses to AF's article together as follows for your easier reading (apology for the repetition as I hate a misleading piece like this by AF): Compared with a debt for equity swap at a low price for the equity, I would much prefer a repayment of the existing debt with cash. Here is what I wrote in Why Piper Jaffray is Wrong on Mannkind in regarding to the debt issue. This situation has not changed at all and my assessment remains the same. HERE IS MY ASSESSMENT OF THE DEBT SITUATION USING THE NUMBERS FROM MANNKIND'S LAST CONFERENCE CALL:Per Mannkind’s last conference call, Mannkind has $107 million cash, $30 million credit line with Al Mann, $147 million available under the credit line with Sanofi, totally $284 million. According to this article, Mannkind will like receive $25 million manufacturing milestone this year. It is also expected that Mannkind will get $50 million in total approval milestone for approval in EU and Japan. One would expect the EU and Japan approval to be cleared within two years. Adding this additional $75 million to the $284 million, that’s $359 million. Per Mannkind’s last conference call, Mannkind’s quarterly loss was $28.9 million last quarter. So at this rate, Mannkind has enough cash to go through the next three years without capital raise. Even if we assume Mannkind does not refinance some of the notes that were due in 2015 (say $60 million) and pay that part off with available cash, Mannkind still have enough cash to go through two and half years without the need of raising cash. This does not take into account sales ramp, additional milestone payments from Sanofi and potential partner payments for other Technosphere applications. ALTERNATIVELY, HERE IS MY ASSESSMENT OF THE DEBT SITUATION GOING BY AF’S CASH BURN RATE, WITHOUT CONSIDERING THE SANOFI FACILITY:Per Mannkind’s last conference call, Mannkind has $107 million cash, and according to this article, Mannkind will like receive $25 million manufacturing milestone this year. That will lead to a total available cash of $132 million. Even if Mannk paid off $64 million with cash and burned another $13 million cash in the third quarter, that will leave Mannkind with $55 million available cash, plus $30 million credit line with Al Mann, at the end of the third quarter, and $42 million available cash, plus $30 million credit line with Al Mann, at the end of the fourth quarter. At $13 million per quarter, Mannkind needs not worry about raising additional cash for 2016.
And most likely, within 2016 or at the beginning of 2017, Mannkind will receive either all or part of the milestone payments for EU and/or Japan approval. That will support Mannkind’s operation through 2017. This does not take into account sales ramp, additional milestone payments from Sanofi and potential partner payments for other Technosphere applications. By that time, what will be Afrezza’s ramp-up, quarterly sales income, and sales-related milestone payments? And milestone payments for other Technoshere applications? Let’s wait and see.
ADDITIONALLY, NOTE THAT IN THE LANGUAGE QUOTED BELOW, AF SNEAKILY AND MISLEADINGLY TOOK AWAY $25 MILLION FROM MANNKIND'S CASH BALANCE. "The problem for MannKind is that it can't really afford to spend cash to settle old debts. The company had $107 million in cash on hand as of June 30, of which $25 million is restricted and cannot be touched due to other outstanding debt obligations. Subtract another $64 million to satisfy current debt holders reduces MannKind's cash balance to $18 million." Even if we assume that $25 million is restricted and can not touched, it is still in the balance book of Mannkind. So that, if we subtract $64 million from Mannkind's cash balance, MannKind's cash balance is not reduced to $18 million as AF claimed, but $43 million (with $25 million restricted, assuming what AF claims is true). There is huge difference between $18 million and $43 million. Adding in the $25 million manufacturing milestone payment that Mannkind is expected to receive, then it is $18 million [the picture AF paints] vs $68 million [the reality] (18 million +25 million (restricted) +25 million (milestone)) million. You see the difference between what AF claims and the reality? |
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Post by compound26 on Oct 1, 2015 14:48:19 GMT -5
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Post by compound26 on Oct 1, 2015 10:20:00 GMT -5
My recommendation is take three deep breaths, carefully re-read the actual article from the local business journal written by the political reporter and find something meaningful to focus on until the next quarterly earnings call. The use of the misleading headline words "third round" is the key. If it is deemed material by MNKD, a press release will appear. Unless that occurs, the lack of specifics in this report constitutes vague and unbalanced reporting that should be treated in the same way as other FUD. The short sided shills don't need our help. Chris, totally agree. Note what the last paragraph of the article says: Pfeffer noted that the company has closed its facility in Paramus, N.J. and moved certain functions from its Valencia, California, headquarters to the Danbury facility, which is located on Casper Street near the city’s downtown. A number of the local employees who have been laid off, he said, were short- term transfers from the New Jersey facility.
Others laid off at the California facility, he said, are being replaced with new hires at the Danbury plant. |
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Post by compound26 on Sept 30, 2015 23:04:52 GMT -5
Shkreli is a low life, but MNKD gave him the ammo to take them down. The delay was the fault of management not some low life short. Would love to hear your argument but I'll have other business for several days. So, how could mgmt be responsible for someone hijacking the Afrezza approval while clearly standing to profit from the same? Or are they all "in cahoots"  One thing I can tell you for sure, is that very likely articles, books, maybe a film will be made about this saga. The whole concept of inhaled insulin is almost 100 years old, three giant pharmas spent billions to implement in all the wrong ways, and Al Mann approaches the issues as a competent scientist/engineer, goes with the monomer. He's a hero. BUT.... these greasy, greedy Wall Street hedge fund types smell money and create a massive smear campaign to make lot of money using the techniques they know so well. How about we start a kickstarter campaign to get some money, compile all the facts with timeline, names, facts, government records, money trails, audits, and make a documentary. Any ideas on how to proceed, compound26 (you are our counsel ;-) should you choose to accept this mission) Let's expose not just Adam (a la exposeadam.com ) but the whole gang. But seriously, I can't possibly believe that anyone internal to Mannkind has any complicity here. Please let me know what you think, we need some light here, sunlight is the best disinfectant and usually works great on cockroaches too (although the ones on Wall Street might have superpowers). What do you think, purge ? Anyone else? This is long winded and it's not pumping or bashing, rose colored glasses or fatalistic nihilism. This is getting real. Great product, unparalled first in class, only in class delivery and action that is only superseded by a healthy, functional pancreas, that produces not only increased longevity and quality of life by normalizing blood sugar levels, but also avoids extremely dangerous hypoglycemic episodes often seen with RAA prandial insulins. What am I missing here??? Sorry about the long-winded post. mssciguy, we will worry about Shkreli once Afrezza has achieved success. |
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Post by compound26 on Sept 30, 2015 22:04:48 GMT -5
This is meant to be long-winded and comprehensive. Let me start this off with a few disclosures: • I am long MNKD for about a year and have done countless hours of due diligence before I decided to invest. • I am a long-term focused investor. I make few trades, so it takes a long time for me to pick a company. I like to set & forget and to buy the dip. • I have no idea what's going to happen from day to day, and quite frankly, I don't care. I'm confident in the long-term prospects • My career is in marketing -- specifically, lead generation/advertising. • Yes, I am a newbie poster here, but I've lurked for a while. You can find me on stocktwits and twitter under the same username. Coming from a marketing/advertising standpoint, this roll-out is great thus far (for Afrezza's success -- not short term stock traders). I believe Sanofi's strategy for rolling out Afrezza follows a simple, structured plan. I believe the 5 steps are: 1. Completion of the CLAMP Study (https://clinicaltrials.gov/ct2/show/NCT02470637) 2. Apply for a new, better label (allows them to make bold advertising claims) 3. Use the new label/clamp study results to gain Tier 2 insurance coverage 4. Gain approval in other countries 5. Once insurance mostly covers Afrezza, Sanofi will hire more sales reps and begin a "full-on" DTC campaign. Yes, Sanofi definitely needs some weapon to move the insurance. It appears the insurance coverage hasn't moved that much in the last few months (comparing with Toujeo). Here is what I got from Formularylookup.com: Formularylookup on 08.07.2015. Insurance Status Toujeo Afrezza Preferred 28% 4% Covered 23% 21% Restricted 28% 43% Not Covered 22% 32% Formularylookup on 08.24.2015. Insurance Status Toujeo Afrezza Lantus Novolog Levemir Preferred 32% 4% 89% 66% 86% Covered 19% 22% 6% 5% 2% Restricted 27% 42% 4% 15% 9% Not Covered 22% 32% 1% 13% 3% Formularylookup on 09.30.2015. Insurance Status Toujeo Afrezza Preferred 33% 4% Covered 26% 22% Restricted 27% 42% Not Covered 14% 32% |
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Post by compound26 on Sept 30, 2015 10:53:04 GMT -5
compound26 I agree! I believe the $370M number I quoted refers only to advertising. The headcount included would push it much higher than that. Great points. cfield23, yes, agree. Most reports have cited a $2.8 billion total cost for pfizer in Exubera. |
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Post by compound26 on Sept 30, 2015 10:27:16 GMT -5
Advertising Failure Case Study: Exubera
One of the reasons Exubera failed was due to it's huge ($370M in ads) overhead cost. It literally put a time limit to the success because scripts HAD to increase in order to justify continual spending. Because scripts didn't increase quickly, they had to make a rather quick/abrupt decision about keeping the drug. Now it’s not quite fair to compare Afrezza and Exubera and attribute advertising as the sole reason for failure. The actual Exubera insulin was average to inferior as compared with the RAA’s available at the time. The delivery device was also the size of a new 3 pack of tennis balls! These most certainly didn’t help the success. It failed because while it was better to inhale than to inject, it was much harder to get the insulin and it was less effective. The hassles outweighed the benefits by a wide margin. Plus, Pfizer spent so much up front that they lost all possible response agility. They weren’t able to listen to the problems and fix them. They were bleeding money. Quote Source: www.wsj.com/articles/SB119284606824265824Quote Source: www.pmlive.com/pharma_news/pfizer_scraps_exubera_9168?SQ_DESIGN_NAME=2& cfield23, great post! Agree this should be post of the year. I totally agree with cfield23 that Pfizer made a mistake in being too aggressive in the marketing of Exubera. Coincidentally, the numbers I assumed in my post (quoted below) turns out to be pretty close to the USD 370 million cited in cfield23's post. Sept 21, 2015 11:42:35 GMT -5 compound26 said: Quoting: Sept 21, 2015 11:25:12 GMT -5 zieg said: Just found out from my friend who attended: Total count of reps in Vegas was just over 200. These reps only sell Afrezza.
(Frankly, I thought it would be more). Assuming this is the case, I am fine with the number on the sales force (200). That means we have an average of 4 reps in a state, with a big state having 4+ and a small state having 4-. Based on this article, the 100th largest city in the US has about 200,000 people. That means for each of these largest cities, there will be at least one rep covering it. In the bigger cities, we apparently have more than one reps covering them. It appears it will take some time for each rep to visit each of the endos and PCPs he/she covers, but if there are 5 of them covering a state, it is doable. I think Sanofi is taking a slow and steady approach, that works and I think that is a prudent approach. This will ensure that Sanofi won't be pressured to see significant sales of Afrezza in a short time frame (as compared with Pfizer in the case Exubera). That will in turn give Sanofi's Afrezza team sufficient time to carry out their strategic plan step by step, without hurry or pressure. I think Pfizer was too aggressive with Exubera (i.e., they had too many people working on the sale, but did not give it enough time; with too many people on the sale, the cost of promoting it was very high to Pfizer). Per this article (of MAY 11, 2007), "Bloomberg News reports that some 2,300 Pfizer sales representatives have been promoting Exubera to more than 5,000 doctors. But Pfizer has also hired approximately 900 additional, part-time diabetes educators to explain the product to doctors and patients, and more will be added, although the company wouldn't say how many." So in total, at one point Pfizer had 3,000+ people promoting Exubera, yet within five month of this article, Pfizer abandoned Exubera. Apparently, Pfizer put in too many people, but did not give enough time. So if Sanofi has 200 rep on Afrezza now and Pfizer had 3,000+ people promoting Exubera, cost wise, just looking at the headcount cost, Pfizer was running a 10+ times that of Sanofi. The cost of Pfizer promoting Exubera (again, just looking at headcount) for 1.5 years was equivalent to Sanofi promoting Afrezza for 15+ years. Assuming a drug company runs a $100,000 (a random number picked just for illustration purpose) headcount cost for each rep, at 200 people, Sanofi runs at $20 million per year for headcount cost for Afrezza, and at 3,000+ people, Pfizer ran at $300 million per year for headcount cost with Exubera. Now I see why Pfizer did not give Exubera more time. It was too expensive for Pfizer to continue the program at that scale much longer. The more I looked at the numbers, the more I think Sanofi's approach is the more prudent approach. |
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