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in4thelonghaul

in4thelonghaul
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  • A New Price Estimate Now That Afrezza Is Launching [View article]
    Sorry, that was supposed to read "...the huge [pre-diabetic] population of roughly 86 million in the US...."
    Jan 26, 2015. 07:06 PM | 2 Likes Like |Link to Comment
  • A New Price Estimate Now That Afrezza Is Launching [View article]
    Like your response, except a realistic market capture for Afrezza, on a global basis, is far more than 3 million. Sanofi's "initial" target population is 3.1 million in the US alone. There are roughly 15 to 16 million diabetics using only oral meds, and 40% of those are failing significantly to maintain their BG levels within acceptable range....so you have those 6 million who could greatly benefit from Afrezza, plus the roughly 1.5 million, out of the current ~ 4.6 million current US RAA injectors, who surveys have indicated simply dread their need to inject 3 or 4 times per day. Then you have the huge population of roughly 86 million in the US (latest figures from the CDC). Up to 30% of these individuals, without effective intervention, will develop full-blown diabetes within 5-years.

    It is pretty easy to see that when Sanofi said "initial" US target population for Afrezza is 3.1 million persons - they truly meant "initial".

    The actual US adopters of Afrezza, given a good number of years time for its effectiveness to become widely known among physicians and the diabetic community, could easily reach 9 million. With the estimated global diabetic population in the vicinity of 365 million (depending on statistical source), and currently increasing at ~ 6.5 %, one can easily see how Afrezza adopters globally can eventually surpass 20 million.
    Jan 26, 2015. 06:42 PM | 6 Likes Like |Link to Comment
  • A New Price Estimate Now That Afrezza Is Launching [View article]
    I find your choice of a PE of 15 as valuation metric to be bordering on absurdly conservative....so much so as to be unrealistic and misleading.

    Let's look at some PE of a few other in the biotech/pharma space for comparison.

    PCYC, a dev. biotech similar to MNKD, with revenue, according to Yahoo, of approx. $563 million, but with a profit margin of only 15%, sports a Trailing PE of 147 and a Forward PE of 295!

    REGN, with revenue of approx. $2.63 billion and a profit margin of approx 13%, sports a Trailing PE of approx. 145 and a Forward PE of approx 36.

    CELG, more established, with a revenue of approx. $7.34 billion and a profit margin of approx. 22%, sports a Trailing PE of ~ 65 and a Forward PE of ~ 25.5

    Sanofi, a Big Pharma thrown in just for comparison, has a revenue of approx. $38 billion and profit margin of 'only' approx. 12%, sports a Trailing PE of 26.5 and a Forward PE of approx. 14.5

    So you used a PE metric similar to that commonly applied to Big Pharmas to base your price projections for MNKD share price on? Why would anyone intentionally do that? You are an experienced SA contributor and there is no way you did that by accident.

    Try re-figuring your estimates using a realistic PE commonly used for developmental biotechs, or better, use a P/S of say 16 (similar to that of REGN) or a P/S of 21 (similar to that of PCYC).

    * I find your use of a '15 PE' absurdly misleading.
    Jan 26, 2015. 11:44 AM | 18 Likes Like |Link to Comment
  • A New Price Estimate Now That Afrezza Is Launching [View article]
    *Another view, by 'finallyinthemoney' on the YHOO MNKD board - estimates MNKD NPV at $22.15

    "Recently a poster mentioned a quote of approx. $235 for a 90-count box of 4 unit Afrezza cartridges...so I will calculate from that and assume that is a 1-month supply.

    $235 X 12 = $2820.00 annual...rounded to $2800. $2800.00 X Sanofi's 'initial' US target population of 3.1 million Afrezza adopters = $8.68 billion to Sanofi. I will use 24% to approximate Matt's claim of a near 'mid-twenty percent' revenue royalty being the equivalent of the 35% profit sharing arrangement btwn MNKD and Sanofi.
    So, we take $8.68 billion X .24 = $2.08 billion falling to MNKD. Applying the P/S (P/Rev) metric of 16, as REGN is sporting currently, results in $33.28 billion. All left to do is divide by number of MNKD shares outstanding. I decided to use a 475M fully diluted share count (adjust up or down a bit according to your view of the true shares outstanding). So, $33.28 billion divided by 475 million shares = $70 p/share.

    *Utilizing a P/Rev of 18 yields a s/price of ~ $78.82
    *Utilizing a P/Rev of 21, similar to that of PCYC, yields a s/p of $91.96

    Assuming that Sanofi will be able to meet their 'initial' US target....then what is a realistic NPV for MNKD shares? Of course this depends on the time to reach their 3.1M adopters and the discount one wishes to apply to each year. So going with the $70 p/sh (P/Rev of 16), assuming 4 years to target achievement ($70 by 2019), and utilizing a 25% discount p/yr results in a NPV of $22.15

    *Important - we are expecting Afrezza to be available in Europe, and who knows where else, by probably sometime in 2017....these share price projections don't include the additional revenue from expected ROW Afrezza future sales, nor do they attempt to figure for added eventual income from future products or licensing deals involving the Technosphere platform technology.

    One can argue that it won't take 4 years to reach SNY's target, and/or that a 25% discount is too high - regardless, MNKD is obviously way undervalued at ~ $5.75"
    Jan 26, 2015. 10:53 AM | 15 Likes Like |Link to Comment
  • Update: A Dangerous Time To Be Short MannKind [View article]
    I believe he is 90 years young and still going strong.
    Jan 12, 2015. 10:26 PM | 1 Like Like |Link to Comment
  • Update: A Dangerous Time To Be Short MannKind [View article]
    Okay Trevor....let's take a 'best case' scenario which would support 'Feinlawyer's statement of a 'possible' MNKD share price of $100 'or more' within a 'few years' time.

    Sanofi has already stated that their 'initial' target population for US sales of Afrezza is 3.1M users - again that is "initial". Supposing Afrezza sells for $2200 annual per user (I have seen estimates for the annual cost of Afrezza from $1700 to $2800). Avanir Pharmaceuticals (AVNR) currently appears to be sporting a P/S metric of 28.5 (YHOO figures btw). So let's just do some simple math. 3.1 million users of Afrezza times $2200 annual equals $6.82 billion revenue to Sanofi from just reaching their initial US target population (granted they did not provide a timetable for achieving this goal). Mathew Pfeffer, CFO of MNKD has previously stated that their deal with SNY is the equivalent of a "mid-twenty percent" revenue stream. So let's take Sanofi's assumed $6.82 billion from above and multiply by say .24 (just a touch under the mid-twenty percent Matt alluded to). This gives us roughly $1.637 billion falling to MNKD. Now let's take that ~ $1.637 billion and multiply by a Price to Revenue (P/R) metric of 28 (similar to the P/S metric of AVNR). This results in a figure of approximately $46 billion. Now let's simply divide that $46 billion by say 450 million shares of MNKD (I think this ballpark for MNKD shares outstanding...fully diluted - if it's off, one would have to adjust up or down a bit accordingly). This results in a MNKD share price of approx. $102.

    Now one can easily argue that the P/R metric I used is quite excessive, and I will grant that it is at the upper end of what one generally encounters....and yet if AVNR, a company yet to turn a profit, is sporting such a valuation, then why not MNKD, a company which will likely not even pay taxes for the first couple years following Afrezza launch? So, I think 'few' usually means at least 3 years....thus one can see that Feinlawyer's projections are indeed plausible; mind you that this exercise is based only on Sanofi's estimates for initial US sales, and thus doesn't include any Afrezza sales which might be achieved ex-US in the first 3 years following launch. Also, these figures don't reflect any additional share price value for the full ~ $900 million in milestone payments to MNKD, nor is there any attempt here made to value any additional revenue to MNKD which the Technosphere platform might bring in.

    Assuming say 500,000 Afrezza adopters by end of Q4/2015, and then an additional roughly 275,000 users every quarter for the next 9 to 10 quarters - well there you have it. And heck, maybe it takes 4 years instead of 3, or maybe Afrezza becomes available in Europe by Q1 2017, or maybe in Europe and China as well. Hmmm, now that I think of it, given say 4 years from launch, maybe $100 p/share is too conservative; seems I recall MNKD has been working on a Technosphere based revolutionary pain reliever for quite some time.
    Jan 12, 2015. 09:27 PM | 4 Likes Like |Link to Comment
  • MannKind Earns $50 Million in Milestone Payments From Sanofi [View article]
    Let's not be too hard on the likes of Cramer and Karp......if not for their efforts we likely wouldn't have had the opportunity to add shares down nearly as low; and who would willingly want to be like that? Notice the short count is only a bit short of all time highs; gonna be pretty funny to watch those guys fighting for shares with the long inst. and retail once positive sales trajectory indicate huge market capture.
    Jan 8, 2015. 09:50 AM | 1 Like Like |Link to Comment
  • One Internist's Glance At MannKind's Afrezza [View article]
    Actually you can indeed do just that.
    Jan 5, 2015. 08:39 PM | Likes Like |Link to Comment
  • One Internist's Glance At MannKind's Afrezza [View article]
    Great comments sayhey44....a real shame this exchange took place off-camera. It appeared tome that the FDA went in with the intent to torpedo Afrezza if they could, but instead the AdCom members totally shut them down.
    Jan 5, 2015. 08:27 PM | 1 Like Like |Link to Comment
  • One Internist's Glance At MannKind's Afrezza [View article]
    Excellent point jayn: "In that context, the afrezza A1c results were at a disadvantage vs patients who were simply continuing usage of their injected insulins, with years of experience. It is remarkable that afrezza achieved non-inferiority."

    This matches closely with what 'affrezzauser' a verified AFREZZA trial participant, has reported re. his experience.
    Jan 5, 2015. 08:16 PM | 2 Likes Like |Link to Comment
  • One Internist's Glance At MannKind's Afrezza [View article]
    Reply to MedGuy103...

    My reading indicates, among the US insulin injecting population, those 'highly averse' to injections is about 30% (not 20%).....the other 70% almost certainly have varying degrees of 'comfort' with their injecting regimen; likely 50% (my speculative assumption based on common sense) of that remaining 70% would readily switch (assuming no underlying contraindicating med. condition) once they are convinced Afrezza provides at least roughly equal efficacy. Besides the 40% of diabetics currently achieving unsatisfactory BG control on oral meds alone (6 million..give or take a bit), the 'elephant' in the room is of course the huge pre-diabetic population of 75 to 80 million US; only time and future Sanofi efforts will decide the outcome there, but you can be sure SNY is highly motivated to demonstrate Afrezza efficacy in that group.
    Jan 5, 2015. 07:08 PM | Likes Like |Link to Comment
  • One Internist's Glance At MannKind's Afrezza [View article]
    Sanofi has indicated surveys demonstrate that the majority of physicians do not share your skepticism regarding Afrezza, and it would appear the near unanimous positive AdCom vote demonstrates a widespread recognition, on the part diabetic care experts, of the benefits which Afrezza brings to the treatment table...benefits over and above existing RAAs.

    *Maybe you just tend more toward the 'luddite' tradition - that's okay btw.....it takes all kinds, but you will either adapt or be relegated to history's medical scrapheap; Afrezza will be quickly recognized as a revolutionary 'paradigm shift' improvement for the majority of insulin supplementing diabetics. Honestly doc, for equal or superior (according to many Afrezza trial participants) efficacy, who, besides those medically contraindicated, would willingly choose to continue stabbing themselves in the belly 3 or 4 times per day? My guess is that as reports of Afrezza's convenience and superiority begin to circulate among diabetics, the adoption rate will go geometric. My guess is also that within 4 years, Sanofi will have study results indicating that the preferred front-line course of treatment for 'pre-diabetics' will be Afrezza. Only time will tell.
    Jan 4, 2015. 09:30 PM | 3 Likes Like |Link to Comment
  • One Internist's Glance At MannKind's Afrezza [View article]
    Exactly....excellent response!
    Jan 4, 2015. 08:51 PM | 2 Likes Like |Link to Comment
  • One Internist's Glance At MannKind's Afrezza [View article]
    "There isn't a compelling improvement in clinical efficacy or patient adherence"

    Oh really....it would appear those with first-hand experience using Afrezza, the trial participants who appeared before the AdCom, don't share your opinion - nor, judging by the near unanimous positive vote outcome, do the AdCom members themselves agree with you.

    Hmmmm, it's tough....a doc with absolutely no experience with Afrezza vs. actual users and those AdCom physicians with expertise in the field who heard their testimony and reviewed all the information from the trials - gee, I think I will go with the opinions of those who actually have the first-hand experience.

    Oh and btw....about this comment of yours in response to a previous comment: "Trading one side effect for another would really only be worth it if efficacy were significantly improved, in my opinion." What side effect specifically were you referring to? Can't be say the transient cough which some Afrezza users experience vs. say the long-tails of existing rapid acting insulins (btw...Afrezza is a good bit more 'rapid' acting than the competition's 'rapid' acting). Go ahead doc....elaborate about Afrezza's side effects which you wouldn't deem worth 'trading' for the side effects of other more established rapid acting insulins - enlighten us please.

    Those with first-hand experience utilizing Afrezza seemed to disagree with you. I wonder how long your patients, those who come to you expressing a desire to try Afrezza, will stay with you when you tell them you just aren't really interested in them switching because you just don't think its worth it to you?

    I have heard of a study which indicates roughly 30% of current US diabetics utilizing rapid-acting insulin absolutely detest their need to inject; bet the majority of the other 70% are only a little less motivated to abandon the need to stab themselves in the stomach 3 or 4 times per day. Truly hope, for your sake, that insulin injecting diabetics are not a sig. percentage of your practice; but you won't have to worry about the smokers or those with lung disease - they will stay with you.
    Jan 3, 2015. 09:06 PM | 7 Likes Like |Link to Comment
  • Losing Confidence In MannKind [View article]
    From prior reading, and statements out of MannKind, there are approximately 4.5 million US diabetics currently utilizing RAA insulin, with approximately 30% of those who dread the need for their current injections, and you can pretty much guess the remaining 70%, while they may have grown to accept the necessity without dread, don't exactly look forward to the discomfort and inconvenience involved. There are also approx. 6 million diabetics who are seriously failing to control their BG levels with orals alone....obviously these are T2s - my guess is a large percentage of these individuals will welcome the opportunity to achieve control using Afrezza while avoiding injections. Afrezza will be priced comparably to insulin pens....so where pens are paid for in Europe, Afrezza should also be covered - apparently Sanofi isn't worried since the latest I heard is they expect European approval in 2017 or sooner.
    Dec 5, 2014. 05:10 PM | 1 Like Like |Link to Comment
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