Seeking Alpha

in4thelonghaul

in4thelonghaul
Send Message
View as an RSS Feed
View in4thelonghaul's Comments BY TICKER:
Latest  |  Highest rated
  • 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 | 8 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
  • Losing Confidence In MannKind [View article]
    My comment appears to have been deleted by SA, likely at the request of the author -

    SNY has recently stated they project $6.2 billion in US revenue from Afrezza, MNKD CFO has stated their partnership deal equates to a "mid-twenty" percent revenue split falling to MNKD. So, 25% of $6 billion is $1.5 billion.
    Dec 5, 2014. 11:46 AM | 2 Likes Like |Link to Comment
  • Losing Confidence In MannKind [View article]
    *Noticed you or SA deleted my response - so I will try again.

    Wow, a rather sparse article, if you can even call it that....did you even bother to check on the increasing short interest? How about mentioning that recently Sanofi provided their projections that Afrezza will pull in roughly $6.2 billion on just their primary US target population of 3.1 million US diabetics?

    MNKD's CFO M. Pfeffer has stated the recent deal with Sanofi is equivalent to a mid-twenty percent revenue split for MNKD. Thus, assuming SNY knows the diabetes/insulin market reasonably well and their projections are relatively accurate, the $6.2 billion equates to roughly $1.5 billion (in time) to MNKD, again assuming Mr. Pfeffer's comments are accurate. Taking that $1.5 billion (just US sales btw), and applying a revenue multiple of 15 results in $22.5 billion....now dividing by 450 million shares results in a share price of $50. Assuming Sanofi's target population capture is achieved by say 2019 (and I expect it will actually be achieved much sooner), and applying a 15% annual discount results in a NPV for MNKD shares of roughly $26.

    We can likely expect Afrezza to be available in Europe sometime in 2017, if not sooner, so one can make their own assumptions about how those sales will add to the figures presented here re. MNKD's projected share price from US sales, and then there is the ROW (rest of world) sales above and beyond US and Europe to figure in.

    *Of course were one to utilize a P/Rev multiple of say 20 instead of 15 (keep in mind that MNKD won't be paying taxes for quite awhile and the use of fast or rapid acting insulin is increasing at roughly 10% annually) then these share price figures can be adjusted upward 25% resulting in a NPV of MNKD shares of $32.50

    The above share price projections don't even consider the roughly $900 million (from memory) in milestone payments which MNKD will receive from Sanofi over the coming few years, nor is any value ascribed to the Technosphere platform...though Matt Pfeffer has recently indicated that in February he expects to update shareholders on a couple of potential opportunities in this area.

    So honestly, if your 'confidence is fading' of late, maybe it is simply because you don't know how to perform proper due diligence.

    Personally, I consider a stock selling for 75% discount to NPV, with multiple irons in the fire soon to be announced, a Screaming Buy - but that's just me; maybe you should place your bets with CDs or maybe in US Treasury Bonds since biotech is definitely no place for lightweights who lose their confidence every time a short interest spike causes their stock to drop a bit, or an insider executes a planned sale for that matter.
    Dec 5, 2014. 11:08 AM | 4 Likes Like |Link to Comment
  • Losing Confidence In MannKind [View article]
    Sanofi has recently stated their projections for US sales of Afrezza to be $6.2 billion. MNKD's CFO has stated the profit sharing deal with Sanofi is equivalent to a 'mid-twenty' percent revenue split (25%). 25% of $6.2 billion is ~ $1.5 billion. As I stated, these projections are dependent on the accuracy of the statements coming from Sanofi and MNKD's CFO - if the deal results in less the 25% falling to MNKD, say it actually works out to 22.5%, then of course the projections would have to be reduced by a corresponding percentage (in this example 25% vs say 22.5%...the NPV reduction would be 10%). We can only project ballpark figures at this time since we have been given so little to go on and of course sales haven't even commenced.
    Dec 5, 2014. 09:36 AM | 5 Likes Like |Link to Comment
  • Losing Confidence In MannKind [View article]
    Wow, a rather sparse article, if you can even call it that....did you even bother to check on the increasing short interest? How about mentioning that recently Sanofi provided their projections that Afrezza will pull in $roughly $6.2 billion on just their primary US target population of 3.1 million US diabetics?

    MNKD's CFO M. Pfeffer has stated the recent deal with Sanofi is equivalent to a mid-twenty percent revenue split for MNKD. Thus, assuming SNY knows the diabetes/insulin market reasonably well and their projections are relatively accurate, the $6.2 billion equates to roughly $1.5 billion (in time) to MNKD, again assuming Mr. Pfeffer's comments are accurate. Taking that $1.5 billion (just US sales btw), and applying a revenue multiple of 15 results in $22.5 billion....now dividing by 450 million shares results in a share price of $50. Assuming Sanofi's target population capture is achieved by say 2019 (and I expect it will actually be achieved much sooner), and applying a 15% annual discount results in a NPV for MNKD shares of roughly $26.

    We can likely expect Afrezza to be available in Europe sometime in 2017, if not sooner, so one can make their own assumptions about how those sales will add to the figures presented here re. MNKD's projected share price from US sales, and then there is the ROW (rest of world) sales above and beyond US and Europe to figure in.

    *Of course were one to utilize a P/Rev multiple of say 20 instead of 15 (keep in mind that MNKD won't be paying taxes for quite awhile and the use of fast or rapid acting insulin is increasing at roughly 10% annually) then these share price figures can be adjusted upward 25% resulting in a NPV of MNKD shares of $32.50

    The above share price projections don't even consider the roughly $900 million (from memory) in milestone payments which MNKD will receive from Sanofi over the coming few years, nor is any value ascribed to the Technosphere platform...though Matt Pfeffer has recently indicated that in February he expects to update shareholders on a couple of potential opportunities in this area.

    So honestly, if your 'confidence is fading' of late, maybe it is simply because you don't know how to perform proper due diligence.

    Personally, I consider a stock selling for 75% discount to NPV, with multiple irons in the fire soon to be announced, a Screaming Buy - but that's just me; maybe you should place your bets with CDs or maybe in US Treasury Bonds since biotech is definitely no place for lightweights who lose their confidence every time a short interest spike causes their stock to drop a bit, or an insider executes a planned sale for that matter.
    Dec 5, 2014. 09:01 AM | 21 Likes Like |Link to Comment
COMMENTS STATS
289 Comments
570 Likes