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MannKind - Afrezza Scripts Remain Flat; Cash Has Better Options Now

Spencer Osborne profile picture
Spencer Osborne


  • Afrezza scripts come in flat at just under 430.
  • Q1 scripts remain lower than previous quarter.
  • Better ATM partner potentially eases cash overhang slightly.

MannKind (NASDAQ:MNKD) investors have seen a busy week with this company. Management announced its earnings on Tuesday, on Wednesday the company announced a new ATM facility with a new and more visible brokerage house, and on Thursday the company announced that it is initiating a phase 1 clinical trial on an investigational drug for the treatment of pulmonary arterial hypertension. Friday is Afrezza scripts day, so here we are with the closing report for the week.

Afrezza sales for the week ending February 23 came in flat once again at just under 430 scripts sold. With 8 weeks of the quarter in the books, Q1 scripts stand at an aggregate total of a bit above 3,300.

Chart Source - Spencer Osborne

The quarter-over-quarter numbers have now improved a bit from last week's report, thanks to the corresponding week in the previous quarter containing the Thanksgiving holiday. At this stage the sales we have seen in Q1 are now tracking 2.7% lower than what was delivered in Q4. I expect that Q1 of 2018 scripts will end up ahead of Q4, but not substantially ahead. Q4 of 2017 had the "benefit" of some direct to consumer advertising that is much less present in the current quarter. I am projecting about another 3,000 scripts in the current quarter, which would bring the total to about 6,300 vs. the 5,700 delivered a quarter ago.

Chart Source - Spencer Osborne

On a year-over-year basis, we are seeing some numbers that at first blush appear impressive. Q1 of 2018 is currently pacing 73.15% higher than Q1 of a year ago. The revenue related to those scripts shows an even bigger delta thanks to new packaging that commands a higher price point per script. MannKind is getting some traction. It simply needs to step up in order to impress the Street and

This article was written by

Spencer Osborne profile picture
Spencer Osborne assesses equities in a data supported realistic manner that is often missing in analysis that the average retail investor receives. His analysis is what investors NEED to hear rather than what they WANT to hear. He believes that the foundation of an equity price is based on what is probable rather than what is possible, and the trade focuses on possible near term catalysts and news. Smart investing is understanding how the market works and how that market mentality impacts a given equity. Spencer believes that investors should model their expectations and maintain a critical eye on whether those expectations are being met. If an invesor finds herself making excuses for missing the mark, then they are losing objectivity.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (45)

Spencer I love that you are still updating like this. I have learned a lot not just about MNKD but about how to go about pricing a stock with unbias logic. Thank you for your consistent updates and wonderful analyses
Spencer Osborne profile picture
This move assists in near term debt. The Mann group debt needs to be addressed, but is not as critical as maturities that are closer in term. Shares are the currency of mnkd right now. It is dilution, but dilution is better than the alternative.
Can we now stop with saying how great this company is!!!
RisingSKEPTIC profile picture

Nrx = 227

Refills = 222

Trx = 449

Revenues = 522,000


Nrx = 232

Refills = 213

Trx = 446

Revenues = 499,000

How much did those commercials cost again?
Meet the new script numbers, same as the old script numbers.

How much does the sales force cost?
RisingSKEPTIC profile picture
"How much does the sales force cost?"???

better YET, how much does MANAGEMENT cost? Did you notice the contracts that were included at the end of the 10-K:

1) Courtney barton Chief Compliance Officer

...$250,000.00 a year

...MannKind Employee Bonus Plan, with a target bonus opportunity of 25% of annual earnings. Bonus awards will be based upon company-wide performance and your achievement of mutually agreed-upon milestones.

...MannKind's Equity Incentive Plan...we will recommend that you be granted a stock award of 84,800 and RSU’s 0f 61,800, comparable to grants made for other individuals in similar level positions throughout the company.

2) Patrick McCauley CCO


...the MannKind Discretionary Bonus Plan, with a target bonus opportunity of 50% of annual earnings.

...a one-time sign-on bonus in the gross amount of $50,000.00,

...we will recommend that you be granted an equity award of 180,100 units of Performance-based Stock Options which is comparable to grants made for other individuals in similar level positions throughout the company

3) DAvid Kendall


...a target bonus opportunity of 50% of annual earnings.

...sign-on bonus in the gross amount of $100,000.00..

...180,100 Restricted Stock Units (RSUs)

And MUSTN'T leave out the fringes:

"We have a substantial list of fringe benefits, including the following: 20 days PTO annually, which accrues on a bi-weekly basis; short term and long term disability insurance; company–paid life insurance; a 401(k) tax deferred savings program; flexible spending accounts; health, vision and dental insurance, Executive Medical Reimbursement plan and paid holidays which includes a full week in July and December for the holiday break."

So just THOSE three alone cost over a MILLION a year, and if you toss in BONUSES and BENEFITS, you're probably looking at close to TWO million a year PLUS they get SIX WEEKS of PAID time off!

In the MEANTIME, Mannkind SHAREHOLDERS get to DUMPSTER DIVE for meals and have to keep TRACK of which HOMELESS SHELTER will have room for them on any given day!

RisingSKEPTIC profile picture
"The going rate for participation..."???

I really don't care whether the guy is earning his pay or being "fairly" compensated or NOT! The SIMPLE fact IS that SILVER is crossing into HIS palm from the COMPANY that stands to BENEFIT from the HIS results!

He KNOWS that if he FAILS to produce a FAVORABLE result, then his supply of MONEY will likely be CUT OFF. He further KNOWS that if WORD gets around that he's FAILED to produce a FAVORABLE result for a pharma, he's at risk of losing the GOOD WILL of OTHER potential "benefactor" pharmas.

Slice and dice it as much as you want, there MUST be an element of BIAS once money changes hands:


"Pharmaceutical industry sponsorship and research outcome and quality: systematic review...

...Conclusion Systematic bias favours products which are made by the company funding the research."



"United States Private-Sector Physicians and Pharmaceutical Contract Research: A Qualitative Study...

...These findings suggest that private-sector physicians participate as PIs[principal investigators] in pharmaceutical clinical trials primarily for financial reasons and see themselves as trial practitioners and businesspeople rather than as scientists."

Personally, I'd rather have a SCIENTIST run a trial than a "business person"!

As far as, "...did you think the STAT study and statistical plan wrote themselves"? Most definitely NOT in this case! Rest ASSURED that the STAT study waswritten by SOMEONE wanting to produce FAVORABLE results for MNKD since:

1) it's a PILOT trial that lasted only 4 weeks -- no doubt because MNKD wanted the results ASAP for their next round of DILUTION

2) the "2 clinic, and 3 phone visits" are OBVIOUSLY meant to provide "coaching" to the afrezza arm since the lispro arm is simply continuing their usual course of therapy

3) the lispro arm is NOT required to check glucose at 1 and 2 hours post-prandial and "take necessary corrections at 1- and 2-hours after meals to optimize PPBG" -- obviously fine tuning the afrezza arm puts them at a decided advantage over the lispro arm for the "primary outcome measures" of "improved time in range" and "better post-prandial glucose excursion."

And did you NOTICE the PHRASING of the "primary outcome measures"? They say up FRONT that they are LOOKING FOR "improved" and "better" results from afrezza! NOT simply COMPARING the two, but are actually LOOKING FOR better results! That ALONE tells you that the thing is BIASED to START with!

WHOEVER designed it KNEW that the ONLY value of such a study would be CHUM to lure naive investors onto the MNKD hook, and looked to OPTIMIZE the probability of success in a short period of time..
RisingSKEPTIC profile picture
"I doubt he noticed, or even much remembers an amount that small."???

Well, the way I look at it is Dr. Garg got his medical degree from Punjab University in Chandigarh, India, and I'm willing to BET that the REASON he is still HERE and not back in good'ol Chandigarh is because of the MONEY!

And while he's not as BAD as Bruce Bode:


...or Steve Edelman:


...he's STILL managing to take home some pocket change and then some:


Then when you consider that, per "glassdoor":

"The national average salary for a Endocrinologist is $219,917 in United States. May 6, 2017"

..AND that he's an ACADEMIC endo who might make even LESS than THAT, then MAYBE some extra SILVER crossing his palms would be WELCOMED.

PLUS note that in 2015 he got only $41 for pumping afrezza while in 2016 he got $4,500, so who KNOWS how much he'd get if those "STAT" results turned out well. And the THING is, couldn't they have found someone who WASN'T on the Mannkind dole to do the study?
Investigators are like any other physician; they don't and can't always work for free. The going rate for participation on any advisory board ranges from $3,000 to $5,000 per day plus travel expenses, and hourly consulting rates are about 10% of the full day figures. Clinical trials normally start out with a full day planning session (usually a weekend) discussing all the various points of the protocol, inclusion/exclusion criteria, lab tests, imaging, and other testing. Then the prepared draft has to be proof-read by each principal investigator and those are frequently 75-100 pages long (and not a light read). That doesn't count the NDA, the investigator's brochure, IRB submission and other documents.

This looks like a stipend for a day or day and a half of consulting. It is not excessive by any industry standard where you easily find specialists getting six figure compensation from big pharma for speaker panels and such. Or did you think the STAT study and statistical plan wrote themselves?
RisingSKEPTIC profile picture
For anyone who wants to see the BEST way to make money off of MNKD -- first become a MD and THEN start PUMPING afrezza:


Hey! Wait a MINUTE! I recognize the TOP EARNER at $4,500 -- Satish Garg! Yeah! HE is the guy in charge of the "STAT" study:


"Responsible Party: Satish K. Garg, Professor of Medicine and Pediatrics, University of Colorado Denver School of Medicine Barbara Davis Center"

Well, isn't THAT special!

Okay! Show of HANDS! Who all here thinks that Dr. Garg being on the RECEIVING end of Mannkind LARGESSE just MIGHT make him feel COMPELLED to applying a soothing MASSAGE to any CONTRARY DATA that could put his CASH FLOW at risk?
Bobstert profile picture
You've made good points in the past, but IMO this isn't one of them. A payment of $4,500 in 2016 to an MD and Professor in a medical school? I doubt he noticed, or even much remembers an amount that small. I know some Professors in a mid-sized medical school, and they are considered failures if they are not pulling in millions of dollars of grants each year. (When I say 'know', what I mean is I was involved in evaluating that school's faculty a few years back and so I saw all their funding histories.)
RisingSKEPTIC profile picture
"Afrezza is the only non-injectable insulin product on the market."???

Yeahhhhhhhh...did you read the first article? The whole point was that Lilly's ULTRAFAST insulin finishes THREE phase 3 studies within the next 11 MONTHS. WHO is in a BETTER position to NEGOTIATE a PBM/insurer deal for ITS ultrafast insulin -- Lilly or Mannkind?

THEN, did you NOTICE that the SECOND article was about ULTRAFAST insulin and was from only six MONTHS ago, and what does it say but FIASP is the ONLY ultrafast insulin on the market!

NO mention of afrezza or Mannkind ANYWHERE! It's their FAILURE to even RECOGNIZE the EXISTENCE of afrezza that "puts things in perpsective."

And I CANNOT resist mentioning this -- can you GUESS what the ACTIVE ingredient is in Lilly's ultrafast insulin? Believe it or NOT, it's TREPROSTINIL:


How about THAT! Talk about SIX degrees of SEPARATION! Just imagine! Lilly will be gnawing on what LITTLE market afrezza has using the same drug that MNKD is trying to use to lure NAIVE investors! Somehow it seems so RIGHT!
RisingSKEPTIC profile picture
Oh, look! Lilly has its OWN "ultrafast" insulin phase 3 trial results coming up this year:


Gotta love that name -- "pronto":


"A Study of LY900014 in Participants With Type 1 Diabetes (PRONTO-T1D)"

I bet someone got a bonus for THAT. But what's REALLY funny is THIS article discussing it last August:


"Eli Lilly’s New Ultra-Rapid Insulin in the Works...

...While Fiasp is now the ONLY ultra fast insulin on the market, it won’t be the new kid for long. At least two other companies are hard at work bringing their own version of ultra fast acting insulin to a pharmacy near you."

HIGHLIGHTING is mine. And the TWO other companies referred to are Lilly and Adocia. Not ONE word about EITHER Mannkind OR afrezza.

Kinda puts things in PERSPECTIVE, doesn't it?
RisingSKEPTIC profile picture
Mannkind appears to be seeking yet another GIMMICK to take investors minds off the FAILURE of afrezza:


"Meet BluHale: Afrezza Inhaled Insulin's New Data-Tracking Accessory"

"California-based MannKind Corp. is currently conducting a limited pilot rollout of prototypes of BluHale, a small electro-acoustic device that snaps on the dry powder inhaler and measures the amount of insulin taken via the sound generated during use, which indicates the pressure of inhalation.

Currently, BluHale's main function is to flash a green light if the Afrezza is inhaled properly and a red light if it's not."

So afrezza is NO LONGER the simple "just breathe" and have your dinner, NOW you need yet ANOTHER device to make SURE your breathing PROPERLY???

Well isn't THAT just a little INconvenient! Pray tell, what do you do if, heaven forbid, you're so INEPT at BREATHING that you get a "red light"? Don't eat? Modify the meal? Take an additional dose of afrezza? How much? When?

And then Castagna provides some HUMOR:

"On the question of whether MannKind would need separate FDA approval for this BluHale technology, Castagna says they are still exploring that. "It's not all black and white on regulatory," he says, adding: 'A rushed timeline doesn't make sense for us."'

Yeah, "rushed" NEVER makes sense at Mannkind as long as they've got their hands deep in the pockets of NAIVE investors.

And wouldn't it be WISE to find out AHEAD of the game whether FDA approval is REQUIRED?

Cuz I believe it IS pretty much "black and white" that when using a MEDICAL DEVICE to make THERAPEUTIC DECISIONS, the FDA will DEMAND evidence that the device actually does measure the amount of insulin being removed from the device and does so with consistent accuracy -- essentially the same sort of requirements that a glucometer must meet.

If true, that means that the device MUST follow all the same RULES as glucometers to get approved:


In a way, the whole idea is rather INSULTING to diabetics given that the insert instructions are pretty CLEAR:

"Hold the inhaler away from your mouth and fully blow out (exhale).

Position Inhaler in Mouth

Keeping your head level, place the mouthpiece in your mouth and tilt the inhaler down towards your chin, as shown.

Close your lips around the mouthpiece to form a seal.

Tilt the inhaler downward while keeping your head level.

Inhale Deeply and Hold Breath With your mouth closed around the mouthpiece, inhale deeply through the inhaler.

Hold your breath for as long as comfortable and at the same time remove the inhaler from your mouth.

After holding your breath, exhale and continue to breathe normally."

How SLOW is someone who can't handle THOSE instructions and needs a DEVICE and special TRAINING?

Moreover, one of the original selling points was that it was SIMPLE -- "just breathe." But now Mannkind is basically broadcasting to diabetics and docs and investors that apparently the device is a lot more complicated that it looks and requires yet ANOTHER device PLUS a training program! Go figure!

Nope! It's like treprostinil -- just another gimmick trying to take investors focus off afrezza's total FAILURE!
I hate to say it but the day of the “detail man” is long gone and most large hospital system will not allow anyone in the door anymore. Mankind’s way of selling is not working
It would be interesting to know how many offices in the territories occupied by the top 10 or top 25 still see reps versus the "no see" policies in the rest of the offices. There are parts of the country where sales reps are persona non grata in nearly every office thanks to past industry sales practices. I doubt MNKD can make much of a dent in those "no see" geographies regardless of how talented the sales force is; a closed door does not write scripts.
Spencer Osborne profile picture

I always take what is said on Cafe Pharma with a grain (or better perhaps a shaker) of salt. That being said, there are nuggets of information within all of the discussions and rants.

Over the past week or so (if what is posted is to be believed), a sales director and 9 reps were fired.

"....... just fired a Regional Sales Director and nine sales representative without cause! No warning, no PIP, no explanation, just fired! Most of the fired reps were high performers. Everyone I know is updating their resumes in order to get out of this hell hole. This is the classic example of why reps leave a company...piss poor leadership! Before you decide to come to work for Mannkind reach out to a rep who has been here for a while and ask them about the culture and recent firings. You may find that a long term rep will be hard to find. When you interview, ask why there is a vacancy. Ask if anyone has ever been fired after one bad quarter. Ask if anyone has ever been let go without going on a PIP first. Ask if ..... ever worked one single day with the reps that he fired. Ask how Afrezza is doing after 4 years and three sales forces. ...... has alienated the sales force and will now see how well Afrezza will do after we all leave"

Now, there is always some shake-up when new leadership comes on board. That being said, shake-ups have a tendency to have a near term impact on sales. I am sure the goal is to create longer term success.

Earlier this year a comment on the board stated the following in answer to the question about whether or not MannKind was a good company to work for

"Let's see. Our leadership team tells us how valued we are and our CEO announces to the world at the conclusion of each quarter that we are out performing Sanofi and their 500 rep sales force but none of us received a raise for 2018! Our resources have been slashed. No patient teaches, no CDEs, severely reduced number of speaker programs. We are losing our car allowance which helps us pay for the cars that we purchased when we started with this company. We are paying more for our health insurance and will have to pay for the new cars that the company will be providing. Do you think Mike Castagna will be driving one of the new Subaru Legacys or does he still get a car allowance? Now here is the big one! Regardless of previous performance, if you have one bad quarter, you are placed on a PIP program! DOES IT SOUND LIKE A GOOD PLACE TO WORK"

As it turns out, a lot of what the rep above stated was in some form or another true.

Why do I bring this up? The reason is simple. Investors should try to keep their finger on the pulse of things. It is apparent that there is some shake-up of things in the sales force. Given the sales levels we have seen, it is perhaps needed. That being said, there could be root causes of poor sales that will not be solved by simply changing out the sales force itself.

On its face, it appears that there is some discord in the sales team. Pharma reps are a smaller world than many imagine. It is a cut throat business, and these reps will and do talk. I was actually stunned over the past year as to how few comments there were on Cafe Pharma. There now seems to be a bit of a string of people raising their voices there. Are there trolls there? yes. That is why I say take what you read with a grain of salt.
RisingSKEPTIC profile picture
I'm still waiting for SOMEONE to tell me what HAPPENED to Mannkind's ALLEGED donation of afrezza to the unfortunate hurricane victims in Puerto Rico:


"The donation will be delivered via American Family Airlift (AFA), a relief organization established by Hector Hoyos and Dr. Cesar Sierra —two Puerto Rican natives passionate about helping those in need."

In particular, I'm interested to see if ANY Puerto Rican diabetics actually TOOK the drug!

I recall the proboards' MNKD forum was FIRED up at the possibility of a big FEMA contract:

"Just heard on the morning news Puerto Rico won't have electricity for weeks and has no way to keep insulin refrigerated. Huge problem. Mannkind is on a Federal schedule through the VA. FEMA today could do an emergency purchase through this schedule to get the needed afrezza to save lives."

Well, Puerto Rico CONTINUES to be plagued by electricity problems:


"Another major blackout hits Puerto Rico after 2 power plants shut down"

Given such an obious DIRE need for afrezza, how MUCH are they actually USING down there? Where's the FEMA contract?
Rising and LFD one and the same
You don't think it's possible that there are two people who are bearish about MNKD?
Looking For Diogenes profile picture
The most amazing think about the insulin supply issue is the fact that MNKD has been unloading at a discount the raw insulin they have on hand-
1) Meaning they are selling more raw insulin than they are selling Afrezza--go figure!
2) Cardinal rule - Economics 101--when a company is selling their raw material supply, they don't have a market for their finished product.
RisingSKEPTIC profile picture
"...I estimate that cost to be somewhere between $2.7 million and $2.8 million per quarter."???

Anyone have any idea exactly what QUANTITY of insulin that is?
HSAIN profile picture
Deerfield is a Naive one for sure
Spencer Osborne profile picture

I would not call Deerfield Naive. They have a very proven track record of getting the money they are contracted to get and then some.
HSAIN profile picture
Spencer , i was being sarcastic to Risings comments which border on lunacy
RisingSKEPTIC profile picture
"Deerfield is a Naive one for sure"???

Uhhhhhhh...you DID notice -- didn't you? -- that Deerfield's loans were SENIOR and SECURED by EVERYTHING -- except the insulin inventory -- that Mannkind owns:

"In the event of certain future defaults under the foregoing agreements for which we are not able to obtain waivers, the holders of the 2021 notes and Facility Financing Obligation may accelerate all of our repayment obligations, and, with respect to the Facility Financing Obligation, TAKE CONTROL of our pledged assets, potentially requiring us to renegotiate the terms of our indebtedness on terms less favorable to us, or to immediately CEASE OPERATIONS. ...In the event we must cease operations and liquidate our assets, the RIGHTS of any holders of our outstanding secured DEBT would be SENIOR to the rights of the holders of our unsecured debt and our common stock to receive any proceeds from the liquidation."

HIGHLIGHTING mine! In OTHER words, Deerfield saw to it that they would effectively OWN the company if things headed south and Mannkind got into cash flow problems -- such as exist right NOW.

No, indeedy, I AGREE, they weren't at ALL naive!
Raymond Chung, CFA profile picture
let's not assume that UTHR is a pushover, as they have accomplished more with an inhaled treatment than many others who have tried. they are not standing still and also working on improving their inhaled therapy with their very deep pockets. treprostinol is also not the most easily delivered substance to ensure efficacy. furthermore PAH patients need above average support, so a solid infrastructure needs to be in place which costs more money. any company thinking about taking down UTHR needs to think how much real market share they can really gain and if it is a profitable enterprise as UTHR owns the majority of patients from low severity to high severity with four forms of delivering treprostinol.
RisingSKEPTIC profile picture
"...any company thinking about taking down UTHR needs to think how much real market share..."???

The ONLY thing Mannkind is "thinking about" is "taking" as much MONEY as it can from every NAIVE investor it can find. It could care less about PAH -- just so long as it provides material to run Mannkind's stock mill.
RisingSKEPTIC profile picture
"...cough 25.6%, throat irritation 20.9%. Not good."???

Yeah! Kinda reminds me of:

"The most common adverse reactions associated with AFREZZA (2% or greater incidence) are hypoglycemia, cough, and throat pain or irritation."

Well, all except for the HYPOGLYCEMIA!
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