Listening to their CC, they are talking about Billions worth of Insulin in storage. Wouldn't that Insulin make this company worth a whole lot more if approved? We are talking about some serious revenues in sales if approved since they already have the drug in posession. I would think a partnership would increase this Company's value three fold in a quick time. This story seems like a positive all around for its stock holders. I have watched this Company for a very long while, i bought some shares earlier this year. Now it looks like an all in company since CEO stated that they are giuded by FDA guidelines and are very confident on approvals. My last word, I am convinced now .
Sentiment: Strong Buy
Insulin in raw form is dirt cheap compared to the finished dosage drug, this is an irrelevant question, and the main concern would / should be, can they keep up with demand/supply if demand astronomically surges at the gates if approved. This way you can capitalize and generate faster customers instead of having wait times for another 6 months out, like there were with so many popular vaccines during epidemics.
I absolutely loved the off the cuff remark when Al was asked about the longevity of the lypholized and stored insulin. Rather than provide an answer to the question his reply was hopefully for a couple years of sales. This was truly not part of Al's scripted remarks. It gives great insight that he expects this product to catch on in sales faster than anyone anticipates.I also liked that comment that Afrezza has the potential to be the most significant product of the time.
This conference call hit all the points; financing is not of concern, trials are complete, FDA and company have had extensive discussions on filling, teams are ready to prepare data for filling. And did anyone catch the smack down to Adam Fuerstein?
They said they have enough insulin to support around $10 billion in revenues. How much the insulin is actually worth is hard to tell since we don't know the actual quantity and what percentage of sales is represented by the insulin cost. What they also said is the insulin has already been expensed since they could not capitalize it so the actual cost of sales will be pretty low until they hit the $10 billion mark in revenues and have to start purchasing insulin again. It's impossible for them to have billions worth of insulin since they have not spent that much on every expense imaginable including all the trials and R & D since the company began operations.
Its a fact MannKind sits on a mountain of raw insulin. This has been discussed at length on this message board. The only value the insulin has to the company is to have it converted to "inhaled insulin". MannKind can not turn around and sell it on the open market based upon the original purchase agreement. That single purchase made by a start-up biotech years ago may end up being the single best financial decision ever made. It also is the main reason Al has not settled a partnership arrangement. I have researched biotech partnerships and have yet to find an instance of the smaller partner (MannKind) dictating manufacturing to the larger partner (XYZ). I can find no precedence for this type of partnership. It might mean a large upfront cash incentive PLUS a higher than normal % split to MannKind. It might also mean the partnership gets agreed to later rather than sooner.
oppie(opc11) you keep moving the insulin to the income statement when it's really apart of the balance sheet as a contra asset account. like taking cash out and buying silver 5 years ago. it is still an asset at this point...............the impact to net income will occur during sales. your argument months ago was it "diluted something"..........whatever....bla bla bla.lol.JMHO
The insulin was bought years ago for the sum of approximately $3mil and then expensed. They have an option to buy more if it hasn't already been sold. Definitely not impossible.
This will keep their initial COGS low. Couple that with loss carryforwards and they are going to see some great margins/net income for a while.