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MannKind Corp. Message Board

  • factspls88 factspls88 Feb 23, 2014 9:44 AM Flag

    My post on Nov. 8 with share price target of $112.

    I wasn't able post this the other day when pfg posted his assessment but I wanted to add my two cents again which confirms pfg's $100+ price target. Note that my numbers do not include technosphere which could make this a conservative projection. I used Regeneron as a comparable case study - Regeneron has been a big success, stealing considerable market share from Novartis's Lucentis - because it reduced the number of injections required of its drug (see a connection with MNKD here?). There were no other performance related benefits, contrary to afrezza which reduces hypos. NOTE: I assumed 400M shares - yahoo now shows 337M??
    Here's what I posted: " Follow me here ----- Regeneron's Eyelea achieved a 25% share of market in one year with a product that merely reduced the number of injections a patient need (in the eye - ouch!). It projects $1.5 billion in revenue this year and has a market cap of $27.5B (so Regeneron's market cap is 18X revenue). If you assume that Afrezza can achieve that same percent share, 25% in the first year (and I think it can very easily), then with a retail market at $20B and a wholesale market at say $10B (I'm assuming pharmacies double the wholesale price - i don't know for sure if that's the case, but it makes the $10B conservative), that would give Afrezza $2.5B in wholesale revenue (as compared to Eyelea's $1.5B). Multiply that revenue by Regeneron's market cap multiple of 18 since Regeneron, like Mannkind, is pretty much a 1 product company right now (I'm assuming Mannkind could achieve the same multiple) then that would give Mannkind a market cap of $45B. Assuming 400 million shares for Mannkind, that would give Afrezza a potential share price of $112.50 ($45B divided by 400m). I've made a bunch of assumptions which I think are reasonable - and this is just a quick and dirty assessment - I realize there are lots of way to get to a share price. Want to be more conservative? Feel free. I'd be happy with 1/2 that price longer term."

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    • $20 billion/yr market share in North America alone for insulin, that's not worldwide. Syringes/needles are less use in foreign countries, makes Afreeza more appealing in international markets.

      Your estimation of 25% is very low, and you are not including international market. My estimation is more like 50-65% of market share. Who wants to use needles when inhalation is possible. I think the only place where needles or IV will still be predominant are in the hospital settings in which patients already have an IV placed. ALL/most outpatient setting will go to Afreeza.

      I bought in after phase III results, because all numbers looked like slam dunk approval, unless they lied (which is illegal from FDA and sec exchange perspective; thus, someone would end up in prison for it). Therefore, I don't think anyone would jeopardize themselves that way.

    • On the con call they discussed having the capability of producing 350 -375 million units in the first year when all three lines are functioning. How much revenue does the 350- 375 million units produce in year one?

      • 2 Replies to scottmax45634
      • From the conference call - MNKD plans on 2 Billion units in capacity - I'm assuming the current lines are to ensure initial pipeline gets filled: "machines are now being installed in our Danbury facility and when completed and validated soon after launch, should give us a capacity to produce up to 350 million cartridges per year, as Hakan has noted, with later addition of equipment and factories that have an annual capacity of about 2 billion cartridges."

        So - 2 billion is 5.7 times the 350 million initial capacity. Using liahall's revenue calculation for the 350 million units, then the planned capacity is for $3.3 billion (5.7 x $667 rev). I'd say that makes my number of $2.5 billion for market potential within the first few years within reason.

      • Based on each patient using 1095 (365 X 3) doses per year and the previously mentioned reimbursement estimates of $2000 per year per patient, that works out to ~ 667 M revenue in the 1st year.

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