I like that Celgene model, though they have only about 400 million shares out. Using them as a model, back out their cash and using their P/S of 10 gives you a s/p of about $24 for $1B in revenue - reducing by 20% for the difference btwn Celgene's 400 million shares and the 500 million shares we are assuming for MNKD gives you a $19 price target. Factoring into the equation that carry forward tax credit, plus the inventory you mentioned, plus what I expect will be a very high and sustainable growth rate and I think you can easily justify a P/S ratio of 15 - more in line with that of REGN; there you are looking at a price target of $28. As we pretty much all agree, once 'Technosphere' is validated thru FDA approval of Afrezza, then MNKD is not only worth a metric of Afrezza sales/profits, but the underlying platform potential comes a good bit more evident and thus 'should' boost the s/p as well.
Greatly appreciate your contributions pfg - just thinking you are being a bit too conservative with the share price projections. Now if the whole market collapses due to who-knows-what, then we have a different ballgame.
Yeah, I doubt the FDA, even if they are inclined to cause further delays, would relish the position of playing 2nd fiddle to EMEA. The FDA is going to look pretty foolish and just further tarnish their reputation if they force US diabetics to be the last to have access to Afrezza.
Let alone below $5.00 anymore. Bet you Girls added about 3 M shares yesterday. Funny thing is even if FDA were to continue with their corrupt practices and deliver another CRL, Europe will approve and it will just result in the FDA appearing stupid as they will keep American diabetics from having the cutting edge treatment which the rest of the world WILL have. That is going to make FDA look real good - you think? LOL
Shorts will try anything to keep the new and curious from popping over the board and seeing some of these past gems which paint an accurate picture of Afrezza's true commercial potential.
Personally, considering that MNKD has all that bought and stored insulin, I think their margins are going to be exceptionally high, for the first couple of years anyway. And with the tax loss carryforward, their tax rate should be negligible to nonexistent for the first couple of years as well. Now incorporate what we expect to be very rapid market penetration of a relatively rapidly increasing global market and I see a Price/Sales metric of 16 being more likely than 10, but then Afrezza isn't a pill either, so maybe I am expecting too much. Of course one has to keep in mind that profits will be split with a BP partner, so it all works out in the end. I think we capture 20% of any market we enter in very short order. I have the global insulin market at about $35 billion by 2018, assuming a 12.5% annual increase such as has been reported previously. I am not sure what percentage of that would fall to the prandial designation, maybe 70% to 75%??? I also am expecting the eventual market penetration rate will be closer to 40%, and I honestly think that is conservative. Assuming approval of course and a relatively unrestricted label from FDA, I can't see how we don't have at least a 10-bagger from here. Of course in a few years who knows what other income will be generated from the technosphere delivery platform; hopefully Afrezza is just the beginning.
Kevin - you seem under increasing stress. My understanding is Al has gotten into trouble in the past by saying to much and implying things which then failed to materialize, so he is trying his best to be positive without saying too much this time around. He has been very upbeat about the apparent serious interest in Afrezza, conveying that the whole team is very pleased at the progress of the negotiations, but he has been fooled before. It seems pretty clear that nobody will step up and sign until they at least know the FDA has accepted the NDA as is - so we can't expect anything until then, and they have been known to miss deadlines by a bit or simply demand an extended review period regardless of deadlines. Even if they get the green light from FDA now, or in a week, it seems very likely they would wish to wait until after the first of the year when all the holidays are over and WS is pretty much back at full strength. Sure, it might be nice if MNKD would just say that it appears there will be no deal until BP sees actual approval and a clean label, or would let us know how close we are to signing a deal, or whether the competition (hopefully there is some serious competition) has been narrowed down, but it just likely isn't going to happen. My suggestion is try and relax a bit, don't bet much on near term options (it wouldn't be out of character for FDA to force say a 3 month delay on something relatively minor), and keep lots of dry powder available to jump on any share price lowering events - either FDA related or a serious short raid bombardment. There is simply no way to accurately handicap and de-risk all the variables from potential FDA corruption and their susceptibility to direct political pressure from above, to the effects of other potentially competing products just completing phase-2 trials and the effects they may have on partnering negotiations - thus why so many simply refuse to have anything to do with biotech.
This very interesting (understatement) stuff Mike - and I have you pegged as a straight shooter from quite a ways back. By my loose calculations, the global prandial insulin market will be roughly $21 billion sometime in 2017 - now assuming a conservative 20% (very conservative in my view) market capture by that time, that equates out to somewhere in the vicinity of $150 per share (assuming a reasonable 10 to 11 times P/S ratio); of course a 30% market capture by 2017/2018 would jump that price to the vicinity of $225 p/sh - all assuming around 400 million shares outstanding by then. Of course these figures would need to be adjusted downward for a share count of say 450 or 500 million if that were the case.
I have always felt that considering Al's age and his strong philanthropy history, that he will be strongly motivated for a quicker sale than otherwise might be the case were he 'only' say 75 years old.
My 'problems' are that I can't figure how or why WS is failing to see what is so obvious to us here - namely the almost certain 20% minimum capture, and thus investing accordingly (MNKD should be selling for closer to $15 right now), and can't figure out how al can get a truly fair price for MNKD anytime soon, before say a year's sales have accrued after FDA approval.
Even if one were to take the figure of approx. $4 billion in annual revenue by 2017ish and split the subsequent valuation in two so as to appropriately figure for a partner - just seems unlikely that Al could get any BP to agree to pay say $60ish acquisition within 3 to 6 months following FDA approval. Of course, if it is a potential BP partner, or their hired guns, who are managing to so effectively hold the s/p at these absurd levels, and were they to let the s/p rise to say $15ish heading into PDUFA, and then allow the s/p to appreciate to say the $30 area quickly following FDA approval - well, then I could see a pre-arranged agreement for say a $50 to $60 acquisition target being hit.
Would hate to see Al sell out cheap for $30 or even $35, especially considering his stated comments previously about Afrezza possibly becoming the best selling drug of all times (the exact quote escapes me at present). I have always felt he wouldn't even look at bids under $60, and that seems an impossibility any time soon, obviously not before FDA approval.
Who knows, maybe there have been serious developments of a personal nature in Al's life which we are not privy to - or just as likely a partnership is still on and Mike may simply have got it wrong. but Al has pretty much kept us above water following the FDA's treachery, so he obviously has the right to push for a bid considerably lower than what we expect.
An absolute travesty that Afrezza wasn't available to diabetics years ago - thanks FDA; consider how many individual have never woken up due to their blood sugar dropping fatally in their sleep, who would still be here except for the FDA's decision. Maybe the number isn't great, but I bet there were 5 or 10 per year - they were people who didn't need to die and who wouldn't have if they were using Afrezza.
We do our part - we are Relentless in combating your absurd doubt inspiring innuendos and misleading contentions; Tireless in support of our esteemed leader cause he has been there and done it multiple times before; Unfazed in the face of blatant injustices kicked in our faces - and all we ask and expect is that you Do Your Part! Can you do that even for the briefest of moments? Apparently No! Here we have the perfect opportunity for you guys to shine, to launch the mother of all bear-raids, to really let loose and demonstrate the power of the darkside - do you seize the opportunity, do you show us all how you are indeed masters of the universe as you hammer the share price with merciless abandon? No!! Instead like indecisive impotent little girly-men mice, you squander and timidly offer us a crummy pathetic tidbit of a load-the-boat accumulation opportunity. To put it simply - you shorts are weak, annoying, foolish pretenders scurrying about defiantly flipping the big bird to your fellow man as the overwhelming tide of superior technological innovation towers above you. Either get in the game or come to your senses and get seriously long.
*Now, that being said - should you, upon reflection, dig down and somehow find the cajones to actually offer up that $ 5 or below opportunity, well of course I retract this criticism; have a good day and thank you for the previous opportunities you have presented.
Yeah - you know you were already going over them in your head. Someone be sure to post first off the one about MNKD headquarters being reduced to rubble by undetected meteor.
Sentiment: Strong Buy
Just a waiting game now is all. Afrezza will eventually capture a minimum of 40% of a very rapidly growing market. the ride up when Al is proved right is going to be fun.
Sentiment: Strong Buy
Too Funny -
Good point. Maybe the accumulation isn't quite what we were expecting, but one or two of our major holders do appear to be increasing their positions.
Indeed - some serious player/players are unfortunately in total control. A partnership now, or before approval anyway, would likely be pretty much be a back-end loaded deal, so unless some serious money stepped up to make it much harder on the shorts now in control we might see a replay of a short-lived $4 to $5 spike only to be subject again to that relentless unopposed shorting. With luck though, at least we might settle at $7ish.
Who knows though, maybe a super win/win deal is just around the corner, maybe one involving a serious equity stake as speculated here recently, and we will be able to maintain a very healthy and significant share price spike going into April's PDUFA date. As others have demonstrated here in the past, even a 10 to 15 percent market capture following approval should get us a 5-bagger from here. I just hope the FDA doesn't clutter the label up with stuff like a mandatory pulmonary function test every 6 months - that might inject enough uncertainty to truly diminish our expectations.
Sadly, you are completely incorrect as regards the inference of an advisory committee being "proof positive" of FDA approval. First - there is no guarantee of a fair committee, second - there is no obligation for FDA to follow even a unanimous committee finding. This requirement, which is totally unnecessary btw, may be just their cover to disapprove or to clutter up the label if they do approve.
What I find odd is that FDA really has no need for an advisory committee - Afrezza has successfully navigated through more Phase-III trials than any other drug I can remember. They know full well it is safer than Pfizer's offering, as it doesn't leave residue in the lungs, not to mention the long-tail issue where Afrezza outshines any competitor, and there is absolutely no question on the overall superior efficacy of Afrezza. And all who are honest admit that Afrezza is likely to significantly enhance compliance among a large percentage of prandial insulin dependent diabetics. Maybe they are just doing the usual CYA maneuvering, just in case something were later to pop up down the road?
Can hardly wait until the ZTE settlement hits and absolutely routs them - Hey Smartttazzz Google Boys, still laughing???
We have nothing to fear from these impotent little girly men - they have nothing, as they are already in sooooo deep they can't afford to drop us any further.
Personally, I think Cramer isn't what he pretends to be. I read a book once by one of Cramer's former employees, this guy said that when Cramer was just a guest on CNBC, before he became one of their stars, he used to tell the employees which stocks he was going to pump as great buys, and he would leave them instructions to basically do the opposite of what he was telling the CNBC viewers. Maybe he has changed, but somehow I doubt it.
Ere, ummmm - oh never mind!