I posted this question and got not one answer. So some here feels MRK could pay $30/share or more for a buy out of MNKD, this amounts to approx. 11 BILLION ( PERHAPS CASH & STOCK)... A 300% premium ...So how much can MRK get in return per year? Please explain how you arrived at your number. I read something last week that Afrezza might have up to $600,000,000 per year sales....So if you were MRK CEO you would think that is a good deal?
10 % could use it, but with restriction it will be lower. If you are a pharm D then you are well aware that many drugs esp costly brand name new drugs have restrictions.
DM2 patients can use oral agents for many years and NEVER go on injectables. I had 100's of patients on oral agent with good HA1C levels. Many will walk daily and improve their weight. And most can not afford to eat out every night. I am surprised at your view of these patients.
OK...partner THEN SELL Afrezza and Technosphere ? So sell it to the partner? How does that work exactly?
Well lets just use your low number of $30/share....Cost to MRK $ 11.34 BILLION....thats a huge chunk of their cash on hand. Thats a 300% premium. WOW OH WOW !!!..Now let me ask the next question HOW MUCH WILL MRK MAKE PER YEAR FROM AFFREZZ ?
Buy out could come in low killing any hopes of those who bought in HIGH in the past to get their money back. The buyer will site stiff competition...black Box Warning....Restrictions for prescribing...Debt....etc to justify the low premium of 20-30 %. But a Partnership could be more profitable in the long run...MNKD could also profit from FUTURE drugs using their technology. So maybe in this case a Partnership would be the better choice. I would be interested in knowing what you think...what Buy OUT price would you guess? do you think a partner would be better?
When they say it will be priced "competitively " say close to the cost of human injectable insulin, what will the competition do.... My guess is they won't have to do much at first because of the drug protocol restrictions that will be in place when Affrezza is released. But at some point the makers of injectable insulin could lower their price to give an incentive to the health care/drug providers not to change over to inhaled insulin.
From July 1 article by By Ben Levisohn - Biotech: Buy the Trial, Sell the Approval? this is just an excerpt.
Cowen’s Eric Schmidt and team looked at how biotech stocks performed both before and after drug approvals. They explain their results:
The great majority of companies (20 out of 29) exhibited positive stock price performance 12 months ahead of their first FDA approval. Moreover, both mean and median stock price performance exhibited a correlation with time. Stocks produced the greatest returns 12 months ahead of approval, and incrementally lower performance six, three, and one months prior to approval…
In contrast, the performance of stocks following an FDA approval decision has been quite poor. Mean and median stock price performance was fairly flat for the first three to six months post licensure. However, by six to twelve months post-approval stock performance had turned sour. Mean performance was down 24% and median performance down 49% in the 12 months following approval. Within the first year following an FDA approval 16 of 24 companies had underperformed the NBI, while five others had yet to reach their one-year post approval anniversary.
And by the way just to give you a little more insight...Insurance carries like Kaiser with their own Pharmacy system want to buy ALL drugs in large bulk contracts to get a major discount. Remember they pass the cost on to the customers who demand low drug cost. My experience tells me they will not be able to get Affrezza at a discount for maybe 1-5 years at the soonest after its released. Most New Brand name drugs will not give a discount until they have too by whatever market condition pushes them to do so. Thus, the cost of the new drug will remain at the high end for some time, costing the health care company and ultimately the consumer more. Restrictive policy's will stay in place for a long time. Once I was give Zyvox over 8 yrs ago? -that could only be ordered by the Infectious Disease specialist - for a finger infection close to my joint...6 pills..one per day for MRSA. Cost= $ 700. OUCH ! But because I was a physician with the company it cost me only $ 5. It saved my finger. Drugs can save your life...but at a high cost. There are still strong restrictions for Zyvox now.
Which patients will be allowed to use this new drug when there are so many choices available, some at generic prices. I can see an insurance company allowing inhaled insulin for certain patients. I am sure you can think of other situations.
1)a stroke patient with Hx DM 1 or 1&2, ( who can not inject him/herself) at home where the care taker can not give an injection either...say an elderly husband or wife with limited help. If in a SNF ( nursing home), giving injections is usually not a problem.
2)Perhaps if on high INR range blood thinners/bleeding disorders like Hemophilia , to avoid excessive bruising might be another indication for inhaled insulin, but the small needle pens still might be used.
3) another use for the inhaled insulin...low vision/blindness. But i don't think "needle phobia " will be good enough for coverage of inhaled insulin unless it is a ....
4) valid Diagnosis of Needle Phobia Confirmed by a mental health provider and documented in the patients record.
5) Recurrent MRSA skin infections.
6) if it shows it will save hospital days. Insurance drug coverage is all about the bottom line.
There is always the patients that demands the latest treatment...they got the coin and don't care if its not a covered drug benefit and are willing to pay out of pocket. But they may still not be able to get it from some health insurance. Now other issues you may not be aware of certain HMO's have their own Pharmacy's , like Kaiser, who cover the drugs may insist that the only person who can write a Rx for a new drug like this must consult with an Endocrinologist or the pharmacy will not fill the Rx. This could be a telephone consult or a full consult / referral to Endocrinology dept. Yep thats right. This helps control costs.
OK so an injection every 3 d...not bad. $350-500/ mo sound on the high end, so let us assume she would like to change over to Afrezza , How much would it cost?
Curious...how much does it cost for the Insulin ? why did she not get an insulin pump?