I'm having trouble seeing this company holding a MC of more than $6-7B if we do not consider miraculous outcomes (i.e. some great interest of other pharma companies in Technosphere for multiple drugs, Afrezza breaking even the most hopeful sales expectations, and so on). Now given that our realistic upside here is maybe +100-150% in 2-3 years assuming it all goes quite well / relatively smoothly, it's hardly obvious that we get much of a return from all this holding the stock and taking stupid risks.
I have no trouble admitting I got into this as a trade around Approval and partnership announcement. As the stock gave back almost all of the paper profit I've made here, I'm left wondering if I should just give it up now, or may as well ride it long term. Now, I see no real reason why Afrezza shouldn't be a success, but I'm not expecting any miracles. To come out of it with any substantial profit would now require holding it another full year at minimum I think. I already know that even if I sell it at a profit at the end, the risk I took is likely to be greater than the profit would justify.
$100/month/patient isn't reasonable when you talk about 390 million patients. I bet half that number of patients live on $100/month because they're located in some third world ****hole. How many of those 390 million patients are covered by public or private med insurance that can even afford this, probably 10% of them. So remove one zero from your numbers. Market penetration may stall at 10% (a very good outcome) so remove another zero. Now we're at $35/shr if the drug is a huge international success.
Viewed this way, 35/65 split on big profit is better than say 50/50 split on half as much profit. The ability of the partner to sell at large scale matters. We will never know if Sanofi outperforms the other could-have-been partners, naturally. But I doubt anyone will care, if they manage to deliver big sales numbers with good margin. We'll have to wait for a year or two to find out.
Yes because it wouldn't be possible for them to simply sell more bonds or more stock the way they have been doing the last 15 years right? So they had no problem running on promises for 15 years, but after they finally get their drug approved no one would dare giving them any more money and they'd file chap 11? Yeah that made so much sense.
Also, what jstokcton said.
I've yet to come across a YMB so full of delusional investors, except perhaps FB. You can't make up stuff that stupid. "Just wait until X, once Y then the shorts will be REALLY squeezed. This time for real!" They never get tired of repeating this template. I guess it comes right along with the $56 buyout.
PJ downgraded it from $5 to $1.5 target before the AdCom and then adjusted it to $2 after the AdCom. Pretty sure he was citing "outstanding concerns", "complex label" and such with FDA and that a partnership/launch is 2 years out at best. You can always say they thought one thing and said another, but that's pure conjecture.
I guess PJ and #$%$erstein don't have "half a brain". Debatable, but their opinions carry some weight in the market, and they were calling for no approval. It was not fully priced in. then again nobody was expecting an overnight double. Partnership was never a 100% sure thing, and it could have gotten delayed for a failure in negotiations, which may have meant more dilution. There was risk, maybe not much risk but some. As of now almost all the gain the stock made since Adcom is wiped out. holding $9-10 area would make more sense, but seems the market is just plain disgusted with the deal and/or lack of transparency from MNKD mgmt. Perhaps both.
question is, after the gazillion $7+ calls for this week are all wiped out, where does it go from there. Volume will probably slow down a lot, perhaps along with the intense selling pressure. It's pretty clear that longs are feeling disgusted and vomiting shares right now, we may get a small relief rally after that's over with. Perhaps it settles back in $7.5 or even $8 before the month is over.
On the other hand, many longs are trapped and bears might entertain the idea of attacking it down to $5.xx to collect some stops. No way to tell at this point. Lack of transparency from management in the CC is exactly what they needed. We can't defend the price if we don't get any assurances from management on commercialization goals/estimations. "Sanofi is on it now" doesn't count. It takes a little more than that.
Maybe we'll get rescued from the hole in May 2015 when they announce Q1 results or give some kind of reasonable rev guidance.
so if they sell around $200M worth of Affrezza annually it just about covers the cost of C level executive compensation? That's so nice.
Maybe they could be just a tad more cooperative towards the analysts trying to build a case for them with a discounted cashflow model. Listen to the CC, they wouldn't commit to ANY target on ANY metric. No lower bounds, no ballpark figures, nothing. Today we see what the market thinks about that attitude of theirs.
This is one of those companies that enjoys torturing their shareholders. They like the situation where holding the stock is an ongoing "test of faith" where we're all kept in the dark as much as legally possible, including analysts, so your only options are to believe and hold or to get disgusted with it all and sell. They won't let you do the number crunching necessary to establish a floor to the stock price based on rational analysis. Because of that, there is no floor to how far the stock may drop just on a sentiment of disgust from long time holders. Forget about the shorts, I think the trade volume yesterday and today speaks for itself.
I can understand it when development stage companies act that way, but this one is supposed to be transitioning to its commercial phase now. Maybe when the stock is $4-5 they will recognize that there's something wrong with what they're doing. Not getting my hopes up though.
brain hurts from reading this. $3B sales justifies $3B MC? and this is from before the 65%/35% split was announced, correct? sounds like a bit of a farce. Is their report publicly available? I want to read the entire thing. Thanks.
they said the same thing about $8 post approval and $8 post partnership you know. The approach of waiting for solid sales to show up before buying any MNKD may well offer him reduced risk free of charge. does it make sense? no, but it can still happen anyway.
Can't it all be calculated down to an exact figure from the company's SEC filings? It's a public company, its capitalization should be 100% in public domain...It's strange that the ML analyst had to ask and even stranger that the CFO couldn't answer it immediately.
Well, it's an improvement from the $1.5 target they had on this a few months back. Pitiful is relative. Let's see if the stock can manage to hold $8 before calling $10 "pitiful".
The train is actually moving backwards in this analogy, why board on the $10 or $8.5 station when they can take the short bus to the $7 station and then watch it sit there for a year while they consider if they should board it or not.