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Post by jpg on Jul 9, 2014 2:04:01 GMT -5
Wow! I don't know how I so quickly became accused of being short! I was thankful I found proboards so that I could escape the idiocy of yahoo boards shorts ranting on about mnkd. The reason that drew me to this board seems to be escaping this thread as I am simply trying to bring perspective from my career. Sorry if I have offended anyone with my opinions. Now, onto a topic more enjoyable to this community- Buyout. I am hoping for a BP buyout with my current position and these are my candidates based on my market knowledge: 1. Merck: They are in tough times with a pipeline drought. Janeuvia has been their savior: it is the best launch in diabetes marketplace history. That said, the new SGLT-2 marketplace is eating away at the DPP-4 market (DPP-4 had a -20% performance last month nationally!) The decline is realized in the drastic growth of the SGLT2 market (Invokana and Farxiga). Summary: Januvia is the main money maker for Merck, it is losing share quickly, and Merck has a diabetes Salesforce that could represent a novel treatment. 2. J&J: they have the next best launch in the diabetes marketplace- Invokana. They have a newly formed Salesforce that is growing a new class of drug (SGLT2) very successfully. Why have a diabetes Salesforce with only 1 drug? 3. AZ: They are trying to position themselves as a top 3 diabetes company (behind novo and Lilly). They already have a DDP4, SGLT-2, GLP-1, and insulin add on (symlin). The only thing they are missing is an insulin! It's hard to be seen as a diabetes company without an insulin. Additionally they are extremely well staffed. Adding another agent would not require additional hiring. These are my three predictions. Thoughts? Disagreements? All possible as the above aren't in the insulin space which is obviously what Mannkimd wants. Novartis is a true global BP which you didn't mention and I was curious why? They are, as far as I am concerned, the best BP out there and would make one very good partner. They don't have any insulin and a DPP IV that is not huge. That I can think of not that big a presence otherwise. Kind of surprising for Novartis not to be more involved in diabetic care? Roche is another potential partner that annoying 'investing tabloid' Sierra keeps mentioning... As I mentioned above I do think many put to much emphasis on physician memory of Exubera. endos remember. Others: not a clue or vague recolections I would suspect. One of the many reason Pfizer didn't sell much of their badly thought out product was that few had heard about it. As another MD mentioned above this was way bigger a deal in the pharma industry and on Wall Street then with clinicians who are usually that interested about what is going on in the Pharma industry. The vast majority of MDs probably don't even know who makes what drugs. JPG
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Post by garrett on Jul 9, 2014 5:41:32 GMT -5
Wow! I don't know how I so quickly became accused of being short! I was thankful I found proboards so that I could escape the idiocy of yahoo boards shorts ranting on about mnkd. The reason that drew me to this board seems to be escaping this thread as I am simply trying to bring perspective from my career. Sorry if I have offended anyone with my opinions. Now, onto a topic more enjoyable to this community- Buyout. I am hoping for a BP buyout with my current position and these are my candidates based on my market knowledge: 1. Merck: They are in tough times with a pipeline drought. Janeuvia has been their savior: it is the best launch in diabetes marketplace history. That said, the new SGLT-2 marketplace is eating away at the DPP-4 market (DPP-4 had a -20% performance last month nationally!) The decline is realized in the drastic growth of the SGLT2 market (Invokana and Farxiga). Summary: Januvia is the main money maker for Merck, it is losing share quickly, and Merck has a diabetes Salesforce that could represent a novel treatment. 2. J&J: they have the next best launch in the diabetes marketplace- Invokana. They have a newly formed Salesforce that is growing a new class of drug (SGLT2) very successfully. Why have a diabetes Salesforce with only 1 drug? 3. AZ: They are trying to position themselves as a top 3 diabetes company (behind novo and Lilly). They already have a DDP4, SGLT-2, GLP-1, and insulin add on (symlin). The only thing they are missing is an insulin! It's hard to be seen as a diabetes company without an insulin. Additionally they are extremely well staffed. Adding another agent would not require additional hiring. These are my three predictions. Thoughts? Disagreements? I don't think there will be a buyout anytime soon. First, when asked that question during the shareholders meeting Al's comment suggests nothing like that was in play. Next, a company is much more valuable when it has historical earnings (EBITDA). If Mannkind is to be sold, I think it will happen similar to the Medtronic sale
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Post by jpg on Jul 9, 2014 6:33:57 GMT -5
Hi Mnkdlong,
Was wondering about some of your previous comments:
The pharma world is very complex and again just because something is a good/great treatment doesn't mean it will be successful. The insulin market is a commodity market with massive pricing wars. The faster time action profile and ease of use will mean nothing if they can't compete in the current pricing wars. We also have to remember that we live in a current market that isn't using the needles of old, but rather 32 gauge needles that you hardly feel (if hurts far far worse to test your blood sugars). Is this slight reduction in pain worth the unknowns of putting a growth hormone through the lungs? This drug may seem like a no brainer to us, but I promise you physicians are not viewing it that way. --------------------------
You state: The insulin market is a commodity market with massive pricing wars.
Insulin a commodity? Insulin is not generic and as you pointed out there is no immediate generic risk after the patents expire. Doctors are often rightfully loyal to many specific medications. There are some drugs that are thought to be 'best in class' by MDs. Those drugs get prescribed a lot obviously. It would be hard to convince many that there is a big huge clinically meaningful difference between the current market leading prandial insulins though. When comparing popular currently available prandial insulins we could probably agree they are almost 'me to drugs' to each other? Will things change once Afrezza gets to market? I think so. Afrezza really is a radically different product. I think forward thinking clinicians and patients will love to use it. Once you get those medical leaders almost everyone does it. It can be impressive to witness. The same works the other way obviously. I say all this in part because interpreting biotech using the 'commodities' angle or thought process can lead to confusion and errors in the analysis of Afrezza.
Another part of the same sentence: with massive pricing wars
I have not seen any 'massive pricing wars'. I certainly haven't seen many bad quarter caused by poor insulin sales in the few big pharmas that control the insulin market. I am also a bit refractory to the often repeated statement by many 'the insulin margins are bad'. Maybe but insulin still seems to do wonders for gig pharma cash flow and overall company profits. We Mannkind shareholders could deal with these burdens?
Many 'diabetic pill big pharmas' think pushing diabetic pills is hard and take a lot of work and money. I certainly won't argue with them... Their diabetic pills are hard to sell for a reason: Could it be doctors don't like them or trust them that much? I look at how fast MDs switch when there seems to be a genuine clinical reason to do so. As you point out the new diabetic medication class (that make you 'dispose' of glucose in your urine...) is gaining in popularity. Maybe not necessarily because of conviction by MDs but because there are no good alternatives except insulin. The recent cardiac failure stuff is just more icing of the 'diabetic pill cake'.
In another post you mention the often repeated fact that the needles are really small and hurt very little. For those who take the time to read my musings sorry to repeat myself... Insulin is a relatively 'hard and messy' drug to prescribe. Patients more often then not feel the same way. Not so with the diabetic pills. Taking one more pill or switching to another diabetic pill is a lot simpler and less displeasing then starting insulin injections. Starting insulin is inconvenient for patients and MDs. For patients it can often be scary. Many MDs aren't set up to do it or don't feel comfortable prescribing insulin and/ or following patients on insulin. Those MDs refer to specialists with clinics. With Afrezza maybe PCP will start referring less and less. The economics of a PCP starting inhaled insulin are hopefully not lost on Mannkind and future BP partners. This is a potentially strong selling point to getting Afrezza payed for by governmental or private health care providers. Hope they and Greenhill use it! Many patients postpone insulin because once the hesitance to start using injections gives way to actually learning and giving yourself injections does change your life. Insulin is one of the more complex drugs patients inject on an out patient basis. Insulin changes your eating habits. Many people obviously get used to it but sticking yourself routinely is not fun Every needle sucks. What I'm saying is basically that 'small needles don't hurt' inaccurately simplifies the whole needle issue.
Lastly you state: This drug may seem like a no brainer to us, but I promise you physicians are not viewing it that way
As a physician I hope I made a bit of a case that I think I understand this market and on the contrary think, maybe wrongly, that MDs will be much more receptive then many skeptics (and less skeptics) think.
JPG
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Post by coco on Jul 9, 2014 7:28:10 GMT -5
I learn so much from all of you on this board. When I first invested about 3 years ago, I understood the concept and the science behind it and knew it could be something that blockbusters are made of but still did not fully understand it. I feel I understand it a whole lot better from reading all of your post. I find myself explaining it to people that ask me questions. Even some doctors on my unit don't understand it and are asking me questions. I love this board. When I hear all the bashing on the yahoo board or investor village I can always count on coming back here with a sigh of relief. Thanks everyone for all the great post. Coco
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Post by rak5555 on Jul 9, 2014 11:10:26 GMT -5
mnkdlong - I never thought you were a short, but didn't rush to your defense because I thought the accusers were just frustrated longs looking for a target to vent their frustrations. I would encourage you to continue to share your thoughts, but be ready for heated debate when those thoughts are less than enthusiastic (especially on down market days).
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Post by mannmade on Jul 9, 2014 11:28:04 GMT -5
Oddly enough i do not care if a person is either short or long... So long (no pun intended) they can support their argument and keep it clean and not make it personal. I have seen a few posts recently for example; accusing Matt P of being "rink dink," "greedy" etc for some sales he has made and so felt the need to get into the conversation and push it back to the facts or at least logical arguments supported by reasonable opinions...
This board has from the start been a much more professionally managed site (thank you Liane/BD) and thus allows for people to have more trust in what is said as we all look to do our research and share our findings/opinions and get the tone of the "collective communities opinions" about issues respecting mnkd as they come up...
I actually think the shorts may now be helping us as the longer the short position stays in place at the current levels last reported, if we get a good deal in place with a partner, it may just trigger a fast ride up in which people who want to get out can take a good profit and move on or move back in later...
I still believe in the science and consider this stk a 3 to 5 year hold for my personal investments...
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Post by liane on Jul 9, 2014 11:31:57 GMT -5
This board has from the start been a much more professionally managed site (thank you Liane/BD)... Too bad we don't get paid the big bucks.
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Post by mannmade on Jul 9, 2014 13:36:14 GMT -5
After my mnkd pay check comes through I will glady reimburse you with drinks in Hawaii...
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Post by ezrasfund on Jul 9, 2014 15:10:10 GMT -5
If you think long enough about what kind of deal MNKD might make, you can come up with some crazy ideas. What about some version of this one? Al is getting older, and bringing Afrezza to market has taken at least 3 years longer than expected, and Al has lots of other projects he is working on. He also likes to run the show, so a partner might be wary of having to deal with him. (Al didn't get along too well with Boston Scientific apparently.) So what if Al sold his share of MNKD to one or both partners and stayed on as Chairman of the BOD with some say in the direction of the company? MNKD would remain an independent company and preserve its NOL. A cash payment as part of the deal would still happen to finance the build-out of production facilities, but it would be easier for the partner to stomach that big upfront payment because they would essentially be paying themselves (and us). And so forth...essentially all the advantages of a buyout but still preserving the advantages of MNKD as an independent company.
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Post by rak5555 on Jul 9, 2014 17:33:07 GMT -5
ezra - that's certainly creative. I assume there would be a tender offer at the agreed upon price that all shareholders (including Al) could participate in. I think we need a tax attorney to weigh in on preserving the NOL.
BTW - my favorite scenario is also driven by Al's age and past history of being difficult. I think they will sell all rights to afrezza other than retaining long term exclusive manufacturing contract. The purchase price would go to one time special dividend for shareholders, cash for capacity buildout for afrezza and next few licensing deals, money to invest in future new product launches using technosphere platform, and anything else Al can come up with. Its a true win/win/win/win (Al/shareholders/acquirer/employees).
The involvement of Greenfield lends credibility to both our predictions.
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Post by BD on Jul 9, 2014 19:31:20 GMT -5
rak, I like the idea of the "one-time special dividend" while there's still a sky-high short position! Either shorts will have to pay the divi on shares they've shorted, or they cover before the record date and fuel a nice squeeze...
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Post by liane on Jul 9, 2014 20:08:35 GMT -5
rak, I like the idea of the "one-time special dividend" while there's still a sky-high short position! Either shorts will have to pay the divi on shares they've shorted, or they cover before the record date and fuel a nice squeeze... Yeah, but then I'd have to execute all my leaps early to capture the divi...
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Post by ezrasfund on Jul 9, 2014 20:54:11 GMT -5
Another question is how Al intends to fund his other ventures, like the basal insulin patch research and clinical trials. This would be another reason for Al to raise some serious cash. Even with his $900M investment MNKD had some serious dilution, and I don't know how we would have gotten to the finish line without his deep pockets.
BTW It's less of a prediction than a daydream.
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Post by indigodaisy on Jul 9, 2014 22:04:28 GMT -5
Was just thinking about the small country ready to place an order. The anticipation is killing me
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Post by bobw on Jul 11, 2014 10:33:31 GMT -5
rak, I like the idea of the "one-time special dividend" while there's still a sky-high short position! Either shorts will have to pay the divi on shares they've shorted, or they cover before the record date and fuel a nice squeeze... Yeah, but then I'd have to execute all my leaps early to capture the divi... I believe that the strike price would be adjusted to account for the special dividend. Option holders are not compensated for normal dividends, but are compensated for special dividends.
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