|
|
Post by mnholdem on Jul 31, 2014 22:51:00 GMT -5
If you are of the opinion, as I am, that Mannkind was already into talks prior to the PDUFA, then you must read Hakan Edstrom’s Goldman Sach comments at the time as words to be given weight and taken seriously.
MannKind in Talks for Afrezza Partnership by Jonathan Polakoff Friday, June 13, 2014
“Chief Operating Officer Hakan Edstrom told analysts at the Goldman Sachs annual health care conference in Palos Verdes yesterday that the company is in negotiations with several potential partners, many of them already in the market with diabetes treatments.
“Edstrom said the discussions included partnerships for North America only as well as global deals. The relationship could be structured in a number of ways, he said, including a royalty arrangement, profit sharing or a co-promotion deal. He said an announcement should be forthcoming in the next month and-a-half to two months – in the weeks after Afrezza gets the final word from the FDA by July 15.”
www.labusinessjournal.com/news/2014/jun/13/mannkind-talks-afrezza-partnership/
Matt Pfeffer may have thought he was mirroring Edstrom’s timetable when he later stated “6-8 weeks after PDUFA” but Hakan Edstrom’s timetable was quoted at the June 13 conference date, which was two weeks before the FDA approved Afrezza. That moves the timetable up a couple weeks. Since it’s very likely that Mannkind already knew approval was pending when Edstrom made his remark, I give his timetable more credence than Matt's.
More important to me than the date, however, is the type of deals Edstrom eluded to at the conference when he implied that there were at least two deals in the works, one of which was for North America. Why would Hakan state it this way? This answer, I believe, is that Mannkind had the first Agreement ready to go, pending FDA approval, for a deal with their manufacturing partner. This was also mentioned in a report by the diabetes-care publication Diabetes Mine.
“We’re told by MannKind’s top executives that they’re working to find a pharma partner to manufacture and distribute Afrezza, and the product could be made available as soon as January, or end of the first quarter of 2015.”
www.diabetesmine.com/2014/06/newsflash-inhaled-insulin-afrezza-gets-fda-approval.html
I believe the North American agreement is with Eli Lilly. In support of this argument, consider this synopsis made by FiercePharma, looking at the top 10 diabetes drug pharmaceutical companies in 2012:
“[Eli Lilly’s] Humalog is another synthetic, fast-acting insulin used for mealtimes. It has been a huge seller for Eli Lilly, but its patents began falling off this year, leaving Lilly looking for replacements. Its sales had weakened ahead of the patent loss as third-party payers demanded discounts and doctors turned to new diabetes drugs, like Lilly's own Tradjenta, to try to control blood sugar ahead of insulins.”
www.fiercepharma.com/special-reports/10-top-selling-diabetes-drugs-2012?page=0,2
Another reason I like Eli Lilly is that they manufacture human insulin in Indianapolis USA, which would result in the lowest possible manufacturing costs down the road, after the current insulin supply is depleted. Mannkind presently has a large supply of insulin, which would give Lilly the time for their insulin to be approved (if required) as substitute human insulin used in the manufacture of Afrezza. Distribution rights in the North America market, which Hakan mentioned and where Afrezza is already approved, would likely be the incentive for them to reach an Agreement.
Al Mann once stated that when it came to diabetes treatment, he did not necessarily see Afrezza as a replacement treatment, but an ADDITION to a big pharma’s family of drug treatment options. By adding Afrezza to its diabetes drug options, Eli Lilly would have two rapid-acting drugs, effectively reaching all diabetics requiring mealtime insulin - they would have two options, injectable or inhalable. This puts Lilly in an enviable marketing position, as several analysts predict Afrezza will significant EXPAND the $5 billion mealtime insulin market, since it is the only FDA approved non-injectable fast-acting mealtime insulin available to diabetics.
Before you argue conflicting interests because Afrezza will displace Eli Lilly's Humalog sales, consider that 1) Humalog is already being hit with discounts, 2) Afrezza will expand the use of mealtime treatment and that 3) Lilly's marketing would target the competition. By signing an Agreement to manufacture and distribute Afrezza to the North American market, Eli Lilly stands to take substantial market share away from North American leaders Sanofi, Merck and Novo Nordisk.
Edstrom mentioned there were global deals being discussed as well. He makes a clear distinction that I think we must not dismiss lightly, as if it were a figure of speech. If a manufacturing deal was close to being done with insulin-producer Eli Lilly, and I think it’s quite likely that deal was concluded within a week of the June 27th PDUFA, talks with other Pharmas would have been focused on a global distributor, with the first party agreeing to delay the official signing until all the deals were concluded.
To me, the perfect global distributor would be GlaxoSmithKline, the global giant who is hungry for a mealtime diabetes blockbuster and already has a huge presence and sales forces in Europe, China and India.
While I feel confident that Eli Lilly will be manufacturing Afrezza, the only question I still have is: has a second deal been finalized with Glaxo? If not, then could another global giant have stepped in to bid for the right to distribute globally?
Edstrom's June 13 remarks had to be non-specific words, carefully chosen to not violate any non-disclosure agreements, because Mannkind was very likely involved in talks at the time, with agreements contingent upon FDA approval. Hakan confirmed this when he said that Mannkind was already engaged in discussions, so he had to have known the structure of the deals when he made those statements.
Was Hakan Edstrom, intentionally or otherwise, giving us clues? The guy has never struck me as a person who would intentionally lie just to throw people off the scent.
|
|
|
|
Post by babaoriley on Aug 1, 2014 0:09:50 GMT -5
I would say Hakan's comments were as candid as possible under the circumstances. I don't doubt at all they were talking to several potentials at that point.
Nice post, 'holdem!
|
|
|
|
Post by 4Balance on Aug 1, 2014 1:33:14 GMT -5
Mnholdem, you say, "By signing an Agreement to manufacture and distribute Afrezza to the North American market, Eli Lilly stands to take substantial market share away from North American leaders Sanofi, Merck and Novo Nordisk." Do you see Eli Lilly having any role in the manufacturing process other than supplying the insulin? Isn't the Danbury plant gearing up to load the Technosphere particles with insulin, and create the cartridges? I had the impression from Psycho Analyst's Seeking Alpha article (link below) that LLY is a weaker player in the diabetes market place than, say Sanofi. If LLY should win the nod, I would have concerns about a less-strong positive reaction. But if being able to manufacture the insulin is a real cost-saver...which then helps to keep the price of Afrezza competitive...that's a positive. seekingalpha.com/article/2326095-5-more-possible-partners-for-mannkinds-afrezza-each-with-a-strong-diabetes-care-franchiseRe GSK, the same author was not overly impressed: "While it is not impossible that GSK might be interested in a partnership with MNKD, its tepid involvement in the diabetes care niche now and its investment in a new GLP-1 receptor agonist make it less likely that it would have much interest in such a partnership or make a particularly good partner." These tepid endorsements give me pause. I'll also comment on my perception of Hakan. I have the sense that his enthusiasm sometimes gets the better of him, and he winds up saying things he thinks the audience would want to hear. Then, Matt comes in with the correction. I have more confidence in Matt's time estimates...but I suspect he would manage expectations by erring on the side of "too much time", and then surprising us with faster performance. Of all people, Matt would try to position MNKD for the best financial deal by not allowing himself to be trapped into a compromise by a prospective partner who used the ticking clock to apply pressure. So...I would see Hakan underestimating the time, and Matt overestimating the time. Yet, I think the 6-8 week timeframe is in the money. |
|
|
|
Post by daduke38 on Aug 1, 2014 5:48:59 GMT -5
Very well written and documented! Maybe it's because it is what I'd like to see, I like the speculation of a buyout with a Royalty % added in. I know everything from the company has been Partnering, but a buyout seems to be the best deal. Again, I think Technosphere is Al's next and probable last venture (Either with-in the frame work of the present set-up or without "A")! On a somewhat personal thought, I don't know how so many people would want this great product to fail. A buyout would give the short side immediate and no recourse pain! Also, in the short term, it does look like we are going to get the overall market correction (Futures down big again, today)! I also think the time of launch should be sooner than later. As of June28, MNKD had 180 employees at Danbury. There is product that was just waiting to be labeled, boxed, and shipped. From listening to the ADCOM, it seems to be a realitively easy to learn and use product. We have seen and written so many speculations, that the only thing we know for sure, is Al Mann will do what's best at the best deal possible. Whatever they announce I am good with. Although I am in a different camp, I have to say you wrote a great post. I still think SNY, though  ! LOL |
|
|
|
Post by mnholdem on Aug 1, 2014 8:53:00 GMT -5
4balance and daduke28,
In regard to your first question regarding manufacturing: While Al may have joked around it with his “maybe in five years we’ll buy out Merck” comment, I would be very surprised if Mannkind expanded from drug development and becomes a manufacturing pharmaceutical, except as a last resort. The first partner would manufacture Afrezza, not just the insulin. The patented Technosphere process is protected and therefore would be licensed to the manufacturer solely for Afrezza. Separate agreements would be drawn up for manufacturing any future Technosphere-delivered drugs.
In regard to Psycho Analyst’s SA article about best partner candidates: I wouldn’t dare presume to know how Dr Mann thinks but, as an executive myself, I would rather partner with a Pharma whose incentive is to capture market shares from the leaders than to partner with the leading Pharma itself, whose interests might be more inclined toward protecting their market share. It should be all about who among the big Pharmas, each with their own family of diabetes drugs, would have the greatest incentive to heavily promote Afrezza. I like Sanofi, as do other ProBoard members like daduke38, but I have doubts as to whether Sanofi, with its current bevy of blockbuster drugs, would be as motivated as a lesser Pharma that would be motivated to take over the lead.
Finally, in regard to your take on Hakan’s comments vs Matt’s: Frankly, I see Matt’s Investor Relations role as one of putting a positive spin for investors regarding the company and its future partner(s), but I would be surprised if he’s ever been directly involved in any negotiating. That would be Mann and Edstrom. Matt may have wanted to manage shareholder expectations back before the news blackout was imposed, and he may advise Dr Mann, but as far as giving in to pressure to compromise because of any specific date, those decisions would belong to Dr Mann alone, IMHO.
|
|
|
|
Post by dreamboatcruise on Aug 1, 2014 9:52:06 GMT -5
In regard to your first question regarding manufacturing: While Al may have joked around it with his “maybe in five years we’ll buy out Merck” comment, I would be very surprised if Mannkind expanded from drug development and becomes a manufacturing pharmaceutical, except as a last resort. The first partner would manufacture Afrezza, not just the insulin. The patented Technosphere process is protected and therefore would be licensed to the manufacturer solely for Afrezza. Separate agreements would be drawn up for manufacturing any future Technosphere-delivered drugs.
Hasn't the company indicated that they intend to be the manufacturer... though I've forgotten the exact quote or when it was. Also, they have the manufacturing line already, and they are recruiting for positions for manufacturing right now unless their job postings are some elaborate misdirect. |
|
|
|
Post by mnholdem on Aug 1, 2014 10:32:12 GMT -5
Hasn't the company indicated that they intend to be the manufacturer... though I've forgotten the exact quote or when it was. Also, they have the manufacturing line already, and they are recruiting for positions for manufacturing right now unless their job postings are some elaborate misdirect. Drug development companies often develop the manufacturing process along with the drug. Because of the proprietary and ground-breaking nature of Technosphere, Mannkind also needed a manufacturing facility for production of Afrezza for trials and to facilitate an earlier product launch.
If Mannkind sells all rights to Afrezza, the manufacturing plant would likely go with the deal. In addition to a cash/stock trade buy out, Mannkind could continue to collect royalties on Afrezza, and licensing of Technosphere for many years.
On the other hand, if the Agreement is for the Party only to manufacture Afrezza, then Mannkind could also lease the plant to the Pharma, who would take over operations until they build facilities of their own. Whatever best expedites the product launch of Afrezza will determine their choices.
Mannkind is currently looking for additional property in Danbury, but that could indicate a number of possibilities. Many think a restructuring of Mannkind into two companies is forthcoming. That's plausible. Even if Mannkind retains the Danbury plant, they would want another facility for the production of other drugs waiting in the pipeline, especially if the current plant is running at capacity to prepare samples for distribution and (they hope) to keep up with demand for Afrezza.
|
|
|
|
Post by kc on Aug 1, 2014 11:46:05 GMT -5
In regard to your first question regarding manufacturing: While Al may have joked around it with his “maybe in five years we’ll buy out Merck” comment, I would be very surprised if Mannkind expanded from drug development and becomes a manufacturing pharmaceutical, except as a last resort. The first partner would manufacture Afrezza, not just the insulin. The patented Technosphere process is protected and therefore would be licensed to the manufacturer solely for Afrezza. Separate agreements would be drawn up for manufacturing any future Technosphere-delivered drugs.
Hasn't the company indicated that they intend to be the manufacturer... though I've forgotten the exact quote or when it was. Also, they have the manufacturing line already, and they are recruiting for positions for manufacturing right now unless their job postings are some elaborate misdirect. IT WOULD BE THE ENTIRE SR MANAGEMENT TEAM INVOLVED WITH THEIR LEGAL ADVISORS. |
|
|
|
Post by 4Balance on Aug 1, 2014 17:23:52 GMT -5
mnholden, I understand...you're saying we want the BP to be "hungry." I can agree.
WRT LLY and GSK, I would have concerns for their ability to execute. It's one thing to be hungry, and another to have a clear food source at one's fingertips that one can fully utilize.
If LLY is cash-strapped (and I don't know the extent to which they are), that would affect the upfront money they're able to scrape up, as well as the investments needed to fully equip a sales force...not to mention taking on a new manufacturing facility.
In your estimation, how healthy is LLY's cash position..??
|
|
|
|
Post by mnholdem on Aug 3, 2014 12:03:15 GMT -5
If LLY is cash-strapped (and I don't know the extent to which they are), that would affect the upfront money they're able to scrape up, as well as the investments needed to fully equip a sales force...not to mention taking on a new manufacturing facility. In your estimation, how healthy is LLY's cash position..?? If I didn't have my grandkids over for the weekend, I'd have the time get more specific numbers. I think Eli Lilly's financial statements would confirm their cash on hand is around $4-$5 billion, slightly more than double that if you throw in short term assets. They'd be able to make a nice upfront cash payment and stock swap. LLY is presently around $60/share so a 2:1 or 3:1 stock swap is doable. Again, I don't have the time right now to figure dilution, but LLY would add a premium to take any dilution of their shares into account as part of the Agreement. I would want the upfront money to eliminate Mannkind's debt and then some to be used for further pipeline drugs, but upfront doesn't need to cover cash needed for production ramp up prior to launch, as the production would no longer be Mannkind's. Adding a second global distributor into the equation makes it more complicated, as another distributing BP would have a purchase agreement with Eli Lilly, plus an agreement with MNKD for royalties and even an upfront cash payment for the rights to distribute Afrezza. In effect, there could be two or more upfront cash payments depending on how distribution is structured and the number of BPs involved. I also wouldn't be surprised if there are performance standards involved, ensuring that any BP that doesn't deliver would eventually lose their distribution rights. Dr Mann believes Afrezza is a game changer and will do what it takes for Afrezza to succeed. |
|
|
|
Post by zieg on Aug 3, 2014 12:16:40 GMT -5
For whatever it's worth. I was with a friend last night that is one of the higher ups in Sales at Allergan. He flew into Miami but is based in Calif. They are going through some rough waters themselves ie, CRL, potential hostile takeover, etc. He wasn't familiar w/MNKD but I soon and quickly briefed him. Your drug, our delivery, etc. He said they have 15 Bil they need to spend to acquire so that they could have future growth. Seemed like a lot to have on hand for acquisitions. After speaking, I realized that they are probably not one of the contenders looking at buyout, but strong possible candidate for Technosphere.
|
|
|
|
Post by kc on Aug 3, 2014 13:34:48 GMT -5
I think AGN needs our inhaler to bring their Migraine drug Semprana to market. posted to another thread earlier today: Be patient whenever it happens it happens. The future is bright all big Pharma is looking at the inhalable drug delivery systems. AGN has a migraine drug approved by the FDA but their inhaler is not approved. They are back on the drawing board. I can see them wanting to partner with MannKind Technologies to bring the AGN drug to market. Allergan bought the company MAP for the drug now named Semprana. Allergan has plenty of money to buy a license from MNKD for a dreamscape Technosphere device. We we have a newly approve patent on our Migraine inhaler. They have an approved drug. YOUR DRUG, OUR DELIVERY. all AGN needs to bring to market is testing with MNKD device. Migraines is a 5 Billion + market in the USA. Do a search on both Semprana and Allergan who is in a fight by raiders from Valeant who is try to buy them out in a hostile bid of $53 billion. So Allergan who is also based in LA could be a player in a licensing partnership. Read more: mnkd.proboards.com/thread/1077/wait-news-remember#ixzz39M6aWzEq |
|
|
|
Post by mnholdem on Aug 3, 2014 14:09:36 GMT -5
I think AGN needs our inhaler to bring their Migraine drug Semprana to market. posted to another thread earlier today: Be patient whenever it happens it happens. The future is bright all big Pharma is looking at the inhalable drug delivery systems. AGN has a migraine drug approved by the FDA but their inhaler is not approved. They are back on the drawing board. I can see them wanting to partner with MannKind Technologies to bring the AGN drug to market. Allergan bought the company MAP for the drug now named Semprana. Allergan has plenty of money to buy a license from MNKD for a dreamscape Technosphere device. We we have a newly approve patent on our Migraine inhaler. They have an approved drug. YOUR DRUG, OUR DELIVERY. all AGN needs to bring to market is testing with MNKD device. Migraines is a 5 Billion + market in the USA. Mannkind's Dreamboat and Semprana are both FDA approved. At first blush, you'd think that a Semprana blister pac with multiple cartridges and a single Dreamboat inhaler would quickly get FDA approved. The problem is that both Dreamboat and Mannkind's 2-piece disposable Cricket inhaler are designed to be used with Technosphere. Partnering with Mannkind for further development is in AGN's best interests, regardless - IMHO. |
|
|
|
Post by kc on Aug 3, 2014 15:00:39 GMT -5
Allergan does not have FDA approval yet. They have to resubmit it again inhaler problems. They need us. www.fiercebiotech.com/story/fda-hands-out-its-third-rejection-allergans-migraine-drug-semprana/2014-06-30In an R&D update out this morning Allergan--best known for its wrinkle-remover Botox--put out the word that regulators had once again turned their thumbs down on Semprana, formerly known as Levadex. The drug had already been rejected by the FDA before Allergan acquired the migraine therapy in the billion-dollar buyout of MAP Pharmaceuticals in early 2013. Now Allergan says that any approval will likely be delayed until the second quarter of 2015. The FDA issued its first CRL on the therapy in the spring of 2012, with a detailed list of demands for more information on MAP's chemistry, manufacturing and controls process as well as more time to inspect a third-party manufacturer's facility and review the company's inhaler. But last spring the FDA had lingering manufacturing concerns, triggering another rejection for the inhalable version of a 60-year-old treatment. And today the company is still struggling to get this program through the approval process--citing the FDA's questions on "specifications around content uniformity on the improved canister filling process and on standards for device actuation." |
|
|
|
Post by 4Balance on Aug 4, 2014 22:59:46 GMT -5
If AGN decided to explore the use of a Technosphere carrier and Dreamboat device, and all studies went smoothly...FDA requirements were well understood and met...about how long before that combo could be approved..?? 2 years? 3 years? 4 years?
|
|
! LOL
