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Post by corpplanner on May 20, 2015 13:53:30 GMT -5
Hi, mnholdem, and thank you for the great explanation. I apologize but have not checked back with this board for many months, as you point out. My bad and again, I apologize to the other board members if this COGS issue has been beaten to death before. From the banter on the "other" message board, there has been so much vitriol that I found myself scratching my head and wondering if I was missing something.
The MNKD-SNY deal is therefore simply a supplier + royalty deal. And MNKD is simply a drug delivery and device developer/manufacturer. It is not a biotech company by any stretch of the imagination. A good analogy might be Powderject, another innovative delivery and device developer/mfr that lost their clear vision of what they wanted to be when they grew up.
I can't help wondering if MNKD mgt thinks of themselves as something more than a delivery/device company. Perhaps if corporate management had a clear vision of what the company really is, they would be more successful in attracting strategic alliances for other therapeutic categories, which should be the major complaint with management at this point in time (other than programmed options selling). I think the question to be asked at the annual meeting is: In one sentence, what type of company do you think you are and what is your vision going forward? If they cannot answer this in one succinct sentence, then mgt needs an off-site pow-wow to come up with the vision statement and a new strategic plan.
I suspect if mgt can be honest with this answer, then a lot of the bashing of MNKD might stop (SNY might still be bashed for the soft launch, which, btw, I believe is the best way to build this product) and MNKD would be seen by the Street/valued differently. Just a thought from someone who has done some "deals" in pharma/biotech and led strategic planning/biz dev for 2 medium sized companies. Get the messaging about the company correct and "they will come."
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Post by savzak on May 20, 2015 14:04:08 GMT -5
The MNKD-SNY deal is therefore simply a supplier + royalty deal. And MNKD is simply a drug delivery and device developer/manufacturer. It is not a biotech company by any stretch of the imagination. A good analogy might be Powderject, another innovative delivery and device developer/mfr that lost their clear vision of what they wanted to be when they grew up. corpplanner, are you suggesting that whether MannKind qualifies as a biotech company is dependent on how they structure their partnership deals? If so, I'm curious as to what your criteria are for qualifying as a biotech company.
What we know about their plan for the future is pretty clear. They're going to leverage technosphere as a delivery technology for other drugs.
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Post by jlaw277 on May 20, 2015 14:23:30 GMT -5
Corp. Planner,
I believe that Matt P. spoke to your question regarding how they see themselves in his recent BofA presentation. The whole thing is well worth a listen if you haven't already.
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Post by corpplanner on May 20, 2015 14:58:28 GMT -5
No, the point is that they successfully lyophylized insulin (a simplification of what they did but it wasn't much more than this) using their proprietary technology and delivered it through a proprietary device. Nothing biotech about this. The deal with SNY is a pretty straighforward supply and royalty alliance so SNY calls the shots.
What I'm suggesting is that MNKD is not a biotech and therefore their future plans should reflect their specific skill set, which is creating powdered forms of drugs and delivering them in a user-friendly manner. For some reason, they are "classified" by the street as a biotech, which has totally different connotations for expectations and valuation.
MNKD does not need to invest their own money in proof of principle endeavors -- that should be done through a strategic alliance or series of strategic alliances. MNKD tosses in the technology/devices needed and the alliance partner adds the agent and money. Clearly, the massive cost of developing Afrezza has not brought the corresponding valuation of the company (at least not immediately) and in hindsight, they might have done this more effectively through a strategic alliance with BP at a much earlier point in the Afrezza development process.
Yes, I agree with you that MNKD would like their future to be based on the TS technology and inhaler device but they are giving mixed messages to the outside world about who they are. Afrezza was an expensive way for them to prove that they can develop a product and in the end, they required a partner to market it. Now, MNKD needs to review their strategy going forward, back off Afrezza (again, SNY runs the ship here) and refocus the public image on the ability to add value to products for patients using a set of proprietary technologies and devices. This change in mindset and outward communication is kind of subtle, in a way, but it could have a major impact on attracting partners.
I headed strategic planning and biz dev at a medium sized company which had DEA clearance for some generic products plus vaccines. The vaccines business was true biotechnology given the way that the vaccines were developed and manufactured (fermentation, folding proteins,etc.). The CEO wanted the company to be in the biotech space. So, I revamped the way in which the company was presented and within one year, closed 3 biotech development deals (and a co-promotion on an existing drug which provided huge cash flow). To accomplish this, we took stock of our areas of excellence and communicated this in a very succinct manner to targeted audiences. For example, I gave a talk at the annual BIO meeting about partnering with a medium-sized company, which brought in many leads.
Which is a long-winded way of saying it is not the deal structure that characterizes the company. It's the company's ability to be honest with itself, take stock of where it excels, then communicate this single-mindedly and on point all of the time. MNKD has some great technology and should have had at least one other strategic alliance booked by this point, if not several. The disconnect, I think, is an ego thing. MNKD would like to be able to say "we have developed this [fill in the blank] product and now, everyone line up to partner with us." That clearly didn't work before and Afrezza took a long time to approval so MNKD needs to rethink how they will go forward. If they just plan to sell the company soon, well, that's another matter. But, if it is to become a sustaining development company/mfr, then they need to revise how they plan to achieve this because what they are doing currently, insofar as additional product development, doesn't seem to be working all that well.
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Post by mnholdem on May 20, 2015 15:03:31 GMT -5
I was pretty sure Hakan stated MannKind's vision at the EOY earnings call, so I went and found it from the transcript and highlighted it below, during the section where Hakan was talking about plans for additional Technosphere-delivered drug solutions.
"In the coming months we will finalize our development plans for each, and at that time we will be able to offer more insight into this process, including timelines, rational, market opportunity, and potential development cost. This will occur one at a time as each target completes its initial steps. In some cases though, competitive pressures may dictate that we not [tip] our hand too early, we will commit to sharing as much information as we can as soon as we can.
"At the same time, but independently, as we have previously said, we are in discussions with certain other companies to bring their API on to the Technosphere platform. This work is ongoing. We view these opportunities as a nice add on to our core business enabling us to extend our reach beyond what we otherwise could, but again we consider ourselves first and foremost [as a] product development company. Additionally, our agreements with these parties currently prevent our making any statement about them, but if our work results in a material agreement we will of course announce it."
I don't think the company is confused nor has there been ambiguity about what this company does. Perhaps the confusion exists among some investment analysts or investors themselves. If so, they need to do better research, IMHO. No rip on you, of course.
Perhaps the problem (and I don't think there is one) lies with Wall Street's always wanting to "lump" companies together. MannKind Corporation falls under the Biotech sector, but so do many other companies whose sole purpose is to provide delivery mechanisms for biotechnological agents. MannKind developed a vehicle for biotechnology companies (in the pure sense of the word) to utilize with the API they designed. Perhaps you'd be better describing MannKind Corporation as a biotech-support company, if there is such a thing.
Although some (including me) may argue with you, cp, that having successfully lyophilized particles that enable the absorption and use of insulin in it's monomeric form is very much a biotechnological achievement... and a HUGE achievement in diabetes treatment that will enable diabetics to have unprecedented control over the disease.
Finally, if MannKind does have problems attracting pharmaceutical companies, it's certainly NOT because of the message they communicate. It's because the technology has not yet been proven in the marketplace.
Afrezza will change all that. Big time.
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Post by savzak on May 20, 2015 15:21:26 GMT -5
No, the point is that they successfully lyophylized insulin (a simplification of what they did but it wasn't much more than this) using their proprietary technology and delivered it through a proprietary device. Nothing biotech about this. The deal with SNY is a pretty straighforward supply and royalty alliance so SNY calls the shots. What I'm suggesting is that MNKD is not a biotech and therefore their future plans should reflect their specific skill set, which is creating powdered forms of drugs and delivering them in a user-friendly manner. For some reason, they are "classified" by the street as a biotech, which has totally different connotations for expectations and valuation. MNKD does not need to invest their own money in proof of principle endeavors -- that should be done through a strategic alliance or series of strategic alliances. MNKD tosses in the technology/devices needed and the alliance partner adds the agent and money. Clearly, the massive cost of developing Afrezza has not brought the corresponding valuation of the company (at least not immediately) and in hindsight, they might have done this more effectively through a strategic alliance with BP at a much earlier point in the Afrezza development process. Yes, I agree with you that MNKD would like their future to be based on the TS technology and inhaler device but they are giving mixed messages to the outside world about who they are. Afrezza was an expensive way for them to prove that they can develop a product and in the end, they required a partner to market it. Now, MNKD needs to review their strategy going forward, back off Afrezza (again, SNY runs the ship here) and refocus the public image on the ability to add value to products for patients using a set of proprietary technologies and devices. This change in mindset and outward communication is kind of subtle, in a way, but it could have a major impact on attracting partners. I headed strategic planning and biz dev at a medium sized company which had DEA clearance for some generic products plus vaccines. The vaccines business was true biotechnology given the way that the vaccines were developed and manufactured (fermentation, folding proteins,etc.). The CEO wanted the company to be in the biotech space. So, I revamped the way in which the company was presented and within one year, closed 3 biotech development deals (and a co-promotion on an existing drug which provided huge cash flow). To accomplish this, we took stock of our areas of excellence and communicated this in a very succinct manner to targeted audiences. For example, I gave a talk at the annual BIO meeting about partnering with a medium-sized company, which brought in many leads. Which is a long-winded way of saying it is not the deal structure that characterizes the company. It's the company's ability to be honest with itself, take stock of where it excels, then communicate this single-mindedly and on point all of the time. MNKD has some great technology and should have had at least one other strategic alliance booked by this point, if not several. The disconnect, I think, is an ego thing. MNKD would like to be able to say "we have developed this [fill in the blank] product and now, everyone line up to partner with us." That clearly didn't work before and Afrezza took a long time to approval so MNKD needs to rethink how they will go forward. If they just plan to sell the company soon, well, that's another matter. But, if it is to become a sustaining development company/mfr, then they need to revise how they plan to achieve this because what they are doing currently, insofar as additional product development, doesn't seem to be working all that well. Thanks for the detailed response. I do think they know what they want to do/be but I'm guessing you may disagree it's the best choice. My perception is that they intend to continue to develop their own products while simultaneously seeking the type of arrangement you've described with other pharma's who have a proprietary product of their own which can be loaded onto Technosphere. I guess that would be a dual approach from the perspective you've described. Do you think there is any fundamental reason that such a dual approach would have a reduced chance of success?
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Post by turk74 on May 20, 2015 15:52:34 GMT -5
Interesting discussion. I think I buy that MNKD has developed a new and different product (drug/device) within the world of diabetic drugs. However, a common theme, if not a tragic flaw, for a company engaged in product development that 'sells' the marketing rights to the product is that "control" of the marketing is in the hands of another - SNY in the case of Afrezza. As a shareholder of MNKD, I would like to see SNY market Afrezza to every potential user and clear the path re spirometry and legality everyplace in the world. But I don't think SNY is doing this - at least not yet. If I had one line of questioning to pursue at the SH meeting tomorrow, I would ask MNKD management to explain exactly how they believe SNY is positioning Afrezza in the diabetes market - because it just isn't clear at all. Does SNY intend to only bang the drum targeting Type 2 needle phobic? In spite of anecdotal evidence that type 1's can control blood sugar levels well, doe the label keep SNY from targeting Type 1 prandial? Is there an overt conflict re positioning Afrezza with SNY's desire to promote toujeo; apidra?
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Post by tchalaa on May 20, 2015 15:58:16 GMT -5
Hi, mnholdem, and thank you for the great explanation. I apologize but have not checked back with this board for many months, as you point out. My bad and again, I apologize to the other board members if this COGS issue has been beaten to death before. From the banter on the "other" message board, there has been so much vitriol that I found myself scratching my head and wondering if I was missing something. The MNKD-SNY deal is therefore simply a supplier + royalty deal. And MNKD is simply a drug delivery and device developer/manufacturer. It is not a biotech company by any stretch of the imagination. A good analogy might be Powderject, another innovative delivery and device developer/mfr that lost their clear vision of what they wanted to be when they grew up. I can't help wondering if MNKD mgt thinks of themselves as something more than a delivery/device company. Perhaps if corporate management had a clear vision of what the company really is, they would be more successful in attracting strategic alliances for other therapeutic categories, which should be the major complaint with management at this point in time (other than programmed options selling). I think the question to be asked at the annual meeting is: In one sentence, what type of company do you think you are and what is your vision going forward? If they cannot answer this in one succinct sentence, then mgt needs an off-site pow-wow to come up with the vision statement and a new strategic plan. I suspect if mgt can be honest with this answer, then a lot of the bashing of MNKD might stop (SNY might still be bashed for the soft launch, which, btw, I believe is the best way to build this product) and MNKD would be seen by the Street/valued differently. Just a thought from someone who has done some "deals" in pharma/biotech and led strategic planning/biz dev for 2 medium sized companies. Get the messaging about the company correct and "they will come." This is what is consider a biotech: A biotechnology company is a company whose products or services primarily use biotechnology methods for their production, design or delivery. The United Nations Convention on Biological Diversity defines 'biotechnology' as: "Any technological application that uses biological systems, living organisms, or derivatives thereof, to make or modify products or processes for specific use."[1] In other words, biotechology can be defined as the mere application of technical advances in life science to develop commercial products. Today, no comprehensive global database of biotech companies is available online, despite a free and open access project was recently started in late 2014 Mannkind is a biotech with others value-added areas
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Post by corpplanner on May 20, 2015 16:17:48 GMT -5
Thank you both for the great responses. My view for the company's strategic direction is really of no importance since I don't have enough shares to make noise . But, I've been long for a long time and get frustrated when a company with such good assets does not communicate the vision in a way that inspires confidence. I do listen in to all conference calls (I used to write these presentations for the CEO of a BP) and heard what Hakan said, which is exactly my point. His first sentence should have been, "First and foremost...." Period. He could then have said, we are also accommodating x number of potential partners who wish to develop their API using our proprietary technology, at their expense (if that is, indeed, the case). Again, full stop. Two sentences. I recall either Hakan or Matt said that MNKD does not have the resources to devote to some of their development projects, which would then be further confounding to the public (like us) when they say they are splintering scarce resources to try developing aomeone else's API, if first and foremost, they want to develop their own products. Hakan somehow doesn't inspire confidence in his investors nor Wall Street. Each time he speaks, one wonders if there really are projects underway (we know there probably are a few due to the DD of folks on this board). We receive mixed messages from him and he panders to the audience. "We're doing a lot"(but we can't tell you what), "we don't have the resources for all of this" (but we plan to hire a new Director of Business Development), etc. Maybe he just needs a public relations firm to tighten the message and then train him to stay on message. Savzak, to answer your question, no, it would be surprising if the dual approach will work for MNKD. They don't have the resources nor the mindset to accomplish both. If my company had an API that would potentially work with the TS technology, I'd be hesitant to bring it to MNKD because they openly state that their own projects will take priority and they don't have enough resources. I'm afraid that MNKD is afraid to choose a single direction for fear that they might not pick the right path. If you throw enough jello at the wall, you might just get something to stick. Again, it goes to internal confidence and strategically planning the deployment of scarce resources.
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Post by babaoriley on May 20, 2015 16:25:21 GMT -5
cp, you wrote: "Clearly, the massive cost of developing Afrezza has not brought the corresponding valuation of the company (at least not immediately) and in hindsight, they might have done this more effectively through a strategic alliance with BP at a much earlier point in the Afrezza development process."
It is going to take longer than anticipated, but remember all the extra time to get the approval and the destructive nature of the CRL's especially number two, where it certainly appears that the FDA was ready to approve. An early partnership would have worked great for expenses, but not for future rewards, and, again, perhaps Al's decision is different if he had an inkling how long it would take to satisfy the FDA.
Due to the scrambling for approval and the venomous effect on the balance sheet, I think most all else had to get shelved and attention was focused on one goal - get Afrezza approved. Whether that was a mistake or not, even in hindsight, is far from clear to me, but I did not, head a strategic planning and biz dev at a medium sized company which had DEA clearance for some generic products plus vaccines," so you have every right to know better.
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Post by corpplanner on May 20, 2015 16:35:13 GMT -5
baboriley, I completely agree with you. Hindsight is 20/20 and in no way did I intend to cast aspersions on Mr. Mann, who I happen to think is one of the all-time great visionaries in the medical device field. One does have to wonder, though, what might have been had a BP partnered with them at an earlier point in time. We will never know and it's water under the bridge now. It's all up to SNY now to carefully build Afrezza to what we all know it can be. I've been long for a long time and will continue to be as I believe in the benefit Afrezza will bring to many patients. The future direction of MNKD? Well, nothing I've heard so far is convincing. But, I'm happy to own a royalty company for now.
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Post by tchalaa on May 20, 2015 17:16:23 GMT -5
baboriley, I completely agree with you. Hindsight is 20/20 and in no way did I intend to cast aspersions on Mr. Mann, who I happen to think is one of the all-time great visionaries in the medical device field. One does have to wonder, though, what might have been had a BP partnered with them at an earlier point in time. We will never know and it's water under the bridge now. It's all up to SNY now to carefully build Afrezza to what we all know it can be. I've been long for a long time and will continue to be as I believe in the benefit Afrezza will bring to many patients. The future direction of MNKD? Well, nothing I've heard so far is convincing. But, I'm happy to own a royalty company for now.Hi Corpplanner, you do have a strange pattern as an investor, i will rather say you have the tendency of spraying Fear, Uncertainty and Doubt. If you plan to invest or are already invested in a company, your assessment should be evaluating this one against it real potential, market opportunities, facts, peers and not your personal experience what no one can trace (Fear and Doubt) in other to refute the facts. I find it strange that you conclude with Uncertainity, instead of step aside like a smart investor you prefer to stay. Bottom of the line is, after going through all your posts i notice the pattern - show few knowledge -> bring up private experience no facts -> negate the assumption -> stay even not happy (instead of moving on..) PS: It is just what i figured out
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Post by tchalaa on May 20, 2015 17:19:57 GMT -5
let's us argue with available information, facts the rest will follow - This BOARD is gradually getting full of F-U-D, do your homework !
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Post by babaoriley on May 20, 2015 18:49:54 GMT -5
I would ask a favor of those of you who attend - if you could post a quick note or two about the meeting and your overall impressions at your earliest convenience, it would be a great thing for those of us who wish the stock were high enough to justify cross-country attendance! And, just think how many will "like" your posts!
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Post by Deleted on May 20, 2015 19:16:02 GMT -5
Any one recording the Q/A session or posting live updates for us un lucky ones not able to attend?
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