MannKind sheds light on new $100m inhaled formulation partne

[lakers]

MannKind sheds light on new $100m inhaled formulation partner

MannKind has spoken about Receptor Life Science, a newly-formed company which last month licensed the Technosphere inhaled delivery platform from the struggling firm.

January was a tumultuous month for MannKind Corporation, with inhaled insulin partner Sanofi pulling-out from its Afrezza commercialisation deal and causing share prices to plummet.

The firm also announced it had entered into a collaboration and license agreement with Seattle, Washington-based Receptor Life Science which intends to use the same drug delivery platform Afrezza is based on – Technosphere – across multiple inhaled therapeutic candidates.

But with no website or public records, questions have been asked about this “newly formed entity” across investor forums.

Yesterday, in an investor call, MannKind’s new CEO Matthew Pfeffer quashed these rumours, saying Receptor is “a wholly independent entity unaffiliated with MannKind” and after being asked about the secrecy surrounding the deal, added further colour.

“We negotiated the agreement with Receptor because it is attractive from the standpoint of Receptor’s pedigree, their management team and the business opportunity,” he said. “Our reverse merger with Receptor is not under consideration at this time.”

He added MannKind is not at liberty to disclose proprietary information about Receptor, but said the firm has been operating for a while and recently changed its name. He also dispelled rumours Receptor was owned by MannKind founder Al Mann.

“We can’t talk about like who the management team is and who’s behind the company and how they’re funded… [they have] good reasons why they don’t want to make those things public at this point and we have to respect that.”

Into the Technosphere

Under terms of the deal potentially worth $100m, MannKind retains all rights for its Technosphere platform except for Receptor’s specific proprietary compounds. Receptor will also be responsible for manufacturing and commercialisation activities.

Technosphere delivers API through inhalation, using the excipient fumaryl diketopiperazine (FDKP) which is highly soluble at pH 6.0, the prevailing physiological pH in the lungs.

The news also supports MannKind’s vision going forward after Sanofi’s exit, explained by Pfeffer at last month’s JP Morgan Conference. He said licensing deals would yield short-term cash and long-term growth opportunities for the firm.

Rumour mill shutdown

Since the Sanofi fallout, MannKind has fallen foul to a number of other rumours, including reports it is looking to offload its Danbury, Massachusetts manufacturing facility.

“The company does not respond to rumors, particularly those around potential buyouts, executive departures, whether the Danbury facility is still in operation and so on.”

He continued: “The problem is that such rumors are so frequent that once we respond to one, people are more likely to believe the next rumor if you don’t respond to that one also and so on.”

And explaining why MannKind has not responded to questions from in-Pharmatechnologist since the Sanofi break-up, he said “other than material disclosures, MannKind will not comment on questions post about rumors or other speculations.”
mobile.in-pharmatechnologist.com/Drug-Delivery/MannKind-sheds-light-on-new-100m-inhaled-formulation-partner

[rickyr49117]

Thanks for the info, you do a good job for us. Hope this puppy can turn around.

[mnholdem]

The author neglected to mention that there are also sales royalties included in the deal:

Excerpt from PR: "MannKind will be eligible to receive development and commercialization milestones of up to $102.25 million as well as mid-single to low double-digit royalties on net sales of product."

Source: investors.mannkindcorp.com/releasedetail.cfm?ReleaseID=951141#sthash.x1UzAQkN.dpuf

[Deleted]

SOunds a lot better then it did on the conference call

[LosingMyBullishness]

But this all is old news, right? Where is the 'new light'? Why bother to start another thread?

[roseylv]

Feb 9, 2016 10:47:32 GMT -5 LosingMyBullishness said:

But this all is old news, right? Where is the 'new light'? Why bother to start another thread?

Agreed Intrinsic!

Lakers, the tidbits and quotes above were all spoken about at the JPM conference.  Are we missing something here....

[lakers]

Feb 9, 2016 17:17:26 GMT -5 roseylv said:

Feb 9, 2016 10:47:32 GMT -5 LosingMyBullishness said:

But this all is old news, right? Where is the 'new light'? Why bother to start another thread?

Agreed Intrinsic!

Lakers, the tidbits and quotes above were all spoken about at the JPM conference.  Are we missing something here....

RLS can do a reverse merger in the future with Mnkd although Matt said "Our reverse merger with Receptor is not under consideration at this time."

There are many companies that perform reverse mergers, also known as reverse takeovers, as opposed to other, more traditional forms of raising capital. A reverse merger is when a private company becomes a public company by purchasing control of the public company. The shareholders of the private company usually receive large amounts of ownership in the public company and control of its board of directors (B of D). Once this is complete, the private and public companies merge into one publicly traded company.

Advantages of Reverse Mergers
The following are the many advantages to performing reverse mergers.

The ability for a private company to become public for a lower cost and in less time than with an initial public offering (IPO). When a company plans to go public through an IPO, the process can take a year or more to complete. This can cost the company money and time. With a reverse merger, a private company can go public in as little as 30 days.
Public companies have higher valuations compared with private companies. Some of the reasons for this include: greater liquidity, increased transparency and publicity, and they have a faster growth rates compared to private companies.
Reverse mergers are less likely to be canceled or put on hold because of the adverse effects of current market conditions. This means that if the equity markets are performing poorly or there is unfavorable publicity surrounding the IPO, underwriters can pull the offering off the table.

The public company can offer a tax shelter to the private company. In many cases, the public company has taken a series of losses. A percentage of the losses can be carried forward and applied to future income. By merging the private and public company, it is possible to protect a percentage of the merged company's profits from future taxes.

www.investopedia.com/articles/stocks/08/reverse-merger.asp

[tayl5]

It's worth noting that the downside to a reverse merger over an IPO is that there is no fresh money coming into the combined company. In an IPO, some percentage of the company is typically sold to the public along with shares from current shareholders. That said, both companies in a reverse merger can benefit if their assets and resources are complementary. That can attract new investment after the merger.

[Deleted]

Feb 9, 2016 21:02:23 GMT -5 lakers said:

Feb 9, 2016 17:17:26 GMT -5 roseylv said:

Agreed Intrinsic!

Lakers, the tidbits and quotes above were all spoken about at the JPM conference.  Are we missing something here....

RLS can do a reverse merger in the future with Mnkd although Matt said "Our reverse merger with Receptor is not under consideration at this time."

There are many companies that perform reverse mergers, also known as reverse takeovers, as opposed to other, more traditional forms of raising capital. A reverse merger is when a private company becomes a public company by purchasing control of the public company. The shareholders of the private company usually receive large amounts of ownership in the public company and control of its board of directors (B of D). Once this is complete, the private and public companies merge into one publicly traded company.

Advantages of Reverse Mergers
The following are the many advantages to performing reverse mergers.

The ability for a private company to become public for a lower cost and in less time than with an initial public offering (IPO). When a company plans to go public through an IPO, the process can take a year or more to complete. This can cost the company money and time. With a reverse merger, a private company can go public in as little as 30 days.
Public companies have higher valuations compared with private companies. Some of the reasons for this include: greater liquidity, increased transparency and publicity, and they have a faster growth rates compared to private companies.
Reverse mergers are less likely to be canceled or put on hold because of the adverse effects of current market conditions. This means that if the equity markets are performing poorly or there is unfavorable publicity surrounding the IPO, underwriters can pull the offering off the table.

The public company can offer a tax shelter to the private company. In many cases, the public company has taken a series of losses. A percentage of the losses can be carried forward and applied to future income. By merging the private and public company, it is possible to protect a percentage of the merged company's profits from future taxes.

www.investopedia.com/articles/stocks/08/reverse-merger.asp

He did not say this. You are adding it. Go look at the FAQ's

[lakers]

Reverse merge not at this time doesn't mean never. Got it?

[petech]

I don't understand what you are saying about a reverse merger.  These are done to expedite a private company going public by 'merging' into a company that effectively is a zombie.  When this is done, the private company's shareholders (in your example RLS) would end up owning pretty much all publicly traded stock.  That isn't what we have here...MNKD is far from a target in a reverse acquisition.

If you are suggesting that MNKD will be acquired by RLS, that could happen I suppose...but I don't see why RLS would want to acquire them and somehow remain public; they're doing just fine in private hands (plus less compliance/regulation).

Regardless of the form, MNKD is trading VERY low now in terms of historic market cap, so this is far from an ideal situation in which to be acquired.  While the combined MNKD + whoever may end up doing fantastic from a stock perspective in the long run; our the value we'd receive would be set based on any acquisition price now...so not ideal.  Yes there is exotic nonsense that allows future value rights....let's not hold our breath.

Long story short: bad time to be acquired when your stock is in the toilet.

[lakers]

I can see a scenario in which if well-funded RLS drugs show great trial results they might reverse merge, then sell off Afrezza, state-of-the-art plant, and keep the patents. This way RLS will save 12-14% royalty which is significant for BBs, take advantage of tax write-off, and own TS+patents.

This could happen if Mnkd doesn't obtain funding in time for 2017. The Sanofi settlement should provide sufficient funding for at least 1 year using $135M Pfizer settled with Nektar as baseline.

To realize Afrezza potential, Mnkd needs at least 4-yr funding plus multiple regional partners to share cost.

[symbil]

The Nektar settlement was for a next gen product Pfizer was working on with them, their NGI.

[petech]

Ok....  So you're saying RLS acquires MNKD at a significant discount because MNKD is cash poor and sales aren't there yet....what do you think that does to MNKD shareholders?  You think they make out well because of this??

[Deleted]

Feb 11, 2016 11:45:37 GMT -5 lakers said:

Reverse merge not at this time doesn't mean never. Got it?

Matt did not say at this time. You are adding "at this time"

You are making it up in your head. Go read the FAQ  the question and answer. 

Matts correct answer as per the FAQ is below 

A REVERSE MERGER WITH RLS IS NOT UNDER CONSIDERATION

You get how different these two statements are?