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Post by centralcoastinvestor on Mar 9, 2016 15:53:54 GMT -5
Let me begin by saying that I believe, along with many of you, that Sanofi sandbagged Mannkind and Afrezza. In a big way, in my opinion. The question as to whether Sny provides a cash settlement when they hand back Afrezza has to do with why they didn't try to sell Afrezza. Let's look at the two possible reasons why they would have sandbagged Afrezza:
1. Sanofi knew Afrezza was a big threat and they partnered with Mannkind to slow down the adoption of the drug.
I don't believe this is what happened. I believe that the previous CEO Viehbacher fully planned to push Afrezza hard. I don't believe the Sny Board agreed with him. In fact, it is my belief that the Afrezza partnership sealed the Viehbacher termination decision by the board. Viehbacher was being too aggressive and innovative for their comfort. So Sny brings in Oliver Brandicourt to bring order and tradition back to Sanofi.
2. Sanofi made the decision to slow sell Afrezza the moment Viehbacher was terminated.
This is what I believe happened. As I look back, I can see so many signs that I should have picked up on that Sanofi wasn't trying. No effort to open international markets. Hardly any visible marketing efforts. Ignoring Afrezza at conferences and on conference calls. The list goes on.
Because i I believe that the second reason is true, it makes a difference as to what Sanofi does as they close out the partnership. Sanofi really doesn't believe that Afrezza is a game changer. After seeing all of the evidence to the contrary, I don't know how they can draw that conclusion. It is what it is. Because they have been on a course to end the partnership for some time, I think they just want to be free of what they believe is just a niche drug. Because they saved hundreds of millions in advertising and staff costs and because Mannkind is having cash problems, they can neatly tie up this problem partnership at a relatively low cost. At this point, Sanofi is trying to reorganize and reinvent itself. Afrezza is not part of that equation. In fact, it's an annoyance to Brandicourt. I believe that for the reasonable cost of $200 to $300 million, Sanofi gets fully rid of Mannkind and Afrezza and Mannkind agrees not to sue in the future. I believe Sanofi just wants to get away from the partnership as quickly and inexpensively as possible. Heck with the money Sanofi saved on the slow sell, they can pay off Mannkind and still be ahead in their minds. Obviously I could be wrong and we shall see in the next 4 weeks.
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Post by babaoriley on Mar 9, 2016 15:58:40 GMT -5
CCI, hope you're right. I agree with your points 1 and 2; just not in the settlement amount. Any settlement that nets us positive cash flow (i.e., over and above forgiveness of debt) would be pennies from heaven in my estimation.
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Post by mnholdem on Mar 9, 2016 16:57:53 GMT -5
MannKind should absolutely NOT give up any right to sue Sanofi. If they were to agree to that, then Sanofi would be able to say all kinds of negative things about Afrezza in the future with impunity.
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Post by oldfishtowner on Mar 9, 2016 17:18:19 GMT -5
MannKind should absolutely NOT give up any right to sue Sanofi. If they were to agree to that, then Sanofi would be able to say all kinds of negative things about Afrezza in the future with impunity. That depends on what is written into the settlement, if there is one. If, as the result of a settlement, MNKD is prohibited from saying anything negative about SNY's marketing of Afrezza, it would only be fair that SNY be prohibited from saying anything negative about Afrezza based on SNY's painfully slow low-budget rollout. |
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Post by centralcoastinvestor on Mar 9, 2016 17:19:32 GMT -5
MannKind should absolutely NOT give up any right to sue Sanofi. If they were to agree to that, then Sanofi would be able to say all kinds of negative things about Afrezza in the future with impunity. Don't get me wrong. I would love to be able to sue Sanofi. But Mannkind needs cash badly. This would be a great way to get a substantial amount of cash. I think Sanofi recognizes that they are very vulnerable to substantial losses in a breach of contract lawsuit. It is why I believe they will offer a substantial amount to remove that risk. Mannkind runs the risk in a lawsuit of losing. Money in hand may be more valuable than the right to sue someday. |
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Post by rockstarrick on Mar 9, 2016 19:11:40 GMT -5
MannKind should absolutely NOT give up any right to sue Sanofi. If they were to agree to that, then Sanofi would be able to say all kinds of negative things about Afrezza in the future with impunity. Don't get me wrong. I would love to be able to sue Sanofi. But Mannkind needs cash badly. This would be a great way to get a substantial amount of cash. I think Sanofi recognizes that they are very vulnerable to substantial losses in a breach of contract lawsuit. It is why I believe they will offer a substantial amount to remove that risk. Mannkind runs the risk in a lawsuit of losing. Money in hand may be more valuable than the right to sue someday. I'll bet there is a mediation from hell happening as we sit. There has to be, unless for some reason Mannkind doesn't think Sanofi owes them anything. Who knows, maybe we will here one way or the other on Monday. |
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Post by spiro on Mar 9, 2016 19:35:35 GMT -5
Spiro agrees with Babaoriley, $200 to $300 million may be a bit too low.
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Post by agedhippie on Mar 9, 2016 19:44:35 GMT -5
MannKind should absolutely NOT give up any right to sue Sanofi. If they were to agree to that, then Sanofi would be able to say all kinds of negative things about Afrezza in the future with impunity. Don't get me wrong. I would love to be able to sue Sanofi. But Mannkind needs cash badly. This would be a great way to get a substantial amount of cash. I think Sanofi recognizes that they are very vulnerable to substantial losses in a breach of contract lawsuit. It is why I believe they will offer a substantial amount to remove that risk. Mannkind runs the risk in a lawsuit of losing. Money in hand may be more valuable than the right to sue someday. I don't know how often this has to be said but the only recourse the partnership agreement allows is arbitration. Neither Sanofi nor Mannkind can sue the other in court and filing a suit would be a breach of contract in it's own right. Can they haul this into arbitration? Absolutely. Can they sue in court? Absolutely not. (Not strictly true, either can file but it will be tossed by the court immediately and the other side would promptly go to arbitration to recover their costs for the breach). |
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Post by kc on Mar 9, 2016 19:45:37 GMT -5
Spiro agrees with Babaoriley, $200 to $300 million may be a bit too low. Spiro my thoughts are they should give us 50% of the agreed upon milestone payments and complete debt repayment. Additionally they need to give all of us a years supply of Mallomars. |
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Post by centralcoastinvestor on Mar 9, 2016 19:56:24 GMT -5
Don't get me wrong. I would love to be able to sue Sanofi. But Mannkind needs cash badly. This would be a great way to get a substantial amount of cash. I think Sanofi recognizes that they are very vulnerable to substantial losses in a breach of contract lawsuit. It is why I believe they will offer a substantial amount to remove that risk. Mannkind runs the risk in a lawsuit of losing. Money in hand may be more valuable than the right to sue someday. I don't know how often this has to be said but the only recourse the partnership agreement allows is arbitration. Neither Sanofi nor Mannkind can sue the other in court and filing a suit would be a breach of contract in it's own right. Can they haul this into arbitration? Absolutely. Can they sue in court? Absolutely not. (Not strictly true, either can file but it will be tossed by the court immediately and the other side would promptly go to arbitration to recover their costs for the breach). Sanofi runs the same risk in arbitration as they do in a trial. And so does Mannkind. I believe that Sanofi reduces their risk by offering cash. As far as arbitration, my profession is in a field where arbitration occurs often. For the most part, it settles most disputes. However, the arbtration process can be called into question and then lawsuits are filed anyway. It is up to a judge to allow a jury to hear a case. If the judge determines that a violation is particularly egregious, the judge will allow it to go to trial. JMHO |
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Post by agedhippie on Mar 9, 2016 20:38:55 GMT -5
I don't know how often this has to be said but the only recourse the partnership agreement allows is arbitration. Neither Sanofi nor Mannkind can sue the other in court and filing a suit would be a breach of contract in it's own right. Can they haul this into arbitration? Absolutely. Can they sue in court? Absolutely not. (Not strictly true, either can file but it will be tossed by the court immediately and the other side would promptly go to arbitration to recover their costs for the breach). Sanofi runs the same risk in arbitration as they do in a trial. And so does Mannkind. I believe that Sanofi reduces their risk by offering cash. As far as arbitration, my profession is in a field where arbitration occurs often. For the most part, it settles most disputes. However, the arbtration process can be called into question and then lawsuits are filed anyway. It is up to a judge to allow a jury to hear a case. If the judge determines that a violation is particularly egregious, the judge will allow it to go to trial. JMHO Provided the arbitration clause is properly drawn there is no way to avoid arbitration. Where arbitration clauses are badly drawn they can definitely be challenged but that is not the case here as they have used the standard clauses. To dispute the arbitration clause you would need to file in Federal court as it would be covered by the FAA - how long have you got? Years? Sanofi have. This is not about the rights and wrongs of what happened. This is about whether the arbitration clause is properly drawn and if it is the case goes to arbitration and not court after a couple of years delay. |
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Post by jurystillout on Mar 9, 2016 23:14:03 GMT -5
mnkd doesn't have the cash or the time to pursue legal action, and even though we are all pissed off about the sny "launch", the contract between mnkd and sny was so poorly written that mnkd would have an extremely tough time proving a breach of contract, the contract had no real defined targets, goals, or time lines for sny to be required to achieve. These two companies are going to part ways and a single dime wont change hands.
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Post by jerrys on Mar 10, 2016 0:19:27 GMT -5
mnkd doesn't have the cash or the time to pursue legal action, and even though we are all pissed off about the sny "launch", the contract between mnkd and sny was so poorly written that mnkd would have an extremely tough time proving a breach of contract, the contract had no real defined targets, goals, or time lines for sny to be required to achieve. These two companies are going to part ways and a single dime wont change hands. I agree. When MNKD agreed to let the JAC settle all disputes and then allowed the final decision to rest with a Sanofi representative on the JAC, they effectively signed an arbitration agreement. Unless MNKD can provide evidence that they did, in fact, dispute the way SNY was doing things and that the committee's decisions were with intent to harm MNKD, I don't see how they could have a case. Did MNKD ever raise any issues with that committee? |
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Post by babaoriley on Mar 10, 2016 2:23:07 GMT -5
Spiro agrees with Babaoriley, $200 to $300 million may be a bit too low. We so rarely agree, Spiro!!  |
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Post by babaoriley on Mar 10, 2016 2:30:46 GMT -5
If MNKD could get SNY to court in a jury trial, anything could happen; juries are notorious for coming up with the wildest verdicts for the worst reasons. Arbitration is far less likely to yield a wild and crazy result, and is often cheaper. Those clauses are usually upheld, so if there's an arbitration provision, that's likely where it will end up. But will there be an arbitration, or a settlement? I hope they settle, quicker, cheaper, less time for Matt and his top guys away from the business. Not looking for much out of our settlement, like I said, forgiveness of debt would be fine with me, not that we don't deserve more, but tough to prove, and arbitrators are generally not swayed, as are jurors, if you have the right legal team.
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