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Post by figglebird on Oct 4, 2016 13:49:00 GMT -5
They hold valencia as calat - there was wording as i recall about other ip as assets but anything ts related would be conflict of interest with respect to two things.
1. Interference for financial gain
2. the ts tech portion of the deal was not executed by sny at sny's disgression. which goes back to point 1.
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Post by lakers on Oct 4, 2016 13:52:57 GMT -5
Cj: I'm curious as to what "rights" Sanofi holds in regards to MNKD tech, patents, and property as "collateral." Do you have a moment to elaborate on this? I've never heard this before. Mahalo. I know there are others here who know all the details better than I do, but from what I understand, SNY holds the patents and tech for Afrezza and at least the Valencia head quarters as collateral against the loan. "The loan" of course being all money SNY blew and accomplished nothing with. Slightly ironic. Yes. The ~$75M loan is dead money to Sny until 2024 anyway, albeit 8% interest if Mnkd will still be an independent entity. That's why I think any settlement will likely include a loan forgiveness. This will lift the lien from those assets. Mnkd can then use those freed assets as collaterals for future financing or sell the Valencia HQ. Sny will likely offer this first (gimme) plus additional comp.
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Post by therealisaching on Oct 4, 2016 13:52:58 GMT -5
SNY's security interests from the 10Q:
The obligations of the Company under the Sanofi Loan Facility are guaranteed by the Company’s wholly-owned subsidiary, MannKind LLC, and are secured by a first priority security interest in certain insulin inventory located in the United States and any contractual rights and obligations pursuant to which the Company purchases or has purchased such insulin, and a second priority security interest in the Company’s assets that secure the Company’s obligations under the Facility Agreement, as amended. In addition, the Company granted to Sanofi, as additional security for the obligations under the Sanofi Loan Facility, a first priority mortgage on the Company’s facility in Valencia, California, which has a carrying value of $17.6 million as of June 30, 2016
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Post by agedhippie on Oct 4, 2016 14:00:09 GMT -5
I know there are others here who know all the details better than I do, but from what I understand, SNY holds the patents and tech for Afrezza and at least the Valencia head quarters as collateral against the loan. "The loan" of course being all money SNY blew and accomplished nothing with. Slightly ironic. Yes. The ~$75M loan is dead money to Sny until 2024 anyway, albeit 8% interest if Mnkd will still be an independent entity. That's why I think any settlement will likely include a loan forgiveness. This will lift the lien from those assets. Mnkd can then use those freed assets as collaterals for future financing or sell the Valencia HQ. Sny will likely offer this first (gimme) plus additional comp. More likely Sanofi take the Valencia HQ which they can then sell and agree to forgive the balance of the loan.
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Post by matt on Oct 4, 2016 14:03:32 GMT -5
and does Mann foundation have the funds to do such financing? With so much invested thus far, it would make logical sense to take it to the final step? If they do have funds , whats the incentive for others to invest , when they themselves are not stepping in? There are two issues with the Mann Foundation. One is whether they have the cash, but the other is how the trust agreement is written. Regardless of how family members may feel, professional trustees have to follow the letter of the trust agreement lest they risk a lawsuit from any named beneficiaries. If the trust agreement explicitly instructed the trustees to prop up MNKD at all costs, even to the 100% diminution of the trust corpus, then that is what they will do, but that would be highly unusual.
If, as is more likely, Al spread the money around to various charities, universities, and relatives then the trustees have to act in the interest of those beneficiaries even if than means they diversify the investment portfolio by selling MNKD and as a result further depress the price. There was a footnote in the last 10-Q mentioning that the trustee might do exactly that.
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Post by cjc04 on Oct 4, 2016 14:13:05 GMT -5
They hold valencia as calat - there was wording as i recall about other ip as assets but anything ts related would be conflict of interest with respect to two things. 1. Interference for financial gain 2. the ts tech portion of the deal was not executed by sny at sny's disgression. which goes back to point 1. Not sure what all that means or how it makes the situation any better. SNY has a lein on Afrezza as long as that loan is active, and I'm not sure how or why they'd use Afrezza as collateral if they weren't able to make it. In either case, I remember reading that MNKD basically had to give SNY the key to the back door and show them everything. So regardless of their exact right of usage, they have seen and they know EVERYTHING about everything. The only point I was trying to make was about the conversation regarding another partner for MNKD. I can't imagine any other company willing to partner while a competitor, SNY, has such a hold on your partner. With all that said,,,,,, I think it'd be amazing if MNKD received any $$ from SNY from a settlement, but I do "hope" thiS BS loan is wiped and all these issues are cleared in the settlement.
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Post by Deleted on Oct 4, 2016 14:13:28 GMT -5
and does Mann foundation have the funds to do such financing? With so much invested thus far, it would make logical sense to take it to the final step? If they do have funds , whats the incentive for others to invest , when they themselves are not stepping in? There are two issues with the Mann Foundation. One is whether they have the cash, but the other is how the trust agreement is written. Regardless of how family members may feel, professional trustees have to follow the letter of the trust agreement lest they risk a lawsuit from any named beneficiaries. If the trust agreement explicitly instructed the trustees to prop up MNKD at all costs, even to the 100% diminution of the trust corpus, then that is what they will do, but that would be highly unusual.
If, as is more likely, Al spread the money around to various charities, universities, and relatives then the trustees have to act in the interest of those beneficiaries even if than means they diversify the investment portfolio by selling MNKD and as a result further depress the price. There was a footnote in the last 10-Q mentioning that the trustee might do exactly that.
Isnt Mann foundation different from Al Mann trust?
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Post by sportsrancho on Oct 4, 2016 14:46:36 GMT -5
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Post by sportsrancho on Oct 4, 2016 14:47:23 GMT -5
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Post by dreamboatcruise on Oct 4, 2016 14:51:49 GMT -5
Given all the money out there, are there not PE firms who look for healthcare deals who also have a stable of operating execs who would cut off body parts in return for a comp package that included equity to make them wealthy assuming success? Given how hot the epi space is now, seems possible but PE firms probably don't want to put up a lot of $$ so how about some risk mitigation by getting a hedge fund or two to share the risk. Private equity firms normally invest only in companies with a profitable business with potential to earn even more with some restructuring or further investment, and venture capital firms do not invest in companies that are already public since they tend to make their money on IPO pops. The logical buyers are existing pharma companies with an interest in diabetes, but most of the research dollars from big pharma is going into oral agents like GLP-1 for use with or without metformin. Are there lots of healthcare executive who would like a sweet comp package, sure, but not so many investment funds willing to give them the dollars. MNKD, between the debt and equity, is simply overpriced for most financially motivated investors.
The fact is that companies like MNKD have the public markets and not much else unless a strategic partner steps up. There really are only three strategic partners for Afrezza; Sanofi already had its chance and I don't see Lilly or Novo chasing Afrezza. The public markets are going to be rough on any company with a < $1 stock price, but that is the case. I don't see that Sanofi is going to sink more money into MNKD especially as they are preparing for major layoffs as Lantus is replaced by biosimilar basalglar and, despite the rhetoric of loving to hate Sanofi, I think holding out for any Sanofi settlement is unlikely to get results.
Not that I think we're about to get a strategic partner soon, but why would you rule out all the other companies that make up the second tier of diabetes pharma? Couldn't it be advantages for them to beef up their offerings with insulin since they are fielding sales forces addressing diabetes already. Surely there are at least several others that would have sales forces with diabetes expertise that are significantly larger than what MNKD has ? ? ?
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Post by matt on Oct 4, 2016 15:31:37 GMT -5
Isnt Mann foundation different from Al Mann trust? There might be both (or even more than one of each type), but it is largely a matter of legal semantics. Legally speaking, both would be trusts and the document that created the trust sets forth the objectives and beneficiaries of the trust. Except in special circumstances, the trustees are obliged to follow the intentions of the grantor to the letter.
Some trusts are allowed to deplete that assets for the benefit of one or more beneficiaries to the detriment of other beneficiaries, even if that totally wipes out the trust assets. Most commonly this happens when a husband and wife put all their assets into a trust providing a lifetime income for the needs of the "second to die", with the remainder going to the grandchildren. If the "second to die" lives an unexpectedly long time or becomes very ill with high medical bills they might use up all the assets, leaving the grandchildren nothing (which is legal). In other cases, it is not legal. It all depends on how the documents are written, and we will likely never see those.
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Post by matt on Oct 4, 2016 15:41:29 GMT -5
Not that I think we're about to get a strategic partner soon, but why would you rule out all the other companies that make up the second tier of diabetes pharma? Couldn't it be advantages for them to beef up their offerings with insulin since they are fielding sales forces addressing diabetes already. Surely there are at least several others that would have sales forces with diabetes expertise that are significantly larger than what MNKD has ? ? ? It is impossible to rule out anybody, but the trend in the industry is to focus on narrower therapeutic areas, and to avoid going head to head with multiple well-entrenched players. A lot of the players in metabolic drugs have taken the decision to exit the field as their remaining drugs come off patent, not to invest more, and despite what you might think of our French friends a lot of companies will look at Afrezza and think to themselves "it Sanofi couldn't make a dent in the market, we will never be able to do it".
There may be a brave company out there willing to try, but the second tier companies don't have the deep pockets of the big pharmas so they are a bit more conservative.
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Post by Deleted on Oct 4, 2016 16:25:17 GMT -5
The CEO has a picture of him and his dog in his linked in profile. Very professional.
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Post by dreamboatcruise on Oct 4, 2016 16:35:13 GMT -5
Not that I think we're about to get a strategic partner soon, but why would you rule out all the other companies that make up the second tier of diabetes pharma? Couldn't it be advantages for them to beef up their offerings with insulin since they are fielding sales forces addressing diabetes already. Surely there are at least several others that would have sales forces with diabetes expertise that are significantly larger than what MNKD has ? ? ? It is impossible to rule out anybody, but the trend in the industry is to focus on narrower therapeutic areas, and to avoid going head to head with multiple well-entrenched players. A lot of the players in metabolic drugs have taken the decision to exit the field as their remaining drugs come off patent, not to invest more, and despite what you might think of our French friends a lot of companies will look at Afrezza and think to themselves "it Sanofi couldn't make a dent in the market, we will never be able to do it".
There may be a brave company out there willing to try, but the second tier companies don't have the deep pockets of the big pharmas so they are a bit more conservative.
I guess I was thinking 2nd tier within diabetes, but still big companies... Merck, AstraZeneca, Bristol Myers, etc. I don't follow the industry very closely, so perhaps some of these are the ones you indicate have already made decisions to pull away from further investment in the segment. I do think it would be hard to get any stellar up front deal with them. But if MNKD were to get one as a marketing partner, I would think that would still have very beneficial effect on share price and thus ease the pain of dilution.
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Post by gonetotown on Oct 4, 2016 16:42:00 GMT -5
Isnt Mann foundation different from Al Mann trust? There might be both (or even more than one of each type), but it is largely a matter of legal semantics. Legally speaking, both would be trusts and the document that created the trust sets forth the objectives and beneficiaries of the trust. Except in special circumstances, the trustees are obliged to follow the intentions of the grantor to the letter.
Some trusts are allowed to deplete that assets for the benefit of one or more beneficiaries to the detriment of other beneficiaries, even if that totally wipes out the trust assets. Most commonly this happens when a husband and wife put all their assets into a trust providing a lifetime income for the needs of the "second to die", with the remainder going to the grandchildren. If the "second to die" lives an unexpectedly long time or becomes very ill with high medical bills they might use up all the assets, leaving the grandchildren nothing (which is legal). In other cases, it is not legal. It all depends on how the documents are written, and we will likely never see those.
You can look up the foundation's annual report on guidestar and study it. They have only about a 100 million in assets and judging by how stable the numbers have been the past few years, I would presume it owns little MNKD.
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