Are there any big players with their finger on the trigger?

[goyocafe]

With all this activity lately, I have to wonder if and or how many bigger players are sitting with their finger on the trigger. After all, what's the potential market cap of a company with the new preferred meal time insulin treatment and a technology platform that is being validated more and more with every move? 

[tinkusr8215]

Apr 28, 2018 10:36:00 GMT -5 goyocafe said:

With all this activity lately, I have to wonder if and or how many bigger players are sitting with their finger on the trigger. After all, what's the potential market cap of a company with the new preferred meal time insulin treatment and a technology platform that is being validated more and more with every move? 

bigger players also look at cash flow, run way , adoption , insurance and they dont mind paying up .. if they want to buy, they will buy even if its trading at 1 billion market cap.  unlike retail who just buy their minimal shares looking at just the price. oh..its under $2, lets just buy.. 

[mytakeonit]

Hey ... I resemble that retail remark !!! Except for that minimal shares part and more like ..its under $1, lets just buy..

[akemp3000]

It does seem eerily quiet lately. This could relate to behind the scenes activity with big players but IMO more likely relates to a temporary marketing stall before a strong plan unfolds following the REMS release letter, announcement of new international partnerships and the release of the STAT study results. Without any of us really knowing what's going on behind the scenes, I'm somewhat skeptical that big players already have their finger on the trigger or that Mannkind management even wants to be a target just yet. This could change very fast with an upward trend. I do believe all diabetes industry execs are watching as each industry is its own small world. They know Dr. David Kendall left Lilly for Mannkind.

Here's a hypothetical...if you're the CEO of one of these big players, would you: a) be unwilling to overpay today knowing there's historically poor sales results and you would get heavily criticized, b) gamble on the future and overpay today knowing this could one day be a monumental decision of your career, or c) sit it out because you just don't believe inhaled insulin will be successful (Brandicourt) and gamble it doesn't succeed with a competitor or own its own? CEO careers are made and lost on this kind of decision.

[babaoriley]

akemp, what a big company would have to pay for us is peanuts - the criticism would be minimal, even if turned out to be a bust. We're not talking $3 billion plus, although many here are. If we got $5/share, that would be about 3/4 billion. Pocket change.  So at $10/share, a billion and a half - still not much "splaining" to do.  And they can always say it was technosphere they really wanted and eventually that will be a winner for them.  The shareholders will have turned over half dozen times before anyone notices, assuming the worst, that nothing came of it).

Big players with their fingers on the trigger? Goyo, we've had those for years - they're called shorts. And they've done it mainly with the sales' trigger finger, but, sometimes, unfortunately for them, they had to hit the buy (cover) trigger and fast!  

[sportsrancho]

It’s to soon in my opinion, but if we get offered 3b next year my question would be will they take it?

[peppy]

Apr 28, 2018 15:23:39 GMT -5 sportsrancho said:

It to soon in my opinion, but if we get offered 3b next year my question would be will they take it?

My initial buy was at a market cap of 2.5 billion.
Approval

[akemp3000]

A market cap of 2.5 billion equates to about $17 per share today. Everyone following MNKD since pre-approval knows this price would merely break even or even lose money for the company. IMO, there's no chance any BP could get TS for this amount. The possibility of a hostile takeover has now also been greatly reduced with the newly authorized shares. Management has said they're going to go it alone to build value first. I believe them. With the new hirings, forthcoming international partnerships, the STAT study and more, the idea of MNKD entertaining $10 or less is not worth discussing. This is why I remain skeptical MNKD has any current interest in being a target...unless of course a seriously attractive offer came in. Tech and biotech companies with solid science, low funds and virtually no sales have sold for more.

[matt]

Apr 28, 2018 13:10:02 GMT -5 tinkusr8215 said:

bigger players also look at cash flow, run way , adoption , insurance and they dont mind paying up .. if they want to buy, they will buy even if its trading at 1 billion market cap.  unlike retail who just buy their minimal shares looking at just the price. oh..its under $2, lets just buy.. 

That comment is pretty much spot on.  I did M&A for a good portion of my career and if an asset is critical to the long-term strategic plan you simply write the check.  If the asset is not critical to the plan, then the price really doesn't matter; it could be damn near free and a big player will not go after it.  In the 1980's and even into the 1990's a big pharma would go after an opportunistic play, but as the industry has consolidated the pharmas tend to be laser focused on a handful of therapeutic areas and no longer try to be all things to all patients.

The other thing retail investors tend to overlook is the plethora of interesting opportunities.  Eli Lilly and Novo Nordisk are well ensconced in the market and a new entrant will have to take market share away from two well-positioned and experienced companies.  That is much easier said than done when the competitors are willing to use price to maintain market share.   If you are the decision-making executive, do you want to buy a company that will have a hard slog making a go of it in the market, or do you aim at the low-hanging fruit in another therapeutic area?  It is not good enough for MNKD to be an interesting opportunity, it has to be the most interesting opportunity available for a buyer to step forward.  Metabolic drugs in general, and insulin in particular, are not nearly so attractive as they were fifteen years ago.

[peppy]

Apr 28, 2018 16:42:01 GMT -5 matt said:

Apr 28, 2018 13:10:02 GMT -5 tinkusr8215 said:

bigger players also look at cash flow, run way , adoption , insurance and they dont mind paying up .. if they want to buy, they will buy even if its trading at 1 billion market cap.  unlike retail who just buy their minimal shares looking at just the price. oh..its under $2, lets just buy.. 

That comment is pretty much spot on.  I did M&A for a good portion of my career and if an asset is critical to the long-term strategic plan you simply write the check.  If the asset is not critical to the plan, then the price really doesn't matter; it could be damn near free and a big player will not go after it.  In the 1980's and even into the 1990's a big pharma would go after an opportunistic play, but as the industry has consolidated the pharmas tend to be laser focused on a handful of therapeutic areas and no longer try to be all things to all patients.

The other thing retail investors tend to overlook is the plethora of interesting opportunities.  Eli Lilly and Novo Nordisk are well ensconced in the market and a new entrant will have to take market share away from two well-positioned and experienced companies.  That is much easier said than done when the competitors are willing to use price to maintain market share.   If you are the decision-making executive, do you want to buy a company that will have a hard slog making a go of it in the market, or do you aim at the low-hanging fruit in another therapeutic area?  It is not good enough for MNKD to be an interesting opportunity, it has to be the most interesting opportunity available for a buyer to step forward.  Metabolic drugs in general, and insulin in particular, are not nearly so attractive as they were fifteen years ago.

Well lucky for us that for now type ones have no other choice than insulin.

[golfeveryday]

Apr 28, 2018 14:19:42 GMT -5 akemp3000 said:

It does seem eerily quiet lately. This could relate to behind the scenes activity with big players but IMO more likely relates to a temporary marketing stall before a strong plan unfolds following the REMS release letter, announcement of new international partnerships and the release of the STAT study results. Without any of us really knowing what's going on behind the scenes, I'm somewhat skeptical that big players already have their finger on the trigger or that Mannkind management even wants to be a target just yet. This could change very fast with an upward trend. I do believe all diabetes industry execs are watching as each industry is its own small world. They know Dr. David Kendall left Lilly for Mannkind.

Here's a hypothetical...if you're the CEO of one of these big players, would you: a) be unwilling to overpay today knowing there's historically poor sales results and you would get heavily criticized, b) gamble on the future and overpay today knowing this could one day be a monumental decision of your career, or c) sit it out because you just don't believe inhaled insulin will be successful (Brandicourt) and gamble it doesn't succeed with a competitor or own its own? CEO careers are made and lost on this kind of decision.

if/when they start takin insulin share plenty will take notice and the game will change quickly, especially if they get some interest from docs to use earlier in T2.

[golfeveryday]

Apr 28, 2018 15:23:39 GMT -5 sportsrancho said:

It’s to soon in my opinion, but if we get offered 3b next year my question would be will they take it?

3B won’t be enough for the ‘standard of care’ as Kendall puts it. 👍🏻

[dreamboatcruise]

Apr 28, 2018 16:32:18 GMT -5 akemp3000 said:

A market cap of 2.5 billion equates to about $17 per share today. Everyone following MNKD since pre-approval knows this price would merely break even or even lose money for the company. IMO, there's no chance any BP could get TS for this amount. The possibility of a hostile takeover has now also been greatly reduced with the newly authorized shares. Management has said they're going to go it alone to build value first. I believe them. With the new hirings, forthcoming international partnerships, the STAT study and more, the idea of MNKD entertaining $10 or less is not worth discussing. This is why I remain skeptical MNKD has any current interest in being a target...unless of course a seriously attractive offer came in. Tech and biotech companies with solid science, low funds and virtually no sales have sold for more.

Actually 2.5 billion market cap would equate to less than $14/share because at that price there would be a lot of low priced warrants, options and conversion rights in the money.