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Post by akemp3000 on Jul 17, 2018 10:00:17 GMT -5
While the cash flow is currently in the red, IMO the situation is not nearly as dire as some are projecting. I do not expect major dilution based on what Mike C has said. Mike has always spoken of numerous options for fundraising and said that he would only do so as needed. This is exactly what he has been doing to extend the runway until script revenues rise. Hopefully this will be soon with the recent activity, i.e. TV ads, ADA, SAB and more. If Mannkind only has $25M remaining owed to Deerfield as someone stated, it appears a sale and lease-back of the plant is one option that would be sufficient to remove the lien, settle the Deerfield debt, pay for advertising and extend the runway. While selling the plant for a lease-back contract is not desirable, a buy-back clause could be included and executed once MNKD moves into the green. There's clearly more to this than I understand but it's obvious the current relationship with Deerfield is preferred, at least for the time being. Other possible options for cash include domestic and/or international partnerships, a TreT partnership, a RLS milestone, rising script revenues from recent TV ads, a possible partnership with a device company and more. I'm simply saying I trust Mike knows much more about the situation and what's needed in the short term to get us to the goal of SOC, green and a climbing pps.
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Post by mnholdem on Aug 26, 2018 6:30:49 GMT -5
One idea being batted around among my circle of friends is to sell the Danbury plant to Amphastar for roughly $200 million cash as part of a China deal. MannKind could either lease the plant or give AMPH manufacturing rights which would eventually expand into manufacturing plants in China and Europe. Amphastar has first rights to China sales as part of a renegotiated purchase agreement with MannKind for the insulin used to manufacture Afrezza and it has experience in manufacturing inhalable medications. They’ve recently announced expansion plans for China. Source: ir.amphastar.com/news-releases/news-release-details/amphastar-announces-expansion-amphastar-nanjing-pharmaceuticalsAmphastar Pharmaceuticals, Inc., headquartered in Rancho Cucamonga, California, established in 1996, is a recognized specialty pharmaceutical company that uses state-of-the-art, cGMP compliant facilities to develop, manufacture, and market injectable and inhalation products. In addition to the Corporate Headquarters, Amphastar has five manufacturing facilities located in the United States, China and Europe along with a state-of-the-art New Drug Research Center. |
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Post by golfeveryday on Aug 26, 2018 7:12:16 GMT -5
One idea being batted around among my circle of friends is to sell the Danbury plant to Amphastar for roughly $200 million cash as part of a China deal. MannKind could either lease the plant or give AMPH manufacturing rights which would eventually expand into manufacturing plants in China and Europe. Amphastar has first rights to China sales as part of a renegotiated purchase agreement with MannKind for the insulin used to manufacture Afrezza and it has experience in manufacturing inhalable medications. They’ve recently announced expansion plans for China. Source: ir.amphastar.com/news-releases/news-release-details/amphastar-announces-expansion-amphastar-nanjing-pharmaceuticalsAmphastar Pharmaceuticals, Inc., headquartered in Rancho Cucamonga, California, established in 1996, is a recognized specialty pharmaceutical company that uses state-of-the-art, cGMP compliant facilities to develop, manufacture, and market injectable and inhalation products. In addition to the Corporate Headquarters, Amphastar has five manufacturing facilities located in the United States, China and Europe along with a state-of-the-art New Drug Research Center. I agree the Danbury/Amphastar option is a good one. $200M is a real good start but still not enough though imo if they don’t get an Afrezza partner initially. TrepT partner would be a good funding option to add to the above with a small cash infusion and covering P3 Trial. If both of these happened then warrants for another $30M would likely be in play. I think shorts would need to cover at that point, followed by some dilution, maybe 30M shares. Cash generated would be uncertain as who knows where the price would be at that point. All the above can quickly add up in excess of $300M-400M cash. My overall point being MNKD needs to have the mother of all recaps and generate a wack of cash as history suggests shorts will just knock it back if it’s not enough. |
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Post by sportsrancho on Aug 26, 2018 7:24:57 GMT -5
I’ve heard so many conflicting opinions on how much the plant is worth.. did Mike mention that it was worth that much?
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Post by golfeveryday on Aug 26, 2018 7:29:43 GMT -5
I’ve heard so many conflicting opinions on how much the plant is worth.. did Mike mention that it was worth that much? I recall him saying $175M? Could be wrong. But a deal with Amphastar could include China. |
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Post by lennymnkd on Aug 26, 2018 8:17:27 GMT -5
Funding partner with trep T yes ! But I think I would be more excited about the credibility It would bring to the platform , and would move the needle in and of itself in a positive direction.making financing much more favorable for us .
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Post by tomtabb on Aug 26, 2018 8:28:15 GMT -5
One idea being batted around among my circle of friends is to sell the Danbury plant to Amphastar for roughly $200 million cash as part of a China deal. MannKind could either lease the plant or give AMPH manufacturing rights which would eventually expand into manufacturing plants in China and Europe. Amphastar has first rights to China sales as part of a renegotiated purchase agreement with MannKind for the insulin used to manufacture Afrezza and it has experience in manufacturing inhalable medications. They’ve recently announced expansion plans for China. Source: ir.amphastar.com/news-releases/news-release-details/amphastar-announces-expansion-amphastar-nanjing-pharmaceuticalsAmphastar Pharmaceuticals, Inc., headquartered in Rancho Cucamonga, California, established in 1996, is a recognized specialty pharmaceutical company that uses state-of-the-art, cGMP compliant facilities to develop, manufacture, and market injectable and inhalation products. In addition to the Corporate Headquarters, Amphastar has five manufacturing facilities located in the United States, China and Europe along with a state-of-the-art New Drug Research Center. If I were Amphastar and wanted afrezza on the cheap, I would approach Deerfield and make them an offer. All Deerfield has to do is stop accepting stock for payment and that would put MNKD in a tough spot. Amphastar could then "rescue" MNKD with some lowball offer or else wait and see if the business fails under the Deerfield debt requirements and then acquire the assets from them. This thought actually occurred to me some time ago when I saw that the end of quarter cash requirement was going to be raised back to 25 million beginning in the 1st quarter. I wondered why Deerfield would toughen the requirement when they had already gotten repaid most of the money owed them. With Amphastar selling it in China they would likely have a better chance of reaching their milestone payments. |
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Post by goyocafe on Aug 26, 2018 9:16:51 GMT -5
One idea being batted around among my circle of friends is to sell the Danbury plant to Amphastar for roughly $200 million cash as part of a China deal. MannKind could either lease the plant or give AMPH manufacturing rights which would eventually expand into manufacturing plants in China and Europe. Amphastar has first rights to China sales as part of a renegotiated purchase agreement with MannKind for the insulin used to manufacture Afrezza and it has experience in manufacturing inhalable medications. They’ve recently announced expansion plans for China. Source: ir.amphastar.com/news-releases/news-release-details/amphastar-announces-expansion-amphastar-nanjing-pharmaceuticalsAmphastar Pharmaceuticals, Inc., headquartered in Rancho Cucamonga, California, established in 1996, is a recognized specialty pharmaceutical company that uses state-of-the-art, cGMP compliant facilities to develop, manufacture, and market injectable and inhalation products. In addition to the Corporate Headquarters, Amphastar has five manufacturing facilities located in the United States, China and Europe along with a state-of-the-art New Drug Research Center. If I were Amphastar and wanted afrezza on the cheap, I would approach Deerfield and make them an offer. All Deerfield has to do is stop accepting stock for payment and that would put MNKD in a tough spot. Amphastar could then "rescue" MNKD with some lowball offer or else wait and see if the business fails under the Deerfield debt requirements and then acquire the assets from them. This thought actually occurred to me some time ago when I saw that the end of quarter cash requirement was going to be raised back to 25 million beginning in the 1st quarter. I wondered why Deerfield would toughen the requirement when they had already gotten repaid most of the money owed them. With Amphastar selling it in China they would likely have a better chance of reaching their milestone payments. “If I were Amphastar and wanted afrezza on the cheap, I would approach Deerfield and make them an offer. All Deerfield has to do is stop accepting stock for payment and that would put MNKD in a tough spot.” Sounds a lot like collusion to me. |
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Post by matt on Aug 26, 2018 9:24:36 GMT -5
I’ve heard so many conflicting opinions on how much the plant is worth.. did Mike mention that it was worth that much? I think at some point Mike stated the $200 million figure, but that is what it cost to build and certainly not the value if it is sold. Pharma and medical plants are generally constructed as "empty boxes" with utility connections and provisions for clean room air handling. The majority of the investment takes place inside the shell building where production rooms are built-out and equipped to support a specific manufacturing process. The value of the plant itself is just the value of the land and the shell building, about $20-30 million based on comparable facilities in Danbury. Used pharmaceutical manufacturing equipment has a resale value that is generally about 10 cents on the dollar not because the equipment is in bad shape, but because an FDA approved production process is tied to specific manufacturers and models of equipment. If a piece of production equipment is not the identical model used in the validation for approval, the production line has to be revalidated and that can cost more than simply buying the right equipment to begin with. I have toured three production plants that cost north of $100 million (in one case $250 million) that have never produced a single dose of product. Each is state of the art with brand new equipment, but in each case the drug was acquired in a merger and the new owner wanted to manufacture the drug somewhere else. Nice as they were, none of the plants were designed in such a way that they could be economically reconfigured to support the production process I had in mind. These plants still sit empty with weeds growing through the asphalt in the parking lot. So who would pay $200 million for Danbury? A company that wanted to manufacture Afrezza and a company that wants to be located in Danbury. The plant has great value for supporting the Afrezza business, but far less value for any other drug product. On a sale-leaseback arrangement, any lender is going to take a conservative view of the value since they will value it at the real estate value in a liquidation scenario. If Mannkind moves out, there would be a significant cost to remove the Afrezza production rooms to return the plant to its "shell" configuration which is why a value closer to $20 million is the likely scenario. A strategic buyer that wanted to be in the business of producing and selling Afrezza would pay more, but then they would be looking at buying out Mannkind in total and not just the building. That is a different calculation entirely. |
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Post by agedhippie on Aug 26, 2018 9:44:21 GMT -5
One idea being batted around among my circle of friends is to sell the Danbury plant to Amphastar for roughly $200 million cash as part of a China deal. MannKind could either lease the plant or give AMPH manufacturing rights which would eventually expand into manufacturing plants in China and Europe. Amphastar has first rights to China sales as part of a renegotiated purchase agreement with MannKind for the insulin used to manufacture Afrezza and it has experience in manufacturing inhalable medications. They’ve recently announced expansion plans for China. ... I am not sure what would be in it for AMPH. I had a look at their last conference call and 10Q. Their balance sheet is quite clean, but they only have just under $50M in the bank and are losing money although slowly. Their sales last year were $71M (MNKD was $6M of that). Their focus at the moment is on their subsidiary, ANP, and finished pharmaceutical product segment. They have their own inhaled delivery system which works for the drugs they sell. I think they may be able to raise money to buy Danbury, but their market cap is only $833M. The bigger blocker though would be why would they do this? They are a pharma, not a REIT (now there's a thought). AMPH would need to borrow the money or heavily dilute their stock to buy Danbury since they don't have the cash. Interest payments would soak up any margin, and they would have just tied up $200M that they cannot now use to develop their core business. As an aside; buying Danbury for $200M would be more than their current entire current property, plant, and equipment line which is only $198M. |
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Post by uvula on Aug 26, 2018 9:52:02 GMT -5
The mnkd market cap is 171M. Are there any examples ever of a company getting a non-dilutive cash infusion larger than the market cap? I can't think of any. Wouldn't it would make more sense in that situation for the other party to acquire the company?
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Post by tomtabb on Aug 26, 2018 11:54:52 GMT -5
If I were Amphastar and wanted afrezza on the cheap, I would approach Deerfield and make them an offer. All Deerfield has to do is stop accepting stock for payment and that would put MNKD in a tough spot. Amphastar could then "rescue" MNKD with some lowball offer or else wait and see if the business fails under the Deerfield debt requirements and then acquire the assets from them. This thought actually occurred to me some time ago when I saw that the end of quarter cash requirement was going to be raised back to 25 million beginning in the 1st quarter. I wondered why Deerfield would toughen the requirement when they had already gotten repaid most of the money owed them. With Amphastar selling it in China they would likely have a better chance of reaching their milestone payments. “If I were Amphastar and wanted afrezza on the cheap, I would approach Deerfield and make them an offer. All Deerfield has to do is stop accepting stock for payment and that would put MNKD in a tough spot.” Sounds a lot like collusion to me. Would it be illegal? |
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Post by lennymnkd on Aug 26, 2018 12:03:40 GMT -5
Collusion or negotiations 😀
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Post by tinkusr8215 on Aug 26, 2018 12:31:22 GMT -5
The mnkd market cap is 171M. Are there any examples ever of a company getting a non-dilutive cash infusion larger than the market cap? I can't think of any. Wouldn't it would make more sense in that situation for the other party to acquire the company? If some one had a billion $ to invest they would try to maximize the returns with minimal risk. So if they decide to infuse cash - They will do it at the expense of the current share holders. |
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Post by joeypotsandpans on Aug 26, 2018 13:11:44 GMT -5
The mnkd market cap is 171M. Are there any examples ever of a company getting a non-dilutive cash infusion larger than the market cap? I can't think of any. Wouldn't it would make more sense in that situation for the other party to acquire the company? That's the theoretical "face value" market cap, let's see a company try to acquire it at current s/p, the short contingent certainly couldn't exit at .13/sh market cap so what makes you think an interested acquirer would be able to pick it up at 171M? Do you really think the BOD would authorize a sale at current s/p? True volume at the current price is next to nothing, who is going to sell that hasn't already, add in the debt of shares that have to be repaid at some point as well. All are waiting to see how the company is going to maneuver the ship through the storm currently, both sides are anxious to see what Mike and Steve have been up to recently in this "quiet period". Volatility in volume and s/p has essentially come in to a tight standstill range, I suspect that's about to change in the upcoming two weeks  |
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