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Post by daduke38 on Jul 30, 2014 8:10:53 GMT -5
If I am correct, doesn't Greenhill specialize in Aquisitions and Mergers? So why did MNKD hire them if they were truly looking for a Partner?
Any thoughts?
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Post by dreamboatcruise on Jul 30, 2014 10:12:39 GMT -5
I would think that the expertise needed would be the same for a partnership as an acquisition. The investment bank would know people within the BP. They would know how to position the drug and assess its value to particular partners... assess whether a bid might be simply one intended to lockup rights to Afrezza and then sit on them. They would likely use a very similar process in running bidding as they would for Acquisition. Etc. etc.
I think somewhere I read that they routinely do these sorts of partnering negotiations, which given above observations doesn't strike me at all as unlikely.
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Post by mannmade on Jul 30, 2014 10:19:43 GMT -5
That is also my understanding and believe you are correct... As to the reasons they hired Greenhill, this will simply be speculative on my part but the following reasons may apply:
1.) GH has a very healthy Pharma Sector (no pun intended) and seems to have done business with all the majors at one time or another so they likely have contacts at the senior levels necessary for what was the initial exploration of discussions for Merger, Acquisition and/or a Partnership deal.
2.) Possibility exists that although not upfront, Merger or Buyout terms may be options that are negotiated into the agreement upfront so down the road once a track record is achieved on Afrezza sales and any other related pipeline products, the terms may be built into the deal which would make GH's experience essential to the deal construction.
3.) I believe there may be some relationships involved between Mannkind and GreenHill and also GH and some of the BP's on Mnkd's list.
4.) GreenHill has a stellar reputation for getting deals done
On a related note; when the GH deal was first announced I met with Matt P and specifically asked among other things how the GH deal was formatted as I was interested in knowing how they got paid. Matt told me GH was getting paid strictly on a success fee basis.
This says two things to me as follows:
1.) Having been on the case for about a year now and still being involved GH must have a finalist partner(s) or else why waste the assets, human capital etc... And even though most costs may be internal overhead costs, it still costs in lost opportunity and increased internal expenses for GH if no deal is completed.
2.) The deal should likely be a good deal as the valuation of GH's fees will be based on the value of the deal to Mnkd.
My opinions only...
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Post by dreamboatcruise on Jul 30, 2014 10:31:53 GMT -5
In my limited experience with investment bankers for M&A, there is usually a retainer fee in addition to the success fee, so that certainly is some indication of a strong belief in Afrezza... or the fact I don't know how to bargain with investment bankers.
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Post by bighaus89 on Jul 30, 2014 11:29:37 GMT -5
That is also my understanding and believe you are correct... As to the reasons they hired Greenhill, this will simply be speculative on my part but the following reasons may apply: 1.) GH has a very healthy Pharma Sector (no pun intended) and seems to have done business with all the majors at one time or another so they likely have contacts at the senior levels necessary for what was the initial exploration of discussions for Merger, Acquisition and/or a Partnership deal. 2.) Possibility exists that although not upfront, Merger or Buyout terms may be options that are negotiated into the agreement upfront so down the road once a track record is achieved on Afrezza sales and any other related pipeline products, the terms may be built into the deal which would make GH's experience essential to the deal construction. 3.) I believe there may be some relationships involved between Mannkind and GreenHill and also GH and some of the BP's on Mnkd's list. 4.) GreenHill has a stellar reputation for getting deals done On a related note; when the GH deal was first announced I met with Matt P and specifically asked among other things how the GH deal was formatted as I was interested in knowing how they got paid. Matt told me GH was getting paid strictly on a success fee basis. This says two things to me as follows: 1.) Having been on the case for about a year now and still being involved GH must have a finalist partner(s) or else why waste the assets, human capital etc... And even though most costs may be internal overhead costs, it still costs in lost opportunity and increased internal expenses for GH if no deal is completed. 2.) The deal should likely be a good deal as the valuation of GH's fees will be based on the value of the deal to Mnkd. My opinions only... Thanks for this. Very informative. |
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Post by daduke38 on Jul 30, 2014 11:58:36 GMT -5
The reason I asked is although they keep saying partner, I am not sure this won't turn into a buy. Here is my thinking:
1. Partnerships are a pain. Split revenue, Supplier questioning the Marketing company from everything from commitment to strategy.
2. It is obvious that Al wants to explore Technosphere. I think in the Board meeting he might have used the term "Mann Group"
3. At this point in his life, does Al Mann really want to deal with a sales based company and / or a development only Company?
4. MNKD (minus the salesforce) is pretty much turn-key.
5. If I was a CEO of a BP would I really want to deal with Al looking over my shoulder?
6. If I was a CEO wouldn't I want complete control?
Also, as another thought, Al could take technosphere Private if he sells "A".
Just some food for thought!
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Post by notamnkdmillionaire on Jul 30, 2014 12:09:22 GMT -5
One other theory can be that Al would sell for the right price. Who better to explore that side of the coin than Greenhill? What might have started as partnership talk could always turn into a buyout. Greenhill has the expertise to do such navigating.
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Post by daduke38 on Jul 30, 2014 12:17:41 GMT -5
Exactly! Not making predictions, but a buy out would not surprise me in the least. I am actually hoping for one!
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Post by 4Balance on Jul 30, 2014 12:37:52 GMT -5
It is very easy to focus on the application of Technosphere to Afrezza...even to the point of seeing Afrezza as its only (or primary) "rider."
But a buyout, to me, would require the full potential of Technosphere to be factored into the planning. This carrier particle has uses that have only begun to be explored.
I believe Al deeply cares about his legacy to diabetics. I'm not as certain that he feels the compulsion to improve the health in another community...and that might drive some interest in cutting the strings. But I would recommend that we keep in mind the enormous, unrealized potential for this tiny carrier particle for medications that require quick onset, the efficacy of which would be compromised if injection or oral use were the primary option.
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Post by ashiwi on Jul 30, 2014 12:51:24 GMT -5
Everyone including Al can be had for the right price. I'm sure it's being explored by Greenhill if there are interested parties. I called investor relations at Greenhill 2 days ago inquiring how the MNKD deal was going. I never expected to get an answer, but I figured what the hell it can't hurt to ask. I am still waiting for the call back.
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Post by joeypotsandpans on Jul 30, 2014 12:55:11 GMT -5
Everyone including Al can be had for the right price. I'm sure it's being explored by Greenhill if there are interested parties. I called investor relations at Greenhill 2 days ago inquiring how the MNKD deal was going. I never expected to get an answer, but I figured what the hell it can't hurt to ask. I am still waiting for the call back. Al (at the shareholder's meeting) stressed the point that they weren't looking to sell....BUT...he did say obviously for the right price and what would be right for the potential customers and shareholders he would have to consider it. It's like my dad use to say....everything is for sale at the right price ;-) |
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Post by dreamboatcruise on Jul 30, 2014 13:32:00 GMT -5
Not to mention that people that know Al seem to think putting his name on Mannkind was a clear indication he was looking at this being a part of his ongoing legacy. Doesn't mean that they wouldn't accept a buyout at the right price, but there have been numerous indications, implicit and explicit, that what is intended is a sales/marketing partner not an acquisition.
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Post by mannmade on Jul 30, 2014 15:53:41 GMT -5
Quick anecdote: At the 2013 shareholder meeting, which I attended, Al made a passing reference in his slide presentation to the fact that in "five years time they may be looking to buy Merck." Some of you may remember this. I am not saying there is anything to this, but it should give us an indication, as to what, was then his state of mind. Not sure what may have change since then as many things have gone on including Al is a year older... But it is a "tell" about the Mann...  |
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Post by babaoriley on Jul 31, 2014 1:30:12 GMT -5
That "we buy Merck" comment brought a lot of laughter at that meeting.
I think I heard a story that Al felt a bit sheepish about the name "MannKind," don't think he was thinking of it as a legacy.
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Post by mnholdem on Jul 31, 2014 9:22:01 GMT -5
manmade,
If you (and others) want to look at the Greenhill payment structure, it was filed with the SEC. It's a Milestone Agreement filed July 1, 2013. You can search SEC Filings by Company and will find there were several documents filed that day. The one you're looking for is the doc that ends in ".3" if memory serves.
The payments to Greenhill are made in cash (drats... no additional SEC to tip us off) due upon completion of the following milestones
$5m - Partnership Agreement
$10m - Product launch
...followed by a series of $5m incremental payments based on sales milestones, starting at $500m and ending at $1.5B.
I believe the cash payments to Greenhill will total $90m if Afrezza reaches the final milestone.
Good fortune all. |
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