Educated guessing - post partnership price

[dreamboatcruise]

I'm sure this has been discussed before but as many are anticipating partnership may be in the works before earnings call, I wanted to solicit opinions on post partnership share price taking into account the context of the overall market and the price action in MNKD we've seen recently.  I know there are a lot of different scenarios.  I'm more interested in educated speculation about the case of partnership not a buyout... and what people are expecting might be the low end of the price, not a best case scenario.

Perhaps Joey has some perspective from the TA view of where resistance levels occur and whether we are likely to breach them.  Could we get stuck around IPO price even with partnership?

[chauffe00]

here is a quote from a respected ymb poster seyhey44 copy and pasted

There will not be a buyout at this point. Expect a partnership similar to what Greenhill structured with Alcon and Novartis which gave Novartis the buyout option. Expect the announcement August 11. This is the last day to file for 2Q. Expect the CC after close Monday or sometime Tuesday depending on the partner availability factoring in the European time difference. IMO, a $20B 5 year minimum sales is the MNKD position with the split being negotiated. Assume 50/50 which gives MNKD $2B per year in sales. Assume cost of goods 20%. That gives MNKD $1.6B in profits or $5 per share at the current $10pps the P/E is 2. Assume 20x P/E which is extremely low it gives you $100pps. Discount it 60% and that is were the$40 comes from. Realistically if Al gets this deal its a $60 stock on August 11th. Those are the numbers. It is really up to Greenhill and Al's stainless steel balls to make it happen. So far Al's had the balls and has not blinked

[dreamboatcruise]

It seems you are presuming that all the FUD regarding market size for Afrezza evaporates with a partner.  I suppose there is a chance that a deal involves some sort of equity transaction that sets a share price, but if the deal is simply revenue split, there will still be loud voices shouting that the patient market will be small, insurers will not cover, etc. etc.

[daduke38]

I know I have continually spouted a "Buyout" of "A" and still think it is possible.  But if we could get a Partnership on those terms..... WOW!  Sey Hey is pretty darn smart, so I am not discounting the possibility.  I do think he may be right about the timing.  Although just a gut feeling based on certain things coming together, I posted on YMB last Sunday nite that I felt by Tues., myself.  Which probably jinxed it, LOL.
I really think they are trying to close this up with at least a letter of intent to announce in a CC.  It would also fall in the timeline given by Hakan.
I expect the deal may be more complex than anyone has guessed, but I really don't see it taking much longer.
In a way, Wed. would sure make for the biggest Birthday present I have ever gotten!

[daduke38]

I wouldn't think the Partnership would be a simple revenue Split.  Somebody is going to pay to get the rights to market this. MNKD took all the risk, and I believe that risk should and will be compensated.  How many Billions has PFE spent in the last 3 years to come up with nothing?  
Not to mention that MNKD would be really stretched to keep going to launch without a Cash payment up front.  
MNKD took a $billion risk and 10 years.  I just don't think a staight revenue split would even be entertained as an offer.  I think the odds of that are virtually nil.

[biotec]

Wow this Board turned into a big pumping forum, Feels like the YMB.If you think a partnership will turn MNKD into a $60 stock with no sales, no revenues I think your dreaming a little to much, Bashers are awful but so are the extream pumpers. If you have 90% of your portfolio in MNKD your not an invester, your a gambler.

[liane]

biotec,

I wouldn't exactly call this a pumping forum, nor compare it to YMB. At least people are giving the rationale behind their posts. We've had a lot of new members in the past few days, and it takes them a while to get accustomed to the style of the board. Our basic rule is no unsubstantiated bashing or pumping. Posts must maintain a respectful tone. We moderate with a light hand to maintain the rules of the board, yet not censor needlessly.

[kc]

Aug 3, 2014 9:10:18 GMT -5 liane said:

biotec,

I wouldn't exactly call this a pumping forum, nor compare it to YMB. At least people are giving the rationale behind their posts. We've had a lot of new members in the past few days, and it takes them a while to get accustomed to the style of the board. Our basic rule is no unsubstantiated bashing or pumping. Posts must maintain a respectful tone. We moderate with a light hand to maintain the rules of the board, yet not censor needlessly.

Iiane I'm glad this is a moderated board. The folks here are knowledgable and thoughtful.  I they step out of line then I agree with your moderator powers to correct the thread and poster, or remove one or both of them.   

[daduke38]

If I sound like I am pumping, please let me know! Idon't think I have mentioned any valuations, but that Sey Heys number would blow me away. I'd take it! LOL

[BD]

Aug 3, 2014 8:33:43 GMT -5 biotec said:

Wow this Board turned into a big pumping forum, Feels like the YMB.If you think a partnership will turn MNKD into a $60 stock with no sales, no revenues I think your dreaming a little to much, Bashers are awful but so are the extream pumpers. If you have 90% of your portfolio in MNKD your not an invester, your a gambler.

So, when you read a post you'd classify as a "pump", do you honestly get the feeling that poster is attempting to manipulate the PPS...? Or can you sense that while there may be a bit of irrational exuberance, the post is heart-felt? To me it's always the latter, and when compared to YMB, that makes a world of difference. Of course, YMMV...

[thekindaguyiyam]

to me the concept of selling a product without bringing to market first is like building a casino and selling it as soon as its built without knowing how much traffic drives the value.  I don't see a sell out happening right off the top.  imho

[paulie]

But don't Casinos do this all the time?  I mean, don't they pay $200 million dollars to state governments before any "traffic" enters their floors?  Why would they take that kind of risk?  These kinds of payouts happen all the time.  I get it though.. an upfront payment of $2-$4 billion really screws up the market cap, so the shorts have to keep dismissing this idea.  (Not that the previous poster was doing that...)

But.. the fact is, Afrezza is not like an everlasting gobstopper or a pet rock.  It is an inhaler for insulin and there is a real medical demand for it.  Why would they develop something that doctors would not describe?  Doctors will take a"Wait and see"  approach.   Wait and see for what?

Perhaps there is fear that this could be another ARNA... where you have a huge demand for a product.. but no sales.   

But is MNKD just another ARNA?  With a stock price almost down to where it was before adcomm?

No.  For one thing, Jack Leif is no Al Mann.  Al Mann knows what he is doing.

MNKD would be better off taking the hit now than to go with some arrangement where the marketing partner doesn't take any risk or takes a far too conservative approach (like EISAI).  This can't be Mary Kay.  There has to be some "skin in the game" and there has to be some money put up on the table.

Otherwise, I don't mind MNKD calling their bluff and saying.. h** with you.. we will do this in house.

[joeypotsandpans]

Aug 3, 2014 14:27:59 GMT -5 paulie said:

But don't Casinos do this all the time?  I mean, don't they pay $200 million dollars to state governments before any "traffic" enters their floors?  Why would they take that kind of risk?  These kinds of payouts happen all the time.  I get it though.. an upfront payment of $2-$4 billion really screws up the market cap, so the shorts have to keep dismissing this idea.  (Not that the previous poster was doing that...)

But.. the fact is, Afrezza is not like an everlasting gobstopper or a pet rock.  It is an inhaler for insulin and there is a real medical demand for it.  Why would they develop something that doctors would not describe?  Doctors will take a"Wait and see"  approach.   Wait and see for what?

Perhaps there is fear that this could be another ARNA... where you have a huge demand for a product.. but no sales.   

But is MNKD just another ARNA?  With a stock price almost down to where it was before adcomm?

No.  For one thing, Jack Leif is no Al Mann.  Al Mann knows what he is doing.

MNKD would be better off taking the hit now than to go with some arrangement where the marketing partner doesn't take any risk or takes a far too conservative approach (like EISAI).  This can't be Mary Kay.  There has to be some "skin in the game" and there has to be some money put up on the table.

Otherwise, I don't mind MNKD calling their bluff and saying.. h** with you.. we will do this in house.

Nice first post Paulie! I agree, this is no where the same as ARNA although the shorts want you to believe it is. Afrezza will not fall into the likes of something similar to EISAI IMO. Rather, as stated previously by so many, Al knows what the fruits of his labor are worth and just like when he negotiated with Medtronic will get full value for laborious efforts, again IMO.

[joeypotsandpans]

Aug 2, 2014 16:39:15 GMT -5 dreamboatcruise said:

I'm sure this has been discussed before but as many are anticipating partnership may be in the works before earnings call, I wanted to solicit opinions on post partnership share price taking into account the context of the overall market and the price action in MNKD we've seen recently.  I know there are a lot of different scenarios.  I'm more interested in educated speculation about the case of partnership not a buyout... and what people are expecting might be the low end of the price, not a best case scenario.

Perhaps Joey has some perspective from the TA view of where resistance levels occur and whether we are likely to breach them.  Could we get stuck around IPO price even with partnership?

I'm going to refer to you as DBC going forward if you don't mind ....with respect to your question I anticipate getting to 15.50-16/sh on a decent partnership announcement....as to the term "getting stuck" is not what I expect but it could trade off that level until resistance is broken at which point we would most likely end up back at all time highs...there are a myriad of reasons (open interest in options are just one, a measured move from 6-11 would project us in a similar measured move after this current test of support from 11-16) why I look at the target area of 15.50-16. There is quite a bit of open interest at 12 area as well so from this point (8-8.08 support area) an initial 50% projection would put us right there on an initial jump, then after a period of negotiating that level would anticipate reaching the anticipated target area....this is how I could see it playing out....once the all time highs are taken out...well that has been the subject of a lot of optimistic numbers

[thekindaguyiyam]

"But don't Casinos do this all the time? I mean, don't they pay $200 million dollars to state governments before any "traffic" enters their floors? Why would they take that kind of risk? " ask Sheldon Adelson; he'd tell you that 200 million is chump change.

To understand the value of something as dynamic as Afrezza is, requires a demonstration of sales. I do agree that Al knows the value and I respect him and whatever decisions he makes. But, in a market this big, and when the FDA refers to Afrezza and Dreamboat creating a revolutionary delivery system... I don't think so.   Technospere's first drug is Afrezza. The future of Technospere will in part be determined by the sales of Afrezza. If it took you 9 years to bring this drug to the market and the future of a much larger market of Technospere was on the horizon would you give up control to someone else to make your first test drug successful? I wouldn't. I believe Al will still call the shots once partnered.

After the market grows and embraces not only Afrezza but Technospere, then that would "may" be the time to SELL if it were my "baby"; because it would be at that time the proof of deliver by that "revolutionary system" will have been proven.