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Post by ktim on Aug 8, 2019 12:36:42 GMT -5
The immediate news is that this is a $40M loan of which $15M must be held in escrow leaving $25M available. The remaining $35M of the loan is dependent on hitting certain targets (and an extra $5M in escrow). Overall certain Afrezza revenue targets must be hit each month to keep the loan open. Mid-Cap have the same lock on the assets that Deerfield did. And warrants. That loan is interesting. It is $75M once all the milestones have been hit. The structure is; - first tranche $40M now - second trance $10M when $30M net Afrezza revenue is hit. This must be achieved before April 2020 so the first quarter is already completed ($6.1M) - third tranche $25M when unspecified TreT revenue targets are hit. This must be achieved before June 2021. - Repayments are monthly starting September 2021 On the plus side the Afrezza revenue targets look fairly safe. For example the August 31 target is $21.5M year to date. I can SO tracking this since they publish the target for each month. Now the not so good: - there are monthly trailing annual Afrezza targets (Minimum Afrezza Net Revenue Schedule) that *must* be hit. - interest rate is a minimum of 8.75% rising if Libor gets above 2% (there is no drop). - $15M in escrow for the initial trance rising to $20M with the subsequent tranches - Warrants issues along side each tranche. For the first tranche there are warrants covering 1.17M shares at $1.12 with a seven year expiry. The strike price and number for the remaining tranche warrants are dependent on the share price, Mid-Cap does better if the price is low. - as with Deerfield Mid-Cap has all assets and IP as security - there is a 6% exit fee based on the maximum borrowed (there is also an early repayment penalty). That's my first cut of the loan agreement. 1. I signed for a loan to buy my house. It was for $300K over 30 years at 3.5% with an adjustable rate. 2. I had to offer my house as security in exchange for the lenders money. 3. I must keep and maintain an escrow account as well, to be held for insurance and taxes? 4. I must set aside additional monies over and above the principal to cover the escrow account. 5. I was not in a position of strength as I only was able to put a mild deposit down and my FICO score went south because I have several other lenders This certainly is a better deal in the favor of the bank. Should we believe that this doesn't benefit me and therefore it must be a bad investment transaction for me and my family? Of course this is not true but, it is very much a part of banking for mortgage with most people. The example was used to illustrate a point. What MNKD did in negotiations with Midcap goes on everyday with all lending institutions. Therefore, to the extent the deal was a good one or a bad one lies in the eyes of the parties making the transactions. Or as with DF it will be assessed in the eyes of hindsight. Repayment and covenants are highly dependent on business outcomes that are still an issue of probabilities, shall we say. Using your example of a mortgage, what we now refer to as the toxic adjustable loans of pre 2008 might have worked out great for someone that bought in 2005 and sold before the crash. Likewise, even what might be considered a rock solid mortgage with good terms today can still end up causing havoc for someone if they lose their job. Did MNKD believe they could easily deal with repayment and covenants on DF loan? Probably, but it wasn't to be. Does MNKD now feel they can easily meet obligations of new loan? One would hope so. But we can't really know how confident management is. These are far from the best terms for a loan, but also far better than the worst I've seen. To me comparing with DF doesn't mean a lot. As with back then, you can't predict the future based on loan terms based on guesses about the future... as with the mortgages of pre 2008 that were too good to believe for borrowers and lenders and predicted a future radically different than what happened. |
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Post by Thundersnow on Aug 8, 2019 12:38:47 GMT -5
Why is Mike still hiring sales guys when he could be working with a partner to open clinics? Good comment on RLS, probable news in the second half. Well, the FDA would never allow them to directly fund clinics (whether traditional ones or VDex ones). Whether indirectly funding a middleman distributor scheme proposed by HFM would pass muster is still debatable. But it now seems like VDex is saying they don't need to be funded by MNKD and can fund expansion on their own, which is great news. Was that SAYHEY24 showing HUMOR??? |
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Post by ktim on Aug 8, 2019 12:43:30 GMT -5
After hearing the good earnings call yesterday, I thought this stock is "not a sinking boat ..... and not a rocket ship". What should the shorts do now to make money off this very undervalued stock? 911k shares traded in first 28 min of trading. I don't think the shorts stand to make a lot of additional profit by shorting from this point forward. They likely made a couple of billion, no exaggeration, since shorting MNKD down since its partnership with Sanofi in 2015. Now it's all about constraining and restricting the growth of Afrezza and harming MNKD by denying them capital via equity raises. Something they have done with a contract killer's effectiveness for years Look at today already. An entire day's volume in the first half hour following a very good conference call with lots of positives. And oh my, BIG SURPRISE. They have walked the price to 1.08. Doesn't that seem a bit strange? It is pure, simple manipulation. They will bore shareholders to death until they lose interest. I just bought again between the bid and ask of 1.08 and 1.09. MNKD has enough cash to survive for a year or more. Once again we are forced to wait for positive events like cash from UTHR and overseas progress, studies, label improvement and such to spur positive momentum. Wall Street, likely incentivised and funded by big Pharma can easily COMPLETELY control and manipulate MNKD's stock price. They have been wildly successful at doing so for years. Has it been "manipulated" to an unreasonably low PE ratio? Is it now down below 10? or 5? Ooops... there is no profit   |
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Post by alethea on Aug 8, 2019 12:47:28 GMT -5
I'll repeat my admonition to read, if you haven't already, the following: Stevil in WTF on 8/5 - mnkd.proboards.com/post/185543/thread Matt in WTF on 8/6 - mnkd.proboards.com/post/185570/threadI am convinced we longs need to stop holding on to the idea of simple, cheap, quick hitter actions. e.g., VDEX except that VDEX buildout would be slow (18 months minimum) even if MNKD partnered with them. It is unreasonable to expect that approaches that are simple, naive, or sophomoric, will make a material improvement in the stock price. What is going to move the stock price is executing on the plan Dr. Castagna and team have laid out and are operating against, BUT that doesn't mean near-term big improvements in stock price. I don't want to list out all of the reasons for my conviction because than I'll read like agedhippie and folks of questionable allegiance to Mannkind and the long thesis. I will say that the turning point for my view going from "if only we do X" to "this is going to take a relatively long time" was the failure of the TV DTC to move the needle in any measurable way. But I am not dismayed. I like buying stock at a very cheap price, especially when my expectations for gain are improving substantially. Say what you will about yesterday's earnings report, there has been measurable and substantive progress since 2017 under Dr. Castagna's leadership. The argument for material double-digit royalties on an inhalable PAH product marketed by UTHR is persuasive. UTHR is not RLS and $50M in milestone payments is not chump change. I believe Stevil and Matt are correct. Afrezza will be successful 1 of 2 ways; viral based on testimony (enhanced by CGM data), or traditional large-scale clinical trials proving superiority, changing the label and the minds of FDA, insurers, and most importantly, prescribers. This is what Sanofi, Eli Lilly, or Novo Nordisk do. Both, or hybrid is possible. Long-shot Hail Mary actions are just that. Like it or not, it is reality. Very well said indeed. LOTS of good things happening and strong reasons for improvement going forward. |
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Post by longliner on Aug 8, 2019 12:48:01 GMT -5
it was nice to hear MC suggest RLS may find their way out of that redwood forest this year!
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Post by Thundersnow on Aug 8, 2019 12:49:06 GMT -5
We have a FDA approved drug with addressable market of multi billion dollars. The CEO should focus on telling us how to sell the drug . Leave the refinancing pride to the CFO. Well actually that's the Chief Commercial Officer. Mike's job is to make sure everyone below him is doing their job and to hit the road and tell the MNKD Story. IR will be lining up the conferences now since Mike has cleaned up the company. Mike said 2 years ago it would take time and now it's complete. |
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Post by longliner on Aug 8, 2019 12:53:42 GMT -5
TNDM just reported 174% revenue increase last quarter. It was once a $2 stock price company as well. Maybe MC should pay them a visit to learn how to sell a product in diabetic market. I'm kinda feeling same as you.. I'm happy with the recap... But now I want to see something happen.. I'm happy with the billboards, but we still have problems with docs not wanting to prescribe.. or not prescribing correctly.. and retention problems.. it's a big problem.. And I'd like to see something pull this pps up.. we are lingering too close to 1$..Not sure what that is going to take but we need it. A buy in from a major pharma company would certainly move the needle. We need BP clout to move rapidly in a Regeneron direction. |
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Post by Thundersnow on Aug 8, 2019 12:54:21 GMT -5
True he dumps a dose of reality on posters prognostications and most here don’t like reality. Downplaying Afrezza's superiority is NOT reality. True that the antiquated FDA Afrezza trials did not show superiority so that comes into play but the reality is that Afrezza offers a next generation superiority to any other prandial option available. To accept current recommended standards of care, that are proven ineffective, as being equal or comparable to Afrezza is misleading and harmful. Let's back up.....MNKD had 2 CRL's so all they wanted to do was to get Afrezza approved. They decided to take the path of least resistance and Al Mann said they will deal with the other issues later. Well LATER is NOW...... Afrezza got a shitty label and now MNKD is paying for it but they are taking the steps to strengthen it's label. It will take time but they are making progress. That's all we can ask for.... |
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Post by letitride on Aug 8, 2019 13:07:00 GMT -5
TNDM just reported 174% revenue increase last quarter. It was once a $2 stock price company as well. Maybe MC should pay them a visit to learn how to sell a product in diabetic market. I thought MNKD just did 285% revenue increase from same qtr 18. Im liking it . And MNKD once had a .67 stock price. |
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Post by mytakeonit on Aug 8, 2019 13:11:50 GMT -5
Sorry people, but as you know I put a rubber band on $1.10 and the pps just snapped right back to it. This puppy won't do much until I return from Las Vegas and complete my quadruple and start working on my fiveruple.  So, at the start of September I will cut the rubber band. But, that's mytakeonit |
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Post by wgreystone on Aug 8, 2019 13:16:25 GMT -5
I'm kinda feeling same as you.. I'm happy with the recap... But now I want to see something happen.. I'm happy with the billboards, but we still have problems with docs not wanting to prescribe.. or not prescribing correctly.. and retention problems.. it's a big problem.. And I'd like to see something pull this pps up.. we are lingering too close to 1$..Not sure what that is going to take but we need it. Well like Mike said at the end of the CC. They need to meet with potential investors and get their story out. Investor Relations will have to line up the conferences and Mike & Co. need to hit the road and get the word out. With revenues rising >50% that's a good story to tell but Mike had to clean up the house. The house is done and now they can tell a great story. it will take time but now is the time to add to your position. Debt is not due until 2024 (5 YEARS FROM NOW) and new money is coming in. That's what Tandem did and we see their stock appreciation. What is the good story? At this very low sales base, Afrezza should grow at 200% if not more. |
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Post by sweedee79 on Aug 8, 2019 13:18:09 GMT -5
I'm not new to Mnkd.. have been in since 2009.. I've seen all of the fumbles.. Yesterday's CC was good.. I'm just not so sure word of mouth is going to be enough to get Afrezza sales off of the ground especially when Docs aren't cooperating for the most part..
In today's world most General practitioners are prescribing meds to save patients money ..or going by what insurance is covering.. the ones I've talked to don't know about Afrezza.. and they don't want to deal with it.. so they send you off to an endo who also doesn't want to deal with it.. that is what we are up against.. I've been there..
This is going to be far from easy.. I knew that a long time ago. We've all waited a fair amount of time already.. so I don't think it's unfair to have expectations of management.nor it is unfair to be uncomfortable with SP where it is.. at this point I'm not buying more as I'm too heavily into this already...my portfolio is lopsided due to being too giddy in the past..
I'm beginning to look more toward technosphere and new partnerships as a means for the company to prosper.. and also looking forward to pediatric trials being completed.. maybe that will make the difference for Afrezza.
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Post by wgreystone on Aug 8, 2019 13:18:26 GMT -5
TNDM just reported 174% revenue increase last quarter. It was once a $2 stock price company as well. Maybe MC should pay them a visit to learn how to sell a product in diabetic market. I thought MNKD just did 285% revenue increase from same qtr 18. Im liking it . And MNKD once had a .67 stock price. 63% Afrezza revenue growth. A good part of the growth is due to packaging and cartridge mix changes, which will be gone soon. Actual script growth is more like around 30%. |
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Post by wgreystone on Aug 8, 2019 13:22:50 GMT -5
We have a FDA approved drug with addressable market of multi billion dollars. The CEO should focus on telling us how to sell the drug . Leave the refinancing pride to the CFO. Well actually that's the Chief Commercial Officer. Mike's job is to make sure everyone below him is doing their job and to hit the road and tell the MNKD Story. IR will be lining up the conferences now since Mike has cleaned up the company. Mike said 2 years ago it would take time and now it's complete. MC was hired as Chief Commercial Officer. Even though he hired another one to take his old position, he still has the obligation to push up the sales. can't just blame the new guy for the sluggish sales number. |
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Post by lifebreath on Aug 8, 2019 13:30:04 GMT -5
it was nice to hear MC suggest RLS may find their way out of that redwood forest this year! more Castagna ignorance obviously has no clue where Redwood trees grow. |
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So, at the start of September I will cut the rubber band.