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Post by rockstarrick on Aug 14, 2019 12:57:55 GMT -5
Thank you ktim. There is some playfulness going on for fun, but I'm not clowning around (intentionally). The comparison of in-licensing versus acquisition was an article I can find again if you want to read it. It made the claim in-licensing is a recently (last few years I assumed) more popular approach to developing a portfolio with shared capital burden and risk/reward. It does seem more like the modus operandi of Martine Rothblatt than would be acquisition. Your comment about looking for other examples of in-licensing followed by acquisition is persuasive. The only reasons to engage in speculative chat (other than boredom) are the verbal slip of "acquisition, or or, in-licensing" made by Martine yesterday, and to your point I think that means evaluating whatever is after TreT because TreT is already locked down in an existing agreement that I assume follows the in-licensing model. And, as I said, I cannot guess how much the unnamed molecule is valued by UTHR and whether it would drive a re-look acquisition as compared to in-licensing. Acquisition is a fairly broad term. If she had said, "we acquired a new formulation from MNKD", I think that would be perfectly accurate statement referring to the license deal in place. I suspect she meant it in that sense and then quickly realized it did leave room for misinterpretation and tightened up the wording. Amazing one inartful sentence can cause such a stir. Only here @ MNKD ^^^^ your last sentence. Have you say, mnkd caused this though. |
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Post by alethea on Aug 14, 2019 13:00:15 GMT -5
Yes. That was the purpose of the recent manufacturing capability build. Martine is shrewd but no way would she try to harm Mannkind or their shareholders. So, again, Martine said “acquisition”. It leaves it out there hanging ripe for speculation. Let’s speculate. I’ll start. MNKD hit $6 last year, but that was before some amount of dilution but that event as a point of speculation of what MNKD can (has) acheived on it’s own under “normal” market forces and can be reasonably argued is achievable again although the timeframe is always a question and a dollar today is better than a dollar tomorrow. Dr. Mann said he wouldn’t sell another of his companies for less than 10x what he had in it, but there is no way anyone will offer $10B+ at this stage. $3 would be $650M for the Afrezza franchise, Technosphere, the pipeline such as it is, the manufacturing facilities, and the substantial pool of IPR. UTHR also acquires the debt, but not much of an issue and I assume just goes against UTHR, not MNKD. Yeah, seems too cheap still. $4 enough? Not for me, but I suspect somewhere between $4 and $10 and closer to $4. Hope y’all been averaging down if your cost basis is higher than that. So a buyout offer of say $4. That will cause a substantial gap up in the MNKD stock price. What happens to a share price for a company with nearly a month of time to cover short positions that has a sudden and significant gap up? Something about Volkswagen comes to mind. Yes indeed, you are correct sir! (Ed McMahn?). BUT 26 million warrants at $1.60 per share is an anti-dilutive equity raise that would be a 48% price increase from today's price. I'd be pretty happy about that. |
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Post by ktim on Aug 14, 2019 13:05:03 GMT -5
Mnkd made a strategic mistake for not allowing Sanofi buying 10% stake in 2014. Mnkd would have huge cash to dev pipeline. Al was over confident on Afrezza with bad Label. Sanofi would have expanded more effort on Afrezza. Al didn’t diversify. Don’t think Mnkd will make the same mistake again. 10% for $50M or 20% for $100M to dev pipeline ? If UTHR is smart, they would offer to acquire Mnkd in whole. TS is very critical to their future dominance. They have a golden chance to avoid paying large royalties in the future and to attack new markets such as CBD, CF,... by paying a reasonable price upfront. Mnkd would become an R&D and manufacturing arm of UTHR. UTHR would out license Afrezza for a manufacturing contract and royalty to partially recoup the deal. TS is the goose which lays golden eggs they are after, not Afrezza. I don’t know how much Mnkd would be willing to accept if UTHR offers. In this market, based on Kevinmik’s findings, my guess is $750M - $1B. For whatever reason they didn't see it the same way you do. The deal is done, it's a licensing deal. If you view that as poor decision making on UTHR's part, then avoid investing in them. My personal belief is they would have been hammered by the markets even worse than they have been recently if they had acquired another cash burning company. If there is someone that would have licensed Afrezza from UTHR, why is MNKD not taking advantage of that opportunity now? |
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Post by ktim on Aug 14, 2019 13:12:05 GMT -5
You would have to add 26 million warrants to the equation. The shorts would just cover at the buyout price and no VW short squeeze. Spell it out for me TraderDennis. I think you are saying the 26M warrants represent an opportunity to quickly and cheaply cover that portion of the 38.5M shares sold short, leaving 12.5M shares left to be covered which averages out to 6.5 days to cover.
I think this assumes that 100% of the warrants are held by people with an equal quantity of short shares. I'm unsure how likely that is, but pretty sure you can tell me. :-)
Even so, 12.5M shares seems like a lot of buying pressure added to ordinary retail, and potentially institutional investor buying. What should be the assumptions with regard to the prices at which those 12.5M shares were sold short? Does that add to the buying pressure?
I can agree that VW class short squeeze is unlikely, but what is the likely price action? I assume it has to go beyond $4 at least briefly, like a pig working through a python if that makes any sense. But happy to learn as always.
I've only shorted a very few stocks in my entire investing career (and usually without good outcomes), so I'm no expert... but I believe someone short can hold clear through the closing date and is simply cashed out in the clearing process at the acquisition price. If the borrow interest rate were astronomical, there would be an incentive to close the short position early even if having to pay over the acquisition price, but I don't think there would be any reason for a stampede of short covering to occur well above the acquisition price. If there was fears an alternate suitor might start a bidding war that would be a different matter, but a bidding war for MNKD is adding a further layer of improbability onto the already implausible acquisition offer from UTHR. |
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Post by lakers on Aug 14, 2019 13:33:08 GMT -5
Some acquiring companies prefer to test water first by seeing if the prospective co. can meet certain milestones, then buy in phases. Case study: SNY buying stake of Regeneron in phases.
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Post by lennymnkd on Aug 14, 2019 13:36:06 GMT -5
Good to see you back lakers !
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Post by pat on Aug 14, 2019 13:45:18 GMT -5
How low will we go?
R-e-d-e-m-p-t-I-o-n
friday script day.
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Post by peppy on Aug 14, 2019 13:48:48 GMT -5
How low will we go? R-e-d-e-m-p-t-I-o-n friday script day. |
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Post by ktim on Aug 14, 2019 13:57:18 GMT -5
Some acquiring companies prefer to test water first by seeing if the prospective co. can meet certain milestones, then buy in phases. Case study: SNY buying stake of Regeneron in phases. Sanofi had been an investor in regeneron from very early. There might have been one partial "surprise" move (when they announced acquiring of shares they already had an investment agreement in place limiting acquisition to 30%, so that move really had already been divulged as contemplated) in the relationship but much of the "testing of waters" was built into the agreements they used. The agreement between MNKD and UTHR does not have opt-in clauses such as ones between Regeneron and SNY. Therefore, not really apples to apples, but I would say it is at least a comparison of two fruits rather than say an apple vs a lump of coal. |
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Post by traderdennis on Aug 14, 2019 17:48:54 GMT -5
You would have to add 26 million warrants to the equation. The shorts would just cover at the buyout price and no VW short squeeze. Spell it out for me TraderDennis. I think you are saying the 26M warrants represent an opportunity to quickly and cheaply cover that portion of the 38.5M shares sold short, leaving 12.5M shares left to be covered which averages out to 6.5 days to cover.
I think this assumes that 100% of the warrants are held by people with an equal quantity of short shares. I'm unsure how likely that is, but pretty sure you can tell me. :-)
Even so, 12.5M shares seems like a lot of buying pressure added to ordinary retail, and potentially institutional investor buying. What should be the assumptions with regard to the prices at which those 12.5M shares were sold short? Does that add to the buying pressure?
I can agree that VW class short squeeze is unlikely, but what is the likely price action? I assume it has to go beyond $4 at least briefly, like a pig working through a python if that makes any sense. But happy to learn as always.
YFor the warrants, you would need to add them into the total share count as they would be exercised on a buyout. And yes, not all of the warrants are short, I would think a large number are. As for the runup in price post offer, the shorts would have their worst case number, the buy out amount. they would have to estimate the percentage chance of a second offer and the likelyhood of the initial offer closing. I would guess they probably would not head to the exits right away. Also arbitragers at some point over the buyout price would go short so their is a ceiling on the runup. |
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Post by mannmade on Aug 14, 2019 18:05:50 GMT -5
Very interesting. How would the 30% purchase be executed? Open market? If so, then that assumes I think a slow acquisition up to 5% (the SEC reporting threshold) and then what? A large market buy order or set of buy orders? (Not trying to be a "clown". I really genuinely don't know how such things are done and assume I'm just ignorant - so I ask.) I'm sure he's talking about private placement so money actually goes to MNKD. Interesting idea, but even with getting a solid backer and likely leading to share price increase due to that, I'm not overly thrilled at that level of dilution at this price level. Also, don't think UTHR is really in a position to do that. Yes am talking about a provate placement so money goes to mnkd. I am not personally as concerned about the dilution vs the benefits of having the backing that UTHR will provide plus the immediate impact of increasing the pps for mnkd. Would likely be the last dilution and so would only be up from that point imho... |
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Post by morfu on Aug 14, 2019 19:06:19 GMT -5
Absolutely right! Why would you want to sell shares of a company which currently grows more than 50% per year? Whatever price you get might be a joke in a few years! Afrezza is not growing 50% per year. It is basically growing at a linear rate. You can't fit an exponential curve to something that is basically linear and have it be meaningful. As for the non-Afrezza revenue, the upfront money we currently know about isn't increasing and ceases at some point, and we don't know how quickly the royalties will kick-in and grow. Bottom line, if MNKD revenue could reasonably be modeled as 50% per year on ongoing basis, the share price would not be where it is today. >> Afrezza is not growing 50% per year. Quite right, that is why I said at least 50% per year!
I18 II18 III18 IV18 I19 II19 Total revenues 3.4 3.8 4.4 16.0 17.5 15.0 of which Afrezza net 3.4 3.8 4.4 5.7 5.0 6.1 collaboration 10.3 12.4 8.9 liane´s table 6.5 8.4 10.0 11.5 12.2 1 3.2 Anet over table .52 .45 .44 .50 .45 .46 Afrezza gross profit -0.6* -1.3 0.7 1.1 1.7 R&D expenses -2.6 -3.0 2.0 -1.1 -1.7 -1.6 SG&A -15.4 -21.7 -19.4 -18.0 -27.7 -16.6 Interest expense -1.8 -1.7 -1.0 -0.6 -0.6 -0.6 net loss -30.4 -22.7 -24.2 -9.7 -14.9 -12.4 Cash 27.2 53.1 11.0 71.7 59.8 38.2 Read more: mnkd.proboards.com/thread/11398/mnkd-hold-2019-financial-results?page=8#ixzz5wcjHPrAr |
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Post by Deleted on Aug 15, 2019 0:14:37 GMT -5
Afrezza is not growing 50% per year. It is basically growing at a linear rate. You can't fit an exponential curve to something that is basically linear and have it be meaningful. As for the non-Afrezza revenue, the upfront money we currently know about isn't increasing and ceases at some point, and we don't know how quickly the royalties will kick-in and grow. Bottom line, if MNKD revenue could reasonably be modeled as 50% per year on ongoing basis, the share price would not be where it is today. >> Afrezza is not growing 50% per year. Quite right, that is why I said at least 50% per year!
I18 II18 III18 IV18 I19 II19 Total revenues 3.4 3.8 4.4 16.0 17.5 15.0 of which Afrezza net 3.4 3.8 4.4 5.7 5.0 6.1 collaboration 10.3 12.4 8.9 liane´s table 6.5 8.4 10.0 11.5 12.2 1 3.2 Anet over table .52 .45 .44 .50 .45 .46 Afrezza gross profit -0.6* -1.3 0.7 1.1 1.7 R&D expenses -2.6 -3.0 2.0 -1.1 -1.7 -1.6 SG&A -15.4 -21.7 -19.4 -18.0 -27.7 -16.6 Interest expense -1.8 -1.7 -1.0 -0.6 -0.6 -0.6 net loss -30.4 -22.7 -24.2 -9.7 -14.9 -12.4 Cash 27.2 53.1 11.0 71.7 59.8 38.2 Read more: mnkd.proboards.com/thread/11398/mnkd-hold-2019-financial-results?page=8#ixzz5wcjHPrAr From Mannkind's PR........2Q 2019 Afrezza Net Revenue was $6.1 million; +62% vs. 2Q 2018 |
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Post by falconquest on Aug 15, 2019 7:14:59 GMT -5
This 30k population with COPD, IPF, iLD they will be much more willing to rapidly adopt our technology if it is a small hand held Mannkind device than compared to a more complicated nebulizer. So we have timed the Mannkind acquisition or in-licensing and development to be timed with out drugs into the Group 3 PAH. this will be a major vector for our business. Read more: mnkd.proboards.com/thread/11425/mnkd-uthr-wedbush-commentary#ixzz5wffEbLVZI think a lot of people are getting way over the tips of their skis here. Martine was clearly talking about the trial with the Mannkind inhaler and the commented on the "acquisition" from Mannkind of the inhaler. There was no slip, it may have been a unique word to use but let's face it, they did "acquire" Technosphere and the inhaler........for their drug. I think everyone is so desperate for good news that they misconstrue comments sometimes. GLTA |
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Post by sportsrancho on Aug 15, 2019 8:05:04 GMT -5
This 30k population with COPD, IPF, iLD they will be much more willing to rapidly adopt our technology if it is a small hand held Mannkind device than compared to a more complicated nebulizer. So we have timed the Mannkind acquisition or in-licensing and development to be timed with out drugs into the Group 3 PAH. this will be a major vector for our business. Read more: mnkd.proboards.com/thread/11425/mnkd-uthr-wedbush-commentary#ixzz5wffEbLVZI think a lot of people are getting way over the tips of their skis here. Martine was clearly talking about the trial with the Mannkind inhaler and the commented on the "acquisition" from Mannkind of the inhaler. There was no slip, it may have been a unique word to use but let's face it, they did "acquire" Technosphere and the inhaler........for their drug. I think everyone is so desperate for good news that they misconstrue comments sometimes. GLTA That makes perfect sense, that there was no slip..I hadn’t even read it and people were just saying she slipped up and I didn’t see how that was possible but you are absolutely right. |
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