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Post by mnkdfann on Dec 18, 2019 19:32:24 GMT -5
Looks to me like UTHR is all in and Midcap wants to make sure they are to. What does Medcap get now that it didn’t get before? |
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Post by letitride on Dec 18, 2019 20:18:39 GMT -5
To : Let it Ride
Lets Go!
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Post by neil36 on Dec 18, 2019 21:37:04 GMT -5
It appears they rescheduled the covenants without raising the interest rate as per the original agreement. The exit fee is increased, and it appears they raised the revenue threshold required to get to the third tranche ($25 million?) of the loan.
Without full modeling and just doing back-o-napkin math, it looks like weekly retail sales for 2020 would need to average about $1.8 million per week to get to $95 million in retail sales, to achieve $40 million in Afrezza revenues to the company. If we are currently averaging about $1.3 million per week, getting up to $1.8 million is achievable, but to average that would mean retail sales would need to be well north of $2 million per week in the second half of 2020.
Hoping to hear other interpretations of the 8k. Thoughts?
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form 8-k
Dec 18, 2019 21:46:59 GMT -5
via mobile
Post by brotherm1 on Dec 18, 2019 21:46:59 GMT -5
Based upon MNKD historical sales results always falling short or expectations, your interpretation and calculation sound true to me as I’m confident the goals would have been set higher than we will achieve.
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Post by cretin11 on Dec 18, 2019 22:48:02 GMT -5
Looks to me like UTHR is all in and Midcap wants to make sure they are to. Is there something in that document to indicate UTHR being “all in”? I’m not saying they aren’t, just wondering what (if anything) in the 8-K supports that. |
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Post by brotherm1 on Dec 18, 2019 23:09:51 GMT -5
no. Their “intent” to be in does not mean they will be all in
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Post by longliner on Dec 19, 2019 0:06:07 GMT -5
no. Their “intent” to be in does not mean they will be all in No, but I suppose it's better than not having the "intent" to be in.  |
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Post by lakers on Dec 19, 2019 1:51:23 GMT -5
spencerosborne
03:57 PM
@vibes121 @detroitish interest rate was not mentioned specifically. Exit fee is now 7%. Net rev targets lowered. Tranch 3 has raised net rev targets, which seem unlikely to be attained. Bottom line...they can borrow $10m more on this deal with relative ease, but the final $25m is not easy. All things considered, they have funds to mid 2020, and another $35m in anticipated funds to get toward end of 2020.
spencerosborne
06:53 PM
@vibes121 @notmykind @woody81 I laid out just after the deal was announced that the covenants would ge difficult and laid out that the miss would happen in October or November. It was simply a realistic assessment. I stated that it would lead to an amendment and that midxap would get their pound of flesh. Making tranche 3 almost unreachable removes $25m in potential funds from the coffers. There will be ramifications from that, as the street must now contemplate what will happen in mid to late 2020. They key to playing this equity is to look at it from an accounting perspective until such time that the company demonstrates that close bean counting is not necessary.
neil36
06:46 PM
$MNKD
To qualify for the third tranche, the Dec 2020 Afrezza revenue look-back is $40 million. My conservative math, using 42% of retail sales, would require $95 million of retail sales in 2020 or $1.8 million per week.
We are currently averaging $1.3 million per week retail sales. To AVERAGE $1.8 million for 2020, it means retail sales would need to be well over $2 million per week the second half of 2020.
If the average script stays around $1700 per, MNKD would need to be moving 1,200 to 1,400 scripts per week the second half of 2020 to qualify for the third tranche
My back-o-napkin and Sharpie model.
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Post by ktim on Dec 19, 2019 2:22:06 GMT -5
Looks to me like UTHR is all in and Midcap wants to make sure they are to. From this 8k it looks like UTHR is moving forward with what they've already spent millions on... TreT. As for "all in"... some here harbor wishful thinking some sort of major investment in MNKD is forthcoming. Nothing in this 8k would make that "all in" seem more likely, or even the 2nd API. But if you meant submitting TreT to FDA and having likelihood of approval, I'd agree with you. Barring bad clinical results, it would be surprising if UTHR wasn't committed to TreT. |
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Post by sayhey24 on Dec 19, 2019 7:08:55 GMT -5
ktim - it seems "bad clinical results" is off the table -
1. Agent has received evidence satisfactory to it, in its discretion, that United Therapeutics has received positive clinical data on the Phase 1b BREEZE trial
2. Agent has received evidence satisfactory to it (in its discretion) that United Therapeutics definitively intends promptly to file or has filed Treprostinil Technosphere for approval by Food and Drug Administration of the United States of America for the treatment of Pulmonary Arterial Hypertension
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Post by neil36 on Dec 19, 2019 7:10:42 GMT -5
ktim - it seems "bad clinical results" is off the table - 1. Agent has received evidence satisfactory to it, in its discretion, that United Therapeutics has received positive clinical data on the Phase 1b BREEZE trial 2. Agent has received evidence satisfactory to it (in its discretion) that United Therapeutics definitively intends promptly to file or has filed Treprostinil Technosphere for approval by Food and Drug Administration of the United States of America for the treatment of Pulmonary Arterial Hypertension That was the most positive take-away of the 8-k |
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Post by matt on Dec 19, 2019 9:32:51 GMT -5
ktim - it seems "bad clinical results" is off the table - 1. Agent has received evidence satisfactory to it, in its discretion, that United Therapeutics has received positive clinical data on the Phase 1b BREEZE trial 2. Agent has received evidence satisfactory to it (in its discretion) that United Therapeutics definitively intends promptly to file or has filed Treprostinil Technosphere for approval by Food and Drug Administration of the United States of America for the treatment of Pulmonary Arterial Hypertension The amendment doesn't say that those events have happened. It says that those events must happen as a condition of further financing. If UTHR balks on either point the conditions precedent to further financing are not met. Elsewhere Neil36 said " If we are currently averaging about $1.3 million per week, getting up to $1.8 million is achievable, but to average that would mean retail sales would need to be well north of $2 million per week in the second half of 2020." I think that is fairly realistic math, but the caveat is that average means average of all weeks. Hitting the target sales in most weeks is not good enough since the covenants do not take into account short weeks, holidays, bad weather, etc. and other reasons why a bad week occurs. I think it is time shareholders stop mentally adjusting the weekly sales for such events and start expecting steady results week in and week out. The lender certainly requires that. |
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Post by Clement on Dec 19, 2019 9:50:58 GMT -5
“following: “Applicable Funding Conditions: means the following:
(a) (x) Agent has received evidence satisfactory to it, in its discretion, that United Therapeutics has received positive clinical data on the Phase 1b BREEZE trial and (y) Agent has received evidence satisfactory to it (in its discretion) that United Therapeutics definitively intends promptly to file or has filed Treprostinil Technosphere for approval by Food and Drug Administration of the United States of America for the treatment of Pulmonary Arterial Hypertension; (b) Agent has received, on or after the Commitment Commencement Date, evidence reasonably satisfactory to it that Afrezza Net Revenue for the preceding twelve (12) calendar months ending on the last day of the month (commencing with July, 2020) for which Borrower delivered (or was required to deliver pursuant to Section 6.2(b) hereof) a Compliance Certificate (the “Tranche 3 Testing Date”) is greater than or equal to the amount set forth on the Tranche 3 Afrezza Net Revenue Schedule opposite the applicable Tranche 3 Testing Date; (c) (x) Agent has received evidence satisfactory to it (in its discretion) that Borrower has received the full amount of all Milestone Payments (as defined in the United Therapeutics License as of the Closing Date) under the United Therapeutics License and (y) immediately prior to and after giving effect to the funding of the Credit Extension under this Credit Facility #3, Borrower is not in breach or violation (nor has United Therapeutics asserted any such breach or violation by Borrower) of the United Therapeutics License Agreement and United Therapeutics shall not have delivered any termination notice pursuant to Section 12.3 of the United Therapeutics License; and (b) The Minimum Afrezza Net Revenue Schedule attached to the Original Credit Agreement is hereby deleted and replaced in its entirety with the Minimum Afrezza Net Revenue Schedule attached as Schedule 1 to this Agreement.” $10m for tranche 2 of credit facility is available until April 15th Read more: mnkd.proboards.com/search/results?captcha_id=captcha_search&what_exact_phrase=tranche+2&who_only_made_by=0&display_as=0&search=Search#ixzz68Z25YgshIn light of the emboldened conditions above, can we conclude that positive clinical data on the BREEZE trial will be revealed before April 15 and that "UT definitively intends promptly to file" by April 15 .... .... or that Tranche 2 is impossible? |
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Post by longliner on Dec 19, 2019 9:58:43 GMT -5
Pediatric approval can't come soon enough.
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Post by agedhippie on Dec 19, 2019 10:07:28 GMT -5
“following: “Applicable Funding Conditions: means the following:
(a) (x) Agent has received evidence satisfactory to it, in its discretion, that United Therapeutics has received positive clinical data on the Phase 1b BREEZE trial and (y) Agent has received evidence satisfactory to it (in its discretion) that United Therapeutics definitively intends promptly to file or has filed Treprostinil Technosphere for approval by Food and Drug Administration of the United States of America for the treatment of Pulmonary Arterial ... ... In light of the emboldened conditions above, can we conclude that positive clinical data on the BREEZE trial will be revealed before April 15 and that "UT definitively intends promptly to file" by April 15 .... .... or that Tranche 2 is impossible? The key phrase is highlighted in red. It is entirely up to MidCap as to whether or not the evidence is adequate. The could be content with a verbal assurance, they could require the final report. It's worded like that to avoid legal disputes since it makes MidCap the sole arbiter and not for any other reason. I think the chance of the second tranche not being released is vanishingly small. If MidCap had been going down that route they would have simply left the agreement as was and let Mannkind fail the covenant. The revision is about fixing Mannkind's continuing inability to accurately forecast Afrezza sales by revising downwards the sales targets. |
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