Don't know at all to what degree it may have been preventable.
What is clear is that MNKD management truly cares nothing about shareholder disclosure. I expected big manipulation all along and have said I don't trust options. Having said that, I do have Jan 2015 $5 calls. Thought that length of time would be sufficient to get past Wall Street manipulation. Looks like I was terribly wrong.
I applaud Al if his main motive is to benefit humanity by getting this drug to market with whom he thinks to be the best partner. However it is already crystal clear management had to sell their souls in terms of agreeing to disclose almost nothing about the deal. Their hands are obviously tied.
In terms of investors' finances the deal is a major betrayal. Again as a Type 2 diabetic I eagerly look forward to using Afrezza.
But I say again, they have irrefutably demonstrated that they
will not or cannot do or say anything to protect investors financially. Incredibly disappointed. I love this Board but I also read the other non-Yahoo board, the one led by Admin (OPC?). He has been bashing management for as long as I've read it. Hate to say it but it looks like he's been correct all along with regard to Investor Disclosure. Don't count on anything to come from the mouths of management as far as coming to the rescue.
Could Mannkind Managment handled things better along the way? Yes quite possibly... But honestly I doubt even they saw this coming... Let's remember for all of Al Mann's accomplishments and for what Mannkind has overcome it took a great deal of character to get here... And these guys are not sharks, the sharks are on Wall Street. Where is the lawsuit against Mr. Tourbillion or Cramer or AF?
I mean in all honestly whether you think Afrezza is a 1B or 5B a year drug, the stock is worth much more than it's current value... There is almost no risk to an investment in this stock at this point, (in getting Afrezza to market and seeing sales revenue, except perhaps for adoption by patients,) but the current share price does not reflect this... All I personally hear is that it is overvalued by the bears/shorts (which is BS, notice how the initials seem to fit Bears/Shorts...)
Well let's do a quick estimated valuation of Mannkind Corp., (Valuations are my own rough estimations) as follows:
A. Assets/Revenue:
1.) 500m for the Danbury Facility (owned outright with no debt)
2.) 200m to 300m in raw insulin (owned outright, not currently certified for use in Afrezza by FDA)
3.) 100m Ownership of Business Park in Valencia, CA where Mnkd HQ (again owned outright w no debt)
4.) 500m in Patents (over 550 registered patents registered)
5.) 300m value of technosphere (my guess which I believe is extremely Low)
6.) 150m in upfront cash from Sanofi
7.) 200m in easily achievable milestones, (EU, Japan approval and first sales milestone) (am not counting remaining 540m in milestone payments possible)
8.) 245m in expected revenue for first 12 months Afrezza is on the market.
(Number 8 above results from the following off the top of my head evaluation: a.) 1B in Sales for first 12 months, b.) assume 30% COG, c.) leaves a operating profit of 700m, d.) 35% of 700m is 245m
9.) Little or no taxes on the first two to three years or more on income as 1.4B in carry forward losses plus Danbury depreciation.
10.) 130m in milestone payments from Oncology licenses done two years ago
Debt/Expenses:
1.) [100m] note likely converted at 6.80 so that is a wash
2.) 80m due to Deerfield for debt not converted
3.) 30m or so due Al Mann
4.) 4m per month expenses as R&D expenses estimated at 10m month currently to transfer over to Sanofi
5.) 5m Other R&D for other projects such as Technosphere licensing and Flu vaccine, etc...
6.) Anything I missed?
You can draw your own conclusions but I see a company with a net asset valuation of at least 2.2B with little or no debt and nothing but upside as it will have no real expenses against it's future income. So let's see Mannkind Corporation is now a company that is flush with cash, immediate revenue on the horizon ($150m), 2/3's of it's current expenses transferring off book, a potential blockbuster drug, with other possible opportunities in development.
Also remember that the 245m in sales revenue I projected as income for the first 12 months of Afrezza sales has no expenses/cogs against it so the multiple on the 245m should be x20 which would make Mannkind a 5B market cap (based on the revenue from sales alone) and I think that is being a tad conservative given everything discussed above and I by no means have all the facts or the terms of the deal worked out (such as the Eiseman Theory on the recapturing of past R&D expenses etc)... Now at 5B that is double todays price or at least $14pps which is how I get to the lower end of my projection.
I for one have always said and still believe in the science... Having said that, yes I am disappointed that I have not realized the 13pps I thought was a conservative estimate on share price post partnership annoumement with a major BP.
I am still very bullish on Mannkind for all the reasons above and for which I previously wrote to WB (and previously posted) about why I think it is a "unorthodox" value stock at the moment. Only now so more then ever. I personally bought 30,000 shs over the last two days.
And so can you fault management? Yes I guess so, but I would rather look at this as a huge opportunity... Now I know many are out of powder and others may have margin call issues so you will need to figure out your strategy moving forward. But I do think we will see a $14 to $21pps in the next 12 to 18 months.
Please see my previous postings on this subject if you are looking for my reasoning.
GLTA!