Some thoughts as to the events of the past few days

[jmerr]

I am not an active participant here so I realize most of you will not recognize me, but I do read what you all have to say with great interest and I really appreciate everyone's insight.  Here are some of my thoughts as I expressed them to some friends who are in the stock. A disclosure is I have a pretty large position dating back to the begining from 2-17 and have bought again recently as it has dropped so-- I have drank the coolaid and I am here for the long haul.

These are my thoughts:

To say I am disappointed in the way the stock has reacted to this partnership news would be an understatement, but I think it just goes to show how crooked and manipulated our markets are.

Why are people selling?? I feel there are a few reasons--
1. Many people wanted a buy out for the quick buck. That did not happen so they are bailing .
2. The stock is heavily manipulated by the shorts, If they can push it down it starts a chain reaction of panic selling and stop losses
3. Margin calls. I would not margin this but I am sure some did and when it drops like this, there could be margin calls--hoping none of you are on the margin.

Now--Lets review the positives--

1.We passed the Adcom with flying colors,
2.Got a good approval with a label that we expected
3.We get the best possible partner we could get in Sanofi .
4. The technosphere platform is still out there and we will begin hearing more about it as the days go by.
5. There are two cancer (melenoma) drugs that will now have new life as Mannkind will have the money to begin new trials on these

I do not know for sure whether the deal is a good one or not, but it was always thought that a smaller up front payment with a bigger payout on the percentage of profits would be a better deal for Mannknd if the product sells-- and of course--we here all feel it will or we would have never been here. That is exactly what they got. Al Mann's MO is to partner up with a company, build the value and then sell it. He has done this numerous times and patience has proven to be a winner when getting on board with an Al Mann deal. That is exactly what we have here. I never expected a buy out but obviously a large number did.

So-- having said that, I can't begin to guess where the bottom will be, but there is no news that is negative out there other than conjecture and fear-- which is hwat the sorts want-- but---everything we wanted to happen has happened. The selling is because of disappointment of one deal over the other and the possibility of a quick dollar vs bigger bucks over time.

This should be a buying opportunity if you are still a believer in the science and the fact everything we wanted has happened. If you are worried about the day to day swings in this stock-- it is probably not for you and I am having some pretty large day to day swings that are a little unsettling, but I still believe in the long term .

What I believe and have always believed is that when it starts selling in 2015, we will see positive results well beyond what the recent highs have been. I am guessing late 2015 after a yr of sales and then if we are successful, the big jump in the 2016-2017 time frame-- at least that is my hope.

Again, I am sorry it did not jump on the partnership news-- I am disappointed and amazed it did not, but with this stock over 9 years , I have seen a lot.

Best of luck to you all-- These are just my opinions and you should do what you believe and feel as far as holding or selling.

[babaoriley]

jmerr, your above post is so incredibly similar to my own way of looking at this, I find it hard to believe we're not the same person! I would add that many traders who were all over our stock waiting for the partnership, have moved on, and even intermediate term investors may look at this as dead money for a few months.

[liane]

jmerr,

Nice post! I hope you'll feel comfortable posting more here. You shouldn't have anyone beating you up over your ideas here - except maybe spiro for a lack of optimism - lol.

I share your views. Many consider it dead money. The day traders want out. I'm in it for the very long haul.

[jmerr]

Thanks Baba and Liane,

I have read your post here for sometime and have come to feel comfortable in both of your views. Thank you for your kind words.

  The truth is as far as opinion goes-- there is not much more than can be said. The numbers guys can play with it all day long and those who are not familiar with it can be led to the slaughterhouse by those who post false numbers and instill fear. There is no question dilution has hurt us, but it has allowed us to stay alive-- Now we are ready to run.  Everything else until a little more clarification concerning sales, acceptance of the product, and the deal at this point as far as the future is concerned is  just conjecture. 

 I just believe in my heart that with the combination of a fast acting quick exiting insulin that is obviously superior to anything that is out there and is easily administered, we have something that will change the world.  If one could have been in at the beginning of the polio vaccine or penicillin or any other break through medical advancement-- who would miss that chance?----- and if I put one dollar in today and in two years it is 10,  why would I worry about it going to .50 today-- Just sayin!!

Again,  I will continue to read your post here with great interest and comment from time to time.

Thank You

[dreamboatcruise]

Aug 15, 2014 13:02:20 GMT -5 jmerr said:

----- and if I put one dollar in today and in two years it is 10,  why would I worry about it going to .50 today-- Just sayin!!

Chameleons literally turn green with envy when they spend $1 to buy shares and then learn someone else got twice as many for the same dollar.  See my avatar... it's happened just thinking about that scenario. 

Looking to buy more... just not so sanguine about pulling the trigger now.

Where's our technical analyst guru to tell us the perfect time to buy?

[in search of the truth]

I don't think that we know enough at this juncture to analyze and dissect the deal, and I agree with all of the sentiments here about at every juncture, the believers in the stock got what they wanted and what they expected (good results in the affinity studies, excellent ADCOM, solid label, good partner, etc.). I am long on options, would never use margin and feel that it is wrong, wrong, and wrong to be able to sell stock that you do not own. Shorting of every kind should be outlawed. When the downward spiral started, I had to jettison my January 15 Call options to try and save as much of my gains as I could, since I know that we would not have any significant binary events coming up before January of 2015. First quarter sales will not tell us much and second quarter sales will most likely not be posted until about August of 2015 (remember, Mannkind's second quarter 2014 report happened on August 11). I then used some of the proceeds to add to my position of January 16 calls. The spiral continues, but I'll just sit on the options and see what the landscape looks like in about November of 2015, after third quarter earnings/reports are out. I am in for the long haul.

What I don't understand and can't come to terms with is why Mannkind? Why does this seem to be such a polarizing stock to be manipulated. If another biotec announces that they have a promising drug still three years away from approval, why does their value quadruple overnight? Which is more prevalent, hepatitis or diabetes? If Afrezza was inferior to other insulins, if it caused major complications for diabetics over injections or pens or if it's label was as bad as almost all drug TV commercials we listen to each day, I could understand it. The stock should be up to at least to $15.00 by now and Mannkind should have received significantly more than $150 million up front. Santofi and Mannkind had to know that signing a deal that did not adequately pay Mannkind for its investment to date would trash the PPS.

The one saving grace that I cling to is that I feel that this battle will ultimately be won or lost by the diabetics themselves. I have faith in the science/technology that it will prevail. They will either take it or they won’t. If they choose it over injections, pens and non-basal slower acting insulins, “we” will eventually be vindicated. If they don’t, then I will capitulate and admit that my due diligence over several years was flawed and I was duped. But until someone can show me where my logic is flawed and explain how I was duped then I remain long……

[babaoriley]

in search of the truth, "when the downward spiral started, I had to jettison my January 15 Call options to try and save as much of my gains as I could, since I know that we would not have any significant binary events coming up before January of 2015."

You could also have added, "and if there were any binary events, the result of which were successful for MNKD, I might also miss the 20 minute window during which the stock would actually trade higher." GH! ("Gallows Humor")

[jpg]

Looking at it from the perspective of a CEO and upper management of a global BP what is the biggest career risk when making a deal to partner with Mannkind on Afrezza? I would guess Exubera and the expensive Pfizer flop would be high on the list of things in the back of the minds of any CEO thinking of doing this deal. Repaeting this past flop has 'career suicide' written all over it. Again looking at it from the perspective of Sanofi upper management how is this deal easier to sell the Board and shareholders? Don't front load it to much and find back channel ways of paying MNKD. I suspect this is what has been done. The comment by Mannkind that this is in reality more a 50/50 split then an asymmetrical deal might be more then spin.

The management bashers might be right that we could have gotten a better deal but as a Lizard has rightfully pointed out: you get the best deal you can get and this was obviously from Mannkind's and Greenhill's perspective the best deal they could get. Time will tell obviously.

Again I really like this deal and my 2 biggest fears for the partnering of Afrezza has been mostly put to rest. I would even have been upset and nervous if we got more then 35-40% of profits. The reaction from the market and management basher would have been much more subdued and the share price would not have dropped (and maybe even risen) but it could have been against our long term best interests. Regardless of the specifics of the deal I am certain Mr. Mann will again prove AF et al. wrong.


JPG