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Post by neil36 on Mar 1, 2021 14:01:17 GMT -5
I’m sure they already have a very specific plan for what they want to do with potential proceeds, so this is just a mental exercise for contemplation.
If the sale/leaseback is executed ($100 million) and the convertible note is consummated ($150 million to $172.5 million), Mannkind would suddenly have over $310 million cash-on-hand ($67 million at the end of December plus the two cash raises). What would you do with that cash?
Based on the key themes of last Thursday’s presentation, here is what I might do.
- Pay off the MidCap loan of $50 million. That would leave the PPP loan (which might eventually be forgiven) and the non-convertible loan from the Mann Group ($38 million). All other debt will be converted to shares by 2024.
- $35 million for the pediatric trials
- $25 million for the Clofazimine trials
- $15 million for BlueHale launch
- $15 million for AfrezzaAssist program
- $15 million social media budget for Afrezza and other pipeline products
- $40 million added to the $60+ million cash-on-hand to keep at least $100 million cash-on-hand going forward
- $30 million for as-required operating expenses to get to mid-2022 when UTHR royalties kick in
- Which leaves another $25 million for efforts in India, Australia or other pipeline development
All of these would be worthwhile investments in the operation (my opinion), and the shares outstanding would increase from the current 241 million to maybe 275 to 280 million….. in 2026.
This is just spitballing and trying to guess how they might use the money. What would you do with a quarter billion dollars?
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Post by longliner on Mar 1, 2021 14:04:31 GMT -5
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Post by porkini on Mar 1, 2021 14:20:30 GMT -5
I'd subtract today's losses and figure what I could do with less than a quata-billion!  |
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Post by castlerockchris on Mar 1, 2021 14:55:33 GMT -5
All good thoughts. I have a couple to add...
1. I would not pay off the Mid-Cap loan. I pay it down to free up some of the capital sitting in escrow and about half to 2/3 of the outstanding face amount of the line of credit, but keep the bird in hand just in case. If all goes well we negotiate more favorable terms or use some of the UTHR money to slowly buy it down. Given our pipeline and all the potential products that could fill the pipeline, we should leverage OPM (other people's money) as much as possible.
2. I would spend less on Afrezza marketing (probably 75% less) and save that money for a pediatric launch which will take way more cash. Afrezza in its current state is not going to be the driver we all hoped it would be until Peds is approved. On top of that nobody has figured out how to market this product in such a way that results in a reasonable ROI. I am not saying that smart people haven't tried, but I am saying they have failed. If we did not have a deal in place which will hopefully defray the cost of our sales team, I would suggest pulling back on that area as well. If you look at the number of reps we have on the street vs. the number of scripts being written, it is embarrassing - and not in a riches way. Again, not blaming the sales team, but I am saying what we are doing is not delivering the block buster results. The only other thing I would think about with Afrezza would be to spend some money on research (100 - 200k) to figure out why this product has not become the block buster we all thought it could become.
3. I would sock away more than you for the operating fund (60 - 90 million) such that I have 1.5 to years of the quarterly NOL covered at its current rate - $15 mm per quarter (letting UTHR income from manufacturing and royalties give the freedom to adjust up and down on future development opportunities).
4. I would build a world class business development team (3-5 million, spent over two to three years). Note I am not talking a sales team. This team would go out and build relationships with every potential bio/pharma partner we could imagine as a potential fit. They would be focused on EMEA, India and North America (skip China, they will just steal the IP). Their job would be to deliver future UTHR type opportunities - 15 - 20 opportunities per year that would hopefully result in 5 - 7 development deals, leading to 3-4 products in market during 2024/25.
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Post by parrerob on Mar 1, 2021 14:59:34 GMT -5
I will buy shares at the open market all in 3 days (50 million shares at 5$, something less on the road) taking advantage of the momentum and bringing PPS at 30$... then dilute a 20 million shares with atm.... collect 600 million $... then close immediately the debt and buy back the property...
With remaining 350 million: Champagne!!!
Joking, unfortunately.... today I need to joke.
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Post by morfu on Mar 1, 2021 15:06:51 GMT -5
I’m sure they already have a very specific plan for what they want to do with potential proceeds, so this is just a mental exercise for contemplation. If the sale/leaseback is executed ($100 million) and the convertible note is consummated ($150 million to $172.5 million), Mannkind would suddenly have over $310 million cash-on-hand ($67 million at the end of December plus the two cash raises). What would you do with that cash? Based on the key themes of last Thursday’s presentation, here is what I might do. - Pay off the MidCap loan of $50 million. That would leave the PPP loan (which might eventually be forgiven) and the non-convertible loan from the Mann Group ($38 million). All other debt will be converted to shares by 2024. - $35 million for the pediatric trials - $25 million for the Clofazimine trials - $15 million for BlueHale launch - $15 million for AfrezzaAssist program - $15 million social media budget for Afrezza and other pipeline products - $40 million added to the $60+ million cash-on-hand to keep at least $100 million cash-on-hand going forward - $30 million for as-required operating expenses to get to mid-2022 when UTHR royalties kick in - Which leaves another $25 million for efforts in India, Australia or other pipeline development All of these would be worthwhile investments in the operation (my opinion), and the shares outstanding would increase from the current 241 million to maybe 275 to 280 million….. in 2026. This is just spitballing and trying to guess how they might use the money. What would you do with a quarter billion dollars?
Hmm dilute the stock for $100mil cash at hand which they do not need sounds just like this management! Today they destroyed the upward movement of the share price of the last weeks and about $300mil share value so far.. Like that strange dilution just before Christmas 2018 (taking 20% of my share value) I wonder who is the benefactor of these shares (which I bet will be placed under the average share price of the next 6 months even after the upward trend was killed by the announcement) This decision is another one which is quite expensive for the average shareholder!
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Post by sportsrancho on Mar 1, 2021 16:54:42 GMT -5
You got the board you voted for!🤷🏼♀️
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Post by falconquest on Mar 1, 2021 18:33:53 GMT -5
You got the board you voted for!🤷🏼♀️ BINGO! |
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Post by longliner on Mar 1, 2021 19:35:27 GMT -5
I look forward to reminding you SHORTLY that yes, this is the board WE (shareholders) elected, with good reason.
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Post by porkini on Mar 1, 2021 19:41:02 GMT -5
I look forward to reminding you SHORTLY that yes, this is the board WE (shareholders) elected, with good reason. Who is "Shortly"? Search - "No members were found." |
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Post by longliner on Mar 1, 2021 19:42:29 GMT -5
I look forward to reminding you SHORTLY that yes, this is the board WE (shareholders) elected, with good reason. Who is "Shortly"? Search - "No members were found." Today, tomorrow, Monday, April....work with me here!  Now, to be clear, when I said shareholders, I was specifically referring to people who actually own shares!  Alright porkini, I will stop calling you April now.  |
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Post by Clement on Mar 1, 2021 20:00:25 GMT -5
SHORTLY = soon
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Post by castlerockchris on Mar 2, 2021 12:17:25 GMT -5
Now that we know the terms and the net amount to be raised I would like to revise my comment from yesterday. Going from $150mm to $185mm net means I would take out Mid-Cap. I would also start to nibble at the Mann debt. Not much, but a little. I have to asterisk this with it being contingent on completing the sales/leaseback agreement.
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