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Post by Deleted on Nov 24, 2021 11:43:45 GMT -5
It's not that easy. MNKD was negotiating from a position of weakness. They had no leverage with Sanofi and was stuck with the terms. Afrezza received a shitty label and the Trial was not designed for SUPERIORITY. Things would have been way different if Chris remained CEO. Sanofi would have spent the money to improve Afrezza and IMO eventually buyout the drug from MNKD. I agree with “not that easy”. It’s my armchair CEO view which is admittedly imperfect. But I disagree with negotiating from a position of weakness. The deal they cut was for over $1B in milestones and then royalties on top of that. You don’t get an agreement like that when working from a position of weakness. Dr. Rothblatt did not enter into the TreT development out of charity, and neither did Sanofi. It is business and in contracts, each side feels they are getting value roughly equal or better than the other company. Yes, there can be overwhelming advantage on one side of the deal, but that clearly wasn’t the case or the deal wouldn’t have been worth so much money. Remember the deal was made with Dr. Al Mann still at the helm of his considerable investments and commanding respect for his vision and his proven abilities to capitalize on it. Come on PCR - Look what happened?? Sanofi terminated the deal and paid...what?? $150M in Fees plus earned milestones??? If the deal was strong for MNKD they would have received a lot more in termination fees for breaking the deal. So no MNKD got shafted bc they had little leverage. And I'm sure MNKD has stronger language in the UTHR deal regarding early termination. |
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Post by prcgorman2 on Nov 24, 2021 14:58:10 GMT -5
I agree with “not that easy”. It’s my armchair CEO view which is admittedly imperfect. But I disagree with negotiating from a position of weakness. The deal they cut was for over $1B in milestones and then royalties on top of that. You don’t get an agreement like that when working from a position of weakness. Dr. Rothblatt did not enter into the TreT development out of charity, and neither did Sanofi. It is business and in contracts, each side feels they are getting value roughly equal or better than the other company. Yes, there can be overwhelming advantage on one side of the deal, but that clearly wasn’t the case or the deal wouldn’t have been worth so much money. Remember the deal was made with Dr. Al Mann still at the helm of his considerable investments and commanding respect for his vision and his proven abilities to capitalize on it. Come on PCR - Look what happened?? Sanofi terminated the deal and paid...what?? $150M in Fees plus earned milestones??? If the deal was strong for MNKD they would have received a lot more in termination fees for breaking the deal. So no MNKD got shafted bc they had little leverage. And I'm sure MNKD has stronger language in the UTHR deal regarding early termination. I agree the Sanofi termination did not cost Sanofi nearly enough. That was my original point that the “lesson learned” from the Sanofi deal is hire very good contract lawyers when creating the deal so that they help keep MNKD out of having to sue for breach later. |
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Deleted
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Post by Deleted on Nov 24, 2021 16:09:54 GMT -5
Come on PCR - Look what happened?? Sanofi terminated the deal and paid...what?? $150M in Fees plus earned milestones??? If the deal was strong for MNKD they would have received a lot more in termination fees for breaking the deal. So no MNKD got shafted bc they had little leverage. And I'm sure MNKD has stronger language in the UTHR deal regarding early termination. I agree the Sanofi termination did not cost Sanofi nearly enough. That was my original point that the “lesson learned” from the Sanofi deal is hire very good contract lawyers when creating the deal so that they help keep MNKD out of having to sue for breach later. I hate to belittle the point but you can have the best lawyers in the world negotiating for you but if you don't have grounds (ie a strong reason) for a good deal it will never happen. Unfortunately MNKD was not there but as more progress is made with their pipeline and FDA Approvals.....I'm sure MNKD will be able to DICTATE the terms. I'm hoping they will renegotiate the RLS deal. It's been 5 years. |
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Post by cretin11 on Nov 25, 2021 11:42:29 GMT -5
Agree with casper. It wasn’t the lawyers’ fault. Lawyering wasn’t the difference maker, leverage was.
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Post by akemp3000 on Nov 25, 2021 12:57:06 GMT -5
Mannkind wasn't expecting the sudden change in the CEO. In hindsight, maybe the lawyers should have included language for that scenario. Regardless of lawyers or leverage, it was the CEO change that tanked the deal especially considering the new CEO was against inhaled insulin because of his history with the failed Exubera. Blame can be scattered around but that was the deal breaker.
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Post by Chris-C on Nov 26, 2021 2:22:33 GMT -5
Mannkind wasn't expecting the sudden change in the CEO. In hindsight, maybe the lawyers should have included language for that scenario. Regardless of lawyers or leverage, it was the CEO change that tanked the deal especially considering the new CEO was against inhaled insulin because of his history with the failed Exubera. Blame can be scattered around but that was the deal breaker.
At that point, Mannkind was on life support, and Al Mann had to serve as interim CEO, and the board tapped Matt Pfeffer to be the new CEO. Matt lasted ~15 months in the CEO position, having previously been CFO for a number of years. As I recall, Matt was able to convince Sanofi to "forgive" contractual expense obligations Mannkind owed Sanofi. I believe he was also responsible for hiring Michael Castagna as the new CCO. Remember, the company did not have a sales force and had no plans for marketing and selling Afrezza on their own until that was their only viable option, so it was MC's role to get that organized. I think MC became CEO about 18 months later.
MC is not perfect, but fair minded investors needs to tip their hat to the progress he has led. I don't think he has quite convinced mainstreet investors in the company's potential yet, but he's made an amazing amount of progress. It is actually painful to recall those events, because the short sharks were circling the company in huge numbers in early 2016, betting on its certain demise. No one had imagined that Sanofi would terminate the agreement and to be honest, I might have folded my own position then (after 6+ years) if they had had any value (other than as an offset to gains). But I still believed in Technosphere and Afrezza and I'm glad I decided to stick around. I'm sure many of you here feel the same way; despite the considerable attrition of die hard longs who inhabited this board 5-7 years ago. |
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Post by akemp3000 on Nov 26, 2021 7:21:48 GMT -5
Excellent summary Chris-C. It puts everything into perspective going from the dark past to the excellent position Mannkind is in today. IMO, MC's strongest move was when he completely overhauled the business plan and gave the company a new direction once it was recognized the previous plan that focused solely on Afrezza was not going to work. The deal with UTHR and others followed.
There's plenty of conversation that gets into the weeds with hindsight criticism, most of which is justifiable, but frankly it's now just history that's become irrelevant over time and doesn't seem to relate to the current environment. Speaking of time, 2022 seems to be the time for the pps to start making the move back up to where it could have been. Let's hope. Everyone deserves it.
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Post by prcgorman2 on Nov 26, 2021 10:19:11 GMT -5
Agree with casper. It wasn’t the lawyers’ fault. Lawyering wasn’t the difference maker, leverage was. Tell us what you think “leverage” is. How many companies ink contracts worth more than $1,000,000,000 with another company that has no “leverage”? I’ll put it in simple terms. At the time that Sanofi entered into the agreement, they expected to earn way more than the $1B+ they promised to pay Mannkind. How much “leverage” do you think it takes for a Tier 3 (or 4) company to get a Tier 1 company to agree to such terms? I’ve worked with attorneys to help negotiate multimillion dollar contracts (as a contributor of requirements). They are advocates, not mind readers. If you don’t tell them what you want or need, they may not anticipate it for you. Clearly, the agreement did not sufficiently anticipate a back out by Sanofi or the terms would have been written differently, and indeed, it might have been that an agreement might not have been reached with Sanofi. But I’m going to stick to my point that where big money (or perhaps the continued existence of your company) is riding on a deal, make sure your concern is on the terms and conditions surrounding both sunny day and rainy day scenarios and not on how much time is eroding or money being spent on lawyers. Of those possible influences and concerns, the only one I suspect was an issue for the Sanofi deal was insufficient attention to a rainy day scenario and I think the facts speak for themselves in that viewpoint. If there are any seasoned veteran contract attorneys who would like to correct my frame of reference with better information, I welcome their feedback. |
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rebby
Researcher
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Post by rebby on Nov 26, 2021 10:55:54 GMT -5
Agree with casper. It wasn’t the lawyers’ fault. Lawyering wasn’t the difference maker, leverage was. Tell us what you think “leverage” is. How many companies ink contracts worth more than $1,000,000,000 with another company that has no “leverage”? I’ll put it in simple terms. At the time that Sanofi entered into the agreement, they expected to earn way more than the $1B+ they promised to pay Mannkind. How much “leverage” do you think it takes for a Tier 3 (or 4) company to get a Tier 1 company to agree to such terms? I’ve worked with attorneys to help negotiate multimillion dollar contracts (as a contributor of requirements). They are advocates, not mind readers. If you don’t tell them what you want or need, they may not anticipate it for you. Clearly, the agreement did not sufficiently anticipate a back out by Sanofi or the terms would have been written differently, and indeed, it might have been that an agreement might not have been reached with Sanofi. But I’m going to stick to my point that where big money (or perhaps the continued existence of your company) is riding on a deal, make sure your concern is on the terms and conditions surrounding both sunny day and rainy day scenarios and not on how much time is eroding or money being spent on lawyers. Of those possible influences and concerns, the only one I suspect was an issue for the Sanofi deal was insufficient attention to a rainy day scenario and I think the facts speak for themselves in that viewpoint. If there are any seasoned veteran contract attorneys who would like to correct my frame of reference with better information, I welcome their feedback. I’m taking the leverage comment as being after the agreement fell through with SFY. At that time there was no incoming revenue and no war chest of cash. While a stronger contract would/could have been beneficial, SFY could have slow-played the litigation to the point that MNKD had to file for bankruptcy. Time was not on MNkDs side and they took the deal that was in their best interest given the time constraints. |
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Post by BD on Nov 26, 2021 12:35:05 GMT -5
I'm finding the Sanofi historical discussion really interesting so I've reflected that in the thread title.
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Post by radgray68 on Nov 26, 2021 22:33:25 GMT -5
What kind of deal do you think we get if the pediatric numbers prove out superiority? I say the tale becomes Sanofi who?
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Post by akemp3000 on Nov 27, 2021 8:25:14 GMT -5
Pediatric superiority could be the proverbial and ironic shot-heard-round-the world. Significant meaning greater time-in-range, lower A1C and/or lower hypos. It's unimaginable that any parent would ever again chose inferior injections over superior inhaled Afrezza unless there's a rare circumstance. Even change in the standard-of-care would finally move into discussion as inferiority would become indefensible. Lining up nicely with this would be UTHR's advertising push telling tens of thousands to switch to inhalation using the Mannkind device. Big Pharma would not be pleased and someone or all would be forced to make a play and it's hard to imagine another deal with that Sanofi who company  When and if that day comes, this message board will light up. Loving the dream. |
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Post by BD on Nov 27, 2021 8:57:29 GMT -5
Why do you think I want more staff LOL?
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Post by Chris-C on Nov 27, 2021 11:51:41 GMT -5
akemp3000,@prcgorman, cretin11, rebby, BD and others. Interesting discussion about the Sanofi exit, contractual oversights, and desperation by MNKD. I heartily agree with the importance of having provisions for a worst case scenario in any deal, but I’m not surprised MNKD was left flat footed there. Al Mann seemed certain that Afrezza would be hugely successful and he convinced his team this would be the outcome after a painfully long and expensive NDA finally leading to approval. Was it Pfeffer who famously predicted “an embarrassment of riches?” after the Sanofi deal? Had MNKD had an inkling of the headwinds facing them, they would have had a plan B, which would have included a cash raise with modest dilution when MNKD shares exceeded $10 p/s. I remember the early script numbers and my reluctance to believe that they did not resemble a blockbuster result. I bought into excuses that blamed the slow growth on the label, newness, lack of insurance coverage and pulmonary testing requirement etc, etc.In the end, too many at the company leadership level were naive, overconfident and complacent. I too drank the kool aid. So, for those convinced that Pediatric approval will send the share price to the moon, I’d suggest that letting history guide us may help long investors (and MNKD leadership) avoid painful humiliation if the results fail to meet our expectations. Personally, I’d love to be proven wrong, but I’m not convinced, and I’d rather see the money spent on pipelines and partnerships built on Technosphere. JMHO GLTAL Chris C
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Post by sportsrancho on Nov 27, 2021 15:34:29 GMT -5
Right Chris…and also speaking of Sanofi, I believe the words blindsided were used by the company.
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When and if that day comes, this message board will light up. Loving the dream. 
