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Post by computerresearchtech on Oct 2, 2014 20:43:43 GMT -5
I just spoke with Matt about this morning’s SA Article in my car and so please see my notes below as best as I am able to restate not having been able to actually takes notes while driving. 1.) The liens on the Mannkind assets are necessary to qualify/categorize the loans for accounting purposes 2.) The patent that expired in 2012 was not material in any way to the process nor Technosphere 3.) The patent language is boilerplate language for the purposes of the filing. And specifically regarding the inhaler patent language, should there be any issues (which they are currently not aware of any material ones) then they could replace the inhaler with another type of inhaler as it is technosphere that is the jewel in the crown here. The inhaler technology in one form or another has been around for quite some time. Important to note however that most forms of inhalers, such as those that treat COPD or Asthma are aerosol based not dry powder, so it is still a relatively unique delivery system but the inhaler is very replaceable 4.) They are not aware of any material issues that would effect technosphere patents 5.) Mannkind has not even been able to meet with Sanofi yet to discuss Marketing. The first joint committee meeting is currently schedule for next week. Thanks for sharing this! Deserves its own post really~and not lost in a BS SA thread. How about starting a General " I spoke to Matt thread" where these gems can be consolidated?
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Post by 4Balance on Oct 2, 2014 20:47:52 GMT -5
My comment to the author: " LFD: I'm not sure you'd recognize Diogenes if you found him...!"
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Post by jpg on Oct 3, 2014 2:31:38 GMT -5
jpg... I'm not really sure there is anything illegal that these guys are doing. All they are doing is saying "Boo!" and getting a reaction from scared individuals. Writing a negative article when one is short is no more illegal than writing a positive article when one is long. Nothing illegal to pay someone to write hit pieces. ) I certainly agree writing a negative article is fair game. Even if it is made up of half lies. Buyer beware. People who run for the exit because of this kind of article shouldn't invest in biotech. Writing false statements with the intent to manipulate the stock price is illegal although difficult to prove. I am more referring to the possible coordinated efforts to manipulate stock price. This has been going for as long as there has been a market but is still illegal. Hedge fund A shorts massively to coincide with an article published at x time to cause the most drop possible is illegal although almost impossible to prove. Add in naked short selling (for the purpose of stock manipulation) and you reach another theoretically more easily provable offense. If someone wants to even look at it... Organize a group of writers, pay them (directly or indirectly) to write negative or positive articles, set up algos to trade shares timed with the articles and few would argue this is legal. Anyone who doesn't think there are regular and repetitive securities violations committed by shady hedge funds (and by shady biotech companies) is not realistic about investing in biotech. T is fairly easier for me to spot crooked biotexh companies then crooked traders and II have seen enough crooked biotech companies that I cannot believe that there aren't as many if not more crooked market participants hiding behind screens. Afrezza will sell and we will do fine. I have made most of my biotech money buying during these 'pre planned panics'. I bought a bit more yesterday and today. Doesn't mean I like these people though. If they collectively keep on pushing their luck they could risk killing biotech innovation and lock baby biotechs out of public capital markets. That would be very bad for investors like me who have (or at least think they have...) an edge in these markets. JPG
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Post by liane on Oct 3, 2014 5:29:33 GMT -5
Here's George Rho's reply (so you don't have to click):
Looking for Diogenes,
Congratulations, it looks like you finally figured out that you can get a lot more attention if you regurgitate a company's SEC filings in the form of an article rather than as comments to someone else's article. Incredibly, long and boring as your article is, it's probably shorter (and duller) than many of the 22 comments you posted to my last article on MNKD; duller, in part, because I had already read about half of your content in the company's filings and the other half in comments to my article.
Beyond the attention, which I know you crave, I certainly hope you got paid more than the penny-per-click that you'll get from SA, you've clearly done yeoman's work over the months. Then again, it seems ridiculous that you should even get a penny for largely cutting and pasting items from "Risk Fackors" that are part and parcel of every company's SEC filings. I would give you a penny, though, for giving me a chuckle with your second bullet point:True reality is always in the details. It's absolutely comical that you would actually think the "true reality" is detailed in the Risk Factors.
I must say it's also funny that you believe, probably, one never really knows when the author is anonymous, that you've found some major problems with MNKD's IP portfolio that Sanofi and its legion of due diligence conductors failed to unearth.... Kudos to you Looking for Diogenes.
On a final note, I find it rather curious that you would expend so much effort posting long long long long nonsensical comments to other authors' MNKD articles but haven't bothered, at least thus far, to respond to a single comment on your own article. Perhaps you think you've already wasted enough of our time with the article itself.
Sleep well LFD, you done good.
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Post by BlueCat on Oct 3, 2014 9:24:33 GMT -5
I just spoke with Matt about this morning’s SA Article in my car and so please see my notes below as best as I am able to restate not having been able to actually takes notes while driving. 1.) The liens on the Mannkind assets are necessary to qualify/categorize the loans for accounting purposes 2.) The patent that expired in 2012 was not material in any way to the process nor Technosphere 3.) The patent language is boilerplate language for the purposes of the filing. And specifically regarding the inhaler patent language, should there be any issues (which they are currently not aware of any material ones) then they could replace the inhaler with another type of inhaler as it is technosphere that is the jewel in the crown here. The inhaler technology in one form or another has been around for quite some time. Important to note however that most forms of inhalers, such as those that treat COPD or Asthma are aerosol based not dry powder, so it is still a relatively unique delivery system but the inhaler is very replaceable 4.) They are not aware of any material issues that would effect technosphere patents 5.) Mannkind has not even been able to meet with Sanofi yet to discuss Marketing. The first joint committee meeting is currently schedule for next week. Thanks for sharing this! Deserves its own post really~and not lost in a BS SA thread. How about starting a General " I spoke to Matt thread" where these gems can be consolidated? Interesting idea. There is that constant analyst and media thread - perhaps a third 'source' thread? Though I imagine the issue there is that, well, if you can't prove the source and the content (no links), that could be tricky - could be legitimizing comments that are unprovable. Maybe call it a rumor thread ....
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Post by kc on Oct 3, 2014 11:48:21 GMT -5
Who is this guy mbracket123 who has twice on this thread made this comment about the LRD being a paid shill? Now that would be interesting if this is true and could be proven. But it's the internet and you can only believe half of what is out there. See clip.
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Post by 4Balance on Oct 3, 2014 17:33:16 GMT -5
jpg... I'm not really sure there is anything illegal that these guys are doing. All they are doing is saying "Boo!" and getting a reaction from scared individuals. Writing a negative article when one is short is no more illegal than writing a positive article when one is long. Nothing illegal to pay someone to write hit pieces. I certainly agree writing a negative article is fair game. Even if it is made up of half lies. Buyer beware. People who run for the exit because of this kind of article shouldn't invest in biotech. Writing false statements with the intent to manipulate the stock price is illegal although difficult to prove. JPG I certainly do NOT see that writing a negative article...half composed of lies...is "fair game"--particularly if it is given the credence of truth, and subsequently damages folks who have a financial interest in the company. I find it infuriating that folks like "Looking for Diogenes" can get away with this "hit and run" tactic by bludgeoning the truth. --4Balance
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Post by jpg on Oct 3, 2014 18:36:29 GMT -5
I certainly agree writing a negative article is fair game. Even if it is made up of half lies. Buyer beware. People who run for the exit because of this kind of article shouldn't invest in biotech. Writing false statements with the intent to manipulate the stock price is illegal although difficult to prove. JPG I certainly do NOT see that writing a negative article...half composed of lies...is "fair game"--particularly if it is given the credence of truth, and subsequently damages folks who have a financial interest in the company. I find it infuriating that folks like "Looking for Diogenes" can get away with this "hit and run" tactic by bludgeoning the truth. --4Balance Hi 4balance, I am getting some push back on this tread! I am not saying writing a negative article with the intent to deceive is nice or honest. I am saying that writing an article that doesn't outright lie to support your point of view is not actionable legally and therefore 'fair game' in the world of investing. You won't get sued for libel or defamation or stock manipulation for simply being illogical or a bad journalist... I am obviously not a legal expert but if it a bearish or bullish article based on a faulty premise and shaky or illogical analysis / information then it is up to the investors to know their stuff. At a certain point the responsibility is with individual investors. My original and only point in all this is that individually these bearish articles are just bad journalism (or intentional manipulation passing off as bad journalism) but that when these bad articles are orchestrated by a group of individuals who have at the same time set up trading algos to manipulate stock price then you cross into the illegal securities manipulation territory. Not that anyone will do anything about it. As I mentioned my 'edge' in investing is knowing when scientific or biotech information (from a company, article or whatever) makes sense. Biotech, mining, tech, oil companies/ articles/ analysts all spin in their direction. What is the truth? Time only tells. Those who understand mining will see through the mining spin and be better off overall then those who don't. Same with every industry. For various reasons biotech and junior exploration mining companies are so much easier to manipulate. Tthese areas attract all sorts of crooks. The problem is that a certain point the crooks overdo it and truly harm an industry. We aren't there with biotech obviously but if there is never any regulatory push back we will eventually get there. JPG
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Post by 4Balance on Oct 3, 2014 19:52:58 GMT -5
JPG,
All right...I agree that articles with "half lies" are not the same as articles "half composed of lies." And innuendo is not necessarily illegal.
From my experience, owning a "good company" is only half the battle. Given the opportunity for manipulation and half truths, PPS can resemble a roller coaster, irrespective of the value of a company. With MNKD, the fact that sales figures, consistently positive analyst recommendations, and overwhelmingly positive testimonies are still future...with few if any significant milestones between now and then...lends weak support to share price. There probably IS a PPS floor...which will only be observed in the rear view mirror.
By "regulatory push back" are you talking, new regs, or enforcing existing regs...? I favor "just the right amount" of regulation needed to keep a system relatively stable.
At some point the violations become so egregious that they scream for redress. I don't know if the naked shorting of MNKD yet falls into that category, but it seems to be an obvious issue. Furthermore, I don't know the criteria the SEC would use to decide to step in and enforce its regulations.
I do appreciate the collective wisdom of our group in ferreting out the truth. Now we just need someone to take on the manipulators! I wonder if there is a way we can, working in concert, impact that process. Certainly, commenting on articles can help...but we might be too weak to counter the voices with the "microphones." Got any ideas...?
--4B
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Post by mnholdem on Oct 3, 2014 20:07:13 GMT -5
Excellent point, jpg. A great example IMO is Wellgreen Platinum, a start up mining company in the Yukon, Canada. This company, through a creative and compelling investor relations campaign, has many believing they are developing what may be the largest undeveloped platinum ore body in the world. I studied their PEA from 2012 and invested. Two months ago I sold at break even because they smelled fishy. My DD was revealing inconsistancies that I found troubling. Good thing, because Wellgreen is being blasted this month by a mine engineering expert who is pointing out the inconsistencies and identifying data manipulation.
So now I'm sitting on a pile of cash waiting for my next entry point to accumulate more of MNKD. Remember, folks, while short trading may be abused and damage innovative companies, the original intent of our government in legalizing short trading was to provide a balance that exposes companies that are being pumped with high share prices that cannot possibly be justified by anything but a manipulative press corp and pump and dump traders and fund managers.
DD is crucial for the retail investor to sort out the truth, in order to identify for himself or herself whether a company's stock is a truly a good or bad investment.
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Post by 4Balance on Oct 10, 2014 2:49:58 GMT -5
I realize that, by now, this hit piece is old news. A friend of mine who stays rather close to good sources wrote an article that he tried to get SA to publish...to no avail. He is rather disgusted with their "standards" for accuracy. So he now would like to publicize a rebuttal...here are his thoughts, expressed in an email this week to a number of fellow MNKD investors:
I believe all of you addressed on this email are MNKD investors. Likely many of you watched as the stock price tumbled last week in response to an article published on the website, Seeking Alpha, entitled "MannKind Reality Check." The article is, in my opinion, essentially fraud. It is so inaccurate that one would have had to deliberately falsify the information. It also happens to be incredibly poorly written. I contacted the website that published the piece, wrote a rebuttal and offered it for publication. It was rejected. I'm not sure what to make of Seeking Alpha for refusing to publish, but at least I have some perspective on how to evaluate what I read there. I figure most of you might like to read "the other side of the story," and for that reason, I'm sending you the article. Feel free to share it as broadly as you like. There is so much misinformation surrounding MannKind that investors have a hard time making a decision one way or another. The company is limited in what they can say. Hence, I offer you my perspective to counter some of the garbage that passes for analysis "out there." Bill MannKind: A Double-Check on “Reality” Recently, an internet article entitled, “MannKind Reality Check,” posted on Seeking Alpha, attempted to interpret some of MannKind Corporation’s recent filings with the Securities Exchange Commission, and to draw further inferences and conclusions therefrom. The theme of the article, in the author’s own words, was “to share a litany of reasons that might explain what has been construed as good news for MannKind investors, where the underlying reality of the situation really is showing there isn’t much good news for MannKind investors.”(sic) In other words, the author’s position is that the company’s apparent progress in the past couple years is in reality a mirage.
While it clearly would not be productive to comment on each and every article written about the company, the “Reality Check” article contains numerous factual errors, unsupported conclusions, suppositions and conjecture that have the potential to seriously mislead investors. If the article were limited to matters of opinion, this rebuttal would be less important. Where errors of fact exist, such misinformation demands correction. In that spirit, I offer the following comments. I will refrain from correcting the many grammatical and syntactical errors of the piece, and will instead provide factual information for investors to use however they wish. “Rebranding” The author’s first significant point is that MannKind is attempting to “rebrand” itself from a biotech company to a “technology focused corporation,” and that this effort could be imperiled because of threats to the intellectual property rights of MannKind’s Technosphere Inhaler. More specifically, the article cites a previously undisclosed patent expiration in April of 2012 in support of his point. There are many problems with the author’s argument, but I highlight just a few below:
1. The company has always been a technology focused company. There is no attempt to “rebrand” the company. Because Afrezza’s future is now mostly in the hands of the marketing partner, Sanofi, it is logical that management’s emphasis would shift to other applications of its technology. Management has informed investors about their work in this area for years.
2. The author mentions numerous times the Technosphere inhaler as the focal point of the future development efforts. This is either inelegantly stated, or the author does not understand the basic business model of the company. It is not the company’s inhalers that are the source of much future value, though the company believes its inhalers are unique and valuable. Rather, it is the Technosphere molecule itself that they expect to drive more value for the company. The molecule is where the greatest intellectual property exists, not the pieces of plastic from which Technosphere particles emanate. Anyone who has been following MNKD for the past few years knows this.
3. The patent expiration referred to was for Afrezza inhalation powder, not Technosphere per se, and was a minor item. If it were expected to have a material impact on company operations and/or value, they would have disclosed this. What matters is NOT when the first patent covering one’s technology expires, but when the last one does. MannKind has very extensive patent protection on the essential elements of its products into the 2029 and 30.
4. The author quotes extensively from some of the company’s SEC filings. In those filings MannKind is required to make broad disclosure of certain “risk factors.” While the company may feel a prospective risk is low, it must nevertheless disclose that risk if it is reasonably foreseeable. The whole point is to give investors plenty of information from which to make their investment decisions. The author exploits the language of the filings to advance his convoluted, and admittedly uncertain theories. This language is largely boilerplate and is found in nearly every filing, by every company with the SEC. For this author to use this information as the basis of any argument is disingenuous at best. Patent “Problems” The next major point the author makes is that “MannKind is telling their shareholders is that they have a myriad of issues facing their patents for their Technosphere Inhaler.” Actually, that is not the case at all. That is what the author would like to tell investors. The company has said just the opposite. Either the author does not understand what he is reading, or there is a more nefarious motive involved.
Prior to drawing his conclusion about patent problems, the author cites verbiage from some of the SEC filings that seem to support his point, yet all that verbiage pertains to “Afrezza inhalation powder.” There is a very clear difference between the Technosphere inhaler and the Afrezza powder. The author does not appear to understand this.
There is a further distinction between the “Technosphere molecule” and the “Technosphere inhaler.” As pointed out above, it is not clear that the author understands this, though it is hugely important for understanding the future of the company.
The key elements of Mannkind’s intellectual property are heavily protected with patents as the company makes clear. Yet, others can still challenge those patents. In fact, this happens in the field of software nearly every day. There are “patent trolls” who do nothing but look to extort money from companies through patent disputes. It is reasonable for the company to cite a patent challenge as a risk factor, but the mere fact of a possible challenge is not proof of weakness in the patents.
The writer spends some time explaining that inhalers have been around for many years and that MannKind’s inhalers are hardly novel. While there are aspects to the company’s inhalers that are novel such as their efficiency of emptying (requiring a smaller breath to clear the chamber), the company hasn’t made this the focus of its intellectual property portfolio. Here the writer has invented an argument that the company has never made.
Throughout the article the author uses the terms “Technosphere Inhaler,” “Afrezza,” “inhaler technology” and other similar terms as if they are interchangeable. They most certainly are not. To understand MannKind Corporation at even the most basic level, one must understand this. It is not clear that this author possesses even the most rudimentary knowledge of the company or its products. The Sanofi Partnership The next major area of comment concerns MNKD’s recent global licensing agreement with Sanofi. The author grabs bits and pieces of information from disparate places and presents them together in a mishmash. For example, the author states, “Also, as part of the MNKD/SNY deal, MannKind would receive a $150 million upfront payment and Sanofi would loan MNKD up to $175 million for funding their portion of the marketing deal for Afrezza.” [actually the $175 million is to cover MannKind’s portion of any losses in the commercialization of Afrezza – since the relationship with SNY is structured as a profit/loss sharing relationship].
The author goes on to write, ”However, with these particulars being detailed in the SEC filing there are many who have misconstrued exactly what will be covered under the joint partnership expense categories. The very nature of Sanofi making the loan convenants being so clearly defined; the prudent thing would have been for Sanofi to include the $175 million as a part of the upfront payment. The fact that Sanofi didn’t give them $325 million in upfront payment without any strings attached is belied by the reality that Sanofi made a loan secured by the MannKind home office facility and their supply of insulin, but not the inhaler.”
Huh?
I cannot tell exactly what point the author is trying to make here. And, again the author seems focused on the value of the inhaler versus the intellectual property behind Technosphere. Continuing with his problematic analysis, the writer misconstrues the basics of the Amphastar deal saying, “…Sanofi required MannKind entering into a long-term contract with Amphastar for a yearly supply of insulin that would cost about $150 million for each of the four years for the contract.” [Incorrect, it’s about $150 million in total over the entire time period] Why would Sanofi turn around and pay MannKind for the insulin, when they could have bought it themselves from Amphastar and at a better discount?”
Here again, the author is missing a critically important point: Sanofi cannot buy “Technosphere Insulin” from Amphastar. Amphastar can manufacture basic insulin, but it still must be loaded onto Technosphere particles to constitute Afrezza. That can only be done by MannKind. If the author actually understands this then it’s not clear what point he is trying to make. Any savings that Sanofi might realize in buying/supplying basic insulin to MannKind would redound to both parties’ benefits. Lower cost insulin means higher profits which MNKD and SNY split 35:65 per the agreement. Conclusion Throughout the article, the reasoning, if it can be called that, and the use of unrelated bits of data to convey a veneer of authority, are so convoluted and confused as to be worthless. It is analogous to trying to make chocolate chip cookies using dirt, lettuce, eggs and water. It’s not really a recipe. It’s just a mess. This article is not really meaningful analysis. One final critique is in order: In what must rank as a paragon of irony the author states: “The nuances of the English language can be difficult.” Difficult indeed.
I could go on to further dissect the piece, but the point should be clear: there is much writing and precious little information in this article. The “Reality Check” article does nothing to aid investors in understanding the merits of investing in MannKind. To the contrary, the writer articulates wild and unsupported theories that serve only to confuse. I will not speculate about the author’s motive in penning this article; rather I will simply state that a piece this poorly written should be viewed with a very healthy degree of skepticism.
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Post by liane on Oct 10, 2014 4:32:41 GMT -5
4balance,
Please make sure to thank your friend Bill for his nice dissection of the SA hit piece. He's always welcome to post here directly; we've been getting quite a few page views in recent months, and word really spreads from here.
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Post by 4Balance on Oct 10, 2014 13:13:22 GMT -5
Liane,
I certainly will forward him your note. I don't know if he is a member...I've asked him if he is. It certainly would be better for him to be interacting directly. I know, a number of our members have said, essentially, the same things as he re the article.
As I mentioned in the "Information Warfare" thread, I wish we could mobilize our forces and act in concert in a way that trumps any individual action...typically a group is more effective than an individual. AND we can be "larger than the sum of our parts."
I'll try to help him gain access and learn how to post!
--4Balance
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