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Post by phdedieu12 on May 15, 2023 11:18:45 GMT -5
There is a takeover case that isn't much talked about. If a company generates more cash than it would take to service the debt required to purchase the company then there is a takeover risk. This can happen when the share price under-performs the revenue and is why the CFO dog and pony shows are so important. When you're sitting on cash, substantial and increasing royalties and sales revenue, patents, and a credible pipeline, and debt with good interest terms, M&A and other deals seem like a more real possibility. She sure is more likely to get asked to the prom!  |
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Post by markado on May 15, 2023 12:56:07 GMT -5
There is a takeover case that isn't much talked about. If a company generates more cash than it would take to service the debt required to purchase the company then there is a takeover risk. This can happen when the share price under-performs the revenue and is why the CFO dog and pony shows are so important. When you're sitting on cash, substantial and increasing royalties and sales revenue, patents, and a credible pipeline, and debt with good interest terms, M&A and other deals seem like a more real possibility. And, with a $2B loss carryforward, worth $800M in tax offsets, you might just be that much more attractive as a wholly-owned subsidiary. But, I'm not a tax expert... |
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Post by agedhippie on May 15, 2023 13:13:00 GMT -5
There is a takeover case that isn't much talked about. If a company generates more cash than it would take to service the debt required to purchase the company then there is a takeover risk. This can happen when the share price under-performs the revenue and is why the CFO dog and pony shows are so important. When you're sitting on cash, substantial and increasing royalties and sales revenue, patents, and a credible pipeline, and debt with good interest terms, M&A and other deals seem like a more real possibility. You don't need any of that beyond your free cash flow being able to service the debt. This is a particular problem for companies that are royalty or franchise based because the acquirer can dump all the expensive staff to save their salaries and run it with a skeleton crew whilst cashing the cheques. I worked with a company that had this problem and their answer was to take on debt for share buy backs which increased their share price and reduced their free cash flow making them less exposed. |
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Post by oldfishtowner on May 15, 2023 16:56:55 GMT -5
First, UTHR has a 10 year commitment to manufacture Tyvaso-DPI with MNKD. I have heard Mike say that one of the reasons for the extra shares is to prevent a hostile take over. That’s conceivable in my mind when companies realize the royalty payments for MNKD no matter who produces it. There is a 10 year commitment in the contract. but there is no quantity mentioned in that contract so it's basically grants UTHR the right to have MNKD manufacture Tyvaso-DPI as and when UTHR requires. MNKD cannot force UTHR to use them for manufacturing Tyvaso-DPI as things currently stand, and the agreement expressly says that. This is not to say that UTHR are going to take manufacturing away tomorrow, but if this becomes a blockbuster drug then they absolutely will take manufacturing into their own plant, but probably retain MNKD as a backup if needed via the 10 year agreement. Of course if it ever reaches that stage MNKD will be making so much money from the royalties that the manufacturing revenue will be irrelevant. Manufacturing revenue is already irrelevant, compared with royalty revenue, since there isn't much profit in the manufacturing. It mostly goes to paying the manufacturing costs There is little profit. It's biggest impact was to increase Afrezza margins. But even that has diminishing returns at this point.
On another point, this also means that having UTHR as a second source for Tyvaso DPI does not hurt MNKD's bottom line much, but actually reduces both MNKD's and UTHR's risk.
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Post by lennymnkd on May 15, 2023 17:11:07 GMT -5
Is uthr packaging or manufacturing… we’re does united get the know how to produce
Technosphere insulin is comprised of recombinant human insulin, a novel excipient fumaryl diketopiperazine (FDKP), the MannKind proprietary excipient and primary component of Technosphere, and polysorbate 80 (PS80). Mike long ago said it was difficult.. and that the Chinese would have one hell of a time knocking it off.
Is mnkd obliged to get there production going
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Post by peppy on May 15, 2023 17:24:38 GMT -5
Is uthr packaging or manufacturing… we’re does united get the know how to produce Technosphere insulin is comprised of recombinant human insulin, a novel excipient fumaryl diketopiperazine (FDKP), the MannKind proprietary excipient and primary component of Technosphere, and polysorbate 80 (PS80). Mike long ago said it was difficult.. and that the Chinese would have one hell of a time knocking it off. Is mnkd obliged to get there production going MNKD will do all the production at the UTHR facility. It is in the contract is my understanding. |
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Post by agedhippie on May 17, 2023 21:49:42 GMT -5
Is uthr packaging or manufacturing… we’re does united get the know how to produce Technosphere insulin is comprised of recombinant human insulin, a novel excipient fumaryl diketopiperazine (FDKP), the MannKind proprietary excipient and primary component of Technosphere, and polysorbate 80 (PS80). Mike long ago said it was difficult.. and that the Chinese would have one hell of a time knocking it off. Is mnkd obliged to get there production going MNKD will do all the production at the UTHR facility. It is in the contract is my understanding. Mannkind will do the production in the Danbury plant,. However, when UTHR builds a plant they will also run production there. Mannkind will assist UTHR in setting up the plant and production for no cost - those are the contract terms. |
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Post by agedhippie on May 17, 2023 21:58:36 GMT -5
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Post by porkini on May 18, 2023 13:26:52 GMT -5
Maybe somebody needs to go back and read what everybody thought before and what actually happened and then go back to the time before that and the time before that. It is nice that the biggest concern is a hostile takeover and not bankruptcy. So the idea of "go back and read" caught me at a weak spare moment and I wanted to know where MNKD was with number of shares at the time of the reverse 5:1 split. My search found this article on SA (I think you might get one "free" article per day without login account to read on SA): seekingalpha.com/article/4051901-mannkind-enacts-reverse-split-1-forminus-5-ratio-what-investors-need-to-considerAbout 6 years have now passed since that event. I'm not suggesting the article be dissected, but it did provide a quick answer to my question in the summary bullet points: - Authorized shares will reduce from 700 million to 140 million.
The current ask to authorize more shares would bring the share count back to what it was pre-reverse split, plus 100M.
Responsible use of the additional shares would imply they won't be "dumped" into the existing share pool all at one time.
Keep in mind that somehow we went from 140M to 400M shares and have something like 100M still available (authorized but not used).
Interesting to look back at that, think on where MNKD was then, and consider events now and where MNKD is currently.
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Post by prcgorman2 on May 18, 2023 14:39:54 GMT -5
It is interesting to look back at that time. I'm glad it's well behind us. The Reverse Split was incredibly painful. It was required to avoid being delisted from NASDAQ. There may have been other reasons as well, but that was the obvious reason. And at least the "December surprise" dilution under Mike Castagna was a knee-jerk reaction to ensure capital was available to remain a going concern in an uncertain downward market situation. i.e., another move of desperation of yet another desperate CEO (and who can blame them?).
I agree with uvula that its nice the concern being discussed (here) was dilution if needed to potentially avoid hostile takeover. agedhippie pointed out "hostile takeover" is boilerplate that was in the last 3 share increase authorization requests (at least).
As we've talked about various things since the request for more shares, my hunch is that a significant dilution, if one happens, will be to raise capital to fund build-out of additional production facilities. As I joked a few days ago about the famous Jaws quote, "We're going to need a bigger boat". (I went back and researched that movie quote, and the actual statement was, "You're going to need a bigger boat". I've seen the Jaws movie several times and would have sworn Roy Scheider said "We're", but either way, you get the idea. Incidentally, it was an ad lib. It wasn't in the script.)
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Post by mytakeonit on May 18, 2023 15:09:18 GMT -5
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Post by BD on May 18, 2023 21:19:48 GMT -5
I've never seen it.
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Post by prcgorman2 on May 19, 2023 7:13:38 GMT -5
You’re seeing it now. UTHR wasn’t whistling Dixie when they publicly committed to building a Danbury-equivalent production facility.
agedhippie shared a very interesting statistic (again, some more) recently with respect to the portion of the mealtime insulin market served by MannKind’s competitors versus what is served by MannKind with Afrezza. agedhippie said the revenue from Afrezza was within the statistical variation in week-to-week sales of RAA sales. And if I remember correctly it was like $1.1B per week versus $2M per week. That’s 500x more revenue per week to the competitors versus what is going to MannKind. Afrezza is bringing in less than .5% of the revenue.
Let’s think forward to the point past pump switch study, Afrezza/GLP1 study, pediatric and India trials, CGM/Afrezza/BlueHale study, and a couple more ADA meetings, FDA approval for pediatric use of Afrezza, and possibly a new label. Let’s be optimistic and assume this is enough to “move the needle”. Afrezza gets recognized as a meaningful tool for maintaining Time In Range. TIR becomes the official measure of compliance. And more people with diabetes are using Afrezza and telling their friends. Maybe even an important sponsorship (nothing against car drivers and Star Girl). Given all of that. How much can sales improve? In theory, 500x.
Let’s be liberal. Let’s say outstanding success for Afrezza is 10% of the market. $110M per week. 55x how much we’re selling now. $5.5B per year.
Now let’s go back to thinking about Tyvaso DPI for PAH, ILD, and clofazamine for NTM, and Nintenadib for IPF, and UTHR’s 2nd molecule.
Some of these things will happen in parallel. Danbury production capacity is already being strained (I can’t tell you how happy it makes me to have typed that last phrase). Yes, more capacity can be built in. But how long do you wait before you break ground to add significantly more capacity?
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Post by prcgorman2 on May 19, 2023 9:12:37 GMT -5
It occurs to me you meant the movie "Jaws". It's entertaining. A typical Spielberg action/adventure. The book was pretty good too although more harsh and graphic. |
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Post by cjc04 on Aug 24, 2023 10:28:27 GMT -5
It's not inconceivable that the main purpose is to hold down the share price so that execs continue to be awarded low priced shares for a longer period. A bit cynical, though to the extent true would indicate a long term belief in increasing enterprise value of MNKD. Not typical for me to indulge in wild speculation, but seems this thread is all about that, lol. stumbled upon this while looking for something else 🤷♂️ |
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