*** 6 ***

[prcgorman2]

I kept saying I didn’t think a buyout under such circumstances is likely, but perhaps it is moreso if you’re EPS estimate proves out, but either way, we’re agreeing that if a buyout happens, it will be on terms significantly cheaper than $60 per share.

If I was in BI’s shoes, I’d look to cut a partnership deal. They can improve CX and sales and preserve a good revenue source that will otherwise become increasingly vulnerable to off-patent competition. Buyout is a much bigger lift and the large tranche of authorized MNKD shares could conceivably come into play.

From my MNKD perspective, my order of preference is partner, go it alone and endure whatever BI throws at MNKD and the FDA, or buyout but I hope not soon because the longer BI waits, the higher the price (I hope).

[ktim]

I'd think partnership with BI, or someone else, much higher prob than buyout.

A cash buyout (which a BI acquisition would necessarily be) in 2026 would be bad for me tax wise, so of course that increases the probability of it happening, lol.

[mytakeonit]

I don't want a buy out ... I want dividends !!! That'll send MNKD share price to the moon !!!

Jackie Gleason

[cretin11]

Partnership seems to make way more sense than the other options IMO, but we shall see.

[Thundersnow]

Aug 29, 2024 9:14:53 GMT -5 prcgorman2 said:

Aug 28, 2024 23:12:43 GMT -5 ktim said:

What you're proposing $60/sh buyout by BI, would on fully diluted basis mean well over half of current BI valuation estimate and 36 times MNKD revenue (not earnings). Seems a stretch for getting board approval on the acquisition.

But fun to think about.

Heck, I consider trading at $10/sh by end of 2026 is fun to think about.

Fun?  Perhaps I should have been more explicit in the math I was doing in my head and what research showed about the last 15 acquisitions by Boehringer Ingelheim (https://tracxn.com/d/acquisitions/acquisitions-by-boehringer-ingelheim/__ooKdHxXtEcyDITzNJ6ncOXIosHFWVdjBkDWzzeDMuNQ)

Boehringer Ingelheim has over 53,000 employees in over 130 markets and has a current market capitalization of around $191B.  Their acquisition of Merial in 2015 was valued at $12.5B.  There may have been larger acquisitions where terms were not published, but $12.5B is what I used to estimate whether an acquisition for MannKind valued at $60/share was achievable.

Using a generous estimate of $1 to $2 EPS and a 17 P/E for MannKind at the end of 2026 should yield upwards of $30 per share.  If we assume an equally generous offer of 2x share price ($60) and multiply by MannKind's 270M shares outstanding, the acquisition would cost Boehringer Ingelheim about $16.2B, or less than 10% of BI's current market cap.

I don't know if that's fun to think about, but it at least explains better why I said I thought that was unlikely.

IF BI decides acquisition is the best strategy (because they make drugs for diabetes and lung disease), they won't wait until MNKD is revved up and hitting on all cylinders.  It will happen much much sooner at a much cheaper premium.

I don't know why you all think B-I wants to own MNKD?  Remember if B-I buys MNKD they will be partners with UTHR?  Would B-I want that???  MNKD's best strategy is to diversify their partners which will deter any BUYERS.  With MNKD's extreme potential I would NOT want to think about someone buying them.  It would LIMIT our UPSIDE POTENTIAL. 

[uvula]

Maybe BI secretly wants to get their hands on V-Go.

[sayhey24]

Aug 29, 2024 16:32:40 GMT -5 uvula said:

Maybe BI secretly wants to get their hands on V-Go.

G-D Gump, you are an f-ing  genius.  Thats it.  It is V-Go which has been driving up the price.  Why have I been so negative on V-Go???

[prcgorman2]

Aug 29, 2024 16:04:04 GMT -5 Thundersnow said:

Aug 29, 2024 9:14:53 GMT -5 prcgorman2 said:

Fun?  Perhaps I should have been more explicit in the math I was doing in my head and what research showed about the last 15 acquisitions by Boehringer Ingelheim (https://tracxn.com/d/acquisitions/acquisitions-by-boehringer-ingelheim/__ooKdHxXtEcyDITzNJ6ncOXIosHFWVdjBkDWzzeDMuNQ)

Boehringer Ingelheim has over 53,000 employees in over 130 markets and has a current market capitalization of around $191B.  Their acquisition of Merial in 2015 was valued at $12.5B.  There may have been larger acquisitions where terms were not published, but $12.5B is what I used to estimate whether an acquisition for MannKind valued at $60/share was achievable.

Using a generous estimate of $1 to $2 EPS and a 17 P/E for MannKind at the end of 2026 should yield upwards of $30 per share.  If we assume an equally generous offer of 2x share price ($60) and multiply by MannKind's 270M shares outstanding, the acquisition would cost Boehringer Ingelheim about $16.2B, or less than 10% of BI's current market cap.

I don't know if that's fun to think about, but it at least explains better why I said I thought that was unlikely.

IF BI decides acquisition is the best strategy (because they make drugs for diabetes and lung disease), they won't wait until MNKD is revved up and hitting on all cylinders.  It will happen much much sooner at a much cheaper premium.

I don't know why you all think B-I wants to own MNKD?  Remember if B-I buys MNKD they will be partners with UTHR?  Would B-I want that???  MNKD's best strategy is to diversify their partners which will deter any BUYERS.  With MNKD's extreme potential I would NOT want to think about someone buying them.  It would LIMIT our UPSIDE POTENTIAL. 

B-I has a problem.  The patent on their drug, Ofev (nintedanib), is expiring in 2026.  (Note: They have lots of patents with varying expiration, but the nintedanib drug compound patent expires in 2026.)  MannKind is in Phase 1 testing of nintedanib DPI, an inhalable version of B-I's oral drug.

B-I's oral drug Ofev has very bad side effects.  From B-I's website:

Diarrhea was the most common adverse event occurring in all OFEV medical studies: Mild to moderate in 9 out of 10 patients.

There's a very solid chance that inhaled nintedanib will have less (or none?) of the gastrointestinal issues because of the difference in administration and potentially an improved effect with a lower dose because MannKind's nintedanib DPI will be inhaled into the lungs where it's needed to do it's job.  According to the National Institute of Health:

Nintedanib is indicated for treating idiopathic pulmonary fibrosis, systemic sclerosis-associated interstitial lung disease, and progressive phenotype interstitial lung disease.

B-I's problem is their 2nd largest source of revenue is at risk from MannKind's nintedanib DPI.  Tyvaso DPI is superior to UTHR's Tyvaso that was a thick viscous liquid which needed to be warmed by a flashlight-looking device before it could be nebulized and inhaled.  Patients in clinical tests of Mannkind's Tyvaso DPI prior to FDA approval overwhelmingly preferred MannKind's product over UTHR's old product.  This same situation is setting up with nintedanib DPI, only chances are pretty good that there will be an even bigger improvement in patient experience as compared to Boehringer Ingelheim's current oral product.

I don't think B-I wants to own MNKD.  I think they would like for MNKD to not be a threat to their 2nd best selling drug.  If you were in B-I's shoes, what would you do?

If I were in their shoes, I would not just sit by idly watching MannKind trudge towards taking most of my revenue from my #2 product starting in about 2 years from now.

I've suggested 3 basic approaches B-I has available to deal with the threat from MNKD: delay (via lawsuits), partner (ala UTHR and Tyvaso DPI), or buyout.

I prefer partner, but if I were in their shoes, I'd be exploring all options.

[ktim]

Aug 29, 2024 16:32:40 GMT -5 uvula said:

Maybe BI secretly wants to get their hands on V-Go.

Who wouldn't want to 

As the old saying goes... a V-Go in the bag is worth... 

[prcgorman2]

I've said Boehringer-Ingelheim has 3 basic options (delay, partner, buyout), but there is a fourth, and that is to find another, cheaper, product alternative. UTHR had 3 potential off-patent competitors for their treprostinil product Tyvaso. UTHR acquired one, and tried to acquire LQDA but couldn't agree to terms so they sued them six ways to Sunday, and then partnered with MannKind. If UTHR could have acquired LQDA, it isn't clear to me they would have partnered with MannKind. It would have been an option to ignore them. I doubt MannKind is the only BP watching nintedanib going off patent. Indeed, Mike reported in the Q&A of one of the ECs that per the agreement with UTHR, they had first right of refusal to develop nintedanib DPI and declined to be involved and instead gave approval to MannKind to develop nintedanib DPI independently.

The bottom-line is B-I is in the situation of having to review it's options and make some choices and time is growing short, and delay can cost them more than if they act sooner.

[ktim]

prcgorman2

On BI options, they could also develop an inhouse advancement of Ofev, be it inhaled or otherwise, that would give a transition path with extended patents. Though that could be combined with delaying tactics if necessary.

[prcgorman2]

Aug 29, 2024 17:18:35 GMT -5 ktim said:

prcgorman2

On BI options, they could also develop an inhouse advancement of Ofev, be it inhaled or otherwise, that would give a transition path with extended patents. Though that could be combined with delaying tactics if necessary.

Agree, and I assume they were on that path.  And whether they're OK on that course, or finding an external option they prefer to MNKD's nintedanib DPI, that's the kind of exercise they have to be engaged in.  But, for sure, they cannot simply do nothing.  MannKind has FDA approval for Phase 1 testing and that testing is happening now.  If B-I ignores MNKD (or delays) and goes with their own development, it still leaves MNKD (and whoever else) as a threat to their Ofev revenue.  Considering UTHR's and MNKD's success with Tyvaso DPI, there has to be serious consideration given to nintedanib DPI.

[minnlearner]

$6.50, $6.50......lets go! Do it for the long weekend!! Do it for Labor. 

[BD]

You know, I'd be perfectly happy just to see it stay over $6 through EOY. Don't be greedy!

[mytakeonit]

Says the guy that has minimal shares ... and wants more.