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Post by jpg on Jul 14, 2015 14:24:55 GMT -5
Vetr is not exactly a solid research firm (and Zachs...).
As for dilution: who knows? I doubt it (after all management has said) but don't know where the $ will come from obviously.
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Post by compound26 on Jul 14, 2015 14:41:24 GMT -5
Vetr is not exactly a solid research firm (and Zachs...). As for dilution: who knows? I doubt it (after all management has said) but don't know where the $ will come from obviously. Most likely, Mannkind will choose to roll-out the maturity date of the convertible notes (say by 12-24 months) and they should be able to reach an agreement with the note holders on that. In essence, no pay-off (of the notes) at this time, but no dilution either.
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Post by mnkdnut on Jul 14, 2015 16:49:46 GMT -5
Just a thought on the short thesis that Sanofi will opt out of the partnership next year: it's inconceivable to me, given Sanofi's strength in their home European market, as well as in other key markets (eg. Japan, India) that they would even consider such a decision until they've at least done a soft launch in those major geographies. By now, they know they have the "real deal" with Afrezza, so I'm sure the US launch is just the first of many major launches they are planning/executing. For Sanofi, the US market is just a part of the overall global picture. It's a puzzle for them to solve how they can get into the most major markets with the best labeling and the least amount of new clinical trials.
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Post by Chris-C on Jul 14, 2015 20:19:17 GMT -5
I hope there is no one on the board who imagines that SNY signed their deal with MNKD without knowing what they had. SNY knows more about Afrezza than those of us "outsiders" are ever likely to know- both good things and potential liabilities. That said, they did the deal, planned a controlled launch, and began with ernest taking on the various aspects of launching the drug, educating providers, and marketing. They have so much sunk money into Afrezza at this point it is inconceivable that they would walk away in 2016. Those familiar with Pfizer's abandonment of Exubera know that the decision had more to do with a new bean counting CEO than it did rational judgment about adoption and sales or clinical benefits. Everything I've read about SNY underscores a belief that they know what needs to be done and are going about their duties in a professional, workmanlike manner. They are a global French company, and Afrezza is just one arrow in their large and impressive quiver. Given the task at hand, I think they will continue to work to overcome the obstacles that the FDA, (first, under a conflicted Margaret Hamburg, and later using an over- abundance of caution, IMO) threw in their way. My knowing that SNY was very aware of obstacles they had to overcome but did the deal anyway "screams to me" about their level of commitment and confidence that this will pay off. If it pays off for SNY, it will benefit long investors. But most importantly, it will benefit people with diabetes.
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Post by BlueCat on Jul 14, 2015 22:34:16 GMT -5
Vetr is not exactly a solid research firm (and Zachs...). As for dilution: who knows? I doubt it (after all management has said) but don't know where the $ will come from obviously. Most likely, Mannkind will choose to roll-out the maturity date of the convertible notes (say by 12-24 months) and they should be able to reach an agreement with the note holders on that. In essence, no pay-off (of the notes) at this time, but no dilution either. Hope not. I think it would be much better to have this convertible note/dilution/loaned shares issue finally off the table and no longer serving as fuel for the short thesis. No doubt shorts would just promote something else to gripe about. But just sayin'.
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Post by mnholdem on Jul 15, 2015 12:12:34 GMT -5
MannKind is generating positive cash flow from their supplier agreement, since Sanofi payments that reimburse 100% of production costs also means cash is available, since much raw material was prepaid a long time ago.
The question is, have there been enough sales to generate sufficient cash to help pay off the debt? It's possible that Matt may pay off the debt, but not likely IMO. MannKind's concern is that they don't run out of operating cash, so they'll likely renegotiate the debt to extend the date that their notes mature.
Paying off the debt would likely create the biggest spark that could light the fuse on a short squeeze, but eliminating the debt isn't the only major catalyst that could do the trick.
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Post by liane on Jul 15, 2015 12:21:03 GMT -5
Agree, paying off the debt from existing cash reserves / cash flow is not a good idea. But a SNY buy-in to pay it off - that may generate some welcome fireworks.
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Post by Deleted on Jul 15, 2015 15:27:21 GMT -5
MannKind is generating positive cash flow from their supplier agreement, since Sanofi payments that reimburse 100% of production costs also means cash is available, since much raw material was prepaid a long time ago. The question is, have there been enough sales to generate sufficient cash to help pay off the debt? It's possible that Matt may pay off the debt, but not likely IMO. MannKind's concern is that they don't run out of operating cash, so they'll likely renegotiate the debt to extend the date that their notes mature. Paying off the debt would likely create the biggest spark that could light the fuse on a short squeeze, but eliminating the debt isn't the only major catalyst that could do the trick. Maybe they pay off $30mm or so of the debt with the balance renegotiated with a lower interest rate and the option for MNKD to repay it early too. As sales ramp, they knock off the remaining $70mm at $xx/quarter. Not sure if note holders would go for that but Matt did say the street is looking for good paper so maybe more flexibility.
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Post by biotec on Jul 15, 2015 16:32:16 GMT -5
MannKind is generating positive cash flow from their supplier agreement, since Sanofi payments that reimburse 100% of production costs also means cash is available, since much raw material was prepaid a long time ago. The question is, have there been enough sales to generate sufficient cash to help pay off the debt? It's possible that Matt may pay off the debt, but not likely IMO. MannKind's concern is that they don't run out of operating cash, so they'll likely renegotiate the debt to extend the date that their notes mature. Paying off the debt would likely create the biggest spark that could light the fuse on a short squeeze, but eliminating the debt isn't the only major catalyst that could do the trick. Maybe they pay off $30mm or so of the debt with the balance renegotiated with a lower interest rate and the option for MNKD to repay it early too. As sales ramp, they knock off the remaining $70mm at $xx/quarter. Not sure if note holders would go for that but Matt did say the street is looking for good paper so maybe more flexibility. All I can say is I'm 99.9% sure no more dilution! Matt said it and we don't need it.
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Post by od on Jul 15, 2015 17:30:14 GMT -5
I hope there is no one on the board who imagines that SNY signed their deal with MNKD without knowing what they had. SNY knows more about Afrezza than those of us "outsiders" are ever likely to know- both good things and potential liabilities. That said, they did the deal, planned a controlled launch, and began with ernest taking on the various aspects of launching the drug, educating providers, and marketing. They have so much sunk money into Afrezza at this point it is inconceivable that they would walk away in 2016. Those familiar with Pfizer's abandonment of Exubera know that the decision had more to do with a new bean counting CEO than it did rational judgment about adoption and sales or clinical benefits. Everything I've read about SNY underscores a belief that they know what needs to be done and are going about their duties in a professional, workmanlike manner. They are a global French company, and Afrezza is just one arrow in their large and impressive quiver. Given the task at hand, I think they will continue to work to overcome the obstacles that the FDA, (first, under a conflicted Margaret Hamburg, and later using an over- abundance of caution, IMO) threw in their way. My knowing that SNY was very aware of obstacles they had to overcome but did the deal anyway "screams to me" about their level of commitment and confidence that this will pay off. If it pays off for SNY, it will benefit long investors. But most importantly, it will benefit people with diabetes. Spot-on! The only issue I have is the notion of 'controlled launch'. To my experience, it has been textbook, even with the misstep or two. Afrezza is a new class, not a me too.
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Post by mannmade on Jul 15, 2015 18:02:57 GMT -5
MannKind is generating positive cash flow from their supplier agreement, since Sanofi payments that reimburse 100% of production costs also means cash is available, since much raw material was prepaid a long time ago. The question is, have there been enough sales to generate sufficient cash to help pay off the debt? It's possible that Matt may pay off the debt, but not likely IMO. MannKind's concern is that they don't run out of operating cash, so they'll likely renegotiate the debt to extend the date that their notes mature. Paying off the debt would likely create the biggest spark that could light the fuse on a short squeeze, but eliminating the debt isn't the only major catalyst that could do the trick. They could pay down a portion of the debt, say 25% That would be a positive sign as well... [Edit Note: Oops just saw Scotta's post]
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Post by Chris-C on Jul 15, 2015 20:33:16 GMT -5
I hope there is no one on the board who imagines that SNY signed their deal with MNKD without knowing what they had. SNY knows more about Afrezza than those of us "outsiders" are ever likely to know- both good things and potential liabilities. That said, they did the deal, planned a controlled launch, and began with ernest taking on the various aspects of launching the drug, educating providers, and marketing. They have so much sunk money into Afrezza at this point it is inconceivable that they would walk away in 2016. Those familiar with Pfizer's abandonment of Exubera know that the decision had more to do with a new bean counting CEO than it did rational judgment about adoption and sales or clinical benefits. Everything I've read about SNY underscores a belief that they know what needs to be done and are going about their duties in a professional, workmanlike manner. They are a global French company, and Afrezza is just one arrow in their large and impressive quiver. Given the task at hand, I think they will continue to work to overcome the obstacles that the FDA, (first, under a conflicted Margaret Hamburg, and later using an over- abundance of caution, IMO) threw in their way. My knowing that SNY was very aware of obstacles they had to overcome but did the deal anyway "screams to me" about their level of commitment and confidence that this will pay off. If it pays off for SNY, it will benefit long investors. But most importantly, it will benefit people with diabetes. Spot-on! The only issue I have is the notion of 'controlled launch'. To my experience, it has been textbook, even with the misstep or two. Afrezza is a new class, not a me too. Agree. Did not intend to suggest otherwise regarding the launch. Maybe a better way of putting it is "carefully planned and systematic." Thanks for your comment!
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Post by od on Jul 16, 2015 10:33:01 GMT -5
Spot-on! The only issue I have is the notion of 'controlled launch'. To my experience, it has been textbook, even with the misstep or two. Afrezza is a new class, not a me too. Agree. Did not intend to suggest otherwise regarding the launch. Maybe a better way of putting it is "carefully planned and systematic." Thanks for your comment! 'Controlled launch' has been cited endlessly by others as rationale commentary - three decades in pharmaceutical marketing, this is a new phrase for me. "Carefully Planned And Systematic" - yes.
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