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Post by longinvstr on Oct 27, 2015 18:19:38 GMT -5
Could have been written more clearly with regard to Jan 1 being date of earliest termination or earliest date of notice, but I would think your reading is correct. Yes, I would think VERY material. Just because it didn't happen ASAP isn't going to keep shorts from claiming its coming. Why would SNY walk away from 65% of profits on something that works as well as Afrezza? Remember you asked the question, don't get mad at me for the answer! One reason sny would walk away is because they get afrezza and technshere for the price of their milestone payments that have been made and the amount of the loan that mnkd defaults on. Mnkd is borrowing money from sny and using their 2+billion dollars worth of R&D and patents as collateral on the loan, the only means mnkd has for possibly generating cash to pay this loan rest solely on the shoulders of afrezza sales which are controlled completely by sny. As I've stated before this is just like coal miners taking credit at the company store. I don't believe sny will blindside mnkd like this however I just can't understand how such a fundamental business mistakes can be overlooked by mnkd management. There is absolutely no reason for management to put this company at such risk and give the shorts such good reason to bet on failure. If mnkd has resources capable of paying this loan off, that is the resource they should be borrowing from now, not from a source that benefits more from afrezza failure than it does by being successful. I'm absolutely confident that I will get completely abused for my comment and I'm sure there will be plenty of childish, personal insults because I'm critical of mnkd management. I used to dabble in buying race horses and there was a term that was often used, the term was "barn blind". Barn Blind is when an owner or trainer could not see the deficits of there own horse, they were smart people however they just couldn't bring themselves to see that a horse didn't have the right stuff to win. This barn blind phenomena is also very apparent while investing in stocks, shareholders need to take a critical eye of management and eventually demand the removal of these incompetent people. >> ... the only means mnkd has for possibly generating cash to pay this loan rest solely on the shoulders of afrezza sales...<< If Technosphere proves to be a valuable, cash generating asset, would the term "barn blind" apply to your assessment of MNKD's revenue sources? |
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Post by EveningOfTheDay on Oct 27, 2015 18:20:39 GMT -5
Jury, I think there are several serious flaws in your reasoning. The most blatant one is to assume that MNKD management is so stupid... wait scratch that... so incredibly stupid that it would have allowed in just a few months, after fighting for years and years, to be put in a situation that losses them the company in such an obvious way. I include in this Alfred Mann who, even no longer the CEO, was obviously instrumental in dealing with Sanofi and likely is still involved in strategic decisions. I am not saying I agree blindly with everything MNKD management does, which given that I only have partial information I find perfectly natural, but your condescending attitude towards them and your ability to disregard your obvious bias perhaps makes you barn blind in an opposite sort of way. |
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Post by mnholdem on Oct 27, 2015 18:30:20 GMT -5
The one caveat I would put to this is that business is run by humans, who frequently make illogical choices. We've pointed out that a fair amount of the short interest may in fact, believe this will fail and go to 0. Which from my vantage, would be highly illogical. By the same token, we've seen business leaders make astronomically bad decisions. How does one do DD on the potential of illogical decisions? Hidden, or illegal actions, for that matter? Trend the history of the business, and its leaders, choices? Kinda like an earnings whisper? At end of day, with my limited knowledge and even more limited visibility, this still all comes down to a probability gamble, and best guess. Warren Buffet was quoted once that a truly great product will succeed regardless of management. This isn't a slam upon Sanofi/MannKind. It's simply a reminder that the science typically prevails, although poor management decisions can certainly lengthen the timeline to success. In the final analysis, for me anyway, it's the science that led me to invest in MannKind. The same science which matters now and which always will, IMHO. |
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Post by jurystillout on Oct 27, 2015 18:49:20 GMT -5
@jurystillout... At least it's a new twist on the FUD... Afrezza is so GREAT that MNKD will obviously be bankrupt. Seems like we've got things all wrapped up then... MNKD is screwed if Afrezza is bad and screwed if it's good. Sounds like you should be shorting like crazy. Schwab's paying me 32% to borrow my shares... I'm willing to take higher bids. I don't think SNY would derail the roll-out for such nonsense, and I don't think they would assume Al would hand over his namesake company. Of your winning horses, any names I'd recognize? I don't understand your attempt to deflect, I've never said and never will say afrezza is bad, in fact the only thing mnkd has going for it is the science, what is bad is the management. The simple fact is, putting the company and everything of any value in the company up as collateral for a loan to an entity that has complete control of your ability to generate revenue to repay the loan is just stupid. Then add to the fact that the entity loaning the money stands to benefit by by your default makes it totally brainless. I'm not saying that it will happen , I'm saying that that it should not even be a possible consideration, mnkd should not be putting the company in this position. How can you not see the obvious? I know afrezza is a great product and I'm betting that it will be successful despite the management team, however with good management my confidence would be much much higher and the short interest would be much much lower. |
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Post by jurystillout on Oct 27, 2015 18:59:50 GMT -5
Remember you asked the question, don't get mad at me for the answer! One reason sny would walk away is because they get afrezza and technshere for the price of their milestone payments that have been made and the amount of the loan that mnkd defaults on. Mnkd is borrowing money from sny and using their 2+billion dollars worth of R&D and patents as collateral on the loan, the only means mnkd has for possibly generating cash to pay this loan rest solely on the shoulders of afrezza sales which are controlled completely by sny. As I've stated before this is just like coal miners taking credit at the company store. I don't believe sny will blindside mnkd like this however I just can't understand how such a fundamental business mistakes can be overlooked by mnkd management. There is absolutely no reason for management to put this company at such risk and give the shorts such good reason to bet on failure. If mnkd has resources capable of paying this loan off, that is the resource they should be borrowing from now, not from a source that benefits more from afrezza failure than it does by being successful. I'm absolutely confident that I will get completely abused for my comment and I'm sure there will be plenty of childish, personal insults because I'm critical of mnkd management. I used to dabble in buying race horses and there was a term that was often used, the term was "barn blind". Barn Blind is when an owner or trainer could not see the deficits of there own horse, they were smart people however they just couldn't bring themselves to see that a horse didn't have the right stuff to win. This barn blind phenomena is also very apparent while investing in stocks, shareholders need to take a critical eye of management and eventually demand the removal of these incompetent people. >> ... the only means mnkd has for possibly generating cash to pay this loan rest solely on the shoulders of afrezza sales...<< If Technosphere proves to be a valuable, cash generating asset, would the term "barn blind" apply to your assessment of MNKD's revenue sources? Given time technosphere will generate revenue however as of today they don't have anything to sell other than afrezza. Afrezza is the sole source of revenue for mnkd today. Today mnkd is borrowing from sny. |
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Post by BlueCat on Oct 27, 2015 19:01:34 GMT -5
The one caveat I would put to this is that business is run by humans, who frequently make illogical choices. We've pointed out that a fair amount of the short interest may in fact, believe this will fail and go to 0. Which from my vantage, would be highly illogical. By the same token, we've seen business leaders make astronomically bad decisions. How does one do DD on the potential of illogical decisions? Hidden, or illegal actions, for that matter? Trend the history of the business, and its leaders, choices? Kinda like an earnings whisper? At end of day, with my limited knowledge and even more limited visibility, this still all comes down to a probability gamble, and best guess. Warren Buffet was quoted once that a truly great product will succeed regardless of management. This isn't a slam upon Sanofi/MannKind. It's simply a reminder that the science typically prevails, although poor management decisions can certainly lengthen the timeline to success. In the final analysis, for me anyway, it's the science that led me to invest in MannKind. The same science which matters now and which always will, IMHO. Nice. And I add something a good friend once said to me - it all comes around, just not always in the way, or the timeline, you need it too ….. |
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Post by jpg on Oct 27, 2015 19:06:01 GMT -5
Jurystillout:
And why would Sanofi ruin their own reputation for the next 20 years or so? This BP game is now all about partnerships with small innovative biotechs... Guess why no one wants to partner with a few BPs (like Teva) and everyone wants to partner with Celgene? Celgene treats their partners well (and get the cream of the creme). Teva: not so much...
Do you really think Sanofi will poison the well to save a few bucks short term? This is just not credible and at best illogical.
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Post by dreamboatcruise on Oct 27, 2015 19:13:21 GMT -5
jpg... fully agree. I've cited that as reason why even if the new CEO for some reason weren't as thrilled with Afrezza as the old, they wouldn't simply walk away from it. This notion that they would purposely deal fraudulently with regard to a contract to screw a partner seems considerably more far fetched. Especially since in all likely Al wouldn't let them succeed at it. They'd ruin their reputation and not gain anything.
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Post by jurystillout on Oct 27, 2015 20:52:02 GMT -5
Jurystillout: And why would Sanofi ruin their own reputation for the next 20 years or so? This BP game is now all about partnerships with small innovative biotechs... Guess why no one wants to partner with a few BPs (like Teva) and everyone wants to partner with Celgene? Celgene treats their partners well (and get the cream of the creme). Teva: not so much... Do you really think Sanofi will poison the well to save a few bucks short term? This is just not credible and at best illogical. I'll say it for the third time,I don't believe sny will do this. The problem I have is mnkd management is not making good business decisions and leaving mnkd open to problems and creating problems shareholders are going to bailing them out of. You buy and install smoke detectors in your home not because you think your house is going to go up in flames, you do it to protect your family in case it does. Business people have to run their business with this same type of responsibility, mknd management does not or cannot. Here's a simple question, if you were in Matt Pfiffers position would you put everything of value up for collateral and borrow money from sny and why? Next problem on the horizon is Amphistar! |
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Post by jpg on Oct 27, 2015 21:23:23 GMT -5
Jurystillout: And why would Sanofi ruin their own reputation for the next 20 years or so? This BP game is now all about partnerships with small innovative biotechs... Guess why no one wants to partner with a few BPs (like Teva) and everyone wants to partner with Celgene? Celgene treats their partners well (and get the cream of the creme). Teva: not so much... Do you really think Sanofi will poison the well to save a few bucks short term? This is just not credible and at best illogical. I'll say it for the third time,I don't believe sny will do this. The problem I have is mnkd management is not making good business decisions and leaving mnkd open to problems and creating problems shareholders are going to bailing them out of. You buy and install smoke detectors in your home not because you think your house is going to go up in flames, you do it to protect your family in case it does. Business people have to run their business with this same type of responsibility, mknd management does not or cannot. Here's a simple question, if you were in Matt Pfiffers position would you put everything of value up for collateral and borrow money from sny and why? Next problem on the horizon is Amphistar! If you don't believe Sanofi will do this why mention it as a possibility? And do you now agree that your hypothesis doesn't make much sense? I am as usual a bit perplexed by your smoke detector analogy but as a side note I am certain all Mannkind buildings have certified smoke detectors. All good. Now that we have identified this latest thesis of yours as a red herring you are bringing up the next red herring? Already? You could at least wait a day or so no? It would be more credible maybe? |
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Post by EveningOfTheDay on Oct 27, 2015 21:43:23 GMT -5
I'll say it for the third time,I don't believe sny will do this. The problem I have is mnkd management is not making good business decisions and leaving mnkd open to problems and creating problems shareholders are going to bailing them out of. You buy and install smoke detectors in your home not because you think your house is going to go up in flames, you do it to protect your family in case it does. Business people have to run their business with this same type of responsibility, mknd management does not or cannot. Here's a simple question, if you were in Matt Pfiffers position would you put everything of value up for collateral and borrow money from sny and why? Next problem on the horizon is Amphistar! Hmmmm. |
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Post by jurystillout on Oct 27, 2015 22:17:50 GMT -5
If you don't believe Sanofi will do this why mention it as a possibility? And do you now agree that your hypothesis doesn't make much sense? I am as usual a bit perplexed by your smoke detector analogy but as a side note I am certain all Mannkind buildings have certified smoke detectors. All good. Now that we have identified this latest thesis of yours as a red herring you are bringing up the next red herring? Already? You could at least wait a day or so no? It would be more credible maybe? I don't have a "thesis", I'm stating a fact that this loan agreement is a terrible agreement and a very bad decision to utilize. So, if you were Matt Pfiffer, would you put everything of any value in mnkd as collateral for a loan from an entity that has complete control of your revenue and thus controls your ability to pay it back? Very simple yes or no answer. Because you don't understand why smoke detectors are installed it's probably way to much to ask of you to understand why this loan is a bad idea. I apologize if this is beyond your grasp. |
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Post by goyocafe on Oct 27, 2015 22:53:31 GMT -5
I had to look twice to make sure I wasn't back on YMB. The discourse is a bit OTT tonight.
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Post by dreamboatcruise on Oct 27, 2015 22:55:17 GMT -5
I don't have a "thesis", I'm stating a fact that this loan agreement is a terrible agreement and a very bad decision to utilize. So, if you were Matt Pfiffer, would you put everything of any value in mnkd as collateral for a loan from an entity that has complete control of your revenue and thus controls your ability to pay it back? Very simple yes or no answer. Because you don't understand why smoke detectors are installed it's probably way to much to ask of you to understand why this loan is a bad idea. I apologize if this is beyond your grasp. The agreement filed in the 10-Q seems to indicate that SNY got first lien on Valencia property and first lien on insulin stocks. It also states second lien on all Collateral under the Deerfield loan. When you state that patents, etc. are collateral, is this because you've checked the Deerfield loan terms and "everything of value" was included as collateral? |
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Post by rrtzmd on Oct 27, 2015 23:39:56 GMT -5
Does it really matter whether Sanofi walks away or not? At present, either way looks rather dark. Consider that, as it stands now, while granting they may be doing something behind the "curtain," publicly SNY appears to be putting little effort into doing the sorts of things that afrezza needs to attract more customers. In particular, Sanofi has yet to announce any trials that might demonstrate afrezza is better than its current "non-inferior" designation. Until that happens, significant reimbursement at a price providing a worthwhile profit margin is highly unlikely. This then translates into perhaps years of losses for MNKD and increasing debt as it utilizes the Sanofi loan facility. Milestone payments ostensibly are out there somewhere, but investors aren't allowed to see them. Nevertheless, we can make some inferences. According to the last 10-Q, MNKD said in reference to Deerfield milestone payments: "In the first quarter of 2015, the Company determined that it was probable that the first commercial sales related milestone would be achieved within the next twelve months." Per the Deerfield agreement: Deerfield agreement...that next milestone was $50,000,000 in afrezza revenues. In other words, MNKD expected to see 50 million in afrezza revenues within the first 12 months of introduction. If that was the case, then one might reasonably assume that the Sanofi milestones were determined along similar lines. Obviously, at its current rate -- using the symphony numbers provided in the "afrezza script counts" section -- it appears revenues likely won't reach 50 million for at least a couple of more years. If the inference is correct, logically Sanofi should not walk away. The debt is secured by literally everything MNKD owns. SNY controls sales and marketing, but doesn't "need" afrezza and it is wealthy enough that it can simply wait. It shares profits but since there aren't any, that's no loss. It shares expenses, but since it controls those, it can be as tight fisted as it desires. If afrezza sales suddenly "explode," SNY does fine. If they don't, MNKD "withers" away until SNY decides it wants to package MNKD's assets for shipment back to France. It will certainly be very interesting to see how MNKD management responds to events over the next year. |
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