Post by lakers on Nov 10, 2015 18:24:01 GMT -5
November 10, 2015, 11:02 A.M. ET
MannKind: Buying Time…But It’s Still All About Afrezza
blogs.barrons.com/stockstowatchtoday/2015/11/10/mannkind-buying-time-but-its-still-all-about-afrezza/
By Ben Levisohn
Shares of MannKind (MNKD) are tumbling today after the struggling biotech company announced that it would be selling up to 50 million shares by listing on the Tel Avive Stock excnage. RBC’s Adnan Butt contends that MannKind is “buying time with innovative financing [but] demand trend still matters.” He explains:
Investors had been focused on when and how MannKind would raise additional capital to fund operations, along with Afrezza trajectory. MannKind disclosed the potential to sell up to 50M shares with its Tel Aviv Stock Exchange listing.Fundamentally, Afrezza ramp is still paramount where visibility from Sanofi (SNY) is listed as that is what will determine the ultimate upside or downside scenario in MannKind shares….
MannKind’s stock purchase agreements could lead to 50M shares of common stock being sold to selected investment funds in Israel and raising ~$120M+ assuming Monday’s closing price. While this could address the financing overhang for the time being, ultimately Afrezza needs to grow to ensure MannKind’s viability as expenses will continue to mount and debts will still need repayment. With ~$30M available from the Al Mann facility, ~$38M from the ATM, and potential 50M in shares offered, the pro forma total could be enough to fund operations into2017.
The Street’s Adam Feuerstein explains why going to Israel was a “wise move” for MannKind:
As disclosed Monday night, MannKind will sell “up to” 50 million shares of its common stock directly to Israeli-managed index funds. These exchange-traded funds are required to buy MannKind shares because the stock is now dual listed on the Tel Aviv Stock Exchange (TASE).) Instead of buying MannKind shares on the open market, MannKind offered to sell stock to the TASE ETF funds directly from the company’s treasury at a 3% discount.
The amount of money raised in this offering isn’t known yet but will hinge on MannKind’s weighting in the various TASE indices, which then dictates how many shares the Israeli ETF funds need to acquire.
As anyone spying a stock chart lately knows, MannKind wasn’t finding demand for its falling shares from U.S. investors, so dual-listing on the TASE and raising money from “forced” buyers in the Israeli investment community is a heads-up survival move.
Shares of MannKind have tumbled 12% to $2.31 at 10:55 a.m. today, while Sanofi has declined 1.4% to $44.80.
MannKind: Buying Time…But It’s Still All About Afrezza
blogs.barrons.com/stockstowatchtoday/2015/11/10/mannkind-buying-time-but-its-still-all-about-afrezza/
By Ben Levisohn
Shares of MannKind (MNKD) are tumbling today after the struggling biotech company announced that it would be selling up to 50 million shares by listing on the Tel Avive Stock excnage. RBC’s Adnan Butt contends that MannKind is “buying time with innovative financing [but] demand trend still matters.” He explains:
Investors had been focused on when and how MannKind would raise additional capital to fund operations, along with Afrezza trajectory. MannKind disclosed the potential to sell up to 50M shares with its Tel Aviv Stock Exchange listing.Fundamentally, Afrezza ramp is still paramount where visibility from Sanofi (SNY) is listed as that is what will determine the ultimate upside or downside scenario in MannKind shares….
MannKind’s stock purchase agreements could lead to 50M shares of common stock being sold to selected investment funds in Israel and raising ~$120M+ assuming Monday’s closing price. While this could address the financing overhang for the time being, ultimately Afrezza needs to grow to ensure MannKind’s viability as expenses will continue to mount and debts will still need repayment. With ~$30M available from the Al Mann facility, ~$38M from the ATM, and potential 50M in shares offered, the pro forma total could be enough to fund operations into2017.
The Street’s Adam Feuerstein explains why going to Israel was a “wise move” for MannKind:
As disclosed Monday night, MannKind will sell “up to” 50 million shares of its common stock directly to Israeli-managed index funds. These exchange-traded funds are required to buy MannKind shares because the stock is now dual listed on the Tel Aviv Stock Exchange (TASE).) Instead of buying MannKind shares on the open market, MannKind offered to sell stock to the TASE ETF funds directly from the company’s treasury at a 3% discount.
The amount of money raised in this offering isn’t known yet but will hinge on MannKind’s weighting in the various TASE indices, which then dictates how many shares the Israeli ETF funds need to acquire.
As anyone spying a stock chart lately knows, MannKind wasn’t finding demand for its falling shares from U.S. investors, so dual-listing on the TASE and raising money from “forced” buyers in the Israeli investment community is a heads-up survival move.
Shares of MannKind have tumbled 12% to $2.31 at 10:55 a.m. today, while Sanofi has declined 1.4% to $44.80.