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Post by lakers on Nov 11, 2015 20:33:52 GMT -5
What deal structure would you like to see for a new TS partnership?
Please provide one answer if you were Mgmt, another one if you were the partner(s), and a proposed compromise given our balance sheet.
As a bonus, any specific input for Pain, Migraine, PAH (API specific).
Only serious reply please. The sooner the better. Thanks.
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Post by bthomas55ep on Nov 11, 2015 21:54:18 GMT -5
Lakers - Given the current financial condition of the company, 1. if I was Management, I would go for as much upfront money as possible (Say $500M) and allow the partner to fully conduct the trials on their dime, but then only pay a 10% Royalty on the drug once it is profitable. This deal extends the Afrezza runway for 4 years. Then, on the third TS product, you have the luxury to have a little more control on the negotiation. 2. If I were the partner, I would be going for a smaller amount up front ($50M to $100M), a split of the trial costs/activities, and then a 50/50 Sanofi-like profit/cost sharing agreement similar to the Sanofi agreement. 3. A proposed compromise would be to have a $200M upfront payment, allow the partner to take a 10% stake for $50M, and set up a Sanofi-like arrangement for cost / profit sharing at 65/35 (65 to the partner).
Bonus: I like a Pain API and a way to potentially deliver a non-narcodic rapid relief for head/migraine pain.
How's that for a starter?
Any reason for the "sooner the better" comment. Is it your belief that we could see a partnership out of a BOD meeting this month? I really appreciate all your input and research.
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Post by rozale on Nov 11, 2015 22:38:31 GMT -5
I'm assuming your referring to a pain TS partnership and not a different afrezza one...
From the management perspective I think $600 M upfront, partner gets 65/35 split, partner also is required to own 20% of MNKD by the end of 2016. 20% ownership could be achieved by non-dilutive acquisition of shares from MNKD or on open market.
That would be my attempt to get cash on hand and provide shareholders some ROI.
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Post by rockstarrick on Nov 11, 2015 22:59:40 GMT -5
First and foremost, A "requirement" that any potential partners take a negotiated % stake in the company, not less than 5%.
The rest is out of my league.
Pain Management.
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Post by vestful on Nov 11, 2015 23:17:14 GMT -5
What deal structure would you like to see for a new TS partnership? Please provide one answer if you were Mgmt, another one if you were the partner(s), and a proposed compromise given our balance sheet. As a bonus, any specific input for Pain, Migraine, PAH (API specific). Only serious reply please. The sooner the better. Thanks. Matt, I mean Lakers, are you on the BoD and looking for investor input? Lol Pain M - 900m and royalties P - 500m C - 700m and royalties up to 15% at 8yrs and for life of drug thereafter. |
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Post by lakers on Nov 12, 2015 0:46:43 GMT -5
Lakers - Given the current financial condition of the company, 1. if I was Management, I would go for as much upfront money as possible (Say $500M) and allow the partner to fully conduct the trials on their dime, but then only pay a 10% Royalty on the drug once it is profitable. This deal extends the Afrezza runway for 4 years. Then, on the third TS product, you have the luxury to have a little more control on the negotiation. 2. If I were the partner, I would be going for a smaller amount up front ($50M to $100M), a split of the trial costs/activities, and then a 50/50 Sanofi-like profit/cost sharing agreement similar to the Sanofi agreement. 3. A proposed compromise would be to have a $200M upfront payment, allow the partner to take a 10% stake for $50M, and set up a Sanofi-like arrangement for cost / profit sharing at 65/35 (65 to the partner). Bonus: I like a Pain API and a way to potentially deliver a non-narcodic rapid relief for head/migraine pain. How's that for a starter? Any reason for the "sooner the better" comment. Is it your belief that we could see a partnership out of a BOD meeting this month? I really appreciate all your input and research. Depending on Stage which is important. Pain: finished animal trial, ready for human clinical, desirable characteristic: non-opiod (less addictive), no built-up resistance long term, effective in < 5 mins. PAH: formulation stage 3. 10% stake for $50M is too low. Dilutive or non-dilutive ? All partnership have milestone incentive. Does 65/35 include trial cost ? Mnkd'd have to spend some R&D resource to collaborate. A common theme is 10% stake, similar to ALNY. Matt in early Aug 2015 : The other program in pain has actually been in animals already, so it’s a bit ahead in that regard. But that one is a little different because we have multiple APIs we’re evaluating. We haven’t selected one yet and all of us coming from that animal model preclinical, pre-human work, but that’s already underway. The pain management program is focused on the product that is intended to manage moderate-to-severe acute pain and is also in the technical feasibility phase. We have already prepared several prototype powders to formulate around a small number of active pharmaceutical ingredients or API, and we have evaluated some in preclinical models. The results have been actually very encouraging so far. The focus now is to select the optimal API and move to Investigational New Drug or IND-enabling studies. www.tcpalm.com/business/torrey-pines-could-begin-human-testing-of-new-pain-medication-in-2013-ep-383096049-331604552.html?d=mobile"It's actually pretty marvelous," Houghten said. "You can't (overdose) on this drug." [TI23] The drug is being developed in partnership with Mannkind Corp., which has created a small device that allows people to inhale medicine. By inhaling, the medicine can relieve pain quicker than through pill form, Houghten said. "Our pain compound, if it all works out, ... if you can take that pain compound and just inhale within just 30 seconds to a minute, your pain will be alleviated," Houghten said. "So you can see that that can be a real important step." The drug has been tested on two separate animal groups and Houghten said the drug will be tested on a third before going before the U.S. Food and Drug Administration, which must give approval for human trials. Houghten said the unique nature of the drug could make it easier to get approval. "You never really quite know," he said. "Right now, everything's looking really good. ... We can't get a high enough dose that causes a problem." Patients also do not build up a tolerance to the medicine, whereas other pain relievers require patients to take more and more to get the same effect. Houghten said he is thrilled with the drug's progress. "In reality is if it's 2014 (before human testing), I'm still going to be happy," Houghten said. "I don't think it's going to be a problem with the FDA. It's very simple what we want to do, so we can show them clearly here's the effective dose, here's the toxic dose. That's 90 percent of it right there. It's effective and it's not toxic." |
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Post by BlueCat on Nov 12, 2015 1:22:35 GMT -5
To chime in - this should really be approached programmatically. MNKD is setting up a "Partner Program". There are different tiers, which reflect the amount of investment and commitment by MNKD and Partner. For each tier, you get a different level and nature of engagement.
This next round wouldn't look like Afrezza, but its not just licensing the technology either - sits somewhere between.
Some thoughts:
1. Stake - Non-dilutive, open market, non-shortable (if possible?) - execute buy-in at launch. But much, much less than 10%. Geez. At 10%, gain a few partners and they'd have controlling interest. So maybe 1%? or 2% buy-in to serve as a win-win partnership milestone.
BUT - imagine you are a SNY competitor, you partner with MNKD and invest, and then Afrezza sales fail to hit their mark and SP tanks at quarterly report. You take a loss on investment because another company's, or even your competitor's, execution? Not sure how well that would play. This arrangement overall seems complex.
2. Royalty makes more sense to me here too, not split both profit and loss like current JV. But with Royalty arrangement, there should be a minimum commit per quarter or year, not only covering MNKD costs, but allowing for a small profit. Naturally, royalty percentage would be far more attractive and motivating to jointly succeed. And to motivate partner to really sell it, perhaps royalty percentage dials back incrementally on (e.g. billions) sold. Another incentive to succeed - like a volume discount. Carrot (earn better royalty percentage) AND Stick (you'll have to pay MNKD the baseline even if you don't sell one script).
3. With royalty, upfront payments/milestones customized to opportunity/effort.
As much as possible, use these first partnerships to form the 'templates' - learn from it and adjust to optimize according. WRT to upfront payments, etc - create a guideline equation for modeling … e.g. Addressable market opportunity launch year - MNKD development costs = and so on.
This is how high tech companies basically set up developer programs for platforms/APIs that they intend to monetize (possibly both APIs/Platform and the partner program itself). They also often charge for service and support. : ) But charging just to participate only works with very high demand and number of desiring partners ….
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Post by lakers on Nov 12, 2015 2:00:54 GMT -5
Q2U, I agree that the program should be systematic as the first TS deal sets precedence for the subsequent ones.
#1 Stake could make sense if a partner owns a plethora of generic drugs wanting to extend their lives and making them more efficient via pulmonary route.
#2 I like volume-based royalty better. It also allows Mnkd to push clinical tria, dev cost to the deep-pocket partner. Mnkd still bears some agreed-upon dev cost.
"Carrot (earn better royalty percentage) AND Stick (you'll have to pay MNKD the baseline even if you don't sell one script
)". The sizable upfront payment is the Stick. This depends on Mnkd's negotiating power, aka balance sheet (that was why TASE index deal was important), several dance partners.
TAM, ETA should be part of equation.
In a Hakan's Lesson Learned interview, he wish he set up trials against the incumbents to show absolute superiority, not a trial to show me-too product which resulted in poor label. I don't have time to dig up that article. Some here are adept at it. Please help dig it up. TIA.
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