topcard
Newbie
Posts: 23
Sentiment: Long
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Post by topcard on Nov 17, 2015 12:03:06 GMT -5
there is no point in selling. I don't see Al allowing MannKind falling into bankruptcy because of a lack of cash; for that reason I will not sell. I realize shorts are creating a wall of worry causing shareholders to sell. I feel your pain, but I will not allow a bunch of Wall Street firms to force me to take a loss when the long term prospects look extremely promising. Awhile ago, when I worked for an employee owned company, and an independent auditor would establish the share price (because the shares could not be traded) for the purpose of buying out shares from departing employees, retirement benefits, etc.... In your opinion @kastanes (or anyone else who has been studying and holding), what would an independent auditor say about the current share price? (Supposing for the moment that AF or GS had no interest in share price destruction and that manipulation did not exist --- and of course, that SEC was impartial and diligent about protecting shareholders). mss - I figure it this way (per share): Current value of TS patent = $3 5-year value of Afrezza earnings = $5 (3 million patients x $3000 x 25%)/420 million shares Speculative value of TS licensing earnings over 5 years = $5 A modest P/E of 10 Total value (in 5-years) per share = $103 Otherwise, one can always use a buy-out number that would likely be acceptable to Al - and that's probably about $60/share.
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Post by oldfishtowner on Nov 17, 2015 12:14:02 GMT -5
jpg Griffin Securities seems a lot more logical, insightful and maybe informed than nearly every other analyst (and they agree with us ) --- so they are neutral but maintain a hold at a higher valuation. I can't find the actual text at the moment but they seem to have knowledge that big pharmas made deals with insurers over the past year to lock in discounts for injectables. That's the kind of analysis I would like to see--- obviously they know a lot more than what I have seen on all the message boards if what they are writing is true. Of course that kind of collusion probably won't last if prescribing physicians continue to grow, and luminous early adopter reports continue to get attention. Insider knowledge about Rest of World plans and timing would probably result in a good share price estimate (within a factor of two or three I would guess). Your thoughts? We don't even know how much money they have... We are so in the dark (as with many companies you may say) that it is almost impossible to make informed decisions other that: 1. Does the drug work? Yes. 2. Is the drug a potential paradigm shift and could be a big block buster? Yes. 3. Do you trust Mannkind management to do good things for Afrezza and us by extension? My answer used to be yes but I've grown sceptical (as you may tell...) as to their skill in figuring out the very basics of running a biotech company. Again when you can't get the simple principle that biotechs should always raise money when the sun is shining because it might not be in the not to distant future then you fail biotech 101. It's sadly as simple as that. My bad for ignoring this simple principle but like I said I thought them not raising capital at 10$ was a sign they were clearly certain (i.e.: confidentiality agreement) of excellent funding (Sanofi, new partnerships, new investors and maybe even Al) but seeing they can't do basic math is a bit of an eye opener. I cannot put enough emphasis on how basic this is in biotech. It's as if Mannkind has an attraction to being constantly near bankrupt. And this with a 90 year old 'sugar daddy' who may not be as rich as he once was (who knows past his stated LOC commitment?) and certainly not getting any younger (or healthier). Do we even have a clear understanding how the biggest shareholder's stake will be administered when he passes away? We need Al as much as ever and will his different trustees fight it out for control or vote against each other as to what to do? Will they fund stuff if things go badly? This is all very material when the company is near constantly bankrupt. So my answer to # 3 is no I do not have faith in Mannkind management or on the post Al structure of who controls the company. The major shareholder would need to give us an explanation and road map for me to regain Mannkinds confidence (and it's not Matt's or Hanken's call as I doubt it was their decision to fly so close to the sun: again...). 4. Do you trust Sanofi? I never really trusted them that much but felt that they got Afrezza cheap (save that 8000 patent mister trial) and stood to make a killing if right. The January 2016 termination clause did give me pause as does the continuous delay of starting it (while starting minor very inexpensive trials). The maximum extension of a decision on the trial is or seems to be March 2016 (strangely near the January 2016 cutoff). Hmmm. The change of CEO was a biggie. Not only for the possible loss of faith of the CEO for Afrezza but as a reaffirmation of all that used to be wrong at Sanofi. Why would someone put a 'not sellable' clause in (and get the drug so cheap)? You put that kind of early clause in if you think there could be issues. Have there been issues? Yeah! And why did Mannkind not prepare/ raise funds at 10$ again? So this was possibly at least partially predictable (one of the analysts who gave us a market perform seemed to think there was a deal with different prandial makers and insurers). Again why did Mannkind not know about this or hedge with funding? The Sanofi CC call last Friday was another piece of damning evidence for me. No need to reemphasis that bad call or the crappy documents (for Afrezza) that accompanied the call. Will Sanofi dump us in January? No clue but they certainly don't inspire me to think they valued Afrezza, have big plans for Afrezza or care in the least for Mannkind. It wouldn't be very hard (or costly strategically or financially) for Sanofi to give struggling Mannkind an token to bring back to Mannkind shareholders and future investors. Some may say this is not material to Sanofi or the JV. I would respond that this is why I would much rather we had partnered with aBP that respects it's partners (like some other do) than Sanofi. Remember that all mmsciguy's IFs occurred before Sanofi, when MNKD was going it alone. As for trusting Sanofi, it is likely that the required pulmonary/cardiovascular risk trial has not been started yet BECAUSE it is so large and expensive. In the past MNKD has been criticized for not beginning trials sooner, especially after the CRLs when discussions with the FDA seemed to take forever. Sanofi has 33 diabetes-related trials ongoing. The typical "large" phase 3 or 4 trial has a planned enrollment of from 500 to about 900 patients. The largest trials have 5000 patients. In this context the 5-year 8000 patient pulmanary/cardio trial is huge. But it may not only be the size of the trial that is causing the delay. Frankly, MNKD did not conduct the phase 3 trial it should have. I believe that Sanofi will not repeat this mistake. Somehow this trial will become a superiority trial. The delay may also be due to Sanofi collecting real world results from the early users to help guide decisions in designing the trial. Furthermore, it is possible that these decisions include expanding the trial objectives to look at Afrezza's benefits in reducing other complications of diabetes beyond cardiovascular disease, such as neuropathy, nephropathy, retinopathy, foot damage and Alzheimer's, and possibly even address mortality rates. Sanofi may even intend to track the number of hospitalizations, surgeries, etc to further document Afrezza's cost effectiveness. This is all speculation on my part. I offer it only as an possible alternative to Sanofi parting ways with MNKD as a rationale for the delay in starting the trial. Even if the trial is not expanded as I think it might be, its announcement will clearly signal Sanofi's long-term commitment to Afrezza and will have a significant positive impact on MNKD's PPS.
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Post by doubleo7 on Nov 17, 2015 12:21:50 GMT -5
Is 8000 confirmed or just another rumor started by af
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Post by suebeeee1 on Nov 17, 2015 12:23:57 GMT -5
Awhile ago, when I worked for an employee owned company, and an independent auditor would establish the share price (because the shares could not be traded) for the purpose of buying out shares from departing employees, retirement benefits, etc.... In your opinion @kastanes (or anyone else who has been studying and holding), what would an independent auditor say about the current share price? (Supposing for the moment that AF or GS had no interest in share price destruction and that manipulation did not exist --- and of course, that SEC was impartial and diligent about protecting shareholders). mss - I figure it this way (per share): Current value of TS patent = $3 5-year value of Afrezza earnings = $5 (3 million patients x $3000 x 25%)/420 million shares Speculative value of TS licensing earnings over 5 years = $5 A modest P/E of 10 Total value (in 5-years) per share = $103 Otherwise, one can always use a buy-out number that would likely be acceptable to Al - and that's probably about $60/share. Obviously, I love your valuation. And, my guess is that many other funds are leaning towards a valuation that is much, much higher than the present $2.25/share. With all the patents MNKD holds, it should be worth something!
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Post by oldfishtowner on Nov 17, 2015 13:33:40 GMT -5
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Post by factspls88 on Nov 17, 2015 13:44:58 GMT -5
Here is the Hakan's full comment re the 8000. Note he refers to it as a milestone:
The last of the post-marketing requirements studies is the long-term pulmonary safety study, a five-year randomized controlled trial in 8,000 patients with diabetes maladies to assess pulmonary safety for Afrezza compared to the standard of care. The Sanofi/MannKind clinical team is currently reviewing the scope and design of this study with the FDA, including specifics of the patient population and study end points. The final milestone for the final agreed upon protocol is April 30, 2016.
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Post by mssciguy on Nov 17, 2015 13:54:48 GMT -5
mss - I figure it this way (per share): Current value of TS patent = $3 5-year value of Afrezza earnings = $5 (3 million patients x $3000 x 25%)/420 million shares Speculative value of TS licensing earnings over 5 years = $5 A modest P/E of 10 Total value (in 5-years) per share = $103 Otherwise, one can always use a buy-out number that would likely be acceptable to Al - and that's probably about $60/share. Obviously, I love your valuation. And, my guess is that many other funds are leaning towards a valuation that is much, much higher than the present $2.25/share. With all the patents MNKD holds, it should be worth something! Have you ever read Peter Thiel? He's one of the founders of paypal, very aggressive start up guy. To sum him up in brief, two points: 1. A business is worth the entire sum of future income.2. The only business you want to be in should be a monopoly. Something nobody else has.For many of us, that is MNKD.... my only concern being the monopoly part... there are other particle inhalation companies in hot pursuit of their own inhalation systems, and it won't be long before TS is challenged (but, still, there will be years-long lags in safety and regulatory aspects).
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Post by mnholdem on Nov 17, 2015 15:22:00 GMT -5
From the FDA site:
Postmarket Requirements and Commitments
Applicant SANOFI-AVENTIS US LLC Product Afrezza (insulin) inhalation powder NDA/BLA Number 22472 NDA/BLA Approval Date 06/27/2014 Annual Report Due Date (must be submitted within 60 days of this date) 06/27/2015
Requirement/Commitment Number 4 Required Under FDAAA Section 505(o)(3) Original Projected Completion Date 12/31/2023 Description Conduct a 5-year, randomized, controlled trial in 8,000-10,000 patients with type 2 diabetes to assess the serious potential risk of pulmonary malignancy with Afrezza use. The primary objective of the trial should be to compare the incidence of pulmonary malignancy observed with Afrezza to that observed in the standard of care control group. Secondary endpoints should include mortality due to pulmonary malignancy and all-cause mortality. Randomization to Afrezza or standard of care should be 1 to 1. The patient population should be enriched with respect to lung cancer risk (i.e., predicted incidence of no less than 200/100,000 patient-year). The potential for detection bias should be adequately addressed in the trial design. Subjects who discontinue randomized intervention due to lack of efficacy or tolerability issues should continue to be followed for the outcomes of interest and prospective measures to encourage subject retention and capture outcomes in patients who withdraw or are lost to follow-up should be in place. Glucose control and glycemic rescue should be per standard of care. The trial must also include an assessment of cardiovascular risk based on prospectively defined, collected and independently adjudicated major adverse cardiovascular events or MACE (i.e., cardiovascular death, non-fatal myocardial infarction, and non-fatal stroke). Also include as part of the trial a substudy (also with 1 to 1 randomization to either Afrezza or standard or care) to evaluate the long-term effect of Afrezza on pulmonary function. Patients in the substudy should have pulmonary function tests at baseline and every 6 months until end of treatment.
Current Status Pending
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Post by babaoriley on Nov 17, 2015 16:05:03 GMT -5
"The maximum extension of a decision on the trial is or seems to be March 2016 (strangely near the January 2016 cutoff). Hmmm."
jpg, is it March, or may it not be August 27, which would also be within 60 days of June 27, 2015?
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Post by babaoriley on Nov 17, 2015 16:09:56 GMT -5
Awhile ago, when I worked for an employee owned company, and an independent auditor would establish the share price (because the shares could not be traded) for the purpose of buying out shares from departing employees, retirement benefits, etc.... In your opinion @kastanes (or anyone else who has been studying and holding), what would an independent auditor say about the current share price? (Supposing for the moment that AF or GS had no interest in share price destruction and that manipulation did not exist --- and of course, that SEC was impartial and diligent about protecting shareholders). mss - I figure it this way (per share): Current value of TS patent = $3 5-year value of Afrezza earnings = $5 (3 million patients x $3000 x 25%)/420 million shares Speculative value of TS licensing earnings over 5 years = $5 A modest P/E of 10 Total value (in 5-years) per share = $103 Otherwise, one can always use a buy-out number that would likely be acceptable to Al - and that's probably about $60/share. Topcard, that valuation is "unusual" in my opinion. A P/E ratio is applied to earnings, now the value of the TS patent may be $3 per share or $1.25 billion, but you don't then use a P/E ratio on that, you just add the value to the value of the other items. Yes, I think $60 would be acceptable to Al, that would be about 10x what would be acceptable to me. And even Al at the height of his mental powers would likely sell for $10 tomorrow!
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Post by oldfishtowner on Nov 17, 2015 16:31:41 GMT -5
From the FDA site:
Postmarket Requirements and Commitments
Applicant SANOFI-AVENTIS US LLC Product Afrezza (insulin) inhalation powder NDA/BLA Number 22472 NDA/BLA Approval Date 06/27/2014 Annual Report Due Date (must be submitted within 60 days of this date) 06/27/2015
Requirement/Commitment Number 4 Required Under FDAAA Section 505(o)(3) Original Projected Completion Date 12/31/2023 Description Conduct a 5-year, randomized, controlled trial in 8,000-10,000 patients with type 2 diabetes to assess the serious potential risk of pulmonary malignancy with Afrezza use. The primary objective of the trial should be to compare the incidence of pulmonary malignancy observed with Afrezza to that observed in the standard of care control group. Secondary endpoints should include mortality due to pulmonary malignancy and all-cause mortality. Randomization to Afrezza or standard of care should be 1 to 1. The patient population should be enriched with respect to lung cancer risk (i.e., predicted incidence of no less than 200/100,000 patient-year). The potential for detection bias should be adequately addressed in the trial design. Subjects who discontinue randomized intervention due to lack of efficacy or tolerability issues should continue to be followed for the outcomes of interest and prospective measures to encourage subject retention and capture outcomes in patients who withdraw or are lost to follow-up should be in place. Glucose control and glycemic rescue should be per standard of care. The trial must also include an assessment of cardiovascular risk based on prospectively defined, collected and independently adjudicated major adverse cardiovascular events or MACE (i.e., cardiovascular death, non-fatal myocardial infarction, and non-fatal stroke). Also include as part of the trial a substudy (also with 1 to 1 randomization to either Afrezza or standard or care) to evaluate the long-term effect of Afrezza on pulmonary function. Patients in the substudy should have pulmonary function tests at baseline and every 6 months until end of treatment.
Current Status Pending
Good find! I don't recall the "all-cause mortality" endpoint being mentioned by MNKD or being included in the PR the FDA released on approval where it described the post-marketing study requirements. I presume the requirement that the "patient population should be enriched with respect to lung cancer risk" means that they want to see smokers or others with lung cancer risk factors in the patient population to provide the required expectation of lung cancer in the study group.
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Post by jpg on Nov 17, 2015 18:17:50 GMT -5
"The maximum extension of a decision on the trial is or seems to be March 2016 (strangely near the January 2016 cutoff). Hmmm." jpg, is it March, or may it not be August 27, which would also be within 60 days of June 27, 2015? 60 days of June 2105? That is obviously long gone. Not certain what you are thinking?
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Post by babaoriley on Nov 17, 2015 19:20:44 GMT -5
"The maximum extension of a decision on the trial is or seems to be March 2016 (strangely near the January 2016 cutoff). Hmmm." jpg, is it March, or may it not be August 27, which would also be within 60 days of June 27, 2015? 60 days of June 2105? That is obviously long gone. Not certain what you are thinking? Certainly not thinking, sorry, jpg! Back and forth between loan documents and the board, overwhelming for this old guy!! Anyway, with the understanding you may have explained it, how did you conclude that March 2016 seems to be the date by which a decision must be made on the trial?
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Post by tayl5 on Nov 17, 2015 20:07:26 GMT -5
How would you enrich for trial participants who might show an increased risk of lung cancer? You'd have to find smokers who are so keen to be on Afrezza that they would be willing to risk a suspected higher cancer rate for five years. I also hope the study has a crossover clause for anyone in the control group who decides there's a better way to live.
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Post by monger on Nov 17, 2015 20:40:13 GMT -5
mss - I figure it this way (per share): Current value of TS patent = $3 5-year value of Afrezza earnings = $5 (3 million patients x $3000 x 25%)/420 million shares Speculative value of TS licensing earnings over 5 years = $5 A modest P/E of 10 Total value (in 5-years) per share = $103 Otherwise, one can always use a buy-out number that would likely be acceptable to Al - and that's probably about $60/share. Topcard, that valuation is "unusual" in my opinion. A P/E ratio is applied to earnings, now the value of the TS patent may be $3 per share or $1.25 billion, but you don't then use a P/E ratio on that, you just add the value to the value of the other items. Yes, I think $60 would be acceptable to Al, that would be about 10x what would be acceptable to me. And even Al at the height of his mental powers would likely sell for $10 tomorrow! Well guys, I love fantasies about future share prices as much as the next person, so let me add some more math. IF those three segments represent actual earnings happening in Year 5, and you apply then a P/E of 10 to the $13 in earnings, I'm pretty sure you're going to get $130, not $103. If we're just going to throw 1's and 3's around, we might as well make it a share price of $301 and celebrate our future riches even more. If a little of something is good, then a whole lot more must be way better! If you're just going to dream, why not dream big? Randomly, but hyper-optimistically and perhaps just a tad sarcastically, but in a nice way, The Monger
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