George Rho Article about resetting expectations
Dec 17, 2015 17:13:38 GMT -5
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Post by LosingMyBullishness on Dec 17, 2015 17:13:38 GMT -5
I read George' s article as it was free accessible via mobile app. I will try to summarize it by memory and some notes especially because I think that the content is not well respresented here.
Let me start with George's statement that he has not sold any of his shares even when they were worth 10-fold and that they does not sell it now (He also said that they probably need a new financial advisor). He also wrote that this may be one of the best performing stocks in 2016, a year later than previously expected. He also stated in this summary that the price reflects too much of the past and too little of the future.
These are very bullish statements.
His analysis of the situation:
- fiancials: MNKD's financial viability is being questioned in many quarters, earnings are uncertain and shares are under constant pressure. vultures of WS are circling and focus on MNKD challenges creating some near-death experienceslll. He said that MNKD had overcome all this (with some dilution) and is now closer to success than ever. George has always looked at the financials and he did it again in this article: As of Sept $30m in cash, $30m in borrowing from Mann Group, ATM of US 40m, $36m raised via TASE deal leads to $136m as of Sept 15. With a burn rate of $8-10m per month they get through 2016. THere are also warrants that could yield about $10m but depend on a price >$2.4 p.s; a R&D milestone from sanofi of $25m and a $50M milestone for approvals in EU/JP.
- sales ramp up
He also said correctly that he, probably like most retail investors and also management of MNKD underestimated the difficulty to penetrate the Diabetes market with Afrezza. Sanofi on the other hand knew what was ahead of them and that's why they made a small $150m upfront payment and a significant $175m loan facility. He stated that the physicians are conservative and reluctance to new medication when they have tried-and-true medication. Then there are the spiro test and the paperwork while label and ftd data does not prove superiority. Same issue with insurances. That's why most patients according to George stay away from Afrezza as they have to pay several thousand dollars per year instead of several hundreds.
He stats that sales will stay low till sanofi has clinical data published that shows that Afrezza is the best meal-time insulin available.Then he wrote about the limitations of the fda trial.
Beside this he strongly critized Mr Edstrom's role in management and Jay Olson role as a bashing analyst who in his words taking every opportunity to remind everyone that Sanofi can opt out in January, something that George thinks is absurd. He believes that the stock price will recover in January when this FUD-argument evaporate.
- I am not a fan of SA but I think that simplifying SA as a hit or pump piece machine does not give credit to all the balanced contributors and commenters that provide a lot of insight for free.
Let me start with George's statement that he has not sold any of his shares even when they were worth 10-fold and that they does not sell it now (He also said that they probably need a new financial advisor). He also wrote that this may be one of the best performing stocks in 2016, a year later than previously expected. He also stated in this summary that the price reflects too much of the past and too little of the future.
These are very bullish statements.
His analysis of the situation:
- fiancials: MNKD's financial viability is being questioned in many quarters, earnings are uncertain and shares are under constant pressure. vultures of WS are circling and focus on MNKD challenges creating some near-death experienceslll. He said that MNKD had overcome all this (with some dilution) and is now closer to success than ever. George has always looked at the financials and he did it again in this article: As of Sept $30m in cash, $30m in borrowing from Mann Group, ATM of US 40m, $36m raised via TASE deal leads to $136m as of Sept 15. With a burn rate of $8-10m per month they get through 2016. THere are also warrants that could yield about $10m but depend on a price >$2.4 p.s; a R&D milestone from sanofi of $25m and a $50M milestone for approvals in EU/JP.
- sales ramp up
He also said correctly that he, probably like most retail investors and also management of MNKD underestimated the difficulty to penetrate the Diabetes market with Afrezza. Sanofi on the other hand knew what was ahead of them and that's why they made a small $150m upfront payment and a significant $175m loan facility. He stated that the physicians are conservative and reluctance to new medication when they have tried-and-true medication. Then there are the spiro test and the paperwork while label and ftd data does not prove superiority. Same issue with insurances. That's why most patients according to George stay away from Afrezza as they have to pay several thousand dollars per year instead of several hundreds.
He stats that sales will stay low till sanofi has clinical data published that shows that Afrezza is the best meal-time insulin available.Then he wrote about the limitations of the fda trial.
Beside this he strongly critized Mr Edstrom's role in management and Jay Olson role as a bashing analyst who in his words taking every opportunity to remind everyone that Sanofi can opt out in January, something that George thinks is absurd. He believes that the stock price will recover in January when this FUD-argument evaporate.
- I am not a fan of SA but I think that simplifying SA as a hit or pump piece machine does not give credit to all the balanced contributors and commenters that provide a lot of insight for free.
