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Post by silentknight on Jan 6, 2016 8:21:32 GMT -5
Lakers' list is all very supportable from a legal point of view and having two simultaneous lawsuits for the same type of behavior will reinforce each other. I'm sure the list gets quite a bit longer when it includes all the behind the scenes information that Mannkind has that we retail shareholders don't know about. There are plenty of law firms who will take the case with no up-front costs for Mannkind and in I think Mannkind has a moral obligation to help discourage big pharma from behaving in the way Sanofi has. Once Afrezza is priced on par with injectables, the year of real world results will make it a lot more likely for tier 2 placement. Mannkind can even offer a discount card or make it slightly less expensive to start since they have so much inventory and a contract to keep buying insulin. Script count is far more important right now than profit margin. If scripts can be pushed up in the exponential rate that they should be, the share price will recover to a level that will make raising money from minor dilution much more palatable to us longs. Now that some of the dust has settled and I've thought more about wether or not MNKD should sue SNY.. I now believe they should. Hindsight being 20/20 the firing of Vienbacher killed Afrezza at SNY, however that's not our issue - the deal was already signed and SNY screwed us every step of the way. Personally I am amazed that SNY didn't see the value of Afrezza to their bottom line...or perhaps the new CEO saw it as a threat?? In any case - Yes an attempt should be made to pile on and sue them. I think MNKD can make a solid case and I also believe that their is a lawfirm out there with multiple names on the letterhead that will take the case without too much upfront money. JMHO I agree, but then again I've been saying it since November. We're still only a day into the termination so let's give MNKD some time to formulate a strategy on how best to address the situation. MNKD might not sue, but perhaps they could convince Greenhill to do it on their behalf. They negotiated the contract after all. If there's no action, perhaps the subject should be brought up at the annual share holders meeting.
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Post by savzak on Jan 6, 2016 8:22:02 GMT -5
You make many assumptions. First what is the jurisdiction? If France, MNKD's lawyers will need to hire French lawyers to decipher French laws (Napoleonic Code). Will the judge allow testimony from another case? Probably not. Most of the cause of low Afrezza sales is tied to its high price. Per the contract, SNY has sole rights to set prices. The parties probably talked about the price before the contract. How is MNKD going to prove damages based on a too high Afrezza price? SNY suffered just as much as MNKD. It takes a lot of gumption to file a lawsuit. Mostly because of the huge cost involved. Don't think for a minute that anybody who has been wronged can sue the wrongor. There is no law firm in this world that will take this case on as a contingency. Why would they commit legal resources when they can make money elsewhere. I know, the payday at the end. As an investor, you were looking for the MNKD payday. Has it arrived yet? There are some assumptions there, but many of those are based on experience. (I work in the legal field). First, the jurisdiction would be in the U.S. The agreement was for U.S. rights, with options to continue on to other countries (which never occurred). So, the venue where the damages took place would be in the United States, thus a U.S. trial. It's why Genzyme filed their lawsuit in Manhattan. Second, you don't have to introduce evidence from another case. Where do you get that? You compare Afrezza to Lantus, Toujeo, or Praluent to make your points that it was starved of resources compared to other Sanofi drugs. The price was set by Sanofi, true. But a lawyer worth his salt could make the argument that the price was the primary factor in limiting sales and was set at a price that prevented it from market saturation. You explain that as the marketer, Sanofi had a responsibility to make every reasonable effort to market the drug appropriately and that setting the price point at a level that killed sales violated that stipulation of the contract. Civil trials are not like criminal ones. You don't have to prove anything beyond a reasonable doubt. All you have to prove is that Sanofi, more likely than not, failed to provide Afrezza with the resources and effort to make it commercially viable, as they promised. One look at TV/print/internet ads for their other products, insurance coverages, and their efforts at doctor education, and it's a slam dunk, at least to me. You'd be surprised how many attorneys would take a corporate breach of contract case with no retainer or fees until settlement. I'm content to keep waiting for my MNKD payday, just like I've waited for the past four years. It hasn't arrived. I could have sold in the 11's after the partnership but I didn't. Hind sight is always 20/20 but I still think there is intrinsic value in TS and Afrezza that hasn't been tapped yet. I have no specific experience with such cases but I wouldn't have thought that there would be many firms capable of handling a case like this willing to take it on a contingency fee basis. The costs and personnel commitment will be astronomical and, despite the puffery in this thread, recovery is not certain, at least as far as we can judge from our distant perspective. Assuming Sanofi breached its obligations under the contract, its very likely they covered their tracks very carefully in order to give plausible explanation for every decision they made. Let's face it, it's extraordinarily unlikely that Sanofi left itself openly and obviously subject to a breach of contract suit here.
If my assumptions are correct, then the real evaluation of the strength of the case can only happen after discovery is conducted. In turn, discovery can (generally) only be conducted after suit is filed. If there's a case against Sanofi here, it will almost certainly be established and proven primarily through document discovery of Sanofi's intra-company e-mails and memoranda-documents which cannot be obtained without first filing suit and undertaking the necessary discovery efforts to get them. Because a firm will not be able to adequately evaluate the case before some discovery is conducted, it is unlikely, in my opinion, that a firm would be willing to undertake the commitment of representation, knowing that thousands of man hours will be spent on the case, even if Mannkind agrees to cover costs and expenses of litigation.
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Post by curiousdoc on Jan 6, 2016 8:33:13 GMT -5
Does it even matter if they sue? Mnkd would run out of money long before it even came to fruition.
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Post by prolux on Jan 6, 2016 9:36:37 GMT -5
I don't typically post here, but I need to interject some reality into this fantasy. Currently, MNKD's priorities are survival, which means focusing on a sale, or a partnership for Afrezza and Technosphere. Once they get the stock price back up, the priority needs to be funding through profitability.
How do you think a lawsuit against their former big pharma partner might influence prospective partners for either Afrezza, or Technosphere ? Additionally, they are still in negotiations with SNY with respect to the details of the current and near future situation with Afrezza. SNY knows that there is potential for another damaging lawsuit and hence should be motivated to cooperate. MNKD can leverage that into SNY continuing to fund ongoing trials, making near term milestone payments as part of a settlement etc.
The time to consider a lawsuit would be after the Afrezza sales and distribution situation has been settled, not before then. SNY, in exchange for some of the above would, of course, be requesting a final settlement where MNKD foregoes any further legal remedies. I hope that Desisto is a better negotiator than Hakan proved to be.
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Post by mindovermatter on Jan 6, 2016 9:43:12 GMT -5
I don't typically post here, but I need to interject some reality into this fantasy. Currently, MNKD's priorities are survival, which means focusing on a sale, or a partnership for Afrezza and Technosphere. Once they get the stock price back up, the priority needs to be funding through profitability. How do you think a lawsuit against their former big pharma partner might influence prospective partners for either Afrezza, or Technosphere ? Additionally, they are still in negotiations with SNY with respect to the details of the current and near future situation with Afrezza. SNY knows that there is potential for another damaging lawsuit and hence should be motivated to cooperate. MNKD can leverage that into SNY continuing to fund ongoing trials, making near term milestone payments as part of a settlement etc. The time to consider a lawsuit would be after the Afrezza sales and distribution situation has been settled, not before then. SNY, in exchange for some of the above would, of course, be requesting a final settlement where MNKD foregoes any further legal remedies. I hope that Desisto is a better negotiator than Hakan proved to be. Who knows. Sanofi MIGHT offer a nice parting package in the form of money to make sure Mannkind doesn't pursue legal recourse.
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Post by pengiep on Jan 6, 2016 9:44:54 GMT -5
Yeah, and monkeys might fly out of my butt. SNY's goal from the outset was to destroy MNKD. We have yet to see if they will be successful in doing so. FWIW, I'm riding this into the ground or into the stratosphere.
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Post by mnkdmorelong on Jan 6, 2016 10:00:46 GMT -5
There are some assumptions there, but many of those are based on experience. (I work in the legal field). First, the jurisdiction would be in the U.S. The agreement was for U.S. rights, with options to continue on to other countries (which never occurred). So, the venue where the damages took place would be in the United States, thus a U.S. trial. It's why Genzyme filed their lawsuit in Manhattan. Second, you don't have to introduce evidence from another case. Where do you get that? You compare Afrezza to Lantus, Toujeo, or Praluent to make your points that it was starved of resources compared to other Sanofi drugs. The price was set by Sanofi, true. But a lawyer worth his salt could make the argument that the price was the primary factor in limiting sales and was set at a price that prevented it from market saturation. You explain that as the marketer, Sanofi had a responsibility to make every reasonable effort to market the drug appropriately and that setting the price point at a level that killed sales violated that stipulation of the contract. Civil trials are not like criminal ones. You don't have to prove anything beyond a reasonable doubt. All you have to prove is that Sanofi, more likely than not, failed to provide Afrezza with the resources and effort to make it commercially viable, as they promised. One look at TV/print/internet ads for their other products, insurance coverages, and their efforts at doctor education, and it's a slam dunk, at least to me. You'd be surprised how many attorneys would take a corporate breach of contract case with no retainer or fees until settlement. I'm content to keep waiting for my MNKD payday, just like I've waited for the past four years. It hasn't arrived. I could have sold in the 11's after the partnership but I didn't. Hind sight is always 20/20 but I still think there is intrinsic value in TS and Afrezza that hasn't been tapped yet. I have no specific experience with such cases but I wouldn't have thought that there would be many firms capable of handling a case like this willing to take it on a contingency fee basis. The costs and personnel commitment will be astronomical and, despite the puffery in this thread, recovery is not certain, at least as far as we can judge from our distant perspective. Assuming Sanofi breached its obligations under the contract, its very likely they covered their tracks very carefully in order to give plausible explanation for every decision they made. Let's face it, it's extraordinarily unlikely that Sanofi left itself openly and obviously subject to a breach of contract suit here.
If my assumptions are correct, then the real evaluation of the strength of the case can only happen after discovery is conducted. In turn, discovery can (generally) only be conducted after suit is filed. If there's a case against Sanofi here, it will almost certainly be established and proven primarily through document discovery of Sanofi's intra-company e-mails and memoranda-documents which cannot be obtained without first filing suit and undertaking the necessary discovery efforts to get them. Because a firm will not be able to adequately evaluate the case before some discovery is conducted, it is unlikely, in my opinion, that a firm would be willing to undertake the commitment of representation, knowing that thousands of man hours will be spent on the case, even if Mannkind agrees to cover costs and expenses of litigation.
Finally somebody with some sense! This Board is full of emotional investors who just want to get back at SNY for alleged failures to market or do their job. Lawsuits are not like Perry Mason (I am dating myself) who with a flourish presents a surprise witness at trial and wins the case. Far, far, from reality. Discovery is a powerful tool. But it is a procedurally driven plodding method to extract information. Think of an army platoon on their bellies crawling towards a target who is shooting at them. MNKD should focus on not going out of business before Afrezza blooms.
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Post by therealisaching on Jan 6, 2016 10:04:43 GMT -5
I don't typically post here, but I need to interject some reality into this fantasy. Currently, MNKD's priorities are survival, which means focusing on a sale, or a partnership for Afrezza and Technosphere. Once they get the stock price back up, the priority needs to be funding through profitability. How do you think a lawsuit against their former big pharma partner might influence prospective partners for either Afrezza, or Technosphere ? Additionally, they are still in negotiations with SNY with respect to the details of the current and near future situation with Afrezza. SNY knows that there is potential for another damaging lawsuit and hence should be motivated to cooperate. MNKD can leverage that into SNY continuing to fund ongoing trials, making near term milestone payments as part of a settlement etc. The time to consider a lawsuit would be after the Afrezza sales and distribution situation has been settled, not before then. SNY, in exchange for some of the above would, of course, be requesting a final settlement where MNKD foregoes any further legal remedies. I hope that Desisto is a better negotiator than Hakan proved to be. I've read many of the lawsuit posts & agree with much of this post. Litigation at this point with our fragile balance sheet isnt the best option. MNKD needs cash & to get its product back quickly. Negotiating a favorable exit, perhaps getting some additional milestone payments and/or debt forgiveness coupled with getting complete control over Afrezza as soon as possible is the best outcome IMHO.
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Post by hawaiiguy42 on Jan 6, 2016 10:19:08 GMT -5
if Sanofi is the Breaching Party and the breach is with respect to Sanofi’s failure to comply with its obligation to use Commercially Reasonable Efforts with respect to (x) the United States, MannKind may terminate this Agreement in its entirety, and (y) any Major Market (other than the United States) or […***…] Country, MannKind may terminate this Agreement only with respect to such Major Market or […***…] Country (as applicable) and not in its entirety. If the Breaching Party disputes in good faith that it has materially breached one of its obligations under this Agreement, termination shall not take effect pending resolution of such dispute pursuant to Article 14. If, as a result of the application of such dispute resolution procedures, the Breaching Party is determined to be in material breach of one or more of its obligations under this Agreement (an “Adverse Ruling”), then if the Breaching Party fails to complete the actions specified by the Adverse Ruling to cure such breach within ninety (90) days (or forty five (45) days for any payment breach) after such Adverse Ruling, then the Complaining Party may terminate this Agreement upon written notice to the Breaching Party. www.sec.gov/Archives/edgar/data/899460/000119312514406347/d783199dex101.htm1. Sny didn't start several post mktg studies on time, and filed to delay lung study. 2. Sny knew that superiority study was key to Tier placement but chose not to start it late 2014 and 2015 3. Intransigent on price resulting in poor mkt access 4. A few print Ads didn't cut it. No internet, Social media Ads let alone TV Ads. No NEJM articles. 5. Reasonable effort was defined as at least same effort as Sny's leading diabetes. AFZ mktg effort was far below that of Lantus, Toujeo, Apidra. 6. Mkt cap should increase significantly when Mnkd file a law suit for ~$2B. 7. Sny didn't even try to expand internationally. Many foreign countries have national health care, single payor systems. 8. No effort made to improve label. The potential law suit should entice a premium outright sale of AFZ franchise. Together with $1.5B dev tax loss credit, Mnkd is a very attractive acquisition target. Hmmmmmmm... www.fool.com/investing/general/2014/12/12/is-mannkind-corporation-in-bed-with-crooks-and-sho.aspx
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Post by iclaudius on Jan 6, 2016 12:13:25 GMT -5
if Sanofi is the Breaching Party and the breach is with respect to Sanofi’s failure to comply with its obligation to use Commercially Reasonable Efforts with respect to (x) the United States, MannKind may terminate this Agreement in its entirety, and (y) any Major Market (other than the United States) or […***…] Country, MannKind may terminate this Agreement only with respect to such Major Market or […***…] Country (as applicable) and not in its entirety. If the Breaching Party disputes in good faith that it has materially breached one of its obligations under this Agreement, termination shall not take effect pending resolution of such dispute pursuant to Article 14. If, as a result of the application of such dispute resolution procedures, the Breaching Party is determined to be in material breach of one or more of its obligations under this Agreement (an “Adverse Ruling”), then if the Breaching Party fails to complete the actions specified by the Adverse Ruling to cure such breach within ninety (90) days (or forty five (45) days for any payment breach) after such Adverse Ruling, then the Complaining Party may terminate this Agreement upon written notice to the Breaching Party. www.sec.gov/Archives/edgar/data/899460/000119312514406347/d783199dex101.htm1. Sny didn't start several post mktg studies on time, and filed to delay lung study. 2. Sny knew that superiority study was key to Tier placement but chose not to start it late 2014 and 2015 3. Intransigent on price resulting in poor mkt access 4. A few print Ads didn't cut it. No internet, Social media Ads let alone TV Ads. No NEJM articles. 5. Reasonable effort was defined as at least same effort as Sny's leading diabetes. AFZ mktg effort was far below that of Lantus, Toujeo, Apidra. 6. Mkt cap should increase significantly when Mnkd file a law suit for ~$2B. 7. Sny didn't even try to expand internationally. Many foreign countries have national health care, single payor systems. 8. No effort made to improve label. The potential law suit should entice a premium outright sale of AFZ franchise. Together with $1.5B dev tax loss credit, Mnkd is a very attractive acquisition target. It seems like the key line is "If the Breaching Party disputes in good faith that it has materially breached one of its obligations under this Agreement, termination shall not take effect pending resolution of such dispute pursuant to Article 14." As I recall MNKD agreed to submit all disputes to the "joint action committee," which had its own process for resolving them. That SNY would terminate the deal implies that either MNKD didn't offer any disputes or else whatever disputes were offered were settled. So the question is: did MNKD dispute anything that was not resolved to its satisfaction? If they never complained about what SNY was doing, then they likely wouldn't have much chance with a lawsuit.
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Post by kc on Jan 6, 2016 12:24:33 GMT -5
The company will be long into bankruptcy when this is litigated. not a great outcome today for shareholders.
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Post by matt on Jan 6, 2016 14:12:10 GMT -5
The key phrase in the license agreement is this:
15.15 Limitation of Liability. EXCEPT FOR LIABILITY FOR BREACH OF ARTICLE 8, NEITHER PARTY SHALL BE ENTITLED TO RECOVER FROM THE OTHER PARTY ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES IN CONNECTION WITH THIS AGREEMENT OR ANY LICENSE OR RIGHT GRANTED HEREUNDER
So that is what MNKD can recover in damages, zero. Be mad, beat the table if you want, scream about how much SNY sucks as a marketing partner, but MNKD management gave away the right to sue SNY for damages related to breach of the agreement (other than the confidentiality provisions). A claim by Mannkind to the contrary would not survive the defendants motion for summary judgment.
Big pharma has had enough deals blow up that they insist on such loss limitations, and if MNKD hadn't signed it then SNY never would have agreed to the deal in the first place. It is much the same with confidentiality agreements. Johnson & Johnson got tired of being sued by every piss-ant inventor that thought J&J stole his idea that they made a corporate decision to not sign any confidentiality agreements, period. If you don't like that, too bad, J&J will forego looking at your idea. As soon as J&J did that, most of the industry followed suit and quit signing confidentiality agreements unless discussions were well advanced. That is just the way it is.
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Post by ricguy on Jan 6, 2016 14:21:08 GMT -5
The key phrase in the license agreement is this:
15.15 Limitation of Liability. EXCEPT FOR LIABILITY FOR BREACH OF ARTICLE 8, NEITHER PARTY SHALL BE ENTITLED TO RECOVER FROM THE OTHER PARTY ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES IN CONNECTION WITH THIS AGREEMENT OR ANY LICENSE OR RIGHT GRANTED HEREUNDER
So that is what MNKD can recover in damages, zero. Be mad, beat the table if you want, scream about how much SNY sucks as a marketing partner, but MNKD management gave away the right to sue SNY for damages related to breach of the agreement (other than the confidentiality provisions). A claim by Mannkind to the contrary would not survive the defendants motion for summary judgment.
Big pharma has had enough deals blow up that they insist on such loss limitations, and if MNKD hadn't signed it then SNY never would have agreed to the deal in the first place. It is much the same with confidentiality agreements. Johnson & Johnson got tired of being sued by every piss-ant inventor that thought J&J stole his idea that they made a corporate decision to not sign any confidentiality agreements, period. If you don't like that, too bad, J&J will forego looking at your idea. As soon as J&J did that, most of the industry followed suit and quit signing confidentiality agreements unless discussions were well advanced. That is just the way it is. Is that you Matt? ;-)
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Post by silentknight on Jan 6, 2016 15:01:41 GMT -5
The key phrase in the license agreement is this:
15.15 Limitation of Liability. EXCEPT FOR LIABILITY FOR BREACH OF ARTICLE 8, NEITHER PARTY SHALL BE ENTITLED TO RECOVER FROM THE OTHER PARTY ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES IN CONNECTION WITH THIS AGREEMENT OR ANY LICENSE OR RIGHT GRANTED HEREUNDER
So that is what MNKD can recover in damages, zero. Be mad, beat the table if you want, scream about how much SNY sucks as a marketing partner, but MNKD management gave away the right to sue SNY for damages related to breach of the agreement (other than the confidentiality provisions). A claim by Mannkind to the contrary would not survive the defendants motion for summary judgment.
Big pharma has had enough deals blow up that they insist on such loss limitations, and if MNKD hadn't signed it then SNY never would have agreed to the deal in the first place. It is much the same with confidentiality agreements. Johnson & Johnson got tired of being sued by every piss-ant inventor that thought J&J stole his idea that they made a corporate decision to not sign any confidentiality agreements, period. If you don't like that, too bad, J&J will forego looking at your idea. As soon as J&J did that, most of the industry followed suit and quit signing confidentiality agreements unless discussions were well advanced. That is just the way it is. True, but if there was a suit, it would most likely be for liabilities of a material breach of said Article 8, meaning they could in fact recover damages if they were awarded judgment. I'm sure Genzyme had a similar provision in their contract, yet they filed suit. Granted it hasn't progressed past the filing but I'll be curious to see how it turns out. But your post makes another point. This partnership contract was BAD. I can't believe anyone would agree to the stipulations. The more you read, the worse it is. Even if they don't sue, we should be grateful to be out from under it.
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Post by wmdhunt on Jan 6, 2016 16:07:01 GMT -5
Bad Faith performance of contractual obligations and intentional harm are recoverable regardless of contract terminology. Good Faith and Commercial Reasonableness means you can't contract away bad conduct, fraud, intentional harm, deceit, etc.
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