Post by silentbob on Mar 4, 2014 19:11:46 GMT -5
Hi guys! Good to see so many of you old-timers stuck around!
Sorry for being so 'silent' - but I started to really dislike the yahoo board, and the agoracom board was not an improvement mostly due the OPC persona in charge.
This seems like a nice place though!
I just wanted to clear up some issues about the new Deerfield transaction.
This is just my interpretation and I didn't dig very deeply, so comments are welcome!
1) Deerfield gets: the right to convert another $60 million.
They can use this to do one of the following trades (as far as we know)
- The risk-off trade : They convert the full $60m, and sell on the open market. They now have significantly less exposure in case of a rejection.
The outstanding and new notes issued to DF on approval will still be up to $150m though, still giving them a nice ROI.
- Risk-on: They convert and stay long through PDUFA. This implies they really like risk. Not sure if that is DF's style, does anybody have any idea about their investment history?
- A combination of the above - reducing some risk but not all.
- No conversion. This seems unlikely; why would they sign this contract at this time if not for conversion rights?
My best guess; they will risk-off at least partly. If they wanted shares that bad they could have bought loads before the runup.
It's just a guess though.
2) Mannkind gets
- If approval, up to $90m in additional notes issued to DF, in addition to the $40m agreed before.
- If no approval, up to $20m in additional notes issued to DF.
In my View, Mannkind didn't get a great deal. This is 10 million shares in dilution, and we only get $90m in additional funds if approval.
I'm sure just issuing the shares after approval/partnership would get that amount. And the $20m on non-approval is just 6 weeks cash burn!
Still, some past cash raises were a lot worse so this is a major improvement.
I also like the ATM style raises.
My guess is they tap the ATM before PDUFA date to hedge against a delay, that would explain why they only negotiated for $20m from DF on a CRL.
Sorry for being so 'silent' - but I started to really dislike the yahoo board, and the agoracom board was not an improvement mostly due the OPC persona in charge.
This seems like a nice place though!
I just wanted to clear up some issues about the new Deerfield transaction.
This is just my interpretation and I didn't dig very deeply, so comments are welcome!
1) Deerfield gets: the right to convert another $60 million.
They can use this to do one of the following trades (as far as we know)
- The risk-off trade : They convert the full $60m, and sell on the open market. They now have significantly less exposure in case of a rejection.
The outstanding and new notes issued to DF on approval will still be up to $150m though, still giving them a nice ROI.
- Risk-on: They convert and stay long through PDUFA. This implies they really like risk. Not sure if that is DF's style, does anybody have any idea about their investment history?
- A combination of the above - reducing some risk but not all.
- No conversion. This seems unlikely; why would they sign this contract at this time if not for conversion rights?
My best guess; they will risk-off at least partly. If they wanted shares that bad they could have bought loads before the runup.
It's just a guess though.
2) Mannkind gets
- If approval, up to $90m in additional notes issued to DF, in addition to the $40m agreed before.
- If no approval, up to $20m in additional notes issued to DF.
In my View, Mannkind didn't get a great deal. This is 10 million shares in dilution, and we only get $90m in additional funds if approval.
I'm sure just issuing the shares after approval/partnership would get that amount. And the $20m on non-approval is just 6 weeks cash burn!
Still, some past cash raises were a lot worse so this is a major improvement.
I also like the ATM style raises.
My guess is they tap the ATM before PDUFA date to hedge against a delay, that would explain why they only negotiated for $20m from DF on a CRL.
