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Post by Deleted on Jan 12, 2016 10:46:37 GMT -5
Techno sphere is currently worth nothing. How can you give it any value? There is no partner or product. It's a fairy tale until then. Afrezza is currently worth nothing bc scripts are so poor.
Yes and what about the value of the NBI index ? I am following other companies too and shocked about today MNKD value. KYTH with an approved drug (obesity), far from the market and much more far then Afrezza for beeing a blockbuster: sold recently just after FDA approval for 2,1 Billion $ (no pipeline; only 1 drug) OMER another company I am following. 1 product recently approved (200-300 million forecast sales in 3 years... then no increase as the market is limited here) and actually with problems to start selling: 420 million (PS OMER has a pipeline but the other products are very far from FDA approval) ADMS a good product quite concluded its phase 3: 430 Million INO a very promised technology (I believe everyone knows INO): 386 Million
I believe the list can be much and much higher !
Now think about MNKD: 1 approved product; difficulties to penetrate the market but not because the product is not good/appreciated; just only because too much income from the basal and so not the first choice to sell from a sales force with basal in their portfolio too. 1 pipeline that can, in 3-4 years, produce products each one in a blockbuster market. around 67 cents / around 280 million.
Even shorters are silent now ! Crazy thread ! Crazy situation !
This is all I currently see. Ive let emotion allow me to go down 80% and from here on out I am only looking at the facts.
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Post by matt on Jan 12, 2016 11:55:42 GMT -5
I spent many years doing M&A for a large healthcare company. While all your perspectives have merit on some level, that is now how acquisition discussions proceed in the real world (for better or worse). What matters above all to many publicly traded companies is the effect an acquisition has on their near-term income statement. Most companies will gladly absorb an acquisition that dilutes their income for a year to eighteen months, but after that the deal had better be neutral or accretive to earnings. You can criticize that view and say that is no way to run a company, and much of the time I won't disagree with you, but Wall Street analysts will absolutely crucify CEOs that willingly sign up for more than a few quarters of dilution for their shareholders. A big issue with MNKD is that it is not income positive, and needs a lot more time and investment in sales and marketing to get income positive. Somebody at Sanofi looked at the portfolio and recommended pruning Afrezza to help improve Sanofi earnings and frankly, from that perspective, it was the right call.
So why do pharmas invest billions in research yet shy away from acquiring wounded but potentially fixable companies like MNKD? It is all about the accounting. If I have a drug in development burning cash on lab experiments, clinical trials, and regulatory filings those all get classified as R&D. Analysts look at R&D differently than they do other expenses and their focus is most often on gross margin less selling and administrative expenses, essentially operating margin without R&D included. Everyone points to MNKD and says how wonderful it is that the drug is FDA approved, but that very approval means that future expenditures to develop the market are selling and marketing expenses. If the acquiring company is more concerned about their short-term operating results than their long-term results this is not a positive from an acquisition standpoint.
When I wasn't doing M&A work, I was managing the company's product portfolio. That determined, in part, what technologies we bought, what business units we divested, and where we placed our research dollars. My analysts did Monte Carlo simulations by the hundreds. Eventually it all comes down to maximizing the overall portfolio of products and technologies. In many cases the perceived benefit of investing in Alzheimer's research, pancreatic cancer research, or a non-addictive pain medication will look better on a portfolio analysis than acquiring a company like MNKD. For the reasons I stated above, that will be the case for many companies in the industry and why MNKD will be a hard sell as a buyout. The best bet, in my opinion, is a new partnership deal. I won't be with the likes of an established global player like Sanofi, but a non-US regional player trying to accumulate enough critical mass to enter the US market in a serious way. There are a few of those that might look at the opportunity through a different lens than a Wall Street analyst and that is what MNKD needs at the moment.
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Post by dpca10 on Jan 12, 2016 12:10:49 GMT -5
Wow, great reply, very interesting. Thanks Matt
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Post by mnkdfann on Jan 12, 2016 12:17:49 GMT -5
Is there any chance that Al is just as pissed as we are that he's been screwed at every turn and is going to fund this thing (or buy it outright) until it is the success we all know it can be? Considering he most likely doesn't have many years of life left and this is his 'swan song' so to speak, even named after him, I'd think he'd do everything to make it a success. Go out with a bang not a whimper. I'm just speculating obviously but something to think about. People have been saying this for years. Yes, it could be. It could also be, that after seeing so much of his money and effort largely wasted, that he wants to focus more on one of his other legacy ventures (like Second Sight) or some charitable foundation, something that will give him a better return for his money and his limited time left.
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Post by james on Jan 12, 2016 13:13:02 GMT -5
I spent many years doing M&A for a large healthcare company. While all your perspectives have merit on some level, that is now how acquisition discussions proceed in the real world (for better or worse). What matters above all to many publicly traded companies is the effect an acquisition has on their near-term income statement. Most companies will gladly absorb an acquisition that dilutes their income for a year to eighteen months, but after that the deal had better be neutral or accretive to earnings. You can criticize that view and say that is no way to run a company, and much of the time I won't disagree with you, but Wall Street analysts will absolutely crucify CEOs that willingly sign up for more than a few quarters of dilution for their shareholders. A big issue with MNKD is that it is not income positive, and needs a lot more time and investment in sales and marketing to get income positive. Somebody at Sanofi looked at the portfolio and recommended pruning Afrezza to help improve Sanofi earnings and frankly, from that perspective, it was the right call. So why do pharmas invest billions in research yet shy away from acquiring wounded but potentially fixable companies like MNKD? It is all about the accounting. If I have a drug in development burning cash on lab experiments, clinical trials, and regulatory filings those all get classified as R&D. Analysts look at R&D differently than they do other expenses and their focus is most often on gross margin less selling and administrative expenses, essentially operating margin without R&D included. Everyone points to MNKD and says how wonderful it is that the drug is FDA approved, but that very approval means that future expenditures to develop the market are selling and marketing expenses. If the acquiring company is more concerned about their short-term operating results than their long-term results this is not a positive from an acquisition standpoint. When I wasn't doing M&A work, I was managing the company's product portfolio. That determined, in part, what technologies we bought, what business units we divested, and where we placed our research dollars. My analysts did Monte Carlo simulations by the hundreds. Eventually it all comes down to maximizing the overall portfolio of products and technologies. In many cases the perceived benefit of investing in Alzheimer's research, pancreatic cancer research, or a non-addictive pain medication will look better on a portfolio analysis than acquiring a company like MNKD. For the reasons I stated above, that will be the case for many companies in the industry and why MNKD will be a hard sell as a buyout. The best bet, in my opinion, is a new partnership deal. I won't be with the likes of an established global player like Sanofi, but a non-US regional player trying to accumulate enough critical mass to enter the US market in a serious way. There are a few of those that might look at the opportunity through a different lens than a Wall Street analyst and that is what MNKD needs at the moment. Matt - thanks for your response. In my NPV estimates of an Afrezza venture, I see operational break even being reached after 3 years and possibly 4. However, operational losses become fairly negligible at around 24 months. The TS activities would go to R&D of course, so it fits your criteria. "Eventually it all comes down to maximizing the overall portfolio of products and technologies."
This is a great point, I don't know who may be willing to purchase or partner with MNKD, but it is probably not a company with a major basal or RAA franchise.
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Post by lakers on Jan 12, 2016 13:14:35 GMT -5
Signing up w/ regional players was Mnkd game plan before the Sanofi deal. This is more diversifying lest one partner terminates. Mnkd may fall back to the original plan.
Griffins also said the same thing.
Sanofi publically promised Second Afrezza Launch. They can be pinned down for that.
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Deleted
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Post by Deleted on Jan 12, 2016 13:17:29 GMT -5
Signing up w/ regional players was Mnkd game plan before the Sanofi deal. This is more diversifying lest one partner terminates. Mnkd may fall back to the original plan. Griffins also said the same thing. Sanofi publically promised Second Afrezza Launch. They can be pinned down for that. Regional players? I keep hearing about them ... but any names out there? Does it mean regional marketing/distributing/payer negotiating companies?
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Post by compound26 on Jan 12, 2016 14:10:29 GMT -5
I spent many years doing M&A for a large healthcare company. While all your perspectives have merit on some level, that is now how acquisition discussions proceed in the real world (for better or worse). What matters above all to many publicly traded companies is the effect an acquisition has on their near-term income statement. Most companies will gladly absorb an acquisition that dilutes their income for a year to eighteen months, but after that the deal had better be neutral or accretive to earnings. You can criticize that view and say that is no way to run a company, and much of the time I won't disagree with you, but Wall Street analysts will absolutely crucify CEOs that willingly sign up for more than a few quarters of dilution for their shareholders. A big issue with MNKD is that it is not income positive, and needs a lot more time and investment in sales and marketing to get income positive. Somebody at Sanofi looked at the portfolio and recommended pruning Afrezza to help improve Sanofi earnings and frankly, from that perspective, it was the right call. So why do pharmas invest billions in research yet shy away from acquiring wounded but potentially fixable companies like MNKD? It is all about the accounting. If I have a drug in development burning cash on lab experiments, clinical trials, and regulatory filings those all get classified as R&D. Analysts look at R&D differently than they do other expenses and their focus is most often on gross margin less selling and administrative expenses, essentially operating margin without R&D included. Everyone points to MNKD and says how wonderful it is that the drug is FDA approved, but that very approval means that future expenditures to develop the market are selling and marketing expenses. If the acquiring company is more concerned about their short-term operating results than their long-term results this is not a positive from an acquisition standpoint. When I wasn't doing M&A work, I was managing the company's product portfolio. That determined, in part, what technologies we bought, what business units we divested, and where we placed our research dollars. My analysts did Monte Carlo simulations by the hundreds. Eventually it all comes down to maximizing the overall portfolio of products and technologies. In many cases the perceived benefit of investing in Alzheimer's research, pancreatic cancer research, or a non-addictive pain medication will look better on a portfolio analysis than acquiring a company like MNKD. For the reasons I stated above, that will be the case for many companies in the industry and why MNKD will be a hard sell as a buyout. The best bet, in my opinion, is a new partnership deal. I won't be with the likes of an established global player like Sanofi, but a non-US regional player trying to accumulate enough critical mass to enter the US market in a serious way. There are a few of those that might look at the opportunity through a different lens than a Wall Street analyst and that is what MNKD needs at the moment. Matt - thanks for your response. In my NPV estimates of an Afrezza venture, I see operational break even being reached after 3 years and possibly 4. However, operational losses become fairly negligible at around 24 months. The TS activities would go to R&D of course, so it fits your criteria. "Eventually it all comes down to maximizing the overall portfolio of products and technologies."
This is a great point, I don't know who may be willing to purchase or partner with MNKD, but it is probably not a company with a major basal or RAA franchise. James, agree with you. I think if Mannkind can find a way to survive through 2017, then we are back.
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Dartman
Newbie
Posts: 24
Sentiment: Way Too Long
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Post by Dartman on Jan 12, 2016 14:53:02 GMT -5
I spent many years doing M&A for a large healthcare company. While all your perspectives have merit on some level, that is now how acquisition discussions proceed in the real world (for better or worse). What matters above all to many publicly traded companies is the effect an acquisition has on their near-term income statement. Most companies will gladly absorb an acquisition that dilutes their income for a year to eighteen months, but after that the deal had better be neutral or accretive to earnings. You can criticize that view and say that is no way to run a company, and much of the time I won't disagree with you, but Wall Street analysts will absolutely crucify CEOs that willingly sign up for more than a few quarters of dilution for their shareholders. A big issue with MNKD is that it is not income positive, and needs a lot more time and investment in sales and marketing to get income positive. Somebody at Sanofi looked at the portfolio and recommended pruning Afrezza to help improve Sanofi earnings and frankly, from that perspective, it was the right call. So why do pharmas invest billions in research yet shy away from acquiring wounded but potentially fixable companies like MNKD? It is all about the accounting. If I have a drug in development burning cash on lab experiments, clinical trials, and regulatory filings those all get classified as R&D. Analysts look at R&D differently than they do other expenses and their focus is most often on gross margin less selling and administrative expenses, essentially operating margin without R&D included. Everyone points to MNKD and says how wonderful it is that the drug is FDA approved, but that very approval means that future expenditures to develop the market are selling and marketing expenses. If the acquiring company is more concerned about their short-term operating results than their long-term results this is not a positive from an acquisition standpoint. When I wasn't doing M&A work, I was managing the company's product portfolio. That determined, in part, what technologies we bought, what business units we divested, and where we placed our research dollars. My analysts did Monte Carlo simulations by the hundreds. Eventually it all comes down to maximizing the overall portfolio of products and technologies. In many cases the perceived benefit of investing in Alzheimer's research, pancreatic cancer research, or a non-addictive pain medication will look better on a portfolio analysis than acquiring a company like MNKD. For the reasons I stated above, that will be the case for many companies in the industry and why MNKD will be a hard sell as a buyout. The best bet, in my opinion, is a new partnership deal. I won't be with the likes of an established global player like Sanofi, but a non-US regional player trying to accumulate enough critical mass to enter the US market in a serious way. There are a few of those that might look at the opportunity through a different lens than a Wall Street analyst and that is what MNKD needs at the moment. Matt - thanks for your response. In my NPV estimates of an Afrezza venture, I see operational break even being reached after 3 years and possibly 4. However, operational losses become fairly negligible at around 24 months. The TS activities would go to R&D of course, so it fits your criteria. "Eventually it all comes down to maximizing the overall portfolio of products and technologies."
This is a great point, I don't know who may be willing to purchase or partner with MNKD, but it is probably not a company with a major basal or RAA franchise. Where does the carry-forward loss of $2B fit in that analysis?
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Post by dudley on Jan 12, 2016 15:28:19 GMT -5
I spent many years doing M&A for a large healthcare company. While all your perspectives have merit on some level, that is now how acquisition discussions proceed in the real world (for better or worse). What matters above all to many publicly traded companies is the effect an acquisition has on their near-term income statement. Most companies will gladly absorb an acquisition that dilutes their income for a year to eighteen months, but after that the deal had better be neutral or accretive to earnings. You can criticize that view and say that is no way to run a company, and much of the time I won't disagree with you, but Wall Street analysts will absolutely crucify CEOs that willingly sign up for more than a few quarters of dilution for their shareholders. A big issue with MNKD is that it is not income positive, and needs a lot more time and investment in sales and marketing to get income positive. Somebody at Sanofi looked at the portfolio and recommended pruning Afrezza to help improve Sanofi earnings and frankly, from that perspective, it was the right call. So why do pharmas invest billions in research yet shy away from acquiring wounded but potentially fixable companies like MNKD? It is all about the accounting. If I have a drug in development burning cash on lab experiments, clinical trials, and regulatory filings those all get classified as R&D. Analysts look at R&D differently than they do other expenses and their focus is most often on gross margin less selling and administrative expenses, essentially operating margin without R&D included. Everyone points to MNKD and says how wonderful it is that the drug is FDA approved, but that very approval means that future expenditures to develop the market are selling and marketing expenses. If the acquiring company is more concerned about their short-term operating results than their long-term results this is not a positive from an acquisition standpoint. When I wasn't doing M&A work, I was managing the company's product portfolio. That determined, in part, what technologies we bought, what business units we divested, and where we placed our research dollars. My analysts did Monte Carlo simulations by the hundreds. Eventually it all comes down to maximizing the overall portfolio of products and technologies. In many cases the perceived benefit of investing in Alzheimer's research, pancreatic cancer research, or a non-addictive pain medication will look better on a portfolio analysis than acquiring a company like MNKD. For the reasons I stated above, that will be the case for many companies in the industry and why MNKD will be a hard sell as a buyout. The best bet, in my opinion, is a new partnership deal. I won't be with the likes of an established global player like Sanofi, but a non-US regional player trying to accumulate enough critical mass to enter the US market in a serious way. There are a few of those that might look at the opportunity through a different lens than a Wall Street analyst and that is what MNKD needs at the moment. I agree with many of these points IF a buyout was a serious option. Perhaps a Japanese company, where they actually manage for the long term and not the quarterly obsession would be a better candidate. I personally see a buyout as idle speculation simply because I do not accept that Al Mann is ready to sell. This is his legacy, his life's fortune we are talking about. Only 11 months on the market and demonstrating the life-changing promise he always thought would be there and you all think Al is ready to sell? Only as a very, very last resort when it is completely clear Afrezza is just not going to make it. I simply cannot see a buyout happening before then. Again, things are vastly more advanced now than they were upon FDA approval. The superiority has been clearly demonstrated in the real world, if not officially validated in clinical trials yet. As George Rho and others have pointed out the balance sheet is actually BETTER now than it was before Sanofi signed. So we have a better balance sheet, a now-proven superior product and a much higher awareness level than there was before Sanofi when there were multiple interested parties. I repeat , it seems quite rational that potential partners are even MORE interested now. Anyone seriously thinking that Al would consider selling the business anytime soon just has not done their homework on the man. All of this is only my opinion of course and it appears there are more opinions than there are shares of MNKD stock.
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ray
Newbie
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Post by ray on Jan 12, 2016 15:32:11 GMT -5
I spent many years doing M&A for a large healthcare company. While all your perspectives have merit on some level, that is now how acquisition discussions proceed in the real world (for better or worse). What matters above all to many publicly traded companies is the effect an acquisition has on their near-term income statement. Most companies will gladly absorb an acquisition that dilutes their income for a year to eighteen months, but after that the deal had better be neutral or accretive to earnings. You can criticize that view and say that is no way to run a company, and much of the time I won't disagree with you, but Wall Street analysts will absolutely crucify CEOs that willingly sign up for more than a few quarters of dilution for their shareholders. A big issue with MNKD is that it is not income positive, and needs a lot more time and investment in sales and marketing to get income positive. Somebody at Sanofi looked at the portfolio and recommended pruning Afrezza to help improve Sanofi earnings and frankly, from that perspective, it was the right call. So why do pharmas invest billions in research yet shy away from acquiring wounded but potentially fixable companies like MNKD? It is all about the accounting. If I have a drug in development burning cash on lab experiments, clinical trials, and regulatory filings those all get classified as R&D. Analysts look at R&D differently than they do other expenses and their focus is most often on gross margin less selling and administrative expenses, essentially operating margin without R&D included. Everyone points to MNKD and says how wonderful it is that the drug is FDA approved, but that very approval means that future expenditures to develop the market are selling and marketing expenses. If the acquiring company is more concerned about their short-term operating results than their long-term results this is not a positive from an acquisition standpoint. When I wasn't doing M&A work, I was managing the company's product portfolio. That determined, in part, what technologies we bought, what business units we divested, and where we placed our research dollars. My analysts did Monte Carlo simulations by the hundreds. Eventually it all comes down to maximizing the overall portfolio of products and technologies. In many cases the perceived benefit of investing in Alzheimer's research, pancreatic cancer research, or a non-addictive pain medication will look better on a portfolio analysis than acquiring a company like MNKD. For the reasons I stated above, that will be the case for many companies in the industry and why MNKD will be a hard sell as a buyout. The best bet, in my opinion, is a new partnership deal. I won't be with the likes of an established global player like Sanofi, but a non-US regional player trying to accumulate enough critical mass to enter the US market in a serious way. There are a few of those that might look at the opportunity through a different lens than a Wall Street analyst and that is what MNKD needs at the moment. I agree with many of these points IF a buyout was a serious option. Perhaps a Japanese company, where they actually manage for the long term and not the quarterly obsession would be a better candidate. I personally see a buyout as idle speculation simply because I do not accept that Al Mann is ready to sell. This is his legacy, his life's fortune we are talking about. Only 11 months on the market and demonstrating the life-changing promise he always thought would be there and you all think Al is ready to sell? Only as a very, very last resort when it is completely clear Afrezza is just not going to make it. I simply cannot see a buyout happening before then. Again, things are vastly more advanced now than they were upon FDA approval. The superiority has been clearly demonstrated in the real world, if not officially validated in clinical trials yet. As George Rho and others have pointed out the balance sheet is actually BETTER now than it was before Sanofi signed. So we have a better balance sheet, a now-proven superior product and a much higher awareness level than there was before Sanofi when there were multiple interested parties. I repeat , it seems quite rational that potential partners are even MORE interested now. Anyone seriously thinking that Al would consider selling the business anytime soon just has not done their homework on the man. All of this is only my opinion of course and it appears there are more opinions than there are shares of MNKD stock. I respect your thoughts Dudley, but what happens if Mr. Mann should pass? My apologies if this has already been discussed on the board.
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Post by dudley on Jan 12, 2016 15:57:22 GMT -5
I agree with many of these points IF a buyout was a serious option. Perhaps a Japanese company, where they actually manage for the long term and not the quarterly obsession would be a better candidate. I personally see a buyout as idle speculation simply because I do not accept that Al Mann is ready to sell. This is his legacy, his life's fortune we are talking about. Only 11 months on the market and demonstrating the life-changing promise he always thought would be there and you all think Al is ready to sell? Only as a very, very last resort when it is completely clear Afrezza is just not going to make it. I simply cannot see a buyout happening before then. Again, things are vastly more advanced now than they were upon FDA approval. The superiority has been clearly demonstrated in the real world, if not officially validated in clinical trials yet. As George Rho and others have pointed out the balance sheet is actually BETTER now than it was before Sanofi signed. So we have a better balance sheet, a now-proven superior product and a much higher awareness level than there was before Sanofi when there were multiple interested parties. I repeat , it seems quite rational that potential partners are even MORE interested now. Anyone seriously thinking that Al would consider selling the business anytime soon just has not done their homework on the man. All of this is only my opinion of course and it appears there are more opinions than there are shares of MNKD stock. I respect your thoughts Dudley, but what happens if Mr. Mann should pass? My apologies if this has already been discussed on the board. What happens if he DOESN'T pass? I'm sure he's made it clear to all in the company he wants to see it through, not sell - unknown if there are any clauses for the estate on the situation. Matt's been part of it all and very close to Al for years. I'm betting that Matt has the same thoughts as Al, knowing that Afrezza is a game-changer and much more interested in seeing it through to full potential and keeping it all in the company rather than crying and selling now just because Sanofi screwed them royally. It's all a crapshoot for sure from here but I just can't see them selling this early. The game is still very much on and until it is clearly OFF they won't sell.
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Post by mnkdmorelong on Jan 12, 2016 16:28:00 GMT -5
I spent many years doing M&A for a large healthcare company. While all your perspectives have merit on some level, that is now how acquisition discussions proceed in the real world (for better or worse). What matters above all to many publicly traded companies is the effect an acquisition has on their near-term income statement. Most companies will gladly absorb an acquisition that dilutes their income for a year to eighteen months, but after that the deal had better be neutral or accretive to earnings. You can criticize that view and say that is no way to run a company, and much of the time I won't disagree with you, but Wall Street analysts will absolutely crucify CEOs that willingly sign up for more than a few quarters of dilution for their shareholders. A big issue with MNKD is that it is not income positive, and needs a lot more time and investment in sales and marketing to get income positive. Somebody at Sanofi looked at the portfolio and recommended pruning Afrezza to help improve Sanofi earnings and frankly, from that perspective, it was the right call. So why do pharmas invest billions in research yet shy away from acquiring wounded but potentially fixable companies like MNKD? It is all about the accounting. If I have a drug in development burning cash on lab experiments, clinical trials, and regulatory filings those all get classified as R&D. Analysts look at R&D differently than they do other expenses and their focus is most often on gross margin less selling and administrative expenses, essentially operating margin without R&D included. Everyone points to MNKD and says how wonderful it is that the drug is FDA approved, but that very approval means that future expenditures to develop the market are selling and marketing expenses. If the acquiring company is more concerned about their short-term operating results than their long-term results this is not a positive from an acquisition standpoint. When I wasn't doing M&A work, I was managing the company's product portfolio. That determined, in part, what technologies we bought, what business units we divested, and where we placed our research dollars. My analysts did Monte Carlo simulations by the hundreds. Eventually it all comes down to maximizing the overall portfolio of products and technologies. In many cases the perceived benefit of investing in Alzheimer's research, pancreatic cancer research, or a non-addictive pain medication will look better on a portfolio analysis than acquiring a company like MNKD. For the reasons I stated above, that will be the case for many companies in the industry and why MNKD will be a hard sell as a buyout. The best bet, in my opinion, is a new partnership deal. I won't be with the likes of an established global player like Sanofi, but a non-US regional player trying to accumulate enough critical mass to enter the US market in a serious way. There are a few of those that might look at the opportunity through a different lens than a Wall Street analyst and that is what MNKD needs at the moment. In some cases companies buy assets not the entire business. In this scenario, the transaction is a balance sheet event. Moreover the "window" to close the transaction could be a year from the acquisition date. Some of the sales and marketing expense for the first year can be considered part of the acquisition cost and be capitalized rather than pass onto the income statement. Wouldn't this accounting method help a buyout scenario?
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Post by blindhog1 on Jan 12, 2016 16:58:01 GMT -5
Now think about MNKD: 1 approved product; difficulties to penetrate the market but not because the product is not good/appreciated; just only because too much income from the basal and so not the first choice to sell from a sales force with basal in their portfolio too. 1 pipeline that can, in 3-4 years, produce products each one in a blockbuster market. around 67 cents / around 280 million.
Even shorters are silent now ! Crazy thread ! Crazy situation !
This is all I currently see. Ive let emotion allow me to go down 80% and from here on out I am only looking at the facts. reverselo, I don't mean to be critical, but you're beginning to sound like my ex-wife.
Why don't you listen to the JPM Conference tomorrow...then decide how you want to act. It'll give you a chance to make a better decision and give the rest of us a break.
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Post by bill on Jan 12, 2016 17:04:58 GMT -5
I spent many years doing M&A for a large healthcare company. While all your perspectives have merit on some level, that is now how acquisition discussions proceed in the real world (for better or worse). What matters above all to many publicly traded companies is the effect an acquisition has on their near-term income statement. Most companies will gladly absorb an acquisition that dilutes their income for a year to eighteen months, but after that the deal had better be neutral or accretive to earnings. You can criticize that view and say that is no way to run a company, and much of the time I won't disagree with you, but Wall Street analysts will absolutely crucify CEOs that willingly sign up for more than a few quarters of dilution for their shareholders. A big issue with MNKD is that it is not income positive, and needs a lot more time and investment in sales and marketing to get income positive. Somebody at Sanofi looked at the portfolio and recommended pruning Afrezza to help improve Sanofi earnings and frankly, from that perspective, it was the right call. So why do pharmas invest billions in research yet shy away from acquiring wounded but potentially fixable companies like MNKD? It is all about the accounting. If I have a drug in development burning cash on lab experiments, clinical trials, and regulatory filings those all get classified as R&D. Analysts look at R&D differently than they do other expenses and their focus is most often on gross margin less selling and administrative expenses, essentially operating margin without R&D included. Everyone points to MNKD and says how wonderful it is that the drug is FDA approved, but that very approval means that future expenditures to develop the market are selling and marketing expenses. If the acquiring company is more concerned about their short-term operating results than their long-term results this is not a positive from an acquisition standpoint. When I wasn't doing M&A work, I was managing the company's product portfolio. That determined, in part, what technologies we bought, what business units we divested, and where we placed our research dollars. My analysts did Monte Carlo simulations by the hundreds. Eventually it all comes down to maximizing the overall portfolio of products and technologies. In many cases the perceived benefit of investing in Alzheimer's research, pancreatic cancer research, or a non-addictive pain medication will look better on a portfolio analysis than acquiring a company like MNKD. For the reasons I stated above, that will be the case for many companies in the industry and why MNKD will be a hard sell as a buyout. The best bet, in my opinion, is a new partnership deal. I won't be with the likes of an established global player like Sanofi, but a non-US regional player trying to accumulate enough critical mass to enter the US market in a serious way. There are a few of those that might look at the opportunity through a different lens than a Wall Street analyst and that is what MNKD needs at the moment. matt I can't see any reason why Afrezza couldn't be accretive to someone's balance sheet within 18 months if the partner chose to cut prices to gain better insurance coverage, ensured access to spirometers, and aggressively marketed and educated physicians and PWDs about Afrezza via the web, social media, and TV. While it would be nice to have a sales force it seems to me it is an inefficient and high cost way to generate prescriptions. Once you know patients will love it, you can look for exponential growth once awareness and adoption reaches a tipping point. The partner would still have to shoulder the burden of the long term lung study, but perhaps that can be postponed for 6 months to a year. In the meantime if the pediatric study results are positive, that opens the door for a whole new avenue of marketing. Who needs a better label if Afrezza is safe for children?
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