|
|
Post by mnkdmorelong on Jan 13, 2016 20:15:22 GMT -5
All longs should be pleased with the show Matt put on. He laid it out in detail warts and all.
MNKD plans to have a skeleton sales force in the US. Most to the heavy lifting will be via social media and Diabetic clinics. The issue is that without a sales call, doctors listen to other reps like SNY and NVO. But without cash MNKD cannot field a sales force.
Maybe most of the sales in the next year will be overseas at low GM.
MNKD has only themselves to blame for the premium price set by SNY. They must have known about it before they signed the contract.
|
|
|
|
Post by james on Jan 13, 2016 20:29:12 GMT -5
I agree, as optimistic as the new roadmap is, there is significant risk and cannot be done with zero sales force. So, some expense for a sales force (and reimbursement specialists to negotiate with payers), etc. must be expected and where those dollars come from is not yet known. Matt gave little detail here.
There was a discussion about Deerfield that was cut off quite quickly - perhaps MNKD would intend to sell some revenue rights to Deerfield (or similar) for near term cash to pursue this strategy. I'm probably making that up from nothing and I don't know if I like it, but I got a brief sniff of that in between what was said. Deal with the devil if you ask me; I'd sooner have dilution at the first reasonable opportunity. Hopefully, there is some parting SNY money (Al loan extension was not brought up) or enough to come in an international rights deal to forestall going down the Deerfield road any farther.
Quick overseas expansion does not address the need for revenues to cover the $90M core burn rate. But it could certainly cover fixed Afrezza costs and prevent the more serious issue of having to bring on new Afrezza expenditures impacting cash flows.
The whole SNY pricing thing will remain a mystery I am afraid. I find it hard to believe they would sign a contract knowing where this would land. SNY would have had to do a lot of convincing that this was the right strategy.
|
|
|
|
Post by bill on Jan 13, 2016 20:41:42 GMT -5
I agree, as optimistic as the new roadmap is, there is significant risk and cannot be done with zero sales force. So, some expense for a sales force (and reimbursement specialists to negotiate with payers), etc. must be expected and where those dollars come from is not yet known. Matt gave little detail here. There was a discussion about Deerfield that was cut off quite quickly - perhaps MNKD would intend to sell some revenue rights to Deerfield (or similar) for near term cash to pursue this strategy. I'm probably making that up from nothing and I don't know if I like it, but I got a brief sniff of that in between what was said. Deal with the devil if you ask me; I'd sooner have dilution at the first reasonable opportunity. Hopefully, there is some parting SNY money (Al loan extension was not brought up) or enough to come in an international rights deal to forestall going down the Deerfield road any farther. Quick overseas expansion does not address the need for revenues to cover the $90M core burn rate. But it could certainly cover fixed Afrezza costs and prevent the more serious issue of having to bring on new Afrezza expenditures impacting cash flows. The whole SNY pricing thing will remain a mystery I am afraid. I find it hard to believe they would sign a contract knowing where this would land. SNY would have had to do a lot of convincing that this was the right strategy. re pricing. Since SNY always had the authority to set the price it wouldn't have made any difference what was discussed ahead of time. SNY had to be allowed to set the price to be consistent with their marketing plan and margin expectations, and they had to keep the right to adjust, as needed. MNKD's assumption was that it would be most profitable to SNY to maximize sales and keep the price competitive with existing products. What MNKD didn't factor in was that SNY was busily subtracting out their other product losses from Afrezza revenue and wanted / needed to keep the price high so those losses would be covered. That part of their math equation may not have come into play until well after the partnership was inked. |
|
|
|
Post by james on Jan 13, 2016 20:44:31 GMT -5
james re pricing. Since SNY always had the authority to set the price it wouldn't have made any difference what was discussed ahead of time. SNY had to be allowed to set the price to be consistent with their marketing plan and margin expectations, and they had to keep the right to adjust, as needed. MNKD's assumption was that it would be most profitable to SNY to maximize sales and keep the price competitive with existing products. What MNKD didn't factor in was that SNY was busily subtracting out their other product losses from Afrezza revenue and wanted / needed to keep the price high so those losses would be covered. That part of their math equation may not have come into play until well after the partnership was inked. If true, that would be a huge point in MNKD's favor when pressing for settlement dollars. |
|
|
|
Post by mnkdmorelong on Jan 13, 2016 20:51:35 GMT -5
I agree, as optimistic as the new roadmap is, there is significant risk and cannot be done with zero sales force. So, some expense for a sales force (and reimbursement specialists to negotiate with payers), etc. must be expected and where those dollars come from is not yet known. Matt gave little detail here. There was a discussion about Deerfield that was cut off quite quickly - perhaps MNKD would intend to sell some revenue rights to Deerfield (or similar) for near term cash to pursue this strategy. I'm probably making that up from nothing and I don't know if I like it, but I got a brief sniff of that in between what was said. Deal with the devil if you ask me; I'd sooner have dilution at the first reasonable opportunity. Hopefully, there is some parting SNY money (Al loan extension was not brought up) or enough to come in an international rights deal to forestall going down the Deerfield road any farther. Quick overseas expansion does not address the need for revenues to cover the $90M core burn rate. But it could certainly cover fixed Afrezza costs and prevent the more serious issue of having to bring on new Afrezza expenditures impacting cash flows. The whole SNY pricing thing will remain a mystery I am afraid. I find it hard to believe they would sign a contract knowing where this would land. SNY would have had to do a lot of convincing that this was the right strategy. Consider MNKD as a pre IPO company. If they can prove an increase in value, more funding comes their way. I caught the same Deerfield hint as you did. Maybe a few dollars from SNY; at least forgive the loan balance. Maybe not surprising is that Al Mann did not mount the stage with a money bazooka. He may be tapped out. From my perspective, MNKD needs $200-250 mln cash. They need to put on some FTEs in the US to service sales. A two year runway is needed. Even then they may not be cash flow neutral. |
|
|
|
Post by od on Jan 13, 2016 20:54:50 GMT -5
james re pricing. Since SNY always had the authority to set the price it wouldn't have made any difference what was discussed ahead of time. SNY had to be allowed to set the price to be consistent with their marketing plan and margin expectations, and they had to keep the right to adjust, as needed. MNKD's assumption was that it would be most profitable to SNY to maximize sales and keep the price competitive with existing products. What MNKD didn't factor in was that SNY was busily subtracting out their other product losses from Afrezza revenue and wanted / needed to keep the price high so those losses would be covered. That part of their math equation may not have come into play until well after the partnership was inked. If true, that would be a huge point in MNKD's favor when pressing for settlement dollars. All things considered I thought Matt's comments could not have been more accepting of SNYs efforts. Unless there is a smoking gun out there, how does MNKD make the case that they were 'had'? |
|
|
|
Post by mnkdmorelong on Jan 13, 2016 21:02:38 GMT -5
If true, that would be a huge point in MNKD's favor when pressing for settlement dollars. All things considered I thought Matt's comments could not have been more accepting of SNYs efforts. Unless there is a smoking gun out there, how does MNKD make the case that they were 'had'? Matt was a statesman tonight with respect to the SNY relationship. But I could see his blond hair turning red as he spoke. When he negotiates with SNY for a severance agreement, he will not be so tactful. It's like this: You marry a woman and have a kid. You want another kid; she only wants one. Was the guy "had?" |
|
|
|
Post by kball on Jan 13, 2016 21:07:52 GMT -5
I'm still wondering how much and when for the divorce settlement.
Didn't Peppy throw out 135 million from a similar nektar position (hard to keep posts straight these days)
Would like to see that before the april 4 date bandied about on other matters.
That would buy us some much needed time and a bit more leverage to make better future deals
|
|
|
|
Post by esstan2001 on Jan 13, 2016 21:10:25 GMT -5
If true, that would be a huge point in MNKD's favor when pressing for settlement dollars. All things considered I thought Matt's comments could not have been more accepting of SNYs efforts. Unless there is a smoking gun out there, how does MNKD make the case that they were 'had'? Step 1. Get extricated out of this god forsaken mess with SNY ASAP Step 2. Proceed forward in an attempt to negotiate a settlement in good faith Step 3. File if Step 2 does not complete to your satisfaction. |
|
|
|
Post by od on Jan 13, 2016 21:10:34 GMT -5
All things considered I thought Matt's comments could not have been more accepting of SNYs efforts. Unless there is a smoking gun out there, how does MNKD make the case that they were 'had'? Matt was a statesman tonight with respect to the SNY relationship. But I could see his blond hair turning red as he spoke. When he negotiates with SNY for a severance agreement, he will not be so tactful. It's like this: You marry a woman and have a kid. You want another kid; she only wants one. Was the guy "had?" Perhaps, but Matt was not compelled to say anything. I am not saying that SNY did our company right, but I am not ready to get caught up in the 'it's all SNYs fault' hysteria. The presentation was good, but it was the Q & A that sold me it was time to increase the position. |
|
|
|
Post by BlueCat on Jan 13, 2016 21:12:10 GMT -5
I'm still wondering how much and when for the divorce settlement. Didn't Peppy throw out 135 million from a similar nektar position (hard to keep posts straight these days) Would like to see that before the april 4 date bandied about on other matters. That would buy us some much needed time and a bit more leverage to make better future deals Its the strings they may try to attach that are alarming. They know MNKD is hurting for cash and time is not their friend. |
|
|
|
Post by lorcan458 on Jan 13, 2016 21:14:32 GMT -5
One question that I'm interested in is how much inventory we already have. I think we have a huge amount of Afrezza warehoused, so selling in bulk overseas at lower margin for cash now when we need it might make very good financial sense.
|
|
|
|
Post by BlueCat on Jan 13, 2016 21:19:39 GMT -5
One question that I'm interested in is how much inventory we already have. I think we have a huge amount of Afrezza warehoused, so selling in bulk overseas at lower margin for cash now when we need it might make very good financial sense. At the end of the shout box I was wondering about this. Most of that warehouse must be SNY's warehouse or their distributors. As part of the smooth transition, and because it would be odd to have SNY and MNKD selling to same pharmacies at different prices - they may negotiate for SNY to be a distributor (but sold by MNKD at their price) until the SNY warehouse is empty. In which case, the question is how much of a cost would it be to pay SNY for that warehouse and shipping - with margins worth something, but still compelling to overseas markets where they may be more price sensitive. This is assuming of course, the 65-35 split is done and no longer applies (as part of that negotiation process) Just a thought - curious to see what they actually do work out. |
|
|
|
Post by esstan2001 on Jan 13, 2016 21:19:52 GMT -5
One question that I'm interested in is how much inventory we already have. I think we have a huge amount of Afrezza warehoused, so selling in bulk overseas at lower margin for cash now when we need it might make very good financial sense. There is one minor hurdle; may not even be the case if they go overseas with the insulin- that is it is not FDA approved, but it is maintained and tested and as of last June still considered a viable source once FDA blessed it (certainly for USA use) |
|
|
|
Post by bradleysbest on Jan 13, 2016 21:20:26 GMT -5
Matt said we have too much inventory....
|
|
