|
Post by compound26 on Jan 27, 2016 15:53:09 GMT -5
Mental math is fine, but very few deals go off at valuations higher than a 50% premium to current market. Most healthcare deals are done with a premium between 20-35%. As I write this the price has moved back down to about $1, so we are talking $1.50. There are three limiting factors: 1. Shareholders from the buyer would show up at their company's headquarters with pitchforks and burning torches. The board of directors would be close behind with buckets of hot tar and feathers. If you do the math on $55 price, including debt, including debt conversion options, and warrants, MNKD would have a $30 billion price tag. There are many pharma companies with $30B price tags that are profitable, well capitalized, and with sales. Is MNKD really as valuable as Baxalta, Biomarin, Shire, and Vertex? Heck, Teva is only worth a bit more. 2. Pharma companies do not pay real cash for Chinese math, and what you proposed is what is known in the finance world as Chinese math (i.e. speculation). If it was so easy to hit penetration numbers, even Sanofi would have done it. The risks of failure in the real world are a lot more daunting, which is why nobody pays up for potential in a mature market. Everybody learned a lesson from the "Dot Com" bubble, and pharmas had their own acquisition bubble in the late 1980's and early 1990's. 3. Even if the executives could initially escape from the angry mob, they have to earn a return on that $30B investment to keep their jobs. Return on equity in drugs averages 20% after tax so MNKD would need to return $6 billion in after-tax profits a year, this year, next year, and every other year in perpetuity just to keep pace. Only if MNKD earned more than $6B per year would the shareholders of the buyer be better off and, if they are not, refer to point 1 above. Biotech companies' PPS do sometimes trade at levels far from its true value. Merck To Buy Idenix Pharmaceuticals For $3.85B, Expanding Foothold In Hep C Drug Market BY SNEHA SHANKAR @snehashankar30 ON 06/10/14 AT 5:09 AM www.ibtimes.com/merck-buy-idenix-pharmaceuticals-385b-expanding-foothold-hep-c-drug-market-1596744Merck & Co. (NYSE:MRK) announced Monday that it will acquire Idenix Pharmaceuticals (NASDAQ:IDIX) for $3.85 billion, to establish a stronger foothold in the market for hepatitis C drugs. New Jersey-based vaccine maker Merck said that it will pay $24.50 a share in cash, which is 3.4 times the value of Idenix stock, which closed at $7.23 on Friday. I also recall at some point prior to the buy-out, IDIX was trading at less than $5.
|
|
|
Post by mpg54 on Jan 27, 2016 15:58:06 GMT -5
What do you think is possible? Is $3-4 a possibility? Given the potential of TS, and still the potential of Afrezza. It would certainly add a nice R&D package to any BP portfolio, especially if they need a boost in that area.
|
|
|
Post by oldfishtowner on Jan 27, 2016 16:02:46 GMT -5
Mental math is fine, but very few deals go off at valuations higher than a 50% premium to current market. Most healthcare deals are done with a premium between 20-35%. As I write this the price has moved back down to about $1, so we are talking $1.50. There are three limiting factors: 1. Shareholders from the buyer would show up at their company's headquarters with pitchforks and burning torches. The board of directors would be close behind with buckets of hot tar and feathers. If you do the math on $55 price, including debt, including debt conversion options, and warrants, MNKD would have a $30 billion price tag. There are many pharma companies with $30B price tags that are profitable, well capitalized, and with sales. Is MNKD really as valuable as Baxalta, Biomarin, Shire, and Vertex? Heck, Teva is only worth a bit more. 2. Pharma companies do not pay real cash for Chinese math, and what you proposed is what is known in the finance world as Chinese math (i.e. speculation). If it was so easy to hit penetration numbers, even Sanofi would have done it. The risks of failure in the real world are a lot more daunting, which is why nobody pays up for potential in a mature market. Everybody learned a lesson from the "Dot Com" bubble, and pharmas had their own acquisition bubble in the late 1980's and early 1990's. 3. Even if the executives could initially escape from the angry mob, they have to earn a return on that $30B investment to keep their jobs. Return on equity in drugs averages 20% after tax so MNKD would need to return $6 billion in after-tax profits a year, this year, next year, and every other year in perpetuity just to keep pace. Only if MNKD earned more than $6B per year would the shareholders of the buyer be better off and, if they are not, refer to point 1 above. Biotech companies' PPS do sometimes trade at levels far from its true value. Merck To Buy Idenix Pharmaceuticals For $3.85B, Expanding Foothold In Hep C Drug Market BY SNEHA SHANKAR @snehashankar30 ON 06/10/14 AT 5:09 AM www.ibtimes.com/merck-buy-idenix-pharmaceuticals-385b-expanding-foothold-hep-c-drug-market-1596744Merck & Co. (NYSE:MRK) announced Monday that it will acquire Idenix Pharmaceuticals (NASDAQ:IDIX) for $3.85 billion, to establish a stronger foothold in the market for hepatitis C drugs. New Jersey-based vaccine maker Merck said that it will pay $24.50 a share in cash, which is 3.4 times the value of Idenix stock, which closed at $7.23 on Friday. I also recall at some point prior to the buy out, IDIX was trading at less than $5. I agree. Buyouts at multiples of 2 or 3 times current market cap are not unusual. Even higher multiples are possible. But even $3 or $4/share is too low at this early stage in MNKD's attempt to turn things around. We are only a little more than 3 weeks into the 6 months MNKD has to put a plan into action. I doubt either Al or the Boards of Directors is in a mood to give the company away at this point. Neither am I.
|
|
|
Post by compound26 on Jan 27, 2016 16:16:13 GMT -5
Biotech companies' PPS do sometimes trade at levels far from its true value. Merck To Buy Idenix Pharmaceuticals For $3.85B, Expanding Foothold In Hep C Drug Market BY SNEHA SHANKAR @snehashankar30 ON 06/10/14 AT 5:09 AM www.ibtimes.com/merck-buy-idenix-pharmaceuticals-385b-expanding-foothold-hep-c-drug-market-1596744Merck & Co. (NYSE:MRK) announced Monday that it will acquire Idenix Pharmaceuticals (NASDAQ:IDIX) for $3.85 billion, to establish a stronger foothold in the market for hepatitis C drugs. New Jersey-based vaccine maker Merck said that it will pay $24.50 a share in cash, which is 3.4 times the value of Idenix stock, which closed at $7.23 on Friday. I also recall at some point prior to the buy out, IDIX was trading at less than $5. I agree. Buyouts at multiples of 2 or 3 times current market cap are not unusual. Even higher multiples are possible. But even $3 or $4/share is too low at this early stage in MNKD's attempt to turn things around. We are only a little more than 3 weeks into the 6 months MNKD has to put a plan into action. I doubt either Al or the Boards of Directors is in a mood to give the company away at this point. Neither am I. Agree. I would think Mannkind (and Al Mann) will have to look at every offer. However, Al Mann probably will not seriously consider offers under $5 (a share).
|
|
|
Post by babaoriley on Jan 27, 2016 16:28:52 GMT -5
I would like them to sell soon, on balance, if they could get $3/share, maybe even $2.50. You have to remember that MNKD at least appears desperate. As far as turning the ship around, sure, could happen, but the current management is not so different than previous management, so that's why I give a turn around less of a chance than if we had a new, higher-profile group in charge.
As for the initial $55 price tag, even if the revenue numbers were accurate, you'd still have to discount them down to present value and take into account all the other negatives, along with the risk factor of getting absolutely zero out of the investment, or losing it all together.
If they don't sell quickly, it will at least be interesting how this whole thing plays out, what Matt is able to do, if he is able to hold onto the CEO job, etc., etc.
|
|
|
Post by mpg54 on Jan 27, 2016 16:35:03 GMT -5
I would like them to sell soon, on balance, if they could get $3/share, maybe even $2.50. You have to remember that MNKD at least appears desperate. As far as turning the ship around, sure, could happen, but the current management is not so different than previous management, so that's why I give a turn around less of a chance than if we had a new, higher-profile group in charge. As for the initial $55 price tag, even if the revenue numbers were accurate, you'd still have to discount them down to present value and take into account all the other negatives, along with the risk factor of getting absolutely zero out of the investment, or losing it all together. If they don't sell quickly, it will at least be interesting how this whole thing plays out, what Matt is able to do, if he is able to hold onto the CEO job, etc., etc. I hate to think $3 is the ceiling, but I would be ecstatic with anything North of $4.
|
|
Deleted
Deleted Member
Posts: 0
|
Post by Deleted on Jan 27, 2016 16:39:45 GMT -5
We have coined the term FUD, how about we coin a new term, SPUD "Spontaneous Pumping Utterly Delusional". This board seems to be full of both, and for those that are following, SPUD is far more dangerous This is FUD. Al will burn you. Buyout coming 2900 pps Tuts are adding so am I
|
|
|
Post by BlueCat on Jan 27, 2016 16:48:12 GMT -5
TO BE CLEAR: I do not believe MNKD, as things stand TODAY, would ever remotely command that type of value.
I'm talking ideal world - if Afrezza was selling worldwide taking the market by storm, TS pipeline healthy and flourishing with royalties on the way. New drugs in development that they can afford and own the revenue on. Long patent protection. The way tchalaa starts framing it up.
Why? Because it seems to me the science, product and human need is real. Are you suggesting this company, platform and drug would never succeed under any circumstance? Or that the math is that far off?
Reality business today is vastly different.
I'll be happy to just break-even and be whole again. And that's a seriously remote chance at this point. I'm hoping for about $4B and I just don't see that getting put up right now based on the stock price. (per before - why would they? Torches for sure!) Better chance if Afrezza starts showing signs of commercial life (back to those palettes sent by freighter to Israel, Saudi and China ...)
But heck. What's all the hand wringing for? $55 isn't that bad. Anyone here remember ST Santa pitching $550/share?
C'mon guys. Livalittle.
|
|
|
Post by mnholdem on Jan 27, 2016 16:55:54 GMT -5
I would think that other pharmaceutical companies see through Sanofi's charade and lack of effort after Brandicourt became CEO.
So the key question in determining a bid price for all rights to Afrezza is not how well Afrezza performed while under control of Sanofi-Aventis, but how well another pharmaceutical company thinks Afrezza would sell under its direction.
|
|
|
Post by suebeeee1 on Jan 27, 2016 17:10:42 GMT -5
We have coined the term FUD, how about we coin a new term, SPUD "Spontaneous Pumping Utterly Delusional". This board seems to be full of both, and for those that are following, SPUD is far more dangerous Hey! I could be accused of SPUD as I have a whole bunch of shares (tens of thousands of them in fact) and I still believe we will get to see, at the very least, my cost basis of $2.48/share. $55/share was in the front windshield a year ago. With some strong sales and some Techno deals, we could have been, right now, ready for that $55. But a year has passed and with SNY trying to bury us, MNKD is a bit tarnished. Can we recover, hell yes! Can we get to $55/share? If we survive the next two years, increase our Afrezza sales both here and abroad and sign a few more Techno licensing deals as well as create a pipeline for ourselves, we are back up PAST $55/share. How many here are willing to hold a few years? After the insanity of the past 10, many are ready to get out with something approacing their investments. Many would be THRILLED to get out with their lives intact. I'm holding until we sell, go bankrupt or until the end. I'm willing to wait 5 years for $55/share.
|
|
|
Post by suebeeee1 on Jan 27, 2016 17:12:13 GMT -5
I would think that other pharmaceutical companies see through Sanofi's charade and lack of effort after Brandicourt became CEO.
So the key question in determining a bid price for all rights to Afrezza is not how well Afrezza performed while under control of Sanofi-Aventis, but how well another pharmaceutical company thinks Afrezza would sell under its direction. The stock market has a very short memory. No one will remember where MNKD nearly drowned in quicksand, as long as they are surfing next year.
|
|
|
Post by irrationalexubera on Jan 27, 2016 17:25:58 GMT -5
^^^ exactly.
|
|
|
Post by BlueCat on Jan 27, 2016 17:27:59 GMT -5
I would think that other pharmaceutical companies see through Sanofi's charade and lack of effort after Brandicourt became CEO.
So the key question in determining a bid price for all rights to Afrezza is not how well Afrezza performed while under control of Sanofi-Aventis, but how well another pharmaceutical company thinks Afrezza would sell under its direction. The stock market has a very short memory. No one will remember where MNKD nearly drowned in quicksand, as long as they are surfing next year. Isn't inhaled insulin suppose to help with those types of conditions?
|
|
|
Post by trondisc on Jan 27, 2016 17:36:39 GMT -5
Ideally $25+ PPS for all of Afrezza+MannKind which recognizes the amazing accomplishments by Technosphere/Mannkind. Realistically only $7-15; larger end of range if more than 2 bidders. Consider Afrezza's undeniable superiority & real world results: astonishing. The execution in the product will help propel future sales for any company who acquires MNKD generations to come! Technosphere could challenge the status quo with wireless health monitoring should the right company buy MannKind. MannKind has spent 10+years of R&D on Afrezza/Technosphere; this company did not invent a mediocre device. How the hell Alphabet hasn't made a move for MannKind yet after the recent Qualcomm+Novartis wireless device partnership IS BEYOND ME.
|
|
|
Post by peppy on Jan 27, 2016 17:36:41 GMT -5
|
|