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Post by me on Feb 8, 2016 10:08:56 GMT -5
My point was that, all else being equal, the resulting proceeds from an offering at the pre-RS price would be identical to the offering at the RS price. There may be other factors that might influence the attractiveness of the offering, but the arithmetic under both scenarios yields the same proceeds. I want to raise 100 million pre-RS, so I offer 100 million shares at current price of one dollar. My proceeds at the offer price and a full subscription = 100 million and my market cap is 500 million. Now, I want to raise the same 100 miliion, but upon completion of a 10-1 RS, so I offer 10 million shares at the current RS price of $10. In this scenario, my proceeds at the offer piece and full subscription = 100 million and my market cap is 500 million...identical to the press scenario. I'm not suggesting there are no other factors influencing the SUCCESS of one scenario over the other, only that the mechanics yield identical results. I doubt MNKD woul be able to even raise USD 50m in the markets right now without shares totally collapsing. It is total delusion to dream about doubling the share count. There aren't enough buyers to make that feasible. Question: why would they have needed the TASE charade, if they could have just simply done a major rights issue back then, before the SNY drop-out? Remember: from the point of view of institutions, MNKD stock is way less "investable" now than it was back in November, when SNY was still in. The only hope, IMO, is Deerfield converting debt to equity, Al Mann upping the credit line, MNKD renewing the ATM and SNY offering a cash settlement (though I think it is way more likely they will just waive the LOC debt than to pony up more cash, which doesn't help MNKD so much in rg to cash burn). If some or all of these things happened, bankruptcy in 2016 can be avoided. Still, even then, there is no real concept to turn the company around, but I think in that scenario, shares could rise to USD 1.50-2.00 or so, if immediate survival is no longer in question. , I'm not sure why you quoted my explanation in offering your doubt about MNKD's ability to go to the market right now. My comment was a simple illustration of why an offering at pre- or post-RS results in the same proceeds, MECHANICALLY. As for your other comments, I disagree that the TASE offering was a charade. After all, MNKD didn't "pretend" they didn't need cash. They needed cash and they did the TASE offering...probably one of the easier options available to them (I believe the TASE offering was also partially driven by Mann's relationship with institutions in Israel). Whether the offering was successful makes no difference as to the fact they weren't pretending they didn't need cash, so I'm not sure why you would term this a charade. As for your "hopes," my opinion is: (i) Deerfield would not convert debt into equity unless they were privy to some major positive upcoming event; (ii) Al Mann believes that the additional $30mm available from the Mann Group is sufficient for MNKD, in addition to other options they are considering; (iii) I have no idea regarding the current status, or renewing, of the ATM; and (iv) While there has been considerable discussion on this board about a SNY settlement, I don't believe that is a slam dunk. It would not be a surprise to me if SNY offered an attractive divorce payment, but that has to negotiated carefully by MNKD. At this stage, I'm looking forward to MNKD's plans to address their cash needs (which I agree with you, a market offering would be difficult at this price level and without any announced positive events), announcement of specifics on their planned diabetes centers, a game plan for educating the medical community on Afrezza, award of their first milestone from RLS (along with more visibility on future opportunities with RLS), and announcements of future TS partnerships. At this point, I'm cautiously optimistic. I'll have a more concrete idea as to whether I'll invest more after I see where we go with the items I've outlined above. |
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Post by biffn on Feb 8, 2016 11:07:57 GMT -5
I frankly don't care about your worst case analysis. this is essentially a binary propostion. It is either some number approaching zero or some multiple of current value ranging conservatively from 5x to 50x. I think the odds are better than 50/50 on the long side and so I like the bet. It appears that most other longs feel similarly. I'm guessing the RLS benchmark payment from the proof of concept will be forthcoming and you can stop your doom and gloom for at least another year. You seriously think the first RLS milestone payment will come soon enough and in a large enough amount to solve MNKD's cash crisis for a year? Wow. That's magical thinking, my friend, I love it! (Still haven't sobered up from your Super Bowl party? Never mind! If you're a Denver fan, enjoy it!) A proof of concept (POC) is not a trial and a first stage compounding POC could be accomplished in a few months. It's not clear if there is even a human testing element involved before some payment is due. I expect to see $50-100M from this deal within 6 months. That should put your fears on the back burner for a while at least. I would have put $2M into the super bowl had SNY been out of the picture. Sanofi continues to be the biggest roadblock to success, and a very aggressive legal team (focusing more on PR, than the courts) could force a payment. |
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Post by therealisaching on Feb 8, 2016 11:30:48 GMT -5
I don't know if this was meant to be a positive but the following quote from the CC from Matt P does concern me: "Bankruptcy is a path of absolute last resort and not one under consideration at this time". Of course it should be a last resort, but those last 3 words (wish he would have left those 3 words out) are possibly telling that they don't have the cash concern figured out yet. I think the clinics especially, and some of the other things Matt talked about sounded promising in the long run, but do we have a long run is my only concern? I 100% believe in this product and TS, but that comment did not make me feel real warm and fuzzy. Add that to we are still stuck with SNY for this entire quarter which basically is doing nothing but burning $........ How do we last to get to where the ideas can generate the needed cash? I want this to succeed on so many different levels (diabetics, investors, future users, of TS, shorts, competing BP's. etc) but the cash thing , I don't know? They get that straight and I buy a ton more and wait this out!!!! I wasnt hung up on the last 3 words. It is telling. They dont have it figured out & Matt is attempting to play the hand he has. The market knows the cash issue and bk is certainly something lurking if they cant extend their liquidity. Something that I havent seen much mention of on the board were his prepared comments on RLS.
The transcript on Seeking Alpha reports it this way: "Our reverse merger with Receptor is not under consideration at this time."
I thought I heard Matt say "A" not "Our".
On the subject of the thread. I have no idea whether Al would or has the ability to provide a cash infusion. What I do find it hard to believe is that he would allow the company to file bk & wipe out his equity position. So if there is ultimately no infusion of cash from SNY, new foreign partners, dilution, etc. I suspect he sells.
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Post by liane on Feb 8, 2016 14:12:41 GMT -5
The transcripts are notoriously bad; very likely it is "A" not "Our".
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Post by mnholdem on Feb 8, 2016 14:13:13 GMT -5
Perhaps the elephant in the room is the Afrezza inventory. Doesn't anybody here think that after MannKind controls the brand again and then negotiates favorable healthcare coverage that Afrezza sales won't explode?
I happen to think that once the reimbursement issue is resolved that Afrezza, itself, will start generating significant revenue.
As part of the transition from Sanofi to MannKind, any product that has already shipped and has been paid for by Sanofi and has not been purchased by any pharmacy, would entitle Sanofi to 65% of the profit unless MannKind purchases that inventory, if Afrezza inventory even exists somewhere. I suspect that there isn't that much sitting in Sanofi warehouses and that most of the shipments went right to the pharmacies.
The point is, once control is returned to MannKind, when pharmacies start ordering Afrezza from MannKind 100% of the profit comes home.
Will MannKind be successful in getting Afrezza covered by 3rd Party Payers? If so, then borrowing money may become a moot point. Keep an eye on the help-wanted ads, boys and girls, because after they hire a new marketing executive, MannKind may be ramping up production sooner than you think.
Then we'll learn once and for all whether Sanofi was sandbagging.
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Post by dreamboatcruise on Feb 8, 2016 14:22:25 GMT -5
Perhaps the elephant in the room is Afrezza. Doesn't anybody here think that after MannKind controls the brand again and then negotiates favorable healthcare coverage that Afrezza sales won't explode? I happen to think that once the reimbursement issue is resolved that Afrezza, itself, will start generating significant revenue. As part of the transition from Sanofi to MannKind, any product that has shipped and has been paid for by Sanofi and is has not been purchased by any pharmacy, would entitle Sanofi to 65% of the profit - unless MannKind purchases that inventory, if it even exists in a Sanofi warehouse. I suspect that there isn't that much sitting in Sanofi warehouses and that most of the shipments went right to pharmacies. The point is, once control is returned to MannKind, when pharmacies start ordering Afrezza from MannKind 100% of the profit comes home. Will MannKind be successful in getting Afrezza covered by 3rd Party Payers? If so, then borrowing money may become a moot point. I think a significant issue is what will need to be done to get favorable coverage and how long it will take. Payers are year by year making their formularies more restrictive. I don't think this is as simple as drop the price and all payers will jump on board. BP use their portfolios of drugs to negotiate exclusive arrangements with payers, some of those may have to run their course even if a payer wanted to put Afrezza at low tier. You should also consider that trad SQ RAA are near or beyond patent expirations. It seems some payers might be resistant to getting a bunch of patients on a unique and beneficial treatment (Afrezza) that still has a long patent protection when they might anticipate price competition as biosimilar SQ RAAs hit the market. So it is easy to say "sales will take off when payers pay and when doctors become more aware"... the "when" is the rub. |
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Post by dreamboatcruise on Feb 8, 2016 14:30:32 GMT -5
You seriously think the first RLS milestone payment will come soon enough and in a large enough amount to solve MNKD's cash crisis for a year? Wow. That's magical thinking, my friend, I love it! (Still haven't sobered up from your Super Bowl party? Never mind! If you're a Denver fan, enjoy it!) A proof of concept (POC) is not a trial and a first stage compounding POC could be accomplished in a few months. It's not clear if there is even a human testing element involved before some payment is due. I expect to see $50-100M from this deal within 6 months. That should put your fears on the back burner for a while at least. I would have put $2M into the super bowl had SNY been out of the picture. Sanofi continues to be the biggest roadblock to success, and a very aggressive legal team (focusing more on PR, than the courts) could force a payment. Just curious what your thought process is that gets from Matt stating something will probably happen before the end of the year and you expecting it by first week in Aug? |
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Post by peppy on Feb 8, 2016 14:31:30 GMT -5
Perhaps the elephant in the room is the Afrezza inventory.
I happen to think that once the reimbursement issue is resolved that Afrezza, itself, will start generating significant revenue.
As part of the transition from Sanofi to MannKind, any product that has already shipped and has been paid for by Sanofi and has not been purchased by any pharmacy, would entitle Sanofi to 65% of the profit unless MannKind purchases that inventory, if Afrezza inventory even exists somewhere. I suspect that there isn't that much sitting in Sanofi warehouses and that most of the shipments went right to the pharmacies.
The point is, once control is returned to MannKind, when pharmacies start ordering Afrezza from MannKind 100% of the profit comes home.
Will MannKind be successful in getting Afrezza covered by 3rd Party Payers? If so, then borrowing money may become a moot point. Keep an eye on the help-wanted ads, boys and girls, because after they hire a new marketing executive, MannKind may be ramping up production sooner than you think.
Then we'll learn once and for all whether Sanofi was sandbagging.
quote; Doesn't anybody here think that after MannKind controls the brand again and then negotiates favorable healthcare coverage that Afrezza sales won't explode? reply: I do with these caveats. I think an advertising campaign will be necessary so the physicians get the demand from the type one's or type two's. screencast.com/t/ZA17DuaELT
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Post by tayl5 on Feb 8, 2016 14:44:05 GMT -5
The transcripts are notoriously bad; very likely it is "A" not "Our". My favorite transcription error was from a recent earnings call where the word "genomics" was transcribed as "ginormous". Changed the meaning of the sentence completely. |
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Post by benyiju on Feb 8, 2016 17:00:32 GMT -5
A proof of concept (POC) is not a trial and a first stage compounding POC could be accomplished in a few months. It's not clear if there is even a human testing element involved before some payment is due. I expect to see $50-100M from this deal within 6 months. That should put your fears on the back burner for a while at least. I would have put $2M into the super bowl had SNY been out of the picture. Sanofi continues to be the biggest roadblock to success, and a very aggressive legal team (focusing more on PR, than the courts) could force a payment. Just curious what your thought process is that gets from Matt stating something will probably happen before the end of the year and you expecting it by first week in Aug? Not only does Biffin advance timetable Matt laid out, but he's also anticipating getting most or even all of the milestones in that period. I think he's still trippin from the party last night! |
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