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Post by Deleted on Feb 8, 2016 15:15:52 GMT -5
Hard to imagine a scenario where sny gives mnkd money mostly due to the fact that mnkd owes sny on their loan agreement. Add to that the contract and the lack of financial strength from mnkd right now and one has to wonder if mnkd is in a position to go after sny in any capacity.
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Post by agedhippie on Feb 8, 2016 15:55:14 GMT -5
Tomorrow's poll will be whether or not (and how much) MNKD is likely to get parting gift from SNY! Is there strong precedent for this, or are we engaging in more wishful thinking on this point? Prior to Matt's statement about it, I would have said pure wishful thinking. I'll take him at face value that there may be some payment... i.e. I'm thinking akin to the fact that many companies routinely offer some "severance" package in order to get laid off employees to sign releases, etc. even when the company feels they have no real legal exposure regarding the termination. I don't believe it will be a huge amount. Though ever extra month of runaway at this point is crucial. Based on what MNKD has said about SNY, I'm guessing that MNKD probably went along with most/all SNY recommendations in the JAC. I could see a payment in kind. At the end of the Exubera deal Pfizer offered their Exubera stockpile to Nektar at a 50% discount, Sanofi might do the same if MNKD release them from the requirement to provide 180 day sales cover after the termination date. Right now Sanofi have blown through $400 million in just over a year so they might be feeling a bit burnt. |
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Post by benyiju on Feb 8, 2016 16:28:25 GMT -5
Prior to Matt's statement about it, I would have said pure wishful thinking. I'll take him at face value that there may be some payment... i.e. I'm thinking akin to the fact that many companies routinely offer some "severance" package in order to get laid off employees to sign releases, etc. even when the company feels they have no real legal exposure regarding the termination. I don't believe it will be a huge amount. Though ever extra month of runaway at this point is crucial. Based on what MNKD has said about SNY, I'm guessing that MNKD probably went along with most/all SNY recommendations in the JAC. I could see a payment in kind. At the end of the Exubera deal Pfizer offered their Exubera stockpile to Nektar at a 50% discount, Sanofi might do the same if MNKD release them from the requirement to provide 180 day sales cover after the termination date. Right now Sanofi have blown through $400 million in just over a year so they might be feeling a bit burnt. It's really hard to imagine where that $400 million has gone. How much do the magazine DTC's cost? Direct mailing? I'm sure the seminars are pricey, I know the trials are, and of course sales staff, but did they ever have significant salesforce numbers on Afrezza alone? Does that $400mill include their reps selling Toujeo as well (read 'primarily')? Is MNKD's 35% of expenses subsidising SNYs Toujeo sales? It still doesn't add up to $400 million. An audit threat might be one way to get Sanofi to offer a parting gift... |
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Post by Deleted on Feb 8, 2016 16:30:25 GMT -5
I could see a payment in kind. At the end of the Exubera deal Pfizer offered their Exubera stockpile to Nektar at a 50% discount, Sanofi might do the same if MNKD release them from the requirement to provide 180 day sales cover after the termination date. Right now Sanofi have blown through $400 million in just over a year so they might be feeling a bit burnt. It's really hard to imagine where that $400 million has gone. How much do the magazine DTC's cost? Direct mailing? I'm sure the seminars are pricey, I know the trials are, and of course sales staff, but did they ever have significant salesforce numbers on Afrezza alone? Does that $400mill include their reps selling Toujeo as well (read 'primarily')? Is MNKD's 35% of expenses subsidising SNYs Toujeo sales? It still doesn't add up to $400 million. An audit threat might be one way to get Sanofi to offer a parting gift... i think he included the $200 mil milestone payments |
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Post by benyiju on Feb 8, 2016 16:45:12 GMT -5
It's really hard to imagine where that $400 million has gone. How much do the magazine DTC's cost? Direct mailing? I'm sure the seminars are pricey, I know the trials are, and of course sales staff, but did they ever have significant salesforce numbers on Afrezza alone? Does that $400mill include their reps selling Toujeo as well (read 'primarily')? Is MNKD's 35% of expenses subsidising SNYs Toujeo sales? It still doesn't add up to $400 million. An audit threat might be one way to get Sanofi to offer a parting gift... i think he included the $200 mil milestone payments still! |
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Post by BlueCat on Feb 8, 2016 17:04:41 GMT -5
There are plenty of ways to stretch out the remaining cash to last longer than six months, but the problem will come when the company pops the Deerfield debt covenant on having $25 million in cash at the end of every quarter. Once that happens there is probably no going back so that event has to be avoided at all costs. If the company can run on its available cash (minus the $25 million Deerfield reserve) then it can run until March next year. I wouldn't count on Sanofi paying anything. They worded the contract terms very carefully, phrases and legal terms of art that normal people might not notice but no competent deal lawyer would fail to notice, that pretty much gave Sanofi carte blanche to do what they did. The contract was entered into by experienced businessmen running public companies that were well-advised by their legal teams. My calculations suggest that Sanofi spent at least $400 million on Afrezza and to convince a judge that this was not "commercially reasonable" (one of those legal terms of art) will be difficult to impossible. If applicable, another SNY informant / whistle-blower would be helpful. |
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Post by factspls88 on Feb 8, 2016 18:34:04 GMT -5
There are plenty of ways to stretch out the remaining cash to last longer than six months, but the problem will come when the company pops the Deerfield debt covenant on having $25 million in cash at the end of every quarter. Once that happens there is probably no going back so that event has to be avoided at all costs. If the company can run on its available cash (minus the $25 million Deerfield reserve) then it can run until March next year. I wouldn't count on Sanofi paying anything. They worded the contract terms very carefully, phrases and legal terms of art that normal people might not notice but no competent deal lawyer would fail to notice, that pretty much gave Sanofi carte blanche to do what they did. The contract was entered into by experienced businessmen running public companies that were well-advised by their legal teams. My calculations suggest that Sanofi spent at least $400 million on Afrezza and to convince a judge that this was not "commercially reasonable" (one of those legal terms of art) will be difficult to impossible. I'd like to see how you come up with a number of $400 million. I find it hard to believe that's the case. I have a lot of experience in this area so I'd like to see what your assumptions are. |
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Post by benyiju on Feb 8, 2016 19:03:48 GMT -5
There are plenty of ways to stretch out the remaining cash to last longer than six months, but the problem will come when the company pops the Deerfield debt covenant on having $25 million in cash at the end of every quarter. Once that happens there is probably no going back so that event has to be avoided at all costs. If the company can run on its available cash (minus the $25 million Deerfield reserve) then it can run until March next year. I wouldn't count on Sanofi paying anything. They worded the contract terms very carefully, phrases and legal terms of art that normal people might not notice but no competent deal lawyer would fail to notice, that pretty much gave Sanofi carte blanche to do what they did. The contract was entered into by experienced businessmen running public companies that were well-advised by their legal teams. My calculations suggest that Sanofi spent at least $400 million on Afrezza and to convince a judge that this was not "commercially reasonable" (one of those legal terms of art) will be difficult to impossible. If applicable, another SNY informant / whistle-blower would be helpful. Was there an earlier SNY informant/whistle-blower? |
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Post by BlueCat on Feb 8, 2016 19:46:05 GMT -5
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Post by agedhippie on Feb 8, 2016 22:16:00 GMT -5
My calculations suggest that Sanofi spent at least $400 million on Afrezza and to convince a judge that this was not "commercially reasonable" (one of those legal terms of art) will be difficult to impossible. I'd like to see how you come up with a number of $400 million. I find it hard to believe that's the case. I have a lot of experience in this area so I'd like to see what your assumptions are. Quick back of the envelope sums - $150 million initial, $50 million milestone, $170 million joint market and sales. That leaves $30 million which the various trials costs could easily swallow. I think $400 million is probably an underestimate. |
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Post by factspls88 on Feb 8, 2016 22:38:22 GMT -5
I'd like to see how you come up with a number of $400 million. I find it hard to believe that's the case. I have a lot of experience in this area so I'd like to see what your assumptions are. Quick back of the envelope sums - $150 million initial, $50 million milestone, $170 million joint market and sales. That leaves $30 million which the various trials costs could easily swallow. I think $400 million is probably an underestimate. It makes no sense to include the milestone payments. Ditto for the trials. We are talking about how much Sanofi spent to market the brand (hence commercially reasonable). Neither the trials nor the milestone payments were spent against the key target consituents for Afrezza: physicians, consumers and, one could argue, insurance companies. As for the $170 million - where does that figure come from? If that is indeed what they spent jointly on commercializing Afrezza (traditional advertising, digital advertising, coupons, sales materials, samples, event marketing venues, physician education etc.) then Sanofi's share is 65% of that figure. If that's only Sanofi's share, then it still sounds high to me but I'd like to understand where it came from. |
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Post by Deleted on Feb 8, 2016 22:49:19 GMT -5
I agree cost to market and cost of the partnership are two very different things
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Post by agedhippie on Feb 8, 2016 22:53:17 GMT -5
Quick back of the envelope sums - $150 million initial, $50 million milestone, $170 million joint market and sales. That leaves $30 million which the various trials costs could easily swallow. I think $400 million is probably an underestimate. It makes no sense to include the milestone payments. Ditto for the trials. We are talking about how much Sanofi spent to market the brand (hence commercially reasonable). Neither the trials nor the milestone payments were spent against the key target consituents for Afrezza: physicians, consumers and, one could argue, insurance companies. As for the $170 million - where does that figure come from? If that is indeed what they spent jointly on commercializing Afrezza (traditional advertising, digital advertising, coupons, sales materials, samples, event marketing venues, physician education etc.) then Sanofi's share is 65% of that figure. If that's only Sanofi's share, then it still sounds high to me but I'd like to understand where it came from. I should probably let Matt answer this but since I have started I will try.The 170 million number is based on Mannkind having borrowed $43.7 million over three quarters at a rate that is increasing by about $1 million per quarter which gets us to about $60 million over the full year and represents 35% of the shared cost. Therefore the full cost is $170 million and while Sanofi is directly responsible for $110 million at the moment it has paid everything. If it comes to court the headline number is what Sanofi will present as this is what Afrezza has cost them to date. The rest is up to the lawyers. |
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Post by factspls88 on Feb 8, 2016 23:04:19 GMT -5
It makes no sense to include the milestone payments. Ditto for the trials. We are talking about how much Sanofi spent to market the brand (hence commercially reasonable). Neither the trials nor the milestone payments were spent against the key target consituents for Afrezza: physicians, consumers and, one could argue, insurance companies. As for the $170 million - where does that figure come from? If that is indeed what they spent jointly on commercializing Afrezza (traditional advertising, digital advertising, coupons, sales materials, samples, event marketing venues, physician education etc.) then Sanofi's share is 65% of that figure. If that's only Sanofi's share, then it still sounds high to me but I'd like to understand where it came from. I should probably let Matt answer this but since I have started I will try.The 170 million number is based on Mannkind having borrowed $43.7 million over three quarters at a rate that is increasing by about $1 million per quarter which gets us to about $60 million over the full year and represents 35% of the shared cost. Therefore the full cost is $170 million and while Sanofi is directly responsible for $110 million at the moment it has paid everything. If it comes to court the headline number is what Sanofi will present as this is what Afrezza has cost them to date. The rest is up to the lawyers. Thanks for the response. Sanofi can present whatever they want to the court, but what they spent on Afrezza does not represent what they spent to commercialize it in my opinion. As for the borrowing for the 3 quarters, it's late now so I'll take a look in the next day or so. I'm wondering if the full amount can be assumed to have been spent on commercializing or if it includes borrowing to keep Mannkind's operations afloat (I suspect the latter but maybe I'm wrong). Have a good night  |
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Post by LosingMyBullishness on Feb 9, 2016 2:53:39 GMT -5
There are plenty of ways to stretch out the remaining cash to last longer than six months, but the problem will come when the company pops the Deerfield debt covenant on having $25 million in cash at the end of every quarter. Once that happens there is probably no going back so that event has to be avoided at all costs. If the company can run on its available cash (minus the $25 million Deerfield reserve) then it can run until March next year. I wouldn't count on Sanofi paying anything. They worded the contract terms very carefully, phrases and legal terms of art that normal people might not notice but no competent deal lawyer would fail to notice, that pretty much gave Sanofi carte blanche to do what they did. The contract was entered into by experienced businessmen running public companies that were well-advised by their legal teams. My calculations suggest that Sanofi spent at least $400 million on Afrezza and to convince a judge that this was not "commercially reasonable" (one of those legal terms of art) will be difficult to impossible. My perspective is that SNY HQ had a marketing budget to the amount that is necessary to show to court that they tried. And their sales reps tried as ground personnel often does. Only if MNKD would play the small US company vs French pharma giant in media they might get some money. Might work with Al as story. Might even work to get some awareness on Afrezza. But I doubt that mngt is willing to go that route even as last resort. |
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