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Post by centralcoastinvestor on Feb 19, 2016 14:12:26 GMT -5
That was the difference. The bright side is a reasonably commercial settlement. I expect > $200M, else a trebled $3B lawsuit. Read the contract. Lawsuits are explicitly ruled out in Article 14. Not if Sanofi first violated the contract by sandbagging sales of Afrezza. It will be up to a judge to determine whether a lawsuit would go forward if filed by Mannkind. I don't think it would take much to convince a jury that Sanofi didn't do a good job. Not one TV commercial for Afrezza and carpet bombing amount of commercials for Toujeo.
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Post by robsacher on Feb 19, 2016 20:25:42 GMT -5
Thank you for posting the Nate Pile info. I have a very high regard for George Rho and Nate Pile.
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Post by dreamboatcruise on Feb 19, 2016 21:17:28 GMT -5
"14.3 Court Actions. Nothing contained in this Agreement shall deny either Party the right to seek, upon good cause, injunctive or other equitable relief from a court of competent jurisdiction in the context of an emergency or prospective irreparable harm, and such an action may be filed and maintained notwithstanding any ongoing dispute resolution discussions or arbitration proceedings."
There's always a catch... and there is in this Agreement that enables MannKind to seek damages, provided it's done within the statute of limitations.
The point is that Sanofi can NOT smugly say, "So, messieurs, go ahead and try to sue us!" If MannKind determines that Sanofi has, indeed, inflicted irreparable harm, they can move outside the arbitration provision. That is pretty standard wording and really doesn't provide much of a loophole to arbitration. You'll notice the "prospective" before the irreparable harm... i.e. the courts can be used only in the case to stop pending future harm not to address past harm. If for instance during this transition phase SNY were to say they were going to notify the FDA that they were cancelling the pediatric study, MNKD might rush to a court and get an injunction to prevent SNY from taking the action. The courts are allowed because using the arbitration would be too slow to prevent the harm.
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Post by agedhippie on Feb 20, 2016 15:00:20 GMT -5
Read the contract. Lawsuits are explicitly ruled out in Article 14. Not if Sanofi first violated the contract by sandbagging sales of Afrezza. It will be up to a judge to determine whether a lawsuit would go forward if filed by Mannkind. I don't think it would take much to convince a jury that Sanofi didn't do a good job. Not one TV commercial for Afrezza and carpet bombing amount of commercials for Toujeo. Likelihood of success is not a requirement for filing, but in this case there is the Federal Arbitration Act and a Supreme Court decision that says this never reaches the courts. Both sides have agreed to settle disputes outside the courts and by arbitration. Unless the arbitration clause is flawed (and it isn't) that's the end of it.
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Post by goyocafe on Feb 20, 2016 17:25:48 GMT -5
Not if Sanofi first violated the contract by sandbagging sales of Afrezza. It will be up to a judge to determine whether a lawsuit would go forward if filed by Mannkind. I don't think it would take much to convince a jury that Sanofi didn't do a good job. Not one TV commercial for Afrezza and carpet bombing amount of commercials for Toujeo. Likelihood of success is not a requirement for filing, but in this case there is the Federal Arbitration Act and a Supreme Court decision that says this never reaches the courts. Both sides have agreed to settle disputes outside the courts and by arbitration. Unless the arbitration clause is flawed (and it isn't) that's the end of it. Does arbitration necessarily imply that any settlement that comes out of such a proceeding be any less than if it was court ordered?
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Post by agedhippie on Feb 20, 2016 18:22:15 GMT -5
Likelihood of success is not a requirement for filing, but in this case there is the Federal Arbitration Act and a Supreme Court decision that says this never reaches the courts. Both sides have agreed to settle disputes outside the courts and by arbitration. Unless the arbitration clause is flawed (and it isn't) that's the end of it. Does arbitration necessarily imply that any settlement that comes out of such a proceeding be any less than if it was court ordered? The short answer is no, but it usually is. The slightly longer answer is that it depends on the terms. Article 14 of the partnership agreement sets the terms for what damages can be sought and they are limited to compensatory damages so you will not see a big pay out as there can be no punitive or exemplary damages. I would be mildly shocked if it was over $10 million based on the difference between the Exubera sales, which nobody claims were sandbagged, and the Afrezza sales. I am not sure how you get the damages much higher as showing a far higher number that you think it could have achieved is extremely difficult to support in arbitration. Arbitration is not adversarial like the courts, it is far more measured and data based. The plus to this is that if you have a good case you are less likely to lose because their side has a high priced law firm. It can also, but not always, be less of an all or nothing than a court case so you may get some damages where as in court you would get nothing.
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Post by agedhippie on Feb 20, 2016 18:35:16 GMT -5
Likelihood of success is not a requirement for filing, but in this case there is the Federal Arbitration Act and a Supreme Court decision that says this never reaches the courts. Both sides have agreed to settle disputes outside the courts and by arbitration. Unless the arbitration clause is flawed (and it isn't) that's the end of it. Does arbitration necessarily imply that any settlement that comes out of such a proceeding be any less than if it was court ordered? The short answer is no. But in this case both sides have agreed to rule out punitive or exemplary damages which is going to limit the damages. It will come down to what can Mannkind prove the sales should have been vs. what they actually were. The emphasis is on prove because the arbitrators are data driven so it will require hard facts. My guess is that Sanofi says, well we had hopes for Afrezza but in the end the sales were in-line with the last attempt to sell inhaled insulin so our forecasts were wrong. That will be a hard argument to overcome at arbitration and would have been a lot easier to beat in court.
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Post by benyiju on Feb 21, 2016 2:08:22 GMT -5
Does arbitration necessarily imply that any settlement that comes out of such a proceeding be any less than if it was court ordered? The short answer is no. But in this case both sides have agreed to rule out punitive or exemplary damages which is going to limit the damages. It will come down to what can Mannkind prove the sales should have been vs. what they actually were. The emphasis is on prove because the arbitrators are data driven so it will require hard facts. My guess is that Sanofi says, well we had hopes for Afrezza but in the end the sales were in-line with the last attempt to sell inhaled insulin so our forecasts were wrong. That will be a hard argument to overcome at arbitration and would have been a lot easier to beat in court. It would be easier if scripts were to improve dramatically after handover, but of course that seems unlikely at this point.
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Post by lakon on Feb 21, 2016 11:09:40 GMT -5
Here is a hypothetical scenario for you. Suppose MNKD works out a significant purchase agreement with someone, perhaps supplying Israeli hospitals with Afrezza, as soon as the partnership termination completes. Suppose MNKD suggested such overseas marketing to be rebuffed by SNY over the last year. Would that change the picture a bit? How many deals of what size would it take until SNY's efforts might be a bit more questionable? If SNY did sandbag MNKD and they know it, as opposed to being simply incompetent, the SNY lawyers have a number in mind that they just pay to stay out of the press, arbitration, and/or courtroom. Things start to get interesting if MNKD can quickly make deals that SNY would not allow. That's the smoking gun folks.
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Post by agedhippie on Feb 21, 2016 12:07:22 GMT -5
Here is a hypothetical scenario for you. Suppose MNKD works out a significant purchase agreement with someone, perhaps supplying Israeli hospitals with Afrezza, as soon as the partnership termination completes. Suppose MNKD suggested such overseas marketing to be rebuffed by SNY over the last year. Would that change the picture a bit? How many deals of what size would it take until SNY's efforts might be a bit more questionable? If SNY did sandbag MNKD and they know it, as opposed to being simply incompetent, the SNY lawyers have a number in mind that they just pay to stay out of the press, arbitration, and/or courtroom. Things start to get interesting if MNKD can quickly make deals that SNY would not allow. That's the smoking gun folks. Sanofi will probably say that they wanted to concentrate their efforts on getting a better grip on the US market before they ventured overseas. That would not be unusual or unreasonable. In the interim since Sanofi hold the global rights they are under no obligation to share an overseas market even if Mannkind found a willing partner. The agreement says that the commercial strategy belongs to Sanofi so they can freely kill any number of potential deals if they do not fit Sanofi's strategy. Sanofi's lawyers will have planned for this going to arbitration from day one so that is not going to worry them. They will have planned for this not because of malice or evil intent but because it is a lawyer's job to limit risk if things go bad later. Bad publicity is not a realistic threat as the agreement says, " Any settlement discussions or arbitration proceedings occurring under this Agreement shall be conducted in strict confidence". Arbitrators take an extremely dim view of parties breaking that sort of clause and under New York law can impose penalties. That Mannkind can make deals which Sanofi rejected would prove nothing other than that Sanofi set a different commercial strategy. That is not going to get Mannkind anywhere.
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Post by lakon on Feb 21, 2016 12:30:18 GMT -5
We shall see. Proof may be less costly than perception of past sins.
In any event, Nate has more compelling thoughts.
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Post by agedhippie on Feb 21, 2016 14:58:57 GMT -5
We shall see. Proof may be less costly than perception of past sins. In any event, Nate has more compelling thoughts. Is that his February 5th newsletter or something else?
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Post by lakon on Feb 22, 2016 11:48:36 GMT -5
In any event...
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Post by lakon on Feb 22, 2016 11:58:42 GMT -5
That was the difference. The bright side is a reasonably commercial settlement. I expect > $200M, else a trebled $3B lawsuit. Read the contract. Lawsuits are explicitly ruled out in Article 14. LMAO! "Lawsuits are explicitly ruled out..." My God 'man, that's anti-American! We always find a way to sue. Those French should have thought about that, and in an American court...let's just say it's not the Revolution anymore...
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Post by sportsrancho on Mar 10, 2016 21:53:21 GMT -5
I used to really like Nate's stuff, though that was also a time when I was less jaded about MNKD's prospects and less critical a reader. These days he's starting to sound a lot like the CNA website (and his ongoing bickering with the bashers and bears on StockTwits is just embarrassing, you'd think you were watching a GOP candidates debate!). I think he really stuck his neck out on MNKD and is probably taking a lot of heat from his subscribers who followed him down the rabbit hole. I hope his business can survive, but if MNKD doesn't turn things around he may have to go to work for Piper Jaffray as an analyst. It is a really bad look for Nate to be bickering with the mutants from stock twits. Really, he debates with Benyiju because benyiju is short MNKD! And does a good job of putting him in his place:-)
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