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Post by trenddiver on Feb 29, 2016 15:35:39 GMT -5
So I just read this announcement regarding the potential extension request for filing the 10-K. I thought the sentence explaining the delay was interesting, particularly that the delay was necessary for "completing a detail review of the impairment of assets as a consequence of the termination." I wonder what assets Mannkind thinks are impaired and the amount of write down that is implied by the wording of the statement. Maybe its part of building the legal case against Sanofy (unlikely, but possible). Also maybe the new Chairman and CEO want a clean slate as they take over the business going forward. Trend finance.yahoo.com/news/mannkind-potentially-file-2015-10-140000325.html |
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Post by irrationalexubera on Feb 29, 2016 16:53:50 GMT -5
"impairment" stuck out for me as well. it's clearly negative, the question being to what degree.
logically i cannot see what the company can announce at this call that will move the needle or even keep it where it currently is: no further RLS news (we're on their timeline for any reveals), afrezza sales were still meager, can't divulge 2016 marketing plans yet as SNY hasn't yet returned the license, ~60M in cash for year end but obviously less now, TS pipeline 'in process', etc., and with al now gone, the street will only have questions about the mann group backstop (matt definitively said it's in place but you know they'll ask again, "for color") and how al's shares will be handled. it'll be a lot of fear.
near-term, i just don't see how the SP doesn't get pounded back to .80s, so i may be sitting on the sidelines till then so i can buy more when it dips.
what are others planning, if i might ask?
and trend, your recent TA has come true on a stock where logic is almost wholly absent. what do you make of the 1.23 spike this am? someone initiating a new position?
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Post by trenddiver on Feb 29, 2016 17:31:26 GMT -5
"impairment" stuck out for me as well. it's clearly negative, the question being to what degree. logically i cannot see what the company can announce at this call that will move the needle or even keep it where it currently is: no further RLS news (we're on their timeline for any reveals), afrezza sales were still meager, can't divulge 2016 marketing plans yet as SNY hasn't yet returned the license, ~60M in cash for year end but obviously less now, TS pipeline 'in process', etc., and with al now gone, the street will only have questions about the mann group backstop (matt definitively said it's in place but you know they'll ask again, "for color") and how al's shares will be handled. it'll be a lot of fear. near-term, i just don't see how the SP doesn't get pounded back to .80s, so i may be sitting on the sidelines till then so i can buy more when it dips. what are others planning, if i might ask? and trend, your recent TA has come true on a stock where logic is almost wholly absent. what do you make of the 1.23 spike this am? someone initiating a new position? MNKD seems to be climbing the wall of worry. Nothing but bad news, yet the stock is holding its own and on even moving up some. The SP is challenging resistance in $1.05-$1.10 area. I'm thinking the climb to $1.23 is probably some buy stops that were taken out creating a short term squeeze. As for the technicals, they are all very constructive. The 50 day moving average is currently at $1.05 so this is a critical point technically. If the SP can hold in here in spite of the lack of favorable news, it will be very bullish for the stock. I'm crossing my fingers.
Trend
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Post by dreamboatcruise on Feb 29, 2016 19:48:16 GMT -5
As for the impairment, I certainly would hope it isn't Afrezza inventory. Seems that as long as there or discussions about new partner we're far enough away from any expiration dates that inventory shouldn't need to be considered an impaired asset.
Any other thoughts on what it might be?
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Post by mnholdem on Feb 29, 2016 20:05:54 GMT -5
No plans, but when it comes to moving the pps needle, sales remains the ticket. While we wait for MannKind to regain control of sales, marketing and development rights, it's possible that we'll get a PR announcing that a marketing executive has been hired. If there's no such announcement, I would wonder if CEO Pfeffer has secured a domestic partner for Afrezza. A seasoned marketing exec would be good news. A domestic partner would be better, especially if coupled with the news of a few international partnerships. Unfortunately, that news will have to wait until Afrezza rights come home in April.  |
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Post by peppy on Mar 1, 2016 7:53:59 GMT -5
No plans, but when it comes to moving the pps needle, sales remains the ticket. While we wait for MannKind to regain control of sales, marketing and development rights, it's possible that we'll get a PR announcing that a marketing executive has been hired. If there's no such announcement, I would wonder if CEO Pfeffer has secured a domestic partner for Afrezza. A seasoned marketing exec would be good news. A domestic partner would be better, especially if coupled with the news of a few international partnerships. Unfortunately, that news will have to wait until Afrezza rights come home in April. I think the earnings announcement date will be April 5th. |
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Post by matt on Mar 1, 2016 9:02:00 GMT -5
The accountants are justifiably concerned about giving a clean audit opinion on a company with a significant risk of a near-term bankruptcy. The last 10Q showed $191 million in property & equipment and $23 million in inventory. At current sales rates, that is many years of inventory in an industry that rarely holds more than what is required to supply the market for around six months. Similarly, a lot of the equipment is specific to production of Afrezza and resale value for pharmaceutical production equipment is normally about 10 cents on the dollar, and rarely more than 20 cents. The bottom line is that there are substantial investments shown on the balance sheet for a product that is not selling very well. While Matt has some strategies for reversing the weak sales trend the auditors are not going to give any credit for that when they revalue the assets at fair market value so expect some big write-offs.
This is just the accounting catching up with what the market has already decided about the company. It is hard to argue that as the share price has declined from $7 to $1 over the past twelve months the value of the assets should remain untouched. This isn't cash; it is just a few catch-up accounting entries that reflect the current economic reality that everybody knows about already. The upside is that to the extent that Matt is successful in turning the ship around it will be easier to show a profit if the production assets have be written down to a more reasonable value.
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Post by trenddiver on Mar 1, 2016 11:27:53 GMT -5
The accountants are justifiably concerned about giving a clean audit opinion on a company with a significant risk of a near-term bankruptcy. The last 10Q showed $191 million in property & equipment and $23 million in inventory. At current sales rates, that is many years of inventory in an industry that rarely holds more than what is required to supply the market for around six months. Similarly, a lot of the equipment is specific to production of Afrezza and resale value for pharmaceutical production equipment is normally about 10 cents on the dollar, and rarely more than 20 cents. The bottom line is that there are substantial investments shown on the balance sheet for a product that is not selling very well. While Matt has some strategies for reversing the weak sales trend the auditors are not going to give any credit for that when they revalue the assets at fair market value so expect some big write-offs. This is just the accounting catching up with what the market has already decided about the company. It is hard to argue that as the share price has declined from $7 to $1 over the past twelve months the value of the assets should remain untouched. This isn't cash; it is just a few catch-up accounting entries that reflect the current economic reality that everybody knows about already. The upside is that to the extent that Matt is successful in turning the ship around it will be easier to show a profit if the production assets have be written down to a more reasonable value. Your points are well taken. I don't think the auditors will be able to give a clean opinion. There will most likely be a "going concern" qualification due to liquidity concerns. |
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Post by matt on Mar 1, 2016 11:47:55 GMT -5
You can count on a "going concern" opinion. The standard is whether the company has enough cash on the balance sheet to survive the next operating cycle (operating cycle is accountant-speak for one year in most cases). Since Matt has publicly admitted that raising cash will be required the auditors will have to qualify the opinion accordingly.
That said, a very substantial percentage of small biotech and pharma companies have a perpetual going concern opinion so again don't equate accounting figures with real economics. Accounting opinions only affect companies and the market when they convey new or unexpected information, and neither the asset impairment nor the going concern opinion should be news to anybody that follows the stock. Unless there is something really ugly in the 10-K the price shouldn't move much.
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Post by LosingMyBullishness on Mar 1, 2016 13:04:26 GMT -5
Trend,
why is a delay or an impairment relevant or even bad news?
It is all about news that have a direct impact on scripts, or a jump in script numbers, or a big upfront payment. Impairment is just book value. And a delay is just a delay. Everyone knows right now that MNKD will need some cash mid of this year.
So why do you make such a fuss about it?
Beside this there is nothing to analyse 'technically' with this stock. If you look at Level 2 there are literally tons of stock for every $0.01 up till $1.12, continued up to a big stopper of 546k at 1.18 then 427k at 1.25. Highest one > 99k is 100k for 1.41. This stock is so much controlled that chart analysis does not make much sense.
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Post by prvs on Mar 1, 2016 14:39:27 GMT -5
Looks like the new filing date will be on or before 15 days after the old filing date. So 3/15 or earlier. stks.co/a3PPR |
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Post by kc on Mar 1, 2016 16:44:42 GMT -5
interesting that employee options were issued. That shows that there is confidence in the company and perhaps the late filing dated is tied to the employee grants. They couldn't publish with the grants in progress.
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Post by mindovermatter on Mar 1, 2016 16:59:13 GMT -5
interesting that employee options were issued. That shows that there is confidence in the company and perhaps the late filing dated is tied to the employee grants. They couldn't publish with the grants in progress. Well, I wouldn't say confidence as much as legally obligated to offer them per their employment contract. |
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Post by peppy on Mar 1, 2016 19:15:02 GMT -5
Looks like the new filing date will be on or before 15 days after the old filing date. So 3/15 or earlier. stks.co/a3PPR Thank you. With in the next 14 days. two weeks. April 5th is 5 weeks. Thank you once again.
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Post by mnholdem on Mar 2, 2016 8:11:12 GMT -5
As for the impairment, I certainly would hope it isn't Afrezza inventory. Seems that as long as there or discussions about new partner we're far enough away from any expiration dates that inventory shouldn't need to be considered an impaired asset. Any other thoughts on what it might be?
If the sum of all estimated future cash flows is less than the carrying value of the asset, then the asset would be considered impaired and would have to be written down to its fair value. Once an asset is written down, it may only be written back up under very few circumstances.
Firm's carrying goodwill on their books are required to make tests of impairment annually. Any impairments found will then be expensed on the company's income statement.
Read more: Impaired Asset Definition | Investopedia www.investopedia.com/terms/i/impairedasset.asp#ixzz41kaddpQn
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Regardless, Rosa indicates on the filed Form 12b-25 that MannKind does not anticipate any change in operations for that period as a result of the impairment(s):
Part IV - OTHER INFORMATION
(3) Is it anticipated that any significant change in results of operations from the corresponding period for the last fiscal year will be reflected by the earnings statements to be included in the subject report or portion thereof? _Yes x No
If so, attach an explanation of the anticipated change, both narratively and quantitatively, and, if appropriate, state the reasons why a reasonable estimate of the results cannot be made.
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