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Post by obamayoumama on Mar 16, 2016 19:15:57 GMT -5
Baba, I am not aware of nor do I remember any difference. I have been on this distressing and frustrating ride along with most of us here. Besides, I am perfectly ok with differences of opinion. I was responding to what I thought was the unexpectedly aggressive tone of your reply, but not the content. When I said imo there is zero chance of SNY offering up any cash settlement, my reasoning was (a) I doubt very much they would offer any sort of concession at all; and (b) even if they offer something, for sure they would do so by forgiving, extending or re-structuring the debt, instead of coming forth with additional cash. That is all. Peace? Don't you find it interesting that MNKD took impairment charges last quarter? When ever you are in a financial lawsuit you need to show damages. Guess what, MNKD can not only show damages but they got the impairment charges already booked. SNY damages exceed 200 million and that is what MNKD should settle for. Remember it was SNY that required MNKD to sign a multi year contract for insulin. SNY can write the 200 million dollar check and forgive the debt or they can have endless depositions and have all the dirt come out regarding their treatment of Afrezza. I believe that SNY knows that they will be forced to pay damages and it would be better to settle than be involved in another lawsuit. |
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Post by kc on Mar 16, 2016 19:28:11 GMT -5
I agree it's better to get all the costs into one quarter. It also enables the company to be more marketable. A potential buyer will gain some benefit from the carry-forward losses. So they might as well stack it up to be shown in that manner. Hopefully we can recover at least 300 million dollars from sanofi for violating their agreement to properly Market the product.
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Post by alcc on Mar 16, 2016 19:47:38 GMT -5
I don't mind having my opinions challenged, but I do mind gratuitous insults. And I do not respect mean people. I won't waste time on you, Greg. But I do wish to clarify my comments to others who might be interested. Others are free to ignore.
In MNKD's present precarious condition, they do have much more pressing issues than worrying about the notes to SNY. SNY understands this as well. So, why would SNY offer up more cash (whether for note or equity)? To head off a lawsuit re non-performance? Should SNY be worried? Is that on MNKD's plate of things to do? Does MNKD have the time/cash to press such a claim against SNY? (Note: I suspect the partnership agreement has an arbitration provision. Still, the resources required to press a claim would be a huge, potential mortal, burden/distraction on the company.)
Ok, if not to head off a suit, why else would SNY pony up cash? To help fund MNKD's efforts? Really? SNY is terminating because they "failed", whether due to lack of effort or change in strategic priorities. Efforts argument: Instead of ramping up their internal efforts, SNY now opts to outsource this to MNKD and expects better results? Change in strategic priorities argument: then why bother with MNKD at all? Terminate and go away. Cough up cash?
Anyways, we'll know soon enough.
Inventory and asset writedown is rudimentary accounting knowledge. Anyone who has been in senior management knows this. No, I am not an accountant. I was the COO of a publicly traded company. The CFO reported to me; I worked closely with him. I understand accounting principles. I keep up with FASB. If anyone wants me to explain this inventory writedown issue further I'd be happy to. Better yet, any accountants among you can just jump in.
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Post by agedhippie on Mar 16, 2016 20:57:04 GMT -5
(Note: I suspect the partnership agreement has an arbitration provision. Still, the resources required to press a claim would be a huge, potential mortal, burden/distraction on the company.) There is an arbitration clause so this never goes to court. Further more since there is a confidentiality clause covering the entire proceeding and judgement there are no messy dispositions, no grandstanding, no bad press. I cannot see what leverage Mannkind have beyond causing the inconvenience of arbitration. Sanofi will be able to justify all their actions (unless they have particularly incompetent risk and legal departments) to the arbitrators. If you are going to exit a contract through a break clause you plan for the ensuing litigation (arbitration in this case) and make sure that your subsequent actions and documentation support your story and will withstand scrutiny later. |
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Post by alcc on Mar 16, 2016 21:18:37 GMT -5
Agreements containing a performance clause, including most variations of partnership agreements and also M&A agreements with earnouts, very often end up in disputes and arbitration. A says B didn't do enough. B says A didn't do enough or (in this case) A's stuff is not good enough. It's a pissing contest. In my experience, both 1st and 2nd hand, a non-performance claim is hard to win. What constitutes good or reasonable effort? Proving bad faith is a high bar. As you said, SNY will have prepared all backups necessary in anticipation of just such a claim. Bottom line is, SNY has been around this block a lot more times than MNKD.
Yes, arbitration will be under confidentiality. Yes, there will be no exhaustive discovery. Still, it will be a huge resource drain on the company's limited -- and diminishing -- resources.
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Post by tayl5 on Mar 16, 2016 21:56:54 GMT -5
I agree that MannKind will have a hard time compelling Sanofi to pay anything, but they may cough up a parting gift to avoid further damage to their reputation as a partner. They now have a string of unhappy former partners and it will likely cost them quite a bit in the future to overcome the perceived risk of working with them. I agree a few hundred million isn't happening but I wouldn't be surprised if they pay tens of millions to keep things sweet(er than they would otherwise be).
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Post by uvula on Mar 16, 2016 22:04:40 GMT -5
I have no experience with this sort of thing but if sales soar after mnkd takes over wouldn't this make it easier to prove that sny didn't live up to their end of the agreement? In this scenario it would be in sny's best interest to settle as quickly as they can before sales take off.
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Post by mnkdfann on Mar 16, 2016 22:31:01 GMT -5
They now have a string of unhappy former partners and it will likely cost them quite a bit in the future to overcome the perceived risk of working with them. If you don't mind me asking, which are these unhappy former partners of whom you speak? |
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Post by alcc on Mar 16, 2016 22:40:17 GMT -5
They now have a string of unhappy former partners and it will likely cost them quite a bit in the future to overcome the perceived risk of working with them. If you don't mind me asking, which are these unhappy former partners of whom you speak? Corollary question: has SNY paid a breakup fee to any unhappy former partners? |
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Post by uvula on Mar 16, 2016 22:53:51 GMT -5
If sales soars after the transition, then there's no damage to claim. Sure there is. Mnkd lost a year's worth of sales that they will never get back. |
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Post by hankscorpio7 on Mar 16, 2016 23:54:05 GMT -5
If sales soars after the transition, then there's no damage to claim. Sure there is. Mnkd lost a year's worth of sales that they will never get back. The larger damage is that they have given the business and medical community the impression that Afrezza/TS is not viable. That will not be fixed cheaply. Either way, I doubt settlement money will arrive in the near term. But the threat of it will help the SP. And I think that is the name of Matt's game. You can be low in cash or have a sub $1 SP- but you can't sign decent partnerships with both. Maybe game plan is- big noise about lawsuit. SP goes to $2.5. Dilute 50m because case looks very promising. Hit big markets with huge DTC. Play pharma games with formulary, cut price. Hope scripts get over 400/wk. Make bigger noise about lawsuit, script increase. SP goes to $5. Dilute another 50m or sign partnership with much better terms or sell in entirety. SNY case never has to be resolved. |
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Post by alcc on Mar 17, 2016 0:10:47 GMT -5
Well, no surprise, we all see things differently. What one considers wishful thinking, another sees as reasonable. And vice versa. It's all good.
Anyway, we'll have to wait and see how it plays out.
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Post by BlueCat on Mar 17, 2016 0:17:31 GMT -5
If sales soars after the transition, then there's no damage to claim. Sure there is. Mnkd lost a year's worth of sales that they will never get back. If sales soar, it sure does prove SNY did nothing. Better yet, the sales with actual DTC budget applied would establish a baseline on what the result should have been, and provide a point of reference for what that damage should be. |
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Post by coo2002coo on Mar 17, 2016 0:45:16 GMT -5
(Note: I suspect the partnership agreement has an arbitration provision. Still, the resources required to press a claim would be a huge, potential mortal, burden/distraction on the company.) There is an arbitration clause so this never goes to court. Further more since there is a confidentiality clause covering the entire proceeding and judgement there are no messy dispositions, no grandstanding, no bad press. I cannot see what leverage Mannkind have beyond causing the inconvenience of arbitration. Sanofi will be able to justify all their actions (unless they have particularly incompetent risk and legal departments) to the arbitrators. If you are going to exit a contract through a break clause you plan for the ensuing litigation (arbitration in this case) and make sure that your subsequent actions and documentation support your story and will withstand scrutiny later. I think SNY will have to demonstrate and prove that they have " committed" resources, exercised their " best" efforts and incurred " substantial" costs in marketing & selling Afrezza within the validity of agreement(s) and up until the full return of control of Afrezza to MNKD. Resources, efforts and costs are mainly related to quantity and quality (& relevance) of sales manpower, marketing / education seminars (activities), advertisements, targeted regions & patients, insurance coverage, further studies, supporting equipment/ facilities, stocking of Afrezza, etc. To measure the above, SNY will have to convince the court whether the weekly script numbers, feedbacks (from patients, endos, doctors, insurance companies, salespeople) or adverse effects are most relevant to represent and reflect appropriately the sale outcome as well as justifies their decision to terminate the agreement (and of course get away with as least compensation to MNKD as possible). However, MNKD is not here to suffer. In fact, I believe, the Company since January this year, has specifically formulated counteracts to deal with SNY's exit strategies and defend in court. Despite MNKD has not yet declared war, it actually is attempting to adopt much less resources with best efforts to keep Afrezza in the market before its return from SNY and cooperate with diabetic centres, promote the drug via advocate groups, media, collaborate with partners, etc. Any effective result may lead a better chance for the Company to achieve growing weekly script numbers from this year low. Should MNKD be able to continuously get as many (or even more) weekly script numbers than SNY's, the Company would likely provide relevant comparative data and prove to the court easily that SNY has not done enough or has not been effectively promoted and sold the drug and thus is subject to much bigger compensation to MNKD. Besides, it is also critical for the court to understand the role of SNY, MNKD & the joint committee in determining, formulating of marketing strategies, execution plans and the timelines thereof, and to know who makes such ultimate decisions as marketing plans, pricing tactics, resources deployment, who is responsible for evaluating progress performance and altering decisions in joint committee. If it is true that MNKD has played a passive role and raised concerns to SNY about their changes in marketing efforts, SNY would be put in a more vulnerable position to defend themselves. |
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Post by babaoriley on Mar 17, 2016 1:14:06 GMT -5
(Note: I suspect the partnership agreement has an arbitration provision. Still, the resources required to press a claim would be a huge, potential mortal, burden/distraction on the company.) There is an arbitration clause so this never goes to court. Further more since there is a confidentiality clause covering the entire proceeding and judgement there are no messy dispositions, no grandstanding, no bad press. I cannot see what leverage Mannkind have beyond causing the inconvenience of arbitration. Sanofi will be able to justify all their actions (unless they have particularly incompetent risk and legal departments) to the arbitrators. If you are going to exit a contract through a break clause you plan for the ensuing litigation (arbitration in this case) and make sure that your subsequent actions and documentation support your story and will withstand scrutiny later. Good points, agedhippie, but never, ever, underestimate the hubris of a CEO. So, although I'm off the thinking that SNY will not end up doing more than forgiving debt (hopefully a whole lot of it), who knows what Brandicort (or whatever his name is) may have said or even written to someone else. |
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