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Post by compound26 on Mar 17, 2016 16:48:34 GMT -5
My understanding is that the loan facility terminates when the partnership ends. However, any amount already borrowed by MNKD to cover their share of expenses does not have to be repaid until 2024. liane, agree. That's also my interpretation of what Matt has stated. I estimate the total outstanding under the Sanofi facility will be around 80 million by April 5 and Mannkind does not need to pay back such amount until 2024.
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Post by LosingMyBullishness on Mar 17, 2016 17:16:28 GMT -5
My understanding is that the loan facility terminates when the partnership ends. However, any amount already borrowed by MNKD to cover their share of expenses does not have to be repaid until 2024. Okay, So you are saying that they could request the untapped $110m from SNY at any date till the partnership ends. Great. The last CC was mostly about the impairment and it seems to me now that this was all set up and well documented now in the SEC fillings to link the impairments with the netlosses from Afrezza and by this with the Loan facility. Well done. And this was not obvious to the shorts (and their whistleblower SNY?)? Both the Sanofi Loan Facility and the Security Agreement remain in effect. Pursuant to the Sanofi Loan Facility, we may borrow up to an aggregate of $175.0 million to fund our share of net losses from AFREZZA product sales by Sanofi or its affiliates. The original maturity date of September 23, 2024 for repayment of the outstanding principal amount of the loans under the Sanofi Loan Facility is not affected by the termination of the Sanofi License Agree
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Post by liane on Mar 17, 2016 17:19:17 GMT -5
No, the loan can only be tapped for the shared expenses getting Afrezza to market.
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Post by kc on Mar 17, 2016 17:25:34 GMT -5
From the 10K
On January 4, 2016, we received written notice from Sanofi of its election to terminate in its entirety the Sanofi License Agreement. Sanofi’s notice indicated that the termination was pursuant to Sanofi’s right to terminate the agreement upon Sanofi’s good faith determination that the commercialization of AFREZZA is no longer economically viable in the United States, in which case the effective date of termination (the “Termination Date”) would be April 4, 2016. In the alternative, Sanofi indicated that the termination was also pursuant to its right to terminate the agreement for any reason, in which case the Termination Date would be July 4, 2016. We believe that Sanofi lacks a good faith basis for determining that commercialization of AFREZZA is no longer economically viable in the United States. Nonetheless, in the interest of an expedient transition, we are currently working with Sanofi to transfer and wind down the agreement activities by April 4, 2016, or as soon as practicable thereafter. As required by the Sanofi License Agreement, we and Sanofi are currently using diligent efforts to facilitate the smooth and orderly transition of development and commercialization activities related to AFREZZA, and are negotiating in good faith a written transition agreement for this purpose. As a result of the foregoing termination, effective on the Termination Date and thereafter during any period which Sanofi is required to perform any wind-down activities pursuant to the terms of the Sanofi License Agreement, the rights granted to Sanofi under the Sanofi License Agreement to develop and commercialize AFREZZA will become non-exclusive and we will have the right to engage one or more other distributors and/or licensees of AFREZZA. Sanofi will continue to distribute AFREZZA during the wind-down period as required by the agreement until such time that we or our designee takes over responsibility for distribution. All profits and losses from AFREZZA product sales by Sanofi or its affiliates after the Termination Date, if any, will continue to be shared 65% by Sanofi and 35% by us pursuant to the terms of the Sanofi License Agreement. We and Sanofi are also parties to a supply agreement, dated August 11, 2014 (the “Sanofi Supply Agreement”), pursuant to which we are required to supply Sanofi or its affiliates or its sublicensees such quantities of AFREZZA as requested by Sanofi to cover its commercial requirements. As a result of the termination of the Sanofi License Agreement, the Sanofi Supply Agreement will terminate by its terms on the Termination Date. In addition to the foregoing agreements, we and Aventisub LLC, an affiliate of Sanofi, are parties to a Senior Secured Revolving Promissory Note, dated September 23, 2014 (the “Sanofi Loan Facility”) and a Guaranty and Security Agreement (the “Security Agreement”). Both the Sanofi Loan Facility and the Security Agreement remain in effect. Pursuant to the Sanofi Loan Facility, we may borrow up to an aggregate of $175.0 million to fund our share of net losses from AFREZZA product sales by Sanofi or its affiliates. The original maturity date of September 23, 2024 for repayment of the outstanding principal amount of the loans under the Sanofi Loan Facility is not affected by the termination of the Sanofi License Agreement.
As part of the approval of AFREZZA, the FDA required us to conduct the following post-marketing studies:
• A dose-ranging pharmacokinetic (PK)-pharmacodynamic (PD) glucose-clamp trial to characterize the dose-response of AFREZZA relative to subcutaneous insulin in patients with type 1 diabetes, which Sanofi completed in 2015;
• A PK-PD glucose-clamp trial to characterize within-subject variability, which Sanofi completed in 2015;
• An open-label PK and multiple-dose safety and tolerability dose-titration trial of AFREZZA in pediatric patients ages 4 to 17 years with type 1 diabetes, for which Sanofi is in the process of enrolling subjects, followed by a prospective, open-label, randomized, controlled trial comparing the efficacy and safety of prandial AFREZZA to prandial subcutaneous insulin as part used in combination with subcutaneous basal insulin in pediatric patients 4 to 17 years old with type 1 or type 2 diabetes; and
• A five-year, randomized, controlled trial in 8,000-10,000 patients with type 2 diabetes to assess the potential serious risk of pulmonary malignancy with AFREZZA use.
Pursuant to the Sanofi License Agreement, we transferred the approved new drug application (“NDA”) for AFREZZA to Sanofi following the closing of the transaction. Sanofi has completed the two PK-PD studies and is in the process of enrolling subjects in the first part of the pediatric study. The obligation to complete the pediatric study and to conduct the five-year pulmonary safety study will revert to us when the NDA for AFREZZA is transferred back to us in connection with the termination of the Sanofi License Agreement. At that time, we will become responsible for the NDA and its maintenance.
www.sec.gov/Archives/edgar/data/899460/000119312516505366/d107849d10k.htm
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Post by kball on Mar 17, 2016 17:37:01 GMT -5
From the 10K
On January 4, 2016, we received written notice from Sanofi of its election to terminate in its entirety the Sanofi License Agreement. Sanofi’s notice indicated that the termination was pursuant to Sanofi’s right to terminate the agreement upon Sanofi’s good faith determination that the commercialization of AFREZZA is no longer economically viable in the United States, in which case the effective date of termination (the “Termination Date”) would be April 4, 2016. In the alternative, Sanofi indicated that the termination was also pursuant to its right to terminate the agreement for any reason, in which case the Termination Date would be July 4, 2016. We believe that Sanofi lacks a good faith basis for determining that commercialization of AFREZZA is no longer economically viable in the United States. Nonetheless, in the interest of an expedient transition, we are currently working with Sanofi to transfer and wind down the agreement activities by April 4, 2016, or as soon as practicable thereafter. As required by the Sanofi License Agreement, we and Sanofi are currently using diligent efforts to facilitate the smooth and orderly transition of development and commercialization activities related to AFREZZA, and are negotiating in good faith a written transition agreement for this purpose. As a result of the foregoing termination, effective on the Termination Date and thereafter during any period which Sanofi is required to perform any wind-down activities pursuant to the terms of the Sanofi License Agreement, the rights granted to Sanofi under the Sanofi License Agreement to develop and commercialize AFREZZA will become non-exclusive and we will have the right to engage one or more other distributors and/or licensees of AFREZZA. Sanofi will continue to distribute AFREZZA during the wind-down period as required by the agreement until such time that we or our designee takes over responsibility for distribution. All profits and losses from AFREZZA product sales by Sanofi or its affiliates after the Termination Date, if any, will continue to be shared 65% by Sanofi and 35% by us pursuant to the terms of the Sanofi License Agreement. We and Sanofi are also parties to a supply agreement, dated August 11, 2014 (the “Sanofi Supply Agreement”), pursuant to which we are required to supply Sanofi or its affiliates or its sublicensees such quantities of AFREZZA as requested by Sanofi to cover its commercial requirements. As a result of the termination of the Sanofi License Agreement, the Sanofi Supply Agreement will terminate by its terms on the Termination Date. In addition to the foregoing agreements, we and Aventisub LLC, an affiliate of Sanofi, are parties to a Senior Secured Revolving Promissory Note, dated September 23, 2014 (the “Sanofi Loan Facility”) and a Guaranty and Security Agreement (the “Security Agreement”). Both the Sanofi Loan Facility and the Security Agreement remain in effect. Pursuant to the Sanofi Loan Facility, we may borrow up to an aggregate of $175.0 million to fund our share of net losses from AFREZZA product sales by Sanofi or its affiliates. The original maturity date of September 23, 2024 for repayment of the outstanding principal amount of the loans under the Sanofi Loan Facility is not affected by the termination of the Sanofi License Agreement.
As part of the approval of AFREZZA, the FDA required us to conduct the following post-marketing studies:
• A dose-ranging pharmacokinetic (PK)-pharmacodynamic (PD) glucose-clamp trial to characterize the dose-response of AFREZZA relative to subcutaneous insulin in patients with type 1 diabetes, which Sanofi completed in 2015;
• A PK-PD glucose-clamp trial to characterize within-subject variability, which Sanofi completed in 2015;
• An open-label PK and multiple-dose safety and tolerability dose-titration trial of AFREZZA in pediatric patients ages 4 to 17 years with type 1 diabetes, for which Sanofi is in the process of enrolling subjects, followed by a prospective, open-label, randomized, controlled trial comparing the efficacy and safety of prandial AFREZZA to prandial subcutaneous insulin as part used in combination with subcutaneous basal insulin in pediatric patients 4 to 17 years old with type 1 or type 2 diabetes; and
• A five-year, randomized, controlled trial in 8,000-10,000 patients with type 2 diabetes to assess the potential serious risk of pulmonary malignancy with AFREZZA use.
Pursuant to the Sanofi License Agreement, we transferred the approved new drug application (“NDA”) for AFREZZA to Sanofi following the closing of the transaction. Sanofi has completed the two PK-PD studies and is in the process of enrolling subjects in the first part of the pediatric study. The obligation to complete the pediatric study and to conduct the five-year pulmonary safety study will revert to us when the NDA for AFREZZA is transferred back to us in connection with the termination of the Sanofi License Agreement. At that time, we will become responsible for the NDA and its maintenance.
www.sec.gov/Archives/edgar/data/899460/000119312516505366/d107849d10k.htm
Now they use language saying "diligent efforts" rather than reasonable efforts? Still think the mannkind lawyers botched up on that one.
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Post by LosingMyBullishness on Mar 17, 2016 17:42:41 GMT -5
kc, can you give a hint of what you wanted to convey with your long quote?
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Post by lakers on Oct 20, 2016 18:21:11 GMT -5
investors.mannkindcorp.com/secfiling.cfm?filingID=1193125-16-505910&CIK=899460 8-K
Correspondingly, given the continued lower than expected sales of Afrezza, we assessed the impact of the value and recoverability of our long-lived assets in accordance with accounting guidance. As a result, impairment charges of $206.6 million were recorded in the fourth quarter of 2015, of which $140.4 million related to impairment of fixed assets and $66.2 million related to loss on future purchase commitments, primarily insulin.
We expect G&A to remain relatively flat in 2016 as compared to last year, as a result of our restructuring measures in 2015, offset by an expected increase in professional fees related to the Sanofi termination. We anticipate our overall R&D expenses will decrease in 2016 compared to last year, due to our focused efforts in the transition of the Afrezza rights this year, and minimal incremental cost associated with our development pipeline.
We will incur sales and marketing expenses in 2016, as the sales and marketing efforts transition from Sanofi this year. Product manufacturing expenses are expected to remain relatively flat as compared to last year, due to the Sanofi termination, and the associated transition period, as this year’s production levels should be consistent with last year’s volumes.
Matthew Pfeffer - MannKind - CEO
The most noteworthy financial event in the fourth quarter was clearly the impairment charges recognized as the results of the continued slow sales of Afrezza by Sanofi through the end of the year, which culminated in their decision to return the product to MannKind.
As a consequence, we wrote down our Danbury manufacturing facility, and wrote off essentially all of our raw material and finished goods inventory, including some components not even yet received, but for which we have purchase commitments. These non-cash write-downs will have a positive effect, ironically, on our P&L going forward, as they will reduce overhead and material costs associated with future product manufacture.
The Sanofi collaboration agreement terminated on April 5, 2016. At that time, we signed a transition agreement, whereby Sanofi agreed to supply Afrezza to the market until such time as we were able to do so ourselves, or October 1, 2016, whichever came first. As announced on August 1, we now have MannKind branded product in commercial channels and available for purchase, so the agreement with Sanofi is winding down.
We expect that the third quarter of 2016 will be the final quarter of our profit and loss sharing arrangement with Sanofi; however, certain aspects of our relationship with Sanofi will continue beyond this date. As examples, our indebtedness under the loan facility with Sanofi will not mature until August 2024 and Sanofi’s obligations under the “Insulin put” will continue until Sanofi’s share of our current and future insulin purchases accumulates to $50 million. Under the terms negotiated with Sanofi, another payment from them is anticipated late this year, and payments will continue to be made periodically for at least the next couple of years.
$206.6M impairment charges - $50M insulin put = $156.6M damage. Mnkd incurs ~ 77M debt w/ Sny. A settlement may include debt forgiveness (debt is considered dead money to Sny till 2024 anyway). So, the min cash Sny might owe is $79.6M.
Debt forgiveness would remove the lien from Valencia building and patents. Mnkd can either sell the building, use as collateral for future financings, or lease out for income. The patents, IPs can be licensed out to the like of RLS, BPs.
This doesn't include damage inflicted on Afrezza future sales due to the following.
investors.mannkindcorp.com/secfiling.cfm?filingID=1193125-16-505366&CIK=899460 10-K
We believe that Sanofi lacks a good faith basis for determining that commercialization of AFREZZA is no longer economically viable in the United States. Nonetheless, in the interest of an expedient transition, we are currently working with Sanofi to transfer and wind down the agreement activities by April 4, 2016, or as soon as practicable thereafter. As required by the Sanofi License Agreement, we and Sanofi are currently using diligent efforts to facilitate the smooth and orderly transition of development and commercialization activities related to AFREZZA, and are negotiating in good faith a written transition agreement for this purpose.
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Post by agedhippie on Oct 20, 2016 20:23:50 GMT -5
I have reformatted this slightly (coloured the 8K and FAQ text blue, elipsed where text was cut, and italicised) to make clear what is filing and what is Laker's commentary. investors.mannkindcorp.com/secfiling.cfm?filingID=1193125-16-505910&CIK=8994608-K for the March 14th 2016 Conference Call.Rose Alinaya - MannKind - Principal Accounting Officer
... Correspondingly, given the continued lower than expected sales of Afrezza, we assessed the impact of the value and recoverability of our long-lived assets in accordance with accounting guidance. As a result, impairment charges of $206.6 million were recorded in the fourth quarter of 2015, of which $140.4 million related to impairment of fixed assets and $66.2 million related to loss on future purchase commitments, primarily insulin.
....
We expect G&A to remain relatively flat in 2016 as compared to last year, as a result of our restructuring measures in 2015, offset by an expected increase in professional fees related to the Sanofi termination. We anticipate our overall R&D expenses will decrease in 2016 compared to last year, due to our focused efforts in the transition of the Afrezza rights this year, and minimal incremental cost associated with our development pipeline.
We will incur sales and marketing expenses in 2016, as the sales and marketing efforts transition from Sanofi this year. Product manufacturing expenses are expected to remain relatively flat as compared to last year, due to the Sanofi termination, and the associated transition period, as this year’s production levels should be consistent with last year’s volumes.
And now I turn back to Matt for final comment. Matthew Pfeffer - MannKind - CEOThank you Rose.The most noteworthy financial event in the fourth quarter was clearly the impairment charges recognized as the results of the continued slow sales of Afrezza by Sanofi through the end of the year, which culminated in their decision to return the product to MannKind.As a consequence, we wrote down our Danbury manufacturing facility, and wrote off essentially all of our raw material and finished goods inventory, including some components not even yet received, but for which we have purchase commitments. These non-cash write-downs will have a positive effect, ironically, on our P&L going forward, as they will reduce overhead and material costs associated with future product manufacture.
....textlab.io/doc/18731440/faq-august-2016---mannkind-corporationFAQ August 2016 - Mannkind CorporationWhat is the status of the Sanofi termination, including the final tally of monetary obligations in each direction?The Sanofi collaboration agreement terminated on April 5, 2016. At that time, we signed a transitionagreement, whereby Sanofi agreed to supply Afrezza to the market until such time as we were able todo so ourselves, or October 1, 2016, whichever came first. As announced on August 1, we now haveMannKind branded product in commercial channels and available for purchase, so the agreement withSanofi is winding down.We expect that the third quarter of 2016 will be the final quarter of our profit and loss sharingarrangement with Sanofi; however, certain aspects of our relationship with Sanofi will continue beyondthis date. As examples, our indebtedness under the loan facility with Sanofi will not mature until August2024 and Sanofi’s obligations under the “Insulin put” will continue until Sanofi’s share of our current and future insulin purchases accumulates to $50 million. Under the terms negotiated with Sanofi, another payment from them is anticipated late this year, and payments will continue to be made periodically for at least the next couple of years. ----- Laker's comments$206.6M impairment charges - $50M insulin put = $156.6M damage. Mnkd incurs ~ 77M debt w/ Sny. A settlement may include debt forgiveness (debt is considered dead money to Sny till 2024 anyway). So, the min cash Sny might owe is $79.6M.
Debt forgiveness would remove the lien from Valencia building and patents. Mnkd can either sell the building, use as collateral for future financings, or lease out for income. The patents, IPs can be licensed out to the like of RLS, BPs.
This doesn't include damage inflicted on Afrezza future sales due to the following. investors.mannkindcorp.com/secfiling.cfm?filingID=1193125-16-505366&CIK=899460
10-K Filed Mar 15, 2016We believe that Sanofi lacks a good faith basis for determining that commercialization of AFREZZA is no longer economically viable in the United States. Nonetheless, in the interest of an expedient transition, we are currently working with Sanofi to transfer and wind down the agreement activities by April 4, 2016, or as soon as practicable thereafter. As required by the Sanofi License Agreement, we and Sanofi are currently using diligent efforts to facilitate the smooth and orderly transition of development and commercialization activities related to AFREZZA, and are negotiating in good faith a written transition agreement for this purpose. Ok - there are a few points to make here. The damages calculation does not stack up since you are combining self-assessed non-cash impairment with real cash liabilities and debt. Mannkind asserts that Sanofi lack a good faith basis for withdrawing - this is purely to preserve their position should they want to try for arbitration but in itself it is meaningless. To get anywhere Mannkind needs to be able to prove the lack of good faith, and to quantify actual losses. I really don't see this going anywhere.
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Post by rockstarrick on Oct 20, 2016 21:55:20 GMT -5
agedhippieSanofi launched afrezza on February 3rd 2015, and announced they were tapping out January 5th 2016. I am not predicting anything, or counting on any type of settlement from Sanofi, but if Mike C and his team can gain some serious ground on Sanofi in the same amount of time, things are going to look really suspicious IMO. Imagine afrezza pressing on to blockbuster status Stranger things have happened, Sanofi would look like complete idiots. That would be good enough for me, I'd love to see it, for several reasons.
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Post by audiomr on Oct 21, 2016 2:21:25 GMT -5
My understanding is that the loan facility terminates when the partnership ends. However, any amount already borrowed by MNKD to cover their share of expenses does not have to be repaid until 2024. Exactly.
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Post by audiomr on Oct 21, 2016 2:24:13 GMT -5
Plus the imminent Sanofi settlement will extend the runway to end of 2019 assuming Mnkd got zero rev from Afrezza, Afrezza licensing agreements with regional partners, RLS' inhaled CBD for epilepsy, MS, pain, RA, Mnkd's PAH, antiematic, Epi. Many shorts including those on this board now realize their risk is very high thereby covering their positions. It would be nice if there were some sort of beneficial settlement with Sanofi, but there doesn't seem to be any reason to expect one.
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Post by winstonsmith on Oct 21, 2016 8:20:51 GMT -5
"Sanofi would look like complete idiots?"......hardly. Sanofi did their part for the pharma club, which was clearly to help kill Afrezza that could take down all of the inferior prandial insulins over time.
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Post by Deleted on Oct 21, 2016 10:13:38 GMT -5
So is part of the purpose of the accelerated write offs to increase the portion of MNKD losses endured under the joint marketing of Afrezza with Sanofi and hence, tap as much of the $175mm line for cash as possible? If so, would they not have already done this or can they now still tap Sanofi on the shoulder and per the agreement, but some more cash in the bank?
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Post by rockstarrick on Oct 21, 2016 10:14:10 GMT -5
"Sanofi would look like complete idiots?"......hardly. Sanofi did their part for the pharma club, which was clearly to help kill Afrezza that could take down all of the inferior prandial insulins over time. I guess I should've said complete idiots to people with Diabetes. If there was a big conspiracy with the "pharma club" to kill afrezza, Sanofi would be known as the new Mikey on the old Life cereal commercial. Regardless, if Mike and team are able to blow this thing out of the water and make Sanofi look like the Company that failed at a Diabetes drug deemed a game changer by many, I would consider that some of the best payback possible. Remember, Sanofi told the world for months that they were purposefully slow launching afrezza, they flat out lied IMO. i hope they sink to the bottom.
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Post by agedhippie on Oct 21, 2016 12:44:46 GMT -5
agedhippie Sanofi launched afrezza on February 3rd 2015, and announced they were tapping out January 5th 2016. I am not predicting anything, or counting on any type of settlement from Sanofi, but if Mike C and his team can gain some serious ground on Sanofi in the same amount of time, things are going to look really suspicious IMO. Imagine afrezza pressing on to blockbuster status Stranger things have happened, Sanofi would look like complete idiots. That would be good enough for me, I'd love to see it, for several reasons. Sanofi can make completely the wrong call on marketing and consequently not believe there is a market, while Mannkind can take over and hit the right market making Sanofi look like complete idiots. The thing is Sanofi looking like complete idiots is not the same as Sanofi acting in bad faith which is what is needed for compensation.
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