Open Kimono

[od]

There have been many posts questioning (attacking) the ethics/morals/integrity of journalists/shorts/media manipulators/SNY. Considering the ‘higher ground’ most here seek, I have been struggling with the following -- if my understanding is correct that Vdex management includes many frustrated MNKD shareholders, should that fact be disclosed, at least on the Vdex website? I write this having increased my position on March 8 with the intent of adding again soon (shared, so I am not branded a troublemaker).

[peppy]

I know some endocrinologists that own some Novartis, Lilly and Johnson and johnson stock? Do they need to disclose?

[od]

Mar 20, 2016 15:47:58 GMT -5 peppy said:

I know some endocrinologists that own some Novartis stock? Do they need to disclose?

I am smiling Peppy, because I expected that response quickly (not necessarily from you)...one of the reasons I am conflicted.

[babaoriley]

It's disclosed all over the place here, which is nice and very upfront. Surely there's no legal requirement to disclose on the VDEX website, VDEX is not a public company. They owe that duty to disclose to no one (other than their private investors, if any) as far as I can see, and that includes on any duty on an ethical basis. And I can't figure a reason MNKD needs to disclose that VDEX is owned by people who own MNKD stock, the two companies are not affiliates, unless the owners of VDEX have enough stock in MNKD to make them affiliates (pretty sure they fall far short of that, mercifully). Does MNKD have an ethical duty to disclose that - don't see it. It goes without saying that a company that sets up clinics and indicates it will make Afrezza available and even describe what others have found to be the benefits and advantages of Afrezza is a fan of Afrezza, so it would be consistent with stock ownership of MNKD. My understanding is that VDEX is in the "help diabetics" business, and their belief is that one of the tools that ought to be considered is Afrezza. VDEX is very far from anyone at MNKD's idea, VDEX was conceived as a separate, money making business, while at the same time, helping diabetics live as close to a non-diabetic life as possible.

[matt]

Whether or not they need to disclose depends on whether or not their ownership in another entity creates such a conflict of interest that it potentially harms the patient by changing their prescribing patterns. Can an endocrinologist write enough scripts to influence the financial results of Novartis or J&J? It would take a small army of endocrinologists to make much of a difference in those company's results so the temptation to alter prescribing patterns is not there.

As for VDEX, it depends on their stake and whether it is material to their practice and their overall economic well-being. If they are prescribing Afrezza out of a bona fide conviction that it is better for the patient then the investment is incidental. If it is more than that, disclosure might be appropriate. Sometimes it is hard to draw the line.

[od]

Mar 20, 2016 16:19:42 GMT -5 babaoriley said:

It's disclosed all over the place here, which is nice and very upfront. Surely there's no legal requirement to disclose on the VDEX website, VDEX is not a public company. They owe that duty to disclose to no one (other than their private investors, if any) as far as I can see, and that includes on any duty on an ethical basis. And I can't figure a reason MNKD needs to disclose that VDEX is owned by people who own MNKD stock, the two companies are not affiliates, unless the owners of VDEX have enough stock in MNKD to make them affiliates (pretty sure they fall far short of that, mercifully). Does MNKD have an ethical duty to disclose that - don't see it. It goes without saying that a company that sets up clinics and indicates it will make Afrezza available and even describe what others have found to be the benefits and advantages of Afrezza is a fan of Afrezza, so it would be consistent with stock ownership of MNKD. My understanding is that VDEX is in the "help diabetics" business, and their belief is that one of the tools that ought to be considered is Afrezza. VDEX is very far from anyone at MNKD's idea, VDEX was conceived as a separate, money making business, while at the same time, helping diabetics live as close to a non-diabetic life as possible.

Agreed, Vdex's transparency on the board has been great; I never once thought/suggested that there was anything amiss.  I also agree that MNKD has any disclosure obligation (not suggested in my original post). 

[od]

Mar 20, 2016 16:21:40 GMT -5 matt said:

.... Sometimes it is hard to draw the line.

Exactly why I put it out there.