|
|
Post by boomboom on Mar 20, 2016 23:19:59 GMT -5
Question for all the experts on this thread...lets say Mannkind Corp. is approached by a company who wants to buy Afrezza (not Mannkind). And lets say the sales pitch is something like
"Look, you cant afford to keep producing technosphere solutions without cash. You sell us Afrezza, we give you X.X billion and now you can become the company you always wanted to be...not a Diabetes company, but a technosphere product driven company"
If the above were to happen, and a cash infusion of X.X billion is given to Mannkind, how would someone value the stock?
The short argument would be "great, they just lost the only revenue driving product in their portfolio and are back to square one with lots of cash and no FDA approved product"
The long argument would be "great, now the company can properly focus on technosphere products and they have the cash to withstand 5+ years of development without any solvency related problems"
Sounds like an attractive solution from the business perspective especially if you can absolve your debt and continue operations for years to come. Just curious if news like this would drive the stock up a lot (back to 10s), up a little (5-7s), or sideways? (I am guessing at the stage we are at now, down would not be an option since this would be overall good news)
Thoughts?
|
|
|
|
Post by kc on Mar 21, 2016 6:34:58 GMT -5
I'm invested for Afrezza first and then Technosphere as a potential development company. I would not hold MannKind shares if the The company sold off their potential cash generator drug. I invested because if Afrezza.
|
|
|
|
Post by slugworth008 on Mar 21, 2016 6:38:31 GMT -5
Question for all the experts on this thread...lets say Mannkind Corp. is approached by a company who wants to buy Afrezza (not Mannkind). And lets say the sales pitch is something like "Look, you cant afford to keep producing technosphere solutions without cash. You sell us Afrezza, we give you X.X billion and now you can become the company you always wanted to be...not a Diabetes company, but a technosphere product driven company" If the above were to happen, and a cash infusion of X.X billion is given to Mannkind, how would someone value the stock? The short argument would be "great, they just lost the only revenue driving product in their portfolio and are back to square one with lots of cash and no FDA approved product" The long argument would be "great, now the company can properly focus on technosphere products and they have the cash to withstand 5+ years of development without any solvency related problems" Sounds like an attractive solution from the business perspective especially if you can absolve your debt and continue operations for years to come. Just curious if news like this would drive the stock up a lot (back to 10s), up a little (5-7s), or sideways? (I am guessing at the stage we are at now, down would not be an option since this would be overall good news) Thoughts? I don't know all the business particulars - but - I would prefer they sold MNKD/Afrezza for "X" per share and then spin off into a new company for Technoshere development. I want to get paid sooner rather than later. Just my preference. |
|
|
|
Post by daduke38 on Mar 21, 2016 6:47:42 GMT -5
Question for all the experts on this thread...lets say Mannkind Corp. is approached by a company who wants to buy Afrezza (not Mannkind). And lets say the sales pitch is something like "Look, you cant afford to keep producing technosphere solutions without cash. You sell us Afrezza, we give you X.X billion and now you can become the company you always wanted to be...not a Diabetes company, but a technosphere product driven company" If the above were to happen, and a cash infusion of X.X billion is given to Mannkind, how would someone value the stock? The short argument would be "great, they just lost the only revenue driving product in their portfolio and are back to square one with lots of cash and no FDA approved product" The long argument would be "great, now the company can properly focus on technosphere products and they have the cash to withstand 5+ years of development without any solvency related problems" Sounds like an attractive solution from the business perspective especially if you can absolve your debt and continue operations for years to come. Just curious if news like this would drive the stock up a lot (back to 10s), up a little (5-7s), or sideways? (I am guessing at the stage we are at now, down would not be an option since this would be overall good news) Thoughts? Interesting Question. Gotta agree with both Sluggo and KC. If they are gonna sell, sell it all. If they just sold off Afrezza, I think I would move my $ to the Company that bought them out! I am of the opinion that MNKD knows that in the right hands, Afrezza could still be a cash cow, so although plausible, I don't see them selling off just Afrezza. But I have been wrong before on MNKD  ! |
|
|
|
Post by daduke38 on Mar 21, 2016 6:52:32 GMT -5
Meant Slugworth, couldn't get it to edit for some reason
|
|
|
|
Post by mindovermatter on Mar 21, 2016 6:56:09 GMT -5
Question for all the experts on this thread...lets say Mannkind Corp. is approached by a company who wants to buy Afrezza (not Mannkind). And lets say the sales pitch is something like "Look, you cant afford to keep producing technosphere solutions without cash. You sell us Afrezza, we give you X.X billion and now you can become the company you always wanted to be...not a Diabetes company, but a technosphere product driven company" If the above were to happen, and a cash infusion of X.X billion is given to Mannkind, how would someone value the stock? The short argument would be "great, they just lost the only revenue driving product in their portfolio and are back to square one with lots of cash and no FDA approved product" The long argument would be "great, now the company can properly focus on technosphere products and they have the cash to withstand 5+ years of development without any solvency related problems" Sounds like an attractive solution from the business perspective especially if you can absolve your debt and continue operations for years to come. Just curious if news like this would drive the stock up a lot (back to 10s), up a little (5-7s), or sideways? (I am guessing at the stage we are at now, down would not be an option since this would be overall good news) Thoughts? I don't know all the business particulars - but - I would prefer they sold MNKD/Afrezza for "X" per share and then spin off into a new company for Technoshere development. I want to get paid sooner rather than later. Just my preference. Mannkind was founded in 1991. Went pulbic in '94 with 6,250,000 shares offered at $14 per share. I'd take a buy out at anything at or over $6 a share. We can all agree Afrezza is a great drug that works. But so far the diabetic community hasn't shown to be that interested in it. But as a long term investment, unless you have been actively trading the stock long and short, the stock has been a horrible investment. That's not an opinion. That's a fact. |
|
|
|
Post by dictatorsaurus on Mar 21, 2016 7:06:49 GMT -5
From my limited experience with diabetics I have to say this is true. The diabetics I have spoken with (around a dozen) verbally expressed they found the concept of inhalation to be interesting but none took the initiative to even ask their physicians about it. The effects of diabetes are cumulative and rear their ugly head later in life, such as kidney failure, nerve damage...etc. When patients are not constantly suffering or in pain, they do little to manage their condition. Sam Finta said it best when he said most diabetics walk around not knowing how sick they are. |
|
|
|
Post by mindovermatter on Mar 21, 2016 7:14:01 GMT -5
From my limited experience with diabetics I have to say this is true. The diabetics I have spoken with (around a dozen) verbally expressed they found the concept of inhalation to be interesting but none took the initiative to even ask their physicians about it. The effects of diabetics are cumulative and rear their ugly head later in life, such as kidney failure, nerve damage...etc. When patients are not constantly suffering or in pain, they do little to manage their condition. Sam Finta said it best when he said most diabetics walk around not knowing how sick they are. Very much true. I was going to state that most diabetics are passive about their disease and will not take the initiative to fight their disease as we see with the very SMALL handful of people online who post about their use of Afrezza. And I understand that seeing just how exhausting it is to manage the disease. |
|
|
|
Post by matt on Mar 21, 2016 9:21:35 GMT -5
Most R&D driven companies with a credible story trade at some premium to cash, but not a huge premium until those hopes and dreams get close to reality (like a completed Phase III and a confirmatory Phase III in progress). There are plenty of pre-revenue biotechs you can look at to calibrate your estimates of how much the market will pay for unapproved, but late in development, drugs.
The hard part with your scenario is that anybody would pay a ten digit figure for Afrezza. Pharma companies rarely have a value more than about 2X sales or 8X net income. Admittedly Afrezza has the capacity to achieve much higher sales than it has so far, but buyers do not pay a multiple of theoretically possible sales; they pay a multiple of actual sales or actual net income with a bonus thrown in for a rapidly growing business and potential synergies.
Remember that the acquiring company, whomever they are, will have to obtain a fairness opinion from an independent investment bank, and fairness opinions create legal liability for the authors. The authors can acknowledge the issues that have faced Afrezza, but ultimately they will opinine on the numbers as audited as that is the most reliable evidence. The only way to get a billion dollar valuation on Afrezza is to create a steep sales ramp that delivers at least several hundred million in profitable sales. Only then does the scenario you paint becomes plausible, but there are a lot of "ifs" at the moment. That could change, but probably not this year.
|
|
|
|
Post by uvula on Mar 21, 2016 9:49:34 GMT -5
Question for all the experts on this thread
Experts? Here?
|
|
|
|
Post by mindovermatter on Mar 21, 2016 10:01:21 GMT -5
Question for all the experts on this thread...lets say Mannkind Corp. is approached by a company who wants to buy Afrezza (not Mannkind). And lets say the sales pitch is something like "Look, you cant afford to keep producing technosphere solutions without cash. You sell us Afrezza, we give you X.X billion and now you can become the company you always wanted to be...not a Diabetes company, but a technosphere product driven company" If the above were to happen, and a cash infusion of X.X billion is given to Mannkind, how would someone value the stock? The short argument would be "great, they just lost the only revenue driving product in their portfolio and are back to square one with lots of cash and no FDA approved product" The long argument would be "great, now the company can properly focus on technosphere products and they have the cash to withstand 5+ years of development without any solvency related problems" Sounds like an attractive solution from the business perspective especially if you can absolve your debt and continue operations for years to come. Just curious if news like this would drive the stock up a lot (back to 10s), up a little (5-7s), or sideways? (I am guessing at the stage we are at now, down would not be an option since this would be overall good news) Thoughts? funny you should think there are experts here. People with opinions. Yes. Experts. No. |
|
|
|
Post by daduke38 on Mar 21, 2016 12:23:48 GMT -5
Question for all the experts on this thread
Experts? Here?
Had I read slow enough to read the word "Expert" I wouldn't have replied.  |
|
!
