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Post by od on Jul 22, 2016 8:45:48 GMT -5
Others, more experienced in litigation than me, have explained why comparing the results of Mannkind's sales efforts to Sanofi's likely has no sway. Additionally, there is now more Afrezza data to influence prescribing decisions. Sanofi had that data before they cancelled. You all know I am not an apologist for SNY. That said, my understanding is the study was completed at the end of Q3 2015. Even if SNY planned on making Afrezza a blockbuster, considering the need for data to be scrubbed/analyzed by clinical affairs, reviewed by legal and regulatory, etc., I have a difficult time believing that the results would have been released immediately after the study closed. |
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Post by agedhippie on Jul 22, 2016 11:02:28 GMT -5
Why doesn't Mannkind have a final termination agreement with Sanofi yet. Whenever Matt is asked about a final termination agreement with Sanofi he says he has to be careful about what he can say. Sanofi has a $60 million lien against the facility in Valencia. The lien was used to secure the line of credit that Sanofi provided Mannkind. Matt said that were that debt to go away that the lien would like wise disappear. Matt also said that if they were to sell the facility the proceeds would need to be used to pay down the debt. Matt says that the facility is not up for sale. Is Matt implying that Mannkind is trying to negotiate some sort of loan forgiveness from Sanofi? If the facility goes up for sale does that mean that the negotiations failed and that there will be no loan forgiveness. What is the likely hood that Sanofi would give Mannkind any sort of loan forgiveness. Does Mannkind have any justification for seeking loan forgiveness from Sanofi? You would think if anything was going to happen it would have happened already. Quote: Why doesn't Mannkind have a final termination agreement with Sanofi yet. Whenever Matt is asked about a final termination agreement with Sanofi he says he has to be careful about what he can say.
Reply: The non-discloser clause in the contact. I am expecting the loan forgiveness.
I don't think that Sanofi will agree to anything that results in hard cash out the door so loan forgiveness looks like the best bet. At this point I think they will have partially written down the loan as they probably do not have confidence Mannkind will be able to repay it. I could imagine a negotiation to write off the loan in exchange for the Valencia building. Doing it within the scope of the arbitration would have the advantage for Mannkind of not triggering any debt default clauses in the Deerfield loans. This would reduce Mannkind's debt ratio and might allow a loan rather than dilution when they do the next cash raise. It is a safety measure for Sanofi as it partially recovers a debt that they would lose if Mannkind went into bankruptcy and also draws a line under the affair. One of my other investments that was going sideways, RLYP, got sold for $32.00 (although the people who bought at $38.50 in the secondary offering will not be happy). Their management were getting slammed for taking a $150M loan at 11.5% rather than accepting dilution but that criticism seems to have vanished! If a deal with Sanofi reduces the debt ratio to a point where Mannkind can follow the same path I will be happy. |
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Post by slugworth008 on Jul 22, 2016 11:31:17 GMT -5
Hey Sports, Yeah that is very frustrating.. We want to hear something positive, anything.. as long as it's true. many get upset when they don't say anything then crucify them for speaking up and things don't pan out.. kind of a no win for mgmt. I guess all we can hope for is honesty that has positive guidance ahead... The perfect storm.. ok dinner time.. time for ice cream and zuchini so I don't feel guilty.  Ice cream and zuchini (sp) - That's just wrong. Then again it might be a hot dessert here in PDX - lol |
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Post by gamblerjag on Jul 22, 2016 11:46:14 GMT -5
hey slug..... the ice cream and zucchini aren't mixed together.. lol it's just my rationalizing that I ate some vegetables ..... kind of like I rationalize that MNKD will be $20 someday!!  |
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Post by chuck on Jul 22, 2016 13:04:07 GMT -5
I don't think that Sanofi will agree to anything that results in hard cash out the door so loan forgiveness looks like the best bet. At this point I think they will have partially written down the loan as they probably do not have confidence Mannkind will be able to repay it. I could imagine a negotiation to write off the loan in exchange for the Valencia building. Doing it within the scope of the arbitration would have the advantage for Mannkind of not triggering any debt default clauses in the Deerfield loans. This would reduce Mannkind's debt ratio and might allow a loan rather than dilution when they do the next cash raise. It is a safety measure for Sanofi as it partially recovers a debt that they would lose if Mannkind went into bankruptcy and also draws a line under the affair. One of my other investments that was going sideways, RLYP, got sold for $32.00 (although the people who bought at $38.50 in the secondary offering will not be happy). Their management were getting slammed for taking a $150M loan at 11.5% rather than accepting dilution but that criticism seems to have vanished! If a deal with Sanofi reduces the debt ratio to a point where Mannkind can follow the same path I will be happy. I think you're on the right track here. Let's look at this from Sanofi's perspective. They dumped $400m of cash into Afrezza and got nothing in return. They have a pretty tight license agreement with mnkd where it is going to be extremely difficult to claim any damages from Sanofi. The chance of any additional cash being offered is low, notwithstanding Matt's wishful thinking. The only leverage mnkd has is a deal, like you indicate, whereby there is a trade of immediate payment (of some amount) in return for forgiveness of a big chunk of the principal. |
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Post by op2778 on Jul 22, 2016 14:31:04 GMT -5
I'm wondering: what will happen If MNKD is able to sell Afrezza in large scale (all of us want that to happen). Let's suppose the ideal scenario of Afrezza going to the moon. In that case, do you think MNKD will not claim or sue SNY? Oh, i bet they will and I'll not like to be in SNY position.
The ideal scenario for SNY is to close this game asap. They buried the product and the company and are Probably betting in BK to avoid any kind of payment, but sometimes you can be wrong.....
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Post by babaoriley on Jul 22, 2016 14:52:29 GMT -5
I'm wondering: what will happen If MNKD is able to sell Afrezza in large scale (all of us want that to happen). Let's suppose the ideal scenario of Afrezza going to the moon. In that case, do you think MNKD will not claim or sue SNY? Oh, i bet they will and I'll not like to be in SNY position. The ideal scenario for SNY is to close this game asap. They buried the product and the company and are Probably betting in BK to avoid any kind of payment, but sometimes you can be wrong..... op, if Afrezza sells like we all think it can, and the share price goes way up, that very much undermines our damage claim against SNY, since now we would be getting 100% instead of 35%. Upon a lot of introspection and reflection, I've come to the conclusion that would be okay with me. |
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Post by kball on Jul 22, 2016 16:03:17 GMT -5
I'm wondering: what will happen If MNKD is able to sell Afrezza in large scale (all of us want that to happen). Let's suppose the ideal scenario of Afrezza going to the moon. In that case, do you think MNKD will not claim or sue SNY? Oh, i bet they will and I'll not like to be in SNY position. The ideal scenario for SNY is to close this game asap. They buried the product and the company and are Probably betting in BK to avoid any kind of payment, but sometimes you can be wrong..... op, if Afrezza sells like we all think it can, and the share price goes way up, that very much undermines our damage claim against SNY, since now we would be getting 100% instead of 35%. Upon a lot of introspection and reflection, I've come to the conclusion that would be okay with me. On the other hand, by the time this might happen many of us here will most likely be on either some sort of anti-depressant, ED drug, possibly alcoholic, a step closer towards alzheimers, mumbling all the time and worrying our loved ones, and long gone from this investment |
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Post by oldfishtowner on Jul 25, 2016 6:35:10 GMT -5
I'm wondering: what will happen If MNKD is able to sell Afrezza in large scale (all of us want that to happen). Let's suppose the ideal scenario of Afrezza going to the moon. In that case, do you think MNKD will not claim or sue SNY? Oh, i bet they will and I'll not like to be in SNY position. The ideal scenario for SNY is to close this game asap. They buried the product and the company and are Probably betting in BK to avoid any kind of payment, but sometimes you can be wrong..... op, if Afrezza sells like we all think it can, and the share price goes way up, that very much undermines our damage claim against SNY, since now we would be getting 100% instead of 35%. Upon a lot of introspection and reflection, I've come to the conclusion that would be okay with me. It's not that simple. A year has been lost on patents. Without revenue from Afrezza, MNKD has been unable to develop other products. How many years delay in developing these products and how much lost revenue will SNY have caused? Time is money in this business. Time for competition to catch up, other products to provide more competition in the diabetes space. SNY may have cost MNKD more than a year since it is fighting the negative perspectives that SNY left behind. So how many billions does SNY owe MNKD? |
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Post by anderson on Jul 25, 2016 7:35:00 GMT -5
op, if Afrezza sells like we all think it can, and the share price goes way up, that very much undermines our damage claim against SNY, since now we would be getting 100% instead of 35%. Upon a lot of introspection and reflection, I've come to the conclusion that would be okay with me. It's not that simple. A year has been lost on patents. Without revenue from Afrezza, MNKD has been unable to develop other products. How many years delay in developing these products and how much lost revenue will SNY have caused? Time is money in this business. Time for competition to catch up, other products to provide more competition in the diabetes space. SNY may have cost MNKD more than a year since it is fighting the negative perspectives that SNY left behind. So how many billions does SNY owe MNKD? Also dilution would not have occurred if Mannkind was looking to be on track(TASE or the 48 million shares). If the scripts were going up cash flow would have been more positive and even if they needed more cash they would have gotten more favorable terms. |
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Post by matt on Jul 25, 2016 7:37:07 GMT -5
So how many billions does SNY owe MNKD? Probably zero. Unless the contract specifically says that Sanofi is liable for consequential damages, then they aren't on the hook even if MNKD could prove the losses (which are purely theoretical and speculative). Regarding Sanofi, their lawyers are probably advising them to do nothing at all. True, the money invested is a sunk cost and has probably been written down to zero on their books, but they do have Valencia as security for the debt. If Sanofi is looking at the MNKD balance sheet and thinking that bankruptcy is inevitable, there is no reason not to wait and then take the asset to recover some of their investment. Since the asset is secured, a liquidation of the building would happen outside of the bankruptcy proceedings and would not be subject to objections by other creditors. From a PR perspective, this would be fairly clean since secured creditors moving to liquidate the underlying assets are considered routine actions and don't attract much press. Will it come to that? Lets hope not, but with the debt not maturing for ten years and binding arbitration required under the contract, Sanofi won't be in a hurry to do much of anything. |
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Post by mnholdem on Jul 25, 2016 9:16:34 GMT -5
Wouldn't the "what" and "when" be determined by the arbitration panel, though?
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Post by dcassidy1618a on Jul 25, 2016 9:38:48 GMT -5
If Sanofi returns unused inventory, will Mannkind have to refund the purchase price?
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Post by agedhippie on Jul 25, 2016 10:20:05 GMT -5
Wouldn't the "what" and "when" be determined by the arbitration panel, though? Yes however Matt's assessment is accurate. The arbitration clause in the agreement says the arbitrators shall have no authority to award punitive or any other type of damages not measured by a Party’s compensatory damages. Mannkind will need to quantify any losses and at arbitration that can be very limiting. Remember also that discovery rules at arbitration are very restrictive compared to law courts (a major reason why company's like arbitration). |
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Post by agedhippie on Jul 25, 2016 10:30:13 GMT -5
If Sanofi returns unused inventory, will Mannkind have to refund the purchase price? Mannkind have to pay if they accept the return. They have to option not to accept the return in which case Sanofi may sell it and keep the revenue. People have been experiencing difficulty getting prescriptions filled so there probably isn't a lot of inventory out there. It's in both Sanofi and Mannkind's interests for this to be the case (Sanofi want to get rid of it, Mannkind do not want Sanofi dumping cut price Afrezza into the supply chain) |
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