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Post by dictatorsaurus on Sept 22, 2016 13:55:15 GMT -5
In an interview with the New York Times several years before his death Al said that his will instructed his foundation to make sure that his companies had "enough money." I'm pretty sure he wasn't aware what a massive failure the Afrezza launch would turn into when he said that.
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Dilution?
Sept 22, 2016 13:59:38 GMT -5
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Post by mnkdnewb on Sept 22, 2016 13:59:38 GMT -5
$100,000,000 line of credit wouldn't guarantee the price would rise over $1 per share and may even dilute it further. Also, with the trustees involved now, they don't make emotional decisions like Al may have done with his namesake company. Right now the company is bleeding heavily and a trustee would potentially open himself up for a lawsuit if they piss any money away on a company with a balance sheet like MNKD. Never said 100 million would get pps over $1 but scripts would if more time for runway. I don't think increasing credit line by trustees is an emotional decision either. Trustee lawsuit for adding credit line if Al wanted?...lol Okay newbie! I'm sorry, I just assumed Al Mann didn't leave such instructions. Where did you see that's what he instructed the trustee to do? I'm also curious why Al Mann told Mnkd to dilute the price by 50,000,000 shares before they announce that Al Mann actually wanted to extend the loc. Hmm With so much interest we see from other large investors (sarcasm), you're right - it wouldn't be an emotional decision at all. Mnkd is completely financially sound - all they need is more time and more money (again, again and now again).
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Post by Deleted on Sept 22, 2016 14:07:00 GMT -5
Just reading this thread makes me really curious. I have to wonder if all the longs here are really long. Some of the posts are so far out there. I get people pump and bash but are some really this blind?
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Post by dreamboatcruise on Sept 22, 2016 14:08:40 GMT -5
Would there be enough buyers for that number of shares without some empirical data that 2nd launch will be more successful than first? I think it is pure guessing game as to when and at what price dilution will occur. I just don't have that sort of feeling that enough people would have a grasp on probabilities to have anything meaningful "baked" into current price. We've held steady at levels before only to crash through them. There are always buyers but it won't be at 70 cents. I have seen a lot of biotechs go through this kind of situation, looming delisting notice with scarce cash, and there are never any "good" buyers. The true healthcare investment funds (Orbimed, Atlas, etc.) will not touch MNKD because it is not the kind of stock they invest in. The good funds want biotechs with novel drugs, preferably first in class, that have a strong marketing partner and a clear playing field. Insulins have become a commodity and even big players like Sanofi are about to feel the pain of the PBM and managed care companies trimming their formularies. Yes, I know you will all say that Afrezza is the best rapid acting insulin and that it should not be compared to other insulins, but it is the market perception that counts and not the reality of the drug. Venture capital firms spend the time to get into details on their investments on private companies, but funds that trade public companies do not so the details aren't relevant to the investment decision.
So what you are left with is the other funds (several adjectives come to mind but this is a family friendly forum so I will refrain from using them). These guys invest to get the discounted shares and sell them quickly, usually within 20-30 days. They don't care if Mannkind sells insulin, mobile telephones, solar panels, or t-shirts; a discount is a discount and in any case they are not hanging around for more than a few weeks so why care about the product. Their primary metrics for whether they will make an investment is the size of the discount, the average daily volume of shares traded (they need somebody to buy the shares they plan to sell), and the volatility since they want an extra pop on the warrants they will demand. The level of analysis is rarely more sophisticated than that.
As for the dilution being built-in to the present price, there is some of that to be sure. When the market knows that a company will have to raise more funding the price inevitably starts to drop and when the funding actually hits there is another drop (because the new buyers want their discount from whatever the market price is as the time). The worst mistake companies make is to wait; the longer Matt goes without pulling the trigger the more the PPS will decline due to the looming dilution which will only make the share price that much lower for the new deal. Had Mannkind stepped up and done a funding when the share price was $1.00, it might have dropped the PPS to 70 cents, but by waiting the overhang and uncertainty let the price move to 70 cents anyway and now the next funding will almost certainly drop it below 50 cents. The price also takes a hit on reverse splits, and one of those is in the near future as well. None of that is a secret to the market.
Time to rip off the Band-Aid. Go ahead and man up, tell the shareholders the bad news that a reverse split is coming (personally I would do something like 1 for 20), conduct the shareholder vote to authorize it, and get back in NASDAQ compliance. Then do the funding with more like a $10 price (less discounts and warrants) and hope for the best. The balance sheet is not going to fix itself, and doing incremental steps with a stock trading under $1.00 is only going to end badly. It might end badly anyway, but at least there is a fighting chance with an investable price.
I think the band-aid is covering more than a superficial wound in my retirement account. I fear it may bleed out if I rip the bandage off.
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Post by Chris-C on Sept 22, 2016 14:26:11 GMT -5
dbc, you may be right... all pure speculation as I mentioned earlier. Money has to come from somewhere, sooner than later at this point... Doubt it will be from Al Mann's estate but just my opinion. So would likely have to come from open market or private party who gets access to info we don't have that gives them enough confidence to do a deal. Either way, as I see it, money is the big issue right now and it will need to be resolved first so that scripts have the time to take care of themselves as the resolution to the second big issue imho... Agree... Time is of the essence to infuse more cash into the business. I have to wonder how Castagna was convinced to take the CCO position given the state of affairs at the time of recruitment. Cash was an issue then as it is now. I can't believe he took the position without assurances from management that cash would be forthcoming to adequately fund the business, either that or that he would be rewarded monetarily for the risk he is taking should sufficient cash prove impossible to raise. Dilution is certainly an option, but I would much prefer that the cash come from elsewhere - perhaps a setttlement with Sanofi, a milestone payment from RLS or a sizeable gift from Mann's estate for example. In my wildest dreams I fantasize that Castagna is a plant from Allergan sent to Mannkind to assess the internal state of affairs prior to a takeover bid- haha. I don't know, but I'm getting concerned about the cash crunch. Perhaps Friday's scipts will so large as to ease my concerns but the number would have to be a blowout and I don't see that in the cards as yet. Oh well, nothing to do but wait and see what happens. Let's hope Matt pulls a rabbit out of his hat. I totally agree with the observation about Mike Castagna. He has demonstrated he is competent and determined. He clearly knew what he was doing, and I don't think his stock purchase was a head fake. The company has a plan, and I agree that they also have contingency plans for funding that we will learn soon enough. There have been a few bumps in this 2.0 launch but scripts are trending in the right direction. There has been lots of speculation here about a looming "pop" in the numbers, but that remains to be seen. Consider the number of representatives and what they realistically are able to accomplish. Paradigm change (disruptive technology) takes a while to develop. Opinion leader Endos prescribing for the first time need to see results from their patients and get comfortable with a new tool. The real dramatic growth, IMO, will come from patient demand; and we've heard time and time again that PWD's don't yet know about Afrezza. Let's face it, whether by intent or incompetence, SNY did a poor job of marketing, and they had deeper pockets and a larger sales force. Their strategy was different and perhaps they underestimated the time needed to gain traction. Or, perhaps they never intended to be in it for the long term. Overall, my opinion is that their performance was lackluster by design once Brandicourt took the reins. They phoned it in and ran out the clock, but they still managed to get the weekly new Rx count to well over 300 before they re-deployed their efforts. I hope not, with lots of long shares averaged down to $3.0 in my deeply underwater MNKD account, but it may be that the ramp to break even is just longer than the current resources will support. I'm praying that skillful DTC advertising will be the saving "Hail Mary". Let's hope so. GLTAL Chris
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Post by saxcmann on Sept 22, 2016 14:47:57 GMT -5
Agree... Time is of the essence to infuse more cash into the business. I have to wonder how Castagna was convinced to take the CCO position given the state of affairs at the time of recruitment. Cash was an issue then as it is now. I can't believe he took the position without assurances from management that cash would be forthcoming to adequately fund the business, either that or that he would be rewarded monetarily for the risk he is taking should sufficient cash prove impossible to raise. Dilution is certainly an option, but I would much prefer that the cash come from elsewhere - perhaps a setttlement with Sanofi, a milestone payment from RLS or a sizeable gift from Mann's estate for example. In my wildest dreams I fantasize that Castagna is a plant from Allergan sent to Mannkind to assess the internal state of affairs prior to a takeover bid- haha. I don't know, but I'm getting concerned about the cash crunch. Perhaps Friday's scipts will so large as to ease my concerns but the number would have to be a blowout and I don't see that in the cards as yet. Oh well, nothing to do but wait and see what happens. Let's hope Matt pulls a rabbit out of his hat. I totally agree with the observation about Mike Castagna. He has demonstrated he is competent and determined. He clearly knew what he was doing, and I don't think his stock purchase was a head fake. The company has a plan, and I agree that they also have contingency plans for funding that we will learn soon enough. There have been a few bumps in this 2.0 launch but scripts are trending in the right direction. There has been lots of speculation here about a looming "pop" in the numbers, but that remains to be seen. Consider the number of representatives and what they realistically are able to accomplish. Paradigm change (disruptive technology) takes a while to develop. Opinion leader Endos prescribing for the first time need to see results from their patients and get comfortable with a new tool. The real dramatic growth, IMO, will come from patient demand; and we've heard time and time again that PWD's don't yet know about Afrezza. Let's face it, whether by intent or incompetence, SNY did a poor job of marketing, and they had deeper pockets and a larger sales force. Their strategy was different and perhaps they underestimated the time needed to gain traction. Or, perhaps they never intended to be in it for the long term. Overall, my opinion is that their performance was lackluster by design once Brandicourt took the reins. They phoned it in and ran out the clock, but they still managed to get the weekly new Rx count to well over 300 before they re-deployed their efforts. I hope not, with lots of long shares averaged down to $3.0 in my deeply underwater MNKD account, but it may be that the ramp to break even is just longer than the current resources will support. I'm praying that skillful DTC advertising will be the saving "Hail Mary". Let's hope so. GLTAL Chris Great post Chris! I agree and same boat. Not sure this is my buddy from yahoo? but seeing more and more familiar posters from over there.
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Post by madog365 on Sept 22, 2016 15:03:29 GMT -5
Not sure this is the right thread but wanted to make a point about this hypothetical "pop" in script numbers.
Right now most of our new RX are doctors prescribing their FIRST script of Afrezza (you can see this in Matt's recent presentation - many new doctors have only 1-2 patients on Afrezza). In the past many of these patients did not re-fill because they did not properly titrate and therefore did not have success. Doctors would then abandon prescribing all together which led to the decline in numbers. Doctors aren't going to prescribe to their entire patient base until they see some success in a small subset.
Assuming these new patients now see more success with Afrezza we should start to see doctors begin to scale RX to a larger percentage of their base patients. When that happens we will start to see exponential growth in script numbers. Endos see on average 50 patients a week, imagine what happens when our 140+ new doctors already prescribing start to have 10+ patients on Afrezza.
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Post by kball on Sept 22, 2016 15:14:23 GMT -5
Being in a not very optimistic mood lately about this company...
To quote someone from somewhere (not sure where but maybe nelson demille)
"The survivors will envy the dead"
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Post by babaoriley on Sept 22, 2016 15:36:17 GMT -5
Look, the reason for a reverse split in this situation, is to keep the listing. Under those circumstances, it will do nothing for the company beyond that (which is important), although it may make it easier for funding additional capital, as no doubt some investing entities are flatly prohibited from buying stock of under a certain per share value. Given that the peril of investment is the same, my guess is that last benefit has very, very little utility. But keeping the stock trading with a main NASDAQ listing is very much worthwhile.
The major downside of such a R/S is that it highlights the weakness of the company needing to do it.
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Dilution?
Sept 22, 2016 17:15:55 GMT -5
via mobile
Post by sportsrancho on Sept 22, 2016 17:15:55 GMT -5
Best time to buy is after a R/S gets sold off. 30 to 40%. If scripts are going up at that point and money has been raised. And we've bought another year of time. I see just up-side from there.
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Post by kball on Sept 22, 2016 18:23:20 GMT -5
Look, the reason for a reverse split in this situation, is to keep the listing. Under those circumstances, it will do nothing for the company beyond that (which is important), although it may make it easier for funding additional capital, as no doubt some investing entities are flatly prohibited from buying stock of under a certain per share value. Given that the peril of investment is the same, my guess is that last benefit has very, very little utility. But keeping the stock trading with a main NASDAQ listing is very much worthwhile. The major downside of such a R/S is that it highlights the weakness of the company needing to do it.As opposed to the stream of highlighted weaknesses already known and attempting to be dealt with? Who doesn't think the company is in a weak position right now?? I think its a certainty the reverse happens
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Post by gonetotown on Sept 22, 2016 18:33:15 GMT -5
Not sure this is the right thread but wanted to make a point about this hypothetical "pop" in script numbers. Right now most of our new RX are doctors prescribing their FIRST script of Afrezza (you can see this in Matt's recent presentation - many new doctors have only 1-2 patients on Afrezza). In the past many of these patients did not re-fill because they did not properly titrate and therefore did not have success. Doctors would then abandon prescribing all together which led to the decline in numbers. Doctors aren't going to prescribe to their entire patient base until they see some success in a small subset. Assuming these new patients now see more success with Afrezza we should start to see doctors begin to scale RX to a larger percentage of their base patients. When that happens we will start to see exponential growth in script numbers. Endos see on average 50 patients a week, imagine what happens when our 140+ new doctors already prescribing start to have 10+ patients on Afrezza. It's amazing how much "assuming" this company seems to require.
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Post by lennymnkd on Sept 22, 2016 18:47:37 GMT -5
Not sure this is the right thread but wanted to make a point about this hypothetical "pop" in script numbers. Right now most of our new RX are doctors prescribing their FIRST script of Afrezza (you can see this in Matt's recent presentation - many new doctors have only 1-2 patients on Afrezza). In the past many of these patients did not re-fill because they did not properly titrate and therefore did not have success. Doctors would then abandon prescribing all together which led to the decline in numbers. Doctors aren't going to prescribe to their entire patient base until they see some success in a small subset. Assuming these new patients now see more success with Afrezza we should start to see doctors begin to scale RX to a larger percentage of their base patients. When that happens we will start to see exponential growth in script numbers. Endos see on average 50 patients a week, imagine what happens when our 140+ new doctors already prescribing start to have 10+ patients on Afrezza. Good post ! Sounds logical
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Post by mnholdem on Sept 22, 2016 20:29:42 GMT -5
I'm pretty sure he wasn't aware what a massive failure the Afrezza launch would turn into when he said that.
Source: www.nytimes.com/2007/11/16/business/16mannkind.html?_r=0
Another uncertainty is Mr. Mann’s age. “If something were to happen to him, you wouldn’t have that pot of money to reach into all the time,” said Solomon Steiner, who helped invent Technosphere technology and started a company in 1991 to develop it.
When that company, Pharmaceutical Discovery, ran out of money around 1997, Mr. Steiner persuaded Mr. Mann to invest. In 2001 Mr. Mann merged the company with two others he controlled and named the new entity MannKind, a decision Mr. Steiner questions.
“Once you put your name on it, how can you let it fail?” said Mr. Steiner, who left MannKind in 2003, apparently after some disagreements with his new boss. He now runs a potential competitor, Biodel, a company developing a rapid-acting injected insulin.
Mr. Mann, who survived two minor bouts of cancer but said he was now healthy, said his will instructed the foundation that is to inherit his wealth to make sure that his companies have enough money. And he said the company’s name was meant to be a joke.
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“Once you put your name on it, how can you let it fail?” Perhaps the $2 billion question for shareholders today is whether the Alfred Mann Foundation and the Mann family would let that happen.
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