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Post by agedhippie on Sept 24, 2016 19:04:09 GMT -5
One of Matt's slide said successful negotiation of a settlement w/ Sny was vital, I paraphrased. You can dig up the slide. I believe it's still on-going. I agree with "outcome of Arbitration would certainly be better after we have shown success where SNY didn't." A settlement should address $70M loan forgiveness to lift the lien on Danbury plant, Valencia HQ. It's dead money to Sny anyway. That's probably the first thing Sny will offer. I would not rule out if EpiHale is part of the package since Sny dropped AviQ, EpiPen competition. Check Pfizer's settlement w/ Nektar, which includes a joint R&D deal. But will MNKD be allowed to publicize the fact (if and when) they received any monetary relieve from SNY as settlement? In theory not. However if the number is big enough it would be a material event and that would have to be filed so we would see an 8K. If it was a loss or only a minor amount there would probably just be silence since it's not material and absent that I am not sure they could break the confidentiality agreement. One thing to remember when cheering Sanofi hitting obstacles is that it hits their balance sheet which gives them less room to settle rather than go to arbitration. Although the $70M loan may be dead money it is sitting on Sanofi's balance sheet as an asset.
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Post by gonetotown on Sept 24, 2016 20:00:46 GMT -5
The contract means that they couldn't tell us even if they wanted to. The fact the arbitration is underway, the evidence, and any judgement is all confidential. [ Understood, but are we still on some planned schedule of separation? Or are we at a point yet where the silence can only mean they're in arbitration? As I understood it, arbitration was handled by the joint action committee which, curiously enough, was chaired by SNY and all final decisions were left to the chairman. Since they'vre separated, I'd presume the JAC is history along with any arbitration that was conducted.
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Post by Deleted on Sept 24, 2016 20:54:48 GMT -5
[ Understood, but are we still on some planned schedule of separation? Or are we at a point yet where the silence can only mean they're in arbitration? As I understood it, arbitration was handled by the joint action committee which, curiously enough, was chaired by SNY and all final decisions were left to the chairman. Since they'vre separated, I'd presume the JAC is history along with any arbitration that was conducted. looks like you know too much and well versed with such dealings. Have any more info?
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Post by agedhippie on Sept 24, 2016 22:10:48 GMT -5
[ Understood, but are we still on some planned schedule of separation? Or are we at a point yet where the silence can only mean they're in arbitration? As I understood it, arbitration was handled by the joint action committee which, curiously enough, was chaired by SNY and all final decisions were left to the chairman. Since they'vre separated, I'd presume the JAC is history along with any arbitration that was conducted Arbitration is handled by a three man panel and it has nothing to do with the JAC. The process for selecting the panel is laid out in the partnership agreement with one arbitrator chosen by Mannkind, one by Sanofi, and the third chosen by the previous two. It is all covered in Article 14 of the agreement. Arbitration can be initiated by Sanofi or Mannkind and the right persists after the termination of the contract (as does the confidentiality clause).
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Post by gonetotown on Sept 25, 2016 10:05:03 GMT -5
As I understood it, arbitration was handled by the joint action committee which, curiously enough, was chaired by SNY and all final decisions were left to the chairman. Since they'vre separated, I'd presume the JAC is history along with any arbitration that was conducted Arbitration is handled by a three man panel and it has nothing to do with the JAC. The process for selecting the panel is laid out in the partnership agreement with one arbitrator chosen by Mannkind, one by Sanofi, and the third chosen by the previous two. It is all covered in Article 14 of the agreement. Arbitration can be initiated by Sanofi or Mannkind and the right persists after the termination of the contract (as does the confidentiality clause). Rereading the agreement, I see the part you're referring to: www.sec.gov/Archives/edgar/data/899460/000119312514406347/d783199dex101.htmBut it also says: "In the event of any dispute arising out of or relating to this Agreement or either Party’s rights or obligations hereunder, except as otherwise provided in this Agreement, the Party wishing to invoke dispute resolution proceedings shall send to the other Party, in accordance with the notice provisions set forth in Section 15.8, a written notice of dispute indicating that such notifying Party wishes to invoke such negotiations pursuant to this Section 14.1 and that sets out in reasonable detail the claims asserted, the nature of the dispute, any facts that are or are not in dispute, and the intended treatment and effect of such pending dispute (“Notice of Dispute”)." Has MNKD sent a written notice? I don't see anywhere that they said anything to that effect.
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Post by babaoriley on Sept 25, 2016 10:38:58 GMT -5
What did Sanofi do to entitle Mannkind to anything? I have no doubt they sandbagged, but this has to be proven over years and years in court and millions of dollars in legal fees. dic, You ask a simple question in the first line, sort of challenging people to come up with something. But then you immediately answer it in the second line. The fact it may cost millions and take years to prove is a matter of whether or not it makes sense or is even possible to pursue.
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Post by audiomr on Sept 25, 2016 11:52:32 GMT -5
Could just be that mannkind didn't want to complain about them while mannkind was still working with them before getting them completely out the door. There was a transition that began in January. And I recall a day in April of importance to that transition. I believe this is correct.
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Post by audiomr on Sept 25, 2016 11:54:36 GMT -5
This is a conversation I'm interested in, not the bashing of sny (as much as I'd enjoy that too, just not productive) but where are we in terms of a final separation? Was it supposed to be final by now? Is there a working timeline? I was hoping to get some clarity on this at the last cc but we only got one, bad, question answered. I think we are finally separated. Sanofi maintained distribution until Mannkind was ready to take it over, and Mannkind exercised the insulin put, which yields ongoing payments from Sanofi. Doubt there is anything more to it than that.
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Post by audiomr on Sept 25, 2016 11:59:21 GMT -5
What did Sanofi do to entitle Mannkind to anything? I have no doubt they sandbagged, but this has to be proven over years and years in court and millions of dollars in legal fees. Can't be taken to court. Everything must be settled by arbitration. Moreover, since the partnership agreement explicitly gives Mannkind the right to terminate in the event Sanofi is determined not to have made a good-faith effort to promote and sell Afrezza, I doubt there's anything to arbitrate. Termination cures that breach. Unless there are disagreements about accounting, I think we're done.
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Post by slugworth008 on Sept 25, 2016 12:06:25 GMT -5
Reading between the lines. Doesn't mean much, especially coming from Matt. Focus should be on promoting and selling the product, not bashing Sanofi. I agree that the focus should be on promoting and selling Afrezza. But SNY's decision to sack Vienbacher cost MNKD in a big way - And I would believe that MNKD could also move forward with arbitration while promoting Afrezza....and IMO that's exactly what they should be doing.
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Post by matt on Sept 25, 2016 13:17:33 GMT -5
Does anyone know the status of Arbitration or if we have even applied for it? I am assuming Matt or surrogates are in negotiations for some form of "severance", but since we contractually can't sue we probably have to negotiate first to show good faith effort. It is painful to wait, but outcome of Arbitration would certainly be better after we have shown success where SNY didn"t Stuck between a rock and a hard place since we could sure use the money. Arbitration does not work the way you have described. Arbitration is not a court of equity; the arbitrators have the powers to interpret the contact as they find it based on what is generally known as the "four corners". If Sanofi was supposed to do something specifically described in the agreement (i.e. spelled out within the four corners of the written contract) then the arbitrators can find a default and apply a remedy. If there is not a specific requirement described in the contract, the arbitrators cannot create one because it is "fair" since the contract is presumed to be the definition of fair.. The fact is that Sanofi spent something on the order of $200 million on marketing of Afrezza, in addition to $150 million in milestone payments, so the theory that Sanofi made no effort simply isn't going to fly. The agreement gave Sanofi sole and absolute discretion to make decisions about how the drug was marketed so disagreements as to how much of that $200 million was spent on print DTC advertising, television, sales force efforts, which physician groups were called on, and so forth aren't going to get much attention. Shareholders may not like the results, but Sanofi performed the services in the manner they thought best and that approach was agreed by Mannkind. Buyer's remorse is not actionable.
Similarly, if Mannkind can show better results than Sanofi that means nothing. Sanofi didn't warrant that their efforts would result in the best possible results, only that they would make reasonable commercial efforts and I think they can show that they did. Certainly Sanofi reduced their efforts after about nine months of trying, but I think it is fair for an experienced pharmaceutical manufacturing organization to look at sales data and growth patterns after nine months and make a judgment call that the launch is not going well and, that under the circumstances, it is commercially reasonable to focus their efforts elsewhere. Arbitration will not second guess judgments based on empirical data, especially when the aggrieved party negotiated to allow the other party to make such decisions, and courts are required to respect the arbitrator's decision unless they overstepped (such as looking beyond the four corners).
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Post by Deleted on Sept 25, 2016 13:23:10 GMT -5
Does anyone know the status of Arbitration or if we have even applied for it? I am assuming Matt or surrogates are in negotiations for some form of "severance", but since we contractually can't sue we probably have to negotiate first to show good faith effort. It is painful to wait, but outcome of Arbitration would certainly be better after we have shown success where SNY didn"t Stuck between a rock and a hard place since we could sure use the money. Arbitration does not work the way you have described. Arbitration is not a court of equity; the arbitrators have the powers to interpret the contact as they find it based on what is generally known as the "four corners". If Sanofi was supposed to do something specifically described in the agreement (i.e. spelled out within the four corners of the written contract) then the arbitrators can find a default and apply a remedy. If there is not a specific requirement described in the contract, the arbitrators cannot create one because it is "fair" since the contract is presumed to be the definition of fair.. The fact is that Sanofi spent something on the order of $200 million on marketing of Afrezza, in addition to $150 million in milestone payments, so the theory that Sanofi made no effort simply isn't going to fly. The agreement gave Sanofi sole and absolute discretion to make decisions about how the drug was marketed so disagreements as to how much of that $200 million was spent on print DTC advertising, television, sales force efforts, which physician groups were called on, and so forth aren't going to get much attention. Shareholders may not like the results, but Sanofi performed the services in the manner they thought best and that approach was agreed by Mannkind. Buyer's remorse is not actionable.
Similarly, if Mannkind can show better results than Sanofi that means nothing. Sanofi didn't warrant that their efforts would result in the best possible results, only that they would make reasonable commercial efforts and I think they can show that they did. Certainly Sanofi reduced their efforts after about nine months of trying, but I think it is fair for an experienced pharmaceutical manufacturing organization to look at sales data and growth patterns after nine months and make a judgment call that the launch is not going well and, that under the circumstances, it is commercially reasonable to focus their efforts elsewhere. Arbitration will not second guess judgments based on empirical data, especially when the aggrieved party negotiated to allow the other party to make such decisions, and courts are required to respect the arbitrator's decision unless they overstepped (such as looking beyond the four corners).
whats your expert comment on this? A former diabetic sales specialist (“Former Employee 1” or “FE1”) who sold Afrezza for Sanofi in the greater Atlanta, Georgia area until August, 2015 (the very beginning of the class period) reports that the spirometry issue “was the major impediment to Afrezza prescription sales.” (First Am. Compl. ¶ 54, ECF No. 49.) However, FE1 also listed numerous other problems with Afrezza’s commercialization,including that Sanofi made “little to no effort” to deal with insurance coverage issues, “dedicated few resources or support to Afrezza sales,” or to “physician outreach,” and “provided its sales force with limited marketing materials.” (First Am. Compl. ¶ 56, ECF No. 49.) Prior to his departure, a Sanofi supervisor told FE1 that “Sanofi needed to increase Afrezza sales numbers or it might stop promotingthe drug.” (First Am. Compl. ¶ 56–57, ECF No. 49.)
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Post by agedhippie on Sept 25, 2016 14:43:02 GMT -5
Arbitration is handled by a three man panel and it has nothing to do with the JAC. The process for selecting the panel is laid out in the partnership agreement with one arbitrator chosen by Mannkind, one by Sanofi, and the third chosen by the previous two. It is all covered in Article 14 of the agreement. Arbitration can be initiated by Sanofi or Mannkind and the right persists after the termination of the contract (as does the confidentiality clause). Rereading the agreement, I see the part you're referring to: www.sec.gov/Archives/edgar/data/899460/000119312514406347/d783199dex101.htmBut it also says: "In the event of any dispute arising out of or relating to this Agreement or either Party’s rights or obligations hereunder, except as otherwise provided in this Agreement, the Party wishing to invoke dispute resolution proceedings shall send to the other Party, in accordance with the notice provisions set forth in Section 15.8, a written notice of dispute indicating that such notifying Party wishes to invoke such negotiations pursuant to this Section 14.1 and that sets out in reasonable detail the claims asserted, the nature of the dispute, any facts that are or are not in dispute, and the intended treatment and effect of such pending dispute (“Notice of Dispute”)." Has MNKD sent a written notice? I don't see anywhere that they said anything to that effect. At the bottom of Section 14.2 it says: Any settlement discussions or arbitration proceedings occurring under this Agreement shall be conducted in strict confidence. Except as necessary to enforce an award or as required by law, no information or documents produced, generated or exchanged in connection with settlement discussions or arbitration proceedings (including any award(s) that might be rendered by the arbitration panel) shall be disclosed to any person other than counsel without the prior written consent of all Parties to the settlement or arbitration proceedings.The written notice would be covered by the confidentiality requirement in this section.
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Post by agedhippie on Sept 25, 2016 15:00:31 GMT -5
Arbitration does not work the way you have described. Arbitration is not a court of equity; the arbitrators have the powers to interpret the contact as they find it based on what is generally known as the "four corners". If Sanofi was supposed to do something specifically described in the agreement (i.e. spelled out within the four corners of the written contract) then the arbitrators can find a default and apply a remedy. If there is not a specific requirement described in the contract, the arbitrators cannot create one because it is "fair" since the contract is presumed to be the definition of fair.. The fact is that Sanofi spent something on the order of $200 million on marketing of Afrezza, in addition to $150 million in milestone payments, so the theory that Sanofi made no effort simply isn't going to fly. The agreement gave Sanofi sole and absolute discretion to make decisions about how the drug was marketed so disagreements as to how much of that $200 million was spent on print DTC advertising, television, sales force efforts, which physician groups were called on, and so forth aren't going to get much attention. Shareholders may not like the results, but Sanofi performed the services in the manner they thought best and that approach was agreed by Mannkind. Buyer's remorse is not actionable.
Similarly, if Mannkind can show better results than Sanofi that means nothing. Sanofi didn't warrant that their efforts would result in the best possible results, only that they would make reasonable commercial efforts and I think they can show that they did. Certainly Sanofi reduced their efforts after about nine months of trying, but I think it is fair for an experienced pharmaceutical manufacturing organization to look at sales data and growth patterns after nine months and make a judgment call that the launch is not going well and, that under the circumstances, it is commercially reasonable to focus their efforts elsewhere. Arbitration will not second guess judgments based on empirical data, especially when the aggrieved party negotiated to allow the other party to make such decisions, and courts are required to respect the arbitrator's decision unless they overstepped (such as looking beyond the four corners).
whats your expert comment on this? A former diabetic sales specialist (“Former Employee 1” or “FE1”) who sold Afrezza for Sanofi in the greater Atlanta, Georgia area until August, 2015 (the very beginning of the class period) reports that the spirometry issue “was the major impediment to Afrezza prescription sales.” (First Am. Compl. ¶ 54, ECF No. 49.) However, FE1 also listed numerous other problems with Afrezza’s commercialization,including that Sanofi made “little to no effort” to deal with insurance coverage issues, “dedicated few resources or support to Afrezza sales,” or to “physician outreach,” and “provided its sales force with limited marketing materials.” (First Am. Compl. ¶ 56, ECF No. 49.) Prior to his departure, a Sanofi supervisor told FE1 that “Sanofi needed to increase Afrezza sales numbers or it might stop promotingthe drug.” (First Am. Compl. ¶ 56–57, ECF No. 49.) You could file it in the arbitration but it's probably pointless since at best it is hearsay but more likely it is speculation. It looks to me like he is guessing from his own view of problems that he saw. Unless he was part of the decision making, which seems unlikely or he would have been more specific, I think it amounts to nothing. The statement about his supervisor reinforces his distance from the decision making.
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Post by Deleted on Sept 25, 2016 15:10:17 GMT -5
whats your expert comment on this? A former diabetic sales specialist (“Former Employee 1” or “FE1”) who sold Afrezza for Sanofi in the greater Atlanta, Georgia area until August, 2015 (the very beginning of the class period) reports that the spirometry issue “was the major impediment to Afrezza prescription sales.” (First Am. Compl. ¶ 54, ECF No. 49.) However, FE1 also listed numerous other problems with Afrezza’s commercialization,including that Sanofi made “little to no effort” to deal with insurance coverage issues, “dedicated few resources or support to Afrezza sales,” or to “physician outreach,” and “provided its sales force with limited marketing materials.” (First Am. Compl. ¶ 56, ECF No. 49.) Prior to his departure, a Sanofi supervisor told FE1 that “Sanofi needed to increase Afrezza sales numbers or it might stop promotingthe drug.” (First Am. Compl. ¶ 56–57, ECF No. 49.) You could file it in the arbitration but it's probably pointless since at best it is hearsay but more likely it is speculation. It looks to me like he is guessing from his own view of problems that he saw. Unless he was part of the decision making, which seems unlikely or he would have been more specific, I think it amounts to nothing. The statement about his supervisor reinforces his distance from the decision making. the point of interest is "reasonable commercialization efforts" - How would the efforts differ if it was from the view of sales person or from the view of Oliver? The view of the sales person would be of more interest actually , as he is the one on the road and has to be provided what he needs?
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