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Post by promann on Mar 17, 2017 10:42:45 GMT -5
Deerfield is the one that negotiated the partnership with Sanofi and for their efforts we owe them money.. I would think MNKD may have a case to restructure the money owed in MNKDs favor seeing how badly the partnership went that Deerfield negotiated.. Greenhill was the matchmaker www.greenhill.com/content/mannkind-corporationOh your right thanks for the correction Derek. I have not heard from Greenhill in a long time.
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Post by surplusvalue on Mar 17, 2017 10:46:34 GMT -5
Headway=week over week increases. Get close to Sanofi numbers and we got doors opening... For moral purposes I guess that would be positive but talking numbers even at Sanofi's peak weeks it would still be less than $25M a year in revenue which would still be viewed as a failing product in Wall Street's eyes. Well, of course that's a given. As I said in a previous post prior to the Roth CC, the bar has been lowered so much that management can do almost anything and people will be tripping over themselves to call it a success. As carefultoinvest said in another more recent post.. "we are reaching new heights of lower expectations"
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Post by dreamboatcruise on Mar 17, 2017 10:48:39 GMT -5
And that's about like restructuring one's debt to a loan shark or a bookie... usually involves some pain. I'm flinching as we speak waiting to have my retirement knee caps whacked with a baseball bat. Not necessarily, my friend. A few months ago, I posted information about royalty-based financing. MannKind need only give a small percentage of future profits in exchange for pushing the debt payments out a few years. Look at it from Deerfield's POV for a minute. Afrezza, if successful in the market, will validate the Technosphere pulmonary drug delivery system, thereby increasing the value of MannKind's IP. Since Deerfield lays claim to that IP as collateral, it's in their best interest to help MannKind succeed.
In exchange for a restructured agreement, MannKind would pay royalties to Deerfield from sales of Afrezza and one or possibly all of their API-TS that come to market. It's non-dilutive and doesn't burden Deerfield with any more risk than is already there.
If it is for all TS APIs it would in effect be dilutive since it dilutes all future earnings. Though perhaps these type terms are only employed when it is a low to moderate fraction as royalty. If it were under 10% royalty for some real money, I would think that would be viewed very positively by investors. Though your analysis only holds if they are able and willing to put in enough money to assure that Afrezza succeeds. Putting more money in is increasing their potential loses. If TS as IP has real value, they might figure they can simply get it now as collateral on a default without putting more money at risk. Wishing Matt good luck in finding something that works.
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Post by cyn on Mar 17, 2017 11:03:30 GMT -5
Not necessarily, my friend. A few months ago, I posted information about royalty-based financing. MannKind need only give a small percentage of future profits in exchange for pushing the debt payments out a few years. Look at it from Deerfield's POV for a minute. Afrezza, if successful in the market, will validate the Technosphere pulmonary drug delivery system, thereby increasing the value of MannKind's IP. Since Deerfield lays claim to that IP as collateral, it's in their best interest to help MannKind succeed.
In exchange for a restructured agreement, MannKind would pay royalties to Deerfield from sales of Afrezza and one or possibly all of their API-TS that come to market. It's non-dilutive and doesn't burden Deerfield with any more risk than is already there.
Deerfield is the one that negotiated the partnership with Sanofi and for their efforts we owe them money.. I would think MNKD may have a case to restructure the money owed in MNKDs favor seeing how badly the partnership went that Deerfield negotiated.. Unless I'm missing something, I don't see MNKD in any position of strength to "favorably" restructure debt until they demonstrate revenue traction. If what you say is true in that Deerfield negotiated the partnership with Sanofi, imo MNKD should schmooze the Mann Foundation (or some other financier) to hand Deerfield their hat and pay them off, assuming debt payoff covenants are reasonable. When you've been snookered like MNKD has been by Sanofi, it's time to clear the decks and remove all remnants of this partnership, especially those who had a hand in the negotiations. JMHO
PS: Just read from other posters that Greenhill was the matchmaker in the Sanofi deal and not Deerfield.
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Post by compound26 on Mar 17, 2017 11:04:57 GMT -5
Not necessarily, my friend. A few months ago, I posted information about royalty-based financing. MannKind need only give a small percentage of future profits in exchange for pushing the debt payments out a few years. Look at it from Deerfield's POV for a minute. Afrezza, if successful in the market, will validate the Technosphere pulmonary drug delivery system, thereby increasing the value of MannKind's IP. Since Deerfield lays claim to that IP as collateral, it's in their best interest to help MannKind succeed.
In exchange for a restructured agreement, MannKind would pay royalties to Deerfield from sales of Afrezza and one or possibly all of their API-TS that come to market. It's non-dilutive and doesn't burden Deerfield with any more risk than is already there.
If it is for all TS APIs it would in effect be dilutive since it dilutes all future earnings. Though perhaps these type terms are only employed when it is a low to moderate fraction as royalty. If it were under 10% royalty for some real money, I would think that would be viewed very positively by investors. Though your analysis only holds if they are able and willing to put in enough money to assure that Afrezza succeeds. Putting more money in is increasing their potential loses. If TS as IP has real value, they might figure they can simply get it now as collateral on a default without putting more money at risk. Wishing Matt good luck in finding something that works. I am a practicing finance attorney. Lenders generally always want to restructure a debt rather than foreclose on the collateral. In this case, the TS as an IP is less valuable in the hands of Deerfield than in the hands of Mannkind.
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Post by dreamboatcruise on Mar 17, 2017 11:06:32 GMT -5
Headway=week over week increases. Get close to Sanofi numbers and we got doors opening... For moral purposes I guess that would be positive but talking numbers even at Sanofi's peak weeks it would still be less than $25M a year in revenue which would still be viewed as a failing product in Wall Street's eyes. I would tend to agree that significant change in opinion will not happen at that level. We, as true believers, may have confidence that Sanofi purposely sand bagged Afrezza, but according to their story they had that level of sales and yet in their judgement they deemed Afrezza to not be commercially viable. Though if our growth trajectory is significantly steeper as we hit that level, that could be a game changer. Will that happen? How long will it take? How do we keep the lights on until then? [rhetorical questions]
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Post by surplusvalue on Mar 17, 2017 11:13:41 GMT -5
For moral purposes I guess that would be positive but talking numbers even at Sanofi's peak weeks it would still be less than $25M a year in revenue which would still be viewed as a failing product in Wall Street's eyes. I would tend to agree that significant change in opinion will not happen at that level. We, as true believers, may have confidence that Sanofi purposely sand bagged Afrezza, but according to their story they had that level of sales and yet in their judgement they deemed Afrezza to not be commercially viable. Though if our growth trajectory is significantly steeper as we hit that level, that could be a game changer. Will that happen? How long will it take? How do we keep the lights on until then? [rhetorical questions] Getting a bit ahead of ourselves. Still waiting to see how long double the sales personnel takes to get back close to or even over 300 consistently let alone 600 scripts.
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Post by Cowgirl on Mar 17, 2017 11:26:27 GMT -5
From Call yesterday someone (Matt or Mike) mentioned somewhere between 1/2 to 2/3 remaining contract employees kept on. Given there were only 40+ at the end then we can assume maybe 25-35 contract sales people remain. I don't think we are up to 100 yet as many of the 100+ employees hired were in there then sales roles and there still are open area business managers position. Given those numbers it appears we may have 50+ new reps out there new to things and trying hard to ramp sales. We'll see if that works materially any better then the contract persons.
What is concerning is that how is this drug so promotionally sensitive? I mean - if you're and endo or primary care physician are you really only prescribing Afrezza based on how many times a rep comes to see you? While I agree the they need insight wouldn't a mass mailing to all potential physicians be able to achieve that?
I hope scripts pick up but have concerns it won't be substantial enough in the near to intermediate term.
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Post by sluggobear on Mar 17, 2017 11:34:33 GMT -5
I would tend to agree that significant change in opinion will not happen at that level. We, as true believers, may have confidence that Sanofi purposely sand bagged Afrezza, but according to their story they had that level of sales and yet in their judgement they deemed Afrezza to not be commercially viable. Though if our growth trajectory is significantly steeper as we hit that level, that could be a game changer. Will that happen? How long will it take? How do we keep the lights on until then? [rhetorical questions] Getting a bit ahead of ourselves. Still waiting to see how long double the sales personnel takes to get back to over 300 consistently let alone 600 scripts. How are folks still hoping that the current MO for sales will work? It's not working. I've read many times that diabetics are having trouble getting coverage and it's too expensive, especially for those without insurance. If TRx were at 1000/wk and rising at 20 percent per month it would not be enough. The key problem may be that docs are not interested in the rewards given potential risks. If that's the case even giving it away, as I've suggested before, won't work. But creation of enormous demand by "giving it away" might create the trigger to get it over the hump and create inertia. The miniscule revenues from 250 Rx/wk is practically immaterial. I don't know everything that Matt and Mike might know but nothing I've heard in 2 years of CC's gives me confidence that the dam will burst and some crazy surge of Rx number is "just around the corner".
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Post by biffn on Mar 17, 2017 11:47:15 GMT -5
What are the chances of agreeing to delay loan repayments?
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Post by peppy on Mar 17, 2017 11:53:26 GMT -5
From Call yesterday someone (Matt or Mike) mentioned somewhere between 1/2 to 2/3 remaining contract employees kept on. Given there were only 40+ at the end then we can assume maybe 25-35 contract sales people remain. I don't think we are up to 100 yet as many of the 100+ employees hired were in there then sales roles and there still are open area business managers position. Given those numbers it appears we may have 50+ new reps out there new to things and trying hard to ramp sales. We'll see if that works materially any better then the contract persons. What is concerning is that how is this drug so promotionally sensitive? I mean - if you're and endo or primary care physician are you really only prescribing Afrezza based on how many times a rep comes to see you? While I agree the they need insight wouldn't a mass mailing to all potential physicians be able to achieve that? I hope scripts pick up but have concerns it won't be substantial enough in the near to intermediate term. From the CC Mike C
On the provider side, our sales force today, we won’t give exact numbers for competitive reasons. But it’s approximate 3X of where we were last year in terms of where we expect to make impact. And we still have few more openings, I think, six or seven. We’re interviewing the candidates today and tomorrow and we should have those pretty much closed out over the next week or two.
(We transition to a per day nurse educator model. And so now we have almost 80 nurse educators across the country who will help to a per day in training and/or education in office. This significantly reduces the cost of a fixed cost into a variable cost and makes it that much more impactful. So as we grow, this cost will grow, but not fixed cost as we had in 2016.)
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Post by dreamboatcruise on Mar 17, 2017 11:56:04 GMT -5
Getting a bit ahead of ourselves. Still waiting to see how long double the sales personnel takes to get back to over 300 consistently let alone 600 scripts. How are folks still hoping that the current MO for sales will work? It's not working. I've read many times that diabetics are having trouble getting coverage and it's too expensive, especially for those without insurance. If TRx were at 1000/wk and rising at 20 percent per month it would not be enough. The key problem may be that docs are not interested in the rewards given potential risks. If that's the case even giving it away, as I've suggested before, won't work. But creation of enormous demand by "giving it away" might create the trigger to get it over the hump and create inertia. The miniscule revenues from 250 Rx/wk is practically immaterial. I don't know everything that Matt and Mike might know but nothing I've heard in 2 years of CC's gives me confidence that the dam will burst and some crazy surge of Rx number is "just around the corner". I would be surprised if even the craziest optimists here on proboards were expecting a dam burst surge just around the corner. That simply isn't going to happen. Success now will be if there is simply enough growth to pull off some sort of financing as things slowly turn around. As you elude to, there likely is no magic wand to wave to get inherently conservative doctors to change their prescribing practices. The pharma market simply doesn't allow hanging out at fast food restaurants handing out inhalers.
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Post by mnholdem on Mar 17, 2017 11:59:35 GMT -5
Not necessarily, my friend. A few months ago, I posted information about royalty-based financing. MannKind need only give a small percentage of future profits in exchange for pushing the debt payments out a few years. Look at it from Deerfield's POV for a minute. Afrezza, if successful in the market, will validate the Technosphere pulmonary drug delivery system, thereby increasing the value of MannKind's IP. Since Deerfield lays claim to that IP as collateral, it's in their best interest to help MannKind succeed.
In exchange for a restructured agreement, MannKind would pay royalties to Deerfield from sales of Afrezza and one or possibly all of their API-TS that come to market. It's non-dilutive and doesn't burden Deerfield with any more risk than is already there.
I think that is what the Deerfield agreement already is. Mannkind sold them $90 million in milestone payments as part of the 2013 agreement. Mannkind current has them as a long term liability at $9 million (fair value of $18.2 million) so Deerfield may not be keen to repeat the experience! As derek2 pointed out to promann, are you confusing Deerfield with Greenhill, who help negotiate the Sanofi-MannKind License & Collaboration Agreement? It was the agreement with Greenhill that was set up with milestone payments tied into Afrezza sales.
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Post by dreamboatcruise on Mar 17, 2017 12:18:53 GMT -5
If it is for all TS APIs it would in effect be dilutive since it dilutes all future earnings. Though perhaps these type terms are only employed when it is a low to moderate fraction as royalty. If it were under 10% royalty for some real money, I would think that would be viewed very positively by investors. Though your analysis only holds if they are able and willing to put in enough money to assure that Afrezza succeeds. Putting more money in is increasing their potential loses. If TS as IP has real value, they might figure they can simply get it now as collateral on a default without putting more money at risk. Wishing Matt good luck in finding something that works. I am a practicing finance attorney. Lenders generally always want to restructure a debt rather than foreclose on the collateral. In this case, the TS as an IP is less valuable in the hands of Deerfield than in the hands of Mannkind. Would certainly be interested in your opinion on what sort of terms Deerfield is likely to extract from MNKD for such a restructuring. MNKD doesn't seem to be in a great negotiating position as the money is due and there likely aren't any other willing lenders. There is always the cliched saying that if you borrow $1,000 from a bank and can't pay it's your problem, but if you borrow $20 million from the bank and can't pay it's their problem. Deerfield has probably already made a lot of money shorting MNKD stock, so they may not really be facing the loses it would appear if MNKD defaults. Deerfield type organizations usually aren't shy about extracting a pound of flesh or worse whenever they feel they have the leverage to do so. Thoughts?
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Post by dreamboatcruise on Mar 17, 2017 12:23:21 GMT -5
I think that is what the Deerfield agreement already is. Mannkind sold them $90 million in milestone payments as part of the 2013 agreement. Mannkind current has them as a long term liability at $9 million (fair value of $18.2 million) so Deerfield may not be keen to repeat the experience! As derek2 pointed out to promann , are you confusing Deerfield with Greenhill, who help negotiate the Sanofi-MannKind License & Collaboration Agreement? It was the agreement with Greenhill that was set up with milestone payments tied into Afrezza sales. Maybe we should sue Greenhill.
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