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Post by trenddiver on Dec 15, 2015 10:58:20 GMT -5
Longs were right about Afrezza, the medicine, but shorts were right about MNKD, the company. MNKD just did not have enough money for this very long journey. Why their plan includes a cash burn rate of $10 million/month is beyond my understanding, but I wrongly trusted that Al and company knew more than I did. Certainly they should have realized that adoption of Afrezza would be slow, as it does not address an unmet need. There is one factor missing in the comparison to Minimed, and that is cash burn. While waiting for the insulin pump to be adopted, MINImed could pay its bills, MannKind cannot. If Afrezza or all of MNKD had been bought by Sanofi or another BP, this painfully slow uptake of Afrezza by the diabetic community would hardly matter. Don't be surprised to see another round of layoffs. |
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Post by trenddiver on Dec 14, 2015 16:07:10 GMT -5
I don't believe GS or shorts had any secret info. GS and shorts believed that MNKD would require addition capital requiring dilution before Afrezza was successful. That was their bet. There were many posts on this board pointing out that fact. We longs (including skeptical longs like me) put our heads in the sand, bashed the bashers and drank the Koolaid, thinking the price couldn't go this low. Well we were wrong and they were right. So the question is - what do we do now. I say Buy, Buy, Buy. Lately I've been spiking the Koolaid with Grey Goose.  Trend |
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Post by trenddiver on Dec 14, 2015 14:58:37 GMT -5
I don't think they had better information. I think they analyzed the information better and weren't drinking the koolaid. Also, there are no significant well-heeled longs defending the long side and there is smart, agile committed money defending the short side.
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Post by trenddiver on Dec 11, 2015 15:12:49 GMT -5
Enough said on this topic. Al will do what Al wants to do. His net worth is reported to be $1.5-2.5 billion. If the reported numbers are true, Al has the financial wherewithal to. take the company private, or lend or arrange loans for Mannkind. As for you and your comments, they will be viewed by myself and others in the context you admitted to - hoping for lower prices. Trend How much control do you think AL has over his money at this point? Do you think his personal finances that are being watched over by BOA can keep him from doing anything he wants? Things change when people get older. I am not saying either or but it has definately gone through my head. I would be very surprised if Al and Claude Mann didn't have total control of their finances, but now I'm speculating. |
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Post by trenddiver on Dec 11, 2015 14:53:06 GMT -5
Trend, the notion that my statements could have any effect on MNKD's price seems absurd. What I know about Al Mann's finances is from the public disclosures. The point I make is simple. Even if we know nothing about Al's financial position, how can some say that Al will be able to fund the company or take it private? And if you do know something more, what can you say beyond "I have made no statements..."? Enough said on this topic. Al will do what Al wants to do. His net worth is reported to be $1.5-2.5 billion. If the reported numbers are true, Al has the financial wherewithal to. take the company private, or lend or arrange loans for Mannkind. As for you and your comments, they will be viewed by myself and others in the context you admitted to - hoping for lower prices. Trend |
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Post by trenddiver on Dec 11, 2015 13:33:39 GMT -5
You have no picture of Al's finances or his financial capability. Trend, you, also, have no picture of Al's finances or his financial capabilities, which is just the point. If you know something the rest of us do not, I would be interested in anything you can disclose. Al always said that on his list of the 10 most important things in bringing an innovation to market, the first three were Capital, capital, and capital. Number 10 on the list, least important, is the innovation itself. (An interesting point, as plenty of junk can be very successful.) But although Al well understood the dangers of under-capitalization, it does not mean he could always avoid them. And in a sense, Al has already succeeded. His goal was not more wealth, but a breakthrough treatment for diabetes. Ezra, Unlike you, I have made no statements, speculation, or comments about Al's net worth. My only comment was that you know nothing about his financial condition. It appears to me that since you have acknowledged that you have "capitulated and sold your entire position" your goal is to try to drive the price down to $1.00 so you can buy again. Good luck with that, but if that does occur, I'll be buying with you. |
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Post by trenddiver on Dec 11, 2015 12:47:14 GMT -5
Ezrafund. Unless you are Al Mann's financial advisor, you have no idea of his financial position. You have become a FUDster in many of your recents posts. Trend I do not have a complete picture of Al Mann's finances, but when people say that Al Mann is a billionaire and that he can always come to the rescue with his deep pockets, they are misinformed, IMO. While his total net worth may still be in the range of $1B most of that is tied up in MNKD, where he has said his investment is $900M. I don't think he has the assets to fund MNKD for very long, and he certainly does not have the assets to take MNKD private by himself, although something like that might happen with a significant partner. The question is where will the operating capital come from until Afrezza starts generating revenue? I see possibilities, but no action on the technosphere front or anywhere else. Yes, I finally sold out the last of my position, figuring that this will keep going lower until there is some good news on the financial front. I am a buyer between $1 and $1.10 where I think a secondary offering might be priced, or if we can get some clarity on financing. As I have been saying, Al has succeeded in bringing an import new insulin therapy to market. It may one day be the best selling drug of all time. But this situation is more common than we want to admit. Many times a real estate developer begins a project but goes bankrupt because of delays, cost overruns and market timing. Another bigger developer buy the assets and makes it a huge success. That will probably be the story here. It is not about the medicine, but all about the money. You have no picture of Al's finances or his financial capability. |
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Post by trenddiver on Dec 10, 2015 16:09:34 GMT -5
Maybe a little to much nickel and diming going on. MNKD is on sale. At these prices it's almost a firesale. Buy all you can. You will be rewarded.
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Post by trenddiver on Dec 10, 2015 15:00:06 GMT -5
Bought 5000 sh @ 1.519 today. Hoping that tax loss selling and capitulation is over.
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Post by trenddiver on Dec 10, 2015 12:08:42 GMT -5
All who believe or are concerned that Al is going to take MNKD private should be buying like crazy right now. Trend MNKD ON SALE!! Just bought 5,000 at 1.519. Large bid at 1.51 - 300k |
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Post by trenddiver on Dec 10, 2015 11:58:08 GMT -5
If Al were to take MNKD private it would be as a debt holder not a stockholder. A buyout of equity would be financial suicide, as he can't even find enough cash now. Taking control in a Chapter 11 bankruptcy scenario might be possible with a partner like Bain Capital. That is what these guys do. Maybe shareholders would get a 1 for 1 swap of MNKD for MNKDQ warrants, good for 1 share (not 0.6!) at a price of $2.60 expiring in August of 2018? Looking at this scenario shows why Mann's swap of debt of equity during the big dilution after the 2nd CRL was in fact a big vote of confidence by Al. By now his confidence is probably much less. Again, it is not about the science, it is about the finances, insurance reimbursement, regulatory issues, and changing the medical protocols; and time. You are totally wrong about taking MNKD private as a debt holder for the following reasons: 1. The loan is an unsecured loan. 2. According to the Deerfield agreement, Al cannot demand payment from Mannkind until Deerfield is paid. 3. Al's legacy in a chapter 11? No way 4. As long as Al is paid interest, the loan is not in default. Trend |
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Post by trenddiver on Dec 10, 2015 11:30:02 GMT -5
All who believe or are concerned that Al is going to take MNKD private should be buying like crazy right now.
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Post by trenddiver on Dec 10, 2015 10:06:44 GMT -5
Pretty realistic assessment of MNKD situation by Motley Fool contributor.
1. Afrezza sales are tankingAfrezza's sales are NOT tanking. That is a ridiculous claim and distortion of facts. By any means the scripts (the sales) are growing, even though not at a fast pace as we would want. Yes, the Mannkind quarterly shipments to Sanofi did not increase, but quarterly shipments are not sales of Afrezza. Mannkind's shipments to Sanofi are decided and influenced by a lot of things and sampling, inventory, and channel filling are a big percentage of the shipments in the initial quarters. Shipments are not sales. And Afrezza sales are NOT tanking. Afrezza sales are growing, month by month, as based on Symphony and IMS.I agree that the shipments were way off base, but the rest of it seemed to be a realistic assessment. |
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Post by trenddiver on Dec 10, 2015 9:48:52 GMT -5
Pretty realistic assessment of MNKD situation by Motley Fool contributor.
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Post by trenddiver on Dec 10, 2015 9:43:57 GMT -5
Is MannKind Corporation in a Death Spiral?
The embattled biotech faces touch challenges. Are they too tough to overcome?
Keith Speights (TMFFishBiz) Dec 10, 2015 at 9:02AM
Dreamboat
IMAGE SOURCE: MANNKIND CORP.
Is the dreamboat envisioned by MannKind Corp. (NASDAQ:MNKD) turning into something more akin to the Titanic? I've been a proponent of the biotech for quite a while, but it's hard to remain positive about MannKind in light of the massive weight of problems the company faces. Some investors are probably now asking a tough question: Is MannKind in a death spiral? Here are three factors that make it possible the answer is "yes."
1. Afrezza sales are tanking
MannKind and marketing partner Sanofi (NYSE:SNY) announced the U.S. launch of inhaled insulin Afrezza on Feb. 3, 2015. Here's how sales have looked so far.
Afrezza Product Shipments Thru
DATA SOURCE: MANNKIND CORP.
It would be one thing if Afrezza sales were climbing more slowly than expected. Instead, product shipments are sinking like a lead balloon. The trend ain't a friend for MannKind or Sanofi.
The biggest issue behind the troubling picture is reimbursement. Too many payers still don't have Afrezza on their formularies. And many insurers that do pay for Afrezza mandate prior authorization before a patient can use the drug.
Is good news on the way? Probably not soon. Sanofi lowered guidance for its diabetes products and specifically pointed to lower-than-expected market penetration for Afrezza and Lyxumia. MannKind executives have mentioned anecdotal evidence that Sanofi's direct-to-consumer marketing campaign has generated patient enthusiasm that could lead to higher sales. That's what they said in the second quarter, too, though -- yet Afrezza shipments continued to fall.
2. Cash is burning
Even if we assume that Sanofi's efforts to woo payers and patients will ultimately pay off, the clock is ticking for MannKind. The biotech is burning through cash at a rate of over $10 million per month. As of the end of September, MannKind had cash and cash equivalents totaling just under $33 million. It doesn't take a math whiz to see the problem.
MannKind did manage to pull off a neat financing trick by listing on the Tel Aviv Stock Exchange. The maneuver resulted in an additional $36.2 million coming in, net of associated fees. MannKind also can access another $30 million through a loan agreement with The Mann Group and receive up to $38 million through its at-the-market equity distribution program.
Putting all of this together means that the biotech should be able to stretch out its cash for maybe another 12 months or so. Something will have to happen prior to then, though.
MannKind could issue more shares, but the company is reluctant to dilute even more -- especially with a short interest of 47%. There's also the option of borrowing more money from billionaire founder Al Mann yet again. If the outlook for Afrezza doesn't improve, however, you have to wonder if even that well could run dry.
3. Questions are swirling
Speaking of Al Mann, that leads to another huge question for MannKind: Who's going to run the company? Mann was named interim CEO recently after Hakan Edstrom left the company. I think it's fair to say that Al Mann is the only 90-year-old running a publicly traded biotech.
It has also not escaped investors' notice that Sanofi could bail out of the partnership to market Afrezza. The French drugmaker retains the option to terminate the relationship by notifying MannKind as early as January. I doubt that will happen anytime soon -- but the mere fact that it's even a possibility at this point is troubling.
Death spiral?
Declining sales, depleting cash, and departure of a CEO. Is MannKind in a death spiral? Despite the abysmal news, I don't think the biotech's fate is sealed yet.
For one thing, I suspect that some payers could open up reimbursement in 2016. Afrezza does, after all, have a lot going for it with its rapid absorption into the body and convenience factor. It's also quite possible that direct-to-consumer marketing helps build word of mouth among diabetic patients. And MannKind just might find another company interested in using its Technosphere platform, the delivery mechanism for Afrezza, for other drugs.
I think that as long as Al Mann believes Afrezza has a chance at success, he'll provide the cash to keep MannKind going. His conviction could also be helpful in finding a new CEO.
Don't get me wrong. I'm not upbeat about MannKind's future. There are simply too many hurdles to overcome. However, I think the biotech at least has a shot at turning the corner. I've always liked underdogs. And MannKind definitely remains an underdog for now.
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Keith Speights has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
COMMENTS
AUTHOR
Keith Speights
TMFFishBiz
Keith began writing for the Fool in 2012 and focuses primarily on healthcare investing topics. His background includes serving in management and consulting for the healthcare technology, health insurance, medical device, and pharmacy benefits management industries.
ARTICLE INFO
Dec 10, 2015 at 9:02AM
Health Care
STOCKS
Sanofi (ADR)
NYSE:SNY
$41.92 $0.32 (-0.76%)
MannKind Corp
NASDAQ:MNKD
$1.55 (0.00%)
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