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Post by matt on Jul 19, 2019 10:13:57 GMT -5
Can anyone think of an example of a company going through 2+ reverse splits and turning it around after that? I can’t. One reverse split is usually bad enough, two seems like the death bell. If you understand the math, a split of any type should not move the stock price but splits do move the price due to information effects. Companies typically don't reverse split if there is good news coming, just as they don't forward split if there is bad news coming. So, in the absence of any other news a split indirectly conveys management's expectations whether good or bad. I do recall one example of a company that went through multiple reverse splits and lived to tell about it, but that was back in graduate school and that has been more years than I care to think about and I can't recall the company name. However, you are correct that one reverse split is generally not good news and two is worse. Some biotechs, like CTI Biopharma, have done five reverse splits and are still operating and trading on NASDAQ but the early investors have been absolutely and totally crushed. A CTI share that was trading for an adjusted price of more than $20,000 in 2007 before the first reverse split is now worth 78 cents.
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Post by matt on Jul 17, 2019 7:59:40 GMT -5
Maybe we can get Jay-Z and Caliva to come to the table also to discuss partnership? That would be good. But, that's mytakeonit This is just plain weird.. I could be wrong. If so, I apologize right now. 1 I feel strange that a bunch of people are saying that MC emails them with clarifications/info, etc. How can a CEO of a public company do it? If the email recipient doesn't disclose to other share holders, isn't that illegal? (since MNKD is not saying anything about these msgs in IR page). 2 Companies meet and discuss with big investors all the time, and not all will be disclosed to common share holders. Is that assumption correct? Buffett investing in BAC, GS, etc, was disclosed later. I'm sure multiple meetings were held before coming up with that deal. 3 BoD hasn't issued any clarifications about Vdex allegations, and now they are meeting them. So, who's right? Did BoD drop the ball by not responding to Vdex, and hence not doing their fiduciary duties, or it was needed as per the point above this? 4 I have nothing against anyone, especially @sports. But, isn't it overwhelming for a person that is not accustomed to corporate dealings to be in that meeting? She is doing her best in social media, which is very commendable. 5 Is the MNKD, vdex meeting public? Can a common share holder get the transcript? To answer your questions (which I have numbered for the purpose): 1. Not everything that comes out of an executive's mouth rises to the level of "material non-public information". If it is material information and it is selectively disclosed to a single party, then it must be disclosed to all. If the information is not material, there is no disclosure obligation. Note that the disclosure obligation is on the company, not the recipient. 2. See above. Lots of people meet with companies under non-disclosure agreements, but those individuals are not allowed to trade on that information. It is essentially impossible to conclude a major deal in 2019 without lawyers, accountants, and other advisors looking under the hood. 3. The BoD is not required to respond to every overture from every interested party as a matter of "business judgment". However, when somebody knocks on the door with a fully-funded credible offer then the board is required to consider it in good faith. What Vdex is doing does not rise to the level of a fully-funded credible transaction; offering to buy MNKD for $1 billion plus assumption of debt and having the cash in the bank (or provable committed funds) would be something else. It is up to management and the board to determine what is, or is not, credible. 4. It doesn't matter what level of experience Sports may or may not have. She was invited to attend and she accepted the invitation; end of story. 5. No and no.
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Post by matt on Jul 12, 2019 10:22:11 GMT -5
This looks like a required segregation of manufacturing lines. Depending on the drugs, the formulation and filling lines have to be segregated into different production suites and with some drugs that carry a known risk for anaphylaxis (such as penicillin) the production suites can't even be in the same building as other drugs due to the risk of cross-contamination. Since MNKD had an obligation to do trial quantities of TreT, that is probably all this announcement means.
As for tadalafil and its cousin sildenafil, these are both phosphodiesterase-5 inhibitors. The drugs were developed originally for treating hypertension, not for erectile dysfunction, but during clinical trials of sildenafil a surprising side effect was seen and thus Viagra was born (the drug was abandoned for the hypertension indication at that time). However, PDE-5 inhibitors have a role to play in controlling hypertension as well and Pfizer markets both Viagra and Revatio with Viagra indicated for erectile dysfunction and Revatio for pulmonary hypertension although the active ingredient is the same (Cialis also has a lower dose daily pill for hypertension). It makes perfect sense to deliver tadalafil in an inhaled form as the desired PK/PD for hypertension are quite different than for the more well-known use.
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Post by matt on Jul 9, 2019 11:40:18 GMT -5
matt finally made a mistake! The answer is 0 not 300. I agree with his reasoning which supports the 0 answer. Mea culpa. I was not at my best after being rudely awakened at an unmentionable hour by a two year-old with aspirations to become a drummer with Dr. Teeth and The Electric Mayhem.
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Post by matt on Jul 9, 2019 6:43:00 GMT -5
I keep thinking about this math problem from 3rd grade for some reason... 300 doctors write 1 prescription a week for a medication that is supplied to pharmacies by 2 distributors. How many more prescriptions would these doctors be able to prescribe if there were 3 distributors supplying the medication? The answer: 300. There are only three national distributors (Amerisource, Cardinal, and McKesson) plus a few notable regional players. Virtually all pharmacies do at least some business with the three major players so it is not like lack of access to Afrezza is the problem. These distributors are purely logistics partners for most products; they move a boxes of drug from point A to point B while complying with all the regulatory requirements, but generally speaking they do no sales and marketing. If a pharmacy wants to order Afrezza, they can do so currently. Adding two or ten or fifty more distributors will not change the wholesale demand; MKND's problem is a lack of demand at retail.
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Post by matt on Jul 8, 2019 11:46:55 GMT -5
3. Exclusive rights are out of the question as it would limit MNKD in working with other players in the direct to consumer clinic / pharmacy space. No thanks. Exclusive rights should be on the table, just as they are most distribution agreements, but that comes with handcuffs. Vdex or HFM gets preferred pricing and exclusivity in certain markets, but MNKD gets quantity guarantees with a "take or pay" model. If the distributor does not reach the agreed quantities then they have to pay a per unit penalty for any shortfall or, at MNKD's option, the preferred status terminates, or both. These deals are easy to arrange; if Vdex really thinks they can move 10,000 scripts a week and make the necessary investments at their expense then let them try. If they fail, MNKD is right back to where it started. If Vdex balks at a take or pay arrangement, they are not very sure of their capability.
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Post by matt on Jul 5, 2019 7:03:10 GMT -5
"Nobody can vote their shares twice Mannkind knows how many shares you own it’s in your proxy in your brokerage account." Mannkind knows - VDEX doesn't Vdex can request the list of non-objecting beneficial owners from the DTCC and they will produce it on CD-ROM with two days advance notice. That would get Vdex a list of the names, addresses, and shares held for any shareholder that has deposited their shares with a brokerage for trading (i.e. "street name" shares). All other registered owners are listed on the company's stock register which must be made available for inspection upon request and which is generally supplied electronically by the transfer agent. Anybody with even rudimentary computer skills can merge the files to create a master shareholder list in a matter of minutes. If VDEX doesn't know precisely who owns each share, it is only because they haven't asked for the information yet.
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Post by matt on Jul 4, 2019 12:25:47 GMT -5
You didn't address the quote. Of course there is no conflict when shareholders and Vdex both benefit. The question is what happens when shareholder interest conflicts with vdex's interest. In any publicly held company you have conflicting shareholder interests. Some want to emphasize short-term stock price while others care more about the long-term. Some want to conserve cash, others want dividends on share buy backs. Some want current income from an increasing the dividend. others prefer the capital gains from share price increases, and others want a mix of the two. I have managed public companies and I can promise you that keeping everybody happy is the definition of an impossible job. Ultimately it the board that decides what is best for shareholders. If Vdex is, in fact, a large shareholder than they get a say like anybody else and most corporate conflicts are settled by reaching a consensus that makes nobody extremely happy, but all the other a bit less unhappy. Ultimately, if a shareholder is significantly unhappy they have two choices: buy the entire company or sell their stock and invest elsewhere. There is something known as the "clientele effect" in the corporate finance literature; some companies attract widow and orphans as investors and some attract risk-prone younger folks with 40 year to retirement. The serious conflicts mostly get resolved by the shareholder clientele shifting to something they are more comfortable with.
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Post by matt on Jun 30, 2019 7:26:42 GMT -5
Wait, so HFM stands for Hope For Mannkind and not Hot F*ing Mess? So sad. It depends if you live in the South. We have way more hot messes down here.
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Post by matt on Jun 26, 2019 7:52:18 GMT -5
Remember that the board members are the representatives of the shareholder body, and management serves as the pleasure of the board. Management crafts a strategy, often with input from outside advisors, and then presents that to the board for their approval. If the board accepted the strategy, and management executed the operational plan to implement that strategy, then who is to blame when the results are less than what was desired? Who sets the management compensation? That would be the Compensation Committee of the board with their recommendations subject to approval by the full board.
Shareholders do not get to hire or dismiss management in a public company, nor do they get to vote on salaries and bonuses. You have no idea what Mike's marching orders are from his boss, the board, or what commitments have been made behind closed doors. If the board pushed to do a big DTC campaign against the wishes of management, Mike nevertheless was obligated to sing from that particular page in the hymnal and to try to execute on the plan that was approved. If he failed was it his fault? Maybe it was, especially if he was the artist crafting the failed strategy, but we don't know if that is true or not.
If you are not happy about the direction of the company or executive compensation, then it is time to get vocal with the board. That is the only way things will change.
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Post by matt on Jun 24, 2019 7:17:25 GMT -5
At that time, Mann Group was still the dominant shareholder. When they picked MC, there was no much you could do. Now seems Mann Group already liquidated their shares (we were abandoned), individual shareholders need to work together to push this company forward. I don’t think the word is abandoned as much as it was to save some capital for their trusts. They didn’t want to lose everything in a situation they could not control. Most of the Mann Group shares were, in fact, Mann Living Trust shares. The same shares were reported twice due to the quirks of the SEC attribution rules on ownership. We don't know, and cannot know, how the trusts were structured, who the trustees are, or what the trust indenture says. If, as in typical, the trustees were an independent third party like the trust department at a bank or a law firm, the trustees are bound to follow the investment goals and objectives set forth indenture. If the trustees fail to do so, they are personally liable to trust beneficiaries for any losses incurred by the trust, so most trustees follow the indenture language down to the last comma. It is financially imprudent to concentrate investments in too few securities just as it is considered imprudent for regulated investment funds to hold more than 5% of total fund assets in a single investment. Since the Mann Living Trust is the sole remaining member of The Mann Group, the trust still has a sizable financial exposure from the $72 million in debt so even with divestiture of the shares, the trust would still be over-invested in Mannkind unless the trust has assets that exceeding $1.4 billion. Given the language typical is most living trust indentures, the trustees probably had little choice but to liquidate the shares. Dealing with Al Mann the individual was one thing, dealing with the trust is quite another. Second Sight Medical (EYES) was another one of Al Mann's companies and the holding structure was similar to that of Mannkind. The trustees have sold their EYES shares at least to the extent that the Mann entities are no longer reportable as a 5% shareholder, and possibly may have liquated the holdings in total. Expect the same to happen here eventually.
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Post by matt on Jun 22, 2019 12:13:54 GMT -5
VDex is asking for something that apparently has not been done before (if it has they should point to the example). If it hasn't ever been done in pharma industry, it's legitimate to be skeptical and assume it isn't the win-win being presented or there is some other obstacle (such as legal) that prevents it from being done. Or maybe Bill is smarter than anyone that's worked in the pharma industry and dreamed up a new business model that no one previously had the insight to imagine. There are many examples in the healthcare industry where a provider signs up for something with the explicit guarantee that they will be exclusive for some geography. There are several companies that provide services within the hospital, essentially a specialty clinic within the clinic, but which are owned by a third party. However, these specialty clinic serve targeted populations and there is not enough activity to go around for all hospitals to have one, so the providers guarantee that they will not open a competing clinic within a specific distance. Examples of these are specialties such as wound treatment centers and some radiological services, and the hospital gets a cut of the action. No legal issue there. Similarly, the model as proposed by Vdex does not have any insurmountable legal barriers. MNKD could do this, but there may be more strings attached that what is out in the public view so the readers of this forum may be working with limited information. It is certainly worth looking at, but there are a lot of ramifications to think about. The ownership structure of the individual Vdex clinics and their obligation, in any, to buy from the new distribution entity is one of those.
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Post by matt on Jun 21, 2019 8:46:23 GMT -5
I don't know that it is possible for MNKD and Vdex to enter an agreement that sets a floor price-to-patient. Matt likely has more pricing intelligence/experience. What is a bit confusing to me is how much less will/can the price-to-patient be with the proposed arrangement? Re: my Matt comment - "Matt likely has more pricing intelligence/experience." -- mnkd.proboards.com/post/181656Yes, I do have a lot of pricing experience, especially in foreign markets. Some of the wounds have still not healed. As for MNKD setting a floor price, that is a per se violation of federal antitrust laws in this country. MNKD can set whatever price it wants to set to its distributors, but there is something known as the "first sale doctrine". Once a manufacturer has sold an item to a distributor, they may no longer control the product or its pricing in any way. In the United States before the 1970's it was permitted to have something known as "retail price maintenance" where the producer could set a floor price and insure that all retailers were charging the same price for the same product. However, this restricted discount stores from offering lower price and the laws were overturned. A manufacturer of luxury goods can still sell only to top department stores and refuse to supply Wal-Mart, but that is all they can do to prevent discounting of their brand. The term "manufacturer's suggested retail price" came about as a replacement term for the former manufacturer-dictated price. In international markets, the same applies in most places. In the EU there is an issue with the gray market for drugs because many pharmas have a higher wholesale price for drugs going into countries like Germany and a lower price for the poorer Mediterranean countries like Portugal and Greece. However, savvy pharmacy suppliers go to Portugal and buy up huge quantities of drugs and then resell them to German pharmacies and pocket the price difference. The was an EU court case on the matter and the courts ruled that the pharma manufacturers could not prevent movement of products within the common market once title had passed in Portugal.
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Post by matt on Jun 21, 2019 8:29:53 GMT -5
I think Matt's point is that since afrezza contains just Humulin R, then likely it will be priced on par with humulin R. Afrezza is not Humulin R!
Humulin R (insulin human recombinant) U-100 is a sterile, clear, aqueous, and colorless solution that contains human insulin (rDNA origin) 100 units/mL, glycerin 16 mg/mL and metacresol 2.5 mg/mL, endogenous zinc (approximately 0.015 mg/100 units) and water for injection. The pH is 7.0 to 7.8. Sodiumhydroxide and/or hydrochloric acid may be added during manufacture to adjust the pH.
I agree completely that there are formulation differences between Humulin R and Afrezza, but Brazil is not going to make that distinction. If you go into the documents that Biomm has filed with ANVISA and translate the Portuguese, you will find that Afrezza has been classified as "human insulin". That is what is relevant for the purposes of the reference price scheme. There are three main categories on the national drug pricing matrix; insulina glargine, insulin asparte, and insulina humana, and the description for Afrezza that was filed is this: Afrezza is composed of recombinant human insulin, which, due to its formulation, can be administered inhalation through an inhaler device, representing a route of administration more convenient for the patient. Or in the original Portuguese language: Afrezza é composto por insulina humana recombinante, que devido à sua formulação, pode ser administrado por via inalatória, através de um dispositivo inalador, representando uma via de administração mais conveniente para o paciente. So the filings have already determined that Afrezza is going to be classified as "insulina humana" and the pricing schedules make no differentiation between different formulation of the same active ingredient. Remember that the purpose of price controls on imported pharmaceuticals is two-fold. First, the government wants to limit the cost of medicine to the national and state insurance funds, but the other reason is that imported pharmaceuticals are a major drain on foreign currency reserves. If the government can limit what an importer charges pharmacies for a drug, they limit the number of dollars and other hard currencies leaving the country. The foreign exchange aspect is not a big deal in oil rich states like Saudi Arabia where they are up to their ears in petro-dollars, but it is still a very big deal in South America. So yes, you are entirely correct that there are differences between Humulin R and Afrezza, but it is not me that you need to convince. Bureaucrats in state agencies with limited resources are not nearly so willing to make the distinction. ANVISA has their pricing rules and the fact that recombinant human insulins, however formulated, were on the market long before Afrezza showed up is what causes the issue. At any rate, official prices are published once a month around the 15th so we will know with certainty in July, or possibly August, what the permitted reimbursement will be. I have a bookmark to the pricing schedules and will post the results when they become available.
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Post by matt on Jun 20, 2019 7:34:26 GMT -5
It seems like that is somehow anti-competitive. Yes, it is. What is your point? Welcome to the world where governments can set drug prices. To be fair, the Centers for Medicare and Medicaid services probably pays more than any other single provider in the US and thus they should be entitled to the largest discount. There are very few competitive industries where the biggest customer doesn't get the best price. If a company doesn't like this arrangement they don't have to sell to the government at all, the government cannot compel a company to do business with it, but if the company chooses to take government money then there are price strings attached. At least in the US the price only applies if the reference customer has comparable terms and conditions, which means time for payment, quantities ordered and other factors. If the government does not order as much as a PBM or does not pay as promptly, then the PBM can get a better price than the government. That is fair. However, it is much worse in other countries. Many countries have implemented pricing methods that limit drug prices to the prevailing market price in a basket of named countries and the manufacturer must disclose those prices. Japan does it, several European countries do it, and most developing countries have started doing this. The problem is that a price discount in one country has a ripple effect across the world that causes the price in all countries to drop. Some pricing formulas are reasonable, while some are stacked against the company. Brazil looks for the lowest price based on the active ingredient in nine specific countries, but one of those named countries is Greece where the drug market is a pricing disaster. Humulin R and Novolin R which both have a retail price of about $150 / 1000 unit vial in the US have a government enforced import price into Brazil that is about $9.60 at current exchange rates. Injector pens are priced about double that amount, which is no where near the $500 retail price in the US. In turn, the government set import price of $9.60 is used to set the maximum price charged to pharmacies (about $12.00) and the maximum consumer price pharmacies can charge (about $16.60 including a 20% sales tax), and government entities in Brazil pay 20% than the permitted import price (about $7.70). It remains to be seen how Brazil will price Afrezza, but the company preaches that Afrezza is "just insulin" so expect the authorities to start with the prevailing prices for recombinant human insulins and add a small premium for the convenience of the delivery method they way they do for pens. Increasingly, government across the world exchange price information to insure that they are getting the best possible price. Then there are place like Spain where it is illegal not to fill a purchase order that comes from a government entity. That is fine if the entity is the local government in Madrid that tends to pay their invoices in about 180 days, but not such a great deal if the order comes from one of the poor provinces that take 18-24 months to pay. No matter how bad you think the market prices and formulary access is for Afrezza in the US, remember that every other country in the world is worse and the growing number with government price controls are much worse.
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