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Post by matt on Feb 15, 2019 17:19:27 GMT -5
I searched on "inhaled" and found 12 hits. You are never going to find a brand name like Afrezza in a medical publication as medications are routinely mentioned only by a generic designation. They treat other brand name products the same as they do Afrezza so no favoritism.
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Post by matt on Feb 15, 2019 12:04:23 GMT -5
How does one determine if the shares purchased were simply an investment vs a purchase for index funds or a purchase at the request of a HNW client? There are specific requirements for disclosure on Schedule D of Form 13F that relate mainly to shareholders with 5% or greater ownership and a desire to exert control or seek changes in the company. All other investments are considered passive and nothing further needs to be disclosed. In short, absent a 5% shareholder nothing needs further disclosure by the institutional manager. You have to guess at the motive and the beneficial owner.
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13g
Feb 14, 2019 15:02:39 GMT -5
Post by matt on Feb 14, 2019 15:02:39 GMT -5
Normally most of these filings have occurred before or after hours. I guess there is no timing issues with it Routine 13G filings by companies regulated under the Investment Act of 1940 and are filed 45 days after quarter end (i.e. December 31). The sale could have happened at any time after October 1st and this would still be timely filing. Quarterly 13G filings are the very definition of stale data so never read too much into them.
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Post by matt on Feb 11, 2019 12:00:10 GMT -5
Perhaps more telling of the significance of Black Rock’s holdings in MNKD would be the MNKD percent of shares they own comapred to the percent of their other individiual holdings? Most index funds are quantity weighted so there is more to the numbers than just share counts. If MNKD is 1% of the total value of the index that the fund tracks, then the fund will own 1% of the value of MNKD. If another company had 10% of the shares outstanding that MNKD does, but the same market cap, then the share changes would be a tenth of that seen for MNKD. The other complication is that the big institution fund managers (I would add Fidelity to the list above) have many different funds. Some are S&P indicies, some track biotech, some track total NASDAQ, some track small cap NASDAQ, and so on. The reporting rules allow a big fund manager to combine all their funds for the purposes of quarter reporting so you can't even tell which fund accounts for the change in ownership. In some recent periods, the NASDAQ has gone down while the biotech index has gone up meaning that a fund manager might not report any change in ownership even though one of their funds was selling and the other buying.
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Post by matt on Feb 1, 2019 12:29:53 GMT -5
I think I can answer my own question on why they only paid $1.07 per share having just read the Employee Stock Purchase Plan. The stock is sold at " eighty-five percent (85%) of the Fair Market Value of the shares of Common Stock", not at the market price. You would have to be stupid not to buy the maximum possible because you can immediately sell for an instant 15% profit. Worst case you hold it and there is a 15% profit margin built in from day one. That is a risk free $944 gift for each participant. I don't know for sure about this transaction but there's almost always a lengthy vesting period that does not allow the discounted stock to be purchased then immediately sold. There is no vesting period for stock purchased under a qualified employee stock purchase plan; once you pay for the shares they are instantly vested. However, certain officers and directors are prohibited from selling stock (however they acquired it) during certain periods, such as between quarter end and release of the 10-Q. The way a qualified plan works is that the employee buys for the lesser of 85% of the fair market value on the date of subscription or 85% of the fair marker value on the date of purchase. The company withholds money at a set rate that takes 27 months to pay for the full subscription. As each paycheck is issued, if there is enough cash in the employee's account to pay for a certain number of shares (as specified in the plan) then the company issues those shares immediately. If the price has declined since the origination date, the employee gets the shares at 85% of the price on the payroll date and if the price has gone up they get the shares at 85% of the subscription price, whichever is lower. The plans are designed to encourage employee ownership and they work very well, especially if the company is a strong performer with a mostly upward trend.
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Post by matt on Feb 1, 2019 12:18:52 GMT -5
So Ralinepag might be the “undisclosed molecule” from UTHR that MC stated UTHR is planning to advance with MNKD Technosphere? Maybe, maybe not. There are a lot of ways to get a drug into the human body, and even lots of ways to do it via the lungs. There is no single technology that can do it all. Pharma manufacturers typically test several different alternatives to see which one is best at accurately and consistently delivering the required dose, and then they go with the best choice. There are a lot of variables that go into that analysis such as the size of the molecule, whether it is an active chemical substance or a pro-drug, the pH, whether it is hydrophilic or lipophilic substance, and many others. Without knowing all those details assuming what a third-party is up to is necessarily pure speculation.
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Post by matt on Jan 31, 2019 16:57:59 GMT -5
Tomorrow ... Tomorrow ... I love you Tomorrow !!! I didn't post the song link ... because I hate that song ! Mr. Rogers did it better anyway (and don't you dare say anything bad about Mr. Rogers). www.youtube.com/watch?v=WyY1vSgNklg
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Post by matt on Jan 31, 2019 10:17:39 GMT -5
I would like to see Mannkind be successful selling Afrezza, and I am hopeful that success will come with the current ad campaign. That said, if sales don't pick up in the short term, it's time to put Afrezza in someone else's hands. I would not advocate for giving it away. A deal that involved royalties would be nice in the event it does turn into the blockbuster drug we all expect it to. This is the post I most agree with. I have every hope we’re going to hit it out of the park but with that being said if the company decides to go another direction then I support it. We are limited if we do not get a partner, and the next few months will tell the story. Well said. The enduring problem is that owning Afrezza costs the company at least $60 million a year to fund marketing, keep an underutilized plant running, and to maintain the sales force. At this point the question is not whether Afrezza is a good use of $60 million, but whether that is the best use of $60 million, especially if existing shareholders have to keep getting diluted to fund the shortfall. You can start a lot of pipeline projects and run a small pilot production cell for $60 million a year. If there were a billion dollars sitting on the balance sheet MNKD could try to do both, but since that is not the situation some hard choices are required.
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Post by matt on Jan 29, 2019 8:01:09 GMT -5
If time in range became relevant to managed care, would PBMs be willing to pay up for it? There are three factors working here: 1. If we use the numbers put forth above, Afrezza is roughly four times as expensive as Novolog at full retail. Time is range becomes relevant to managed care if, and only if, the improved time in range translates to reduced costs for the managed care provider. Realistically, managed care will have to pay the premium price for Afrezza on many patients to save the additional costs for a few patients that do not stay in range. Can Afrezza be economically justified on this basis? Perhaps, but it certainly isn't an obvious conclusion or there wouldn't be an issue. The cost and difficulty of doing a large study that tracks all costs of diabetic care and differences in outcomes is what is needed, and MNKD simply doesn't have the money or the organization to generate that data. 2. Never forget the impact of competition. Novo and Lilly both boosted their insulin prices over the last ten years and enjoy very sizeable profit margins on these legacy products. If MNKD were able to do a detailed pharmacoeconomic study that proves that time in range is economically relevant for the providers, what keeps Novo or Lilly from simply dropping prices back to 2010 levels? The legacy products are probably still marginally profitable at less than $100 / month, and that is a tough price point for MNKD to compete against. Novo, especially, would rather sell their legacy product at $100 than to lose market share to MNKD, and Lilly is not much different. 3. Managed care looks at incremental prices after all rebates and discounts. The large PBMs don't pay retail and a lot of the rebates they enjoy get passed back to the managed care group that contracted them. They are going to compare the cost of Novo or Lilly product,, net of rebates, against the negotiated prices for extra medical services for those patients that do not stay in range. Only if the net costs make sense will managed care make a change, and the net costs are hard to know from the outside looking inward.
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Post by matt on Jan 28, 2019 8:19:27 GMT -5
Why doesn’t Mannkind talk about these activities? This type of conference is mostly to connect micro-cap companies with investors for their next financing round. It is not like the JP Morgan conference where it is mainly industry players potentially looking for acquisition and/or partnering opportunities. For example, one of the keynote speakers is Josh Scheinfeld who was a founder of Fusion Capital and later Lincoln Park Capital, both hard money investors that specialized in Rule 415 offerings. If you look at the history of Fusion and Lincoln Park you will find a dearth of quality deals and lots of biotech disasters that got crushed by serial dilution. Rule 415 offerings almost always end badly for the company. This conference attracts predatory investors, not high-quality funds. It is not something you want to promote.
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Post by matt on Jan 17, 2019 17:20:25 GMT -5
You have to keep in mind that the purchase price has to look reasonable to the shareholders of the acquiring company or else the management of that company will not be long for this world. Most deals still get done at a 20-35% premium over a recent market price, and a handful get done at a 50% premium, but very few get done at higher prices. Today MNKD has a market cap of $258 so 150% of market is roughly $380 million. The purchaser also gets to pay off all the debt and other liabilities which adds another $250 million to the price tag.
In order to get more than that, MNKD has to show much stronger fundamentals that will move the market price north of where it is. Buyers will fork out a modest premium to get an asset that fits with their portfolio, but they want to see more than hopes and dreams. Also keep in mind that with TS all the key patents are expired at this point so if that ever does become the next big thing in drug delivery there will be generic imitators emerging rapidly. That puts something of a ceiling on the value of that part of the portfolio.
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Post by matt on Jan 17, 2019 12:07:03 GMT -5
What is interesting is a comparison of the two curves using 12 month data rather than the 7 days the links provide. While Afrezza seems to have mild interest, overall interest in "inhaled insulin" is on the decline. More interesting are the state by state comparisons of the two charts; it would seems that the area with the most interest in inhaled insulin (Mass, NY and Penn) are less interested in Afrezza (comparatively speaking) while California is about the same.
Likewise, there are a bunch of states where people are searching for Afrezza but not at all on inhaled insulin. It is certainly evident which states the company is targeting and which they have chosen to ignore.
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Post by matt on Jan 17, 2019 8:35:00 GMT -5
Warrants are similar to call options, the only difference being that a warrant issued by the company increased the shares outstanding while call options are traded between third parties and do not affect the share count. As a general rule, no option or warrant is ever exercised until the last day before expiration because as an option the holder enjoys the upside above the strike price, but is protected from any downside.
Once an option or warrant is exercised, the holder owns a share of stock which exposes them to both the upside and the downside. Since there is economic value to the downside protection, a warrant holder will wait until the expiration date before exercising. The exception to this rule is when a stock is about to pay a dividend and early exercise will allow the holder to take part in the dividend distribution, but that is not relevant for MNKD and most other small cap stocks.
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Post by matt on Jan 16, 2019 16:43:21 GMT -5
I was thinking OneDrop since they already have a direct to consumer model that cuts out the middle man, but Vdex would be an interesting partner too.
Mannkind can use both. OneDrop for the direct sale infrastructure and Vdex for consumers to get a prescription. So if a consumer wants to get Afrezza through the direct sales program, he/she can get a prescription from Vdex and then get the prescription fulfilled through OneDrop. OneDrop is a medical device while Afrezza is a drug which means that while a pharmacy can sell OneDrop, OneDrop cannot fill prescriptions without the necessary pharmacy license in each state. That is why the company has partnered with Eagle Pharmacy to handle the drug sales. While the FDA approves drugs and devices for sale, state pharmacy boards still make the rules as to who can fill a prescription and keeping all fifty of them happy is no easy task.
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Post by matt on Jan 13, 2019 11:37:46 GMT -5
What mnholdem said is essentially the case; fixed manufacturing costs have to be absorbed somewhere and underutilization of the plant drives negative absorption variances (i.e. there are more fixed costs per unit than originally budgeted due to unit shortfalls). As unit volume grows, the same fixed costs get spread over more units so the cost burden per unit of manufacturing goes down; that is the basis for economies of scale.
However there is one important caveat with respect to MNKD that should be kept in mind. At the end of 2015 there was a write-off of $140 million for "property and equipment impairment" which had the result of reducing the book value of the Danbury plant by that amount. Depreciation going through the books in 2019 is lower than it should be because of the impairment charge (you can only depreciate the asset one time). In other words, the true economic decline in the value of the manufacturing assets that happened in 2018, which is normally captured as depreciation charged to cost of goods, is understated due to the write-off in 2015. Sooner or later the equipment used on the manufacturing line will wear out or become technologically obsolete, and the cost to replace it will be more than suggested by the current depreciation charges hitting the income statement. Similarly, the company booked a $66 million charge in 2015 to write down the value of future insulin purchases from Amphastar so less than the true cost of insulin purchases is recorded as cost of sales (i.e. Amphastar charges more for the insulin that MNKD buys than what is reflected in the cost of goods). The combination of the two write-offs gives a more rosy picture of the cost of goods than the true economics; exactly how much better is hard to estimate.
So yes, as volume grows the two numbers will flip and Afrezzaa will start making a gross profit contribution to cover the operating expenses of the company. Just be aware that the accounting is not as simple as it may seem at first blush.
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