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Post by matt on May 9, 2017 15:24:45 GMT -5
matt "The could have been sold, gifted, distributed to <5% beneficiaries not subject to reporting, conveyed to charity or educational institutions" Your statement contradicts lfd's assertion of selling. Need I say any more? Please don't misquote me. My statement does not contradict LFD's assertion of selling any more than it confirms your assertion to the contrary. When somebody uses a conditional auxiliary verb like " could" it is specifically because they don't intend to draw a definite conclusion. If I couldn't reach a conclusion when writing that sentence, you can't reach one by reading it. The only thing you can see from SEC reporting is changes in holdings. You can not know how those holdings changed unless the recipient of the shares discloses it voluntarily, or unless the recipient is (or becomes) subject to SEC reporting requirements. All that is knowable with certainty is that 20 million shares that used to belong to the trust have been disposed of. Living trusts are normally more for personal use so some of the shares could have disappeared from the trust's holdings due to transfers that satisfied bequests made upon Al Mann's death or other life events such as specific beneficiaries reaching the age of majority or needing funds for educational purposes. If that is the case, it goes without saying that the disposition of the shares in the hands of the beneficiaries is likewise unknowable; they could have sold, held, or donated the shares to some other charitable purpose. As for the trust buying back shares, that is unlikely. Trusts, by their nature, are overinvested in the shares of a single company and acquiring more shares in that same company would violate the trustee's duty of prudence. Trusts exist to preserve the wealth transferred by the grantor for the named beneficiaries, not to generate new wealth via stock trading by the trustee.
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Post by matt on May 9, 2017 9:40:02 GMT -5
If we get our run way extended . . . That is the key phrase, and one that cannot simply be assumed to happen. I think Derek's list is a reasonable starting point and we will have to see how the market reacts to the latest announcements when earning come in and the shareholder meeting is over, as that will determine how a financing deal can possibly be structured. It may not be cheap, but it sure beats the alternative. Deerfield does not want Mannkind or any other company they loan money to in bankruptcy court, so they are happy to convert debt to equity if the price is right and if there is continued retail demand because that lets them exist their long position. Yesterday was a blip on the radar, but if the trend can be maintained through the shareholders meeting and beyond then that is a positive sign that there will be some more runway. Still, it is time for Matt and Mike to deploy full flaps and pull back on the stick!
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Post by matt on May 8, 2017 16:56:25 GMT -5
Is MNKD not allowed to have a list of endo's who can offer prescriptions by email? The endo could request a battery of tests from the patient who can be provided directly/electronically by the lab (common practice) based on which the endo could prescribe Afrezza then monitor the patient periodically. This would be great for MNKD, patients and those endo's who took the trouble to learn about Afrezza and know how to prescribe it efficiently. Think how well this would work with OneDrop??? Wow, I'm getting excited just thinking about it. Physicians must personally examine every patient before they start them on a course of medication, and at least once a year thereafter if they continue the prescription. Medicine by email does not meet that requirement.
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Post by matt on May 7, 2017 10:59:54 GMT -5
matt please provide links and page numbers. "The only thing you cannot know for sure is whether the "other entities" (Biomed Partners I & II, MannCo, AGC Trust, CGM Trust) actually sold their shares, or whether the Living Trust ceased to be a managing member, in which case they don't need to report any longer." Because of this noone knows with certainty whether or not the Trust has sold. Those numbers are straight out of the DEF 14A filings dated April 4, 2016 and April 7, 2017. Just look under the heading "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT" and read footnote 2 carefully. We do know, with certainty, that roughly 20 million shares are no longer in the hands of the Living Trust. The could have been sold, gifted, distributed to <5% beneficiaries not subject to reporting, conveyed to charity or educational institutions, but it really doesn't matter. Regardless of the type of disposition, the trust owns 20 million fewer shares than at this time last year and they own the exact same number of options. What the transferees have done with those 20 million shares is unknowable. With respect to the "other entities", the Living Trust did not own those shares but it was required to report those shares as a managing member (SEC rules require that). The fact that those shares are no longer reported is due to one of two reasons: 1. Those entities sold or otherwise disposed of their shares, or 2. The terms of the management agreements provided that the Living Trust ceased to be a managing member on the occurrence of Al Mann's death, in which case the reporting requirement ceased. We do not know which of those is true, or if some combination of those is true. We do know that the Living Trust no longer has a say in what happens to those shares. Likewise, we do not know if there were any subsequent dispositions since April 7. The heavy selling we have seen in the past month could be due to the Living Trust selling more shares, it could be due to Deerfield dumping their newly acquired shares, it could be due to long-term shareholders existing their position, or something else. To the extent that the shares are held in street name, not even the transfer agent know what happened to the shares as all they see is the weekly report from the DTC that shows ownership of street name shares moving between brokerages. If the shares are registered and not in street name the transfer agent can see the disposition to or from the DTC bucket. None of that is information that you, as a shareholder, are entitled to see. Deerfield is subject to reporting under the Investment Act of 1940 so you can see if they held or disposed of their new shares when they file their 13-F report for the period ended June 30 (that report is due 45 days later, or August 14). Changes in holdings by the trusts will not be reported again until and unless the company files a new DEF 14A, but that is usually only done once per year. Since the trusts are not required to report individual transactions, you will likely have to wait until next April for the next snapshot. In the meantime, feel free to guess what the trusts are doing just so you realize that it is precisely that; a guess.
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Post by matt on May 6, 2017 17:09:14 GMT -5
You can't figure out exactly how many shares are held as to today, but you can compare the most recent DEF 14A with the one filed a year ago.
Mann Group 89,750,000 shares last year, 89,750,000 this year (no change)
Mann Living Trust 41,068,142 shares last year, 20,798,469 this year, reduction of 20,269,673 shares
Mann Living Trust 3,651,442 options last year, 3,651,442 options this year
Other Mann Entities 22,405,629 as of last year, 0 this year, reduction of 22,405,629
In total, Mann related entities sold 42,675,302 actual shares and there was no net change in options.
The only thing you cannot know for sure is whether the "other entities" (Biomed Partners I & II, MannCo, AGC Trust, CGM Trust) actually sold their shares, or whether the Living Trust ceased to be a managing member, in which case they don't need to report any longer.
But bottom line, the trust did sell 20 million shares (before reverse split)
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Post by matt on May 6, 2017 8:19:07 GMT -5
Virtually all pharmaceuticals shipped internationally that are light in weight and of high value go via air freight, while this quote was for a twenty-foot ocean container requiring one month to arrive. Way too much can go wrong with a high value temperature controlled product during a one month transit to ship pharmaceuticals by ocean. When I worked in Asia I managed a pipeline from various places of the world to Tokyo, and we shipped all our high value product by air with about 40 tons per month transiting via FedEx and another 40 tons consigned to various air freight forwarders. Since air frames are fixed in size and the air line needs to make maximum use of the cargo hold, the shippers like to stack heavy items (like urgent auto and machine parts) on the bottom of a pallet and then top it up with light weight pharma products; this make it reasonably economical for all concerned. We also received about 55 eighty-foot ocean containers a month, but that was all low value and temperature insensitive goods or raw materials for local manufacturing.
Since the manufacturer is responsible for any temperature and humidity variations in transit, they have to quarantine and retest each batch in each shipment on arrival, and them release each batch from quality hold unless they have telemetry inside the container that measures critical parameters at regular intervals, typically every five minutes. Imagine the difference in conditions of a container placed on the bottom of a ship crossing the icy North Atlantic in winter, versus a container stacked on top of a ship exposed to direct sun as it passes through the Arabian Gulf to Abu Dhabi in the middle of the summer. There is a reason pharma product moves by air with a time definite arrival.
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Post by matt on May 4, 2017 14:21:30 GMT -5
You are correct that an MOU can go very quickly or they can drag out. In my experience either the other side wants to do the deal as much as you, in which case nobody quibbles too much about a letter that will soon be replaced by a definitive contract, or they over-lawyer the terms. The longer the negotiations drag out, the less chance for a mutually beneficial deal. I have managed one in under an hour, we were really eager to sell the asset and they were really eager to buy, but those don't happen very often.
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Post by matt on May 4, 2017 9:30:40 GMT -5
Does anyone know if my assumption is incorrect about OneDrop's business... are they potentially striking agreements with insurance so that they get some additional payment from a patient's insurance in addition to what the patient pays for the subscription? That seems to be the case. It looks to me like this is designed to create a link back to the user's physician or insurance company so that somebody at the payor end can proactively get involved if there is a patient that does not have well-controlled blood sugar. If you look at their site they have a OneDrop Professional service, and that is something insurance will pay for if the concept proves out. The subscription fee is more than adequate to cover the cost of test strips as those are largely a commodity these days, especially when purchased in bulk. You will know this is real if insurers start paying for OneDrop Professional and also pick up the monthly subscriptions for patients. Anything that truly helps control blood sugar translates to big cost savings for insurers, so if the insurance companies are not paying for the subscription that suggests the app is a nice looking tool that doesn't create enough savings. This is doubly true because if a large insurer agreed to pay for everything they would be getting big discounts on everything. If a system can't drive savings of $200 or more for a diabetic, then it has limited value, but if it can deliver those savings then the inventor will be a happy man.
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Post by matt on May 4, 2017 6:33:45 GMT -5
I think you confuse the ownership of Danbury with the ownership of the foreign pharmacy license in Arkansas, or the Arkansas file is simply wrong (that happens a lot with state filings made years ago). The SEC filings are clear that Mannkind owns Danbury and has used it to collateralize the Deerfield loan, the operative phrase below being this: "...are also secured by the mortgage on the Company’s facilities in Danbury, Connecticut".
In connection with the Facility Agreement, the Company and its subsidiary, MannKind LLC, entered into a Guaranty and Security Agreement (the “Security Agreement”) with Deerfield and Horizon Sante FLML SA’RL (collectively, the “Purchasers”), pursuant to which the Company and MannKind LLC each granted the Purchasers a security interest in substantially all of their respective assets, including respective intellectual property, accounts, receivables, equipment, general intangibles, inventory and investment property, and all of the proceeds and products of the foregoing. The Security Agreement includes customary covenants by the Company and MannKind LLC, remedies of the Purchasers and representations and warranties by the Company and MannKind LLC. The security interests granted by the Company and MannKind LLC will terminate upon repayment of the 2019 notes and Tranche B notes, if applicable, in full. The Company’s obligations under the Facility Agreement and the Milestone Agreement are also secured by the mortgage on the Company’s facilities in Danbury, Connecticut, which has a carrying value of $28.7 million. Even if one of the trusts had a residual ownership interest in Danbury, they have obviously consented to offer it as a security for Deerfield. This is equivalent to a parent guaranteeing a debt for one of their children using their house as collateral; if the child defaults on the loan the bank will foreclose on the mortgage and take the house notwithstanding the fact that it is the child that defaulted and not the parents. Deerfield has rights to substantially all of the assets which puts them in control in any insolvency proceeding. I won't go into all the rules about priority of liens in bankruptcy situations, but suffice it to say that Deerfield has locked up anything of value and can legally prevent the estate from borrowing any more money unless their claims are first satisfied in full. In past bankruptcies, like Dendreon, they have not played that card because they were mostly interesting in getting paid and didn't want to take over the company, and were happen to let the court auction off the assets rather than assert their rights to the collateral under the Uniform Commercial Code. If what they really wanted was to own the company, they wouldn't have done that.
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Post by matt on May 3, 2017 11:10:40 GMT -5
With the volume lower than previous levels, you can't blame the market makers for reducing the guaranteed size of the trade blocks to 100 shares or so. That makes it easy for a big holder (or a big shorter) to repetitively hit the bid with 100 share "at the market" offers and crash the price. The price dump looked to be somebody selling about 250-300 thousand shares in a short period, and in dollar terms that is only about $200K; not a very big trade. As long as the shorts can borrow shares, they can knock the price down 7-10% losses almost at will, and if the Mann Group or Deerfield get into the game they can do the same. Short of very material news, there is no antidote for this disease.
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Post by matt on May 3, 2017 9:21:52 GMT -5
When you say news it seems you are implying good news... Good news or bad news will do depending on what the market expects. A company could have an increase in net income of 15% year-over-year, which is decent growth in almost any industry, but if the analysts are expecting 18% improvement then 15% is a big miss and the stock will tank. It matters less what the news actually is and more how the news compares with the market expectation. It is easy to know market expectations for large cap stocks with 15 analysts following the company, but it is hard to do the same for a small player like Mannkind. In the case of Mannkind, I think the focus will be on the balance sheet. At this point it should be fairly obvious what the cash burn rate is, how Symphony or IMS data translate into true net sales, the cost of producing product, and so on. Likewise, there is good transparency on future obligations (like the debt payments due in July) so a lot of people will be updating their monthly cash projections for the remainder of 2017, and listening to whether the company sounds credible on its plan to raise more cash. Right now the expectation is a fairly ugly cash forecast and no positive surprises, but a good surprise of some magnitude (on the order of the Sanofi settlement) would probably pop the PPS. Modest surprises, like announcement of another $1 million in milestone payment from RLS or promoting the upcoming television show, while welcome will probably not move the needle and may be even viewed as a negative under the category of "is that all you got?" when much more is needed to right the ship.
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Post by matt on May 1, 2017 15:22:06 GMT -5
Can we be confident that Matt has, at a minimum, contacted all these players working on CGMs and diabetes management initiatives? A more traditional way of doing this would be working with an investment banking firm that has pharma as a specialty. It's part of investment banking job to know who is interested in making investments in a given sector. I have to believe that this has been done. There are only so many pharma companies that can be approached with a property like this so it is a fairly simple engagement to manage and writing the information circular is also fairly simple for a public company. When the bank solicits expressions of interest, almost all will take a pass just by looking at a one page summary, and there are only a few interested parties that will sign confidentiality agreements and look at the detailed information. That process rarely takes longer than two months; if there was a serious suitor they would have emerged by now. However, like dreamboatcruise said, few CGM companies would want to get into the pharma business. There is a world of difference between making drugs and medical devices, and you don't need to control the drug supply to move some electronics.
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Post by matt on May 1, 2017 13:11:28 GMT -5
Also, production costs aside, why is it that I see a million or so My Pillow or Flex Seal commercials EVERY DAY? How do these companies or the UnTuckIt shirt guy get all that air time in the Tri-State? At one point I did some financial consulting work for a media company that owned a lot of local television stations and I learned a lot about their revenue model. The answer is that the station provides the air time for free and the phone number to call shown at the end of the commercial is tied to the station that shows the commercial (each station has a different one). Order revenue is split between the stations showing the ad and the manufacturer. That works well for a product that you are only going to order once or twice; how many Ronco Rotissere Ovens are you going to buy in a lifetime for just three easy payments of $39.95? Here you need a prescription to sell the product which is not the same business model. The problem is that paying somebody to promote usage of a medical product or service that is reimbursed by Medicare falls under prohibitions imposed by the Stark Act (and most states have a similar law that applies to any reimbursed healthcare expenditure from private insurance). The gatekeeper is the physician who is presumed to prescribe only that which is medically necessary, and the physician cannot be compensated for writing the prescription except as part of the normal doctor-patient relationship. Whether a drug company could spiff television stations for running commercials in a particular geography in exchange for NRx filled by pharmacies in specific zip codes would be a novel idea, but one that has not been tried to my knowledge. That might be an interesting strategy to try in an area where most of the doctors are in "no see" practices where the salesmen cannot get through the door. Would local stations be willing to rely on Symphony or IMS data to track sales? I don't think anybody knows that answer.
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Post by matt on May 1, 2017 7:34:42 GMT -5
Why would you assume that? Few doctors know what each insurer covers, what copays are, what retail prices are, etc? I am not sure I agree with that. My physician knows exactly which drugs are on or off formulary for each of the health plans, and can see which drug he should be writing before he ever sends the script. I takes him no more than five seconds to pull it up on his computer, and I presume most offices are computerized at this point.
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Post by matt on Apr 28, 2017 10:24:44 GMT -5
I would be curious as to how they monitor rep activity and how they evaluate performance. You can't necessarily blame someone who gets stuck in a difficult area, but how does MNKD decide whether a spot is difficult or whether the rep just isn't performing? Most pharma companies know which territories are difficult. In some parts of the country nearly all the private practices are affiliated with a large local hospital system that has a firm "no see" policy, meaning that pharma salesmen are not allowed to visit those doctors in the hospital or office (most have periodic product fairs where the companies can present). If you get stuck into a no see region, you are not going to sell much product. Similarly, if a particular insurance company covers 80-90% of the insured lives, and that insurance is partnered with ExpressScripts or CVS as a pharmacy benefit manager, then most of the patients aren't going to have access to Afrezza. Those are the rules of the game in pharma in 2017. One product companies with a disruptive technology are not going to do well in many geographies, and no amount of DTC or social media advertising is going to change that. Many large pharma companies have a sales quota of 8 physician visits a day, but even when the salesman reps multiple products and can walk around a medical office building stuffed with 50 or more physicians with whom they have long-standing relationships, they still have a hard time having 8 conversations. Now, imagine being an Afrezza salesman with one product that you can detail only to endos and PCPs with large diabetic populations. It is tough out there.
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