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Post by matt on Oct 10, 2016 15:06:29 GMT -5
matt, I believe you may have hit on an issue for people more frustrating than Afrezza script sales. The Cubs World Series drought. And here I thought being a MannKind fan made me one of the hardiest fans. You are both a Cubs fan and MannKind fan at the same time, ouch. Actually I am a Cardinal fan, but when you live in Chicago they make you pick between the Cubs and the Sox. Now if Mannkind would just post their weekly script count on a manual scoreboard in center field like they do at Wrigley they might have a shot. If not, shareholders can always adopt the Cubs mantra "just wait until next year".
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Post by matt on Oct 8, 2016 8:18:36 GMT -5
We should start a pool on which will come first; Afrezza hitting $1 billion a year in sales or the Cubs winning the World Series. Having lived most of my adult life in Chicago, it is a no brainer bet that Afrezza will reach $1 billion in sales first.
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Post by matt on Oct 4, 2016 15:41:29 GMT -5
Not that I think we're about to get a strategic partner soon, but why would you rule out all the other companies that make up the second tier of diabetes pharma? Couldn't it be advantages for them to beef up their offerings with insulin since they are fielding sales forces addressing diabetes already. Surely there are at least several others that would have sales forces with diabetes expertise that are significantly larger than what MNKD has ? ? ? It is impossible to rule out anybody, but the trend in the industry is to focus on narrower therapeutic areas, and to avoid going head to head with multiple well-entrenched players. A lot of the players in metabolic drugs have taken the decision to exit the field as their remaining drugs come off patent, not to invest more, and despite what you might think of our French friends a lot of companies will look at Afrezza and think to themselves "it Sanofi couldn't make a dent in the market, we will never be able to do it".
There may be a brave company out there willing to try, but the second tier companies don't have the deep pockets of the big pharmas so they are a bit more conservative.
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Post by matt on Oct 4, 2016 15:31:37 GMT -5
Isnt Mann foundation different from Al Mann trust? There might be both (or even more than one of each type), but it is largely a matter of legal semantics. Legally speaking, both would be trusts and the document that created the trust sets forth the objectives and beneficiaries of the trust. Except in special circumstances, the trustees are obliged to follow the intentions of the grantor to the letter.
Some trusts are allowed to deplete that assets for the benefit of one or more beneficiaries to the detriment of other beneficiaries, even if that totally wipes out the trust assets. Most commonly this happens when a husband and wife put all their assets into a trust providing a lifetime income for the needs of the "second to die", with the remainder going to the grandchildren. If the "second to die" lives an unexpectedly long time or becomes very ill with high medical bills they might use up all the assets, leaving the grandchildren nothing (which is legal). In other cases, it is not legal. It all depends on how the documents are written, and we will likely never see those.
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Post by matt on Oct 4, 2016 14:03:32 GMT -5
and does Mann foundation have the funds to do such financing? With so much invested thus far, it would make logical sense to take it to the final step? If they do have funds , whats the incentive for others to invest , when they themselves are not stepping in? There are two issues with the Mann Foundation. One is whether they have the cash, but the other is how the trust agreement is written. Regardless of how family members may feel, professional trustees have to follow the letter of the trust agreement lest they risk a lawsuit from any named beneficiaries. If the trust agreement explicitly instructed the trustees to prop up MNKD at all costs, even to the 100% diminution of the trust corpus, then that is what they will do, but that would be highly unusual.
If, as is more likely, Al spread the money around to various charities, universities, and relatives then the trustees have to act in the interest of those beneficiaries even if than means they diversify the investment portfolio by selling MNKD and as a result further depress the price. There was a footnote in the last 10-Q mentioning that the trustee might do exactly that.
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Post by matt on Oct 4, 2016 11:24:22 GMT -5
Given all the money out there, are there not PE firms who look for healthcare deals who also have a stable of operating execs who would cut off body parts in return for a comp package that included equity to make them wealthy assuming success? Given how hot the epi space is now, seems possible but PE firms probably don't want to put up a lot of $$ so how about some risk mitigation by getting a hedge fund or two to share the risk. Private equity firms normally invest only in companies with a profitable business with potential to earn even more with some restructuring or further investment, and venture capital firms do not invest in companies that are already public since they tend to make their money on IPO pops. The logical buyers are existing pharma companies with an interest in diabetes, but most of the research dollars from big pharma is going into oral agents like GLP-1 for use with or without metformin. Are there lots of healthcare executive who would like a sweet comp package, sure, but not so many investment funds willing to give them the dollars. MNKD, between the debt and equity, is simply overpriced for most financially motivated investors.
The fact is that companies like MNKD have the public markets and not much else unless a strategic partner steps up. There really are only three strategic partners for Afrezza; Sanofi already had its chance and I don't see Lilly or Novo chasing Afrezza. The public markets are going to be rough on any company with a < $1 stock price, but that is the case. I don't see that Sanofi is going to sink more money into MNKD especially as they are preparing for major layoffs as Lantus is replaced by biosimilar basalglar and, despite the rhetoric of loving to hate Sanofi, I think holding out for any Sanofi settlement is unlikely to get results.
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Post by matt on Oct 3, 2016 15:54:29 GMT -5
Baba, great post on Technosphere being a delivery system in search of a drug. Minor correction: Warner-Lambert developed Lipitor, I believe. Correct on Warner-Lambert (I think). It was developed at the old Parke-Davis research facility in Ann Arbor which went through several owners in the consolidation of American Home, Warner-Lambert, and Parke Davis, all of which wound up as part of Pfizer (as did Wyeth) but I am not sure who owned the molecule at which point. I spent a little too much time consulting with a particular unit of Pfizer to keep it all straight in my old age.
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Post by matt on Oct 2, 2016 8:07:45 GMT -5
This is normal behavior in the AH market for thinly traded stocks. Market makers who agree to participate AH are required to submit and honor quotes, but not all have the staffing required to manage their entire book AH, so they post bid and ask numbers that are far apart as a signal that they are not really open for business. If a stock closes at %1.00 there is no easier way to drive away business than to quote $0.50 / $2.00 on a small size. The spread always comes back down to earth in the ten minutes or so before the normal market opens the next day.
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Post by matt on Oct 1, 2016 7:52:09 GMT -5
Patents for undeveloped products are valued the same way as for developed products. The only value of a patent is to exclude competitors from the market, presently or in the future, so by paying anything for a patent you are making a bet that A) a lucrative market for the patent will develop, B) that the patent is legally valid and cannot by bypassed with clever engineering, and C) that you will be successful in making the product.
There are examples where somebody paid dearly for a potential market, and I didn't mean to imply otherwise. Pfizer bought Wyeth for a number of reasons, but mostly it was to get control of a drug then in development that would later become Lipitor. Great bet, they made out like bandits. As Lipitor approached patent expiration, Pfizer bought another patent for a new generation of cholesterol therapy, from the exact same scientists that invented Lipitor, and that bet turned into a $1.1 billion write-off of Experion Therapeutics. Experion is still around, but is a reboot of its former self; Pfizer is long gone.
Technosphere is a drug delivery technology looking for a drug to deliver. There are MANY drug delivery technologies out there, Alza was a multi-billion company that did nothing but develop drug delivery methods, but the trick is forming a marriage between a drug that needs a better delivery method and an ideal method that will still have valid patent claims by the time the drug is approved. If MNKD finds one of those, Technosphere will have value.
The biggest risk in pharma is that there is another way to do something that does not violate still valid patent claims. I am presently negotiating a license to a small molecule from a "Big Pharma" for a particular purpose. If they want to play ball, I am happy to pay them a modest royalty because they have done a lot of work characterizing the molecule and I won't have to take the time or spend the money on duplicating the safety tests. If not, I know at least two places I can go to obtain similar molecules, one with an expired patent and one that had their patent denied as not being novel. The fact that I have alternatives will determine how much I am willing pay the "Big Pharma" for a license.
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Post by matt on Sept 30, 2016 15:59:36 GMT -5
Maybe not, but everytime I look at MNKD the phrase, "Lasciate ogne speranza, voi ch'intrate," seems to flash across the screen. Which circle have you reached?
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Post by matt on Sept 30, 2016 15:56:55 GMT -5
I assume you are addressing this question to me. The answer depends on "Why do you want to know?"
If you are asking the question as a matter of Delaware law, the answer is 1 director and that person does not need to be independent.
The SEC does not regulate corporations, only sale of securities, so they have no say in the matter.
If you are asking assuming that the company wants to remain in compliance with NASDAQ rules, the answer is a bit more complicated. Under NASDAQ rules more than half of all directors must be independent directors, and NASDAQ also requires there be an Audit Committee of at least three members, all of whom must be outside directors, and an Executive Compensation Committee of at least two members, all or whom must be outside directors. All director nominations must be made by the independent directors.
At a minimum, NASDAQ will require three independent directors to constitute the Audit Committee, and those same directors can do double duty as the Compensation Committee. NASDAQ does not require any non-independent directors, so three in total is enough to meet the bare requirement. However, most companies will also have a Corporate Governance and Nominating Committee and the committees do most of the work required by a board. Companies try to avoid having directors on multiple committees, and never in the case where they already serve as a committee chairman. Some companies have Audit Committee meeting every quarter and alternate the Executive Compensation and Corporate Governance Committee meeting every other quarter to spread out the work.
If you want a properly functioning and active board, you need 5-6 board members of which no more than 1 is an inside director. Does that answer your question?
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Post by matt on Sept 30, 2016 10:49:25 GMT -5
The value of the patents, is large. ? The value of any patent, by itself, is zero. If the inventor has a highly successful new product, a patent protects the market from competition for the life of the patent, and in that case the patent has great economic value. If the new product is a failure, the patent is worthless because it protects a commercial market that does not exist. Ultimately, the value of the product determines the value of the patent and not the other way around.
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Post by matt on Sept 29, 2016 10:23:52 GMT -5
There weekly report that is available to prescribers has a 1-week lag time, but it doesn't capture ALL scripts. The pharmaceutical company would have that information and it is common for BP to report quarterly sales for specific drugs.
That is true, but the sales numbers provided by the pharma companies are their sales into the wholesale chain and not sales to end consumers. Pharmas know by dose by lot number who they sold their product to, but if the sale is to a large wholesaler like McKession, Amerisource Bergen, or Cardinal Healthcare it may flow down to a retail pharmacy (sale transaction two) and then to the final customer (sale transaction three). Nobody can track all of the pieces with precision, and that there is a time lag between when the dose ships from the factory to the wholesaler, and when the consumer fills a script. Often that is a matter of a few weeks, but it can be months in slower parts of the supply chain.
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Post by matt on Sept 28, 2016 11:03:26 GMT -5
What you posted is not an article, it is probably just a citation to the abstract. Abstracts are generally published as a supplement after the meeting, and there are no articles in press by that author on the magazine web site (there might be in the future).
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Post by matt on Sept 28, 2016 9:45:45 GMT -5
Your really can't compare metformin to insulin, they are two different beasts. Metformin does work for many Type II patients, but small molecule drugs are dirt cheap to produce and generics are really cheap at this point. I am on one generic small molecule and I can buy a year's supply for about $35 without any insurance contribution.
The valid comparison point is rapid acting insulin vs Afrezza, but even there Afrezza is expensive. Nobody really know how much the big PBMs pay for insulin because those sold source deals are confidential, but suffice it to say that Lilly and Novo are deeply discounting their product to get tier 1 coverage. MNKD can help fight that war with the discount card, but that is economically the same as cutting the price, and for a company that has yet to breakeven it is not clear if that is a sustainable strategy or not. However, if a patient compares full price insulin with full price Afrezza, that is an invalid comparison since most drugs covered by insurance are actually price much lower than that after rebates and other discounts. It is roughly comparable to Hertz and Avis buying new cars for their fleet; they don't pay anything close to the sticker price.
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