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Post by matt on Aug 1, 2016 7:01:27 GMT -5
Mannkind first has to get an EMA approval. While, in theory, obtaining a national approval (i.e. UK only) is still possible, virtually no drugs have been approved in the past ten years on a national basis because the effort is almost identical to going through the central procedure at EMA, and success there gives access to 28 countries. The process is similar to FDA, and takes a minimum of 270 days after the application is actually filed.
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PPS
Jul 27, 2016 18:16:37 GMT -5
Post by matt on Jul 27, 2016 18:16:37 GMT -5
From Yahoo, shows MNKD closed at $1.00. Doesn't that restart the clock? NASDAQ has tightened up the rules a bit. It needs to have a closing bid price of at least $1.00 for ten consecutive trading days to reset the clock. If the last trade was hitting a $1.00 ask but the bid was $0.99 then it doesn't count. Last trade may, or may not, have been on the bid.
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Post by matt on Jul 25, 2016 7:37:07 GMT -5
So how many billions does SNY owe MNKD? Probably zero. Unless the contract specifically says that Sanofi is liable for consequential damages, then they aren't on the hook even if MNKD could prove the losses (which are purely theoretical and speculative). Regarding Sanofi, their lawyers are probably advising them to do nothing at all. True, the money invested is a sunk cost and has probably been written down to zero on their books, but they do have Valencia as security for the debt. If Sanofi is looking at the MNKD balance sheet and thinking that bankruptcy is inevitable, there is no reason not to wait and then take the asset to recover some of their investment. Since the asset is secured, a liquidation of the building would happen outside of the bankruptcy proceedings and would not be subject to objections by other creditors. From a PR perspective, this would be fairly clean since secured creditors moving to liquidate the underlying assets are considered routine actions and don't attract much press. Will it come to that? Lets hope not, but with the debt not maturing for ten years and binding arbitration required under the contract, Sanofi won't be in a hurry to do much of anything.
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Post by matt on Jul 22, 2016 9:13:19 GMT -5
My experience across many product lines suggest that there is a seasonal component to almost all healthcare activities, and in ways you might not suspect. For example, while you might expect the demand for surgical supplies to decrease around the holidays, when in fact some people choose to have elective surgeries over Christmas.
However, I agree with that insulin is a daily requirement for diagnosed diabetics so refills should not be affected so much, but with vacations referrals to endocrinologists might slow down a bid, delaying the switchover for patients still on other therapies until Sept/Oct. It all shakes out in the end and you can't look too closely at weekly script counts without driving yourself nuts.
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Post by matt on Jul 21, 2016 13:51:39 GMT -5
We will certainly find out at the next earnings call. I wish that was the case. As it is, the next earnings call will be for period ending June 30 when Sanofi was still part of the equation and the loan facility was still intact. For most of that period, MNKD had no sales force or serious marketing efforts since those kicked in rather late in the period. Q3 will be a different story with essentially 100% of the expense and cash flow hitting MNKD's books directly, but that accounting period doesn't end until September 30 and the 10Q is not due out until the middle of November. That is a long time to wait for credible numbers, and I don't think we know enough to reasonably estimate the full P&L with only weekly script numbers to go by, especially due to the heavy sampling that will take place on the relaunch. The price is going to move, big time, on November 10 but it is hard to guess on the direction. Right now an option straddle will cost 43 cents, but that may look like a sweet deal on Nov 11.
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Post by matt on Jul 21, 2016 10:48:37 GMT -5
Not sure there is much overlap. Certainly it is good to have a device that monitor glucose continuously, but all that does is tell patients how effective their insulin regimen is and whether is needs tweaking. It is not going to be obvious to the average patient that some insulins will be better or worse for their condition, or that some are more convenient to use. The task at hand remains the same: convincing doctors to write scripts for Afrezza in preference to other alternatives, of which there are many.
Ideally MNKD would run a large trial putting Afrezza + continuous monitoring up against the other insulin regimens + continuous monitoring to see which patient cohort is better controlled. However, that would required a large number of patients, which are easy to find, and a large amount of investment, which might prove more tricky.
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Post by matt on Jul 20, 2016 15:30:15 GMT -5
Short and long are opposite sides of the same coin. Some people think a stock is overvalued so they short, some think it is undervalued so they accumulate. While you might find it annoying that the short sellers can announce that they think the company's story is full of holes and that they are betting against it, you can't really prevent it unless you are willing to shut down promotional activities for the stock and sites like this one that are heavily weighted towards advocates of the company and its product. For every Ackerman out there who shorts Herbalife, there are ten Warren Buffets that look for good companies and take the long side.
The reality is once Al Mann decided to take the company public, he lost the right to control the spin and who owns the shares. That is the cost of accessing the huge amount of funding available in the capital markets.
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Post by matt on Jul 18, 2016 17:14:32 GMT -5
Does anyone here have the professional expertise to evaluate the longevity of the P insulin in frozen storage? I can't speak to the chemical stability of insulin per se, but I have experience with a lot of other proteins. When you do stability testing, there is a maximum life that FDA will allow on the label but the API can be retested and recertified periodically. I have worked with proteins where our company owned the entire world supply of a particular protein for which manufacturing had been discontinued more than ten years before. Every few years my QA and Regulatory guy would test a sample, recertify it, and life would go on as before. We used this item in production of our product, which was also FDA licensed, but I was told the same applies to API that is past its sell-by date; if a stability test shows that the protein has not degraded you can use it indefinitely. Obviously only the manufacturer is in a position to do that; once the product goes out the door it must have an expiration date affixed.
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Post by matt on Jul 18, 2016 6:51:43 GMT -5
It all comes down to the precise language in the trust documents. Most trusts are professionally managed by special departments in major banks and trust companies, and being a trustee carries a lot of legal liability. If the trust document says to invest only in companies with left-handed CEOs then that is what the trustees will do. However, absent very specific instructions to the contrary there are rules of "prudence" in the common law that require the trustee to follow certain investment practices in the best interests of the beneficiaries.
Unless the trust documents are very specific on when and under which circumstances the trustee can sell the shares, you may be surprised at the result. "Guidelines and parameters" don't relieve the trustee of the legal liability; following the precise language of the trust indenture does. You can do nothing but guess unless you have seen the text. While Al was a great inventor, don't assume he got the trust language correct. There are many foundations that support causes 180 degree opposite to what the grantors stood for during their lifetime.
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Post by matt on Jul 17, 2016 7:29:28 GMT -5
Institutional ownership is reported quarterly, isn't it? I read that large holders have to report by the 15th of the second month following each quarter. So if that is correct, by mid-August we should have numbers current to the end of July. Right now, the figures at that link may be current only as far back as end of March. You are partially correct, institutional holders have to report 45 days after quarter end, but "large holders" and "institutional holders" are not the same thing. Institutional ownership reporting only applies to entities regulated under the Investment Act of 1940. That includes any entity that manages money for a third party in exchange for a fee such as mutual funds, index funds, and brokerages but, generally speaking, private foundations and family offices are not Investment Act companies and have zero reporting obligations. This is similar to the difference between public companies that must file 10K and 10Q reports with the SEC while privately held businesses do not. Investment Act reports are due regardless if the fund holds 10% of the shares or just 10 shares; holding size does not matter. The only way you will see changes in private holdings is if the individual entity has filed a 13D or 13G, which is required if the entity purchases more than 5% or if it makes a subsequent change equal to more than 1% of the shares outstanding. If Al Mann had 35% of the shares spread around 10 separate entities in roughly equal proportions, then each entity would only own 3.5% and would not have to file disclosures (there are complicated rules for figuring out if two entities are under common control and therefor must be combined for reporting, but I have not had enough coffee to even think about explaining that). The bottom line, if the various foundations and trusts that remained after Al's death each have less than 5% of the shares they can sell it all without having to report anything. You can be sure that Al's private wealth advisers thought carefully about such things when the structure was set-up in the first place, and the trustees will diversify the holdings quietly to avoid putting too much pressure on the PPS. Remember that the trustees that control the various foundations have a fiduciary obligation to act in the best interest of the trust even if that is not to the advantage of the company, and over concentration of holdings in a highly volatile company violates their legal obligation to act with prudence. Since the trustees can be sued by the beneficiaries, they tend to take such obligations very seriously.
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Post by matt on Jul 15, 2016 13:54:17 GMT -5
A lot will come down to the cash flow numbers for Q2 as released in the 10Q due around August 10. The cash runway continues to be the biggest risk to this company, and the ability to raise more cash is a combination of share price and NASDAQ limits on the number of shares that can be issued with a discount in any six month period. If the share price is too low, the maximum number of shares sold will be high relative to the cash proceeds obtainable. Realistically, the new sales program won't make any serious contribution until after Labor Day so there will really have to be a sharp uptick in script numbers for any October financing to be successful, but waiting longer might be a bad idea if the cash is running low. The vulture investors that buy into small biotechs with low cash balances will demand even larger discounts simply because they know they can get whatever terms they ask for.
I don't know what kind of weekly script numbers there would have to be to get the price into the range you estimated, but my gut tells me 1,000 NRx isn't going to cut it, especially since the refill numbers on the new program won't be visible until very late in the year. Here is hoping for bigger relaunch numbers.
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Post by matt on Jul 14, 2016 15:28:34 GMT -5
The day of those results will be a vicious move but given what MNKD has gone through I can't see the FDA approving this on a 30 person trial. I hope to be proven wrong. FDA is fairly practical on these matters, and whether a 30 patient trial is enough depends on the particular label change. The pharmacodynamics data that FDA approved in the label was developed from just 12 patients so if there is a cohort of 30 that gives a different (but not totally different) answer then it might be enough.
The tricky bit is that there is one set of claims in the label that were agreed to based on data that was claimed to be reliable. If there is new, and different, data then it is fair for FDA to ask some tough questions like:
"Do we believe the data you showed us when we approved the drug, this new data, or should we make you run a trial of 100 patients to break the tie before deciding?"
"If you say the new data is reliable but the old data was not, does that mean everything we based the approval on should be considered unreliable?"
Answers to those questions are not easy. Changes in labels always open a can of worms and the answer might not be what shareholder want. Still, given where the company is the risk is probably worth it if there is chance to improve sales.
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Post by matt on Jul 13, 2016 16:21:19 GMT -5
It is important to remember that price means different things to different people. To self-pay patients with no insurance of any type the retail price matters but most patients have some form of coverage. For those people, many only see the co-pay and it may not be different regardless of what drug is involved so they don't care about the final cost (although the PBM does). Unless Mannkind is willing and able to make Afrezza cheaper than other fast acting insulins, and thereby capture tier 1 formulary positions, much of the "cost savings" will accrue to managed care companies and not to the benefit of the patient. That is not what the game is about.
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Post by matt on Jul 10, 2016 14:00:07 GMT -5
What the paper says (I just read the full text) is that insulin levels have a negative effect on lung function. This manifests itself by increased amounts of smooth muscle in the airways, PI3K/AKT mediated up-regulation of the beta catenin signaling pathway, and collagen type 1 deposition, all in an insulin level-dependent manner. That combination of symptoms is profibrotic and procontractile, meaning that the lungs stiffen and become less able to remodel due to the collagen, and asthma like obstructive disease is increased. The work was done in mice and cell culture using standard methods, not in humans, but these are well-studied pathways and similar effects are extremely likely in humans.
The point of the article is that there have been observations in the population that show a pronounced correlation between obesity, insulin resistance, hyperinsulinemia, and lung diseases, but until now nobody could show a cause and effect. This article outlined fairly persuasively a direct cause and effect linkage between hyperinsulinemia and deterioration of lung function due to fibrosis. Once fibrosis is established in any organ (as shown by consolidated collagen type 1 scar) then the organ is permanently impaired. Their conclusion is that nobody (anywhere) should use any insulin product without being aware of the risks, and that inhaled insulin poses an added level of risk that warrants further human studies before it becomes an accepted therapy.
Most of what I do involves regeneration of tissue, especially in fibrotic environments, so I look at this kind of study almost daily. The study was well-designed and controlled, and supports the imposition of a black box warning on Afrezza. The authors would be similarly cautious about careless use of injectable insulins and drugs (like metformin) that affect insulin production. Note again that the effects are seen with ANY insulin that is not properly controlled, not just Afrezza, but the risks are especially high with inhaled formulations. While that does not make for a better investment thesis in Mannkind, the science suggests that some caution is prudent.
For those of you with access to an academic library, the citations are:
PubMed PMID:26919895 DOI: 10.1152/ajplung.00091.2015
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Post by matt on Jul 10, 2016 7:30:00 GMT -5
The document is available for purchase for $35, no subscription necessary. The website looks legit. It seems pretty sophisticated and has quite a bit of content on its other pages. You can save your $35. BioCentury is a legit publication, I had a subscription for years back when my job was looking for the next new thing in healthcare for a Fortune 100 company, but there probably isn't much new content there. Mostly they take what is already out in the public domain, organize it, and republish the information. In many cases their source of information is the same press releases that everybody sees. The value of their information is generally low unless you are totally clueless about a topic and are starting from a blank sheet of paper. If you want real insight to private and public biotech companies, the "go to" industry publication is BioWorld. Most of their content is original, they track EVERYBODY in the industry, publish every business day with an e-mail update in the afternoon, and have global coverage. As you might expect, it does not come cheap with the most reasonable subscription costing several thousand dollars a year.
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