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Post by matt on Apr 1, 2020 10:12:36 GMT -5
CJM did say on the previous page these shares need to be voted on at the annual shareholder’s meeting coming up in May before they can be authorized for sale. Is that definitely true? I too thought they had to be voted at the meeting but am now not certain that they could not be otherwise approved and registered for sale later at a better time after the meeting. True and false  . Delaware general corporate law mandates that shareholder approval is required for any increase in authorized capital, and this action may be taken at the annual meeting or a special meeting called for that purpose or by a consent resolution (used mainly for closely held corporations). There is a cost to prepare SEC filings and to solicit proxies so if a capital authorization is needed in the next year it generally makes sense to put the item on the agenda for the annual meeting to avoid the cost of duplicate filings and proxy solicitations, but this is a judgment call by the board. The text of the statute reads as follows: "If the corporation has capital stock, its board of directors shall adopt a resolution setting forth the amendment proposed, declaring its advisability, and either calling a special meeting of the stockholders entitled to vote in respect thereof for the consideration of such amendment or directing that the amendment proposed be considered at the next annual meeting of the stockholders . . ." Note that the shareholder vote authorizes the new shares as a matter of Delaware law, but it does not register the shares for sale which is an SEC matter under federal law. These are two separate events that require two separate legal documents. Authorization must, necessarily, be the first step before registration but companies like MNKD can issue shares against a valid S-3 shelf registration, so the registration step is literally submitting a two page form. |
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Post by matt on Apr 1, 2020 6:56:49 GMT -5
Note Patrick McCauley Chief Commercial Officer is not on executive mgmt team
He is named as an officer under the section showing securities holdings, but not under the table of executive officers. Either he should be included on both lists or neither, but somebody missed this. These are the kind of minor errors that sneak through on the PRE14A, which is a preliminary filing, that often get corrected on the DEF14A. |
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Post by matt on Mar 26, 2020 7:45:37 GMT -5
I haven't been around much lately so if this has already been addressed please let me know where to find it. Do we think that all this new capital available from the stimulus bill will make funds available to Mannkind? Could it be that all of a sudden money that was unavailable to Mannkind is suddenly available and cheap? Thoughts? Congress has not made many of the details publicly available, but most stimulus bills of this type focus on preserving existing jobs that would otherwise be lost due to an unexpected decline in business (i.e. auto manufacturers). So far at least, the script numbers seem to be holding up suggesting that MNKD's business, however humble it may be in size, is largely unaffected by recent events. During the last downturn in 2008, virtually no money flowed to the biotech sector to support R&D intensive companies. So this magic pile of money is unlikely to suddenly shower dollars down upon MNKD. It is also important to remember that this is a presidential election year. Companies with heavy employment can deliver votes in November, and doubly so those in "blue" states with unionized operations, and any company with large operations in the "purple" swing states that count most in elections. While that may seem excessively cynical go back to 2008 and look at where the big dollars went, and look at the accompanying legislative changes (such as allowing loss carrybacks if a company goes bankrupt) that were done as political favors. TARP money was made available when the capital markets got tight, but those funds were certainly not cheap and they came with lots of strings. Distressed debt is never cheap. |
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Post by matt on Mar 21, 2020 15:03:08 GMT -5
The underlying drug is already manufactured by UTHR and it is approved for sale. There is no need for any approval on the UTHR side if physicians want to try it for treating any disease; that is what off-label prescribing is all about. Any licensed physician can used any approved drug for treating any condition where, in the professional judgment of the physician, the treatment is warranted. Naturally when a physician prescribes a drug off-label, they are solely responsible for the consequences if the patient suffers adverse events but in life threatening situations few people second guess physicians.
The new formulation is not MNKD's drug, just MNKD's delivery system. Does UTHR feel a pressing need to push the new formulation through FDA at this time?
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Post by matt on Mar 17, 2020 13:38:14 GMT -5
those tubes seem so long. heh, we had tubes for 450 gram babies. Do I remember correctly, 750 grams is a pound? The tube length varies, but they are roughly a foot long. The only thing that really matters is that the balloon cuff has to be fully inserted into the trachea and that it is not advanced so far that it is seated in the right or left bronchus. That is why you always see them listening on both sides of the lung after insertion to make sure there are breath sounds in both lung during ventilation. There are a number of ways to insert an ET tube, but all require good visualization of the arytenoid cartilage that guards the entrance to the trachea. You visualize the arytenoid, take aim, and hope that you hit the hole on the first try. It takes a lot of practice to get it right and I assure you that is not as easy as it looks on television! |
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Post by matt on Mar 12, 2020 15:12:31 GMT -5
I'm just concerned about them having to dilute again in order to not end up being delisted. Under ordinary circumstances I would agree with your concern, but these are not ordinary circumstances. NASDAQ has the rule to protect investors from garbage stocks, but with so many companies taking a severe hit over the past two weeks I cannot imagine that they will not change or loosen the rule somewhat. The exchange is owned by the member brokerages and brokers only make money when shares are trading. Delisting a lot of small companies doesn't make sense in these circumstances, and NASDAQ usually acts in their own enlightened best interest. |
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Post by matt on Mar 9, 2020 15:10:14 GMT -5
Can Mannkind ever get afrezza's price down to a point where it could compete on price? I think the answer to that is a big no. Lilly and Novo produce huge quantities of recombinant insulin in-house or with a dedicated contract manufacturer working on a "cost plus" basis, while MNKD has to buy insulin from Amphastar who is making a profit from that relationship. If MNKD had 100,000 scripts per week that could change, their options for cheaper insulin would improve, but for now they have a cost disadvantage on the most critical component. Add to that the cost of the FDKP delivery particles, the need to combine insulin with the carrier, and the packaging into the unit dose canisters and there is an inherent cost disadvantage. At large enough volumes, the differential will not be so large but the difference will always be there. For reference, the "factory price" of recombinant insulin from some providers in Brazil is lower than half a cent per unit (a 1,000 unit vial is less than US$4.70). That Brazilian company is a non-profit manufacturer that doesn't need to keep shareholders happy, but it gives you an idea of how cheaply recombinant insulin can be manufactured in bulk. While I expect that Lilly and Novo cannot make their insulin so cheaply given higher US prices for labor and overhead, but I doubt their insulin production cost reaches a penny per unit. This puts them in a position where they can always price their RAA cheaper than MNKD's production cost, and at that point Lilly and Novo would still be making money. Afrezza is not a product that will ever sell on price alone; it has to be a combination of reducing cost from the present level and demonstrating superior benefits. |
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Post by matt on Mar 8, 2020 11:29:20 GMT -5
The stupid FDA is the one who set up the protocols for the trials. The FDA never dictates trial protocol. They do give guidance on what parameters they need to see in order for the drug to be approvable, but that is it. The sponsor is not handcuffed in any way and unless the trial poses an undue risk of harm to the patient the sponsor can include additional arms to prove whatever they like. That is with an unapproved drug; with an approved drug it becomes even easier to run trials since FDA is not generally not involved. If the trial design is bad (and some of MNKD's trials have been poorly designed) then they have nobody to blame but themselves. There are lots of ways to game the results of a trial, but most physicians can spot deficient designs a mile away (like comparing Afrezza against RAA while allowing Afrezza redosing after seeing what the CGM sales but not allowing redosing for the RAA). Anyone who has spent any time writing clinical trial protocols knows better. |
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Post by matt on Mar 3, 2020 8:09:51 GMT -5
Here was your original post. mnkd.proboards.com/post/192877Afrezza pricing finally announced in Brazil. The official prices in Brazilian Reals (US dollars in parentheses) are: 8U X 90 70.63 ($17.14) 12U X 90 105.95 ($25.71) 4U X 60, 8U X 30 47.09 ($11.43) 4U X 30, 8U X 60 58.86 ($14.29) 8U X 60, 12U X 30 82.41 ($20.00) 4U X 90, 8U X 90 105.95 ($25.71) These are “factory prices” and represent the maximum amount Biomm can charge any pharmacy for the product. MNKD is paid from the factory price. I remember that post (I have not gone THAT senile, yet) but there were several price changes after I posted that first one. At least part of the difference is that when a new drug is introduced, one way that CMED prices it is with reference to the prices set in a defined list of countries OR the home country of production, whichever is lower. Since MNKD is only sold in the US and Brazil, under that regime the US price was the benchmark and a few pricing spreadsheets reflected that reality. The pricing sheet for February had the higher prices I mention above, the one for March has the lower prices. Why the change? I think the higher prices in January and February were from one pricing methodology, and the prices for March are from the other. The pricing regime on the latest sheet is marked "Regulado" or regulated while at least one of the earlier sheets said "Liberado" or free pricing. It doesn't help that CMED issued several versions of the price sheet in December, not all of which even listed Afrezza. However, I think the new March prices are more in line with what the official policy is in Brazil so I would expect those prices will apply during the March 2020 to February 2021 period. |
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Post by matt on Mar 2, 2020 16:16:45 GMT -5
Did anybody notice the significant change in Afrezza prices as of March 1? The official prices from CMED are updated once a year, in March, so I think these are going to be the new prices going forward.
The prices originally published ranged from 1563 to 3925 Reals (about $350 to $875) depending on the package size. The prices published for March 1 range from 93 to 209 Reals (about $21 to $47) for the same package sizes. Those are the PMC 20% prices, the maximum that can be charged to a patient by a retail pharmacy in the states with a 20% sales tax rate. The maximum import prices are now 48 to 109 Reals ($11 to $24 per package) and the import prices has to be shared between MNKD and Biomm because the pharmacy mark-up and all taxes are regulated.
I was surprised that the original maximum consumer prices were set so high given that CMED is supposed to regulate new drugs at similar prices to existing drugs with the same active ingredient. The new pricing brings Afrezza in line with those of other imported insulins (Humulin and Novolin R are both 65 Reals for a 10ml vial, about $15), and modestly higher prices are allowed for pre-filled injector pens (Novolin R is 129 Reals for five pens of 3ml each, about $29, and five 3ml pens of Lilly lispro are 301 Reals, about $67).
While these prices are substantially lower than the temporary introduction price, it doesn't appear that Afrezza is being treated any better or any worse than the other foreign insulin manufacturers. However, with the lower prices the question becomes whether MNKD makes any gross profit at all on Brazil sales. If they do, it can't be much.
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Post by matt on Mar 2, 2020 7:50:35 GMT -5
I don't think a covenant miss, per se, will mean that MNKD cannot access the loan although this is certainly possible. With yields crashing due to market uncertainty, MidCap can probably borrow money at ever cheaper rates to loan to their clients like MNKD. What a covenant miss does mean is that MidCap is given an opportunity to extract more pain from MNKD in the form of free shares, a higher interest rate, or a cash penalty just a Deerfield did every time the company was cash poor. Hard money lenders rarely give ground on any covenant without imposing a cost on the borrower, but it is not in the interest of the lender to bankrupt their client either.
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Post by matt on Feb 29, 2020 13:51:05 GMT -5
Anyone think they have a good sense of where the general stock market is heading? Anyone hear anything from any reputable stock market pundits on where it is likely to go? I guess a lot obviously surrounds around this new strain of virus. Anyone recall how the markets in the past were affected by prominent viruses in the past? Short lived declines? Enough to throw good economies into recessions? Is this virus just in time for a correction that was bound to happen soon from other conditions such as slowing US and global growth? I’m now wondering whether MNKD should have had an equity raise several weeks ago. I was kind of hoping a few weeks ago they were going to (not knowing of course if they have a pending deal or more to obtain enough cash on hand for the next couple of years). Epidemiological models suggest that a pathogen with this level of virulence and no natural immunity in the general population will take around two years to fully manifest itself. That is why some of the estimates you see of the number of people that will be exposed or the number that will die are so broad; nobody is working with good numbers. Given that COVID-19 spreads in much the same way as normal influenza and rhinovirii, and that we are entering March, means that the US and Northern Europe may have escaped the worst impacts for now but the virus could start spreading rapidly again in the fall months. That is a long time for the markets to be worried, but the market hates uncertainty. It is simply going to take a while before the CDC and similar agencies really know what is happening. What is unique about this time is that global supply chains have never been this exposed. The earlier SARS and MERS epidemics were largely localized, and Ebola affected a region in Africa that was not a significant part of any supply chain. This virus will affect the entire world, and supply chain disruptions in one place will cause companies manufacturing elsewhere to shut down due to lack of raw materials or component parts; the auto industry is a prime example of this dynamic. It will all get sorted out eventually, but "eventually" will likely be 24-36 months. As for equity raises, I have said before that any biotech that does not have a cash balance at least equal to the following year's worth of COGS and expenses is playing with fire. It is not so much the dilution pain, raising money at a discount to $1.27 is painful versus $1.70, but the bigger risk is that the financial markets simply become so unfriendly that no deals are available on commercially acceptable terms. That is what happened in 2008; some biotechs had an extremely difficult time raising money and several did not survive the downturn. Most small companies depend on robust trading volume to place new shares, and if people are staying away from the market until things settle down the volume will not be there. This week there was a lot of selling (obviously) but the daily volumes a week or two from will give a good indication of how long this funk may last. |
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Post by matt on Feb 28, 2020 15:53:30 GMT -5
Pricing is an issue that will never go away. It simply costs more to make Afrezza than other insulins, partly due to the fact that they purchase insulin from a third-party that needs to make a profit, and partly because the FDKP particles used in the Technosphere delivery system add to the cost. Even if MNKD were to lower prices to the point where they were selling Afrezza simply to recoup the variable cost of production, Lilly and Novo could price their RAA products at the same level and they would still be making money due to their greater economies of scale and their lower cost for recombinant insulin. That is an impossible competitive position.
Until and unless MNKD can demonstrate conclusively the long-term economic benefits of Afrezza over the competing RAA products, they will be at a serious competitive disadvantage. A superior product can garner a premium price, but the medical world is not convinced by the evidence offered to date. It is going to take a large and medium to long-term head-to-head trial of Afrezza vs the other insulins to prove the value, and I am not sure MNKD can afford to do such a trial.
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Post by matt on Feb 17, 2020 8:04:58 GMT -5
Everyone and their mother, sister, and brother have been waiting for "the correction"....there are countless bodies of short sellers with arrows in their backs who have tried to time "the" correction No argument that nearly everybody has been waiting for the correction which has stubbornly refused to cooperate. The one thing I have learned over the years is that attempts to time anything related to the markets with any degree of precision is a fool's errand, and not much can be forecast in the short-term and the long-term often turns out to be a lot longer than we might have thought. However, every trend regresses to the mean at some point so it is simply a matter of time. I agree that you don't want to give away the store with any financing, but if an enterprise is not making money and the balance sheet does not have at least a year of cash in the bank then that is cutting it very close for a company that is still burning cash every quarter. The advantage in always having millions of authorized shares in reserve is that management can move quickly to close a funding if market conditions dictate, but the downside of having them authorized is that there is no way to prevent the "Christmas Surprise". On the flip side, authorizing more shares outside the annual meeting requires a bare minimum of three weeks to meet SEC notification rules, and practically speaking it takes four to five weeks. A three to five week heads-up that the company is about to go to the financial markets is a gift to the shorts. |
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Post by matt on Feb 16, 2020 13:41:46 GMT -5
Agree, Also the stock is to low to dilute at this share price. And asking for more authorized shares would make it go even lower, so they need a deal first. IMO I understand the sentiment, but never play chicken with the financial markets. The market is long overdue for a correction and while it is nice to have a high value deal signed, there are no guarantees that a deal can get done on good terms before the market goes soft. I have seen too many small biotechs play the waiting game and then found themselves trying to raise money in a declining or crashing market environment. None of those stories ended well hence the old adage "raise money when you can, not when you need it." |
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. Delaware general corporate law mandates that shareholder approval is required for any increase in authorized capital, and this action may be taken at the annual meeting or a special meeting called for that purpose or by a consent resolution (used mainly for closely held corporations). There is a cost to prepare SEC filings and to solicit proxies so if a capital authorization is needed in the next year it generally makes sense to put the item on the agenda for the annual meeting to avoid the cost of duplicate filings and proxy solicitations, but this is a judgment call by the board. The text of the statute reads as follows:
