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Post by agedhippie on Jan 21, 2024 13:07:41 GMT -5
Two thoughts from Bill pertaining to different parts of this overall conversation. “1) I don’t think insurers will ever voluntarily cover Afrezza bc that’s not how those businesses function. But great data showing the superiority of Afrezza will FORCE the insurers to cover, especially for people who have prolonged lack of BG control. 2) regarding the use of Afrezza as first AND SOLO therapy, I start from the premise that the best therapy is one that manages BG as close as possible to the way the body does naturally. Intuitively it makes sense that such a strategy will lead to better control and fewer side effects. Afrezza is as close as one can get to what the body does naturally in managing glucose levels. One good example: the body doesn’t make basal insulin. Basal insulins are synthetic. They have value but they have side effects. Afrezza is essentially identical to pancreatic insulin and therefore works the same with no major side effects. In fact with Afrezza we see true disease reversal something we don’t see with other therapies. That’s why it should be used first: catch diabetes at the early stage with Afrezza and you can eliminate the disease. At least that is my belief and one I intend to prove with data in time.” Bullet 1; absolutely. Trial data to show markedly better outcomes will do it - look at the transition from human insulin to RAA. It will also not be quick. Bullet 2; insulin will always work where there is a deficiency, either absolute in the case of T1, or effective in the case of T2, and you are addressing the deficiency. The argument that the body doesn't make basal insulin is right in the literal sense (it only makes human insulin), but wrong in the effect. As a background process the body continually outputs glucose for energy (breathing, brain function, etc.) and insulin to utilize that glucose, this is also how pumps handle basal insulin. Basal insulin analogs like Tresiba replace that continuous insulin output and lets the body save it's own insulin for meal time. What Bill is doing is turning that around and using Afrezza for meal times which leaves the body's insulin to handle basal. Historically it has been done the other way around because handling basal doesn't require many smarts (there are fluctuations during the day, but these are slow) and it was considered better to have the body's insulin handle meals since the body continuously adjusts in real time to the glucose levels rather than being a one time event. Proving Afrezza can handle that role would be big.
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Post by agedhippie on Jan 21, 2024 12:53:03 GMT -5
Sports posted a nice response from Bill above. In a general sense the best approach is diet/exercise plus afrezza. For glucose control Mounjaro really has no place since what you really want to do is help the body replicate natural function. If you are looking for weigh reduction Mounjaro plus afrezza makes sense. ... And yet here we are because Novo Nordisk and Lilly have done the work to prove that GLP-1 and GLP-1/GIP work. The A1c reduction for Mounjaro in large clinical trials is higher than the top end that Mike is quoting for the CIPLA trial. At this point the argument is usually that HbA1c is outdated, but it's also still the gold standard because it can be directly tied to outcomes and outcomes are what matters. The same as always; do the work or don't expect change. In this case the work is a trial for T2 adopting the SURPASS format but with Afrezza as one of the arms. That gives direct comparison to basal only, Ozempic, and Mounjaro. That's how you change the SoC, not with limited time special offers on Afrezza.
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Post by agedhippie on Jan 20, 2024 18:46:45 GMT -5
It's worth circling back to a post limo posted earlier in this thread, specifically this image: These are the people who own those MidCap notes although when I looked there were 23 so some have been traded since that snapshot or new 13F filings. You can take the CUSIP number and find information about what it is trading at here: www.finra.org/finra-data/fixed-income/bond?cusip=56400PAQ5&bondType=CA
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Post by agedhippie on Jan 20, 2024 18:29:15 GMT -5
Being sarcastic, can’t believe what’s best is being denied ! It's not the best if you cannot afford to pay for it.
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Post by agedhippie on Jan 20, 2024 15:32:16 GMT -5
... What kind of debt limits accompany from being able to pay it back, and actually roots against the company to grow in value so that it can NOT pay the debt off? ... Welcome to the world of corporate bonds.
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Post by agedhippie on Jan 20, 2024 11:39:57 GMT -5
It might be free money but if the stock price is stuck below $4 then what's the purpose? MIKE is supposed to create SHAREHOLDER VALUE. The only way to do that is to have the share price higher. With all of the existing good news out about MNKD the stock is at $3.36. Why is it at $3.36......The SHORTS. Who are the SHORTS??? The Convertible Bondholders. That's why they need to get rid of (or pay down) the debt. MNKD has an annual run rate of $200M now and any small cap pharma company has a sales multiple of 10x which means their market cap should be at least $2 Billion. It's at $907M and you're telling me the SHORTS (i.e. bondholders) are not keeping it down? And there is no momentum in a higher stock price or even a SHORT SQUEEZE. MNKD has to get rid of the SHORTS. It's not the shorts, but people who believe it is are never going to agree. If shorts were a real problem the cost of borrowing stock would be far higher. MNKD is priced as it is because it's seen as a supplier for pharma, Technosphere, with a single customer. That's a big problem and reduces the value because it makes MNKD's revenue dependent on UTHR's ability to grow Tyvaso-DPI. Before someone says, "but what about Afrezza, it's a drug" look at the price before the UTHR deal that's the value the market attaches to Afrezza.
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Post by agedhippie on Jan 20, 2024 11:16:07 GMT -5
They probably would, a better question is why MNKD would want to pay it early. As they pointed out in the call they can put the $150M in the bank and collect on the difference between the 2.5% they are paying, and the higher amount they are being paid - it's free money. If the debt holders then have incentive to be paid sooner rather than later, what actions might they take to precipitate that? They cannot convert the notes because because the strike price if far higher than the current price so they would take a huge loss so they would have to amend the agreement. I am not sure that they would want to do this though because these are almost certainly part of a ladder. The ladder gives them certainty about their cashflow and that's what these firms are all about. Early payment would land them with a gap in their revenue from the loss of the interest stream, and a pile of cash with nowhere to place it. Counterintuitively unexpected piles of cash are a bad thing because it has to be placed and that takes time.
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Post by agedhippie on Jan 19, 2024 20:49:03 GMT -5
...They may need to reposition their strategy due to that news, and they have until March 6th until it is an actual threat to them with the possibility of the notes being paid at any moment (and they wouldn’t want to get caught with short positions, and now know there won’t be shares from MNKD to cover any short positions, as you point out.... To be clear on this, MNKD can only redeem the notes under certain very specific conditions that are currently nowhere near met. They can redeem the share price has been over $6.90 for 20 trading days so hardly at any moment even assuming they are shorting. MannKind may redeem for cash all or any portion of the notes (subject to certain limitations), at its option, on or after March 6, 2024 and prior to the 36th scheduled trading day immediately preceding the maturity date, if the last reported sale price of MannKind’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period
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Post by agedhippie on Jan 19, 2024 19:24:23 GMT -5
... Is $35 the right number IDK. Maybe its a little more or less but $35 is the current Medicare price for insulin. Its also the number Mark Cuban promised for CostPlusDrugs. From an ongoing business perspective, as long as BP has afrezza at 1k scripts afrezza is really not worth perusing. If it were not for Tyvaso DPI paying for the factory afrezza at 1k scripts a week even at the current $1000 a box pricing is a money loser. ... Why do you think insurers will rush to cover Afrezza? They know MNKD can only subsidize the price for a short while and is then going to put the price back up and the price increase is going to land on them. They will stand back and let MNKD throw money at the problem. The share price would go off a cliff. The Medicare price MNKD has to match isn't $35 per box, it's $35 per prescription which is several boxes. The same mantra applies; if you want to change the SoC do large trials and get the data.
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Post by agedhippie on Jan 19, 2024 18:26:34 GMT -5
Ok, I will keep it simple. The note holders only have an incentive to keep the price low IF MNKD cannot pay in cash. Since MNKD will pay in cash the note payers view the share price as irrelevant and don't care what it is because they are not getting shares. Hence, not toxic. and as I just said, that logic applies after March 6th. Until then the note holders have free rein because it doesn’t matter how MNKD may settle the debt, they’re not allowed to, so it isn’t a threat to the note holders to stop being toxic until March 6th. Why? MNKD have the money sitting in the bank to settle the debt right now. The note holders know when this gets settled they are getting cash so their only other option is to convert now and pay MNKD $5.21 per share rather than buy on the open market at $3.35 a share. It's pretty obvious they will not convert. If anything they have an incentive to pump the price, convert, and dump. The toxic part is the warrants that were issued in parallel with the tranches. The first tranche were issued with a strike price of $1.11 so those absolutely could be used to support a short position.
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Post by agedhippie on Jan 19, 2024 15:01:53 GMT -5
you just shifted the conversation to everything that goes into the market valuation of MNKD. As much as I would love to hear your very complex explanation as to why this company deserves be valued where it is, this particular conversation was about whether or not the debt should be considered toxic based on whether or not the debt holders have incentive keep the sp below $5.21. And they do, you said it! Ok, I will keep it simple. The note holders only have an incentive to keep the price low IF MNKD cannot pay in cash. Since MNKD will pay in cash the note payers view the share price as irrelevant and don't care what it is because they are not getting shares. Hence, not toxic.
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Post by agedhippie on Jan 19, 2024 13:57:36 GMT -5
There is no way MNKD is waiting until March 2026 to payoff the convertible debt. They cannot wait another 2 years with no stock price improvement. Yes the Bondholders are keeping a ceiling on the stock price by using their allotment to short. Mike will not last 2 years if the stock does not appreciate. ... Mike was aware of the consequences of doing the Conv. Debt Deal. He talked about it after they entered into it. It's common practice which artificially DEFLATES the stock price. Is it TOXIC?? It's a lesser degree of toxic. This was the only way for MNKD to clean up their very toxic old debt. If they were in a stronger position then a Conv. Deal would not have been done. It would have been a straight debt deal. Unfortunately this is what the market was giving them at that time. Another possibility during the window - MNKD will approach the bondholders and renegotiate the terms like lowering the strike price. I believe they did that years ago to get a deal done. It's not ideal but it's a negotiation. ... The note holders are not going to try and depress the stock as long as MNKD has the money to settle the note when it falls due because it's unnecessary risk. Having the cash kills the incentive to depress the stock stone dead because they are not going to be paid in stock therefore the stock price is irrelevant. If they were going to be paid in stock because there was insufficient cash then there absolutely would be an incentive to drive down the price since they would get more stock. At this time this is not depressing the share price.
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Post by agedhippie on Jan 19, 2024 13:49:14 GMT -5
Going from memory, I think the debt maturity is December 2026, not March. The March date I remember is this year as a possible earliest payoff date, but it comes with share price constraints over some period of time. The interest on the debt is way less than current debt instruments. It begs the question, why would debt holders not want it paid off early? They probably would, a better question is why MNKD would want to pay it early. As they pointed out in the call they can put the $150M in the bank and collect on the difference between the 2.5% they are paying, and the higher amount they are being paid - it's free money.
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Post by agedhippie on Jan 19, 2024 13:43:16 GMT -5
... MNKD statement that they will repays the debt with cash means there is no incentive for the note holders to short the stock unless the price rises above $5.21 because their convertible notes are more valuable as cash. And if they want to short the stock there are cheaper ways to do it anyway. Calling this toxic debt as it stands now is just trying to shift blame for the current share price. ... I mean, it can’t possibly be because of some toxic debt holders having incentive to keep the sp under $5.21… as YOU said. That may be a concern if the price had spent more of it's life near that point, but it hasn't so there is no action for the note holders. Any time a price spikes above around $4.70 the channel traders pile in and short the stock back down, it's nothing personal but rather how they trade - betting on fluctuations reverting to the mean. If the stock has a solid reason for repricing buyers will emerge who will soak up the selling and a new higher channel becomes established. Almost every time though it was just a spike and stock remains in the channel, this is the whole basis of this trading strategy - absent increases in tangible profitability the assumption is that the stock is fairly priced and will revert to that price. To date that has been the MNKD story, it repriced when the UTHR deal was done and that's where it has been sitting ever since. Come up with a new and profitable revenue stream and it may well reprice again, but until then don't blame the note holders if this is what the market think the stock is worth.
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Post by agedhippie on Jan 19, 2024 11:01:24 GMT -5
I'm asking only because I truly don't know. Do diabetics really inject in their abdomen or elsewhere while sitting at a nice restaurant table? And do they really consider an objection to this the problem of the other restaurant patrons? Yes to both of those (although maybe the people in support groups are more assertive.). To be fair you don't make a huge production of it and usually people never even notice it happened. These days it's largely pumps rather than injections and those use apps on your phone.
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