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Post by agedhippie on Jan 4, 2024 19:04:15 GMT -5
I think it's about optics, not necessarily to maximize return for the insiders who buy. I totally cannot speak from the perspective of a public company insider (I'm an insider of BD Inc. and that's about it) but if I were one and I had the opportunity to telegraph my confidence in my company by paying market price for a few shares and give the shareholders something positive to think about, knowing the pieces were falling into place for a nice ramp up in sentiment and value so it wouldn't actually cost me anything (probably the opposite), why the hell would I choose NOT to do it? This IS the EXACT moment when a CEO could take advantage of the conditions as a result of how he/she has set the table. If there was ever a time, given everything we/they know, this would be the time. Not necessarily because it shows confidence, although that's the optics, rather now is the time because going forward their actions may result in an increase in SP they may not see again. Lol. I would be more self-interested. If someone unaffiliated is prepared to put in the work to suppress the share price I would (after consulting the in-house lawyers) be backing up the truck. It is a chance to buy the shares at a one time discount. As an added advantage seeing the CEO or board members buying heavily will help break the suppression and bring forward the point at which you make out like bandits. Suppression is vanishingly rare, mispricing is far more common and far riskier as a buying proposition because they may be right.
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Post by agedhippie on Jan 4, 2024 7:46:44 GMT -5
prcgorman2 - some excellent points, thank you.
Your guess of MNKD's motivations makes a good sense to me. Also thank you for an excellent summary of key catalysts as well as not so likely ones.
I would be very interested if anyone has some insight also into the bit in green, namely
"... holders will have the right to convert all or any portion of their notes at their election. Upon conversion, MannKind will pay or deliver, as the case may be, cash, shares of MannKind’s common stock or a combination of cash and shares of MannKind’s common stock, at its election.". My reading is the holders have the option to initiate this conversion process but when they elect to do so, it is then MNKD who controls what gets delivered to the debt holders -- stock (at equivalent of $5.21 per share), cash (is it the pricipal+ interest only, i.e. equivalent $4.01/share + interest OR is it the equivalent of $5.21/share + interest?) or the combination of two.
MNKD can either supply the shares, or can give the lender cash to the value of the shares at that moment in time. Almost invariably companies supply shares because it preserves cash.
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Post by agedhippie on Jan 3, 2024 20:45:41 GMT -5
My oh my this board got very entertaining today. I too agree with agedhippie , and am a big believer in OPM - Other People's Money, especially if I can get it at less than 3% APR, hence why I still have a 30 year mortgage. As an investor or business person, I know I can double or triple the return. So I am a little concerned when I see companies with no debt. Likewise I get concerned when companies spend or even borrow to buy back stock. It tells me they are out of ideas on how to create additional opportunities with better ROI or ways to create leverage. AAPL is one of the few exceptions. ... Actually AAPL has a ton of debt. I could see 17 bonds right out to 2060 and I might have missed a couple. Analysts like to see debt for exactly the reason you say - management are confident in the growth prospects of the company. At one point I worked for a wildly profitable multinational company and remember being told to prepare for the underwriters because we were going to take on debt. I asked why since we plainly didn't need the money and the reply was that it helped the share price as it showed confidence in revenue growth.
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Post by agedhippie on Jan 3, 2024 17:16:02 GMT -5
Wall Street is never going to reward you for raising cash and then settling debt unless the interest rate on the debt is horrific. They see it as management saying that they don't know how to grow the business so they are going to pay down debt because they don't have any better ideas. Wall Street does not see debt as a problem as the bond markets will testify.
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Post by agedhippie on Jan 2, 2024 20:10:19 GMT -5
Woo hoo! $4.01 Well, let's see how long that lasts. WTF? Can't even hold $4/share on a decent news. It's up 7% on a cash raise, what more do you want? If Mike can articulate what he needed the money for then I think it will go over $4 and last.
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Post by agedhippie on Jan 2, 2024 17:48:47 GMT -5
I think you are out by a factor of 10 The 1% is based on UTHR's sales, not MNKD royalties. From the contract; “ Net Sales” has the meaning set forth in Section 1.71 of the License Agreement." If you look at section 1.71 of the Mannkind/UTHR license you see; "“ Net Sales” shall mean the net sales recorded by United Therapeutics or its Affiliates or sublicensees for the sale or disposition of Product to Third Parties (other than sublicensees) in bona fide arm’s length transactions, as determined in accordance with GAAP and as reported in United Therapeutics’ audited financial statements." (plus a list of deductions UTHR is allowed to make.) In other words MNKD sold about 10% of their royalty revenue stream, not 1%. What is your overall view of this move aged? It entirely depends on what they intend to do with the money, which I assume is what the call will be about. MNKD is buying 10% of their expected lifetime revenue now which makes sense if they can invest it and earn more than they would have gained by simply taking the royalties. It also hedges the royalty risk.
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Post by agedhippie on Jan 2, 2024 17:26:03 GMT -5
As of right now we are up .25/share after selling 1% of royalty. Would it be totally wacko to make the assumption that 100% of the royalty would be worth $25/share? I'm sure this is an overly simplistic way of valuing the company, but is there any way to value the company based on today's news? I think the 1% of royalty is of the 10-14% ("low double-digit") royalty owed by UTHR to MNKD on Tyvaso DPI sales. i.e., the simplistic view is if MannKind is currently getting 11%, they'll now get 10% and give the other 1% to Sagard. ... I think you are out by a factor of 10 The 1% is based on UTHR's sales, not MNKD royalties. From the contract; “ Net Sales” has the meaning set forth in Section 1.71 of the License Agreement." If you look at section 1.71 of the Mannkind/UTHR license you see; "“ Net Sales” shall mean the net sales recorded by United Therapeutics or its Affiliates or sublicensees for the sale or disposition of Product to Third Parties (other than sublicensees) in bona fide arm’s length transactions, as determined in accordance with GAAP and as reported in United Therapeutics’ audited financial statements." (plus a list of deductions UTHR is allowed to make.) In other words MNKD sold about 10% of their royalty revenue stream, not 1%.
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Post by agedhippie on Jan 2, 2024 8:11:50 GMT -5
So this deal values the entire Tyvaso DPI royalty stream at $1.5 to 2.0 billion yep, NPV $15B to $20B in total UTHR sales That's not an NPV, it a sales number, and a fairly random one. The two are utterly different. A couple of reasons why it's not an NPV; there is a cap on payments to Sagard at $3.5bn royalty revenue to MNKD per calendar year (Sagard get nothing for any excess), and secondly you don't know the discount rate so you cannot calculate the NPV.
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Post by agedhippie on Jan 2, 2024 6:42:33 GMT -5
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Post by agedhippie on Jan 1, 2024 15:17:47 GMT -5
My memory is fading but cable television advertisements started around May/June of 2018 and lasted for about 6 months?
Script numbers were in the 400-500s before the commercials. They jumped to 600-700s starting in September of 2018. Not sure what measurement we are using for 'failure' but I can't confirm what was paid for this advertising 'blitz'. We know how long the FD-delAy takes in just approving advertisements so why not get started on this sooner rather than later. It's tough to google what the actual price would be but it looks like in 2018 MannKind probably did pay $10 Million for it. My measure for failure was whether it altered the trend line. If you look at the NRx numbers the trend line across the whole of 2018 hardly moved. The same for the TRx trend line. If the adverts had worked there would have been a growing deviation from the existing trend line. By all means have another go with DTC, it's just that I don't think you will get any more traction unless the endos are onboard and the insurance cover is fixed.
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Post by agedhippie on Jan 1, 2024 14:59:03 GMT -5
He is 100% on the money with that. Stevil talked about it and why the $35 insulin cap is a killer in the Afrezza Medicare market. Until how the PBM could have Afrezza as a high tier drug and between the artificially high price making a high co-pay they made little or no loss. That has gone now as co-pays are capped at $35, but Afrezza's price has not dropped so with Medicare the PBM takes a big hit on anyone using Afrezza. The list price on Novolog is now around $72 for a vial if I remember correctly, the Afrezza equivalent (90x12u) lists for $535. At the moment MNKD doesn't have the volume to be able to reduce the price of Afrezza to where it would be competitive - they would make a major loss if they attempted to compete. Today's trick for those who are interested requires a VPN with an endpoint in the UK (I use NordVPN but that's not an endorsement, just a comment.) Go to this site using a VPN with the UK endpoint (https://bnf.nice.org.uk/drugs) and under the Medicinal Forms section for every drug it shows what the UK National Health System pays. At this point someone will say that the NHS covers an entire nation while US PBMs don't. The dirty little secret is that a PBM like Caremark is twice the number of members as the NHS so anything the NHS can do a PBM like Caremark should be able to as well. Case in point; since the video mentions GLP-1 drugs lets look at Trulicity for the UK vs. US cost. The NHS pays 92 GBP for a pack of 4 pens, in the US that lists at $1,113 for the same pack. Circling back to insulin. Even after the price reductions that come in after Jan 1st 2024 Novolog will cost $21 for a vial of Novolog, the US list is $72. This is before you realize that in the UK there is a zero co-pay to diabetics (actually it's a zero copay for all drugs if you are a diabetic, not just diabetes drugs.) I feel better for that little rant. And "death panels" exist in the US already, they are called PBMs.
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Post by agedhippie on Dec 31, 2023 14:51:59 GMT -5
Since we have growing Tyvaso DPI sales and that huge inventory buildup let's get that new Afrezza commercial rollling in anticipation of some outstanding study results. I remember hearing the cable TV runs were $10 Million ? If that is true let's start them up again. Aside from cheeseburger on a fishing pole commercial I assume this one is an option also:
Until the study results come out there is nothing new to talk about and the adverts will fail like before. Once the pediatrics completes it may be worth trying to targeting that market. The better approach is to concentrate on doctors with the pediatrics data. Typically endos treat adults or kids but not both so the pediatrics endos is a new market.
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Post by agedhippie on Dec 31, 2023 3:18:18 GMT -5
Previous thread on an Afrezza national commercial yielded a lot of replies. In a nutshell, it seemed the negative replies surmised that Afrezza sucks, there is not enough data that proves that Afrezza does not suck, MannKind the company does not have enough free capital to spend on any Marketing. Any futile attempt to market the only homegrown MannKind FDA approved drug will end in failure. Previous statements by MannKind's leadership have alluded to a very low Afrezza awareness rate.
On to the suggestion... How does everyone feel about a National Tyvaso DPI Commercial ? I believe United has the free capital, a Tyvaso DPI patient satisfaction rate of 98%, a rapidly growing Tyvaso revenue stream and a much larger patient population that United / MannKind are able to market to. Would $50-$100M not make sense, even if the Marketing campaign is considered a failure ? Is Tyvaso DPI providing the largest growing revenue stream for both United and MannKind currently ? What matters is awareness rate amongst prescribers, not the patients. The prescriber is the gatekeeper and the one that needs to be convinced. What convinces these doctors is data supported outcomes and that is what is missing with Afrezza. In the case of Tyvaso DPI with PAH this is a far easier sell since Tyvaso itself is a well established treatment making it a choice of DPI or a nebulizer with minimal differences - the result is clear from the conversion rates. The other point is that this is a very small market so mass marketing is not efficient. UTHR will concentrate on going after the specialists which means hospitals and conferences for the multiplier effect. In the case of PH-ILD the news that there is now a treatment does all the advertising you need!
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Post by agedhippie on Dec 28, 2023 12:31:26 GMT -5
... I'm also confused in sub section (2.2): “Year 1” means the year that starts on the first day of the calendar quarter after MannKind receives FDA approval to use the Product produced with inclusion bodies that are manufactured by Amphastar Twice it's mentioned "FDA approval" starts the clock on this new agreement? I think this is because Amphastar is changing the way they manufacture the insulin (different inclusion bodies). As I understand it this means that MNKD will need to get FDA approval for the change since it's now a different API. The approval is pretty much a formality since Amphastar France is a reputable manufacturer and will have done the work with the FDA to establish equivalence which is what matters. My guess would be that you can get a good handle on the timing from those approval dates in the contract.
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Post by agedhippie on Dec 28, 2023 7:19:43 GMT -5
That insulin was from Pfizer when MNKD bought their facility 11+ years ago. Per Al Mann it was stored in their freezer and tested annually to make sure it was still viable. The insulin had a Zero Cost Basis (it was totally expensed) so any product sold would go to the bottom line. For about 6 years the CEO's said it was still good but then you never heard anything about it. Does anyone understand today SEC Filing? What is Inclusion Bodies? It looks like Amphastar are changing their manufacturing and/or sourcing. That needs MNKD to approve the change under the terms of the supply contract. Nobody wants to play chicken as Amphastar would be in breach of contract while MNKD would be scrabbling to find a new supplier with the attendent disruption. The outcome is that MNKD gets to reduce their committed spend and Amphastar gets their change without problems - everyone wins. The inclusion bodies are interesting. As I understand it they are in the E. coli bacteria and where the insulin precursor accumulates. The precursor is stripped from the inclusion bodies and used to make insulin. More efficient inclusion bodies can accumulate more precursor and hence make more insulin. That's the sum of my knowledge from a tour of Eli Lilly's insulin plant in Indianapolis maybe fifteen years ago so it's a bit hazy.
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