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Pursuant to this site, it appears Novolog will lose its patent in 2017. Could someone knowledgeable on this subject confirm whether this is true or not.  

If that is true, it appears there actually is not such big conflict of its RAA business for Novo to pick up Afrezza.
This is especially the case giving Matt B's videos on Tresiba + Afrezza working extremely well. 

I do not expect to hear much from Matt. But an email acknowledgment from him saying that he received the email and are taking actions to address the financing needs will be great. I understand he probably can not disclose any details, that is fine.

My main objective for writing the email is to persuade them that they have been too short-term oriented in arranging financing in the last several quarters. This has to change.

We have to take actions to take the rumors about bankruptcy off the table. With such rumors being recycled daily by the street.com, fool.com, etc., those rumors, while not true, are not good to the morale of the employees, the confidence of the shareholders and investors, and the image of Mannkind to the users of Afrezza and potential partners of TS applications.

If we look back over the last several years, Mannkind has never had cash balance over $200 million since 2008, with most quarters the cash balance was actually below $100 million. This is not good financial planning.

In 2014, we had Adcom meeting (positive), FDA approval (positive), and announcement of major partnership with Sanofi (positive) and PPS in double digits. In beginning of 2015, we had formal launch of Afrezza (positive).  In June of 2015, we had a great analyst report that drove the PPS from $3 to $7 in a few weeks. And yet, no additional capital was raised on any of those occasions. Did management think Mannkind will not need any additional cash in the coming years?

And then, most recently, we saw Mannkind's press release that our cash balance was reduced to $32.9 million, without any accompanying update on back-up financing. And they left the press release out there for a whole trading day (waiting to be attached by shorts) by scheduling the conference call in the afternoon after the market!

I certainly hope Mannkind can first raise some capital via a new TS partnership. But they have to act quickly. As another member have posted, on a day when the major indexes are up more than 0.5%, we are still down 7%.  At this point, the waiting game will hurt Mannkind more and more. Therefore, I think management needs to take some decisive action right now. How about increasing Mann Group's loan facility by just $50 million (instead of by $70 million to $100 million as I suggested earlier)? That still sends a message and buys some time for Mannkind to arrange for other financing. 
 

I actually sent an email to Matt last night, outlining the points raised in my original post. I have not heard anything back yet. I think you guys may also consider writing to Matt (mpfeffer@mannkindcorp.com) and Hakan (I do not have his email address) to emphasize the importance of putting our financing in order.

If I was running Mannkind, I would not ever let its cash balance to dip below $100 million. Under a normal circumstance, I would like to keep it at around $300 million level and ideally at $500 million level. But now what we got from the management.

I am still a strong believer in Afrezza and I do not mind Mannkind spending another five years to slowly make it a blockbuster. But, to do that, they have to first ensure that they can survive for another five years and show that to the world. If they can do that, Mannkind will be a winner.

DBC, at this point, I personally do not view Sanofi ditching Mannkind as a bad thing or a significant issue, if only Mannkind can fix its financial situation first. If Mannkind has lined up $300-500 million cash + backup loan facilities, I would view Sanofi's ditching Mannkind as a neutral event. Granted, Sanofi has not helped that much in ramping up Afrezza sales. However, in about 10 months of launch as of now, Afrezza's public awareness (among the doctors and patients) must has increased substantially. And we have a growing body of positive feedback and reviews from users. Additionally Sanofi has provided with about $200 million milestone payments + what ever balance remained on the Sanofi facilities. So if Sanofi chooses to walk away at this point, whether Mannkind has to do it by itself or with a partner, or being acquired by a big pharma, all of these options appear to be viable options.  

Even if Mannkind has no other choice, but to do it by itself, the situation actually looks much better than when Minimed was ramping up the insulin pump. 

Pursuant to this article (published in 1995, which is 10 years after Minimed started to selling insulin pump), MiniMed, which has been selling the insulin pump since 1985, has long had trouble making money, in part due to large amounts spent on research into new systems of diabetes treatment.

Yet, we also know that MiniMed was successfully sold to Medtronic in 2001.

Let's take at a look at what kind of problem Minimed faced.

Quoting the article, “it's hard to conceive of a more difficult product to develop and market: The pumps must be virtually flawless because their users' health depends on their reliability. But their sales are complicated by their cost--about $4,000 per pump--doctors' skepticism, and the reluctance of diabetics themselves to change their lifestyles.”

“Granted, MiniMed's annual sales have almost tripled to $36.3 million in 1994 from $12.5 million in 1990, but in 1994, MiniMed lost $900,000, compared to a loss of $1.6 million in 1993. However, in the second quarter ending June 30 of this year, the company reported a profit of $101,000.”

Without a partner, Mannkind actually will have more flexibility in its marketing strategy. For example, Mannkind will have more flexibility in reducing the price of Afrezza if it sees fit in order to secure better formulary placement. 

Personally, I think the priority for Mannkind is to secure as much cash and loan facility support as possible.  They could easily have raised $500 million when the PPS was in double digits. But I think they can still do it right now, just have to be able to seize the moment, like when there is a strong upward movement of the PPS as a result of an announcement of a new TS partnership, an unexpected large jump in weekly TRx or a surprise upbeat analyst report (like the one we received from Jefferies this past June). And now they probably have to do it at multi-stages, rather than at one stroke when our PPS was much higher. 

There is a Chinese saying goes like this: "with (long term) food supply in hand, there is nothing to worry about." 

Read more: mnkd.proboards.com/thread/4180/suggestions-management#ixzz3rfZMgvyx

For your information, I have just added a number 8 to my original post.

8. Have someone (Al Mann, Hakan, Matt or some Afrezza uses like Sam, etc.) appear in popular shows/reports like The Oprah Winfrey Show, 60 minutes, etc.

Sanofi and Mannkind should line up with some popular shows/reports like The Oprah Winfrey Show, 60 minutes, etc. Need not be too fancy or too promotional. Just need to reveal to the world that we have this new weapon to fight against diabetes. It would be great if Al Mann himself can do it. But Hakan, Matt or some Afrezza uses like Sam will also do a great job. Just demonstrate the dreamboat and breathe a couple time would be great.

I do not think this will be that expensive and this will increase the awareness of Afrezza greatly. And I think Sanofi and Mannkind will be to line up such appearances if they take this seriously.

mbseeking, I totally agree that Hakan and Matt are nice guys and probably are not in control of most of the things. However, when our cash balance is reduced to $32.9 million and a rumor of failed Israel offering was able to reduce our PPS to around $1.76, the management should take an awakening call and realize that a financial war has been declared against them. I do not have any doubt that Mannkind will survive and do well over time. But now is the time to roll up our sleeves and take actions. It is like Buffett has said (the financial crisis was like pearl harbor or Sept. 11, when those things hit, a war is to be declared). Now is the time for the management to take action decisively and step up to be the great leaders.  

I know it is painful to take some sacrifice. But when one needs to take some sacrifice to get things done, then you have to. I remember that as a junior lawyer, I once was called up from home to return to office at 12:00 a.m. to finish some work. Another time, I have to work in the office nonstop for 36 hours to finish some work. At one point, I got to return home from work at three or four o'clock every night for several months on a stretch. 

I think right now is the time for the management to take initiative (by putting in place a long term financing arrangement for the company), stop any passive, knee-jerk type reaction or bandage fixes to problems (e.g., the slow ramp-up of Afrezza or the nonstop manipulation of shorts on the PPS).  Take a small pay cut (like a 10% cut) will set a great example for leadership. And if the PPS recovers (no doubt about that if the management performs well), they will be certainly be rewarded handsomely.

I know we have deleted a thread on this as we were going nowhere. However, I am thinking about starting a new thread. Here are my thoughts on this. Let's discuss and let me know your thoughts. Apologize as this was written in a short time and I haven't spent much time proofreading it. I want to get it before you guys and get your thoughts on these points as early as possible.

1. We shouldn’t be here.

Leaving alone the fact that our PPS is at around $2.5 and was at a point at $1.76 a few days ago, we are currently being written about by the Street.com and the Fool.com as teetering on the brink of bankruptcy or as an adopted child going to be deserted by Sanofi on a daily basis. Analysts are going around touting $1 or $2 PPS targets. We shouldn’t be here. We last time saw our PPS at around $2 in 2012, when FDA approval was still uncertain. Now Afrezza has been approved and more importantly, with excellent real world user feedbacks, we have Sanofi as a partner and our other Technosphere applications are in the development.

I still firmly believe that the technoshpere technology, the patents and other IP rights are worth more than our current market and if Mannkind is unequivocally backed up by a firm commitment from a big pharma (including Sanofi), our market cap should be at least around 4-5 times at current level.

It appears our current situation (that we are being taken advantage of by the shorts) is to a large extent unintentionally facilitated by many of the decisions made by the company along the way over the last several quarters.

Imagine that what the shorts predicted turns out to be true, that Afrezza is a failure and Mannkind goes bankrupt. That would be such a shame and a huge loss to the millions of diabetics, and tens of thousands of investors. We do not want that to be happen and therefore, the company, the management and the shareholders would better take some decisive actions today.

2. Management

I think our management is decent. In my view, both Hakan and Matt are honest and nice guys. I respect them and appreciate their work and contributions. However, given the slow uptick of Afrezza and unprecedented short interests hang over Mannkind, good leaders are not enough at this juncture, we need great leaders to steer Mannkind through the rough waters. I have confidence in Hakan and Matt. However, at this critical juncture, Hakan and Matt need to step up their gear and efforts and take some decisive actions.

One thing the management can do instantaneously is to announce a pay cut of the top management by 10-25% and state that without the PPS going above $5, they will forgive any bonus. I am not dissatisfied with Hakan and Matt’s performance or pay. Given the recent restructuring in Mannkind, I just think such an announcement will be a huge morale boost to the Mannkind employees and shareholders.

3. Financing

The shorts have been feasting on Mannkind’s cash position over some time. Given the $32.9 cash balance as of 30 Sept. 2015, I believe the shareholders are also legitimately concerned about this issue. I would suggest Mannkind take the following actions to address these concern:

3.1 Have Mannkind Group increase its loan facility from $30 million to $100 million.

The loan facility is there as a backup. Matt has indicated that Mann Group may increase the size of the facility. The right time for the increase is now. An increase of the loan facility to $100 million will demonstrate great commitment of Al Mann to Mannkind and will be a great morale boost to all the Mannkind employees and shareholders. It will in the same time send a strong message to the doubters of Mannkind regarding Mannkind’s staying power.

3.2 Use the ATM and returned BofA shares to get more funds

Respectively, it appears it was a mistake that Mannkind did not sell some shares when the PPS was at $10, $7 or %5 in 2014 and earlier in 2015. I wouldn’t be surprised that Mannkind used its ATM on 12 November 2015 to raise another $20-30 million by taking advantage of the 40 million shares volume on that date. I would think it is a good idea for Mannkind to sell a certain number of shares at $2.5, $3.5 and $5 going forward to raise an additional $100 million or more capital, taking advantage of any good upward movement of the PPS (e.g., like after the announcement of a new Technosphere partner).

3.3 Announce a Technosphere partner as soon as possible

Get as much as possible upfront fee and milestone payments as possible, with some compromise in royalty payment. If we can get another upfront payment at $100-$150 million, that will help greatly.

3.4 Get the $25 million milestone payment from Sanofi as soon as possible.

Based on Hakan’s statement on the last conference call, it appears there is a $25 million related to some Sanofi/Mannkind development efforts. Some have speculated that it is related to certification of Sanofi insulin as a supply source to Mannkind. No matter for what purpose it is supposed to be, it appears it could come in 2015. If that is the case, Mannkind needs to communicate to Sanofi that Sanofi should make the payment of the milestone as soon as possible to demonstrate its commitment to Afrezza and Mannkind (more on this subject below).

3.5 Approve additional ATM facility, before the current ATM is used up

To sum it up, I would like to see that Mannkind line up cash balance, Mannkind Group loan facility and ATM facility to the tune of around $300 million in total (or ideally $500 million in total). That financial resource should be enough to enable Mannkind to have enough cash to support Afrezza ramp up and Technoshere development for at least another three years (and ideally five years).

We simply can not live on a quarter-by-quarter financing any more. We need long term financial planning, and on a very lean and conservative basis. For that purpose, I think we should always have three to five years's funding support lined up, supported with a combination of cash and loan facilities.

Note, I think financial stability currently ranks above no dilution of equity.  Of course, when raising capital, the goal should always be to raise capital with as little dilution as possible.

This will be the foundation of my other suggestions below and will also put to rest of all those bankruptcy rumors/nonsenses being recycled by the Street.com and the Fool.com daily.

4. Mannkind to demonstrate strong commitment and confidence in Afrezza by announcing a long term commitment to ramp up Afrezza sales

With healthy financial resources as a foundation, Mannkind should publicly demonstrate its strong commitment and confidence in Afrezza by announce a long term commitment to ramp up Afrezza sales. Mannkind can state that, while it is 100% confident that Afrezza has all the necessary conditions to be a blockbuster and can ramp up swiftly going forward, it is prepared to take five or more years to ramp up the Afrezza sales and Mannkind has both the determination and financial resources in place to do that. And Mannkind is prepared to do that with Sanofi, and (in the unlikely situation that Sanofi and Mannkind choose not to continue the partnership at some point in  the future) by itself or with another partner, i.e., no matter what.

History shows that Al Mann can do it and has done it, multiple times.

Pursuant to this article (published in 1995), MiniMed, which has been selling the insulin pump since 1985, has long had trouble making money, in part due to large amounts spent on research into new systems of diabetes treatment. Yet, we also know that MiniMed was successfully sold to Medtronic in 2001.

Let's take at a look at what kind of problem Minimed faced.

Quoting the article, “it's hard to conceive of a more difficult product to develop and market: The pumps must be virtually flawless because their users' health depends on their reliability. But their sales are complicated by their cost--about $4,000 per pump--doctors' skepticism, and the reluctance of diabetics themselves to change their lifestyles.”

“Granted, MiniMed's annual sales have almost tripled to $36.3 million in 1994 from $12.5 million in 1990, but in 1994, MiniMed lost $900,000, compared to a loss of $1.6 million in 1993. However, in the second quarter ending June 30 of this year, the company reported a profit of $101,000.”

So we can see that there isn't anything that is insurmountable with Afrezza. It just takes time, determination and patience.

5. Mannkind to communicate to Sanofi that it needs to demonstrate strong commitment and confidence in Afrezza by announcing a long term commitment to ramp up Afrezza sales

Again, this is on the assumption that Mannkind already obtains a strong financial footing as stated in Section 3 above (i.e., having lined up enough cash to support its next three to five years’ operation), Mannkind should communicate clearly to Sanofi, giving the recent noises raised in the media regarding whether Sanofi will terminate its partnership agreement, whether Sanofi is sandbagging Afrezza and the recent lawsuit against Sanofi for Genzyme Corp., it is reasonable for Sanofi to show that it is making good efforts in marketing Afrezza and committed to the long term success of Afrezza by:

5.1 making a public announcement that it is committed to ramp up Afrezza long term (i.e., at least for the next three to five years);

5.2 taking a minority stake in Mannkind

A 5-10% stake in Mannkind will be a minor capital outlay for Sanofi, but giving the current circumstance, a reasonably expected action by Sanofi to show that is committed to Afrezza long term and Mannkind’s financial situation long term.

5.3 Increacing the Sanofi facility to Mannkind for Afrezza marketing

An increase of $50-100 million should be a reasonably expected action by Sanofi to show that it is committed to Afrezza long term and Mannkind’s financial situation long term.

5.4 Publicly announcing time tables for EU and Japan applications and global expansions of Afrezza

5.5 Providing update on the 8,000 safety study

5.6 Providing update on label improvement study.

6. Sanofi and Mannkind JAC to comb through all sales and user data

The JAC to meticulously comb through the sales data, down to each prescribing Afrezza physician to find out why some physicians prescribed a lot, some prescribed a few and most did not and why some sales representatives are more successful than the others in terms of being able to persuade physicians to adopt Afrezza.

The JAC should follow up a large group of Afrezza users and collect their feedbacks and establish a database to at least form a basis on the best practices of Afrezza uses (like how to eliminate dry cough (we know drink water before and after inhalation helps), how to dose on pizza and other fatty foods, and how to correct for runaway highs, etc.).

7. Sanofi and Mannkind JAC to fix formulary placement

JAC should really identify what is holding back the insurance companies to move Afrezza to tier 2 and remove PA. Is a price cut is needed, that cut the price by 30-50%. Before the FDA approval, Al Mann has always maintained that Afrezza will be priced competitively with RAAs. We now know it is now. And we also know that Sam has noted that on average he uses two boxes of Afrezza each month. That’s around $600 per months and $7,200 per years. That is too much. We also know that one of the reasons that contributed to the poor sales of Exubera is its relatively high price tag.

JAC should also discuss if there are ways to make use of the existing data collected by the current Afrezza physicians for support of an improved label or better formulary placement.

8. Have someone (Al Mann, Hakan, Matt or some Afrezza uses like Sam, etc.) appear in popular shows/reports like The Oprah Winfrey Show, 60 minutes, etc.

Sanofi and Mannkind should line up with some popular shows/reports like The Oprah Winfrey Show, 60 minutes, etc. Need not be too fancy or too promotional. Just need to reveal to the world that we have this new weapon to fight against diabetes. It would be great if Al Mann himself can do it. But Hakan, Matt or some Afrezza uses like Sam will also do a great job. Just demonstrate the dreamboat and breathe a couple time would be great.

I do not think this will be that expensive and this will increase the awareness of Afrezza greatly. And I think Sanofi and Mannkind will be to line up such appearances if they take this seriously.

9. Senior management should show their commitment to the company by buying shares in the open market.

If management, with all the non-public information in front of them, were to purchase shares in the open market at these low prices it would be a major blow to the short interests and would encourage buying by many longs sitting on the fence. [note: added per suggestion of trenddiver.]