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MannKind Corp. Message Board

  • doctorgreenback doctorgreenback Aug 6, 2014 5:49 PM Flag

    Buyout more likely.

    The company's supply of insulin is now secure and they no longer have to depend on the Pfizer supply.
    I, like many posters here, misread the 8-K thinking that they would have had to provide a cash infusion or a co-guarantor to sign a $160m deal. But now I view it more as a strategic move by Al to make sure that there are no supply constraints in the coming years.
    There is very little money on the table and they can certainly come up with $160m for insulin over the course of the agreement.
    I am more convinced that this is really about GREENHILL's strategy to sell the company for Al.
    Let's face it. If there were a partner, we could have gotten an additional bump by releasing this news afterwards. The street would have felt that the companies involved with mnkd were thinking they need a lot more insulin because sales will be robust.
    This exercise was more about Greenhill developing mnkd strategically to be more independent and efficient.
    My guess is that Al is a pretty thoughtful guy. He knows that he won't be around to see this drug take over the world and that even continued good health wouldn't be enough to run a corporation like this into his 90s.
    Greenhill has been asking BP one thing....a buyout offer.
    Imagine a BP CEO..'so I buy these guys out and find out that the insulin is unusable in 12 months with no contingency plan or approved facility my shareholders are going to flip and there may be a recall.' (Remember the FDA must bless this arrangement)'
    BP has probably raised these points to green hill and they are addressing the things that need to be done in order to complete the buyout.

    My guess is that Al has received an offer contingent upon completion of an approved insulin supply agreement and the staffing and production buildout promised to the buyer.

    Sentiment: Strong Buy

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    • Check out the retailinvestor360 article. Interesting

      Sentiment: Strong Buy

    • Or could just be as simple as them actually making sure they have a supplier for insulin.

    • shorts are giving this a green thumb ? what long gives this thumbs up ? lol

    • Three points would add weight to your thesis.

      First, Mannkind is a drug development company, which in this case also means that they developed the manufacturing process. But I don't think Al intends for Mannkind to become a pharmaceutical company. He would sell the manufacturing rights along with the license to use the Technosphere system for.manufacturing.

      Secondly, Matt allegedly confirmed today that Amphastar manufactured the human insulin used in Afrezza for the test trials. Amphastar is already approved. If the buyer is a BP that manufactures its own insulin and would want to use their own for the lowest cost to manucture, they'd need time to get their own insulin approved by the FDA for use with Afrezza. This purchase agreement gives them that much needed time.

      Third, China almost always requires a company to invest in their country to do business their. Amphastar is currently building their newest manufacturing facility and has the agreement with the Chinese government. For the foreseeable future Amphastar's insulin would be used for Afrezza sales in China. Probably Europe as well, since it's likely the same insulin is being used for current test trials for EU approval.

      Sentiment: Strong Buy

    • For longs that are going to hold this for at least a year, best way to get maximum reward is to go alone, then partnership. BO might be quick and safest way to lock in profit, but we might not even get half of what we could get after actual sales. Actual sales from US, asia, and eu BO after that is the real motherload, and with the response from Afrezza, technosphere s value could fetch quite a sum also.

      So all in all any of the 3 I 'm fine with lol.

    • Its funny how everyone speculates the future in a scenario that puts it in the best light for the longs. You have to ask real questions. Not mentally masturbate yourself with all these best case Theories. Stock price reflects value. MP is always what someone is willing to pay or what its worth. No buyers lining up as the stock price shows that.

      • 2 Replies to bbheli
      • Well... you either believe or you don't -- hence the long and short positions --- which you should arrive at by your own due diligence. It is also fine to speculate as to current value and future value as long as some intelligence goes into the post....and the argument is resaonably articulated.... This stock is hugely manipulated..not unlike many other bios in this situation. You either understand that or you don't. A stock in this situation does NOT necessarilly reflect value because the endpoint has not been realized yet. Hence the MP is a game between shorts and longs..... Crazy speculation is indeed insane and bothers me....KEVIN bothers me as does ROCKSRICKY (or whatever his name is) but that does not have anything to do with investing long or short in this stock based on your own work.... It is amazing to me that anyone can believe that Afrezza will not be marketed and something very good is in the cards ---- I don't know how good, but the major hurdles are being solved one at a time --- in due course....

        Sentiment: Buy

      • bbheli,

        AMEN, nice to see another realist. this forum is for entertainment only. most here are idiots, pumpers, bashers and id clones. I get real insight at Mannkind Central. (mannkind.freeforums net)

        good luck.

    • partnership folks............gee whiz............

    • Seems like a major pharma house should be wholly capable of securing insulin in any quantity. MNKD just did it in a heartbeat, Their agreement is in ways, just making a good down payment to secure a long term reliable worldwide source.

    • management has never indicated buyout. management has only indicated partnership. not sure why everyone here is clamoring "buyout" unless it is just shorts in disguise wanting to create retail disappointment if there's partnership. all that is necessary is an exclusive license domestically and internationally to one or more companies. all this spin off and buyout talk is not in line with what management has indicated. fine to speculate but really all indications are partnership with Mannkind manufacturing and selling the drug to another company who will market and sell the drug or Mannkind going it alone. However if Mannkind were going it alone one would expect to see the hiring of sales and marketing employees on their careers page. they would need to be hired and trained NOW to sell by end of 4Q or early next year. also Estrom corrected himself when describing the potential partner in the GS conference call...he stated specifically "diabetes care and management"...it seemed like a "tell".

      Sentiment: Strong Buy

    • You are not good at reading tea too leaves I bet. In a partnership agreement in which Mannkind is supplying a finished product and the partner markets the product and invests literally hundreds of millions in clinical trials and upfront payments, it would be fair for the prospective partner to require Mannkind to demonstrate a reliable supply source of recumbent DNA insulin. If it were a buyout, almost every company capable of buying MNKD could manufacture insulin for less than MNKD can buy it.

      Sentiment: Strong Buy

      • 4 Replies to balert2
      • like ARNA and EIisai. I pray the sp doesn't behave like ARNA but another similarity is the astounding short interest. And a question to those in the know; does this agreement do anything to the supply of insulin available to other companies?

      • besides...how would you know that....i'm calling bull....there is no way in hell that a BP could start a brand new production line and get it approved and do it all for much less.
        but these deals don't just take place overnight. You might think that GREENHILL and Deerfield have really pulled off quite a heist. seriously, how that plant went from Merck to alpha then to partner with mankind is really suggesting that merck is part of the deal....was merck holding up the fda? was merck holding the plant over Al's head? BP don't play nice.

        Sentiment: Strong Buy

      • yes but they would run into potential production delays and required equivalence testing.
        doesn't matter. Al was able to figure out a way to avoid all that. Certainly convenient how Greenhill and Deerfield figured into amphastar. POINT IS...THEY GOT IT DONE.
        now i'm sure BP could figure it out...but let me remind you of GSK's PAXIL CR...perhaps the greatest example ever of how billions of dollars can be lost when production delays and recalls take place. formularies quickly lose faith when consumers are quickly routed to other cheaper alternatives and there is no definitive timeframe for a drug's return to market.

        Sentiment: Strong Buy

      • However, that BP would need to have their own insulin approved for use with Afrezza. If what Matt allegedly replied today to an inquiry is that Amphastar's insulin was used in the trials. It's already approved, and the purchase agreement gives BP time to get their own insulin by the FDA.

        Sentiment: Strong Buy

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