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With over 70 million short interest, shorts do not give up so easily. This is good though b/c we will have chances to buy more cheap shares within this year.
My take is the PPS may be going to fill the gap of $5.75 (as of March 28, 2014). I'll buy more below $6.00 regardless.
Though I agree 100% of what you said, I'm pretty much sure that your post is likely to be made disappear. In any event, You can have the choice to put him on ignore.
"Sanofi filed the lawsuit in January this year triggering an automatic 30-month stay of approval by the FDA, meaning Lilly and Boehringer cannot launch their insulin in the US until the middle of 2016 even thought the patent for Lantus is set to expire in 2015."
That's very interesting. Sanofi has literally extending its expiration without application. And that seems to mean that it has gained more than 6 months securing the diabetic market. This extended time seems critical when you are at market war.
Sanofi's salespersons will surely be work their A$$ off to sell Afrezza to keep the market shares!
Thanks for the update to both of you, Phaeton and Sixshotlimit.
Looking at the AH volume and price action, I believe the market has not the time to react, after all, it's Friday evening!
Days to cover is 22 days? Love to see how shorts react this time. They have more than sufficient time to prepare for counter act, including SA articles about black box label, etc.
My average cost is $9.41 with small position. GLTA
You are right. I did not trigger my buy order today as I was observing how the shorts play out with the SA articles in the past couple of days.
PS: I come to this board looking to get and share meaningful information and discussions, whether positive or negative but do not need bashing and repeating comments which contribute low or no values to us at all.
I am surprised that the share price held up quite well and closed with a drop of 0.58% ONLY. Shorts seem to have run out of gas pushing the share price down further so far.
Short covering is a painful long way, given the current trading volume. November is drawing near. This is the month MNKD will commence its commercial production. Between now and then, shorts will be facing more positive news than negativities.
MannKind: Nothing But Good News, Trading Volume Drops, Short Interest Remains Sky High
Summary
-After a quiet period, more information has emerged about the Sanofi/MannKind deal.
-More information is available about the coming launch.
-Short interest remains high but trading volume has dropped dramatically while prices remain historically high.
-More Details about the Sanofi/MannKind Deal Emerge from the Morgan Stanley Global Healthcare Conference.
MannKind (NASDAQ:MNKD) management presented Tuesday at the Morgan Stanley Global Healthcare Conference. The analysts present asked intelligent questions and received substantial answers. Here are some of the most important points that were covered in the presentation.
1. MNKD believes that the 65/35 profit sharing deal with Sanofi will yield them the equivalent of a 25% royalty, but with several advantages.
One is that the deal is for the life of Afrezza as a product, not just the life of the patent. This is important, because the history of other patented insulins like Humalog and Novolog shows that they typically continue to be sold as premium prices long after the patents were due to expire. The other advantage is that the terms of the agreement mean that Sanofi (NYSE:SNY) will be fronting MNKD's development costs going forward into the launch, which means that MNKD will not need to issue more shares. This is good news for shareholders.
2. The tests are done for the 12 unit cartridge and management expects to submit it for approval shortly.
The hope is to have these large cartridges available at the time of the product launch. This is very significant, because most people with type 2 diabetes will be using doses that will range from 12-36 units per meal. The larger the cartridges, the fewer needed to fill a prescription. As Matthew Pfeffer, MNKD's CFO points out, the factory measures production in cartridges, not units of insulin, so being able to produce the larger cartridges means that more patients can be served with the same production capacity.
3. There is the possibility that MNKD will also produce cartridges with smaller doses than are currently available.
I see this as almost certain. That's because the FDA has asked for a post approval pediatric study involving children as young as age four. Children of that age who have diabetes almost all have type 1 diabetes and they use much smaller doses than adults, often doses in the range of 1/2 to 1 unit. The current smallest Afrezza cartridge is 4 units, which is far too much insulin for very small children. The availability of a smaller dose cartridge would also expand the number of people with Type 1 who could use Afrezza, as many of those who strive for tight control also use doses in the 1-2 unit range.
4. Production of Afrezza should begin in November.
Sanofi is expecting a robust launch in the first quarter of 2015. This is why, as part of the deal, SNY demanded that MNKD contract to buy a lot more insulin so that there will be sufficient insulin on hand to meet these expectations.
The ultimate plan is to use SNY's insulin as the raw material, which will reduce costs and increase margin. But because any insulin used to manufacture Afrezza must go through an FDA approval process MNKD ensured it has adequate supplies for the next several years of the one insulin that the FDA has already approved.
It has not been decided whether the aging Pfizer insulin (already expensed) will be submitted for approval. With Sanofi being a manufacturer of insulin, that old insulin may well end up a sunk cost.
5. There are plans to apply the Technosphere technology to other drugs, but given the limits on manufacturing capacity the challenge is to determine which drug candidates would be the most profitable and hence worth producing.
The most interesting comment made on this topic was the suggestion that the use of the Technosphere technology to administer pain medications has the advantage that, since pain drugs are not administered on a daily basis the way insulin or some GLP-1 drugs are, getting approval for their use with the Technosphere technology may be much easier. This would be because the fear of damaging the lung is much less with only occasional use. This makes a lot of sense, and gives me the impression that the migraine drug is probably the next one to be developed as a Technosphere offering.
Though the GLP-1 drug is also discussed as a candidate, and SNY has the right as part of the partnership deal to first refusal for the application of the Technosphere technology to a GLP-1 drug, their drug is not currently approved for use in the U.S.. In addition, given the grave concerns that have been raised about the side effects of this class of drugs, the road to approval for a Technosphere GLP-1 drug could involve long and costly safety studies. Pain drugs are probably a much better choice.
Another comment that stood out in this presentation was Pfeffer's comment that there are quite a few important drugs that might be candidates for using the Technosphere delivery system because they have safety problems when delivered into the digestive system, because they are toxic to the liver, but which might be safe if administered in a way that skipped digestion. This makes me suspect that there may be a specific drug under consideration that would fit this description.
6. More details emerge about the marketing strategy.
While existing users of fast-acting insulin are an important market, and one that SNY is extremely well positioned to access, given its established relationships with both endocrinologists and general practitioners who prescribe Lantus, the much more enticing market is people with type 2 diabetes who are not currently using any insulin. It sounds like SNY will be aggressively pursuing this market, as we should hope they will, not only for the sake of profits, but because so many of these patients need to lower their blood sugar more aggressively if they are to avoid diabetic complications. Using Afrezza should make this possible and avoid the concerns that are developing around the safety of the incretin drugs.
7. SNY is going to be aggressively pursuing approval in other countries.
Most of the testing has already been done that is required for submission to European markets. And the value of the SNY/MNKD deal becomes evident when you realize that Sanofi has already gotten Lantus approved in 120 countries. That means it already has the expertise needed to negotiate the requirements needed to get Afrezza approved in the world market.
The whole presentation is worth listening to, especially since the transcript posted here on SA is, as is so often the case, quite garbled.
The Other Big News: Shorts Still Hold 29.8% of the Float and Trading Volume has Declined Dramatically
The latest report on short interest came out after the market closed yesterday, and it revealed that 74,067,605 MNKD shares are held short. This number has only dropped 4.2% since the middle of August, which was right after the announcement of the partnership with SNY.
More importantly, the volume of MNKD shares traded daily has dropped dramatically since the announcement of the deal. And it has dropped more than the statistics you may have seen would indicate. That is because a whopping 73.8 million shares traded in the two days surrounding the announcement of the Sanofi partnership, boosting the average volume for the month. However, since Sept. 2, the average daily volume of MNKD shares traded has only been 4.854 million. So the actual days to cover for the stock, trading at the rate it has been trading recently, is a robust 15.25--more than three weeks of trading. You can examine the volume numbers here: http://www.nasdaq.com/symbol/mnkd/historical
All this tells you there are a lot of people and hedge funds holding short positions in MNKD. With no bad news on the horizon and low trading volume, the best way for these shorts to get out of their positions is to spread doubt in the media. This strategy has certainly been evident on CNBC. For example, Jim Cramer, who has always been unceasingly negative on MNKD stock, was asked about MNKD by a caller on last Monday's Mad Money. In response, he resorted to muttering that he'd heard negative things about the stock from people who knew, though not a word was said illuminating what these negative things might have been.
But the shorts can't hold on forever, and the critical thing to keep in mind is that 63,995,678 MNKD shares were held short on March 29, 2014, just before the ADCOM meeting where Afrezza received the near unanimous expert recommendations that led to its approval. That tells us a lot about the prices at which most of these shares were shorted.
That's because, at the time of the ADCOM when those roughly 64 million share were held short, MNKD stock had not traded over $6/share since 2010 except for three months in the summer of 2013. During much of this time it traded under $3. Over the months right before the ADCOM, the price mostly traded in the $5 range.
So while shorts who bought in during the brief periods in the past when the stock surged over $7/share may have closed out their positions with a profit, it's likely there are a lot of shorts left who will need the price to drop considerably lower than its current level to be able to close their positions without taking a loss.
The last hope of these shorts is that Afrezza will fail to sell when it finally hits the market this winter. If it doesn't, there are going to be a lot of shorts all heading for the exits at once and, once again, this drama queen of a stock could get very interesting indeed.
Source: http://seekingalpha.com/article/2488805-mannkind-nothing-but-good-news-trading-volume-drops-short-interest-remains-sky-high
I would like to observe the price action for this week and see how shorts counter this article.
Yes. Looks like this is a good sign.
Owner Name Date Shared Held Change (Shares) Change (%) Value (in 1,000s)
RENAISSANCE TECHNOLOGIES 06/30/2014 1,769,800 1,769,800 New 12,459
http://www.nasdaq.com/symbol/mnkd/institutional-holdings
I expect a retest of $6.66 within this couple of days. Like I said before, I'll buy below $7. And I just started it, slowly.
They are suffering from an investment of riches: Significant investment opportunities in terms of disease area (or significant unmet medical needs) that they will hopefully approach with their technosphere technologies.
It is expected that in the next couple of quarters, they will elaborate with their board in regards to the above.
If this TURD is also a POS, I'm most certain that it would enhance the quality life of a lot of needed patients. This is something I feel grateful of.
Whoever willing to spend over $7 million investing in MNKD must have his/her reasons. I am not smart enough to speculate this a great investment nor foolish enough to conclude the company is a POS.
I also noticed that one happened at around 12:41:44 (if I remember correctly), after the attempted hit at $7. If $7 is to be hit again unsuccessfully tomorrow, I will start buying to complete an initial position.
Sold at 10.02 and bought back the same at $9.80 to average down my cost.
Get yourself ready to buy at low. Buy below $7 is what I will be doing. Expect to retest recent low. Feeling so good!
I think this is exactly what bashers want you to say. Because they do believe that if there is no BO, the company is left with Billions of debts only.
Their line is no revenue, no product, no profits .... Let me repeat it ....no revenue, no product, no profits. Don't feel bored as this is the kind of message you will get every now and then until Q2 2015.
Me... I am excited about MNKD development and the potential of commercialization in the next few years.
HIGH CAPACITY DIEKTOPIPERAZINE MICROPARTICLES AND METHODS
TECHNICAL FIELD
Disclosed herein are diketopiperazine microparticles having high capacity for carrying and delivering a pharmaceutical substance. In particular, the microparticles comprise fumaryl diketopiperazine (FDKP) which can be used as a pulmonary drug delivery system for the treatment of disease or disorders requiring large doses of drugs or active agents, for example, to treat disease and disorders, including those of systemic or endocrine origin, including, pain, diabetes and obesity.
BACKGROUND
Delivery of drugs has been a major problem for many years, particularly when the compound to be delivered is unstable under the conditions encountered in the gastro-intestinal tract when administered orally to a subject, prior to reaching its targeted location. For example, it is preferable in many cases to administer drugs orally, especially in terms of ease of administration, patient compliance, and decreased cost. However, many compounds, including small organic molecules, peptides and proteins are ineffective or exhibit low or variable potency when administered orally. Presumably, this is because the drugs are unstable to conditions in the digestive tract or because they are inefficiently absorbed.
Due to the problems associated with oral drug delivery, drug delivery to the lungs has been explored. For example, typically, drugs delivered to the lungs are designed to have an effect on the tissue of the lungs, for example, vasodilators, surfactants, chemotherapeutic agents or vaccines for flu or other respiratory illnesses. Other drugs, including nucleotide drugs, have been delivered to the lungs because they represent a tissue particularly appropriate for treatment, for example, for genetic therapy in cystic fibrosis, where retroviral vectors expressing a defective adenosine deaminase are administered to the lungs in an attempt to correct the defective gene.
Drug delivery to the lungs for agents having systemic effects can also be performed. Advantages of the lungs for delivery of systemic agents include the large surface area and the ease of uptake by the lung's mucosal surface. One problem associated with all of these forms of pulmonary drug delivery is that it is difficult to deliver drugs into the lungs due to problems in getting the drugs past all of the natural barriers, such as the cilia lining the trachea, and in trying to administer a uniform volume and weight of drug. In addition, decreasing the amount of powder to be delivered to the lungs should be advantageous to the subject being treated so as to minimize coughing and prevent any loss of lung function, which can be a potential problem with increased amount of powders required to deliver an appropriate or increase in dose of an active agent. Accordingly, there is room for improvement in designing and providing pharmaceutical formulations requiring large amounts or doses of an active agent for pulmonary delivery to improve treatment and patience compliance.
(http://patentscope.wipo.int/search/en/detail.jsf?docId=US105897611&recNum=1&office=&queryString=FP%3A%28mannkind%29&prevFilter=&sortOption=Pub+Date+Desc&maxRec=603
Go to the patentscope website and type MannKind for the search. You will find a lot more....
"For example, let’s start small and assume that no milestones are hit and Sanofi generates “just” $50 million worth of profit from Afrezza. In this case, MannKind will get it’s 35% cut ($17.5 million), and when this is combined with the $150 million it got upfront, we’re looking at the company receiving $167.5 million for a product that did $50 million in sales. "
No, we are actually looking at company receiving $167.5 million for a product that did $50 million in profits, NOT sales. Sales amount would be at least $125 million (when assuming the profit margin is 40%).
HSR clearance to be confirmed in Sept?
Is it ok to keep posting same or similar content everyday? To me, it is ok, but it may be annoying to others.
Some people love to look backward and play smart while others with vision will look forward and search for opportunities. MNKD is a sure thing. It's in much better shape now than a quarter ago.
Thanks for the advice, M. I'll check it out.
Thanks. This is the kind of advice we really need here.
Shorts are getting harder to get out if wash, rinse & repeat pattern goes on while growing number of investors accumulates shares at low price and hold for longer term.
Shorts will need more funds to hold the share price down by giving away more shares they borrowed (or naked short) to them. As we are drawing near to the launch of the product, shorts will be facing an ever austere situation to have their position cover against the sales figure early next year.
Everybody sees the upside potential, including shorts (who for obvious reasons will not admit it openly). Thus whenever shorts driving the pps down, they will giving away shares cheap between now and then. Vicious cycle has just begun for the shorts!
Maybe we will have to wait until IO stop loaning out shares to shorts. I do not mind have the SP drifting up and down for a couple of quarter as I can better utilize my funds to get some profits elsewhere first before loading more of MNKD later.GLTA
MannKind: Moving From Short To Long?/b]
Summary
MannKind is mostly associated with its insulin drug Afrezza.
Investors' target prices were overly optimistic and driven by excitement over FDA approval.
My short thesis was spot on and investors following my advice to short the stock might want to consider taking profits off the table.
Since the market substantially re-priced MannKind, there may be an opportunity on the long side now.
MannKind's (NASDAQ:MNKD) stock has been in freefall since the end of June and the decline in share price was quite deserved. In fact, I can hardly imagine any other biopharmaceutical company that is as loved as MannKind, even though the development of its stock price lately has not exactly given reason for boundless optimism.
Quite the opposite is true: Soon after MannKind received approval for its inhaled insulin drug Afrezza from the U.S. Food and Drug Administration in June, the stock tanked. Investors have largely been betting their chips on a favorite FDA decision in the first six months of the year and MannKind's stock has done extremely well for shareholders until that point.
However, as the FDA decision date approached, I have pointed out how euphoric investors were (ALWAYS a bearish sign) in the article "MannKind: Does Greed Devour The Brain". I also pointed out, that investors were largely unwilling to adjust their overly optimistic expectations with respect to MannKind's Afrezza drug -- another bearish sign. At this point of time it was clear, that MannKind's stock price was solely running on hopes and extremely high expectations.
Specifically, I wrote:
Probably the best investment guidance I have ever heard relates to Warren Buffett's quote "Be fearful when others are greedy and be greedy when others are fearful". This investment advice cannot be repeated enough. Fear and greed are the two primary drivers of share prices, and MannKind's share price certainly runs high on hopes and greed.
Further, I mentioned the overwhelmingly positive reception of MannKind's Afrezza story:
While I acknowledge that Afrezza is an interesting drug and treating diabetes is an attractive market, I stand by my previous assertion that MannKind is a highly speculative play on FDA approval. One can easily see the existence of speculators by recognizing the amount of bullish articles on MannKind and the euphoric language used in such articles.
As you can imagine, telling euphoric investors that they are being carried away with an extremely optimistic outlook was not exactly a recipe for making friends. But it was a great way of making money: I have recommended to short MannKind at a price of $10.70 on June 12, 2014 (see original thesis here) and at a price of $10.52 on June 16, 2014.
MannKind now quotes at just $7.35 and investors who followed my advice to short the stock are looking at an approximately 30% gain over the course of just two months.
However, since shares have corrected that dramatically and are more reasonably priced, an opportunity on the long side is emerging.
A lot of speculators have exited MannKind
Now that MannKind has corrected substantially, the opportunity has come to look at the long side. One of the most fascinating things with respect to the stock market is, that it always swings between greed and fear -- almost as reliable as clockwork.
The period of greed was probably reached as MannKind's shares traded at about $11 per share and all warnings about caution were being dismissed right off the bat. Since then, investors have materially re-priced MannKind and reassessed Afrezza's partnership potential.
MannKind recently announced a partnership with Sanofi which sets the stage for some attractive cash inflows for MannKind if Afrezza meets certain sales and performance targets. As for the partnership deal, Sanofi will shell out $150 million as an upfront payment, but may fork over another $775 million in performance-based remuneration later on as certain milestones are achieved.
I think the global licensing agreement, which stipulates that MannKind will retain a 35% profit share, is a good way for MannKind to get the insulin drug off to a good start. It is also a good strategic fit for Sanofi which already has a strong position in the insulin market.
Chart situation
As you can see in the chart below, the buying frenzy in June pushed MannKind's stock meaningfully into overbought territory.
Since shares have moved down quite a bit since June, a contrarian purchase of MannKind's shares might be an interesting move for volatility-hardened investors now that Afrezza is backed by a strong commercial partner.
(click to enlarge)
(Source: StockCharts.com)
Conclusion
I know many bullish MannKind investors don't want to hear it, but euphoria is always a calamitous signal, especially since investors were unable to tell when a global licensing agreement would be announced and what the performance numbers would be.
Now that there is more clarity in the market about the MannKind/Sanofi global partnership and stock market prices are no longer determined by emotional investors chasing prices, the time for a contrarian Buy on the back of MannKind's global licensing agreement may have come. Contrarian Buy.
http://seekingalpha.com/article/2449045-mannkind-moving-from-short-to-long
No, I guess not. In fact, only 12,447 shares, out of the transaction dates of those filed, were on August 19. Thus, the big block is not from the management.
"this POS has 0% of market"?
Which market do you see?
I'm holding a small position only. Really like the products. I don't mind the drop at all as I also intend to buy more below $7 and hold for at least 2 years as investment.
I'm waiting to increase my position below $7 though. Really no rush getting in now.
According to the transcript (page 5), the $5 million related to the MabThera, is going to show up in 3Q.
Pleas support your opinion with some rationale. I really like to buy low but you need to give me some justification.
Just bought at 8.46
OK. So Q3 is not done yet. Hope we get more institutional buyers to accumulate.
"First Eagle Investments almost doubled their stake in Halo in Q2. BB Biotech added 205,000 in Q2 and 425,000 in Q3." You mean Q3 of 2013? Any addition between now and then?
The MNKD video is not working though, is it?
From TA perspective, the bottom is not confirmed in the short term. 7.10 maybe the next support, if 8 level is not held early next week.
Good to know you have made up your mind. I wish you best of luck in all your trades.
I did not get the chance to read that article but I think Mannkind is having two websites focusing different products and technologies (& applications). Really no need to scare investors. The only reason I can think of is the writer has failed to done enough DD and made a fool of himself.