Seeking Alpha
View as an RSS Feed

Joseph Krueger  

View Joseph Krueger's Comments BY TICKER:
Latest  |  Highest rated
  • Why Biodel Is Breathing Easy, Part 2 [View article]
    Again, some strong points, and readers should value your counter opinion, but you are not going to change my mind.
    VIOXX was off the top of my head and the ratio of 7 was just the ratio of market caps which should be equal in my opinion.

    You are really missing the main point.
    Look at ITMN's 80% haircut- investors should be nervous about a company with a single product with a pivotal and controversial trial whose large market cap has already priced in approval. Like MNKD. You have to respect that an investment in an over-hyped stock like ITMN or MNKD, with analysts (not me, plenty others)being very wary of the results and the FDA's response is a riskly one. Today that risk/reward lesson was re-iterated.

    BIOD's trial is pivotal but is not the only one- they have VIAject pump studies that will be complete by June, seeking the 505b2 route, so by the first VIAject PDUFA date in October investors will already have something else to cling on to if denial happens. And denial was already priced in by the 75% shave it got after the Indian trial data. Risk/reward is very high.

    Apparently my "illogic" is contagious. You said:
    "Biodel is going for a complet response letter and will raise cash on the way there. It's a semi logical strategy and will dilute shareholders at a better price point then they could now. It will delay market entry of this potentially useful drug by a few years though.
    -almost out of cash
    -no bargaining position with big pharma
    -huge competition from very big established players"

    To address those points- they have plenty of cash (about $40MM)through PDUFA anyway, no debt, and their trials are not that costly because they dont need to be large because of the 505b2 approval route. Raise cash? Always a possiblity, but why? Marketing partner should be a piece of cake, a modest 10% market share for the current indication they are seeking is a whole lot of dough for that small company, and also they are seeking the insulin pump indication I mentioned, which Afrezza cannot ever seek. They are in a way a direct competitor for Afrezza, but given the low marketability of Afrezza, they should capture plenty of diabetics who want better glucose control but dont want to use an inhaler (which is MOST of them). As long as their market cap stays under $500MM they should still be a buyout target.
    Meanwhile MNKD $300 million in debt and has a $200 shelf offering for no disclosed reason (to build a manufacturing facility? marketing costs? just in case?), with no partner for all the much discussed reasons, and buyout is not an option with its large market cap. How are they any better positioned?
    May 4, 2010. 07:01 PM | Likes Like |Link to Comment
  • Why Biodel Is Breathing Easy, Part 2 [View article]
    I will concede that Afrezza has far more data than VIAject, and no competitor comes close to that. But the reason is the 505b2 mechanism simply doesnt need that much data. Afrezza needs that much data because of its novelty and 5051b approval route.

    As for the investors that attend Mann's church, MOST (as I stated) simply regurgiate PR statements; this is not unusual for any stock however. I appreciate the intellegent, well thought out replies from people who have looked close at the data. But someone looking at the data from a critical eye sees different things... am positive the FDA will look at it with a critical eye.

    As far as the flawed Indian data for BIOD, it is indeed flawed, but they know why. They are not the first company to have sample mishandling issues in a clinicl trial and gain approval; I believe Vioxx is an example. The US and German trials didnt have problems. The burden now is on MNKD to convince the FDA that there is a specific cause for this flawed data, and that it can be excluded from the analysis, and I believe they can do that.
    The 75% haircut BIOD recieved was very harsh, and offers a value to investors- I argue that there are different risks, but the same level of risk for BIOD and MNKD investors. Given the BIOD market cap is 1/7 of MNKD, the risk reward ratio is 7 times better for BIOD investors.
    Based on the conversations I have had with you and others, I am attempting to fix any potential errors and better clarify some statements.
    May 4, 2010. 03:34 PM | 1 Like Like |Link to Comment
  • Why Biodel Is Breathing Easy, Part 2 [View article]
    I am not the only person bearish on MNKD....that goes without saying.
    Nor am I the only person bullish on BIOD. These analysts also reiterated buys for BIOD, even after the Indian results:

    25-Mar-09 Reiterated Wedbush Morgan Buy $10 → $16
    25-Mar-09 Reiterated Ladenburg Thalmann Buy $9.50 → $14
    11-Dec-08 Reiterated Ladenburg Thalmann Buy $11 → $9.50
    20-Nov-08 Reiterated Cantor Fitzgerald Buy $33 → $15
    May 4, 2010. 10:18 AM | Likes Like |Link to Comment
  • Why Biodel Is Breathing Easy, Part 2 [View article]
    Pacard, take your Mann-tinted glasses off and look at the facts.
    The FDA did not ask for NEW safety data....MNKD had plenty of safety data in there, and it wasn't all positive. Ask yourself- why does the street dislike MNKD so much?

    About all the other stuff such as partnership, etc- I just discussed that a few comments above.

    I may not have been completely consistent about my emphasis through the all the MNKD and BIOD articles as it was a developing story-last week I did not set out to write a BIOD article and two MNKD articles, just one MNKD article. But critical (and helpful) posters brought up good points and led me down this path.

    But my message has been clear- Afrezza has regulatory and market acceptance issues ahead of it- most people without Mann tinted glasses agree with that. The belief that Afrezza eliminates needles is simply wrong and the belief that it shows anything more than non-inferiority is unproven. Meanwhile, little Manns post all over the internet regurgitated Mann quotes without knowing what they really mean and without ever have taken a hard look at the data. When you do look at the data, the statements made by MNKD are clearly statements meant to guide investors away from all the holes in the data and are to misdirect investors from considering the significant regulatory and market acceptance risks of Afrezza. But that is their job....

    The comparison between Afrezza and VIAject is simply that- it has the PK, primary and secondary benefits of Afrezza, with the exception of not being inhaled, which is actually a detriment to Afrezza. If you were being fair, you would recognize that these statements have merit.
    I also dont see how Afrezza and VIAject are mutually exclusive- why cant you invest in both companies? This is where my risk/reward is coming in- the market is pricing in Afrezza approval but had priced in VIAject failure.....that provides for a good opportunity in BIOD that suits my investing style.
    May 4, 2010. 08:52 AM | 3 Likes Like |Link to Comment
  • Why Biodel Is Breathing Easy, Part 2 [View article]
    Always good to hear from you JPG.
    Partners usually show up around PDUFA dates. Given that MNKD is about 3 months behind that and no partners are showing up, it is not encouraging. BIOD's is about 6 months off. As well, Afrezza is a much more prominent drug than VIAject, it seems (perhaps unfairly) that the much expected partner would come into the picture by now.

    I am optimistic about the data. You, me, or anyone else has not seen it in detail, we only know what is publicly released (same is true for Afrezza). But given that the US and German trials were robust, and the problems in the Indian trial were clearly identified and accounted for, I think the FDA will account for that data. Perhaps more importantly, every component of VIAject is GRAS and injected insulin is a well defined product, and it is being submitted through the 505b2 route, the hurdle for BIOD to prove safety and effiacy is just not as high as is required for Afrezza.

    The US and German data demonstrated non-inferiority; the Indian data caused the data to shift away from that. Although no one knows the details, it appears that a post-hoc analysis of the Indian data identified a specific subset of samples with a commonality (being processed at a specific lab), when removed from the dataset, VIAject became equivalent. Now the FDA does not allow you to exclude data- you must present it all. But the FDA does allow you to interpret data, and if you present a convincing case and the FDA agrees with your interpretation, the NDA is accepted. So the "bad" data is not a deal-breaker, and I believe based on what I have read that BIOD will be able to present sufficient evidence about the "bad" data that the FDA will agree with their interpretation, given the clear-cut identified problems with just some of the data.

    More than anything, it is risk vs reward. Investing should not be an emotional experience based in gut feeling and faith, it should be calculated and methodical. With a market cap of nearly $1 billion already, and really nothing else substantial coming through, in my opinion MNKD has about a 75% downside. In contrast, BIOD has already "paid" that 75% downside with its dive from $17 to $5...there is really only upside from here for BIOD. The risk/reward ratio is low for MNKD and very high for BIOD.

    I dont buy the much touted claim that diabetics are so afraid of needles that they would embrace Afrezza. In fact, much to the contrary, if you read some diabetes boards you find that current diabetics requiring insulin are worried about Afrezza....they dont think they will have as good control over dosage, people are worried about the side effects, people with asthma dont think they can use it, and mothers are afraid to give it to their kids. Go ahead and browse those boards and see for yourself. There is a pervasive attitude of "why bother?".
    The fact that inhaled insulin was so poorly embraced forced 3 major drug companies to cut their losses and abandon their programs...why would they seek partnership now, having learned that lesson just a few years ago? So MNKD is out to solve a problem that with avoiding needles that doesnt really exist. My point is that VIAject addresses the PK issues that solve the problem of glucose control without any the disadvantages.

    You have to remember that drug companies don't make drugs just to be humanitarians, they do it to make money. There is a whole side of the business that has very little to with hard data and science; it has to do with selling the drug to investors before it is submitted for approval, selling it to the FDA to gain approval, and finally to doctors and patients after it is approved. Most investors don't account for this. MNKD is real good at selling the drug to investors....I am not convinced they will be successful in the subsequent steps. I am convinced BIOD will be.
    May 3, 2010. 11:37 PM | 2 Likes Like |Link to Comment
  • Why Biodel Is Breathing Easy, Part 2 [View article]
    I actually first learned about BIOD from responses to my MNKD article and became a BIOD long today. If you bothered, you would see all the evidence for that happening in my responses. Having taken a close look at Afrezza (far closer than most MNKD longs will even dare), I am thrilled with VIAject.
    You can take the cynical view or see things at face value. It is not good vs evil, either longs or shorts will get burned in the end depending on the outcome, which is not decided by either side.
    The only people creating some grand conspiracy to steal your money are biotech companies, unfortunately. But as a friend once said to me: "Good drugs are the side affect of greedy biotechs"
    May 3, 2010. 11:14 PM | 1 Like Like |Link to Comment
  • Why Biodel Is Breathing Easy, Part 2 [View article]
    RJ your clarifications about the FDA consultants are correct.
    My comments about phase I remain true, the comment was directed specifically to the many GNBT investors paths I cross. VIAject is by far the most significant asset BIOD has; VIAtab has a long way to go and the other programs are also in their infancy.
    However, there are many other related indications VIAject is seeking,look at their current clinical trials at clinicaltrials.gov
    May 3, 2010. 09:33 PM | Likes Like |Link to Comment
  • Why Biodel Is Breathing Easy, Part 2 [View article]
    Note that I am still long on BIOD and plan to remain there through the PDUFA. Any discrepency is an editors glitch.
    May 3, 2010. 06:13 PM | Likes Like |Link to Comment
  • Mannkind's Afrezza Seems Short of Breath [View article]
    I am not long or short on MNKD.
    Readers may not also understand that SA editors dont edit article content but do change titles and abbreviate position disclosures, limiting them to the relevant stock. My original disclosure was "I do not have positions in any of the stocks mentioned in this article".

    But I did buy BIOD at open today- see my most recent instablog.
    I didnt even know about BIOD until my MNKD research that lead me there....I discovered BIOD article after a poster mentioned it a few days ago.
    I wrote the first MNKD article after doing DD considering MNKD, I wrote the second MNKD article after receiving so many criticisms to clarify and add data based validity to the points in the first article. It is all very timely- coming from my MNKD perspective BIOD seemed the better investment to me. There was no mention of BIOD in either MNKD article.
    May 3, 2010. 02:27 PM | Likes Like |Link to Comment
  • Mannkind's Afrezza: No Real Benefits for Diabetics or Investors [View article]
    Not a BIOD long yet...I came across it during the MNKD research. I will be a BIOD long today.
    May 3, 2010. 08:44 AM | 1 Like Like |Link to Comment
  • Mannkind's Afrezza: No Real Benefits for Diabetics or Investors [View article]
    I do like BIOD alot. The nature of their product, the GRAS status of the components, the 5052b submission, and the fact that it has the same PK profile as Afrezza makes it a winner in my mind. I am in the process of writing an article on BIOD right now.
    May 2, 2010. 07:12 PM | 2 Likes Like |Link to Comment
  • Mannkind's Afrezza: No Real Benefits for Diabetics or Investors [View article]
    Equivalency is sufficient to meet the endpoint of the trial, and they did that. The question is if there will be significant regulatory hurdles (agressive REMS) to approval and even after approval market acceptance. Usually it is nice to hold a stock and sell before the PDUFA date to avoid downside risk. Given the market cap already, and the problems with approval delays, I am not sure there is a whole lot of upside from here, but there is alot of potential downside.
    May 2, 2010. 07:00 PM | Likes Like |Link to Comment
  • Mannkind's Afrezza: No Real Benefits for Diabetics or Investors [View article]
    MNKDs oncology programs are valued at zero at this point. There is nothing past phase I, typically programs at these level have no investment value. If Afrezza busts, MNKD should be worth less than $100 million.

    The comment about MNKD divesting into mulitple disciplines was in response to a posters comment that I shouldnt talk about diabetes when my field of expertise is oncology...they were directed at the poster, not at MNKD.
    May 2, 2010. 04:39 PM | 2 Likes Like |Link to Comment
  • Mannkind's Afrezza: No Real Benefits for Diabetics or Investors [View article]
    JPG, it is good to hear your response again.

    I agree with all these statements you made:
    "I think that the big market will be for patients who are on oral first line agents (metformin) and aren't doing well with it (which is a huge market)."
    "The label from the FDA will obviously matter as to the possibilty of doing this but even without a 'perfect label' I would probably do it anyway seeing that these patients have so few real benificial options anyway."

    "A market cap of 700 million is huge if they don't get approval for Afrezza. I give for 'practical reasons' a value of 0 to there oncology pipeline for now although it is interesting. The same market cap is very small IMO if they get approval. "
    "It would be very difficult for me to find a reason not to give these teenagers inhaled insulin off label if they would take it: the potential risks of inhaled insulin far outweigh very bad management of type I IMO."

    "As I've posted in the past I think Generex is simply a fraud talking advantage of naive investors and patients."


    In the end, we are talking about 2 things:
    1) FDA labelling and approval for Afrezza
    2) Risk in investing in MNKD

    I think we are actually in general agreement about the major points. As far as who are the most likely users of Afrezza and the potential off label uses, I think your points are very valid.
    May 2, 2010. 04:17 PM | 1 Like Like |Link to Comment
  • Mannkind's Afrezza: No Real Benefits for Diabetics or Investors [View article]
    Thanks for the comments RJ, I did not know the connection between PPH and cardiovascular disease. I am not arguing that the trial did not reach its primary endpoint of non-inferiority, I am arguing that all it did was reach its endpoint- it does not prevent diabetics from using needles and it did not improve overall glucose control (as measured by hAC1) as most MNKD investors tout. Secondary endpoints are irrelevant unless they can show that they have direct benefit. Maybe MNKD will be able to show the direct benefit of the secondary measures of glucose control in a different study, but they would have to set out to do that.
    May 2, 2010. 04:09 PM | 1 Like Like |Link to Comment
COMMENTS STATS
283 Comments
212 Likes