MannKind Corporation (Nasdaq:MNKD) announced today that it has
entered into a secured financing with affiliates of Deerfield Management
Company L.P. (“Deerfield”), who have committed to purchase up to $160
million in senior secured notes.
Under the terms of the financing, Deerfield committed to provide up to
four tranches of $40 million each on the following schedule: at closing;
following the release of certain results in MannKind’s two current Phase
3 clinical studies of Afrezza®; concurrently with repayment of
MannKind’s 3.75% Senior Convertible Notes due 2013; and following FDA
approval of Afrezza. The notes will accrue interest at a rate of 9.75%
per annum until maturity in 2019. A portion of the principal amount of
the loan facility may be convertible into shares of MannKind’s common
stock at the Deerfield’s option after a specified period following the
release of data from the aforementioned clinical trials. The conversion
price will be determined by the volume weighted average price of the
common stock during the 20 trading days immediately preceding the
conversion date. If the conversion price exceeds $6.67, no more than 6
million shares may be issued upon conversion; if the conversion price is
less than $3.33, no more than 12 million shares may be issued upon
conversion; and if the conversion price is between these dollar amounts,
no more than $40 million worth of common stock may be issued upon
conversion. As part of the transaction, Deerfield received from MannKind
milestone rights that provide for the payment of up to $90 million upon
the occurrence of certain strategic and sales milestones.
“We are encouraged by Deerfield’s confidence in the potential of
AFREZZA,” commented Alfred E. Mann, Chief Executive Officer of MannKind
Corporation. “We worked with Deerfield to structure a facility that
aligns with our near- and long-term strategy to achieve important
development, commercial and strategic milestones while minimizing near
term dilution.”
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy these securities, nor shall there be any
sale of these securities in any state or other jurisdiction in which
such offer, solicitation or sale would be unlawful prior to the
registration or qualification under the securities laws of any such
state or other jurisdiction.
About MannKind
MannKind Corporation (Nasdaq: MNKD) focuses on the discovery,
development and commercialization of therapeutic products for patients
with diseases such as diabetes. Its lead product candidate, AFREZZA®,
is in late stage clinical investigation for the treatment of adults with
type 1 or type 2 diabetes for the control of hyperglycemia. MannKind
maintains a website at www.mannkindcorp.com
to which MannKind regularly posts copies of its press releases as well
as additional information about MannKind. Interested persons can
subscribe on the MannKind website to e-mail alerts that are sent
automatically when MannKind issues press releases, files its reports
with the Securities and Exchange Commission or posts certain other
information to the website.
About Deerfield
Deerfield is a leading investment management firm, committed to
advancing healthcare through investment, information and philanthropy.
For more information, please visit www.deerfield.com.
Forward-Looking Statements
This press release contains forward-looking statements, including
statements regarding MannKind’s expectations with respect to the
expected gross proceeds from the financing, that involve risks and
uncertainties. Words such as “believes,” “anticipates,” “plans,”
“expects,” “intends,” “will,” “goal,” “potential” and similar
expressions are intended to identify forward-looking statements. These
forward-looking statements are based upon MannKind’s current
expectations. Actual results and the timing of events could differ
materially from those anticipated in such forward-looking statements as
a result of these risks and uncertainties, which include, without
limitation, risks associated with market conditions, the progress,
timing and results of clinical trials, difficulties or delays in seeking
or obtaining regulatory approval, the manufacture of AFREZZA®,
competition from other pharmaceutical or biotechnology companies,
MannKind’s ability to enter into any collaborations or strategic
partnerships, intellectual property matters, stock price volatility and
other risks detailed in MannKind’s filings with the Securities and
Exchange Commission, including its quarterly report on Form 10-Q for the
quarter ended March 31, 2013. You are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of the
date of this press release. All forward-looking statements are qualified
in their entirety by this cautionary statement, and MannKind undertakes
no obligation to revise or update any forward-looking statements to
reflect events or circumstances after the date of this press release.
Copyright Business Wire 2013