VALENCIA, Calif., Aug. 07, 2017 (GLOBE NEWSWIRE) -- MannKind Corporation (NASDAQ:MNKD) (TASE:MNKD) today
reported financial results for the second quarter and the six months ended June 30, 2017. Key results include:
- Completed commercial expansion
- Afrezza net revenue and gross revenue grew 29% and 60%, respectively, vs. Q1 2017
- Reduced Deerfield obligations by $15 million through equity conversion and cash payments
- Increased cash by $19.4 million through The Mann Group loan arrangement
- Positive pre-IND meeting with the FDA for treprostinil Technosphere
Second Quarter Results
For the second quarter of 2017, total net revenue of $2.2 million was comprised of $1.5 million of Afrezza
product net sales, $0.1 million of collaboration revenues and $0.6 million of other revenues from the sale of certain oncology
intellectual property. As of June 30, 2017, Afrezza product shipped to the wholesale and retail channel, but not yet recognized as
revenue, was $2.6 million. Afrezza net revenue and gross revenue grew 29% and 60%, respectively, compared to the first
quarter of 2017. A reconciliation of gross to net revenues can be found in the Management’s Discussion and Analysis of
Financial Condition and Results of Operations section of the Form 10-Q for the quarterly period ended June 30, 2017.
Cost of goods sold was $5.1 million in the second quarter of 2017 compared to $4.0 million in the second quarter
of 2016, an increase of approximately $1.1 million or 28%, primarily due to a write-down of inventory which was forecasted to
become obsolete due to expiration.
Research and development expenses were $3.1 million in the second quarter of 2017 compared to $4.3 million in
the second quarter of 2016, a decrease of $1.2 million or 28%, due to the reduction in workforce that took place in the fourth
quarter of 2016.
Selling, general and administrative expenses were $18.6 million for the second quarter of 2017 compared to $11.1
million for the same quarter of 2016, an increase of $7.5 million or 68%. The increase in selling expense is primarily due to
recruiting a MannKind-employee sales force and building the related commercial support.
The net loss for the second quarter of 2017 was $35.3 million, or $0.35 per share based on 99.9 million weighted
average shares outstanding, compared to the net loss of $30.0 million, or $0.33 per share on 91.1 million weighted average shares
outstanding in the second quarter of 2016.
Six Months Ended Results
For the six months ended June 30, 2017, total net revenue of $5.2 million was comprised of $2.7 million of
Afrezza product net sales, $1.8 million from the sales of surplus bulk insulin to a third party and $0.6 million from the sale of
certain oncology intellectual property.
Cost of goods sold was $7.6 million for the six months ended June 30, 2017 compared to $9.2 million for the same
period in 2016, a decrease of approximately $1.6 million or 17%, primarily due to a decrease in under-absorbed labor and overhead
as a result of the reduction in the workforce that took place in the fourth quarter of 2016.
Research and development expenses were $6.3 million for the six months ended June 30, 2017 compared to $9.4
million for the same period in 2016, a decrease of $3.1 million or 33%, due primarily to compensation expense resulting from the
reduction in force in the fourth quarter of 2016.
Selling, general and administrative expenses were $34.0 million for the six months ended June 30, 2017 compared
to $18.5 million for the same period in 2016, an increase of $15.5 million or 84%, primarily due to increased selling and marketing
activities associated with recruiting a MannKind-employee sales force and building the related commercial support.
The net loss for the six months ended June 30, 2017 was $51.7 million, or $0.53 per share based on 97.8 million
weighted average shares outstanding, compared to the net loss of $54.8 million, or $0.62 per share on 88.4 million weighted average
shares outstanding at June 30, 2016.
Cash and Cash Equivalents
Cash and cash equivalents at June 30, 2017 were $43.4 million, compared to $48.0 million at March 31, 2017.
During the second quarter of 2017, we received net borrowings of $19.4 million from the Mann Group.
Product Pipeline
The Company had a positive pre-IND meeting with the FDA during June 2016 and, as a result, will be advancing
treprostinil Technosphere for the treatment of pulmonary arterial hypertension with the intention of filing an investigational new
drug application by the end of 2017.
Conference Call
MannKind will host a conference call and presentation webcast to discuss these results today at 5:00 p.m.
Eastern Time. To view and listen to the earnings call webcast, visit MannKind's website at http://www.mannkindcorp.com and click on the "Q2 2017 MannKind Earnings Conference Call"
link in the Webcast section of News & Events. To participate in the live call by telephone, please dial (888) 771-4371 or (847)
585-4405 and use the participant passcode: 44096373.
A telephone replay will be accessible for approximately 14 days following completion of the call by dialing
(888) 843-7419 or (630) 652-3042 and use the participant passcode: 4409 6373#. A replay will also be available on MannKind's
website for 14 days.
About MannKind Corporation
MannKind Corporation (NASDAQ:MNKD) (TASE:MNKD) focuses on the discovery, development and commercialization of
therapeutic products for patients with diseases such as diabetes. MannKind maintains a website at http://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.
Forward-Looking Statements
This press release contains forward-looking statements that involve risks and uncertainties, including
statements regarding MannKind's ability to directly commercialize pharmaceutical products. Words such as "believes",
"anticipates", "plans", "expects", "intend", "will", "goal", "potential" and similar expressions are intended to identify
forward-looking statements. These forward-looking statements are based upon the 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, the ability to generate significant product sales for MannKind,
MannKind's ability to manage its existing cash resources or raise additional cash resources, stock price volatility and other risks
detailed in MannKind's filings with the Securities and Exchange Commission, including the Annual Report on Form 10-K for the year
ended December 31, 2016 and subsequent periodic reports on Form 10-Q and current reports on Form 8-K. 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.
| MANNKIND CORPORATION AND
SUBSIDIARIES |
|
|
| CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
|
|
| (Unaudited) |
|
|
| (In thousands, except per share data) |
|
|
| |
|
|
|
|
|
|
|
|
|
| |
Three Months Ended
June 30, |
|
Six Months Ended June
30, |
|
|
| |
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
| Revenues: |
|
|
|
|
|
|
|
|
|
| Net revenue - commercial product sales |
$ |
1,548 |
|
|
$ |
-- |
|
|
$ |
2,745 |
|
|
$ |
-- |
|
|
|
| Net revenue - collaboration |
|
63 |
|
|
|
-- |
|
|
|
125 |
|
|
|
-- |
|
|
|
| Revenue - other |
|
552 |
|
|
|
-- |
|
|
|
2,302 |
|
|
|
-- |
|
|
|
| |
|
|
|
|
|
|
|
|
|
| Total revenues |
|
2,163 |
|
|
|
-- |
|
|
|
5,172 |
|
|
|
-- |
|
|
|
| Expenses: |
|
|
|
|
|
|
|
|
|
| Cost of goods sold |
|
5,086 |
|
|
|
4,045 |
|
|
|
7,635 |
|
|
|
9,213 |
|
|
|
| Research and development |
|
3,123 |
|
|
|
4,310 |
|
|
|
6,251 |
|
|
|
9,440 |
|
|
|
| Selling, general and administrative |
|
18,566 |
|
|
|
11,110 |
|
|
|
33,956 |
|
|
|
18,460 |
|
|
|
| Property and equipment impairment |
|
111 |
|
|
|
-- |
|
|
|
111 |
|
|
|
-- |
|
|
|
| (Gain) loss on foreign currency translation |
|
6,848 |
|
|
|
(341 |
) |
|
|
8,392 |
|
|
|
2,023 |
|
|
|
| Total expenses |
|
33,734 |
|
|
|
19,124 |
|
|
|
56,345 |
|
|
|
39,136 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
| Loss from operations |
|
(31,571 |
) |
|
|
(19,124 |
) |
|
|
(51,173 |
) |
|
|
(39,136 |
) |
|
|
| |
|
|
|
|
|
|
|
|
|
| Other income (expense): |
|
|
|
|
|
|
|
|
|
| Change in fair value of warrant liability |
|
147 |
|
|
|
(5,306 |
) |
|
|
6,776 |
|
|
|
(5,306 |
) |
|
|
| Interest income |
|
58 |
|
|
|
26 |
|
|
|
114 |
|
|
|
41 |
|
|
|
| Interest expense on notes |
|
(2,422 |
) |
|
|
(4,181 |
) |
|
|
(5,128 |
) |
|
|
(8,401 |
) |
|
|
| Interest expense on note payable to principal stockholder |
|
(721 |
) |
|
|
(721 |
) |
|
|
(1,435 |
) |
|
|
(1,443 |
) |
|
|
| Loss on extinguishment of debt |
|
(830 |
) |
|
|
-- |
|
|
|
(830 |
) |
|
|
-- |
|
|
|
| Other income |
|
-- |
|
|
|
(653 |
) |
|
|
13 |
|
|
|
(586 |
) |
|
|
| |
|
|
|
|
|
|
|
|
|
| Total other expense |
|
(3,768 |
) |
|
|
(10,835 |
) |
|
|
(490 |
) |
|
|
(15,695 |
) |
|
|
| |
|
|
|
|
|
|
|
|
|
| Loss before benefit for income taxes |
|
(35,339 |
) |
|
|
(29,959 |
) |
|
|
(51,663 |
) |
|
|
(54,831 |
) |
|
|
| Income tax benefit |
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
| |
|
|
|
|
|
|
|
|
|
| Net loss |
$ |
(35,339 |
) |
|
$ |
(29,959 |
) |
|
$ |
(51,663 |
) |
|
$ |
(54,831 |
) |
|
|
| |
|
|
|
|
|
|
|
|
|
| Net loss per share - basic and diluted |
$ |
(0.35 |
) |
|
$ |
(0.33 |
) |
|
$ |
(0.53 |
) |
|
$ |
(0.62 |
) |
|
|
| |
|
|
|
|
|
|
|
|
|
| Shares used to compute basic and diluted net loss per share |
|
99,864 |
|
|
|
91,061 |
|
|
|
97,816 |
|
|
|
88,416 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
| MANNKIND CORPORATION AND
SUBSIDIARIES |
| CONDENSED CONSOLIDATED BALANCE
SHEETS |
| |
|
(Unaudited) |
| |
|
(In thousands, except par value and share data) |
| |
|
|
|
|
|
| |
|
|
June 30,
2017 |
|
December 31,
2016 |
| |
|
|
|
|
|
| ASSETS |
|
|
|
| Current assets: |
|
|
|
| |
Cash and cash equivalents |
$ |
43,384 |
|
|
$ |
22,895 |
|
| |
Accounts receivable, net |
|
1,312 |
|
|
|
302 |
|
| |
Receivable from Sanofi |
|
-- |
|
|
|
30,557 |
|
| |
Inventory |
|
3,172 |
|
|
|
2,331 |
|
| |
Asset held for sale |
|
-- |
|
|
|
16,730 |
|
| |
Deferred costs from commercial product sales |
|
500 |
|
|
|
309 |
|
| |
Prepaid expenses and other current assets |
|
2,563 |
|
|
|
4,364 |
|
| |
|
Total current assets |
|
50,931 |
|
|
|
77,488 |
|
| Property and equipment - net |
|
27,920 |
|
|
|
28,927 |
|
| Other assets |
|
523 |
|
|
|
648 |
|
| |
|
Total assets |
$ |
79,374 |
|
|
$ |
107,063 |
|
| |
|
|
|
|
|
| |
|
LIABILITIES AND STOCKHOLDERS' DEFICIT |
|
|
|
| Current liabilities: |
|
|
|
| |
Accounts payable |
$ |
6,541 |
|
|
$ |
3,263 |
|
| |
Accrued expenses and other current liabilities |
|
9,076 |
|
|
|
7,937 |
|
| |
Facility financing obligation |
|
57,484 |
|
|
|
71,339 |
|
| |
Deferred revenue - net |
|
2,592 |
|
|
|
3,419 |
|
| |
Deferred payments from collaboration - current |
|
250 |
|
|
|
1,000 |
|
| |
Recognized loss on purchase commitments - current |
|
9,926 |
|
|
|
5,093 |
|
| |
|
Total current liabilities |
|
85,869 |
|
|
|
92,051 |
|
| Note payable to principal stockholder |
|
79,666 |
|
|
|
49,521 |
|
| Accrued interest - note payable to principal
stockholder |
|
- |
|
|
|
9,281 |
|
| Senior convertible notes |
|
27,649 |
|
|
|
27,635 |
|
| Recognized loss on purchase commitments - long term |
|
99,001 |
|
|
|
95,942 |
|
| Deferred payments from collaboration - long term |
|
625 |
|
|
|
- |
|
| Warrant liability |
|
605 |
|
|
|
7,381 |
|
| Milestone rights liability and other liabilities |
|
7,202 |
|
|
|
8,845 |
|
| |
|
Total liabilities |
|
300,617 |
|
|
|
290,656 |
|
| |
|
|
|
|
|
| Commitments and contingencies (Note 11) |
|
|
|
| |
|
|
|
|
|
| Stockholders' deficit: |
|
|
|
| Undesignated preferred stock, $0.01 par value -
10,000,000 shares authorized; |
|
|
|
| |
no shares issued or outstanding at June 30, 2017 and
December 31, 2016 |
|
-- |
|
|
|
-- |
|
| Common stock, $0.01 par value - 140,000,000 shares
authorized, |
|
|
|
| |
104,615,982 and 95,680,831 shares issued and outstanding
at |
|
|
|
| |
June 30, 2017 and December 31, 2016, respectively |
|
1,046 |
|
|
|
957 |
|
| Additional paid-in capital |
|
2,566,960 |
|
|
|
2,553,039 |
|
| Accumulated other comprehensive loss |
|
(21 |
) |
|
|
(24 |
) |
| Accumulated deficit |
|
(2,789,228 |
) |
|
|
(2,737,565 |
) |
| |
|
Total stockholders' deficit |
|
(221,243 |
) |
|
|
(183,593 |
) |
| |
|
Total liabilities and stockholders' deficit |
$ |
79,374 |
|
|
$ |
107,063 |
|
| |
|
|
|
|
|
Company Contact: Rose Alinaya SVP, Investor Relations 661-775-5300 ir@mannkindcorp.com
