MannKind Corporation Reports 2015 Fourth Quarter and Full Year Financial Results
March 14 2016 - 4:48PM
MannKind Corporation (Nasdaq:MNKD) (TASE:MNKD)
today reported financial results for the fourth quarter and full
year ended December 31, 2015.
For the fourth quarter of 2015, research and development
expenses decreased 64.8%, from $17.6 million to $6.2 million,
reflecting effects of our restructuring measures taken in 2015 and
the transition from development to commercial activities.
General and administrative costs declined 33.6%, from $12.5
million to $8.3 million, mainly due to a decrease in non-cash stock
compensation expense. Sales of Afrezza continued to be lower
than expected during the fourth quarter of 2015, culminating in a
decision by Sanofi on January 4, 2016 to return the Afrezza rights
to MannKind after a notice period, all of which impacted the value
and recoverability of long-lived assets in accordance with
accounting guidance. As a result, non-cash impairment charges
of $206.6 million were recorded for the fourth quarter of 2015, of
which $140.4 million related to impairment of fixed assets and
$66.2 million related to loss on future purchase commitments,
primarily for insulin. No such impairment charge was
recognized in 2014. Product manufacturing costs for the
fourth quarter of 2015 were $51.8 million related to under absorbed
labor and overhead and inventory write-offs. We did not recognize
any product manufacturing costs in the fourth quarter of 2014 as we
had not yet commenced commercialization of Afrezza.
For the full year 2015, our total operating expenses, excluding
fixed asset impairment and loss on purchase commitments, were
$138.1 million compared to $179.6 million for the full year 2014, a
decrease of 23.1%. Total research and development costs for 2015
were $29.7 million compared $100.2 million for 2014, a decrease of
70.4%, primarily due to decreased development expenses resulting
from the shift to commercial production of Afrezza, decreased
clinical trial-related expenses and the effects of restructuring
measures, in addition to reduced non-cash stock compensation
expense resulting from the non-recurring achievement of performance
and modification events in 2014 and the first quarter of 2015.
General and administrative expenses for 2015 were $41.0 million
compared to $79.4 million in 2014, a decrease of 48.4%, primarily
due to reduced non-cash stock compensation expense resulting from
the modification and achievement of performance-based awards in
2014 and in the first quarter of 2015 and the effects of
restructuring measures, in addition to the non-recurrence of
professional fees incurred in the third quarter of 2014 associated
with the entry into the Sanofi License Agreement. Product
manufacturing costs for 2015 were $67.4 million related to under
absorbed labor and overhead and inventory write-offs. We did not
recognize any product manufacturing costs in 2014 as we had not yet
commenced commercialization of Afrezza.
The net loss for 2015 was $368.4 million, including total
non-cash impairment charges of $206.6 million, or $0.91 per share
based on 406.2 million weighted average shares outstanding, higher
than the net loss of $198.4 million, or $0.51 per share on 385.2
million weighted average shares outstanding in 2014. The
number of common shares outstanding at December 31, 2015 was 428.7
million.
Cash and cash equivalents at December 31, 2015 were $59.1
million, compared to $32.9 million in the third quarter of 2015.
During the fourth quarter of 2015, we received $34.7 million in net
proceeds from sale of stock on the Tel Aviv Stock Exchange, $0.7
million in proceeds from warrants and options exercised, $2.6
million in payments from Sanofi for product shipments, and $13.6
million in net proceeds from the sale of stock pursuant to our
at-the-market sales facility. Currently, $30.1 million remains
available to borrow under our amended loan arrangement with The
Mann Group.
“Our financial results for 2015 were not what we expected going
into the year, but we are looking forward to the next twelve months
with optimism and great excitement,” said Matthew Pfeffer, Chief
Executive Officer of MannKind Corporation. “Afrezza will soon
be back under our control and we are all energized about the
opportunity to launch a lean, focused commercial effort that
highlights the differentiating qualities of our lead product.
With Michael Castagna now on board as our Chief Commercial Officer,
as announced earlier today, we have taken another tangible step in
building our commercial infrastructure. Other activities are
planned to follow quickly, as we finalize additional hires and line
up assets for a variety of roles. There is still much to do
in the coming months, but we are all highly motivated by the
positive feedback we have received from enthusiastic Afrezza
patients and we want to do all we can to ensure that more adults
with diabetes have an opportunity to receive the same
benefits.”
Conference Call
MannKind management will host a conference call to discuss these
results today at 5:00 p.m. Eastern Time. To participate in
the call please dial (888) 771-4371 or (847) 585-4405 and use the
participant passcode: 4201 4510. Those interested in
listening to the conference call live via the Internet may do so by
visiting the Company's website at
http://www.mannkindcorp.com.
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: 4201 4510#. A
replay will also be available on MannKind's website for 14
days.
About MannKind Corporation
MannKind Corporation (Nasdaq and 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. 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 Company'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 successful
transition with Sanofi for the return of Afrezza, the ability to
directly commercialize Afrezza, the ability to generate significant
product sales for MannKind, difficulties or delays in obtaining
regulatory feedback or completing and analyzing the results of
clinical studies, 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, 2014 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.
(Tables to follow)
MannKind Corporation |
Condensed Consolidated Statements of
Operations |
(Unaudited) |
(In thousands, except per share amounts) |
|
|
Three months ended December
31, |
Twelve months ended December
31, |
|
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
Revenue |
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
Research and development |
|
6,218 |
|
|
17,560 |
|
|
29,674 |
|
|
100,244 |
|
General and administrative |
|
8,311 |
|
|
12,543 |
|
|
40,960 |
|
|
79,383 |
|
Product manufacturing |
|
51,754 |
|
|
— |
|
|
67,442 |
|
|
— |
|
|
|
|
|
|
Property and equipment
impairment |
|
140,412 |
|
|
— |
|
|
140,412 |
|
|
— |
|
Loss on purchase commitments |
|
66,167 |
|
|
— |
|
|
66,167 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses |
|
272,862 |
|
|
30,103 |
|
|
344,655 |
|
|
179,627 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations |
|
(272,862 |
) |
|
(30,103 |
) |
|
(344,655 |
) |
|
(179,627 |
) |
Other income
(expense) |
|
(106 |
) |
|
42 |
|
|
1,366 |
|
|
1,679 |
|
Interest expense on note
payable to principal stockholder |
|
(729 |
) |
|
(729 |
) |
|
(2,894 |
) |
|
(2,894 |
) |
Loss on extinguishment of
debt |
|
— |
|
|
— |
|
|
(1,049 |
) |
|
— |
|
Interest expense on
notes |
|
(3,331 |
) |
|
(5,654 |
) |
|
(21,231 |
) |
|
(17,549 |
) |
Interest income |
|
10 |
|
|
5 |
|
|
18 |
|
|
9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
$ |
(277,018 |
) |
$ |
(36,439 |
) |
$ |
(368,445 |
) |
$ |
(198,382 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share— basic
and diluted |
$ |
(0.66 |
) |
$ |
(0.09 |
) |
$ |
(0.91 |
) |
$ |
(0.51 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used to compute
basic and diluted net loss per share |
|
419,314 |
|
|
396,793 |
|
|
406,165 |
|
|
385,229 |
|
MannKind Corporation |
Condensed Consolidated Balance Sheet |
(Unaudited) |
(in thousands) |
|
|
December 31, 2015 |
December 31, 2014 |
|
|
|
Assets |
|
|
Current assets: |
|
|
Cash and cash equivalents |
$ |
59,074 |
|
$ |
120,841 |
|
Receivables from collaboration |
|
23 |
|
|
50,436 |
|
Inventory – current |
|
- |
|
|
9,670 |
|
Deferred product costs from
collaboration |
|
13,539 |
|
|
- |
|
Prepaid expenses and other current
assets |
|
4,018 |
|
|
20,206 |
|
Total current
assets |
|
76,654 |
|
|
201,153 |
|
Property and equipment
— net |
|
48,749 |
|
|
192,127 |
|
Other assets |
|
1,009 |
|
|
1,159 |
|
Total |
$ |
126,412 |
|
$ |
394,439 |
|
|
|
|
|
|
|
|
Liabilities and
Stockholders’ Deficit |
|
|
|
|
|
|
Current
liabilities |
$ |
268,324 |
|
$ |
403,353 |
|
Senior convertible
notes — long term |
|
27,613 |
|
|
- |
|
Note payable to
principal stockholder |
|
49,521 |
|
|
49,521 |
|
Sanofi loan facility
and loss share obligation |
|
62,371 |
|
|
3,034 |
|
Purchase
commitments |
|
53,692 |
|
|
- |
|
Other liabilities |
|
15,225 |
|
|
12,301 |
|
Stockholders’
deficit |
|
(350,334 |
) |
|
(73,770 |
) |
Total |
$ |
126,412 |
|
$ |
394,439 |
|
Company Contact:
Matthew J. Pfeffer
Chief Executive Officer
661-775-5300
mpfeffer@mannkindcorp.com
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