MannKind Corporation Reports 2016 Second Quarter Financial Results
August 08 2016 - 4:00PM
MannKind Corporation (Nasdaq:MNKD) (TASE:MNKD)
today reported financial results for the second quarter and the six
months ended June 30, 2016.
For the second quarter ended June 30, 2016,
total operating expenses were $19.1 million as compared to $24.1
million for the same quarter in 2015. Research and
development expenses were $4.3 million for the second quarter of
2016, a decrease of 44% compared to the second quarter of 2015,
primarily due to a reduction in force in 2015 following the
completion of Afrezza registration trials. Selling, general and
administrative costs were $11.1 million for the second quarter of
2016, an increase of 5% compared to general and administrative
costs for the second quarter of 2015, mainly due to sales and
marketing expenses. Manufacturing of commercial product
resumed in the second quarter of 2016, in preparation for the
relaunch of Afrezza in the third quarter of 2016, resulting in the
recognition of product manufacturing costs of $3.7 million for the
three months ended June 30, 2016. With limited production and
underutilization of the manufacturing facility in the same period
of 2015, product manufacturing costs were $5.7 million for the
second quarter of 2015 due to under absorbed labor and overhead.
For the first six months ended 2016, total
operating expenses were $39.1 million, a decrease of 15% as
compared to $45.8 million for the same period in 2015. Research and
development expenses were $9.4 million for the six months ended
June 30, 2016, a decline of 45% compared to the same period in
2015, primarily due to the reduction in force in 2015 and the
transition from development to commercial activities.
Selling, general and administrative expenses for the six months
ended June 30, 2016 were $18.5 million, a decrease of 13% compared
to the same period in 2015, primarily due to the reduction in
force, reduced professional fees related to strategic planning
activities and lower non-cash stock compensation expense in 2015,
offset by increased sales and marketing expense in 2016. Product
manufacturing costs were $11.2 million for the six months ended
June 30, 2016, an increase of 47% compared to the same period in
2015, as manufacturing of commercial product resumed in preparation
for the relaunch of Afrezza in the third quarter of
2016.
For the three months ended June 30, 2016, the
Company earned $0.3 million under the Sanofi License
Agreement, which is required to be applied as a prepayment against
the balance owed under the Sanofi Loan Facility. As of June 30,
2016, the total amount owed to Sanofi is $70.3 million, which
includes accrued interest of $4.3 million.
Included in net loss for the three and six
months ended June 30, 2016 is the non-cash effect of a $5.3 million
fair value adjustment of the warrant liability related to the
registered direct public offering completed in May 2016.
The net loss for the second quarter of 2016 was
$30.0 million, or $0.07 per share, based on 455.3 million weighted
average shares outstanding, compared with to the net loss of $28.9
million, or $0.07 per share, based on 401.0 million weighted
average shares outstanding for the second quarter of 2015. The
number of common shares outstanding at June 30, 2016 was 477.7
million.
Cash and cash equivalents at June 30, 2016 were
$63.7 million, compared to $27.7 million at March 31, 2016. In May
2016, the Company received net proceeds of $47.4 million upon
completion of a registered direct public offering, $9.2 million
from Sanofi for the sale of insulin inventory in connection with a
contractual obligation upon termination of the Sanofi License
Agreement, and $0.7 million from Connecticut as a Research &
Development tax credit. Currently, $30.1 million remains available
for borrowing under the amended loan arrangement with The Mann
Group along with $50.0 million available under the ATM
facility.
Conference Call and Presentation Webcast
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 webcast, visit
MannKind’s website at http://www.mannkindcorp.com and click on the
“Q2 2016 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: 41477572.
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:
4147 7572#. 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, 2015 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) |
|
|
|
|
Three months ended |
|
Six months ended |
|
|
June
30, |
|
June
30, |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
|
Revenue |
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
| Research
and development |
|
4,310 |
|
|
|
7,737 |
|
|
|
9,440 |
|
|
|
17,115 |
|
| Selling,
general and administrative |
|
11,110 |
|
|
|
10,623 |
|
|
|
18,460 |
|
|
|
21,102 |
|
| Product
manufacturing |
|
3,704 |
|
|
|
5,691 |
|
|
|
11,236 |
|
|
|
7,573 |
|
| Total
operating expenses |
|
19,124 |
|
|
|
24,051 |
|
|
|
39,136 |
|
|
|
45,790 |
|
|
|
|
|
|
|
|
|
|
| Loss
from operations |
|
(19,124 |
) |
|
|
(24,051 |
) |
|
|
(39,136 |
) |
|
|
(45,790 |
) |
| Other
(expense) income |
|
(5,959 |
) |
|
|
(10 |
) |
|
|
(5,892 |
) |
|
|
1,403 |
|
| Interest
expense on note payable to principal stockholder |
|
(721 |
) |
|
|
(721 |
) |
|
|
(1,443 |
) |
|
|
(1,435 |
) |
| Interest
expense on notes |
|
(4,181 |
) |
|
|
(4,131 |
) |
|
|
(8,401 |
) |
|
|
(13,753 |
) |
| Interest
income |
|
26 |
|
|
|
3 |
|
|
|
41 |
|
|
|
6 |
|
|
|
|
|
|
|
|
|
|
| Net
loss |
|
(29,959 |
) |
|
|
(28,910 |
) |
|
|
(54,831 |
) |
|
|
(59,569 |
) |
|
|
|
|
|
|
|
|
|
| Net loss
per share — basic and diluted |
$ |
(0.07 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.12 |
) |
|
$ |
(0.15 |
) |
|
|
|
|
|
|
|
|
|
| Shares
used to compute basic and diluted net loss per share |
|
455,305 |
|
|
|
401,018 |
|
|
|
442,082 |
|
|
|
399,972 |
|
|
|
|
|
|
|
|
|
|
| |
| MannKind Corporation |
| Condensed Consolidated Balance Sheet |
| (Unaudited) |
| (in thousands) |
| |
|
|
June 30, 2016 |
|
December
31, 2015 |
|
|
|
|
|
|
|
|
Assets |
|
|
| Current assets: |
|
|
| Cash and
cash equivalents |
$ |
63,733 |
|
|
$ |
59,074 |
|
|
Inventory |
|
2,866 |
|
|
|
- |
|
| Deferred
costs from collaboration |
|
22,742 |
|
|
|
13,539 |
|
| Prepaid
expenses and other current assets |
|
1,423 |
|
|
|
4,041 |
|
| Total current
assets |
|
90,764 |
|
|
|
76,654 |
|
| Property and equipment
— net |
|
47,422 |
|
|
|
48,749 |
|
| Other assets |
|
1,248 |
|
|
|
1,009 |
|
| Total |
$ |
139,434 |
|
|
$ |
126,412 |
|
| |
|
|
|
|
|
| Liabilities and
Stockholders’ Deficit |
|
|
| |
|
|
| Current
liabilities: |
|
|
|
|
|
|
|
| Accounts
payable |
$ |
2,849 |
|
|
$ |
15,599 |
|
| Accrued
expenses and other current liabilities |
|
10,252 |
|
|
|
7,929 |
|
| Facility
financing obligation |
|
75,452 |
|
|
|
74,582 |
|
| Deferred
sales from collaboration |
|
17,680 |
|
|
|
17,503 |
|
| Purchase
commitment loss - current |
|
20,986 |
|
|
|
12,475 |
|
| Deferred
payments from collaboration |
|
144,431 |
|
|
|
140,231 |
|
| Warrant
liability |
|
18,056 |
|
|
|
- |
|
| Total current
liabilities |
|
289,706 |
|
|
|
268,319 |
|
| Note payable to related
party |
|
49,521 |
|
|
|
49,521 |
|
| Sanofi loan facility
and profit/loss share obligation |
|
69,978 |
|
|
|
62,371 |
|
| Senior convertible
notes |
|
27,623 |
|
|
|
27,613 |
|
| Non-current purchase
commitment loss |
|
52,515 |
|
|
|
53,692 |
|
| Other liabilities |
|
16,668 |
|
|
|
15,225 |
|
| Stockholders’
deficit |
|
(366,577 |
) |
|
|
(350,329 |
) |
| Total |
$ |
139,434 |
|
|
$ |
126,412 |
|
| |
|
|
|
|
|
|
|
Company Contact:
Rose Alinaya
SVP, Finance
661-775-5300
ralinaya@mannkindcorp.com
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