MannKind Corporation Reports 2017 First Quarter Financial Results
May 10 2017 - 4:05PM
MannKind Corporation (NASDAQ:MNKD) (TASE:MNKD)
today reported financial results for the first quarter ended March
31, 2017. Key results include:
- Total revenue for the quarter of $3.0 million
- Deferred revenue of $1.8 million as of March 31, 2017
- Net loss for the quarter of $16.3 million
- Cash and cash equivalents of $48.0 million at March 31,
2017
First Quarter ResultsFor the first
quarter of 2017, total net revenue of $3.0 million was comprised of
$1.8 million from the sale of surplus bulk insulin to a third party
and $1.2 million of recognized Afrezza product sales as dispensed
to patients. As of March 31, 2017, deferred net revenue included
$1.8 million of Afrezza product shipped to the third-party
logistics provider and wholesale distributors, but not yet
recognized as revenue.
Cost of goods sold was $2.5 million in the first
quarter of 2017 compared to $5.2 million in the first quarter of
2016, a decrease of approximately $2.7 million or 52%, due
primarily to a $0.7 million decrease in under-absorbed labor and
overhead as a result of the reduction in work force, $0.3 million
related to the revaluation of inventory and deferred costs of
commercial sales, and a reduction of $1.9 million for capitalized
costs related to the manufacturing of Afrezza that has not yet been
sold in 2017. These decreases are partially offset by $0.3 million
of cost of goods sold attributed to commercial product sales which
consist of manufacturing costs for Afrezza dispensed to
patients.
Research and development expenses were $3.1 million
in the first quarter of 2017 compared to $5.1 million in the first
quarter of 2016, a decrease of $2.0 million or 39%, due primarily
to a decrease in personnel costs including related stock
compensation expense of $2.2 million resulting from reductions in
staff and decreases in outsourced services of $0.4 million.
These decreases were partially offset by $0.5 million in clinical
trial costs.
Selling, general and administrative expenses were
$15.4 million for the first quarter of 2017 compared to $7.4
million for the same quarter of 2016, an increase of $8.0 million
or 108%. Our former partner was responsible for selling activities
in the first quarter of 2016. G&A expenses increased $0.3
million for the first quarter of 2017 as compared to the same
quarter of 2016, primarily due to increased spending on regulatory
activities associated with Afrezza.
The net loss for the first quarter of 2017 was
$16.3 million, or $0.17 per share based on 95.7 million weighted
average shares outstanding, compared to the net loss of $24.9
million, or $0.29 per share on 85.8 million weighted average shares
outstanding in the first quarter of 2016. The number of common
shares outstanding at March 31, 2017 was 95.8 million.
Cash and cash equivalents at March 31, 2017 were
$48.0 million, compared to $22.9 million at the end of 2016. During
the first quarter of 2017, we received $30.6 million from Sanofi,
pursuant to the settlement of the insulin put option, $16.7 million
from the sale of a surplus building, and $2.1 million from
shipments of Afrezza. Currently, $30.1 million remains available to
borrow under the amended loan arrangement with The Mann Group.
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 "Q1 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: 44096372.
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 6372#. A replay will also be available on MannKind's website
for 14 days.
About MannKind
CorporationMannKind 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
StatementsThis 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 March 31, |
|
|
2017 |
|
2016 |
Revenues: |
|
|
|
|
Net
revenue - collaboration |
|
$ |
63 |
|
|
$ |
-- |
|
Net
revenue - commercial product sales |
|
|
1,196 |
|
|
|
-- |
|
Revenue -
bulk insulin sales |
|
|
1,750 |
|
|
|
-- |
|
|
|
|
|
|
|
|
|
|
Total
revenues |
|
|
3,009 |
|
|
|
-- |
|
Expenses: |
|
|
|
|
|
|
|
|
Cost of
goods sold |
|
|
2,548 |
|
|
|
5,168 |
|
Research
and development |
|
|
3,129 |
|
|
|
5,130 |
|
Selling,
general and administrative |
|
|
15,389 |
|
|
|
7,351 |
|
Loss on
foreign currency translation |
|
|
1,545 |
|
|
|
2,364 |
|
Total
expenses |
|
|
22,611 |
|
|
|
20,013 |
|
Loss
from operations |
|
|
(19,602 |
) |
|
|
(20,013 |
) |
|
|
|
|
|
|
|
|
|
Other
income (expense): |
|
|
|
|
Change in
fair value of warrant liability |
|
|
6,629 |
|
|
|
-- |
|
Interest
income |
|
|
55 |
|
|
|
15 |
|
Interest
expense on notes |
|
|
(2,706 |
) |
|
|
(4,221 |
) |
Interest
expense on note payable to principal stockholder |
|
|
(714 |
) |
|
|
(721 |
) |
Other income |
|
|
14 |
|
|
|
67 |
|
Total
other income (expense) |
|
|
3,278 |
|
|
|
(4,860 |
) |
|
|
|
|
|
|
|
|
|
Loss
before benefit for income taxes |
|
|
(16,324 |
) |
|
|
(24,873 |
) |
Income
tax benefit |
|
|
-- |
|
|
|
-- |
|
Net loss |
|
$ |
(16,324 |
) |
|
$ |
(24,873 |
) |
|
|
|
|
|
|
|
|
|
Net loss
per share - basic and diluted |
|
$ |
(0.17 |
) |
|
$ |
(0.29 |
) |
|
|
|
|
|
|
|
|
|
Shares used to compute
basic and diluted net loss per share |
|
|
95,744 |
|
|
|
85,772 |
|
|
|
|
|
|
|
|
|
|
MANNKIND CORPORATION AND
SUBSIDIARIES |
CONDENSED CONSOLIDATED BALANCE
SHEETS |
(Unaudited) |
(In thousands, except par value and share
data) |
|
|
March 31, 2017 |
|
December 31, 2016 |
|
|
|
|
ASSETS |
|
|
|
Current
assets: |
|
|
|
Cash and
cash equivalents |
$ |
47,978 |
|
|
$ |
22,895 |
|
Accounts
receivable, net |
|
438 |
|
|
|
302 |
|
Receivable from Sanofi |
|
-- |
|
|
|
30,557 |
|
Inventory |
|
3,698 |
|
|
|
2,331 |
|
Asset
held for sale |
|
-- |
|
|
|
16,730 |
|
Deferred
costs from commercial product sales |
|
472 |
|
|
|
309 |
|
Prepaid
expenses and other current assets |
|
3,508 |
|
|
|
4,364 |
|
Total
current assets |
|
56,094 |
|
|
|
77,488 |
|
Property
and equipment - net |
|
28,482 |
|
|
|
28,927 |
|
Other
assets |
|
609 |
|
|
|
648 |
|
Total
assets |
$ |
85,185 |
|
|
$ |
107,063 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' DEFICIT |
|
|
|
Current
liabilities: |
|
|
|
Accounts
payable |
$ |
1,519 |
|
|
$ |
3,263 |
|
Accrued
expenses and other current liabilities |
|
10,657 |
|
|
|
7,937 |
|
Facility
financing obligation |
|
71,795 |
|
|
|
71,339 |
|
Deferred
revenue - net |
|
1,844 |
|
|
|
3,419 |
|
Deferred
payments from collaboration - current |
|
250 |
|
|
|
1,000 |
|
Recognized loss on purchase commitments - current |
|
6,984 |
|
|
|
5,093 |
|
Total
current liabilities |
|
93,049 |
|
|
|
92,051 |
|
Note
payable to principal stockholder |
|
49,521 |
|
|
|
49,521 |
|
Accrued
interest - note payable to principal stockholder |
|
9,995 |
|
|
|
9,281 |
|
Senior
convertible notes |
|
27,642 |
|
|
|
27,635 |
|
Recognized loss on purchase commitments - long term |
|
95,062 |
|
|
|
95,942 |
|
Deferred
payments from collaboration - long term |
|
687 |
|
|
|
-- |
|
Warrant
liability |
|
752 |
|
|
|
7,381 |
|
Milestone rights liability and other liabilities |
|
7,202 |
|
|
|
8,845 |
|
Total
liabilities |
|
283,910 |
|
|
|
290,656 |
|
|
|
|
|
|
|
|
|
Commitments and contingencies (Note 10) |
|
|
|
|
|
|
|
Stockholders' deficit: |
|
|
|
Undesignated preferred stock, $0.01 par value - 10,000,000 shares
authorized; no |
|
|
|
shares
issued or outstanding at March 31, 2017 and December 31, 2016 |
|
-- |
|
|
|
-- |
|
Common
stock, $0.01 par value - 140,000,000 shares |
|
|
|
authorized, 95,776,297 and 95,680,831 shares issued and outstanding
at March 31, |
|
|
|
2017 and
December 31, 2016, respectively |
|
958 |
|
|
|
957 |
|
Additional paid-in capital |
|
2,554,230 |
|
|
|
2,553,039 |
|
Accumulated other comprehensive loss |
|
(24 |
) |
|
|
(24 |
) |
Accumulated deficit |
|
(2,753,889 |
) |
|
|
(2,737,565 |
) |
Total
stockholders' deficit |
|
(198,725 |
) |
|
|
(183,593 |
) |
Total
liabilities and stockholders' deficit |
$ |
85,185 |
|
|
$ |
107,063 |
|
|
|
|
|
|
|
|
|
Company Contact:
Rose Alinaya
SVP, Finance
661-775-5300
ralinaya@mannkindcorp.com
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