MannKind Corporation Reports 2015 Third Quarter Financial Results
09 November 2015 - 10:00PM
MannKind Corporation (Nasdaq:MNKD) (TASE:MNKD)
today reported financial results for the third quarter ended
September 30, 2015.
For the three and nine months ended September 30, 2015, product
shipments of Afrezza, our novel rapid-acting inhaled insulin
therapy, were $4.1 million and $17.1 million, respectively, which
we recorded as deferred product sales from our collaboration with
Sanofi. For the quarter ended September 30, 2015, our portion of
the loss sharing arrangement with Sanofi related to Afrezza was
$14.7 million, which we subsequently financed by way of an advance
under the loan facility with an affiliate of Sanofi after September
30, 2015. The amount currently outstanding under the Sanofi loan
facility is now $43.7 million, which includes $0.8 million in
paid-in-kind interest.
For the third quarter of 2015, total operating expenses
decreased from $38.3 million to $26.0 million, a decline of 32.1%,
compared to the same quarter in 2014, primarily due to Afrezza
having moved out of clinical development into the commercial
market. Additionally, non-cash stock compensation from the
non-recurring achievement of performance and modification events in
2014 decreased in the third quarter of 2015 as compared to the
third quarter of 2014. Research and development expenses decreased
from $19.2 million to $6.3 million, a decrease of 67.2%, reflecting
the transition from development to commercial activities. General
and administrative expenses decreased from $19.1 million to $11.5
million, a reduction of 39.8%, mainly due to the decrease in
non-cash stock compensation expense. Offsetting the total decrease
of $20.5 million in R&D and G&A for the third quarter of
2015 were product manufacturing variance costs of $8.1
million. We did not recognize any product manufacturing costs
in the third quarter of 2014 as we had not yet commenced
commercialization of Afrezza.
For the first nine months of 2015, operating expenses were $71.8
million, a decline of 52.0% compared to the same period in 2014.
Total research and development expenses for the nine months ended
September 30, 2015 were $23.5 million, a decline of 71.6% compared
to the same period in 2014, primarily due to reduced non-cash stock
compensation expense resulting from the non-recurring achievement
of performance and modification events in 2014 and in the first
quarter of 2015. General and administrative expenses for the nine
months ended September 30, 2015 were $32.6 million, a decrease of
51.2% compared to the same period in 2014, primarily due to reduced
non-cash stock compensation expense resulting from the
non-recurring achievement and modification events in 2014 and in
the first quarter of 2015.
The net loss for the third quarter of 2015 was $31.9 million, or
$0.08 per share, based on 405.2 million weighted average shares
outstanding, compared with a net loss of $36.5 million, or $0.09
per share, based on 394.2 million weighted average shares
outstanding for the third quarter of 2014. The number of common
shares outstanding at September 30, 2015 was 418.3 million.
Cash and cash equivalents were $32.9 million at September 30,
2015, compared to $107.2 million in the second quarter of
2015. During the third quarter of 2015, we paid $64.3 million
upon maturity of the 2015 notes and received $0.7 million in
proceeds from warrant and option exercises, $7.2 million in
payments from Sanofi for product shipments, and $12.2 million in
net proceeds from our at-the-market sales facility. Currently,
$30.1 million remains available to borrow under our amended loan
arrangement with The Mann Group and $37.5 million of common stock
remains available for sale under our at-the-market sales
facility.
Conference Call
MannKind management will host a conference call to discuss these
results today, November 9, 2015, at 5:00 p.m. Eastern Time. To
participate in the call please dial (800) 708-4539 or (847)
619-6396 and use the participant passcode: 3859 3130. Those
interested in listening to the conference call live via the
Internet may do so by visiting MannKind'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: 3859 3130#. 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
Statements contained in this press release that are not strictly
historical in nature are 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
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 extent to
which MannKind's collaboration with Sanofi for commercialization of
Afrezza is able 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 capital, 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 periodic reports on Form 10-Q and 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 September 30, |
Nine months
ended September 30, |
|
2015 |
2014 |
2015 |
2014 |
Revenue |
$ — |
$ — |
$ — |
$ — |
|
|
|
|
|
Operating expenses: |
|
|
|
|
Research and development |
6,341 |
19,178 |
23,455 |
82,684 |
General and administrative |
11,547 |
19,088 |
32,649 |
66,840 |
Product manufacturing |
8,115 |
— |
15,688 |
— |
|
|
|
|
|
Total operating expenses |
26,003 |
38,266 |
71,792 |
149,524 |
|
|
|
|
|
Loss from operations |
(26,003) |
(38,266) |
(71,792) |
(149,524) |
Other income |
67 |
7,898 |
1,470 |
1,638 |
Loss on extinguishment of debt |
(1,049) |
— |
(1,049) |
— |
Interest expense on note payable to principal
stockholder |
(729) |
(729) |
(2,164) |
(2,164) |
Interest expense on notes |
(4,145) |
(5,424) |
(17,899) |
(11,895) |
Interest income |
2 |
1 |
8 |
4 |
|
|
|
|
|
Net loss |
$ (31,857) |
$ (36,520) |
$ (91,426) |
$ (161,941) |
|
|
|
|
|
Net loss per share — basic and diluted |
$ (0.08) |
$ (0.09) |
$ (0.23) |
$ (0.42) |
|
|
|
|
|
Shares used to compute basic and diluted net
loss per share |
405,199 |
394,163 |
401,734 |
381,332 |
|
MannKind
Corporation |
Condensed Consolidated
Balance Sheet |
(Unaudited) |
(in thousands) |
|
|
|
|
September
30, 2015 |
December
31, 2014 |
|
|
|
Assets |
|
|
Current assets: |
|
|
Cash and cash equivalents |
$ 32,928 |
$ 120,841 |
Receivables from
collaboration |
1,679 |
50,436 |
Inventory |
23,402 |
9,670 |
Prepaid expenses and other
current assets |
13,227 |
20,206 |
Total current assets |
71,236 |
201,153 |
Property and equipment — net |
191,408 |
192,127 |
Deferred product costs from
collaboration |
13,539 |
— |
Other assets |
1,831 |
1,159 |
Total |
$ 278,014 |
$ 394,439 |
|
|
|
Liabilities and Stockholders'
Deficit |
|
|
|
|
|
Accounts payable |
$ 4,444 |
$ 7,394 |
Accrued expenses and other current
liabilities |
14,081 |
26,206 |
Facility financing obligation |
74,163 |
72,995 |
Senior convertible notes |
— |
99,355 |
Deferred product sales from
collaboration |
17,474 |
436 |
Deferred payments from collaboration |
157,145 |
196,967 |
Current liabilities |
267,307 |
403,353 |
Note payable to related party |
49,521 |
49,521 |
Sanofi loan facility and loss share
obligation |
43,653 |
3,034 |
Senior convertible notes |
27,607 |
— |
Other liabilities |
14,495 |
12,301 |
Stockholders' deficit |
(124,569) |
(73,770) |
Total |
$ 278,014 |
$ 394,439 |
PLACEHOLDER
CONTACT: Company Contact:
Matthew J. Pfeffer
Chief Financial Officer
661-775-5300
mpfeffer@mannkindcorp.com
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