MannKind Corporation (Nasdaq: MNKD) today reported
financial results for the fourth quarter and full year ended
December 31, 2022.
“For 2022, we recognized almost $100 million in
total revenues – an incredible triumph for our entire
organization,” said Michael Castagna, PharmD, Chief Executive
Officer of MannKind Corporation. “With our revenues growing nicely,
we are focusing on our product pipeline where our INHALE-1 Phase 3
trial for Afrezza in pediatrics reached 50% enrollment at December
31, 2022 and our inhaled clofazimine will move into an adaptive
Phase 2/3 study in the second half of 2023.”
Fourth Quarter 2022 Results
Revenue Highlights
|
For the Three Months EndedDecember
31, |
|
|
2022 |
|
|
2021 |
|
|
$ Change |
|
|
% Change |
|
Net revenue — Afrezza |
$ |
12,006 |
|
|
$ |
11,340 |
|
|
$ |
666 |
|
|
|
6 |
% |
Net revenue — V-Go |
|
5,434 |
|
|
|
— |
|
|
$ |
5,434 |
|
|
* |
|
Revenue — collaborations and
services |
|
9,544 |
|
|
|
1,175 |
|
|
$ |
8,369 |
|
|
|
712 |
% |
Royalties — collaborations |
|
9,075 |
|
|
|
— |
|
|
$ |
9,075 |
|
|
* |
|
Total revenues |
$ |
36,059 |
|
|
$ |
12,515 |
|
|
$ |
23,544 |
|
|
|
188 |
% |
______________________________* Not meaningful
The increase in Afrezza® net revenue was mainly a
result of higher demand. V-Go was acquired in the second quarter of
2022. The increase in collaborations and services revenue reflected
the fact that the manufacture of Tyvaso® DPI for commercial sale
had not yet commenced in the previous period. Royalties from United
Therapeutics (“UT”) for Tyvaso DPI continued to grow based on
strong patient demand.
Afrezza gross margin in the fourth quarter of 2022
was 92% compared to 62% for the same period in 2021, mainly due to
a decrease in cost of goods sold driven by lower inventory write
offs, lower cost of production per unit and a higher amount of
manufacturing activity in 2022 (which absorbed more cost to
inventory). V-Go® gross margin was 42% for the fourth quarter of
2022.
Cost of revenue – collaborations and services for
the fourth quarter of 2022 was $12.0 million compared to $7.1
million for the same period in 2021, an increase of $4.9 million,
primarily due to an increase in manufacturing activities associated
with the production of Tyvaso DPI.
Research and development (“R&D”) expenses for
the fourth quarter of 2022 were $7.2 million compared to $3.9
million for the same period in 2021. This $3.3 million increase was
primarily attributed to costs incurred to develop our product
pipeline, including the Afrezza pediatrics clinical study
(INHALE-1) and MNKD-101 (inhaled clofazimine).
Selling expenses for the fourth quarter of 2022
were $11.6 million compared to $13.5 million for the same period in
2021. This $1.9 million decrease was primarily attributable to the
net impact of lower personnel-related costs associated with the
first quarter of 2022 Afrezza sales force restructuring, and a
pilot promotional effort aimed at primary care physicians that
began in the fourth quarter of 2021 and ended in the third quarter
of 2022, partially offset by V-Go promotional efforts.
General and administrative (“G&A”) expenses for
the fourth quarter of 2022 were $10.5 million compared to $9.2
million for the same period in 2021. This $1.3 million increase was
primarily attributable to higher stock-based compensation and
increased headcount.
Interest expense on financing liability was $2.5
million for the fourth quarter of 2022 and represented interest
incurred on the sale lease-back transaction for our manufacturing
facility in Danbury, CT, which was entered into in the fourth
quarter of 2021.
Interest expense on notes was flat in the fourth
quarter of 2022 compared to the same period in 2021 due to fixed
interest rates and no changes in debt balances.
Year Ended December 31, 2022
Revenue Highlights
|
For the Year EndedDecember
31, |
|
|
2022 |
|
|
2021 |
|
|
$ Change |
|
|
% Change |
|
Net revenue — Afrezza |
$ |
43,316 |
|
|
$ |
39,168 |
|
|
$ |
4,148 |
|
|
|
11 |
% |
Net revenue — V-Go |
|
12,931 |
|
|
|
— |
|
|
$ |
12,931 |
|
|
* |
|
Revenue — collaborations and
services |
|
27,924 |
|
|
|
36,274 |
|
|
$ |
(8,350 |
) |
|
|
(23 |
%) |
Royalties — collaborations |
|
15,599 |
|
|
|
— |
|
|
$ |
15,599 |
|
|
* |
|
Total revenues |
$ |
99,770 |
|
|
$ |
75,442 |
|
|
$ |
24,328 |
|
|
|
32 |
% |
______________________________* Not meaningful
Afrezza net revenue increased year-over-year
primarily due to higher price (including a more favorable
gross-to-net adjustment), higher product demand, and a more
favorable cartridge mix. Collaborations and services revenue
decreased, primarily due to the completion of the R&D services
associated with our collaboration with UT, which was partially
offset by revenues associated with the manufacturing of Tyvaso DPI.
As of December 31, 2022, $37.9 million of manufacturing revenue
associated with Tyvaso DPI remains deferred and will be recognized
as commercial product is sold to UT.
Afrezza gross margin for 2022 was 80% compared to
57% for the same period in 2021, driven primarily by a decrease in
excess manufacturing capacity costs (as Tyvaso DPI was in
commercial production in 2022), a decrease in inventory write offs
and an amendment fee associated with our Insulin Supply Agreement
in 2021. V-Go gross margin was 43% for 2022.
Cost of revenue – collaborations and services for
2022 was $41.5 million compared to $22.0 million for the same
period in 2021, an increase of $19.5 million, primarily due to an
increase in manufacturing activities for the production of Tyvaso
DPI.
R&D expenses for 2022 were $19.7 million
compared to $12.3 million for the prior year. This $7.4 million
increase was primarily attributable to costs incurred to develop
our product pipeline, including INHALE-1 and MNKD-101.
Selling expenses for 2022 were $53.8 million
compared to $45.5 million for the prior year. This $8.3 million
increase was primarily attributable to the primary care pilot
program, elimination of the Thyquidity co-promotion (which
permitted some expenses associated with the sales force to be
recognized as cost of revenue for collaborations and services in
the same period of 2021), V-Go promotional efforts after the
acquisition in the second quarter of 2022, and partially offset by
the net favorable impact of personnel-related costs associated with
the Afrezza sales force restructuring in 2022.
G&A expenses for 2022 were $37.7 million
compared to $31.9 million for the prior year. This $5.8 million
increase was primarily attributable to higher stock-based
compensation, increased headcount, and higher professional
fees.
Interest expense on the financing liability was
$9.8 million for 2022 and represented interest incurred on the sale
lease-back transaction for our manufacturing facility in Danbury,
CT.
Interest expense on notes was flat for 2022
compared to 2021 due to fixed interest rates and no changes in debt
balances.
Cash and cash equivalents and investments as of
December 31, 2022 were $172.8 million.
Conference Call
MannKind will host a conference call and
presentation webcast to discuss these results today at 5:00 p.m.
Eastern Time. Those interested in listening to the conference call
live via the Internet may do so by visiting the Company’s website
at mannkindcorp.com under Events & Presentations. A replay will
be available on MannKind's website for 14 days.
About MannKind
MannKind Corporation (Nasdaq: MNKD) focuses on the
development and commercialization of inhaled therapeutic products
for patients with endocrine and orphan lung diseases.
We are committed to using our formulation
capabilities and device engineering prowess to lessen the burden of
diseases such as diabetes, pulmonary arterial hypertension (PAH)
and nontuberculous mycobacterial (NTM) lung disease. Our signature
technologies – dry-powder formulations and inhalation devices –
offer rapid and convenient delivery of medicines to the deep lung
where they can exert an effect locally or enter the systemic
circulation.
With a passionate team of Mannitarians
collaborating nationwide, we are on a mission to give people
control of their health and the freedom to live life.
Please visit mannkindcorp.com to learn more, and
follow us on LinkedIn, Facebook, Twitter or Instagram.
Forward-Looking Statements
Statements in this press release that are not
statements of historical fact are forward-looking statements that
involve risks and uncertainties. These statements include, without
limitation, statements regarding MannKind’s revenue growth and
pipeline advancement, including the planned adaptive Phase 2/3
study. 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, risks associated with manufacturing
and supply, risks associated with product commercialization, risks
associated with developing product candidates, risks associated
with MannKind’s ability to manage its existing cash resources or
raise additional cash resources, and other risks detailed in
MannKind’s filings with the Securities and Exchange Commission
(“SEC”), including under the “Risk Factors” heading of its
Quarterly Report on Form 10-Q for the quarter ended September 30,
2022, as filed with the SEC on November 8, 2022, and under the
“Risk Factors” heading of its Annual Report on Form 10-K for the
year ended December 31, 2022, being filed with the SEC on February
23, 2023. 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.
Tyvaso DPI is a trademark of United Therapeutics
Corporation.
AFREZZA, MANNKIND, and V-GO are registered
trademarks of MannKind Corporation.
MannKind Contact:Rose Alinaya, Investor
Relations(818) 661-5000
MANNKIND CORPORATION AND
SUBSIDIARY CONSOLIDATED BALANCE
SHEETS
|
December 31, |
|
|
2022 |
|
|
2021 |
|
|
(In thousands except share and per share
data) |
|
ASSETS |
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
69,767 |
|
|
$ |
124,184 |
|
Short-term investments |
|
101,079 |
|
|
|
79,932 |
|
Accounts receivable, net |
|
16,801 |
|
|
|
4,739 |
|
Inventory |
|
21,772 |
|
|
|
7,152 |
|
Prepaid expenses and other current assets |
|
25,477 |
|
|
|
3,482 |
|
Total current assets |
|
234,896 |
|
|
|
219,489 |
|
Property and equipment, net |
|
45,126 |
|
|
|
36,612 |
|
Goodwill |
|
2,428 |
|
|
|
— |
|
Other intangible asset |
|
1,153 |
|
|
|
— |
|
Long-term investments |
|
1,961 |
|
|
|
56,619 |
|
Other assets |
|
9,718 |
|
|
|
8,441 |
|
Total assets |
$ |
295,282 |
|
|
$ |
321,161 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' DEFICIT |
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
Accounts payable |
$ |
11,052 |
|
|
$ |
6,956 |
|
Accrued expenses and other current liabilities |
|
35,553 |
|
|
|
27,419 |
|
Financing liability — current |
|
9,565 |
|
|
|
6,977 |
|
Deferred revenue — current |
|
1,733 |
|
|
|
827 |
|
Recognized loss on purchase commitments — current |
|
9,393 |
|
|
|
6,170 |
|
Total current liabilities |
|
67,296 |
|
|
|
48,349 |
|
Promissory notes |
|
8,829 |
|
|
|
18,425 |
|
Accrued interest — promissory
notes |
|
55 |
|
|
|
404 |
|
Financing liability — long
term |
|
94,512 |
|
|
|
93,525 |
|
Midcap credit facility |
|
39,264 |
|
|
|
38,833 |
|
Senior convertible notes |
|
225,397 |
|
|
|
223,944 |
|
Recognized loss on purchase
commitments — long term |
|
62,916 |
|
|
|
76,659 |
|
Operating lease liability |
|
5,343 |
|
|
|
1,040 |
|
Deferred revenue — long term |
|
37,684 |
|
|
|
19,543 |
|
Milestone liabilities |
|
4,524 |
|
|
|
4,838 |
|
Deposits from customer |
|
— |
|
|
|
4,950 |
|
Total liabilities |
|
545,820 |
|
|
|
530,510 |
|
Stockholders' deficit: |
|
|
|
|
|
|
|
Undesignated preferred stock,
$0.01 par value — 10,000,000shares authorized; no shares issued or
outstanding atDecember 31, 2022 and 2021 |
|
— |
|
|
|
— |
|
Common stock, $0.01 par value —
400,000,000 shares authorized,263,793,305 and 251,477,562 shares
issued and outstandingat December 31, 2022 and 2021,
respectively |
|
2,638 |
|
|
|
2,515 |
|
Additional paid-in capital |
|
2,964,293 |
|
|
|
2,918,205 |
|
Accumulated deficit |
|
(3,217,469 |
) |
|
|
(3,130,069 |
) |
Total stockholders' deficit |
|
(250,538 |
) |
|
|
(209,349 |
) |
Total liabilities and stockholders' deficit |
$ |
295,282 |
|
|
$ |
321,161 |
|
MANNKIND CORPORATION AND
SUBSIDIARY CONSOLIDATED STATEMENTS OF
OPERATIONS
|
Three Months EndedDecember
31, |
|
|
Twelve Months EndedDecember
31, |
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|
(In thousands except per share data) |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue — commercial product sales |
$ |
17,440 |
|
|
$ |
11,340 |
|
|
$ |
56,247 |
|
|
$ |
39,168 |
|
Revenue — collaborations and services |
|
9,544 |
|
|
|
1,175 |
|
|
|
27,924 |
|
|
|
36,274 |
|
Royalties — collaborations |
|
9,075 |
|
|
|
— |
|
|
|
15,599 |
|
|
|
— |
|
Total revenues |
|
36,059 |
|
|
|
12,515 |
|
|
|
99,770 |
|
|
|
75,442 |
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold |
|
4,081 |
|
|
|
4,295 |
|
|
|
16,003 |
|
|
|
16,833 |
|
Cost of revenue — collaborations and services |
|
12,043 |
|
|
|
7,139 |
|
|
|
41,494 |
|
|
|
22,024 |
|
Research and development |
|
7,156 |
|
|
|
3,886 |
|
|
|
19,721 |
|
|
|
12,312 |
|
Selling |
|
11,616 |
|
|
|
13,536 |
|
|
|
53,753 |
|
|
|
45,528 |
|
General and administrative |
|
10,479 |
|
|
|
9,191 |
|
|
|
37,720 |
|
|
|
31,889 |
|
Asset impairment |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
106 |
|
Loss (gain) on foreign currency translation |
|
3,474 |
|
|
|
(1,564 |
) |
|
|
(4,811 |
) |
|
|
(6,567 |
) |
Loss on purchase commitments |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
339 |
|
Total expenses |
|
48,849 |
|
|
|
36,483 |
|
|
|
163,880 |
|
|
|
122,464 |
|
Loss from operations |
|
(12,790 |
) |
|
|
(23,968 |
) |
|
|
(64,110 |
) |
|
|
(47,022 |
) |
Other (expense) income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income, net |
|
957 |
|
|
|
48 |
|
|
|
2,513 |
|
|
|
112 |
|
Interest expense on financing liability |
|
(2,478 |
) |
|
|
(1,373 |
) |
|
|
(9,758 |
) |
|
|
(1,373 |
) |
Interest expense on notes |
|
(2,809 |
) |
|
|
(2,769 |
) |
|
|
(15,011 |
) |
|
|
(15,204 |
) |
Loss on available-for-sale securities |
|
(932 |
) |
|
|
— |
|
|
|
(932 |
) |
|
|
— |
|
Loss on extinguishment of debt |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(17,200 |
) |
Other income (expense) |
|
105 |
|
|
|
1 |
|
|
|
(102 |
) |
|
|
(239 |
) |
Total other expense |
|
(5,157 |
) |
|
|
(4,093 |
) |
|
|
(23,290 |
) |
|
|
(33,904 |
) |
Loss before income tax
expense |
|
(17,947 |
) |
|
|
(28,061 |
) |
|
|
(87,400 |
) |
|
|
(80,926 |
) |
Provision for income taxes |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Net loss |
$ |
(17,947 |
) |
|
$ |
(28,061 |
) |
|
$ |
(87,400 |
) |
|
$ |
(80,926 |
) |
Net loss per share — basic and
diluted |
$ |
(0.07 |
) |
|
$ |
(0.11 |
) |
|
$ |
(0.34 |
) |
|
$ |
(0.32 |
) |
Shares used to compute net loss
per share— basic and diluted |
|
263,378 |
|
|
|
251,083 |
|
|
|
257,092 |
|
|
|
249,244 |
|
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