MNKD Investors

Technosphere®

One of the largest organs in your body are the lungs. Picture the size of a full tennis court and that is roughly the surface area of both lungs in a typical adult.

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NTM Lung Disease on the Rise

“I cough every morning upon waking, so I don’t feel rested.” “Imagine not being able to breathe.” “Anxiety ruins everything about you – it’s not a normal life.” “You just exist from day to day and week to week.”

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What exactly is the Technosphere® Platform?

One of the largest organs in your body are the lungs. Picture the size of a full tennis court and that is roughly the surface area of both lungs in a typical adult. Running through those lungs are airways whose total length measures 1,500 miles – that’s the distance between Chicago and Las Vegas, New York to Albuquerque, and Los Angeles to Nashville.

Simply put, the lungs create a wonderful platform for effective drug delivery. MannKind’s Technosphere technology recognizes this and provides the distinct advantage of rapid, deep lung drug delivery. The effect is similar to intravenous delivery (I.V.; within a vein) and has the added benefit of bypassing the liver which can be especially helpful in reducing systemic side effects.

Examining it closer, it helps to look at inhalation, air flow travel, and the exhale. When you breathe in, air is drawn into the lung and flows down curving, narrowing airways that end in the air sacs or alveoli. When air is exhaled, the flow is reversed. Between the end of an inhalation and the start of exhalation, the air in the lung is stationary. To reach the deep lung, inhaled particles must be carried by the air stream and have enough momentum to continue through the stationary air to collide with the lung surface.

Particles that can reach the lung have aerodynamic diameters between 0.5 µm and 5-6 µm (1 µm is 1 micro-meter or about 0.00004 inches). Particles that are larger than 6 µm will leave the air stream and hit the back of your mouth and throat; smaller than 0.5 µm wouldn’t have the ability to reach the lungs and would simply get exhaled.

“The average Technosphere particle is about 2-2.5 µm which is in the middle of the respirable range,” explains Marshall Grant, PhD, MSc, Executive Director, Clinical Pharmacology & Research for MannKind Corporation. “The particle size distribution is a major reason Technosphere powders are highly efficient in delivering drug to the lungs than other dry powder inhalers (DPIs).”

The Technosphere particles in FDA-approved Afrezza® (insulin human) Inhalation Powder and Tyvaso DPI™ (treprostinil) Inhalation Powder are manufactured by different processes and possess different characteristics. But both are made up of small crystals of FDKP (fumaryl diketopiperazine), MannKind’s proprietary molecule. FDKP provides high solubility and fast dissolution at physiologic pH – and more importantly – can crystallize and form particles in the range appropriate for optimum delivery to the lungs.

When Technosphere powder reaches the lung surface, the FDKP and drug dissolve. The FDKP is then rapidly cleared from the lung into systemic circulation. The FDKP is not metabolized, but rather excreted primarily in the urine. Another value of Technosphere powders has been their versatility – they are compatible with a wide range of doses with different types of drugs.

MannKind’s Technosphere powders are delivered into the lung’s airstream via an inhalation device or DPI (dry powder inhaler). The breath-powered inhalers (Dreamboat® being the most common version) provide excellent delivery efficiency and are proven to deliver up to 70% of the dry-powder dose deep into the lungs. Our DPI are designed to be simple, easy to use and discreet. For patients, imagine having a drug in the convenient form of an inhaler that fits in the palm of your hand. This approach allows patients to not only take control of their health but do it while going about their day and enjoying life more humann.

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NTM Lung Disease on the Rise

“I cough every morning upon waking, so I don’t feel rested.” “Imagine not being able to breathe.” “Anxiety ruins everything about you – it’s not a normal life.” “You just exist from day to day and week to week.” These are a sampling of comments about the most bothersome symptoms from living with Nontuberculous Mycobacteria (NTM) shared in a study from NTM Info & Research, Inc. The statements are unfortunately typical and those with NTM often have unpredictable day-to-day health functioning and reduced quality of life.

NTM lung disease is a serious infection that is caused by bacteria that are common in the environment and can cause lung damage. The reality is that we are all exposed to these bacteria in our day-to-day lives – more than 120 species of mycobacteria have been identified. These common bacteria exist in water and soil particles that are in the air, wet places like hot tubs, steamy bathrooms, dishwashers, and even the dewy ground we walk on at the park. But not everyone is at risk of getting NTM lung disease just because they are exposed.

Those predisposed often have underlying conditions such as asthma, COPD, and bronchiectasis, which makes them prone to NTM infection. NTM is not considered to be contagious. Women over the age of 65 make up the majority of those impacted, with a predominance in those of Caucasian and Asian descent.

A rare disease, NTM can often be difficult to diagnose. Many will experience coughing, fatigue, weight loss and shortness of breath – all of which are common with other lung disease symptoms and other conditions like tuberculosis. With NTM, symptoms often worsen, and that is a marker not to be ignored.

It is estimated that some 86,000 individuals are living with NTM lung diseases, and it is on the rise growing 8% each year. Coastal regions including Gulf States have higher rates of infection accounting for 70% of annual NTM cases.

While no cure is available, treatments to manage NTM are available. Treatment for NTM involves antibiotic and multidrug regimens with duration lasting from months to years with tolerability and adverse reactions to treatment which often leads to a lack of adherence to therapy.

There is a valuable need to develop medicines that are well tolerated and effective that lends to consistent patient use and alleviates symptoms of NTM lung disease. MannKind continues to progress MNKD-101 (Clofazimine) for the treatment of NTM.

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Release Details

MannKind Corporation Reports Second Quarter Financial Results

08/03/09
MannKind Corporation Reports Second Quarter Financial Results

VALENCIA, Calif.--(BUSINESS WIRE)--Aug. 3, 2009-- MannKind Corporation (Nasdaq: MNKD) today reported financial results for the second quarter ended June 30, 2009.

For the second quarter of 2009, total operating expenses were $53.4 million, compared to $80.9 million for the second quarter of 2008. Research and development (R&D) expenses were $39.8 million for the second quarter of 2009 compared to $67.6 million for the same quarter in 2008, a decrease of $27.7 million. This 41% decrease was primarily due to reduced costs associated with the clinical development of AFRESA® as the Company completed its pivotal AFRESA trials in 2008, as well as decreases in clinical supplies costs. General and administrative (G&A) expenses increased by $0.2 million or 2% to $13.5 million for the second quarter of 2009 compared to $13.3 million in the second quarter of 2008.

For the first six months of 2009, operating expenses totaled $111.2 million, compared to $154.9 million in the first half of 2008. R&D expenses for the first six months were $82.7 million, compared to $126.0 million in 2008, a decrease of $43.3 million. The 34% decrease in R&D expenses for the first six months was primarily due to decreased costs associated with the clinical development of AFRESA as the Company completed its pivotal AFRESA trials in 2008, as well as decreases in clinical supplies costs. G&A expenses decreased by $0.5 million or 2% to $28.5 million for the first half of 2009 as compared to $29.0 million in the same period in 2008. The decrease in G&A expenses for the first six months was primarily due to the purchase of patents expensed during the first quarter of 2008, offset by increased professional fees related to the acquisition transaction with Pfizer Inc. completed in June 2009.

The net loss for the second quarter of 2009 was $55.6 million, or $0.54 per share, based on 102.3 million weighted average shares outstanding. This compares to a net loss of $79.8 million, or $0.79 per share, based on 101.4 million weighted average shares outstanding for the second quarter of 2008.

The net loss for the first half of 2009 was $115.0 million, or $1.13 per share based on 102.2 million weighted average shares outstanding, compared with a net loss of $151.2 million, or $1.49 per share based on 101.4 million weighted average shares outstanding, for the first half of 2008.

Cash, cash equivalents and marketable securities were $34.0 million at June 30, 2009, $30.2 million at March 31, 2009 and $46.5 million at December 31, 2008. Currently, the Company has $215.0 million of available borrowings under the loan agreement with an entity controlled by the Company’s principal stockholder.

"The highlight of the last quarter was the acceptance by the FDA of our NDA submission for AFRESA," said Alfred Mann, Chairman and Chief Executive Officer. "But even as we reached this important milestone, development activities were already underway for our next-generation delivery system, which we unveiled in June. We have completed two Phase 1 clinical studies using the new device and we plan to begin additional studies before the end of September. We are proud of the work done by our pharmaceutical technology development group and want to get their innovations into the hands of patients as soon as possible."

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) 677-5721 or (210) 839-8507. To listen to the call via the Internet please visit http://www.mannkindcorp.com. The web site replay will be available for 14 days. A telephone replay will be accessible for approximately 14 days following completion of the call by dialing (800) 879-7630 or (203) 369-4000 and entering conference number 7091668.

Presenting from the Company will be:

  • Chairman and Chief Executive Officer Alfred Mann
  • President and Chief Operating Officer Hakan Edstrom
  • Corporate Vice President and Chief Financial Officer Matthew Pfeffer

About MannKind Corporation

MannKind Corporation (Nasdaq: MNKD) focuses on the discovery, development and commercialization of therapeutic products for patients with diseases such as diabetes and cancer. Its pipeline includes AFRESA®, MKC253, MKC1106-PP, and MKC1106-MT. MannKind has submitted an NDA to the FDA requesting approval of AFRESA for the treatment of adults with type 1 or type 2 diabetes for the control of hyperglycemia. Its other programs are currently in Phase 1 clinical trials. 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, including statements related to future clinical trials, 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, risks inherent in the progress, timing and results of clinical trials, difficulties or delays in seeking or obtaining regulatory approval, intellectual property matters 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, 2008 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.

MannKind Corporation

(A Development Stage Company)

 Condensed Consolidated Statements of Operations

(Unaudited)

(In thousands, except per share amounts)

 

 

 

 

Three months ended

June 30,

   

 

 

Six months ended

June 30,

    Cumulative period

from February 14,

1991 (date of

inception) to

June 30,

  2009       2008     2009       2008     2009  
Revenue $ —   $

—

  $

—

  $ 20   $ 2,988  
Operating expenses:
Research and development 39,849 67,574 82,738 126,019 1,080,220
General and administrative 13,537 13,290 28,454 28,930 274,296
In-process research and development costs — — — — 19,726
Goodwill impairment   —     —     —     —     151,428  
Total operating expenses   53,386     80,864     111,192     154,949     1,525,670  
Loss from operations (53,386 ) (80,864 ) (111,192 ) (154,929 ) (1,522,682 )
Other income (expense) 283 (60 ) 353 — (1,589 )
Interest expense on note payable to principal stockholder (1,398 ) — (1,990 ) — (3,514 )
Interest expense on senior convertible notes (1,130 ) (124 ) (2,245 ) (461 ) (8,202 )
Interest income   27     1,222     58     4,143     36,919  
Loss before provision for income taxes (55,604 ) (79,826 ) (115,016 ) (151,247 ) (1,499,068 )
Income taxes   —     —     —     —     (26 )
Net loss (55,604 ) (79,826 ) (115,016 ) (151,247 ) (1,499,094 )
Deemed dividend related to beneficial conversion feature of convertible preferred stock — — — — (22,260 )
Accretion on redeemable preferred stock   —     —     —     —     (952 )
Net loss applicable to common stockholders $ (55,604 ) $ (79,826 ) $ (115,016 ) $ (151,247 ) $ (1,522,306 )
Net loss per share applicable to common stockholders — basic and diluted $ (0.54 ) $ (0.79 ) $ (1.13 ) $ (1.49 )
Shares used to compute basic and diluted net loss per share applicable to common stockholders   102,322     101,427     102,177     101,418  

MannKind Corporation

(A Development Stage Company)

Condensed Consolidated Balance Sheet

(Unaudited)

(in thousands)

 

 

June 30, 2009

   

December 31, 2008

 
Assets
Current assets:
Cash and cash equivalents $ 31,328 $ 27,648
Marketable securities 2,639 18,844
State research and development credit exchange receivable — current — 1,500
Prepaid expenses and other current assets   4,533     5,983
Total current assets 38,500 53,975
Property and equipment — net 226,221 226,436
State research and development credit exchange receivable — net of current portion 1,850 1,500
Other assets   555     548
Total $ 267,126   $ 282,459

Liabilities and Stockholders’ Equity (Deficit)

Current liabilities

$ 38,889 $ 53,472
Senior convertible notes 112,506 112,253
Note payable to principal stockholder 135,000 30,000
Other liabilities — —
Stockholders’ equity (deficit)   (19,269 )   86,734
Total $ 267,126   $ 282,459

Source: MannKind Corporation

MannKind Corporation
Matthew Pfeffer
Chief Financial Officer
661-295-4784
mpfeffer@mannkindcorp.com