UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 9, 2016
MannKind Corporation
(Exact name of registrant as specified in its charter)
| Delaware | 000-50865 | 13-3607736 | ||
| (State or other jurisdiction of incorporation or organization) |
(Commission File Number) |
(IRS Employer Identification No.) |
| 25134 Rye Canyon Loop, Suite 300 Valencia, California |
91355 | |||
| (Address of principal executive offices) | (Zip Code) | |||
Registrant’s telephone number, including area code: (661) 775-5300
N/A
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. of Form 8-K):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 Results of Operations and Financial Condition
On November 9, 2016, MannKind Corporation (“MannKind”) issued a press release announcing its financial results for the quarter ended September 30, 2016. A copy of this press release is attached hereto as Exhibit 99.1. As previously announced, on November 9, 2016, MannKind also hosted a conference call to discuss these financial results. An excerpt of the conference call transcript is attached hereto as Exhibit 99.2.
The information in this Item 2.02 and the attached exhibits are being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act.
Item 9.01 Financial Statements and Exhibits.
| (d) | Exhibits |
| Exhibit No. |
Description | |
| 99.1 | Press release of MannKind Corporation dated November 9, 2016, reporting MannKind’s financial results for the quarter ended September 30, 2016 | |
| 99.2 | Excerpt of transcript of conference call held on November 9, 2016 | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: November 14, 2016 | MANNKIND CORPORATION | |||||
| By: | /s/ David Thomson | |||||
| David Thomson, Ph.D., J.D. | ||||||
| Corporate Vice President, General Counsel and Secretary | ||||||
EXHIBIT INDEX
| Exhibit No. |
Description | |
| 99.1 | Press release of MannKind Corporation dated November 9, 2016, reporting MannKind’s financial results for the quarter ended September 30, 2016 | |
| 99.2 | Excerpt of transcript of conference call held on November 9, 2016 | |
Exhibit 99.1
MannKind Corporation Reports 2016 Third Quarter Financial Results
- Conference Call to Begin Today at 5:00 PM ET -
VALENCIA, Calif., Nov. 09, 2016 (GLOBE NEWSWIRE) — MannKind Corporation (NASDAQ:MNKD) (TASE:MNKD) today reported financial results for the three and nine months ended September 30, 2016.
For the three and nine months ended September 30, 2016, we recognized $161.8 million in net revenue from our collaboration with Sanofi. This amount relates to activities from prior periods previously deferred. In the third quarter of 2016, due to the termination of the Sanofi license agreement, the remaining costs under the Sanofi License Agreement were fixed or determinable and future activity under the Sanofi Supply Agreement was reasonably estimable, which allowed for the recognition of revenue from collaboration this quarter. There are no future obligations to Sanofi. The amount of net revenue—collaboration recognized in the three and nine months ended September 30, 2016 consists of the upfront payment of $150.0 million and milestone payments of $50.0 million, net of $64.8 million of net loss share with Sanofi, as well as $17.4 million in sales of Afrezza and $9.2 million in sales of raw insulin, both to Sanofi.
We began distributing MannKind branded Afrezza products to wholesalers during the week of July 25, 2016. For the three and nine months ended September 30, 2016, net revenue from commercial product sales represents $0.6 million of net sales of Afrezza dispensed to patients. In addition, as of September 30, 2016, we recorded $2.0 million in deferred revenue, of which $1.6 million is net of estimated gross-to-net adjustments and represents product shipped to our third-party logistics provider and wholesale distributors, but not dispensed to patients as of that date. Estimated gross-to-net adjustments for the third quarter of 2016 were approximately 32%, which includes estimates of wholesaler distribution and logistics fees, prompt pay discounts, estimated government rebates and patient discount programs. Deferred revenue also includes $0.4 million that we have received for the sale of surplus raw materials to a third party, where delivery was made after September 30, 2016.
For the three and nine months ended September 30, 2016, we recognized $22.7 million of product costs — collaboration which was previously deferred and consisted of $13.5 million in Afrezza manufacturing costs for product sold to Sanofi and $9.2 million for a change in estimate in our recognized loss on purchase commitments related to the sale of raw insulin to Sanofi.
Cost of goods sold was approximately $4.3 million for the third quarter of 2016, a decrease of 47% from the third quarter of 2015. This decrease is primarily due to a decrease in under-absorbed labor and overhead due to decreased depreciation as a result of the fixed asset impairment write-down in 2015 and decreased salaries resulting from the reduction in force in 2015 as well as a gain on purchase commitments for other material related to a change in estimate associated with the renegotiation of certain agreements and a reduction in inventory write-offs offset by a foreign currency exchange loss on recognized loss on purchase commitments for insulin purchases. Cost of goods sold was $15.6 million for the nine months ended September 30, 2016, and included under-absorbed labor and overhead costs expensed in the period, and a foreign currency exchange loss on the recognized loss on purchase commitments for insulin offset by a gain on purchase commitments for other materials related to a change in estimate associated with the renegotiation of certain agreements. Cost of goods sold for the three and nine months ended September 30, 2016 also includes $0.1 million attributable to commercial product sales, which consists of the manufacturing costs for Afrezza dispensed to patients. This $0.1 million attributable to commercial product sales only includes conversion cost as we wrote off the cost of our raw materials held in inventory at the end of 2015.
During the three and nine months ended September 30, 2015, the Company did not recognize any net revenue or product costs — collaboration or net revenue — commercial product sales.
Research and development expenses were $3.9 million for the third quarter of 2016, a decrease of 38% from the third quarter of 2015, primarily due to expense associated with the 2015 reduction in force exceeding the expense associated with the 2016 reduction in force along with curtailing certain research and development projects and facility spending offset by an increase in development work done for third parties. Research and development expenses were $13.4 million for the nine months ended September 30, 2016, a decrease of 43% compared to the same period in 2015, primarily due to expense associated with the 2015 reduction in force exceeding the expense associated with the 2016 reduction in force along with a decrease in research and development projects and facility spending offset by an increase in development work done for third parties and tax credits.
Selling, general and administrative expenses were approximately $13.1 million for the third quarter of 2016, an increase of 14% from the third quarter of 2015, mainly due to increased costs for the support of sales and marketing of Afrezza offset by a decrease in general and administrative expenses due to the reduction in force in 2015. Selling, general and administrative expenses for the nine months ended September 30, 2016 were $31.6 million, a decrease of 3% from the same period in 2015, primarily due to the 2015
reduction in force, lower communication, facility and insurance costs and lower stock-based compensation expense in general and administrative expenses offset by increased costs for the support of sales and marketing of Afrezza in selling expenses.
Included in the three months ended September 30, 2016 is a $13.2 million benefit from a decrease in the fair value of the warrant liability from June 30, 2016. Included in the nine months ended September 30, 2016 is a $7.9 million benefit from a decrease in the fair value of the warrant liability from May 12, 2016, the date the warrants were issued.
The net income for the three and nine months ended September 30, 2016 was $126.5 million and $71.7 million, or basic net income of $0.26 and $0.16 per share, based on 478.1 and 454.2 million weighted average shares outstanding, compared with a net loss of $31.9 million and $91.4 million for the same periods in 2015, or basic net loss of $0.08 and $0.23 per share, based on 405.2 and 401.7 million weighted average shares outstanding. The number of common shares outstanding at September 30, 2016 was 478.4 million.
Cash and cash equivalents at September 30, 2016 were $35.5 million, compared to $59.1 million at December 31, 2015. 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 at-the-market 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 “Q3 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: 41477573.
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 7573#. 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.
MannKind Corporation and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
(in thousands, except par value and share data)
| Three Months Ended September 30, |
Nine Months Ended September 30, | |||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Revenue: |
||||||||||||||||
| Net revenue—collaboration |
$ | 161,781 | $ | — | $ | 161,781 | $ | — | ||||||||
| Net revenue—commercial product sales |
573 | — | 573 | — | ||||||||||||
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| |||||
| Total net revenue |
162,354 | — | 162,354 | — | ||||||||||||
| Expense: |
||||||||||||||||
| Product costs—collaboration |
22,742 | — | 22,742 | — | ||||||||||||
| Cost of goods sold |
4,331 | 8,115 | 15,567 | 15,688 | ||||||||||||
| Research and development |
3,917 | 6,341 | 13,357 | 23,455 | ||||||||||||
| Selling, general and administrative |
13,135 | 11,547 | 31,595 | 32,649 | ||||||||||||
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| |||||
| Total expenses |
44,125 | 26,003 | 83,261 | 71,792 | ||||||||||||
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| Income (loss) from operations |
118,229 | (26,003 | ) | 79,093 | (71,792 | ) | ||||||||||
| Change in fair value of warrant liability |
13,185 | — | 7,879 | — | ||||||||||||
| Interest income |
28 | 2 | 70 | 8 | ||||||||||||
| Interest expense on notes |
(4,166 | ) | (4,145 | ) | (12,567 | ) | (17,899 | ) | ||||||||
| Interest expense on note payable to our principal stockholder |
(729 | ) | (729 | ) | (2,172 | ) | (2,164 | ) | ||||||||
| Loss on extinguishment of debt |
— | (1,049 | ) | — | (1,049 | ) | ||||||||||
| Other (expense) income |
(27 | ) | 67 | (613 | ) | 1,470 | ||||||||||
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| Net income (loss) |
$ | 126,520 | $ | (31,857 | ) | 71,690 | (91,426 | ) | ||||||||
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| Net income (loss) per share—basic |
$ | 0.26 | $ | (0.08 | ) | $ | 0.16 | $ | (0.23 | ) | ||||||
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| Net income (loss) per share—diluted |
$ | 0.26 | $ | (0.08 | ) | $ | 0.16 | $ | (0.23 | ) | ||||||
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| Shares used to compute basic net income (loss) per share |
478,137 | 405,199 | 454,188 | 401,734 | ||||||||||||
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| Shares used to compute diluted net income (loss) per share |
482,744 | 405,199 | 454,366 | 401,734 | ||||||||||||
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MannKind Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited)
(in thousands, except par value and share data)
| September 30, 2016 |
December 31, 2015 | |||||||
| ASSETS |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 35,530 | $ | 59,074 | ||||
| Accounts receivable |
3,137 | 23 | ||||||
| Inventory |
5,124 | — | ||||||
| Deferred costs from collaboration |
— | 13,539 | ||||||
| Deferred costs from commercial product sales |
279 | — | ||||||
| Prepaid expenses and other current assets |
4,534 | 4,018 | ||||||
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| |||
| Total current assets |
48,604 | 76,654 | ||||||
| Property and equipment — net |
46,825 | 48,749 | ||||||
| Other assets |
702 | 1,009 | ||||||
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| Total assets |
$ | 96,131 | $ | 126,412 | ||||
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| LIABILITIES AND STOCKHOLDERS’ DEFICIT |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ | 5,093 | $ | 15,599 | ||||
| Accrued expenses and other current liabilities |
14,164 | 7,929 | ||||||
| Facility financing obligation |
70,888 | 74,582 | ||||||
| Deferred sales from collaboration |
— | 17,503 | ||||||
| Deferred payments from collaboration |
462 | 140,231 | ||||||
| Deferred revenue |
2,014 | — | ||||||
| Recognized loss on purchase commitments—current |
8,340 | 12,475 | ||||||
| Warrant liability |
4,871 | — | ||||||
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| Total current liabilities |
105,832 | 268,319 | ||||||
| Note payable to our principal stockholder |
49,521 | 49,521 | ||||||
| Sanofi loan facility and loss share obligation |
71,210 | 62,371 | ||||||
| Senior convertible notes—long term |
27,629 | 27,613 | ||||||
| Recognized loss on purchase commitments—long term |
63,229 | 53,692 | ||||||
| Other liabilities |
17,397 | 15,225 | ||||||
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| Total liabilities |
334,818 | 476,741 | ||||||
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| Stockholders’ deficit |
(238,687 | ) | (350,329 | ) | ||||
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| Total liabilities and stockholders’ deficit |
$ | 96,131 | $ | 126,412 | ||||
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Company Contact:
Rose Alinaya
SVP, Finance
661-775-5300
ralinaya@mannkindcorp.com
Exhibit 99.2
NOVEMBER 09, 2016 / 5:00PM EST, MNKD - Q3 2016 MannKind Corp Earnings Call
CORPORATE PARTICIPANTS
Rose Alinaya MannKind Corporation - PAO
Matthew Pfeffer MannKind Corporation - CEO & CFO
Michael Castagna MannKind Corporation - CCO
Ray Urbanski MannKind Corporation - CMO
CONFERENCE CALL PARTICIPANTS
Stephen Weil Oppenheimer & Co. - Analyst
PRESENTATION
Operator
Ladies and gentlemen, thank you for standing by. Welcome to the MannKind Corporation 2016 third-quarter conference call.
As a reminder, this call is being recorded November 9, 2016. Joining us today from MannKind are Chief Executive Officer Matthew Pfeffer, Chief Commercial Officer Michael Castagna, Chief Medical Officer Raymond Urbanski and Principal Accounting Officer Rose Alinaya.
I will now turn the call over to Ms. Rose Alinaya, Principal Accounting Officer of MannKind Corporation. Please go ahead.
Rose Alinaya - MannKind Corporation - PAO
Thank you. Good afternoon and thank you for joining us to discuss MannKind’s third-quarter 2016 performance. Our third-quarter results were released this afternoon and are available on the SEC’s EDGAR system and on our corporate website.
Before we proceed I’d like to remind everyone that comments made on this call will include forward-looking statements within the meaning of federal security laws which are based upon current expectations that involve risk, changes in circumstances, assumptions and uncertainties. It is possible that the actual results could differ from these stated expectations.
For factors which could cause actual results to differ from expectations, please refer to the reports filed by the Company with the Securities and Exchange Commission under the Securities and Exchange Act of 1934. The information we provide on this call is provided only as of today November 9, 2016 and we undertake no obligation to update or revise publicly any forward-looking statements to reflect events or circumstances after the date of this call except as required by law.
I will now turn the call over to our CEO Matt Pfeffer. Matt?
Matthew Pfeffer - MannKind Corporation - CEO & CFO
Thank you, Rose, and good afternoon to our investors, analysts, members of the diabetes community and Afrezza users. Thank you for joining us on today’s call.
I’m excited about the accomplishments of our leadership team we have been able to execute on over the last several months. The intense focus to transform the Company has resulted in our ability to extend our cash runway out to Q3 of 2017 without causing shareholder dilution while simultaneously creating financial flexibility for us to take some calculated bets on Afrezza.
By now you will have seen our earnings release, one of the highlights of which is a $126.5 million net income. This release included many new elements including our first quarter of commercial sales, an income statement recognition of items related to the Sanofi collaboration that had previously been deferred.
What is not included are two new agreements being announced with this call which I would like to discuss now. First, I’m very pleased to announce that we have reached an agreement with Sanofi that contains several key elements. First, Sanofi will forgive the entire amount of our loan from them of $71.6 million and terminate the associated note and security agreement. MannKind is also released from its obligation to pay $0.5 million in previously uncharged costs related to the collaboration.
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Next, Sanofi will purchase $10.2 million worth of insulin from MannKind in early December. Note that this insulin is considered surplus to our current needs and is carried on our books at zero value.
Finally, Sanofi will pay an additional $30.6 million in cash to MannKind in early January canceling and settling our insulin put agreement with them without our having to deliver any further insulin. In addition, it should be noted that the termination of the promissory note and security agreement allows MannKind to pursue the sale of its Valencia, California facility and the adjoining property which is now on the market for roughly $25 million without our being required to use the proceeds to reduce the balance of the loan. So this is another source of non-dilutive liquidity for MannKind.
Collectively, as a result of this agreement, we have improved our financial position by over $130 million. This will go a long way towards meeting our near-term financial needs. We have also taken steps to reduce our cash requirements to amplify this effect.
Which brings me to the second agreement we are announcing today. As many of you may know one of our largest financial commitments results from a long-term insulin supply agreement with Amphastar. I’m pleased to announce that collaboratively with Amphastar we have successfully updated our commitments under the contract and reduced projected spend by over $65 million for the period 2016 through 2018.
This will allow us to invest our resources to drive the success of Afrezza. We have also deferred our next purchase of insulin to the fourth quarter of next year.
Finally, as described in our 10-Q filing we enacted a reorganization in September of this year, reducing our headcount by approximately 20%. This step was taken as part of our continuing efforts to reduce overhead and offset increased spend in the commercialization of Afrezza. As a result of these steps, we now have the financial resources to embark on important initiatives that will be discussed in more detail by Mike and by Ray.
Now that we have launched Afrezza and established our infrastructure we expect to increase our investment to grow Afrezza sales faster. Based on everything we have planned, we expect the current financial resources to last into Q3 of 2017 and we will provide further updates, including revenue guidance for 2017, during our Q4 earnings call.
With that I’d like to turn the call back over to Rose to run through our financial results reported earlier today. After Rose, Mike will say a few words about our commercial activities, then Ray will discuss plan development activities as well as our label change for Afrezza. After that I will have a few additional comments before opening up for questions. Rose?
Rose Alinaya - MannKind Corporation - PAO
Thank you, Matt. Turning now to the financials, the third quarter of 2016 was a significant reporting period for MannKind. Our financials reflect the recognition of several previously deferred amounts related to the Afrezza collaboration as well as the first quarter of MannKind-branded Afrezza product sales.
In the third quarter of 2016, we recognized total net revenue of $162.4 million of which $161.8 million resulted from our ability to satisfy the accounting requirements for revenue recognition this quarter following the termination of the Sanofi license agreement. The total amount recognized relates to activities from prior periods which were previously deferred, including the upfront payment of $150 million and milestone payments of $50 million, net of $64.8 million of net loss share amounts related to Sanofi, as well as $17.4 million in sales of Afrezza and $9.2 million in sales of raw insulin, both to Sanofi. Additionally, we recognized $22.7 million of previously deferred costs from the collaboration which consisted of $13.5 million in Afrezza manufacturing costs for products sold to Sanofi in 2015 and $9.2 million for a change in estimate in our recognized loss on purchase commitments as a result of the sale of raw insulin to Sanofi.
We began distributing MannKind-branded Afrezza product to major wholesalers during the week of July 25. This being our first quarter of commercial product sales, we do not have enough sales history to reliably estimate the expected product returns at the time of shipment into the distribution channel. As a result, we are currently only recognizing Afrezza revenue at the point prescription units are dispensed to patients based on reported prescription data.
This model necessarily recognizes a relatively small percentage of sales into the wholesale and retail channel and will change as a longer history of product return patterns is established. In the third quarter of 2016 we recognized net revenue related to sales of Afrezza to patients of $600,000.
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As of September 30, 2016 we had recorded $2 million in deferred revenue of which $1.6 million net of estimated gross to net adjustments represents products shipped to our third-party logistics provider and wholesale distributors but not identified as having been dispensed to patients as of that date. Estimated gross to net adjustments for the third quarter of 2016 were approximately 32%, which includes estimates of wholesaler distribution and logistics fees, prompt pay discounts, estimated government rebates and patient discount programs. Deferred revenue also includes $0.4 million we received in advance for the sale of surplus raw materials to a third-party where delivery was not completed as of September 30, 2016.
Cost of goods sold in the third quarter of 2016 includes a $0.1 million of manufacturing costs of Afrezza product sold to patients and corresponds to this quarter’s recognized commercial product sales. The remaining portion of cost of goods sold of approximately $4.2 million for the third quarter of 2016 relates to unabsorbed overhead and other costs, a decrease of 48% from the third quarter of 2015. This decrease is primarily due to reduced depreciation as a result of the fixed asset impairment write-down in 2015 and decreased salaries resulting from the reduction in force in 2015, partially offset by a decrease in production costs in 2016.
Cost of goods sold or product manufacturing costs were $15.6 million for the nine months ended September 30, 2016 and included under-absorbed labor and overhead costs and a foreign currency exchange loss on purchase commitments for insulin, offset by a change in estimates that resulted in a gain on purchase commitments for other materials. Corresponding product manufacturing costs for the same period in 2015 were primarily under-absorbed labor and overhead costs.
Research and development expenses were $3.9 million for the third quarter of 2016, a decrease of 38% from the third quarter of 2015, primarily due to a reduction in force in 2015 along with curtailing certain research and development projects. Research and development expenses were $13.4 million for the nine months ended September 30, 2016, a decrease of 43% compared to the same period in 2015, primarily due to the 2015 RIF along with a reduction in research and development projects and facility spending offset by lower reimbursable third-party development expense and tax credits.
Selling, general and administrative expenses were approximately $13.1 million for the third quarter of 2016, an increase of 14% from the third quarter of last year mainly due to increased costs for the support of sales and marketing of Afrezza. SG&A for the nine months ended September 30, 2016 were $31.6 million, a decrease of 3% from the same period last year, again primarily due to the 2015 RIF, lower telecommunication costs in facility and insurance costs and a lowered non-cash stock-based compensation expense offset by increased sales and marketing costs for Afrezza.
Included in the results for the three and nine months ended September 30, 2016 is the non-cash effect of a $13.2 million and a $7.9 million fair value adjustment of the warrant liability related to the registered public offering completed in May 2016. Net income applicable to common stockholders for the third quarter of 2016 increased to $126.5 million or basic net income of $0.26 per share compared with a net loss applicable to common stockholders of $31.9 million or basic net loss of $0.08 per share for the same quarter in 2015.
Cash and cash equivalents at September 30, 2016 were $35.5 million compared to $59.1 million at December 31, 2015. Currently $30.1 million remains available for borrowing under the amended loan arrangement with The Mann Group along with $50 million still available under the ATM facility.
. . .
We also announced today the completion of a revision to our largest supply agreement, pushing out our next purchase commitments to the fourth quarter of 2017 and reducing our contractual cash burn under that arrangement by $65 million for the period of 2016 through 2018 compared to the prior contract. As a result of these items and steps taken previously, we have extended our financial resources comfortably into the third quarter of 2017.
. . .
Thank you, ladies and gentlemen. This concludes today’s conference. Thank you for your participation and you may now disconnect.
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