MannKind Corporation Reports Third Quarter Financial Results

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- Conference Call Today at 9:00 a.m. EST -

VALENCIA, Calif., Nov. 5 /PRNewswire-FirstCall/ -- MannKind Corporation (Nasdaq: MNKD) today reported financial results for the third quarter ended September 30, 2008.

For the third quarter of 2008, total operating expenses were $69.1 million, compared to $75.6 million for the third quarter of 2007, primarily attributable to the $9.2 million reduction in research and development (R&D) expenses which totaled $55.6 million for this quarter compared to $64.8 million for the same quarter in 2007. The decrease in R&D expenses for the three months ended September 30, 2008 as compared to the same period in the prior year was primarily due to decreased costs associated with the clinical development of AFRESA (formerly identified as the Technosphere Insulin System) and the related manufacturing costs associated with clinical trial materials, partially offset by increased stock-based compensation expense and increased facilities-related expenses. General and administrative (G&A) expenses increased by $2.7 million to $13.4 million for the third quarter of 2008 compared to the third quarter of 2007. G&A expenses for the three months ended September 30, 2008 increased as compared to the same period in the prior year primarily due to increased employee-related and consulting expenses and increased stock-based compensation expense.

For the first nine months of 2008, operating expenses totaled $224.0 million, compared to $228.3 million in the first nine months of 2007. R&D expenses for the first nine months were $181.7 million, compared to $190.1 million in 2007. The decrease in R&D expenses for the nine months ended September 30, 2008, as compared to the same period in the prior year was primarily due to decreased costs associated with the clinical development of AFRESA and the related manufacturing costs associated with clinical trial materials, partially offset by increased stock-based compensation expense and increased facilities-related expenses. G&A expenses increased by $4.2 million to $42.4 million for the first nine months of 2008 as compared to the same period in 2007. G&A expenses for the nine months ended September 30, 2008 increased as compared to the same period in the prior year primarily due to increased employee-related and consulting expenses and increased stock-based compensation expense, offset by decreased professional fees.

We anticipate that our R&D expenses associated with AFRESA will continue to decline as we close out our pivotal clinical studies and complete preparations for the filing of our New Drug Application ("NDA") with the U.S. Food and Drug Administration ("FDA"). We expect G&A expenses, other than non- cash stock-based compensation expense, to remain constant in the future.

The net loss for the third quarter of 2008 was $68.5 million, or $0.67 per share, based on 101.6 million weighted average shares outstanding. This compares to a net loss of $73.0 million, or $0.99 per share, based on 73.5 million weighted average shares outstanding for the third quarter of 2007. The net loss for the first nine months of 2008 was $219.7 million, or $2.17 per share based on 101.5 million shares outstanding, compared with a net loss of $218.2 million, or $2.97 per share based on 73.4 million shares outstanding, for the first nine months of 2007.

Cash and cash equivalents and marketable securities were $95.2 million at September 30, 2008, $180.5 million at June 30, 2008, and $368.3 million at December 31, 2007.

"MannKind has made great progress this quarter," commented Alfred Mann, Chairman and Chief Executive Officer. "Our pivotal trials are completed and we are well along in preparation of the AFRESA NDA submission to the FDA. We have completed and dedicated our new manufacturing facility and equipped it with the first stage of the modular production systems that will be used to supply commercial product. The emerging data support our belief that AFRESA will be a very important prandial insulin for most people with type 1 and type 2 diabetes. We will soon be ready to reinitiate discussions with potential partners."

Conference Call

MannKind management will host a conference call to discuss these results today at 9:00 a.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 fourteen days. A telephone replay will be accessible for approximately 14 days following completion of the call by dialing (866) 411-1707 or (203) 369- 0654 and entering conference number 4423761.

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
* Corporate Vice President and Chief Scientific Officer Peter Richardson



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, which has completed Phase 3 clinical trials, and MKC253, which is currently in phase 1 clinical trials. Both of these investigational products are being evaluated for their safety and efficacy in the treatment of diabetes. MannKind maintains a website at http://www.mannkindcorp.com to which MannKind regularly posts copies of its press release as well as additional information about MannKind. Interested persons can subscribe on the MannKind website to email alerts that are sent automatically when MannKind issues press releases, files its reports with the SEC or posts certain other information to the website.

Forward-Looking Statements

This press release contains forward-looking statements, including statements related to MannKind's expected R&D and G&A expenses, clinical trials, product candidates, regulatory submissions, manufacturing facility and partnership opportunities 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 related to the progress, timing and results of clinical trials, difficulties or delays in seeking or obtaining regulatory approval, the manufacture of AFRESA, competition from other pharmaceutical or biotechnology companies, MannKind's ability to enter into any collaborations or strategic partnerships, intellectual property matters, 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, 2007 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
                        (A Development Stage Company)
                      CONDENSED STATEMENTS OF OPERATIONS
                                 (Unaudited)
                     (In thousands except per share data)


                                                             Cumulative period
                                                             from February 14,
                                                              1991 (date of
                      Three months ended   Nine months ended    inception) to
                         September 30,        September 30,     September 30,
                         2008      2007      2008        2007         2008


    Revenue                $-        $-        $20        $10        $2,988
    Operating
     expenses:
    Research and
     development       55,645    64,825    181,665    190,093       928,705
    General and
    administrative     13,435    10,744     42,365     38,207       232,864
    In-process
     research and
     development costs      -         -          -          -        19,726
    Goodwill
     impairment             -         -          -          -       151,428
    Total operating
     expenses          69,080    75,569    224,030    228,300     1,332,723
    Loss from
     operations       (69,080)  (75,569)  (224,010)  (228,290)   (1,329,735)
    Other income
     (expense)             (7)       62         (7)       158        (1,888)
    Interest expense
     on note
     payable to
     principal
     stockholder            -         -          -          -        (1,511)
    Interest expense
     on senior
     convertible
     notes               (124)     (778)      (585)    (2,824)       (4,215)
    Interest income       715     3,238      4,858     12,779        36,590
    Loss before
     provision for
     income taxes     (68,496)  (73,047)  (219,744)  (218,177)   (1,300,759)
    Income taxes            -         -          -          -           (24)
    Net loss          (68,496)  (73,047)  (219,744)  (218,177)   (1,300,783)
    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    $(68,496) $(73,047) $(219,744) $(218,177)  $(1,323,995)
    Net loss per
     share
     applicable to
     common
     stockholders -
     basic and
     diluted           $(0.67)   $(0.99)    $(2.17)    $(2.97)
    Shares used to
     compute
     basic and
     diluted net
     loss per share
     applicable
     to common
     stockholders     101,647    73,520    101,495     73,444



                             MANNKIND CORPORATION
                        (A Development Stage Company)
                           CONDENSED BALANCE SHEETS
                                 (Unaudited)
                       (In thousands except share data)


                                                  September 30,   December 31,
                                                      2008            2007
                         ASSETS
    Current assets:
     Cash and cash equivalents                       $31,582         $368,285
     Marketable securities                            63,651                -
     State research and development credit
      exchange                                             -              831
     Prepaid expenses and other current assets         7,709            9,596
      Total current assets                           102,942          378,712
    Property and equipment - net                     225,515          162,683
    State research and development credit exchange
     receivable - net of current portion               2,625            1,500
    Other assets                                         550              548
      Total                                         $331,632         $543,443
            LIABILITIES AND STOCKHOLDERS' EQUITY
    Current liabilities:
     Accounts payable                                $19,992          $35,463
     Accrued expenses and other current liabilities   36,087           32,095
      Total current liabilities                       56,079           67,558
    Senior convertible notes                         112,128          111,761
    Other liabilities                                      -               24
      Total liabilities                              168,207          179,343
    Commitments and contingencies
    Stockholders' equity:
    Undesignated preferred stock, $0.01 par
     value - 10,000,000 shares authorized; no shares
     issued or outstanding at September 30, 2008 and
     December 31, 2007                                     -                -
    Common stock, $0.01 par value - 150,000,000 shares
     authorized; 101,710,590 and 101,380,823 shares
     issued and outstanding  at September 30, 2008 and
     December 31, 2007, respectively                   1,017            1,014
    Additional paid-in capital                     1,463,191        1,444,125
    Deficit accumulated during the development
     stage                                        (1,300,783)      (1,081,039)
      Total stockholders' equity                     163,425          364,100
      Total                                         $331,632         $543,443

SOURCE MannKind Corporation

CONTACT: Matthew Pfeffer, Chief Financial Officer of MannKind Corporation, +1-661-295-4784, mpfeffer@mannkindcorp.com

Web site: http://www.mannkindcorp.com

MNKD

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Price: 0.87

Change: 0.00 (0.388%)

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