MannKind Corporation Reports Second Quarter Financial Results

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Company to Review Clinical Trials, Manufacturing Process, and

Financial Outlook on Today's 9:00 a.m. EDT Conference Call

VALENCIA, Calif., July 28 /PRNewswire-FirstCall/ -- MannKind Corporation (Nasdaq: MNKD) today reported financial results for the second quarter and six months ended June 30, 2005.

For the second quarter of 2005, total operating expenses were $27.6 million, compared with $18.4 million for the second quarter of 2004. Research and development (R&D) expenses increased by $9.3 million to $23.6 million, primarily due to increased costs associated with the Company's expanded clinical trials and related support for its Technosphere® Insulin program. General and administrative (G&A) expenses decreased by $0.1 million to $4.0 million.

For the first six months of 2005, operating expenses totaled $50.2 million, compared with $35.0 million in the first half of 2004. R&D expenses were $42.3 million, up $15.2 million, again primarily related to the expansion of clinical trials of MannKind's Technosphere® Insulin program. G&A expenses increased by $0.1 million to $7.9 million for the first half of 2005.

The net loss applicable to common stockholders for the first half of 2005 was $49.3 million, or $1.50 per share based on 32.8 million shares outstanding, compared with a net loss applicable to common stockholders of $35.3 million, or $1.77 per share based on 20.0 million shares outstanding, for the first half of 2004.

Cash, cash equivalents and marketable securities were $42.4 million at June 30, 2005 and $90.5 million at December 31, 2004.

"During this past quarter, we achieved a significant milestone in the development of our inhaled Technosphere® Insulin System as a unique and innovative treatment for diabetes. We initiated a pivotal Phase 3 safety study in the United States, involving patients with type 1 and type 2 diabetes. This is our second Phase 3 trial, the first being an efficacy study that we have been conducting in Europe since late 2004, in which patient enrollment is ahead of schedule. We expect these studies to add to the growing evidence of the safety and efficacy of inhaled Technosphere® Insulin, such as our completed phase 2b study in which HbA1c levels decreased significantly within a three-month period compared to control with no increase in the risk of hypoglycemia," said Alfred Mann, Chairman and Chief Executive Officer of MannKind Corporation.

Conference Call

MannKind management will host a conference call to discuss these results today at 9:00 a.m. Eastern Daylight Time. To participate in the call please dial (888) 935-0258 or listen to the call on the Internet at www.mannkindcorp.com. A telephone replay will be accessible for approximately 48 hours following completion of the call by dialing (866) 476-5481 and entering conference number 8860480. The web site replay will be available for fourteen days.

Presenting from the Company will be:

  • Chairman of the Board and Chief Executive Officer, Alfred E. Mann
  • President and Chief Operating Officer, Hakan Edstrom
  • Corporate Vice President and Chief Financial Officer, Dick Anderson
  • Sr. Vice President Clinical, Scientific & Medical Affairs, Anders Boss

About MannKind Corporation

MannKind Corporation (Nasdaq: MNKD) focuses on the discovery, development and commercialization of therapeutic products for diseases such as diabetes and cancer. The Company is currently in phase 3 clinical trials of its lead product, the Technosphere® Insulin System, in the U.S. and Europe to study its potential for the treatment of diabetes. For more information on MannKind Corporation and its technology, visit www.mannkindcorp.com.

Forward-Looking Statements

This press release contains forward-looking statements, including statements related to MannKind's clinical trials and product candidates 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, the risk that future safety and efficacy studies may not confirm our past clinical results, intellectual property matters, difficulties or delays in seeking or obtaining regulatory approval, manufacturing the Company's lead product candidate, competition from other pharmaceutical or biotechnology companies, the Company's ability to enter into any collaborations or strategic partnerships or obtain additional financing to support the Company's operations, the Company's ability to meet milestones and other risks detailed in MannKind's filings with the SEC, including the Annual Report on Form 10-K for the year ended December 31, 2004 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 news release.




                             MannKind Corporation
                    Consolidated Statements of Operations
                                 (Unaudited)

     (In thousands, except
      per share amounts)         Three Months Ended      Six Months Ended
                                June 30,    June 30,    June 30,    June 30,
                                   2005        2004        2005        2004

     Revenue                        $--         $--         $--         $--

     Operating expenses:
     Research and development    23,596      14,311      42,292      27,110
     General and administrative   3,971       4,071       7,922       7,840
     Total operating expenses    27,567      18,382      50,214      34,950
     Loss from operations       (27,567)    (18,382)    (50,214)    (34,950)
     Other income                     7          14          21          75
     Interest income                405         123         877         221
     Loss before provision
      for income taxes          (27,155)    (18,245)    (49,316)    (34,654)
     Income taxes                                            (1)
     Net loss                   (27,155)    (18,245)    (49,317)    (34,654)
     Deemed dividend related
      to beneficial conversion
      feature of convertible
      preferred stock                --          --          --        (612)
     Accretion on redeemable
      preferred stock                --           4          --         (60)
     Net loss applicable to
      common stockholders      $(27,155)   $(18,241)   $(49,317)   $(35,326)
     Net loss per share
      applicable to common
      stockholders -- basic
      and diluted                $(0.83)     $(0.91)     $(1.50)     $(1.77)
     Shares used to compute
      basic and diluted net
      loss per share applicable
      to common stockholders     32,777      19,975      32,777      19,975



                             MannKind Corporation
                           Condensed Balance Sheet
                                 (Unaudited)
                                (in thousands)

                                                     June 30,   December 31,
     Assets                                             2005           2004

     Current assets:
       Cash and cash equivalents                     $19,552        $78,987
       Marketable securities                          22,884         11,546
       Restricted cash                                    18            583
       State research and development tax
        credit exchange receivable -- current            537          1,500
       Prepaid expenses and other current assets       2,457          3,265

     Total current assets                             45,448         95,881

     Property and equipment -- net                    68,353         66,511

     State research and development tax
      credit exchange receivable -- net of
      current portion                                    813          1,030
     Other assets                                        203             61

     Total                                          $114,817       $163,483

     Liabilities and Stockholders' Equity

     Current liabilities                             $16,188        $13,044

     Other liabilities                                    43             76

     Stockholders' equity                             98,586        150,363

     Total                                          $114,817       $163,483

SOURCE MannKind Corporation
07/28/2005
CONTACT: Dick Anderson, Chief Financial Officer of MannKind Corporation, +1-661-775-5302, danderson@mannkindcorp.com; or Investor Relations, Julie Huang of Financial Dynamics, +1-212-850-5628, jhuang@fd-us.com, for MannKind Corporation
/Web site: http://www.mannkindcorp.com

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