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 2012 Second Quarter Financial Results

08/07/12
MannKind Corporation Reports 2012 Second Quarter Financial Results

VALENCIA, Calif.--(BUSINESS WIRE)--Aug. 7, 2012-- MannKind Corporation (Nasdaq: MNKD) today reported financial results for the second quarter ended June 30, 2012.

For the second quarter of 2012, total operating expenses were $44.1 million, compared to $39.2 million for the second quarter of 2011, an increase of $4.9 million. Research and development (R&D) expenses were $26.6 million for the second quarter of 2012 compared to $30.3 million for the same quarter in 2011, a decrease of $3.7 million. This 12.2% decrease was primarily due to the settlement of the terminated insulin supply agreement in the second quarter of 2011 of $11.9 million, partially offset by an increase of $7.5 million in clinical trial related activities. General and administrative (G&A) expenses increased by $8.5 million to $17.4 million for the second quarter of 2012 compared to $8.9 million in the second quarter of 2011. This 95.5% increase in G&A expense was primarily due to a $7.7 million litigation settlement accrual recorded in the second quarter of 2012 and increased legal fees and financing transaction costs.

For the first six months of 2012, operating expenses totaled $78.0 million, compared to $77.2 million in the first half of 2011. Total R&D expenses for the six months ended June 30, 2012 decreased $5.8 million or 10.2% compared to the same period in 2011, primarily due to the termination of the insulin supply agreement partially offset by increased clinical trial related activities in the first half of 2012. G&A expenses increased by $6.5 million, or 31.7%, to $27.2 million for the first half of 2012 as compared to $20.7 million in the same period in 2011. The increase was primarily due to the $7.7 million litigation settlement accrual recorded in the second quarter of 2012 and increased legal fees and financing transaction costs, partially offset by the decrease in salary related costs as a result of the February 2011 reduction in force.

The net loss applicable to common stockholders for the second quarter of 2012 was $36.6 million, or $0.23 per share based on 159.9 million weighted average shares outstanding, compared with a net loss applicable to common stockholders of $44.5 million, or $0.37 per share based on 121.7 million weighted average shares outstanding for the second quarter of 2011. The number of common shares outstanding at June 30, 2012 was 199,300,833.

Cash, cash equivalents and marketable securities were $32.0 million at June 30, 2012 and $3.2 million at December 31, 2011.

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 (800) 447-0521 or (847) 413-3238 and use the participant passcode: 32993955. 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 (888) 843-7419 or (630) 652-3042 and use the participant passcode: 3299 3955#.

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 lead product candidate, AFREZZA®, is in late stage clinical investigation for the treatment of adults with type 1 or type 2 diabetes for the control of hyperglycemia.

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 MannKind’s proposed public offering of common stock, that involve risks and uncertainties. Words such as “believes”, “anticipates”, “plans”, “expects”, “intends”, “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 market conditions and the satisfaction of customary closing conditions related to the proposed offering, the progress, timing and results of clinical trials, difficulties or delays in seeking or obtaining regulatory approval, the manufacture of AFREZZA, 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 its Annual Report on Form 10-K for the year ended December 31, 2011 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,

  2012         2011     2012         2011     2012  
Revenue $ —   $ —   $ —   $ 50   $ 3,131  
Operating expenses:
Research and development 26,638 30,296 50,794 56,585 1,416,845
General and administrative 17,416 8,890 27,193 20,652 407,424
In-process research and development costs — — — — 19,726
Goodwill impairment   —     —     —     —     151,428  
Total operating expenses   44,054     39,186     77,987     77,237     1,995,423  
Loss from operations (44,054 ) (39,186 ) (77,987 ) (77,187 ) (1,992,292 )
Other income 13,345 47 14,727 1,397 13,651
Interest expense on note payable to related party (3,028 ) (2,509 ) (6,076 ) (4,985 ) (34,410 )
Interest expense on senior convertible notes (2,844 ) (2,834 ) (5,419 ) (5,247 ) (34,213 )
Interest income   1     2     2     17     36,991  
Loss before provision for income taxes (36,580 ) (44,480 ) (74,753 ) (86,005 ) (2,010,273 )
Income taxes   —     —     —     —     (26 )
Net loss (36,580 ) (44,480 ) (74,753 ) (86,005 ) (2,010,299 )
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 $ (36,580 ) $ (44,480 ) $ (74,753 ) $ (86,005 ) $ (2,033,511 )
Net loss per share applicable to common stockholders — basic and diluted $ (0.23 ) $ (0.37 ) $ (0.49 ) $ (0.71 )
Shares used to compute basic and diluted net loss per share applicable to common stockholders   159,859     121,708     151,506     121,385  
 

MannKind Corporation

(A Development Stage Company)

Condensed Consolidated Balance Sheet

(Unaudited)

(in thousands)

 

 

   

June 30, 2012

   

December 31, 2011

 
Assets
Current assets:
Cash and cash equivalents $ 31,639 $ 2,681
Marketable securities 350 515
Prepaid expenses and other current assets   18,357     2,625  
Total current assets 50,346 5,821
Property and equipment — net 189,159 193,029
State research and development credit exchange receivable — net of current portion 658 473
Other assets   230     230  
Total $ 240,393   $ 199,553  
 

Liabilities and Stockholders’ Deficit

 

Current liabilities

$ 55,441 $ 25,360
Senior convertible notes 211,184 210,642
Note payable to principal stockholder 218,142 277,203
Stockholders’ deficit   (244,374 )   (313,652 )
Total $ 240,393   $ 199,553  
 

Source: MannKind Corporation

Company Contact:
MannKind Corporation
Matthew J. Pfeffer
Chief Financial Officer
661-775-5300
mpfeffer@mannkindcorp.com