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 2020 Second Quarter Financial Results

08/05/20
PDF Version
Conference Call to Begin Today at 5:00 PM ET
  • 2Q 2020 Afrezza Net Revenue of $7.0 million; +15% vs. 2Q 2019
  • 1H 2020 Afrezza Net Revenue of $15.0 million; +35% vs. 1H 2019
  • Cash and cash equivalents of $63.2 million at June 30, 2020
  • Non-GAAP cash used in operating activities decreased by 37% vs. 1H 2019
  • Chief Commercial Officer, Alejandro Galindo, joined MannKind

WESTLAKE VILLAGE, Calif., Aug. 05, 2020 (GLOBE NEWSWIRE) -- MannKind Corporation (NASDAQ:MNKD) today reported financial results for the quarter and six months ended June 30, 2020.

“I am proud of how our employees pulled together during these uncertain times and innovated as a team to minimize the impact of the COVID-19 pandemic on our business during the second quarter,” said Michael Castagna, Chief Executive Officer.  “A small 3% reduction in Afrezza TRx compared to the first quarter, when there was a bolus of prescriptions due to patient stockpiling, reflects the successful execution of our commercial plan in a new virtual environment.  We faced many challenges during this quarter, but whether it was production personnel ensuring Afrezza supply through the end of the year, the research team producing clinical supplies for our collaboration partner, United Therapeutics, the field force executing new sales tactics or home office staff adapting to a totally virtual environment, our team exceeded all expectations.”

Second Quarter 2020 Results

Total revenues were $15.1 million for the second quarter of 2020, reflecting Afrezza net revenue of $7.0 million and collaboration and services revenue of $8.1 million. Afrezza net revenue increased 15% compared to $6.1 million in the second quarter of 2019, primarily driven by price, a favorable mix of cartridges and higher product demand. Collaboration and services revenue for the second quarter of 2020 decreased $0.8 million compared to the second quarter of 2019, primarily due to the substantial completion of the research agreement with United Therapeutics in the second quarter of 2019. 

Afrezza gross profit for the second quarter of 2020 was $3.3 million vs. $1.7 million in the same period of 2019, a 90% increase that was driven primarily by higher Afrezza revenue combined with a reduction in cost of goods sold. Cost of goods sold decreased by $0.7 million, primarily due to $0.6 million in reduced spending. Gross margin in the second quarter of 2020 increased to 47% from 29% for the same quarter in 2019.

Selling, general and administrative expenses for the second quarter of 2020 were $13.7 million compared to $16.6 million for the second quarter of 2019. This 18% decrease was primarily due to a $1.9 million reduction in promotional and marketing activities, a $0.5 million decrease in personnel related costs as well as a $0.2 million decrease in professional costs.

Interest expense for the second quarter of 2020 was $2.4 million compared to $1.7 million for the second quarter of 2019. This $0.7 million increase was primarily attributable to a higher balance of outstanding principal.

The net loss for the second quarter of 2020 was $10.3 million, or $0.05 per share, compared to a $12.4 million net loss in the second quarter of 2019, or $0.07 per share. The lower net loss is mainly attributable to a decrease in operating expenses of $2.9 million. The reduction in the net loss per share was impacted by both lower operating expenses and a greater number of outstanding shares.

Six Months Ended June 30, 2020

Total revenues were $31.3 million for the six months ended June 30, 2020, reflecting Afrezza net revenue of $15.0 million and collaboration and services revenue of $16.4 million. Afrezza net revenue increased 35% compared to $11.1 million for the six months ended June 30, 2019, primarily driven by higher product demand, a more favorable mix of Afrezza cartridges, price and a reduction in wholesaler channel inventory in the six months ended June 30, 2019. Collaboration and services revenue for the six months ended June 30, 2020 decreased $4.9 million compared to the six months ended June 30, 2019, primarily due to a $5.5 million decrease in revenue recognized from the UT Research Agreement, which was substantially completed in the second quarter of 2019, partially offset by a $0.6 million increase in revenue from the UT License Agreement.

Afrezza gross profit for the six months ended June 30, 2020 was $7.1 million vs. $2.8 million in the same period of 2019, a 156% increase that was driven primarily by higher Afrezza revenue. Cost of goods sold decreased by $0.5 million, primarily attributable to $1.2 million of increased manufacturing activities, which resulted in a greater amount of costs capitalized to inventory and $0.6 million in reduced spending, partially offset by $0.9 million in costs associated with higher commercial product sales and $0.5 million of inventory write-offs. Gross margin for the six months ended June 30, 2020 increased to 48% from 25% for the same period in 2019, primarily due to higher Afrezza revenue.

Selling, general and administrative expenses for the six months ended June 30, 2020 were $28.0 million compared to $42.3 million for the same period in 2019. This 34% decrease was primarily due to $9.3 million spent on direct-to-consumer television advertising in 2019 (which was not repeated in 2020), a $3.1 million decrease in promotional and marketing activities, a $1.2 million decrease in personnel and employee related costs and a $0.5 million decrease in consulting costs.

Interest expense for the six months ended June 30, 2020 was $4.7 million compared to $3.3 million for the same period in 2019. This $1.4 million increase was primarily due to the borrowings under the MidCap Credit Facility in August 2019.

The net loss for the six months ended June 30, 2020 was $19.6 million, or $0.09 per share, compared to a $27.3 million net loss for the same period in 2019, or $0.15 per share. The lower net loss is mainly attributable to a decrease in operating expenses of $10.5 million. The reduction in the net loss per share was impacted by both lower operating expenses and a greater number of outstanding shares.

Cash, cash equivalents and restricted cash at June 30, 2020 was $63.5 million compared to $50.2 million at December 31, 2019, which also included short-term investments of $20.0 million. The increase was primarily due to the receipt of a $12.5 million United Therapeutics milestone payment, $12.2 million of net proceeds received from the at-the-market offering, $11.6 million received from warrant exercises and the origination of a Paycheck Protection Program loan for $4.9 million, offset by non-GAAP net cash used in operating activities of $27.4 million.

Chief Commercial Officer

As previously announced, Alejandro Galindo, M.B.A, M.S., joined the Company on August 4, 2020 as Chief Commercial Officer. Mr. Galindo has an accomplished track-record of over 25 years in the healthcare, energy, and consumer industries. He spent the past six years at Medtronic as Vice President and President of the Advanced Insulin Management Business Unit, where he led a fast-paced, double-digit growth global business within their diabetes division. Prior to Medtronic, Mr. Galindo spent nine years at General Electric (GE) Healthcare in a variety of leadership roles, leading emerging markets, strategic corporate development and global supply chain operations. Prior to joining GE’s Healthcare division, he spent eleven years in various global leadership positions for the company’s energy and appliance sectors, overseeing advanced manufacturing engineering and product development. Mr. Galindo received a B.Sc. in Industrial & Systems Engineering from Monterrey Institute of Technology, Mexico and M.B.A. and M.S. degrees from Indiana University.

Non-GAAP Measures

Certain financial information contained in this press release is presented on both a reported basis (GAAP) and a non-GAAP basis.  Reported results were prepared in accordance with GAAP whereas non-GAAP measures exclude items described in the reconciliation tables below.  Non-GAAP financial information is intended to portray the results of our baseline performance, supplement or enhance management, analysts and investors overall understanding of our underlying financial performance and facilitate comparisons among current and past periods.  The non-GAAP financial measures are in addition to, not a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP.

    Six Months Ended June 30,  
    2020     2019     $ Change     % Change  
Net cash used in operating activities   $ (14,903 )   $ (31,325 )   $ (16,422 )       (52 %)
Exclude United Therapeutic milestone payment received     (12,500 )     (12,500 )     —         0 %
Non-GAAP cash used in operating activities   $ (27,403 )   $ (43,825 )   $ (16,422 )       (37 %)

Conference Call

MannKind will host a conference call and presentation webcast to discuss these results today at 5:00 p.m. Eastern Time. Those interested in listening to the conference call live via the Internet may do so by visiting the Company's website at http://www.mannkindcorp.com under News & Events. 

A telephone replay of the call will be accessible for approximately 14 days following completion of the call by dialing (844) 512-2921 or (412) 317-6671 and use the participant passcode: 7888638#. A replay will also be available on MannKind's website for 14 days.

About MannKind Corporation

MannKind Corporation (NASDAQ: MNKD) focuses on the development and commercialization of inhaled therapeutic products for patients with diseases such as diabetes and orphan lung diseases. MannKind is currently commercializing Afrezza® (insulin human) Inhalation Powder, the Company’s first FDA-approved product and the only inhaled ultra rapid-acting mealtime insulin in the United States, where it is available by prescription from pharmacies nationwide.  MannKind is headquartered in Westlake Village, California, and has a state-of-the art manufacturing facility in Danbury, Connecticut. The Company also employs field sales and medical representatives across the U.S. For further information, visit www.mannkindcorp.com.

Forward-Looking Statements

This press release contains forward-looking statements 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 various risks and uncertainties detailed in MannKind's filings with the SEC, including risks related to the COVID-19 pandemic. For a discussion of these and other factors, please refer to MannKind’s annual report on Form 10-K for the year ended December 31, 2019 as well as MannKind’s other filings with the SEC. 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.

Company Contact:

818-661-5000
ir@mannkindcorp.com


MANNKIND CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except per share data)		  
   
    June 30, 2020     December 31, 2019  
ASSETS                
Current assets:                
Cash and cash equivalents   $ 63,222     $ 29,906  
Restricted cash     316       316  
Short-term investments     —       19,978  
Accounts receivable, net     3,366       3,513  
Inventory     3,823       4,155  
Prepaid expenses and other current assets     1,856       2,889  
Total current assets     72,583       60,757  
Property and equipment, net     26,187       26,778  
Other assets     4,011       6,190  
Total assets   $ 102,781     $ 93,725  
                 
LIABILITIES AND STOCKHOLDERS' DEFICIT                
Current liabilities:                
Accounts payable   $ 5,821     $ 4,789  
Accrued expenses and other current liabilities     14,706       15,904  
Short-term notes payable     5,387       5,028  
Deferred revenue — current     32,184       32,503  
Recognized loss on purchase commitments — current     9,841       7,394  
Total current liabilities     67,939       65,618  
Promissory notes     70,024       70,020  
Accrued interest — promissory notes     4,538       2,002  
Long-term Midcap credit facility     39,304       38,851  
Senior convertible notes     5,000       5,000  
Paycheck Protection Program loan — long term     2,030       —  
Recognized loss on purchase commitments — long term     81,027       84,639  
Operating lease liability     1,843       2,514  
Deferred revenue — long term     4,860       8,344  
Milestone rights liability     5,926       7,263  
Total liabilities     282,491       284,251  
                 
Stockholders' deficit:                
Undesignated preferred stock, $0.01 par value — 10,000,000 shares
  authorized; no shares issued or outstanding as of June 30, 2020 and
  December 31, 2019		     —       —  
Common stock, $0.01 par value - 400,000,000 and 280,000,000 shares
  authorized, 228,927,505 and 211,787,573 shares issued and outstanding
  at June 30, 2020 and December 31, 2019, respectively		     2,289       2,118  
Additional paid-in capital     2,829,478       2,799,278  
Accumulated other comprehensive loss     —       (19 )
Accumulated deficit     (3,011,477 )     (2,991,903 )
Total stockholders' deficit     (179,710 )     (190,526 )
Total liabilities and stockholders' deficit   $ 102,781     $ 93,725  
                 


MANNKIND CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
 
  Three Months Ended June 30,     Six Months Ended June 30,  
  2020     2019     2020     2019  
Revenues:                              
Net revenue — commercial product sales $ 6,985     $ 6,065     $ 14,985     $ 11,141  
Revenue — collaborations and services   8,129       8,937       16,364       21,309  
Total revenues   15,114       15,002       31,349       32,450  
Expenses:                              
Cost of goods sold   3,677       4,327       7,841       8,347  
Cost of revenue — collaborations and services   1,983       2,139       5,345       3,676  
Research and development   1,464       1,632       3,219       3,299  
Selling, general and administrative   13,670       16,609       28,020       42,282  
Asset impairment   368       —       1,889       —  
Loss (gain) on foreign currency translation   1,867       1,247       71       (688 )
Total expenses   23,029       25,954       46,385       56,916  
Loss from operations   (7,915 )     (10,952 )     (15,036 )     (24,466 )
Other (expense) income:                              
Interest income   14       255       147       573  
Interest expense on notes   (1,084 )     (564 )     (2,155 )     (1,157 )
Interest expense on promissory notes   (1,281 )     (1,109 )     (2,540 )     (2,189 )
Other income (expense)   14       (17 )     10       (31 )
Total other expense   (2,337 )     (1,435 )     (4,538 )     (2,804 )
Loss before provision for income taxes   (10,252 )     (12,387 )     (19,574 )     (27,270 )
Provision for income taxes   —       —       —       —  
Net loss $ (10,252 )   $ (12,387 )   $ (19,574 )   $ (27,270 )
Net loss per share - basic and diluted $ (0.05 )   $ (0.07 )   $ (0.09 )   $ (0.15 )
Shares used to compute basic and diluted net loss per
  share		   213,880       188,054       212,943       187,744  
                               


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Source: MannKind