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 Second Quarter Financial Results

08/03/06
PDF Version
MannKind Corporation Reports Second Quarter Financial Results

Company to Host Conference Call at 8:00 a.m. EDT

VALENCIA, Calif., Aug. 3 /PRNewswire-FirstCall/ -- MannKind Corporation (Nasdaq: MNKD) today reported financial results for the second quarter and six months ended June 30, 2006.

For the second quarter of 2006, total operating expenses were $55.8 million, compared with $27.6 million for the second quarter of 2005. Research and development (R&D) expenses increased by $21.7 million to $45.3 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 increased by $6.5 million to $10.5 million primarily due to an increase in stock compensation expense and increased consulting and various other general and administrative expenses, such as legal and accounting fees.

For the first six months of 2006, operating expenses totaled $100.9 million, compared with $50.2 million in the first half of 2005. R&D expenses were $81.3 million, up $39.0 million, again primarily related to the expansion of clinical trials of MannKind's Technosphere® Insulin program. G&A expenses increased by $11.7 million to $19.6 million for the first half of 2006 primarily related to increased stock compensation expense, compensation and other employee related costs and increased legal, accounting and consulting fees.

The net loss applicable to common stockholders for the second quarter of 2006 was $54.8 million, or $1.10 per share based on 49.6 million shares outstanding, compared with a net loss applicable to common stockholders of $27.2 million, or $0.83 per share based on 32.8 million shares outstanding, for the second quarter of 2005.

The net loss applicable to common stockholders for the first half of 2006 was $98.3 million, or $1.98 per share based on 49.7 million shares outstanding, compared with a net loss applicable to common stockholders of $49.3 million, or $1.50 per share based on 32.8 million shares outstanding, for the first half of 2005.

Cash, cash equivalents and marketable securities were $50.9 million at June 30, 2006 and $102.6 million at March 31, 2006.

"During the second quarter of this year, MannKind announced additional data on our lead investigational compound, Technosphere® Insulin, and its novel effect on the treatment of diabetes," stated Alfred Mann, Chairman and Chief Executive Officer of MannKind Corporation. "Importantly, Study 101 demonstrated that patients with Type 1 diabetes who switched from meal time rapid acting insulin analog injections to Technosphere® Insulin achieved comparable levels of control in HbA1c and superior effects on post prandial glucose excursions. We plan to present data from our Phase 3 results from Study 014 at the European Association for the Study of Diabetes in September. During the second quarter, we also initiated an additional major Phase 3 trial, Study 103. Overall, we believe this has been another strong period for the continuous advancement of Technosphere® Insulin."

MannKind also announced today that it has entered into a loan agreement with Mr. Mann under which the Company may borrow up to $150 million and has initiated the first borrowing under that agreement in the amount of $50 million.

Conference Call

MannKind management will host a conference call to discuss these results today at 8:00 a.m. Eastern Daylight Time. To participate in the call please dial (888) 566-5775 or listen to the call on the Internet at www.mannkindcorp.com. A telephone replay will be accessible until August 10, 2006 by dialing (800) 884-1524. The web site replay can be accessed at www.mannkindcorp.com and will be available for fourteen days.

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, 2005 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      Three Months Ended         Six Months Ended
      per share amounts)       June 30,    June 30,     June 30,     June 30,
                                 2006        2005          2006         2005

    Revenue                        $--          $--          $100         $--

    Operating expenses:
    Research and development    45,321       23,596        81,271      42,292
    General and administrative  10,456        3,971        19,594       7,922
    Total operating expenses    55,777       27,567       100,865      50,214
    Loss from operations       (55,777)     (27,567)     (100,765)    (50,214)
    Other income                    59            7           109          21
    Interest income                971          405         2,351         877
    Loss before provision for
     income taxes              (54,747)     (27,155)      (98,305)    (49,316)
    Income taxes                    (4)          --            (5)         (1)
    Net loss applicable to
     common stockholders      $(54,751)    $(27,155)     $(98,310)   $(49,317)

    Net loss per share
     applicable to common
     stockholders - basic
     and diluted                $(1.10)      $(0.83)       $(1.98)     $(1.50)

    Shares used to compute
     basic and diluted net
     loss per share applicable
     to common stockholders     49,638       32,777        49,712      32,771



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

                                                      June 30,    December 31,
    Assets                                              2006          2005

    Current assets:
      Cash and cash equivalents                        $27,056       $56,037
      Marketable securities                             23,800        89,597
      State research and development tax credit
       exchange receivable - current                     1,043         1,194
      Prepaid expenses and other current assets          6,952         3,044

    Total current assets                                58,851       149,872

    Property and equipment - net                        83,190        76,183

    State research and development tax credit exchange
     receivable - net of current portion                 2,250         2,031
    Other assets                                           288           285

    Total                                             $144,579      $228,371

    Liabilities and Stockholders' Equity

    Current liabilities                                $27,134       $21,365

    Other liabilities                                       24            29

    Stockholders' equity                               117,421       206,977

    Total                                             $144,579      $228,371

SOURCE MannKind Corporation

CONTACT: Dick Anderson, Chief Financial Officer of MannKind Corporation, +1-661-775-5302, danderson@mannkindcorp.com; or Investors, Julie Huang, or Media, Robert Stanislaro, both of Financial Dynamics, +1-212-850-5600, mnkd@fd-us.com, for MannKind Corporation
Web site: http://www.mannkindcorp.com