MannKind Corporation Reports Third Quarter Financial Results
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."
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.
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