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 Third Quarter Financial Results

10/24/05
MannKind Corporation Reports Third Quarter Financial ResultsConference Call to Begin Today at 9:00 a.m. ET

VALENCIA, Calif., Oct. 24 /PRNewswire-FirstCall/ -- MannKind Corporation (Nasdaq: MNKD) today reported financial results for the third quarter and nine months ended September 30, 2005.

For the third quarter of 2005, total operating expenses were $32.9 million, compared with $20.5 million for the third quarter of 2004. Research and development (R&D) expenses increased by $12.7 million to $24.5 million for the third quarter of 2005 compared to the third quarter of 2004, primarily due to increased costs associated with the Company's expanded clinical development program for Technosphere® Insulin, which is currently in Phase 3 clinical trials in the U.S. and Europe. General and administrative (G&A) expenses decreased by $0.3 million to $8.4 million for the third quarter of 2005 compared to the third quarter of 2004.

The net loss applicable to common stockholders for the third quarter of 2005 was $31.7 million, or $0.73 per share based on 43.5 million shares outstanding, compared with a net loss applicable to common stockholders of $39.4 million, or $1.40 per share based on 28.1 million shares outstanding, for the third quarter of 2004.

For the first nine months of 2005, operating expenses totaled $83.1 million, compared with $55.5 million in the first nine months of 2004. R&D expenses were $66.8 million for the first nine months of 2005, up $27.9 million from the first nine months of 2004, primarily related to the expansion of clinical trials of the Technosphere Insulin program. G&A expenses decreased by $0.2 million to $16.3 million for the first nine months of 2005 as compared to the first nine months of 2004.

The net loss applicable to common stockholders for the first nine months of 2005 was $81.0 million, or $2.23 per share based on 36.4 million shares outstanding, compared with a net loss applicable to common stockholders of $74.7 million, or $3.29 per share based on 22.7 million shares outstanding, for the first nine months of 2004.

"We successfully completed one of the largest equity placements in our sector this year. As well, our Technosphere Insulin (TI) System continues to gain recognition for being unlike any other inhaled insulin therapy in registration or under development," said Alfred Mann, Chairman and Chief Executive Officer of MannKind Corporation. "With a strengthened balance sheet and operating team, management continues to advance and execute its clinical development program for TI. We are currently completing database lock on the results of our TI European Phase 2b trial (005) and intend to announce the results in the next few months."

Financing Transaction

On August 5, 2005, MannKind completed a $175 million private placement of newly issued shares of common stock and the concurrent issuance of warrants for the purchase of additional shares of common stock. Net proceeds will be used primarily to fund the development of the Technosphere Insulin System.

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) 282-8353 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 (888) 568-0414 and entering conference number 2891046. The web site replay will be available for fourteen days.

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, Dick Anderson

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, risks related to intellectual property matters, difficulties or delays in seeking or obtaining regulatory approval, risks related to manufacturing the Company's lead product candidate, risks related to competition from other pharmaceutical or biotechnology companies, risks related to the Company's ability to enter into any collaborations or strategic partnerships or obtain additional financing to support the Company's operations, risks related to 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            Nine Months Ended
                    September 30,  September 30,  September 30,  September 30,
                       2005           2004           2005           2004

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

     Operating
      expenses:
     Research and
      development       24,466       11,790         66,758       38,901
     General and
      administrative     8,396        8,713         16,318       16,552
     Total operating
      expenses          32,862       20,503         83,076       55,453
     Loss from
      operations       (32,862)     (20,503)       (83,076)     (55,453)
     Other income
      (expense)            (29)          37             (8)         112
     Interest
      income             1,161          278          2,038          499
     Loss before
      provision for
      income taxes     (31,730)     (20,188)       (81,046)     (54,842)
     Income taxes           --           --             (1)          --
     Net loss          (31,730)     (20,188)       (81,047)     (54,842)
     Deemed dividend
      related to
      beneficial
      conversion
      feature of
      convertible
      preferred
      stock                 --      (19,210)            --      (19,822)
     Accretion on
      redeemable
      preferred
      stock                 --           --             --          (60)

     Net loss
      applicable
      to common
      stockholders    $(31,730)    $(39,398)      $(81,047)    $(74,724)

     Net loss per
      share
      applicable
      to common
      stockholders
       - basic
      and diluted       $(0.73)      $(1.40)       $( 2.23)      $(3.29)

     Shares used
      to compute
      basic and
      diluted net
      loss per share
      applicable to
      common
      stockholders      43,460       28,051         36,373       22,687



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

    Assets                            September 30, 2005   December 31, 2004
    Current assets:
      Cash and cash equivalents             $69,238            $78,987
      Marketable securities                 113,166             11,546
      Restricted cash                            18                583
      State research and development
       tax credit exchange
       receivable - current                   1,233              1,500
      Prepaid expenses and other
       current assets                         3,451              3,265

     Total current assets                   187,106             95,881

     Property and equipment - net            71,387             66,511

     State research and development
      tax credit exchange receivable
      - net of current portion                1,249              1,030
     Other assets                               282                 61

     Total                                 $260,024           $163,483

     Liabilities and Stockholders' Equity

     Current liabilities                    $18,960            $13,044

     Other liabilities                           36                 76
     Stockholders' equity                   241,028            150,363

     Total                                 $260,024           $163,483

SOURCE MannKind Corporation
10/24/2005
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, Julie.Huang@fd.com, for MannKind Corporation
Web site: http://www.mannkindcorp.com