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 Restructures Near-Term Debt Obligations

10/23/17
PDF Version

New 5.75% Convertible Senior Subordinated Exchange Notes due 2021 and Common Stock to be Issued in Exchange for Existing Convertible Senior Subordinated Exchange Notes due 2018

Fourth Amendment to Facility Agreement with Deerfield and Amendment and Restatement of Deerfield Notes

WESTLAKE VILLAGE, Calif., Oct. 23, 2017 (GLOBE NEWSWIRE) -- MannKind Corporation (NASDAQ:MNKD) (TASE:MNKD) today announced the restructuring of certain of its outstanding debt obligations. 

  • Exchanged senior convertible notes in the amount of approximately $27.7 million due August 2018 for senior convertible notes in the amount of approximately $23.7 million due October 2021 and 973,236 shares of common stock.
  • Extended the maturity of $10 million of the Deerfield facility from October 31, 2017 to January 15, 2018 and allowed for such principal to be converted into common stock.
  • Allowed for certain additional outstanding principal under the Deerfield facility to be converted into common stock.

MannKind's Chief Executive Officer, Michael Castagna, commented, "These transactions, in combination with the recent registered direct offering, are expected to enable us to execute our near-term business plan."

New 5.75% Convertible Senior Subordinated Exchange Notes due 2021

MannKind entered into an exchange agreement with the holders of its outstanding 5.75% Convertible Senior Subordinated Exchange Notes due 2018 (the "2018 notes"), pursuant to which the Company agreed to issue to such holders in exchange for all of the outstanding 2018 notes (i) $23,670,000 aggregate principal amount of new 5.75% Convertible Senior Subordinated Exchange Notes due 2021 (the "2021 notes") and (ii) an aggregate of 973,236 shares of its common stock, par value $0.01 per share (the "Exchange Shares").

The 2021 notes will be the Company's general, unsecured, senior obligations, except that the 2021 notes will be subordinated in right of payment to the outstanding notes issued pursuant to the Company's Facility Agreement, dated July 1, 2013, as amended (the "Facility Agreement"), with Deerfield Private Design Fund II, L.P. and Deerfield Private Design International II, L.P. (collectively "Deerfield"). The 2021 notes will rank equally in right of payment with the Company's other unsecured senior debt. The 2021 notes will bear interest at the rate of 5.75% per year on the principal amount, payable semiannually in arrears in cash or, at the option of the Company if certain conditions are met, in shares of the Company's common stock (the "Interest Shares"), on February 15 and August 15 of each year, beginning February 15, 2018, with interest accruing from August 15, 2017.  The 2021 notes will mature on October 23, 2021.

The 2021 notes will be convertible, at the option of the holder, at any time on or prior to the close of business on the business day immediately preceding the stated maturity date, into shares of the Company's common stock at a conversion rate of 194.1748 shares per $1,000 principal amount of 2021 notes, which is equal to a conversion price of approximately $5.15 per share. The conversion rate will be subject to adjustment under certain customary circumstances to be described in an indenture governing the 2021 notes (the "Indenture").

The Company may elect at its option to cause all or any portion of the 2021 Notes to be mandatorily converted in whole or in part at any time prior to the close of business on the business day immediately preceding the maturity date, if the last reported sale price of its common stock equals or exceeds 120% of the conversion price then in effect for at least 10 trading days in any 20 trading day period, ending within five business days prior to the date of the mandatory conversion notice.

Fourth Amendment to Facility Agreement with Deerfield

MannKind also entered into an exchange and fourth amendment to the Facility Agreement, pursuant to which $10.0 million in principal previously due on October 31, 2017 under the 9.75% Senior Convertible Notes will be deferred to January 15, 2018 (the "October Payment"), conditioned upon, among other things, MannKind depositing $10.0 million with an escrow agent, which is subject to reduction as the October Payment is satisfied through conversions to equity.

Specifically, the Facility Agreement was amended and restated to provide that Deerfield may convert principal due from time to time into an aggregate of up to 4,000,000 shares of MannKind's common stock. The conversion price will be the greater of (i) the average of the volume weighted average price per share of the common stock for the three trading day period immediately preceding the date of any election by Deerfield to convert principal amounts and (ii) $3.25 per share, subject to adjustment under certain circumstances described in the notes. Any conversions of principal by Deerfield under the Facility Agreement will be applied first to reduce the October Payment, and after the October Payment has been satisfied, to reduce other principal payments due under the notes.

ABOUT MANNKIND CORPORATION
MannKind Corporation (NASDAQ:MNKD) (TASE:MNKD) focuses on the development and commercialization of inhaled therapeutic products for patients with diseases such as diabetes and pulmonary arterial hypertension. MannKind is currently commercializing Afrezza® (insulin human) inhalation powder, the Company's first FDA-approved product and the only inhaled 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, including statements regarding the completion of the debt and exchange transactions and expectations regarding MannKind's ability to execute its near-term business plan.  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 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 risks associated with MannKind's ability to satisfy closing conditions, whether MannKind's cash resources will be sufficient to operate its business and satisfy its debt repayment obligations and the 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, 2016 and subsequent periodic reports on Form 10-Q and current reports on 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.

Company Contact:
Rose Alinaya
SVP, Investor Relations
818-661-5000
ir@mannkindcorp.com