UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event Reported): May 7, 2019
MannKind Corporation
(Exact Name of Registrant as Specified in Charter)
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Delaware |
000-50865 |
13-3607736 |
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(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification Number) |
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30930 Russell Ranch Road, Suite 300, Westlake Village, California 91362 |
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(Address of Principal Executive Offices) (Zip Code) |
(818) 661-5000
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company [ ]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
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Common Stock |
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MNKD |
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The Nasdaq Stock Market LLC |
Item 2.02. Results of Operations and Financial Condition.
On May 7, 2019, MannKind Corporation issued a press release, a copy of which is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
Exhibit 99.1. Press release dated May 7, 2019
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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MannKind Corporation |
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Date: May 7, 2019 |
By: |
/s/ David Thomson, Ph.D., J.D. |
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David Thomson, Ph.D., J.D. |
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Corporate Vice President, General Counsel and Secretary |
EXHIBIT 99.1
MannKind Corporation Reports 2019 First Quarter Financial Results
Conference Call to Begin Today at 9:00 AM ET
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1Q 2019 Total Revenues of $17.4 million |
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1Q 2019 Afrezza Net Revenue was $5.1 million; +49% vs. 1Q 2018 |
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1Q 2019 Collaborations and Services Revenue was $12.4 million |
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1Q 2019 net loss per share $(0.08) vs. $(0.25) in 1Q 2018; +68% improvement |
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Received first $12.5 million milestone payment under United Therapeutics License and Collaboration Agreement |
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Paid $2.5 million to Deerfield on May 6, 2019 for debt maturity |
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New scientific data released at ATTD and ACCE and late-breaking abstract accepted for release at ADA in June |
WESTLAKE VILLAGE, CA, May 7, 2019 (GLOBE NEWSWIRE) — MannKind Corporation (NASDAQ:MNKD) today reported financial results for the quarter ended March 31, 2019.
“In the first quarter of 2019, we executed against the United Therapeutics License and Collaboration agreement, achieving the first of four milestone payments of $12.5 million. We also continued to grow Afrezza net revenue by 49% compared to 1Q 2018 and we released new clinical data at scientific meetings that continue to differentiate Afrezza from other rapid acting insulins,” said Michael Castagna, Chief Executive Officer of MannKind Corporation.
Total revenues were $17.4 million for the first quarter of 2019, reflecting Afrezza net revenue of $5.1 million and collaboration and services revenue of $12.4 million. Afrezza net revenue increased 49% compared to $3.4 million in the first quarter of 2018, primarily driven by higher product demand, a more favorable mix of cartridges and price. Collaboration and services revenue increased $12.4 million, primarily due to the United Therapeutics licensing and research agreements.
Afrezza cost of goods sold was $4.0 million for the first quarters of both 2019 and 2018. Afrezza gross profit for the first quarter of 2019 was $1.1 million, the second consecutive quarter that gross profit was recognized for Afrezza. Afrezza gross profit for the first quarter of 2018 was negative $0.6 million. The increase was primarily driven by higher Afrezza sales.
Research and development expenses for the first quarter of 2019 were $1.7 million compared to $2.6 million for the first quarter of 2018. This 37% decrease was primarily attributable to $0.4 million decreases in both lower clinical trial spending and lower personnel costs.
Selling, general and administrative expenses for the first quarter of 2019 were $25.7 million compared to $20.6 million for the first quarter of 2018. This 25% increase was primarily due to $9.3 million spent on direct-to-consumer television advertising offset by a $1.2 million decrease in personnel costs, a $0.9 million decrease in stock-based compensation expense, and a $0.7 million decrease in professional fees.
Interest expense on notes (facility financing obligation and senior convertible notes) for the first quarter of 2019 was $0.6 million compared to $1.8 million for the first quarter of 2018. This $1.2 million decrease was primarily due to a reduction in debt principal balances.
The net loss for the first quarter of 2019 was $14.9 million, or $0.08 per share compared to a $30.4 million net loss in the first quarter of 2018 or $0.25 per share. The lower net loss is mainly attributable to a $14.0 million increase in total revenues.
Cash, cash equivalents, restricted cash, and short-term investments at March 31, 2019 was $59.8 million compared to $71.7 million at December 31, 2018. The decrease was primarily due to net cash used in operating activities of $11.6 million in the first quarter of 2019, which included the receipt of a $12.5 million milestone payment from United Therapeutics.
MannKind will host a conference call and presentation webcast to discuss these results today at 9:00 a.m. Eastern Time. To participate in the live call by telephone, please dial (800) 289-0438 or (323) 794-2423 and use the participant passcode: 6329706. 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: 6329706#. 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 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 MannKind’s ability to directly commercialize pharmaceutical products. 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 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, without limitation, the ability to generate significant product sales for MannKind, MannKind’s ability to manage its existing cash resources or raise additional cash resources, 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, 2018. 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.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share amounts)
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Three Months Ended March 31, |
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2019 |
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2018 |
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Revenues: |
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Net revenue - commercial product sales |
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$ |
5,076 |
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$ |
3,402 |
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Revenue - collaborations and services |
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12,372 |
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63 |
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Total revenues |
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17,448 |
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3,465 |
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Expenses: |
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Cost of goods sold |
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4,020 |
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4,008 |
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Cost of revenue - collaborations and services |
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1,537 |
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— |
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Research and development |
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1,667 |
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2,644 |
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Selling, general and administrative |
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25,673 |
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20,618 |
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(Gain) Loss on foreign currency translation |
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(1,935 |
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2,984 |
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Total expenses |
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30,962 |
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30,254 |
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Loss from operations |
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(13,514 |
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(26,789 |
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Other (expense) income: |
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Interest income |
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318 |
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106 |
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Interest expense on notes |
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(593 |
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(1,794 |
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Interest expense on note payable to related party |
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(1,080 |
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(1,114 |
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Loss on extinguishment of debt |
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— |
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(825 |
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Other income (expense) |
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(14 |
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31 |
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Total other expense |
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(1,369 |
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(3,596 |
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Loss before provision for income taxes |
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(14,883 |
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(30,385 |
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Provision for income taxes |
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— |
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— |
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Net loss |
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$ |
(14,883 |
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$ |
(30,385 |
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Net loss per share - basic and diluted |
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$ |
(0.08 |
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$ |
(0.25 |
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Shares used to compute basic and diluted net loss per share |
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187,434 |
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120,911 |
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CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands except share data)
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March 31, 2019 |
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December 31, 2018 |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
34,530 |
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$ |
71,157 |
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Restricted cash |
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527 |
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527 |
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Short-term investments |
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24,764 |
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— |
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Accounts receivable, net |
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3,759 |
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4,017 |
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Inventory |
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3,720 |
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3,597 |
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Prepaid expenses and other current assets |
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2,392 |
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2,556 |
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Total current assets |
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69,692 |
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81,854 |
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Property and equipment, net |
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25,750 |
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25,602 |
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Right-of-use and other assets |
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5,519 |
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249 |
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Total assets |
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$ |
100,961 |
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$ |
107,705 |
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LIABILITIES AND STOCKHOLDERS' DEFICIT |
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Current liabilities: |
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Accounts payable |
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$ |
6,978 |
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$ |
5,379 |
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Accrued expenses and other current liabilities |
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18,064 |
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15,022 |
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Facility financing obligation |
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11,385 |
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11,298 |
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Deferred revenue - current |
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32,384 |
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36,885 |
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Recognized loss on purchase commitments - current |
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9,057 |
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6,657 |
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Total current liabilities |
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77,868 |
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75,241 |
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Senior convertible notes |
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19,065 |
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19,099 |
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Note payable to related party |
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72,036 |
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72,089 |
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Accrued interest - note payable to related party |
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7,969 |
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6,835 |
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Recognized loss on purchase commitments - long term |
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85,344 |
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91,642 |
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Deferred revenue - long term |
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15,867 |
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10,680 |
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Milestone rights liability |
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7,201 |
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7,201 |
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Operating lease liabilities |
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3,615 |
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— |
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Total liabilities |
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288,965 |
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282,787 |
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Commitments and contingencies |
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Stockholders' deficit: |
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Common stock, $0.01 par value - 280,000,000 shares authorized, 187,778,236 and 187,029,967 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively |
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1,878 |
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1,870 |
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Additional paid-in capital |
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2,765,020 |
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2,763,067 |
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Accumulated other comprehensive loss |
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(19 |
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(19 |
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Accumulated deficit |
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(2,954,883 |
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(2,940,000 |
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Total stockholders' deficit |
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(188,004 |
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(175,082 |
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Total liabilities and stockholders' deficit |
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$ |
100,961 |
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$ |
107,705 |
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Company Contact:
Rose Alinaya
SVP, Investor Relations and Treasury
818-661-5000
ir@mannkindcorp.com