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 2019 Second Quarter Financial Results and Recent Business Highlights

08/07/19
PDF Version
Conference Call to Begin Today at 5:00 PM ET
  • 2Q 2019 Total Revenues of $15.0 million; +285% vs. 2Q 2018
      º  2Q 2019 Afrezza Net Revenue was $6.1 million; +62% vs. 2Q 2018
      º  2Q 2019 Collaboration and Services Revenue was $8.9 million
  • Afrezza approved in Brazil
  • Entered into exclusive marketing and distribution agreement with AMSL for Australia
  • Completed debt financing, which replaces previous secured debt facility and provides up to $75 million in non-dilutive capital

WESTLAKE VILLAGE, Calif., Aug. 07, 2019 (GLOBE NEWSWIRE) -- MannKind Corporation (NASDAQ:MNKD) today reported financial results for the quarter and six months ended June 30, 2019.

“We continue to execute our commercial strategy for Afrezza, which resulted in product growth of 62% versus the second quarter of 2018,” said Michael Castagna, Chief Executive Officer of MannKind Corporation.  “Our partner in Brazil, Biomm, received marketing approval for Afrezza and expects to launch in the second half of this year.  Meanwhile, our partnership with United Therapeutics continues to gain strength as we celebrated the completed construction of a new high-potency manufacturing suite in our Danbury facility in July.”

Second Quarter 2019 Results
Total revenues were $15.0 million for the second quarter of 2019, reflecting Afrezza net revenue of $6.1 million and collaboration and services revenue of $8.9 million. Afrezza net revenue increased 62% compared to $3.8 million in the second quarter of 2018, primarily driven by higher product demand, a more favorable mix of Afrezza cartridges and price. Collaboration and services revenue increased $8.9 million compared to the second quarter of 2018, reflecting the licensing and research agreements signed with United Therapeutics in September 2018. 

Afrezza gross profit was $1.7 million for the second quarter of 2019, an increase of $3.1 million, or 230%, compared to a gross loss of $1.3 million for the same period in 2018, primarily due to an increase of $2.3 million in net revenue, a $0.4 million decrease in realized currency loss associated with a foreign exchange contract and a $0.2 million decrease in inventory write-offs, partially offset by increased costs due to higher sales.  

Research and development (R&D) expenses for the second quarter of 2019 were $1.6 million compared to $3.0 million for the second quarter of 2018. This 45% decrease was primarily attributable to a $0.5 million decrease in clinical trial spending and a $0.5 million decrease in personnel costs. 

Selling, general and administrative (SG&A) expenses for the second quarter of 2019 were $16.6 million compared to $21.7 million for the second quarter of 2018.  This decrease of $5.1 million, or 24%, was primarily attributable to a $2.3 million decrease in personnel related costs, a $1.3 million decrease in professional fees and a $1.0 million decrease in marketing spending. 

Interest expense on notes (facility financing obligation and senior convertible notes) for the second quarter of 2019 was $0.6 million compared to $1.7 million for the second quarter of 2018. This $1.1 million decrease was primarily due to a reduction in debt principal balances.

The net loss for the second quarter of 2019 was $12.4 million, or $0.07 per share compared to a $22.7 million net loss in the second quarter of 2018 or $0.16 per share.  The decrease was primarily the result of total revenues increasing from higher Afrezza commercial demand and from our licensing and research agreements with United Therapeutics.

Six Months Ended June 30, 2019  
Total revenues were $32.5 million for the six months ended June 30, 2019, reflecting Afrezza net revenue of $11.1 million and collaboration and services revenue of $21.3 million. Afrezza net revenue increased 56% compared to $7.2 million for the six months ended June 30, 2018, primarily due to higher product demand, a more favorable mix of Afrezza cartridges and price. Collaboration and services revenue increased $21.2 million compared to the six months ended June 30, 2018, reflecting the licensing and research agreements signed with United Therapeutics in September 2018.

Afrezza gross profit was $2.8 million for the six months ended June 30, 2019, an increase of $4.7 million or 243% compared to a gross loss of $1.9 million in the same period in 2018, primarily due to an increase of $4.0 million in net revenue, a $0.8 million decrease in inventory write-offs, partially offset by increased costs due to higher sales.

R&D expenses for the six months ended June 30, 2019 were $3.3 million compared to $5.6 million for the six months ended June 30, 2018. This 41% decrease was primarily attributable to a $1.0 million decrease in personnel related costs and a $0.7 million decrease in clinical trial spending.

SG&A expenses for the six months ended June 30, 2019 and June 30, 2018 were both $42.3 million. The first half of 2019 included a $9.3 million expenditure for a television campaign for Afrezza offset by a $4.5 million decrease in personnel related costs, a $2.0 million decrease in professional fees, a $1.6 million decrease in marketing spending and a $0.4 million decrease in sponsorship expense.   
               
Interest expense on notes (facility financing obligation and senior convertible notes) for the six months ended June 30, 2019 was $1.2 million compared to $3.5 million for the six months ended June 30, 2018. This $2.3 million decrease was primarily due to a reduction in debt principal balances.

The net loss for the six months ended June 30, 2019 was $27.3 million, or $0.15 per share compared to a $53.1 million net loss for the six months ended June 30, 2018 or $0.41 per share. The lower net loss was mainly attributable to a $25.1 million increase in total revenues.

Cash and Cash Equivalents
Cash, cash equivalents, restricted cash, and short-term investments at June 30, 2019 was $38.2 million compared to $71.7 million at December 31, 2018. The decrease was primarily due to net cash used in operating activities of $31.5 million for the six months ended June 30, 2019, including the receipt of a $12.5 million milestone payment from United Therapeutics, and a principal payment to Deerfield of $2.5 million.   

Business Update
On August 6, 2019, MannKind Corporation and MannKind LLC entered into a Credit and Security Agreement with Apollo Investment Corporation, as lender, and MidCap Financial Trust, as lender and agent, which provides a secured term loan facility in an aggregate principal amount of up to $75.0 million and which matures on August 1, 2024 (the “MidCap Credit Facility”). MannKind borrowed the first advance of $40.0 million on August 6, 2019. In connection with the MidCap Credit Facility, MannKind also entered into privately negotiated exchange agreements with each of its existing creditors in order to pay off (in the case of Deerfield as a secured creditor) and restructure (in the case of Bruce & Co. and The Mann Group as unsecured creditors) MannKind’s existing debt obligations. When combined with a July 2019 exchange agreement with Deerfield, these exchanges reduced the principal amount of existing debt by $28.4 million and extended the maturity until November 2024 for $75.1 million (out of $80.3 million) of the remaining debt.

Conference Call

MannKind will host a conference call and presentation webcast to discuss these results today at 5:00 p.m. Eastern Time. To participate in the live call by telephone, please dial (866) 548-4713 or (323) 794-2093 and use the participant passcode: 8241782. 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: 8241782#. 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 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
Investor Relations and Treasury
818-661-5000
ir@mannkindcorp.com


 
MANNKIND CORPORATION AND SUBSIDIARIES 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 
(Unaudited) 
(In thousands, except per share data) 
 
    Three Months Ended June 30,     Six Months Ended June 30,  
    2019     2018     2019     2018  
Revenues:
Net revenue - commercial product sales   $ 6,065     $ 3,753     $ 11,141     $ 7,155  
Revenue - collaborations and services     8,937       87       21,309       150  
Revenue – other     —       53       —       53  
Total revenues     15,002       3,893       32,450       7,358  
Expenses:
Cost of goods sold     4,327       5,095       8,347       9,103  
Cost of revenue - collaborations and services     2,139       —       3,676       —  
Research and development     1,632       2,967       3,299       5,611  
Selling, general and administrative     16,609       21,731       42,282       42,349  
(Gain) loss on foreign currency translation     1,247       (5,363 )     (688 )     (2,379 )
Total expenses     25,954       24,430       56,916       54,684  
Loss from operations     (10,952 )     (20,537 )     (24,466 )     (47,326 )
Other (expense) income:
Interest income     255       55       573       161  
Interest expense on notes     (564 )     (1,709 )     (1,157 )     (3,503 )
Interest expense on note payable to related party     (1,109 )     (1,046 )     (2,189 )     (2,160 )
Gain (loss) on extinguishment of debt     —       772       —       (53 )
Other income (expense)     (17 )     30       (31 )     61  
Total other expense     (1,435 )     (1,898 )     (2,804 )     (5,494 )
Loss before provision for income taxes     (12,387 )     (22,435 )     (27,270 )     (52,820 )
Provision for income taxes     —       (240 )     —       (240 )
Net loss   $ (12,387 )   $ (22,675 )   $ (27,270 )   $ (53,060 )
Net loss per share - basic and diluted   $ (0.07 )   $ (0.16 )   $ (0.15 )   $ (0.41 )
Shares used to compute basic and diluted net loss per share     188,054       140,054       187,744       130,535  
 


MANNKIND CORPORATION AND SUBSIDIARIES 
CONDENSED CONSOLIDATED BALANCE SHEETS 
(Unaudited)
(In thousands, except per share data) 
 
    June 30, 2019     December 31, 2018  
ASSETS 
Current assets:
Cash and cash equivalents   $ 7,968     $ 71,157  
Restricted cash     5,316       527  
Short-term investments     24,909       —  
Accounts receivable, net     4,974       4,017  
Inventory     3,963       3,597  
Prepaid expenses and other current assets     2,704       2,556  
Total current assets     49,834       81,854  
Property and equipment, net     27,146       25,602  
Right-of-use and other assets     4,815       249  
Total assets   $ 81,795     $ 107,705  
 
LIABILITIES AND STOCKHOLDERS' DEFICIT 
Current liabilities:
Accounts payable   $ 7,533     $ 5,379  
Accrued expenses and other current liabilities     16,452       15,022  
Facility financing obligation     8,974       11,298  
Deferred revenue - current     32,370       36,885  
Recognized loss on purchase commitments - current     11,649       6,657  
Total current liabilities     76,978       75,241  
Senior convertible notes     19,031       19,099  
Note payable to related party     71,981       72,089  
Accrued interest - note payable to related party     9,132       6,835  
Recognized loss on purchase commitments - long term     81,978       91,642  
Deferred revenue - long term     8,399       10,680  
Milestone rights liability     7,201       7,201  
Operating lease liabilities     3,094       —  
Total liabilities     277,794       282,787  
Commitments and contingencies
Stockholders' deficit:
Common stock, $0.01 par value - 280,000,000 shares authorized,     1,894       1,870  
  189,447,055 and 187,029,967 shares issued and outstanding at
  June 30, 2019 and December 31, 2018, respectively
Additional paid-in capital     2,769,396       2,763,067  
Accumulated other comprehensive loss     (19 )     (19 )
Accumulated deficit     (2,967,270 )     (2,940,000 )
Total stockholders' deficit     (195,999 )     (175,082 )
Total liabilities and stockholders' deficit   $ 81,795     $ 107,705  
 

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Source: MannKind