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mnkd-10q_20200930.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2020

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission file number: 000-50865

MannKind Corporation

(Exact name of registrant as specified in its charter)

Delaware	13-3607736
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

30930 Russell Ranch Road, Suite 300 Westlake Village, California	91362
(Address of principal executive offices)	(Zip Code)

(818) 661-5000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.01 per share

MNKD

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☒

Non-accelerated filer	☐	Smaller reporting company	☒

		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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of October 26, 2020, there were 232,600,608 shares of the registrant’s common stock, $0.01 par value per share, outstanding.

MANNKIND CORPORATION

Form 10-Q

For the Quarterly Period Ended September 30, 2020

TABLE OF CONTENTS

	Page
PART I: FINANCIAL INFORMATION	2

Item 1. Financial Statements (Unaudited)	2
Condensed Consolidated Balance Sheets: September 30, 2020 and December 31, 2019	2
Condensed Consolidated Statements of Operations: Three and nine months ended September 30, 2020 and 2019	3
Condensed Consolidated Statements of Comprehensive Loss: Three and nine months ended September 30, 2020 and 2019	4
Condensed Consolidated Statements of Stockholders’ Deficit: Three and nine months ended September 30, 2020 and 2019	5
Condensed Consolidated Statements of Cash Flows: Nine months ended September 30, 2020 and 2019	7
Notes to Condensed Consolidated Financial Statements	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	32
Item 3. Quantitative and Qualitative Disclosures About Market Risk	40
Item 4. Controls and Procedures	40

PART II: OTHER INFORMATION	41

Item 1. Legal Proceedings	41
Item 1A. Risk Factors	41
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	68
Item 3. Defaults Upon Senior Securities	68
Item 4. Mine Safety Disclosures	68
Item 5. Other Information	68
Item 6. Exhibits	69

SIGNATURES	71

PART 1: FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

MANNKIND CORPORATION AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except per share data)

	September 30, 2020			December 31, 2019
ASSETS
Current assets:
Cash and cash equivalents	$	52,398		$	29,906
Restricted cash		316			316
Short-term investments		—			19,978
Accounts receivable, net		4,135			3,513
Inventory		4,881			4,155
Prepaid expenses and other current assets		4,616			2,889
Total current assets		66,346			60,757
Property and equipment, net		25,736			26,778
Other assets		3,599			6,190
Total assets	$	95,681		$	93,725

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable	$	5,797		$	4,789
Accrued expenses and other current liabilities		15,814			15,904
Short-term notes payable		45,379			5,028
Deferred revenue — current		28,867			32,503
Recognized loss on purchase commitments — current		10,267			7,394
Total current liabilities		106,124			65,618
Promissory notes		70,025			70,020
Accrued interest — promissory notes		5,854			2,002
Long-term Midcap credit facility		—			38,851
Senior convertible notes		5,000			5,000
Paycheck Protection Program loan — long term		1,421			—
Recognized loss on purchase commitments — long term		84,529			84,639
Operating lease liability		1,523			2,514
Deferred revenue — long term		1,699			8,344
Milestone rights liability		5,926			7,263
Total liabilities		282,101			284,251
Commitments and contingencies (Note 11)
Stockholders' deficit:
Undesignated preferred stock, $0.01 par value — 10,000,000 shares authorized; no shares issued or outstanding as of September 30, 2020 and December 31, 2019		—			—
Common stock, $0.01 par value - 400,000,000 and 280,000,000 shares authorized, 230,922,513 and 211,787,573 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively		2,309			2,118
Additional paid-in capital		2,834,003			2,799,278
Accumulated other comprehensive loss		—			(19	)
Accumulated deficit		(3,022,732	)		(2,991,903	)
Total stockholders' deficit		(186,420	)		(190,526	)
Total liabilities and stockholders' deficit	$	95,681		$	93,725

See notes to condensed consolidated financial statements.

MANNKIND CORPORATION AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share data)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
Revenues:
Net revenue — commercial product sales	$	7,275		$	6,402		$	22,260		$	17,543
Revenue — collaborations and services		8,077			8,193			24,441			29,502
Total revenues		15,352			14,595			46,701			47,045
Expenses:
Cost of goods sold		3,591			7,099			11,432			15,446
Cost of revenue — collaborations and services		1,581			1,836			6,926			5,512
Research and development		1,484			1,580			4,703			4,879
Selling, general and administrative		13,899			16,666			41,919			58,948
Asset impairment		—			—			1,889			—
Loss (gain) on foreign currency translation		3,927			(3,807	)		3,998			(4,495	)
Total expenses		24,482			23,374			70,867			80,290
Loss from operations		(9,130	)		(8,779	)		(24,166	)		(33,245	)
Other (expense) income:
Interest income		18			220			165			794
Interest expense on notes		(1,057	)		(4,126	)		(3,212	)		(5,283	)
Interest expense on promissory notes		(1,318	)		(1,162	)		(3,858	)		(3,351	)
Gain on extinguishment of debt		—			3,529			—			3,529
Other income (expense)		14			(52	)		24			(84	)
Total other expense		(2,343	)		(1,591	)		(6,881	)		(4,395	)
Loss before provision for income taxes		(11,473	)		(10,370	)		(31,047	)		(37,640	)
Benefit for income taxes		218			—			218			—
Net loss	$	(11,255	)	$	(10,370	)	$	(30,829	)	$	(37,640	)
Net loss per share - basic and diluted	$	(0.05	)	$	(0.05	)	$	(0.14	)	$	(0.20	)
Shares used to compute basic and diluted net loss per share		229,668			199,906			218,559			191,786

See notes to condensed consolidated financial statements.

MANNKIND CORPORATION AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited)

(In thousands)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
Net loss	$	(11,255	)	$	(10,370	)	$	(30,829	)	$	(37,640	)
Other comprehensive loss:
Cumulative translation loss		—			(1	)		(19	)		(1	)
Comprehensive loss	$	(11,255	)	$	(10,371	)	$	(30,848	)	$	(37,641	)

See notes to condensed consolidated financial statements.

MANNKIND CORPORATION AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

(Unaudited)

(In thousands)

	Common Stock				Additional Paid-In			Accumulated Other Comprehensive			Accumulated
	Shares		Amount		Capital			Loss			Deficit			Total
BALANCE, JANUARY 1, 2019		187,030	$	1,870	$	2,763,067		$	(19	)	$	(2,940,000	)	$	(175,082	)
Net issuance of common stock associated with stock options and restricted stock units	66		1			1		—			—				2
Issuance of common stock under Employee Stock Purchase Plan	296		3			314		—			—				317
Stock-based compensation expense	—		—			999		—			—				999
Issuance of common stock pursuant to conversion of Senior Convertible Notes	386		4			534		—			—				538
Restricted stock unit award	—		—			105		—			—				105
Net loss	—		—		—			—				(14,883	)		(14,883	)
BALANCE, MARCH 31, 2019		187,778	$	1,878	$	2,765,020		$	(19	)	$	(2,954,883	)	$	(188,004	)

Net issuance of common stock associated with stock options and restricted stock units		101		1		14		—			—				15
Stock-based compensation expense	—		—			2,568		—			—				2,568
Issuance of common stock in at the market offering		1,568		15		1,835		—			—				1,850
Issuance costs associated with at the market offering	—		—			(41	)	—			—				(41	)
Net loss	—		—		—			—				(12,387	)		(12,387	)
BALANCE, JUNE 30, 2019		189,447	$	1,894	$	2,769,396		$	(19	)	$	(2,967,270	)	$	(195,999	)

Net issuance of common stock associated with stock options and restricted stock units		576		6		25		—			—				31
Issuance of common stock under Employee Stock Purchase Plan		356		4		335		—			—				339
Stock-based compensation expense	—			—		1,640		—			—				1,640
Issuance of common stock pursuant to conversion of Senior Convertible Notes		4,525		45		4,992		—			—				5,037
Issuance of common stock pursuant to conversion of Facility Financing Obligation		4,193		42		4,533		—			—				4,575
Issuance of common stock pursuant to conversion of Promissory Notes		7,143		71		7,929		—			—				8,000
Issuance of common stock in at-the-market offering		168		2		186		—			—				188
Issuance of warrants pursuant to Credit facility	—		—			1,854		—			—				1,854
Cumulative translation loss	—		—		—				(1	)	—				(1	)
Net loss	—			—	—			—				(10,370	)		(10,370	)
BALANCE, SEPTEMBER 30, 2019		206,408	$	2,064	$	2,790,890		$	(20	)	$	(2,977,640	)	$	(184,706	)

Common Stock

Additional

Paid-In

Accumulated

Other

Comprehensive

Accumulated