SEC Filing - MannKind Corporation

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mnkd-10q_20210930.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, 2021

☐	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)

N/A

(Former name, former address and former fiscal year, if changed since last report)

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 29, 2021, there were 251,256,353 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, 2021

TABLE OF CONTENTS

	Page
PART I: FINANCIAL INFORMATION	2

Item 1. Financial Statements (Unaudited)	2
Condensed Consolidated Balance Sheets: September 30, 2021 and December 31, 2020	2
Condensed Consolidated Statements of Operations: Three and nine months ended September 30, 2021 and 2020	3
Condensed Consolidated Statements of Comprehensive Loss: Three and nine months ended September 30, 2021 and 2020	4
Condensed Consolidated Statements of Stockholders’ Deficit: Three and nine months ended September 30, 2021 and 2020	5
Condensed Consolidated Statements of Cash Flows: Nine months ended September 30, 2021 and 2020	7
Notes to Condensed Consolidated Financial Statements	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	33
Item 3. Quantitative and Qualitative Disclosures About Market Risk	42
Item 4. Controls and Procedures	42

PART II: OTHER INFORMATION	43

Item 1. Legal Proceedings	43
Item 1A. Risk Factors	43
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	70
Item 3. Defaults Upon Senior Securities	70
Item 4. Mine Safety Disclosures	70
Item 5. Other Information	70
Item 6. Exhibits	72

SIGNATURES	74

PART 1: FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

MANNKIND CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except share and per share data)

	September 30, 2021			December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents	$	51,740		$	67,005
Restricted cash		—			158
Short-term investments		87,312			—
Accounts receivable, net		9,445			4,218
Inventory		7,482			4,973
Prepaid expenses and other current assets		3,227			3,122
Total current assets		159,206			79,476
Property and equipment, net		30,848			25,867
Long-term investments		42,059			—
Other assets		6,094			3,265
Total assets	$	238,207		$	108,608

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable	$	9,528		$	5,582
Accrued expenses and other current liabilities		20,829			19,707
PPP loan — current		—			4,061
Deferred revenue — current		14,016			33,275
Recognized loss on purchase commitments — current		5,660			11,080
Total current liabilities		50,033			73,705
Senior convertible notes		223,580			—
MidCap credit facility		38,723			49,335
Mann Group promissory notes		18,425			63,027
Accrued interest — Mann Group promissory notes		286			4,150
PPP loan — long term		—			812
2024 convertible notes		—			5,000
Recognized loss on purchase commitments — long term		79,653			84,208
Operating lease liability		798			1,202
Deferred revenue — long term		1,552			1,662
Milestone rights liability		4,838			5,926
Deposits from customer		5,007			—
Total liabilities		422,895			289,027
Commitments and contingencies (Note 12)
Stockholders' deficit:
Undesignated preferred stock, $0.01 par value — 10,000,000 shares authorized; no shares issued or outstanding as of September 30, 2021 and December 31, 2020		—			—
Common stock, $0.01 par value - 400,000,000 shares authorized, 250,245,831 and 242,117,089 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively		2,502			2,421
Additional paid-in capital		2,914,818			2,866,303
Accumulated deficit		(3,102,008	)		(3,049,143	)
Total stockholders' deficit		(184,688	)		(180,419	)
Total liabilities and stockholders' deficit	$	238,207		$	108,608

See notes to condensed consolidated financial statements.

MANNKIND CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share data)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
Revenues:
Net revenue — commercial product sales	$	9,753		$	7,275		$	27,828		$	22,260
Revenue — collaborations and services		12,458			8,077			35,099			24,441
Total revenues		22,211			15,352			62,927			46,701
Expenses:
Cost of goods sold		3,812			3,591			12,538			11,432
Cost of revenue — collaborations and services		6,075			1,581			14,885			6,926
Research and development		3,655			1,484			8,426			4,703
Selling, general and administrative		17,221			13,899			54,690			41,919
Asset impairment		106			—			106			1,889
(Gain) loss on foreign currency translation		(2,068	)		3,927			(5,003	)		3,998
Loss on purchase commitments		—			—			339			—
Total expenses		28,801			24,482			85,981			70,867
Loss from operations		(6,590	)		(9,130	)		(23,054	)		(24,166	)
Other (expense) income:
Interest income		36			18			64			165
Interest expense on notes		(2,709	)		(1,057	)		(10,943	)		(3,212	)
Interest expense on Mann Group promissory notes		(94	)		(1,318	)		(1,492	)		(3,858	)
Gain (loss) on extinguishment of debt, net		4,930			—			(17,200	)		—
Other income (expense)		1			14			(240	)		24
Total other income (expense)		2,164			(2,343	)		(29,811	)		(6,881	)
Loss before provision for income taxes		(4,426	)		(11,473	)		(52,865	)		(31,047	)
Provision for income taxes		—			218			—			218
Net loss	$	(4,426	)	$	(11,255	)	$	(52,865	)	$	(30,829	)
Net loss per share - basic and diluted	$	(0.02	)	$	(0.05	)	$	(0.21	)	$	(0.14	)
Shares used to compute net loss per share - basic and diluted		249,910			229,668			248,624			218,559

See notes to condensed consolidated financial statements.

MANNKIND CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited)

(In thousands)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
Net loss	$	(4,426	)	$	(11,255	)	$	(52,865	)	$	(30,829	)
Other comprehensive loss:
Cumulative translation loss		—			—			—			(19	)
Comprehensive loss	$	(4,426	)	$	(11,255	)	$	(52,865	)	$	(30,848	)

See notes to condensed consolidated financial statements.

MANNKIND CORPORATION AND SUBSIDIARIES

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, 2020		211,788		$	2,118		$	2,799,278		$	(19	)	$	(2,991,903	)	$	(190,526	)
Issuance of common stock under Employee Stock Purchase Plan		334			3			315			—			—			318
Stock-based compensation expense		—			—			1,128			—			—			1,128
Issuance of common stock associated with debt interest payment		99			1			143			—			—			144
Net issuance of common stock associated with stock options and restricted stock units		504			5			(322	)		—			—			(317	)
Issuance of common stock in at-the-market offering		413			4			518			—			—			522
Issuance cost associated with at-the-market offering		—			—			(16	)		—			—			(16	)
Write-off of cumulative translation loss		—			—			—			19			—			19
Net loss		—			—			—			—			(9,322	)		(9,322	)
BALANCE, MARCH 31, 2020		213,138		$	2,131		$	2,801,044		$	—		$	(3,001,225	)	$	(198,050	)

Stock-based compensation expense		—			—			2,185			—			—			2,185
Issuance of common stock from the exercise of warrants		7,250			73			11,527			—			—			11,600
Issuance of common stock pursuant to conversion of the June 2020 note		1,235			12			2,618			—			—			2,630
Net issuance of common stock associated with stock options and restricted stock units		297			3			114			—			—			117
Issuance of common stock in at-the-market offering		7,459			75			12,291			—			—			12,366
Issuance cost associated with at-the-market offering		—			—			(320	)		—			—			(320	)
Issuance of common stock from market price stock purchase		10			—			14			—			—			14
Adjustment of common stock in association with restricted stock units		(461	)		(5	)		5			—			—			—
Net loss		—			—			—			—			(10,252	)		(10,252	)
BALANCE, JUNE 30, 2020		228,928		$	2,289		$	2,829,478		$	—		$	(3,011,477	)	$	(179,710	)

Stock-based compensation expense		—			—			1,294			—			—			1,294
Issuance of common stock associated with debt interest payment		89			1			143			—			—			144
Net issuance of common stock associated with stock options and restricted stock units