mnkd-8k_20230223.htm
false MANNKIND CORP 0000899460 0000899460 2023-02-23 2023-02-23

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event Reported):  February 23, 2023  

MannKind Corporation

(Exact Name of Registrant as Specified in Charter)

 

Delaware

000-50865

13-3607736

(State or Other Jurisdiction of Incorporation)

(Commission File Number)

(I.R.S. Employer Identification Number)

 

1 Casper Street, Danbury, Connecticut 06810

(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)

 

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:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

 

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:

 

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

 


 

Item 2.02. Results of Operations and Financial Condition.

On February 23, 2023, MannKind Corporation issued a press release, a copy of which is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

 

Exhibit 99.1.

Press release dated February 23, 2023

 

 

Exhibit 104

Cover Page Interactive Data File (embedded within the Inline XBRL document)

 


 

SIGNATURE

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.

 

 

MannKind Corporation

 

 

 

 

 

 

Date: February 23, 2023

By: 

/s/ David Thomson, Ph.D., J.D.

 

 

David Thomson, Ph.D., J.D.

 

 

Corporate Vice President, General Counsel and Secretary

 

 

mnkd-ex991_6.htm

 

EXHIBIT 99.1

 

MANNKIND CORPORATION REPORTS
2022 FOURTH QUARTER AND FULL YEAR FINANCIAL RESULTS


Conference Call to Begin Today at 5:00 p.m. (ET)

 

2022 Total Revenues of $100 million; +32% vs. 2021

 

2022 Royalties from Tyvaso DPI of $16 million; 4Q 2022 of $9 million

 

4Q 2022 Commercial Products Net Revenue of $17 million;+54% vs. 4Q 2021

 

$173 million of Cash and Cash Equivalents and Investments at December 31, 2022

 

DANBURY, Conn. and WESTLAKE VILLAGE, Calif. February 23, 2023 (Globe Newswire) — MannKind Corporation (Nasdaq: MNKD) today reported financial results for the fourth quarter and full year ended December 31, 2022.

“For 2022, we recognized almost $100 million in total revenues – an incredible triumph for our entire organization,” said Michael Castagna, PharmD, Chief Executive Officer of MannKind Corporation. “With our revenues growing nicely, we are focusing on our product pipeline where our INHALE-1 Phase 3 trial for Afrezza in pediatrics reached 50% enrollment at December 31, 2022 and our inhaled clofazimine will move into an adaptive Phase 2/3 study in the second half of 2023.”

Fourth Quarter 2022 Results

Revenue Highlights

 

 

For the Three Months Ended

December 31,

 

 

 

2022

 

 

2021

 

 

$ Change

 

 

% Change

 

Net revenue — Afrezza

 

$

12,006

 

 

$

11,340

 

 

$

666

 

 

 

6

%

Net revenue — V-Go

 

 

5,434

 

 

 

 

 

$

5,434

 

 

n/a

 

Revenue — collaborations and services

 

 

9,544

 

 

 

1,175

 

 

$

8,369

 

 

 

712

%

Royalties — collaborations

 

 

9,075

 

 

 

 

 

$

9,075

 

 

n/a

 

Total revenues

 

$

36,059

 

 

$

12,515

 

 

$

23,544

 

 

 

188

%

The increase in Afrezza® net revenue was mainly a result of higher demand. V-Go was acquired in the second quarter of 2022. The increase in collaborations and services revenue reflected the fact that the manufacture of Tyvaso® DPI for commercial sale had not yet commenced in the previous period. Royalties from United Therapeutics (“UT”) for Tyvaso DPI continued to grow based on strong patient demand.

Afrezza gross margin in the fourth quarter of 2022 was 92% compared to 62% for the same period in 2021, mainly due to a decrease in cost of goods sold driven by lower inventory write offs, lower cost of production per unit and a higher amount of manufacturing activity in 2022 (which absorbed more cost to inventory). V-Go® gross margin was 42% for the fourth quarter of 2022.

Cost of revenue – collaborations and services for the fourth quarter of 2022 was $12.0 million compared to $7.1 million for the same period in 2021, an increase of $4.9 million, primarily due to an increase in manufacturing activities associated with the production of Tyvaso DPI.


Research and development (“R&D”) expenses for the fourth quarter of 2022 were $7.2 million compared to $3.9 million for the same period in 2021. This $3.3 million increase was primarily attributed to costs incurred to develop our product pipeline, including the Afrezza pediatrics clinical study (INHALE-1) and MNKD-101 (inhaled clofazimine).

Selling expenses for the fourth quarter of 2022 were $11.6 million compared to $13.5 million for the same period in 2021. This $1.9 million decrease was primarily attributable to the net impact of lower personnel-related costs associated with the first quarter of 2022 Afrezza sales force restructuring, and a pilot promotional effort aimed at primary care physicians that began in the fourth quarter of 2021 and ended in the third quarter of 2022, partially offset by V-Go promotional efforts.

 

General and administrative (“G&A”) expenses for the fourth quarter of 2022 were $10.5 million compared to $9.2 million for the same period in 2021. This $1.3 million increase was primarily attributable to higher stock-based compensation and increased headcount.

Interest expense on financing liability was $2.5 million for the fourth quarter of 2022 and represented interest incurred on the sale lease-back transaction for our manufacturing facility in Danbury, CT, which was entered into in the fourth quarter of 2021.

Interest expense on notes was flat in the fourth quarter of 2022 compared to the same period in 2021 due to fixed interest rates and no changes in debt balances.

Year Ended December 31, 2022

Revenue Highlights

 

 

For the Year Ended

December 31,

 

 

 

2022

 

 

2021

 

 

$ Change

 

 

% Change

 

Net revenue — Afrezza

 

$

43,316

 

 

$

39,168

 

 

$

4,148

 

 

 

11

%

Net revenue — V-Go

 

 

12,931

 

 

 

 

 

$

12,931

 

 

n/a

 

Revenue — collaborations and services

 

 

27,924

 

 

 

36,274

 

 

$

(8,350

)

 

 

(23

%)

Royalties — collaborations

 

 

15,599

 

 

 

 

 

$

15,599

 

 

n/a

 

Total revenues

 

$

99,770

 

 

$

75,442

 

 

$

24,328

 

 

 

32

%

Afrezza net revenue increased year-over-year primarily due to higher price (including a more favorable gross-to-net adjustment), higher product demand, and a more favorable cartridge mix. Collaborations and services revenue decreased, primarily due to the completion of the R&D services associated with our collaboration with UT, which was partially offset by revenues associated with the manufacturing of Tyvaso DPI. As of December 31, 2022, $37.9 million of manufacturing revenue associated with Tyvaso DPI remains deferred and will be recognized as commercial product is sold to UT.

Afrezza gross margin for 2022 was 80% compared to 57% for the same period in 2021, driven primarily by a decrease in excess manufacturing capacity costs (as Tyvaso DPI was in commercial production in 2022), a decrease in inventory write offs and an amendment fee associated with our Insulin Supply Agreement in 2021. V-Go gross margin was 43% for 2022.

Cost of revenue – collaborations and services for 2022 was $41.5 million compared to $22.0 million for the same period in 2021, an increase of $19.5 million, primarily due to an increase in manufacturing activities for the production of Tyvaso DPI.

R&D expenses for 2022 were $19.7 million compared to $12.3 million for the prior year. This $7.4 million increase was primarily attributable to costs incurred to develop our product pipeline, including (INHALE-1) and MNKD-101. This $7.4 million increase was primarily attributable to costs incurred to develop our product pipeline, including INHALE-1 and MNKD-101.


Selling expenses for 2022 were $53.8 million compared to $45.5 million for the prior year. This $8.3 million increase was primarily attributable to the primary care pilot program, elimination of the Thyquidity co-promotion (which permitted some expenses associated with the sales force to be recognized as cost of revenue for collaborations and services in the same period of 2021), V-Go promotional efforts after the acquisition in the second quarter of 2022, and partially offset by the net favorable impact of personnel-related costs associated with the Afrezza sales force restructuring in 2022.

 

G&A expenses for 2022 were $37.7 million compared to $31.9 million for the prior year. This $5.8 million increase was primarily attributable to higher stock-based compensation, increased headcount, and higher professional fees.

Interest expense on the financing liability was $9.8 million for 2022 and represented interest incurred on the sale lease-back transaction for our manufacturing facility in Danbury, CT.

Interest expense on notes was flat for 2022 compared to 2021 due to fixed interest rates and no changes in debt balances.

Cash and cash equivalents and investments as of December 31, 2022 were $172.8 million.

Conference Call

MannKind will host a conference call and presentation webcast to discuss these results today at 5:00 p.m. Eastern Time. Those interested in listening to the conference call live via the Internet may do so by visiting the Company’s website at mannkindcorp.com under Events & Presentations. A replay will be available on MannKind's website for 14 days.

About MannKind

MannKind Corporation (Nasdaq: MNKD) focuses on the development and commercialization of inhaled therapeutic products for patients with endocrine and orphan lung diseases.

We are committed to using our formulation capabilities and device engineering prowess to lessen the burden of diseases such as diabetes, pulmonary arterial hypertension (PAH) and nontuberculous mycobacterial (NTM) lung disease. Our signature technologies – dry-powder formulations and inhalation devices – offer rapid and convenient delivery of medicines to the deep lung where they can exert an effect locally or enter the systemic circulation.

With a passionate team of Mannitarians collaborating nationwide, we are on a mission to give people control of their health and the freedom to live life.

 

Please visit mannkindcorp.com to learn more, and follow us on LinkedIn, Facebook, Twitter or Instagram.


Forward-Looking Statements

Statements in this press release that are not statements of historical fact are forward-looking statements that involve risks and uncertainties.  These statements include, without limitation, statements regarding MannKind’s revenue growth and pipeline advancement, including the planned adaptive Phase 2/3 study. 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, without limitation, risks associated with manufacturing and supply, risks associated with product commercialization, risks associated with developing product candidates, risks associated with MannKind’s ability to manage its existing cash resources or raise additional cash resources, and other risks detailed in MannKind’s filings with the Securities and Exchange Commission (“SEC”), including under the “Risk Factors” heading of its Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, as filed with the SEC on November 8, 2022, and under the “Risk Factors” heading of its Annual Report on Form 10-K for the year ended December 31, 2022, being filed with the SEC on February 23, 2023. 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.

Tyvaso DPI is a trademark of United Therapeutics Corporation.

AFREZZA, MANNKIND, and V-GO are registered trademarks of MannKind Corporation.

# # #

MannKind Contact:

Rose Alinaya, Investor Relations

(818) 661-5000

 

 


 

MANNKIND CORPORATION AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

 

 

 

December 31,

 

 

 

2022

 

 

2021

 

 

 

(In thousands except share and per share data)

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

69,767

 

 

$

124,184

 

Short-term investments

 

 

101,079

 

 

 

79,932

 

Accounts receivable, net

 

 

16,801

 

 

 

4,739

 

Inventory

 

 

21,772

 

 

 

7,152

 

Prepaid expenses and other current assets

 

 

25,477

 

 

 

3,482

 

Total current assets

 

 

234,896

 

 

 

219,489

 

Property and equipment, net

 

 

45,126

 

 

 

36,612

 

Goodwill

 

 

2,428

 

 

 

 

Other intangible asset

 

 

1,153

 

 

 

 

Long-term investments

 

 

1,961

 

 

 

56,619

 

Other assets

 

 

9,718

 

 

 

8,441

 

Total assets

 

$

295,282

 

 

$

321,161

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

11,052

 

 

$

6,956

 

Accrued expenses and other current liabilities

 

 

35,553

 

 

 

27,419

 

Financing liability — current

 

 

9,565

 

 

 

6,977

 

Deferred revenue — current

 

 

1,733

 

 

 

827

 

Recognized loss on purchase commitments — current

 

 

9,393

 

 

 

6,170

 

Total current liabilities

 

 

67,296

 

 

 

48,349

 

Promissory notes

 

 

8,829

 

 

 

18,425

 

Accrued interest — promissory notes

 

 

55

 

 

 

404

 

Financing liability — long term

 

 

94,512

 

 

 

93,525

 

Midcap credit facility

 

 

39,264

 

 

 

38,833

 

Senior convertible notes

 

 

225,397

 

 

 

223,944

 

Recognized loss on purchase commitments — long term

 

 

62,916

 

 

 

76,659

 

Operating lease liability

 

 

5,343

 

 

 

1,040

 

Deferred revenue  — long term

 

 

37,684

 

 

 

19,543

 

Milestone liabilities

 

 

4,524

 

 

 

4,838

 

Deposits from customer

 

 

 

 

 

4,950

 

Total liabilities

 

 

545,820

 

 

 

530,510

 

Stockholders' deficit:

 

 

 

 

 

 

 

 

Undesignated preferred stock, $0.01 par value — 10,000,000

   shares authorized; no shares issued or outstanding at

   December 31, 2022 and 2021

 

 

 

 

 

 

Common stock, $0.01 par value — 400,000,000 shares authorized,

   263,793,305 and 251,477,562 shares issued and outstanding

   at December 31, 2022 and 2021, respectively

 

 

2,638

 

 

 

2,515

 

Additional paid-in capital

 

 

2,964,293

 

 

 

2,918,205

 

Accumulated deficit

 

 

(3,217,469

)

 

 

(3,130,069

)

Total stockholders' deficit

 

 

(250,538

)

 

 

(209,349

)

Total liabilities and stockholders' deficit

 

$

295,282

 

 

$

321,161

 

 

 


 

MANNKIND CORPORATION AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

 

Three Months Ended

December 31,

 

 

Twelve Months Ended

December 31,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

(In thousands except per share data)

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net revenue — commercial product sales

 

$

17,440

 

 

$

11,340

 

 

$

56,247

 

 

$

39,168

 

Revenue — collaborations and services

 

 

9,544

 

 

 

1,175

 

 

 

27,924

 

 

 

36,274

 

Royalties — collaborations

 

 

9,075

 

 

 

 

 

 

15,599

 

 

 

 

Total revenues

 

 

36,059

 

 

 

12,515

 

 

 

99,770

 

 

 

75,442

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of goods sold

 

 

4,081

 

 

 

4,295

 

 

 

16,003

 

 

 

16,833

 

Cost of revenue — collaborations and services

 

 

12,043

 

 

 

7,139

 

 

 

41,494

 

 

 

22,024

 

Research and development

 

 

7,156

 

 

 

3,886

 

 

 

19,721

 

 

 

12,312

 

Selling

 

 

11,616

 

 

 

13,536

 

 

 

53,753

 

 

 

45,528

 

General and administrative

 

 

10,479

 

 

 

9,191

 

 

 

37,720

 

 

 

31,889

 

Asset impairment

 

 

 

 

 

 

 

 

 

 

 

106

 

Loss (gain) on foreign currency translation

 

 

3,474

 

 

 

(1,564

)

 

 

(4,811

)

 

 

(6,567

)

Loss on purchase commitments

 

 

 

 

 

 

 

 

 

 

 

339

 

Total expenses

 

 

48,849

 

 

 

36,483

 

 

 

163,880

 

 

 

122,464

 

Loss from operations

 

 

(12,790

)

 

 

(23,968

)

 

 

(64,110

)

 

 

(47,022

)

Other (expense) income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income, net

 

 

957

 

 

 

48

 

 

 

2,513

 

 

 

112

 

Interest expense on financing liability

 

 

(2,478

)

 

 

(1,373

)

 

 

(9,758

)

 

 

(1,373

)

Interest expense on notes

 

 

(2,809

)

 

 

(2,769

)

 

 

(15,011

)

 

 

(15,204

)

Loss on available-for-sale securities

 

 

(932

)

 

 

 

 

 

(932

)

 

 

 

Loss on extinguishment of debt

 

 

 

 

 

 

 

 

 

 

 

(17,200

)

Other income (expense)

 

 

105

 

 

 

1

 

 

 

(102

)

 

 

(239

)

Total other expense

 

 

(5,157

)

 

 

(4,093

)

 

 

(23,290

)

 

 

(33,904

)

Loss before income tax expense

 

 

(17,947

)

 

 

(28,061

)

 

 

(87,400

)

 

 

(80,926

)

Provision for income taxes

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(17,947

)

 

$

(28,061

)

 

$

(87,400

)

 

$

(80,926

)

Net loss per share — basic and diluted

 

$

(0.07

)

 

$

(0.11

)

 

$

(0.34

)

 

$

(0.32

)

Shares used to compute net loss per share

   — basic and diluted

 

 

263,378

 

 

 

251,083

 

 

 

257,092

 

 

 

249,244