8-K
0000899460false00008994602023-08-072023-08-07

 

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): August 07, 2023

 

 

MannKind Corporation

(Exact name of Registrant as Specified in Its Charter)

 

 

Delaware

000-50865

13-3607736

(State or Other Jurisdiction
of Incorporation)

(Commission File Number)

(IRS Employer
Identification No.)

 

 

 

 

 

1 Casper Street

 

Danbury, Connecticut

 

06810

(Address of Principal Executive Offices)

 

(Zip Code)

 

Registrant’s Telephone Number, Including Area Code: (818) 661-5000

 

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))

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 is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

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.

 

 


Item 2.02. Results of Operations and Financial Condition.

On August 7, 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 August 7, 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: August 7, 2023

By:

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

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

Corporate Vice President, General Counsel and Secretary

 

 


EX-99.1

 

https://cdn.kscope.io/304c31bdcff1b46437ad759ddea274d2-img208524907_0.jpg 

EXHIBIT 99.1

 

MANNKIND CORPORATION REPORTS
2023 SECOND QUARTER FINANCIAL RESULTS


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

2Q 2023 Total revenues of $49M; +157% vs. 2Q 2022
2Q 2023 Tyvaso DPI royalties of $19M; +63% vs. 1Q 2023
2Q 2023 Endocrine Business Unit net revenues of $18M; Afrezza net revenues +27% vs. 2Q 2022
2Q 2023 Income from operations of $2M; Non-GAAP income from operations of $8M

 

DANBURY, Conn. and WESTLAKE VILLAGE, Calif. August 7, 2023 (Globe Newswire) — MannKind Corporation (Nasdaq: MNKD) today reported financial results for the quarter ended June 30, 2023.

“We are excited to report positive income from operations in the second quarter driven by growing patient demand for Tyvaso DPI® and Afrezza as well as manufacturing revenues from Tyvaso DPI,” said Michael Castagna, PharmD, Chief Executive Officer of MannKind Corporation. “In addition, we have optimized our commercial operations supporting Afrezza® and V-Go®, which is expected to get our Endocrine Business Unit to profitability starting in 2024.”

Second Quarter 2023 Results

Revenue Highlights

 

 

Three Months
Ended June 30,

 

 

 

2023

 

 

2022

 

 

$ Change

 

 

% Change

 

 

 

(Dollars in thousands)

 

Net revenue – Afrezza

 

$

13,527

 

 

$

10,649

 

 

$

2,878

 

 

 

27

%

Net revenue – V-Go

 

 

4,818

 

 

 

2,073

 

 

$

2,745

 

 

*

 

Revenue – collaborations and services

 

 

11,211

 

 

 

5,868

 

 

$

5,343

 

 

 

91

%

Royalties – collaborations

 

 

19,055

 

 

 

304

 

 

$

18,751

 

 

*

 

Total revenues

 

$

48,611

 

 

$

18,894

 

 

$

29,717

 

 

 

157

%

________________________

* Not meaningful

Afrezza net revenue for the second quarter of 2023 increased $2.9 million, or 27%, compared to the same period in 2022 as a result of higher product demand and price. V-Go was acquired in the second quarter of 2022 and achieved $22.0 million in cumulative net revenues one year post-acquisition, which was at the high end of our forecasted range. The increase in collaborations and services revenue was primarily attributable to revenues associated with the commercial supply agreement (the "CSA") with United Therapeutics ("UT"). In the second quarter of 2022, revenue associated with the CSA was deferred until we began commercial manufacturing and subsequently selling Tyvaso DPI in June 2022. Royalties related to Tyvaso DPI, launched in late second quarter of 2022 by UT, were $19.0 million in the second quarter of 2023 and continued to grow based on strong patient demand.

Commercial product gross margin in the second quarter of 2023 was 72% compared to 64% for the same period in 2022, primarily attributable to an increase in Afrezza net revenue, which has a higher gross margin than V-Go.


Cost of revenue – collaborations and services for the second quarter of 2023 was $9.0 million compared to $8.3 million for the same period in 2022, an increase of $0.7 million, due to an increase in manufacturing activities for Tyvaso DPI.

Research and development ("R&D") expenses for the second quarter of 2023 were $6.5 million compared to $4.9 million for the same period in 2022. The $1.6 million increase was primarily attributed to development activities for MNKD-101 (inhaled clofazimine) and an Afrezza post-marketing clinical study (INHALE-3), which commenced in the second quarter of 2023.
 

Selling expenses for the second quarter of 2023 were $14.0 million compared to $15.9 million for the same period in 2022. The $1.9 million decrease was primarily attributable to the termination of an Afrezza pilot promotional effort targeting primary care physicians, which ended in the third quarter of 2022, partially offset by increased headcount after the acquisition of V-Go in the second quarter of 2022.

 

General and administrative expenses for the second quarter of 2023 were $11.9 million compared to $10.2 million for the same period in 2022. The $1.8 million increase was primarily attributable to higher stock-based compensation and increased headcount.

 

Interest income was $1.5 million for the second quarter of 2023 compared to $0.5 million for the same period in 2022. The increase was primarily due to higher yields on our marketable securities and money market funds.

Interest expense on financing liability was $2.4 million for the second quarter of 2023 and remained consistent with the same period in 2022.

Interest expense was $6.9 million in the second quarter of 2023 compared to $6.6 million for the same period in 2022, which remained consistent due to fixed interest rates on notes and consistent recognition of interest expense related to the achievement of Afrezza milestones.

Gain on available-for-sale securities for the second quarter of 2023 was $0.9 million as a result of the change in the fair value of the investment that related to credit risk.

First half of 2023

Revenue Highlights

 

 

Six Months
Ended June 30,

 

 

 

2023

 

 

2022

 

 

$ Change

 

 

% Change

 

Net revenue — Afrezza

 

$

25,951

 

 

$

20,475

 

 

$

5,476

 

 

 

27

%

Net revenue — V-Go

 

 

9,956

 

 

 

2,073

 

 

$

7,883

 

 

*

 

Revenue — collaborations and services

 

 

22,597

 

 

 

8,034

 

 

$

14,563

 

 

 

181

%

Royalties — collaborations

 

 

30,733

 

 

 

304

 

 

$

30,429

 

 

*

 

Total revenues

 

$

89,237

 

 

$

30,886

 

 

$

58,351

 

 

 

189

%

________________________

* Not meaningful

Afrezza net revenue for the first half of 2023 increased $5.5 million, or 27%, compared to the same period in 2022 primarily as a result of higher product demand and price. V-Go was acquired in the second quarter of 2022 and achieved $22.0 million in net revenues one year post-acquisition, which was at the high end of our forecasted range. The increase in collaborations and services revenue was primarily attributable to the deferral of revenue associated with the CSA until we began commercial manufacturing and subsequently selling Tyvaso DPI in June 2022. Royalties related to Tyvaso DPI, launched in the late second quarter of 2022 by UT, reached $30.7 million in the first half of 2023 based on strong patient demand.

Commercial product gross margin in the first half of 2023 was 70%, which was consistent with the same period in 2022.


Cost of revenue – collaborations and services for the first half of 2023 was $19.7 million compared to $17.0 million for the same period in 2022, an increase of $2.7 million, due to an increase in manufacturing activities for Tyvaso DPI.

R&D expenses for the first half of 2023 were $12.1 million compared to $8.4 million for the same period in 2022. The $3.6 million increase was primarily attributed to development activities for MNKD-101 and INHALE-3.
 

Selling expenses for the first half of 2023 were $27.3 million compared to $28.6 million for the same period in 2022. The $1.3 million decrease was primarily due to the termination of an Afrezza pilot promotional effort targeting primary care physicians, which ended in the third quarter of 2022, partially offset by increased headcount and promotional expenses after the acquisition of V-Go in the second quarter of 2022.

 

General and administrative expenses for the first half of 2023 were $22.5 million compared to $18.1 million for the same period in 2022. The $4.3 million increase was primarily attributable to higher stock-based compensation and increased headcount.

 

Interest income was $2.8 million for the six months ended June 30, 2023 compared to $0.9 million for the same period in 2022. The increase was primarily due to higher yields on our marketable securities and money market funds.

Interest expense on financing liability was $4.9 million for the first half of 2023 and remained consistent with the same period in 2022.

Interest expense on notes was $9.7 million in the first half of 2023 compared to $9.4 million for the same period in 2022, which remained consistent due to fixed interest rates on notes and consistent recognition of interest expense related to the achievement of Afrezza milestones.

Gain on available-for-sale securities for the first half of 2023 was $0.9 million as a result of the change in the fair value of the investment that related to credit risk.

Cash, cash equivalents and investments as of June 30, 2023 were $146.6 million.

Non-GAAP Measures

To supplement our unaudited condensed consolidated financial statements presented under U.S. generally accepted accounting principles (GAAP), we are presenting non-GAAP income (loss) from operations, non-GAAP net loss and non-GAAP net income (loss) per share, which are non-GAAP financial measures. We are providing these non-GAAP financial measures to disclose additional information to facilitate the comparison of past and present operations, and they are among the indicators management uses as a basis for evaluating our financial performance. We believe that these non-GAAP financial measures, when considered together with our GAAP financial results, provide management and investors with an additional understanding of our business operating results, including underlying trends.

These non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures; should be read in conjunction with our unaudited condensed consolidated financial statements prepared in accordance with GAAP; have no standardized meaning prescribed by GAAP; and are not prepared under any comprehensive set of accounting rules or principles. In addition, from time to time in the future there may be other items that we may exclude for purposes of our non-GAAP financial measures; and we may in the future cease to exclude items that we have historically excluded for purposes of our non-GAAP financial measures. Likewise, we may determine to modify the nature of its adjustments to arrive at our non-GAAP financial measures. Because of the non-standardized definitions of non-GAAP financial measures, the non-GAAP financial measures as used by us in this report have limits in their usefulness to investors and may be calculated


differently from, and therefore may not be directly comparable to, similarly titled measures used by other companies.

The following tables reconcile our financial measure for income (loss) from operations, net loss and earnings (loss) per share ("EPS") for basic and diluted weighted average shares as reported in our condensed consolidated statement of operations to a non-GAAP presentation as adjusted for the non-cash stock-based compensation expense and non-cash gain (loss) on foreign currency transactions for the periods presented:

 

 

Three Months

 

 

Six Months

 

 

Ended June 30,

 

 

Ended June 30,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

(In thousands except per share data)

 

GAAP Income (loss) from operations

$

1,721

 

 

$

(20,454

)

 

$

(4,277

)

 

$

(41,710

)

Increase (decrease) for excluded non-cash items:

 

 

 

 

 

 

 

 

 

 

 

    Stock compensation

 

5,580

 

 

 

4,422

 

 

 

9,235

 

 

 

7,228

 

    Loss (gain) on foreign currency transaction

 

251

 

 

 

(4,503

)

 

 

1,205

 

 

 

(6,486

)

Non-GAAP income (loss) from operations

$

7,552

 

 

$

(20,535

)

 

$

6,163

 

 

$

(40,968

)

 

 

 

 

 

 

 

 

 

 

 

 

GAAP net loss

$

(5,265

)

 

$

(29,023

)

 

$

(15,060

)

 

$

(55,021

)

Increase (decrease) for excluded non-cash items:

 

 

 

 

 

 

 

 

 

 

 

    Stock compensation

 

5,580

 

 

 

4,422

 

 

 

9,235

 

 

 

7,228

 

    Loss (gain) on foreign currency transaction

 

251

 

 

 

(4,503

)

 

 

1,205

 

 

 

(6,486

)

    Gain on available-for-sale securities

 

(932

)

 

 

 

 

 

(932

)

 

 

 

Non-GAAP net loss

$

(366

)

 

$

(29,104

)

 

$

(5,552

)

 

$

(54,279

)

 

 

 

 

 

 

 

 

 

 

 

 

GAAP net loss per share - basic and diluted

$

(0.02

)

 

$

(0.11

)

 

$

(0.06

)

 

$

(0.22

)

Increase (decrease) for excluded non-cash items:

 

 

 

 

 

 

 

 

 

 

 

    Stock compensation

 

0.02

 

 

 

0.02

 

 

 

0.03

 

 

 

0.03

 

    Loss (gain) on foreign currency transaction

 

0.00

 

 

 

(0.02

)

 

 

0.00

 

 

 

(0.03

)

    Gain on available-for-sale securities

 

0.00

 

 

 

0.00

 

 

 

0.00

 

 

 

0.00

 

Non-GAAP net loss per share - basic and diluted

$

0.00

 

 

$

(0.11

)

 

$

(0.03

)

 

$

(0.22

)

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares - basic and diluted

 

265,626

 

 

 

253,644

 

 

 

264,802

 

 

 

252,775

 

 

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 the optimization of our commercial operations for Afrezza and V-Go and the potential for our Endocrine Business Unit to reach profitability starting in 2024. 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 various 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 Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 23, 2023, and under the “Risk Factors” heading of its Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, being filed with the SEC later today. 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

IR@mannkindcorp.com

 

 


MANNKIND CORPORATION AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

 

Three Months
Ended June 30,

 

 

Six Months
Ended June 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

 

(In thousands except per share data)

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Net revenue – commercial product sales

 

$

18,345

 

 

$

12,722

 

 

$

35,907

 

 

$

22,548

 

Revenue – collaborations and services

 

 

11,211

 

 

 

5,868

 

 

 

22,597

 

 

 

8,034

 

Royalties – collaborations

 

 

19,055

 

 

 

304

 

 

 

30,733

 

 

 

304

 

Total revenues

 

 

48,611

 

 

 

18,894

 

 

 

89,237

 

 

 

30,886

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of goods sold

 

 

5,224

 

 

 

4,617

 

 

 

10,754

 

 

 

6,901

 

Cost of revenue – collaborations and services

 

 

9,013

 

 

 

8,298

 

 

 

19,696

 

 

 

17,012

 

Research and development

 

 

6,453

 

 

 

4,893

 

 

 

12,058

 

 

 

8,429

 

Selling

 

 

14,002

 

 

 

15,868

 

 

 

27,312

 

 

 

28,596

 

General and administrative

 

 

11,947

 

 

 

10,175

 

 

 

22,489

 

 

 

18,144

 

Loss (gain) on foreign currency transaction

 

 

251

 

 

 

(4,503

)

 

 

1,205

 

 

 

(6,486

)

Total expenses

 

 

46,890

 

 

 

39,348

 

 

 

93,514

 

 

 

72,596

 

Income (loss) from operations

 

 

1,721

 

 

 

(20,454

)

 

 

(4,277

)

 

 

(41,710

)

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

Interest income, net

 

 

1,547

 

 

 

516

 

 

 

2,849

 

 

 

893

 

Interest expense on financing liability

 

 

(2,449

)

 

 

(2,443

)

 

 

(4,873

)

 

 

(4,814

)

Interest expense

 

 

(6,873

)

 

 

(6,642

)

 

 

(9,659

)

 

 

(9,390

)

Gain on available-for-sale securities

 

 

932

 

 

 

 

 

 

932

 

 

 

 

Other expense

 

 

(143

)

 

 

 

 

 

(32

)

 

 

 

Total other expense

 

 

(6,986

)

 

 

(8,569

)

 

 

(10,783

)

 

 

(13,311

)

Loss before income tax expense

 

 

(5,265

)

 

 

(29,023

)

 

 

(15,060

)

 

 

(55,021

)

Benefit from income taxes

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(5,265

)

 

$

(29,023

)

$

(15,060

)

 

$

(55,021

)

Net loss per share – basic and diluted

 

$

(0.02

)

 

$

(0.11

)

 

$

(0.06

)

 

$

(0.22

)

Weighted average shares used to compute net loss per share
   – basic and diluted

 

 

265,626

 

 

 

253,644

 

 

 

264,802

 

 

 

252,775

 

 

 


MANNKIND CORPORATION AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

 

 

 

 

 

 

 

June 30, 2023

 

 

December 31, 2022

 

 

 

(In thousands except share
and per share data)

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

86,184

 

 

$

69,767

 

Short-term investments

 

 

58,163

 

 

 

101,079

 

Accounts receivable, net

 

 

27,789

 

 

 

16,801

 

Inventory

 

 

25,290

 

 

 

21,772

 

Prepaid expenses and other current assets

 

 

32,807

 

 

 

25,477

 

Total current assets

 

 

230,233

 

 

 

234,896

 

Property and equipment, net

 

 

69,510

 

 

 

45,126

 

Goodwill

 

 

1,931

 

 

 

2,428

 

Other intangible asset

 

 

1,113

 

 

 

1,153

 

Long-term investments

 

 

2,282

 

 

 

1,961

 

Other assets

 

 

8,353

 

 

 

9,718

 

Total assets

 

$

313,422

 

 

$

295,282

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

17,127

 

 

$

11,052

 

Accrued expenses and other current liabilities

 

 

36,833

 

 

 

35,553

 

Financing liability – current

 

 

9,686

 

 

 

9,565

 

Midcap credit facility – current

 

 

16,667

 

 

 

 

Deferred revenue – current

 

 

3,489

 

 

 

1,733

 

Recognized loss on purchase commitments – current

 

 

13,164

 

 

 

9,393

 

Total current liabilities

 

 

96,966

 

 

 

67,296

 

Mann Group convertible note

 

 

8,829

 

 

 

8,829

 

Accrued interest – Mann Group convertible note

 

 

55

 

 

 

55

 

Financing liability – long term

 

 

94,395

 

 

 

94,512

 

Midcap credit facility – long term

 

 

22,811

 

 

 

39,264

 

Senior convertible notes

 

 

226,124

 

 

 

225,397

 

Recognized loss on purchase commitments – long term

 

 

56,063

 

 

 

62,916

 

Operating lease liability

 

 

4,646

 

 

 

5,343

 

Deferred revenue – long term

 

 

60,248

 

 

 

37,684

 

Milestone liabilities

 

 

3,772

 

 

 

4,524

 

Total liabilities

 

 

573,909

 

 

 

545,820

 

Stockholders' deficit:

 

 

 

 

 

 

Undesignated preferred stock, $0.01 par value – 10,000,000 shares
   authorized; no shares issued or outstanding as of June 30, 2023
   and December 31, 2022

 

 

 

 

 

 

Common stock, $0.01 par value – 800,000,000 and 400,000,000 shares
   authorized as of June 30, 2023 and December 31, 2022, respectively,
  and 268,235,145 and 263,793,305 shares issued and outstanding as of
   June 30, 2023 and December 31, 2022, respectively

 

 

2,682

 

 

 

2,638

 

Additional paid-in capital

 

 

2,968,917

 

 

 

2,964,293

 

Accumulated other comprehensive income

 

 

443

 

 

 

 

Accumulated deficit

 

 

(3,232,529

)

 

 

(3,217,469

)

Total stockholders' deficit

 

 

(260,487

)

 

 

(250,538

)

Total liabilities and stockholders' deficit

 

$

313,422

 

 

$

295,282