SEC Filing - MannKind Corporation

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10-Q

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 June 30, 2023

☐ 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.)

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, 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 July 28, 2023, there were 268,355,182 shares of the registrant’s common stock, $0.01 par value per share, outstanding.

MANNKIND CORPORATION

Form 10-Q

For the Quarterly Period Ended June 30, 2023

TABLE OF CONTENTS


	Page
PART I: FINANCIAL INFORMATION	2

Item 1. Financial Statements (Unaudited)	2
Condensed Consolidated Statements of Operations: Three and six months ended June 30, 2023 and 2022	2
Condensed Consolidated Statements of Comprehensive Loss: Three and six months ended June 30, 2023 and 2022	3
Condensed Consolidated Balance Sheets: June 30, 2023 and December 31, 2022	4
Condensed Consolidated Statements of Stockholders’ Deficit: Three and six months ended June 30, 2023 and 2022	5
Condensed Consolidated Statements of Cash Flows: Six months ended June 30, 2023 and 2022	6
Notes to Condensed Consolidated Financial Statements	7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	33
Item 3. Quantitative and Qualitative Disclosures About Market Risk	40
Item 4. Controls and Procedures	40

PART II: OTHER INFORMATION	42

Item 1. Legal Proceedings	42
Item 1A. Risk Factors	42
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 STATEMENTS OF OPERATIONS

(Unaudited)


	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

See notes to condensed consolidated financial statements.

MANNKIND CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited)


	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
	(In thousands)
Net loss	$	(5,265	)	$	(29,023	)	$	(15,060	)	$	(55,021	)
Other comprehensive income (loss):
Unrealized gain (loss) on available-for-sale securities		443			(130	)		443			(1,206	)
Comprehensive loss	$	(4,822	)	$	(29,153	)	$	(14,617	)	$	(56,227	)

See notes to condensed consolidated financial statements.

MANNKIND CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)



	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
Commitments and contingencies (Note 15)
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

See notes to condensed consolidated financial statements.

MANNKIND CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

(Unaudited)


	Common Stock				Additional			Accumulated Other			Accumulated
	Shares		Amount		Paid-in Capital			Comprehensive Loss			Deficit			Total
	(In thousands)
BALANCE, JANUARY 1, 2022		251,478	$	2,515	$	2,918,205		$	—		$	(3,130,069	)	$	(209,349	)
Net issuance of common stock associated with stock options and restricted stock units		450		4		125			—			—			129
Issuance of common stock under the employee stock purchase plan		233		2		738			—			—			740
Stock-based compensation expense		—		—		2,806			—			—			2,806
Issuance of common stock from market price stock purchase plan		252		3		681			—			—			684
Cumulative loss on available-for-sale securities		—		—		—			(1,076	)		—			(1,076	)
Net loss		—		—		—			—			(25,998	)		(25,998	)
BALANCE, MARCH 31, 2022		252,413	$	2,524	$	2,922,555		$	(1,076	)	$	(3,156,067	)	$	(232,064	)
Issuance of common stock pursuant to conversion of Mann Group convertible note		3,838		39		9,557			—			—			9,596
Issuance of common stock pursuant to conversion of the Mann Group convertible note interest		193		2		518			—			—			520
Net issuance of common stock associated with stock options and restricted stock units		833		8		(385	)		—			—			(377	)
Stock-based compensation expense		—		—		4,422			—			—			4,422
Cumulative loss on available-for-sale securities		—		—		—			(130	)		—			(130	)
Net loss		—		—		—			—			(29,023	)		(29,023	)
BALANCE, JUNE 30, 2022		257,277	$	2,573	$	2,936,667		$	(1,206	)	$	(3,185,090	)	$	(247,056	)


	Common Stock				Additional		Accumulated Other		Accumulated
	Shares		Amount		Paid-in Capital		Comprehensive Loss		Deficit			Total
	(In thousands)
BALANCE, JANUARY 1, 2023		263,793	$	2,638	$	2,964,293	$	—	$	(3,217,469	)	$	(250,538	)
Issuance of common stock associated with at-the-market placement		269