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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

Or

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

 

 

 

1


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.

2


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.

3


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.

 

4


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