MannKind Corporation (Nasdaq: MNKD) today reported
financial results for the second quarter and first half of 2022.
“In the second quarter, we achieved multiple milestones that
position the Company for growth over the next decade,” said Michael
Castagna, PharmD, Chief Executive Officer of MannKind Corporation.
“Tyvaso DPI was approved by the FDA, which allowed us to recognize
manufacturing and royalty revenues for the first time this quarter.
We also generated revenue from a newly acquired product, V-Go, that
is complementary to our endocrine franchise.”
Second Quarter 2022 Results
Total revenues were $18.9 million for the second quarter of
2022, reflecting Afrezza® net revenue of $10.6 million, V-Go net
revenue of $2.1 million, collaborations and services revenue of
$5.9 million, and royalties of $0.3 million. Afrezza net revenue
increased 7% compared to $10.0 million in the second quarter of
2021 as a result of increased price, which included more favorable
gross-to-net deductions, and patient demand which was substantially
offset by wholesaler inventory ordering patterns that resulted in
lower inventory levels for the second quarter of 2022.
Collaborations and services revenue decreased $7.4 million compared
to the second quarter of 2021 primarily due to the completion of
the R&D Services associated with our collaboration with United
Therapeutics (“UT”) in the second half of 2021. In August 2021, we
entered into a commercial supply agreement (“CSA”) with UT. Revenue
associated with the CSA was deferred until commercial product was
manufactured and sold to UT, which occurred in the second quarter
of 2022 when $4.7 million of revenue was recognized. The deferred
revenue balance associated with the CSA increased by $4.1 million
in the second quarter to $29.8 million as of June 30, 2022. The
increase in deferred revenue was associated with the production of
commercial product not yet sold to UT and services associated with
the Tyvaso DPI production capacity expansion.
Afrezza gross profit for the second quarter of 2022 was $7.3
million compared to $5.6 million in the same period of 2021, an
increase of $1.7 million, or 31%, which was driven by an increase
in Afrezza sales and a decrease in cost of goods sold. Afrezza’s
cost of goods sold decreased by $1.0 million, or 24%, compared to
the same period in 2021, primarily attributable to a $2.0 million
fee for the amendment of the Insulin Supply Agreement in the prior
year period, partially offset by a $1.1 million increase in costs
capitalized to inventory due to the timing of production between
quarters. Afrezza gross margin in the second quarter of 2022 was
68% compared to 56% for the same period in 2021. V-Go gross profit
for the second quarter of 2022 was $0.8 million.
Cost of revenue – collaborations and services in the second
quarter of 2022 was $8.3 million compared to $5.5 million for the
same period in 2021, an increase of $2.8 million, primarily due to
an increase in manufacturing activities for commercial product
manufacturing in the second quarter of 2022.
Research and development expenses for the second quarter of 2022
were $4.9 million compared to $2.3 million for the second quarter
of 2021. This $2.6 million increase was mainly related to costs
incurred for development activities on our product pipeline and the
Afrezza pediatrics clinical study (INHALE-1).
Selling, general and administrative expenses for the second
quarter of 2022 were $26.0 million compared to $20.0 million for
the second quarter of 2021. This $6.0 million increase was
primarily attributable to an Afrezza pilot promotional effort aimed
at primary care physicians that began in Q4 2021, elimination of
the Thyquidity co-promotion (which permitted some expenses
associated with the sales force to be recognized as cost of revenue
— collaborations and services in 2Q 2021), promotional expenses to
support Afrezza growth, V-Go promotional efforts and higher
stock-based and other compensation for G&A employees partially
offset by lower personnel related costs offset due to Afrezza
territory restructuring.
For the second quarter of 2022, the gain on foreign currency
translation (for insulin purchase commitments denominated in Euros)
was $4.5 million compared to a loss of $0.9 million for the second
quarter of 2021. The fluctuation was due to a change in the U.S.
dollar to Euro foreign currency exchange rate.
Interest expense on financing liability was $2.4 million for the
second quarter of 2022, representing interest incurred on the
November 2021 sale and lease-back of our manufacturing facility in
Danbury, CT.
Interest expense on notes for the second quarter of 2022 was
$6.6 million compared to $3.2 million for the second quarter of
2021. This increase of $3.4 million was primarily due to a $3.9
million increase due to a milestone rights obligation that occurred
during the second quarter of 2022 and will be paid in the third
quarter. Mann Group converted $10.0 million of debt and capitalized
interest into common stock during the second quarter.
The net loss for the second quarter of 2022 was $29.0 million,
or $0.11 per share, compared to $35.5 million in the second quarter
of 2021, or $0.14 per share. The $6.5 million decrease in the net
loss was primarily due to a loss on extinguishment of debt of $22.1
million in the second quarter of 2021 partially offset by lower
collaboration and service revenue and an increase in operating
expenses.
First half of 2022
Total revenues were $30.9 million for the first half of 2022,
reflecting Afrezza net revenue of $20.5 million, V-Go net revenue
of $2.1 million, collaborations and services revenue of $8.0
million and royalties of $0.3 million. Afrezza net revenue
increased 13% compared to $18.1 million in the first half of 2021
as a result of price, which included more favorable gross-to-net
deductions, higher product demand and a more favorable cartridge
mix. Collaborations and services revenue for the first half of 2022
decreased $14.6 million compared to the first half ended June 30,
2021, primarily due to the completion in the second half of 2021 of
the R&D services associated with our collaboration with United
Therapeutics. Revenue associated with the CSA was deferred until
commercial product was manufactured and sold to UT, which occurred
in the second quarter of 2022 when $5.9 million of revenue was
recognized.
Afrezza gross profit for the first half of 2022 was $14.8
million, compared to $9.3 million in the same period of 2021, an
increase of $5.5 million, or 58%, which was driven by an increase
in Afrezza sales and a decrease in cost of goods sold. Afrezza’s
cost of goods sold for the first half of 2022 decreased by $3.1
million, or 35%, compared to the same period in 2021, primarily as
a result of a decrease in manufacturing-related spending, a $2.0
million fee for the amendment of the Insulin Supply Agreement in
the prior year period plus a decrease in cost of goods sold due to
lower manufacturing-related spend for Afrezza as a result of
manufacturing a second product. Afrezza gross margin for the first
half of 2022 was 72% compared to 52% for the same period in 2021.
V-Go gross profit for the second half of 2022 was $0.8 million
which was adversely impacted by the purchase price valuation of
inventory.
Cost of revenue – collaborations and services for the first half
of 2022 was $17.0 compared to $8.8 million in the same period in
2021, an increase of $8.2 million, primarily due to an increase in
manufacturing activities leading up to commercial product
manufacturing in the second quarter of 2022.
Research and development expenses for the first half ended June
30, of 2022 were $8.4 million compared to $4.8 million for the same
period in 2021. This $3.7 million increase primarily attributable
to costs incurred for development activities on our product
pipeline and the Afrezza pediatrics clinical study (INHALE-1).
Selling, general and administrative expenses for the first half
of 2022 were $46.7 million compared to $37.5 million for same
period in 2021. This $9.2 million increase was primarily
attributable to a pilot promotional effort aimed at primary care
physicians that began in Q4 2021, elimination of the Thyquidity
co-promotion (which permitted some expenses associated with the
sales force to be recognized as cost of revenue — collaborations
and services in 2Q 2021), promotional expenses to support Afrezza
and V-Go growth and higher stock-based and other compensation for
G&A employees.
For the first half of 2022, the gain on foreign currency
translation (for insulin purchase commitments denominated in Euros)
was $6.5 million compared to $2.9 million for the same period of
2021. The fluctuation was due to a change in the U.S. dollar to
Euro foreign currency exchange rate.
Interest expense on financing liability was $4.8 million for the
first half of 2022, representing interest incurred on the November
2021 sale and lease-back of our manufacturing facility in Danbury,
CT.
Interest expense on notes for the first half of 2022 was $9.4
million compared to $9.6 million in the same period of 2021.
The net loss for the first half of 2022 was $55.0 million, or
$0.22 per share, compared to $48.4 million in the same period of
2021, or $0.20 per share. The $6.6 million increase in the net loss
was primarily due to total revenues decreasing $9.8 million,
selling, general and administrative expenses increasing $9.2
million and cost of revenue – collaboration and services increasing
by $8.2 million partially offset by the loss on extinguishment of
debt of $22.1 million in the second quarter of 2021.
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 innovative therapeutic products and
devices to address serious unmet medical needs for those living
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 expected sources of revenue and growth
opportunities for MannKind. 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 that our
products may only achieve a limited degree of commercial success
and that manufacturing risks may adversely affect our ability to
manufacture our products. These and other are 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, 2021, filed
with the SEC on February 24, 2022, and in its Quarterly Report on
Form 10-Q for the quarter ended June 30, 2022, 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, TECHNOSPHERE, MANNKIND, V-GO and the MannKind logo are
registered trademarks of MannKind Corporation.
MannKind Contact:Rose Alinaya, Investor
Relations(818) 661-5000
MANNKIND CORPORATION AND
SUBSIDIARY CONDENSED CONSOLIDATED
BALANCE SHEETS (In thousands, except share and per
share data)
|
June 30, 2022 |
|
|
December 31, 2021 |
|
ASSETS |
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
35,507 |
|
|
$ |
124,184 |
|
Short-term investments |
|
118,649 |
|
|
|
79,932 |
|
Accounts receivable, net |
|
15,030 |
|
|
|
4,739 |
|
Inventory |
|
20,573 |
|
|
|
7,152 |
|
Prepaid expenses and other current assets |
|
3,717 |
|
|
|
3,482 |
|
Total current assets |
|
193,476 |
|
|
|
219,489 |
|
Property and equipment, net |
|
37,918 |
|
|
|
36,612 |
|
Goodwill |
|
2,900 |
|
|
|
— |
|
Other intangible asset |
|
1,400 |
|
|
|
— |
|
Long-term investments |
|
32,596 |
|
|
|
56,619 |
|
Other assets |
|
17,507 |
|
|
|
8,441 |
|
Total assets |
$ |
285,797 |
|
|
$ |
321,161 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' DEFICIT |
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
Accounts payable |
$ |
7,823 |
|
|
$ |
6,956 |
|
Accrued expenses and other current liabilities |
|
33,184 |
|
|
|
27,419 |
|
Financing liability — current |
|
9,470 |
|
|
|
6,977 |
|
Deferred revenue — current |
|
1,667 |
|
|
|
827 |
|
Recognized loss on purchase commitments — current |
|
7,420 |
|
|
|
6,170 |
|
Total current liabilities |
|
59,564 |
|
|
|
48,349 |
|
Senior convertible notes |
|
224,670 |
|
|
|
223,944 |
|
Midcap credit facility |
|
39,047 |
|
|
|
38,833 |
|
Mann Group convertible note |
|
8,829 |
|
|
|
18,425 |
|
Accrued interest — promissory
notes |
|
86 |
|
|
|
404 |
|
Financing liability — long
term |
|
94,447 |
|
|
|
93,525 |
|
Recognized loss on purchase
commitments — long term |
|
65,996 |
|
|
|
76,659 |
|
Operating lease liability |
|
5,928 |
|
|
|
1,040 |
|
Deferred revenue — long term |
|
29,762 |
|
|
|
19,543 |
|
Milestone liabilities |
|
4,524 |
|
|
|
4,838 |
|
Deposits from customer |
|
— |
|
|
|
4,950 |
|
Total liabilities |
|
532,853 |
|
|
|
530,510 |
|
Stockholders' deficit: |
|
|
|
|
|
|
|
Undesignated preferred stock,
$0.01 par value — 10,000,000 shares authorized; no shares issued or
outstanding as of June 30, 2022 and December 31, 2021 |
|
— |
|
|
|
— |
|
Common stock, $0.01 par value -
400,000,000 shares authorized, 257,276,847 and 251,477,562 shares
issued and outstanding at June 30, 2022 and December 31, 2021,
respectively |
|
2,573 |
|
|
|
2,515 |
|
Additional paid-in capital |
|
2,936,667 |
|
|
|
2,918,205 |
|
Accumulated other comprehensive
loss |
|
(1,206 |
) |
|
|
— |
|
Accumulated deficit |
|
(3,185,090 |
) |
|
|
(3,130,069 |
) |
Total stockholders' deficit |
|
(247,056 |
) |
|
|
(209,349 |
) |
Total liabilities and
stockholders' deficit |
$ |
285,797 |
|
|
$ |
321,161 |
|
MANNKIND CORPORATION AND
SUBSIDIARY CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (In thousands, except per
share data)
|
Three Months EndedJune 30, |
|
|
Six Months EndedJune 30, |
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue — commercial product sales |
$ |
12,722 |
|
|
$ |
9,976 |
|
|
$ |
22,548 |
|
|
$ |
18,075 |
|
Revenue — collaborations and services |
|
5,868 |
|
|
|
13,304 |
|
|
|
8,034 |
|
|
|
22,641 |
|
Royalties |
|
304 |
|
|
|
— |
|
|
|
304 |
|
|
|
— |
|
Total revenues |
|
18,894 |
|
|
|
23,280 |
|
|
|
30,886 |
|
|
|
40,716 |
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold |
|
4,617 |
|
|
|
4,411 |
|
|
|
6,901 |
|
|
|
8,726 |
|
Cost of revenue — collaborations and services |
|
8,298 |
|
|
|
5,515 |
|
|
|
17,012 |
|
|
|
8,810 |
|
Research and development |
|
4,893 |
|
|
|
2,329 |
|
|
|
8,429 |
|
|
|
4,771 |
|
Selling, general and administrative |
|
26,043 |
|
|
|
20,056 |
|
|
|
46,740 |
|
|
|
37,469 |
|
(Gain) loss on foreign currency translation |
|
(4,503 |
) |
|
|
903 |
|
|
|
(6,486 |
) |
|
|
(2,935 |
) |
Loss on purchase commitments |
|
— |
|
|
|
339 |
|
|
|
— |
|
|
|
339 |
|
Total expenses |
|
39,348 |
|
|
|
33,553 |
|
|
|
72,596 |
|
|
|
57,180 |
|
Loss from operations |
|
(20,454 |
) |
|
|
(10,273 |
) |
|
|
(41,710 |
) |
|
|
(16,464 |
) |
Other (expense) income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income, net |
|
516 |
|
|
|
25 |
|
|
|
893 |
|
|
|
28 |
|
Interest expense on financing liability |
|
(2,443 |
) |
|
|
— |
|
|
|
(4,814 |
) |
|
|
— |
|
Interest expense on notes |
|
(6,642 |
) |
|
|
(3,180 |
) |
|
|
(9,390 |
) |
|
|
(9,632 |
) |
Loss on extinguishment of debt, net |
|
— |
|
|
|
(22,130 |
) |
|
|
— |
|
|
|
(22,130 |
) |
Other expense |
|
— |
|
|
|
35 |
|
|
|
— |
|
|
|
(241 |
) |
Total other expense |
|
(8,569 |
) |
|
|
(25,250 |
) |
|
|
(13,311 |
) |
|
|
(31,975 |
) |
Loss before provision for income
taxes |
|
(29,023 |
) |
|
|
(35,523 |
) |
|
|
(55,021 |
) |
|
|
(48,439 |
) |
Provision for income taxes |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Net loss |
$ |
(29,023 |
) |
|
$ |
(35,523 |
) |
|
$ |
(55,021 |
) |
|
$ |
(48,439 |
) |
Net loss per share - basic and
diluted |
$ |
(0.11 |
) |
|
$ |
(0.14 |
) |
|
$ |
(0.22 |
) |
|
$ |
(0.20 |
) |
Shares used to compute net loss
per share - basic and diluted |
|
253,644 |
|
|
|
249,295 |
|
|
|
252,775 |
|
|
|
247,970 |
|
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