Conference Call to Begin Today at 5:00 PM
ET
MannKind Corporation (NASDAQ:MNKD) (TASE:MNKD)
today reported financial results for the fourth quarter and full
year ended December 31, 2016. Key results include:
- Total revenue for the quarter of $12.4 million, including $10.2
million from insulin sales to Sanofi, and net income for the fourth
quarter of $54.0 million including $72.0 million from the
extinguishment of debt owed to Sanofi
- Total revenue for 2016 of $174.8 million, including $172.0
million in revenue previously deferred from the collaboration with
Sanofi, and net income for 2016 of $125.7 million, compared with a
net loss of $368.4 million for 2015
- Finished 2016 with $22.9 million of cash and cash equivalents,
not including $30.6 million subsequently received from Sanofi and
$16.7 million subsequently received from sale of surplus
building
Fourth Quarter Results
For the fourth quarter of 2016, total net
revenue of $12.4 million was comprised primarily of $10.2 million
from the sale of bulk insulin to Sanofi under the terms of the
settlement agreement, in addition to $1.3 million of recognized
Afrezza product sales as dispensed to patients. As of
December 31, 2016, deferred net revenue included $1.7 million of
Afrezza product shipped to the third-party logistics provider and
wholesale distributors, but not yet recognized as revenue.
Research and development expenses were $1.6
million for the fourth quarter of 2016 compared to $6.2 million in
the fourth quarter of 2015, a decrease of 74.2%, primarily due to
$1.9 million in decreased collaboration development work and $1.6
million in decreased consulting support for research and
development projects.
Selling, general and administrative expenses
were $15.3 million for the fourth quarter of 2016 compared to $8.3
million for the same quarter of 2015, an increase of 84.3%,
primarily due to $8.8 million in sales and marketing expense
associated with the commercialization of Afrezza, offset by a $1.8
million decrease in general and administrative costs, mainly due to
the effects of the 2015 and 2016 reductions in force.
Full Year 2016 Results
Total net revenue for 2016 of $174.8 million is
comprised primarily of $172.0 million net revenue previously
deferred from the collaboration with Sanofi. Net revenue from
commercial product sales by the Company was $1.9 million, after
giving effect to gross to net adjustments on gross revenue of $2.7
million of Afrezza product dispensed to patients. Commercial
product sales commenced in August 2016, after Afrezza transitioned
from Sanofi to MannKind. During 2015, there was no
recognition of revenue or cost of revenue related to the
collaboration.
Research and development costs for 2016 were
$14.9 million compared to $29.7 million for 2015, a decrease of
49.8%, primarily due to $6.2 million of reduced expenses associated
with the reductions in force, $3.3 million of decreased facility
spending, $3.1 million in lower project costs, and $2.1 million of
reduced clinical trial costs. These decreases were partially
offset by the FDA filing fee of $1.0 million for the supplemental
new drug application submitted in 2016.
Selling, general and administrative expenses for
2016 were $46.9 million compared to $41.0 million for 2015, an
increase of 14.4%, primarily due to increased costs for the sales
and marketing of Afrezza, offset by decreased general and
administrative expenses. Sales and marketing expenses were
$19.8 million for 2016 compared to $1.6 million for 2015. General
and administrative expenses for 2016 were $27.1 million compared to
$39.4 million in 2015, a decrease of 31.2%, primarily due to
decreased costs associated with the effects of the reductions in
force of $9.0 million, $1.7 million in decreased professional fees
and $1.7 million in reduced facility spending.
The $72.0 million gain from extinguishment of
debt in 2016 resulted from the forgiveness of the full outstanding
loan balance of the Sanofi Loan Facility as part of the settlement
agreement with Sanofi.
Net income for 2016 was $125.7 million, or $1.37
net income per share, compared to the net loss of $368.4 million,
or $4.54 net loss per share in 2015.
On March 1, 2017, following stockholder approval
of the Reverse Split Proposal, the Company’s board of directors
approved a reverse stock split of the Company’s common stock at a
ratio of 1-for-5. On March 1, 2017, the Company filed with the
Secretary of State of the State of Delaware a Certificate of
Amendment of its Amended and Restated Certificate to (i) implement
a one-for-five reverse stock split of the Company’s outstanding
common stock and (ii) reduce the authorized number of shares of the
Company’s common stock from 700 million to 140 million shares.
As a result, all common stock share amounts included in this
release were retroactively reduced by a factor of five and all
common stock per share amounts were increased by a factor of
five.
Cash and cash equivalents at December 31, 2016
were $22.9 million, compared to $35.5 million at the end of the
third quarter of 2016. During the fourth quarter of 2016, cash
receipts were $10.2 million from the sale of insulin to Sanofi,
$4.8 million from shipments of Afrezza, $2.2 million from sales of
insulin to a third party and $1.1 million from the collaboration
with Receptor. Currently, $30.1 million remains available to borrow
under the amended loan arrangement with The Mann Group.
Conference Call
MannKind will host a conference call and
presentation webcast to discuss these results today at 5:00 p.m.
Eastern Time. To view and listen to the earnings call
webcast, visit MannKind’s website at
http://www.mannkindcorp.com and click on the “Q4 2016 MannKind
Earnings Conference Call” link in the Webcast section of News &
Events. To participate in the live call by telephone, please
dial (888) 771-4371 or (847) 585-4405 and use the participant
passcode: 44096370.
A telephone replay will be accessible for
approximately 14 days following completion of the call by dialing
(888) 843-7419 or (630) 652-3042 and use the participant passcode:
4409 6370#. A replay will also be available on MannKind’s
website for 14 days.
About MannKind Corporation
MannKind Corporation (NASDAQ:MNKD) (TASE:MNKD)
focuses on the discovery, development and commercialization of
therapeutic products for patients with diseases such as
diabetes. MannKind maintains a website at
http://www.mannkindcorp.com to which MannKind regularly posts
copies of its press releases as well as additional information
about MannKind. Interested persons can subscribe on the MannKind
website to e-mail alerts that are sent automatically when MannKind
issues press releases, files its reports with the Securities and
Exchange Commission or posts certain other information to the
website.
Forward-Looking Statements
This press release contains forward-looking
statements that involve risks and uncertainties, including
statements regarding MannKind’s ability to directly commercialize
pharmaceutical products. 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 the 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, the
ability to generate significant product sales for MannKind,
MannKind’s ability to manage its existing cash resources or raise
additional cash resources, stock price volatility and other risks
detailed in MannKind’s filings with the Securities and Exchange
Commission, including the Annual Report on Form 10-K for the year
ended December 31, 2016 and subsequent periodic reports on Form
10-Q and current reports on Form 8-K. 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.
MannKind CorporationCondensed
Consolidated Statements of
Operations(Unaudited)(In thousands,
except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended December
31, |
|
Twelve months ended December
31, |
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
Net
revenue – collaboration |
|
$ |
|
10,184 |
|
|
$ |
|
— |
|
|
$ |
|
171,965 |
|
|
$ |
|
— |
|
Net
revenue – commercial product sales |
|
|
|
1,322 |
|
|
|
|
— |
|
|
|
|
1,895 |
|
|
|
|
— |
|
Revenue –
bulk insulin sales |
|
|
|
898 |
|
|
|
|
— |
|
|
|
|
898 |
|
|
|
|
— |
|
Total net
revenue |
|
|
|
12,404 |
|
|
|
|
— |
|
|
|
|
174,758 |
|
|
|
|
— |
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenue - collaboration |
|
|
|
10,230 |
|
|
|
|
— |
|
|
|
|
32,971 |
|
|
|
|
— |
|
Cost of
goods sold |
|
|
|
1,553 |
|
|
|
|
49,057 |
|
|
|
|
17,121 |
|
|
|
|
64,745 |
|
Research
and development |
|
|
|
1,559 |
|
|
|
|
6,218 |
|
|
|
|
14,917 |
|
|
|
|
29,674 |
|
Selling,
general and administrative |
|
|
|
15,333 |
|
|
|
|
8,311 |
|
|
|
|
46,928 |
|
|
|
|
40,960 |
|
Property
and equipment impairment |
|
|
|
1,259 |
|
|
|
|
140,412 |
|
|
|
|
1,259 |
|
|
|
|
140,412 |
|
(Gain)
loss on foreign currency translation |
|
|
|
(3,433 |
) |
|
|
|
2,697 |
|
|
|
|
(3,433 |
) |
|
|
|
2,697 |
|
(Gain)
loss on purchase commitments |
|
|
|
(2,265 |
) |
|
|
|
66,167 |
|
|
|
|
(2,265 |
) |
|
|
|
66,167 |
|
Total
expenses |
|
|
|
24,236 |
|
|
|
|
272,862 |
|
|
|
|
107,498 |
|
|
|
|
344,655 |
|
Income (loss) from
operations |
|
|
|
(11,832 |
) |
|
|
|
(272,862 |
) |
|
|
|
67,260 |
|
|
|
|
(344,655 |
) |
Other income
(expense): |
|
|
|
|
|
|
|
|
|
|
|
|
Change in
fair value of warrant liability |
|
|
|
(2,510 |
) |
|
|
|
— |
|
|
|
|
5,369 |
|
|
|
|
— |
|
Interest
income |
|
|
|
15 |
|
|
|
|
10 |
|
|
|
|
85 |
|
|
|
|
18 |
|
Interest
expense on notes |
|
|
|
(3,010 |
) |
|
|
|
(3,331 |
) |
|
|
|
(15,576 |
) |
|
|
|
(21,231 |
) |
Interest
expense on note payable to principal stockholder |
|
|
|
(729 |
) |
|
|
|
(729 |
) |
|
|
|
(2,901 |
) |
|
|
|
(2,894 |
) |
Gain
(loss) on extinguishment of debt |
|
|
|
72,024 |
|
|
|
|
— |
|
|
|
|
72,024 |
|
|
|
|
(1,049 |
) |
Other
income (expense) |
|
|
|
18 |
|
|
|
|
(106 |
) |
|
|
|
(597 |
) |
|
|
|
1,366 |
|
Net income (loss) |
|
$ |
|
53,976 |
|
|
$ |
|
(277,018 |
) |
|
$ |
|
125,664 |
|
|
$ |
|
(368,445 |
) |
Net income (loss) per
share — basic |
|
$ |
|
0.56 |
|
|
$ |
|
(3.30 |
) |
|
$ |
|
1.37 |
|
|
$ |
|
(4.54 |
) |
Net income (loss) per
share — diluted |
|
$ |
|
0.56 |
|
|
$ |
|
(3.30 |
) |
|
$ |
|
1.36 |
|
|
$ |
|
(4.54 |
) |
Shares used to compute
basic net income (loss) per share |
|
|
|
95,676 |
|
|
|
|
83,862 |
|
|
|
|
92,053 |
|
|
|
|
81,233 |
|
Shares used to compute
diluted net income (loss) per share |
|
|
|
96,510 |
|
|
|
|
83,862 |
|
|
|
|
92,085 |
|
|
|
|
81,233 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MannKind CorporationCondensed
Consolidated Balance Sheets(Unaudited)(In
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016 |
|
|
December 31, 2015 |
Assets |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and
cash equivalents |
|
|
$ |
22,895 |
|
|
|
$ |
59,074 |
|
Accounts
receivable |
|
|
|
302 |
|
|
|
|
— |
|
Receivable from Sanofi |
|
|
|
30,557 |
|
|
|
|
23 |
|
Inventory |
|
|
|
2,331 |
|
|
|
|
— |
|
Asset
held for sale |
|
|
|
16,730 |
|
|
|
|
— |
|
Deferred
costs from commercial product sales |
|
|
|
309 |
|
|
|
|
— |
|
Deferred
costs from collaboration |
|
|
|
— |
|
|
|
|
13,539 |
|
Prepaid
expenses and other current assets |
|
|
|
4,364 |
|
|
|
|
4,018 |
|
Total
current assets |
|
|
|
77,488 |
|
|
|
|
76,654 |
|
|
|
|
|
|
|
|
|
|
Property and equipment
— net |
|
|
|
28,927 |
|
|
|
|
48,749 |
|
Other assets |
|
|
|
648 |
|
|
|
|
1,009 |
|
Total
assets |
|
|
$ |
107,063 |
|
|
|
$ |
126,412 |
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders’ Deficit |
|
|
|
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
|
|
|
Accounts
payable |
|
|
$ |
3,263 |
|
|
|
$ |
15,599 |
|
Accrued
expenses and other current liabilities |
|
|
|
7,937 |
|
|
|
|
7,929 |
|
Facility
financing obligation |
|
|
|
71,339 |
|
|
|
|
74,582 |
|
Deferred
revenue - net |
|
|
|
3,419 |
|
|
|
|
— |
|
Deferred
payments from collaboration |
|
|
|
1,000 |
|
|
|
|
140,231 |
|
Deferred
sales from collaboration |
|
|
|
— |
|
|
|
|
17,503 |
|
Recognized loss on purchase commitments - current |
|
|
|
5,093 |
|
|
|
|
12,475 |
|
Total
current liabilities |
|
|
|
92,051 |
|
|
|
|
268,319 |
|
|
|
|
|
|
|
|
|
|
Note payable to
principal stockholder |
|
|
|
49,521 |
|
|
|
|
49,521 |
|
Accrued interest – note
payable to principal stockholder |
|
|
|
9,281 |
|
|
|
|
6,380 |
|
Senior convertible
notes |
|
|
|
27,635 |
|
|
|
|
27,613 |
|
Sanofi loan facility
and loss share obligation |
|
|
|
— |
|
|
|
|
62,371 |
|
Recognized loss on
purchase commitments – long term |
|
|
|
95,942 |
|
|
|
|
53,692 |
|
Warrant liability |
|
|
|
7,381 |
|
|
|
|
— |
|
Milestone rights
liability |
|
|
|
8,845 |
|
|
|
|
8,845 |
|
Total
liabilities |
|
|
|
290,656 |
|
|
|
|
476,741 |
|
Total
stockholders’ deficit |
|
|
|
(183,593 |
) |
|
|
|
(350,329 |
) |
Total
liabilities and stockholders’ deficit |
|
|
$ |
107,063 |
|
|
|
$ |
126,412 |
|
|
|
|
|
|
|
|
|
|
Company Contact:
Rose Alinaya
SVP, Finance
661-775-5300
ralinaya@mannkindcorp.com
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