MannKind Corporation (NASDAQ:MNKD) today reported financial results
for the fourth quarter and full year ended December 31, 2020.
“Our fourth quarter produced exceptional
results, with $10.1 million in Afrezza net revenue and positive
clinical data for Tyvaso DPI from the BREEZE study conducted by
United Therapeutics,” said Michael Castagna, Chief Executive
Officer of MannKind Corporation. “UT also announced their plan to
submit a new drug application for Tyvaso DPI to the FDA in April
2021. During the fourth quarter, we solidified our new direction
with the acquisition of QrumPharma, which added a nebulized version
of clofazimine to our pipeline of therapies for orphan lung
diseases, and we entered into a collaboration agreement with
Vertice for the co-promotion of Thyquidity, which is indicated for
hyperthyroidism and is expected to expand our reach into endocrine
diseases.”
Fourth Quarter 2020 Results
Total revenues were $18.4 million for the fourth
quarter of 2020, reflecting Afrezza net revenue of $10.1 million
and collaborations and services revenue of $8.4 million. Afrezza
net revenue increased 30% compared to $7.8 million in the fourth
quarter of 2019, primarily driven by higher product demand with a
more favorable mix of Afrezza cartridges and more favorable
gross-to-net deductions. Collaborations and services revenue
increased $0.2 million compared to the fourth quarter of 2019.
Afrezza gross profit for the fourth quarter of
2020 was $6.4 million compared to $3.1 million in the same period
of 2019, an increase of $3.3 million, or 105%, that was driven by a
combination of increased Afrezza revenue and a reduction in cost of
goods sold.
In-process research and development expense for
the fourth quarter of 2020 was $13.2 million, reflecting the
acquisition of QrumPharma for approximately $12.8 million in total
consideration and approximately $0.4 million in transaction costs.
The acquisition of QrumPharma was accounted for as an asset
acquisition and expensed on the date of acquisition as
substantially all of the fair value of the assets acquired was
concentrated in a single asset that consisted of in-process
research and development in a pre-clinical development state.
Research and development expenses for the fourth
quarter of 2020 were $1.5 million compared to $2.0 million for the
fourth quarter of 2019. This decrease was mainly related to lower
clinical trial spending.
Selling, general and administrative expenses for
the fourth quarter of 2020 were $17.1 million compared to $15.7
million for the fourth quarter of 2019. This increase of $1.4
million, or 9%, was primarily attributable to a $1.2 million
increase in personnel costs related to the expansion of our sales
and medical field force.
During the fourth quarter of 2020, loss on
foreign currency translation for insulin purchase commitments,
which are denominated in Euros, was $4.0 million compared to $2.6
million for the fourth quarter of 2019. The fluctuation
was due to a change in the U.S. dollar to Euro foreign exchange
rate.
Interest expense on debt for the fourth quarter
of 2020 was $2.4 million compared to $2.3 million for the fourth
quarter of 2019.
The net loss for the fourth quarter of 2020 was
$26.4 million, or $0.11 per share, compared to $14.3 million in the
fourth quarter of 2019, or $0.07 per share. The increase in the net
loss of $12.1 million was primarily due to the write-off of
in-process research and development related to the acquisition of
QrumPharma. On a non-GAAP basis, excluding the expense incurred for
the acquisition of QrumPharma, the net loss for the fourth quarter
of 2020 was $13.2 million, or $0.06 per share.
Twelve Months Ended December 31,
2020
Total revenues were $65.1 million for the year
ended December 31, 2020, reflecting Afrezza net revenue of $32.3
million and collaborations and services revenue of $32.8 million.
Afrezza net revenue increased 28% compared to $25.3 million for the
year ended December 31, 2019, primarily driven by higher product
demand with a more favorable mix of Afrezza cartridges, a price
increase and more favorable gross-to-net deductions, all of which
was partially offset by a reduction in sales to Biomm (Brazil).
Collaborations and services revenue decreased $4.9 million compared
to the full year ended December 31, 2019, primarily driven by a
$5.8 million decrease in revenue recognized from the UT Research
Agreement, which was substantially completed in the second quarter
of 2019.
Afrezza gross profit was $17.2 million for the year ended
December 31, 2020, an increase of $12.0 million, or 230%, compared
to a gross profit of $5.2 million in the same period in 2019,
primarily due higher commercial product sales combined with a
reduction in cost of goods sold. In-process research and
development expense for the year ended December 31, 2020 was $13.2
million, reflecting the research and development acquired and
expensed from the acquisition of QrumPharma for approximately $12.8
million in total consideration and approximately $0.4 million in
transaction costs.
Research and development expenses for the year
ended December 31, 2020 were $6.2 million compared to $6.9 million
for the year ended December 31, 2019. This decrease of $0.7
million, or 9%, was primarily attributable to lower clinical trial
spending.
Selling, general and administrative expenses for
the year ended December 31, 2020 were $59.0 million compared to
$74.7 million for the year ended December 31, 2019. This decrease
of $15.6 million, or 21%, was primarily attributable a $9.3 million
decrease in costs for television advertising for Afrezza, a $4.1
million decrease in promotional and marketing activities in
response to the COVID-19 pandemic and a $2.5 million decrease in
professional fees.
An impairment of $1.9 million was recognized for
the year ended December 31, 2020 on a commitment asset and debt
issuance costs related to future funding commitments of the MidCap
Credit Facility. There were no asset impairments for the year ended
December 31, 2019.
For the year ended December 31, 2020, foreign
currency translation for insulin purchase commitments, which are
denominated in Euros, resulted in a loss of $8.0 million compared
to a gain of $1.9 million for the year ended December 31, 2019. The
fluctuation was due to a change in the U.S. dollar to Euro foreign
exchange rate.
Interest expense on debt for the year ended
December 31, 2020 was $9.5 million compared to $10.9 million for
the year ended December 31, 2019. This $1.4 million decrease was
primarily attributable to a $3.4 million milestone obligation to
Deerfield that was achieved in the third quarter of 2019 and a
decrease of $0.8 million of interest expense related to the
Deerfield Credit Facility, which was extinguished in the third
quarter of 2019. This decrease was partially offset by an increase
in interest expense from the MidCap Credit Facility of $2.3 million
and an increase in interest expense from our Mann Group promissory
notes of $0.6 million in 2020.
The net loss for the year ended December 31,
2020 was $57.2 million, or $0.26 per share, compared to $51.9
million net loss for the year ended December 31, 2019, or $0.27 per
share. The higher net loss was mainly attributable to the write-off
of in-process research and development related to the acquisition
of QrumPharma and a loss on foreign currency translation related to
insulin purchase commitments denominated in Euros, offset by a
decrease in selling, general and administrative expenses. On a
non-GAAP basis, excluding the expense incurred for the acquisition
of QrumPharma, the net loss for the year ended December 31, 2020
was $44.0 million, or $0.20 per share.
Cash, cash equivalents, restricted cash, and
short-term investments at December 31, 2020 was $67.2 million
compared to $50.2 million at December 31, 2019.
Debt Reductions Subsequent to December
31, 2020
Pursuant to the terms of the senior convertible
notes, the Company forced the conversion of all $5.0 million in
principal of such notes into 1,666,667 shares of the Company’s
common stock.
In addition, the Mann Group converted $9.6
million of principal and $0.4 million of accrued interest on its
convertible promissory note into 4.0 million shares of the
Company’s common stock. As of the date hereof, $53.4 million in
principal remains outstanding under the promissory notes held by
the Mann Group ($18.4 of which is convertible).
Sale-Leaseback of the Danbury
Manufacturing Facility
Subsequent to December 31, 2020, the Company
entered into a non-binding letter of intent (“LOI”) with a third
party to sell and lease back a portion of the Company’s Danbury
manufacturing facility and administrative offices. The terms of the
LOI include a sales price of approximately $95 million - $105
million, a lease term of 20 years with four 5-year renewal options,
and annual rent of approximately $10 million - $11 million at the
beginning of the lease. If the transaction is completed, the
Company intends to use the proceeds for general corporate purposes,
and may also pay down a portion of its senior secured debt. The
completion of the transactions contemplated by the LOI is subject
to certain conditions, including the negotiation of satisfactory
definitive agreements and satisfactory results of the buyer’s
inspections and other investigations, all of which are anticipated
to be completed during the first quarter of 2021.
However, there can be no assurances that this proposed transaction
will be completed in the timeframe or on the principal terms set
forth above, or at all.
Non-GAAP Measures
Certain financial information contained in this
press release is presented on both a reported basis (GAAP) and a
non-GAAP basis. Reported results were prepared in accordance with
GAAP whereas non-GAAP measures exclude items described in the
reconciliation tables below. Non-GAAP financial information is
intended to portray the results of our baseline performance,
supplement or enhance management, analysts and investors overall
understanding of our underlying financial performance and
facilitate comparisons among current and past periods. The non-GAAP
financial measures are in addition to, not a substitute for, or
superior to, measures of financial performance prepared in
accordance with GAAP.
|
|
Three Months Ended December 31, |
|
|
Twelve Months Ended December 31, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Net loss |
|
$ |
(26,411 |
) |
|
$ |
(14,263 |
) |
|
$ |
(57,240 |
) |
|
$ |
(51,903 |
) |
GAAP net loss per share — basic and diluted |
|
$ |
(0.11 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.26 |
) |
|
$ |
(0.27 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(26,411 |
) |
|
$ |
(14,263 |
) |
|
$ |
(57,240 |
) |
|
$ |
(51,903 |
) |
Less in-process research and
development |
|
|
13,233 |
|
|
|
— |
|
|
|
13,233 |
|
|
|
— |
|
Non-GAAP net loss |
|
$ |
(13,178 |
) |
|
$ |
(14,263 |
) |
|
$ |
(44,007 |
) |
|
$ |
(51,903 |
) |
Non-GAAP net loss per share — basic and diluted |
|
$ |
(0.06 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.20 |
) |
|
$ |
(0.27 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conference Call
MannKind will host a conference call and
presentation webcast to discuss these results today at 9:00 a.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 http://www.mannkindcorp.com under News & Events. A
replay will be available on MannKind's website for 14 days.
About MannKind Corporation
MannKind Corporation (NASDAQ: MNKD) focuses on
the development and commercialization of inhaled therapeutic
products for patients with endocrine and orphan lung diseases.
MannKind is currently commercializing Afrezza® (insulin human)
Inhalation Powder, the Company’s first FDA-approved product and the
only inhaled ultra rapid-acting mealtime insulin in the United
States, where it is available by prescription from pharmacies
nationwide. Afrezza is also available by prescription in
Brazil where it is commercialized by the Company’s partner Biomm
SA. MannKind is headquartered in Westlake Village,
California, and has a state-of-the art manufacturing facility in
Danbury, Connecticut. The Company also employs field sales and
medical representatives across the U.S. For further information,
visit www.mannkindcorp.com.
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, 2020 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.
Tyvaso DPI (formerly known as TreT) is an
investigational combination product that is not approved for any
use in any country. The Tyvaso DPI tradename is pending final FDA
review.
Company Contact: 818-661-5000ir@mannkindcorp.com
MANNKIND CORPORATION AND
SUBSIDIARY CONDENSED CONSOLIDATED
BALANCE SHEETS (In thousands, except share and per
share data)
|
|
December 31, |
|
|
|
2020 |
|
|
2019 |
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
67,005 |
|
|
$ |
29,906 |
|
Restricted cash |
|
|
158 |
|
|
|
316 |
|
Short-term investments |
|
|
— |
|
|
|
19,978 |
|
Accounts receivable, net |
|
|
4,218 |
|
|
|
3,513 |
|
Inventory |
|
|
4,973 |
|
|
|
4,155 |
|
Prepaid expenses and other current assets |
|
|
3,122 |
|
|
|
2,889 |
|
Total current assets |
|
|
79,476 |
|
|
|
60,757 |
|
Property and equipment, net |
|
|
25,867 |
|
|
|
26,778 |
|
Other assets |
|
|
3,265 |
|
|
|
6,190 |
|
Total assets |
|
$ |
108,608 |
|
|
$ |
93,725 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' DEFICIT |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
5,582 |
|
|
$ |
4,789 |
|
Accrued expenses and other current liabilities |
|
|
19,707 |
|
|
|
15,904 |
|
Paycheck Protection Program loan — current |
|
|
4,061 |
|
|
|
— |
|
Short-term note payable |
|
|
— |
|
|
|
5,028 |
|
Deferred revenue — current |
|
|
33,275 |
|
|
|
32,503 |
|
Recognized loss on purchase commitments — current |
|
|
11,080 |
|
|
|
7,394 |
|
Total current liabilities |
|
|
73,705 |
|
|
|
65,618 |
|
Promissory notes |
|
|
63,027 |
|
|
|
70,020 |
|
Accrued interest — promissory
notes |
|
|
4,150 |
|
|
|
2,002 |
|
Long-term Midcap credit
facility |
|
|
49,335 |
|
|
|
38,851 |
|
Senior convertible notes |
|
|
5,000 |
|
|
|
5,000 |
|
Recognized loss on purchase
commitments — long term |
|
|
84,208 |
|
|
|
84,639 |
|
Operating lease liability |
|
|
1,202 |
|
|
|
2,514 |
|
Deferred revenue — long term |
|
|
1,662 |
|
|
|
8,344 |
|
Milestone rights liability |
|
|
5,926 |
|
|
|
7,263 |
|
Long-term debt - other |
|
|
812 |
|
|
|
— |
|
Total liabilities |
|
|
289,027 |
|
|
|
284,251 |
|
|
|
|
|
|
|
|
|
|
Stockholders' deficit: |
|
|
|
|
|
|
|
|
Undesignated preferred stock,
$0.01 par value — 10,000,000 shares authorized; no shares issued or
outstanding at December 31, 2020 and 2019 |
|
|
— |
|
|
|
— |
|
Common stock, $0.01 par value —
400,000,000 and 280,000,000 shares authorized, 242,117,089 and
211,787,573 shares issued and outstanding at December 31, 2020 and
2019, respectively |
|
|
2,421 |
|
|
|
2,118 |
|
Additional paid-in capital |
|
|
2,866,303 |
|
|
|
2,799,278 |
|
Accumulated other comprehensive
loss |
|
|
— |
|
|
|
(19 |
) |
Accumulated deficit |
|
|
(3,049,143 |
) |
|
|
(2,991,903 |
) |
Total stockholders' deficit |
|
|
(180,419 |
) |
|
|
(190,526 |
) |
Total liabilities and stockholders' deficit |
|
$ |
108,608 |
|
|
$ |
93,725 |
|
|
|
|
|
|
|
|
|
|
MANNKIND CORPORATION AND
SUBSIDIARY CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (In thousands, except per
share data)
|
|
Three Months Ended December 31, |
|
|
Twelve Months Ended December 31, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue — commercial product sales |
|
$ |
10,064 |
|
|
$ |
7,761 |
|
|
$ |
32,324 |
|
|
$ |
25,304 |
|
Revenue — collaborations and services |
|
|
8,379 |
|
|
|
8,232 |
|
|
|
32,820 |
|
|
|
37,734 |
|
Total revenues |
|
|
18,443 |
|
|
|
15,993 |
|
|
|
65,144 |
|
|
|
63,038 |
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold |
|
|
3,652 |
|
|
|
4,632 |
|
|
|
15,084 |
|
|
|
20,078 |
|
Cost of revenue — collaborations and services |
|
|
2,631 |
|
|
|
2,389 |
|
|
|
9,557 |
|
|
|
7,901 |
|
Research and development |
|
|
1,545 |
|
|
|
2,021 |
|
|
|
6,248 |
|
|
|
6,900 |
|
Acquired In-Process R&D |
|
|
13,233 |
|
|
|
— |
|
|
|
13,233 |
|
|
|
— |
|
Selling, general and administrative |
|
|
17,121 |
|
|
|
15,721 |
|
|
|
59,040 |
|
|
|
74,669 |
|
Impairment of commitment asset |
|
|
— |
|
|
|
— |
|
|
|
1,889 |
|
|
|
— |
|
Loss (gain) on foreign currency translation |
|
|
4,008 |
|
|
|
2,582 |
|
|
|
8,006 |
|
|
|
(1,913 |
) |
Total expenses |
|
|
42,190 |
|
|
|
27,345 |
|
|
|
113,057 |
|
|
|
107,635 |
|
Loss from operations |
|
|
(23,747 |
) |
|
|
(11,352 |
) |
|
|
(47,913 |
) |
|
|
(44,597 |
) |
Other (expense) income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
2 |
|
|
|
203 |
|
|
|
167 |
|
|
|
997 |
|
Interest expense on notes |
|
|
(1,104 |
) |
|
|
(1,021 |
) |
|
|
(4,316 |
) |
|
|
(6,304 |
) |
Interest expense on promissory notes |
|
|
(1,297 |
) |
|
|
(1,251 |
) |
|
|
(5,155 |
) |
|
|
(4,602 |
) |
(Loss) gain on extinguishment of debt |
|
|
(264 |
) |
|
|
— |
|
|
|
(264 |
) |
|
|
3,529 |
|
Other expense |
|
|
(1 |
) |
|
|
(842 |
) |
|
|
23 |
|
|
|
(926 |
) |
Total other expense |
|
|
(2,664 |
) |
|
|
(2,911 |
) |
|
|
(9,545 |
) |
|
|
(7,306 |
) |
Loss before income tax
expense |
|
|
(26,411 |
) |
|
|
(14,263 |
) |
|
|
(57,458 |
) |
|
|
(51,903 |
) |
Benefit from income taxes |
|
|
— |
|
|
|
— |
|
|
|
218 |
|
|
|
— |
|
Net loss |
|
$ |
(26,411 |
) |
|
$ |
(14,263 |
) |
|
$ |
(57,240 |
) |
|
$ |
(51,903 |
) |
Net loss per share — basic and
diluted |
|
$ |
(0.11 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.26 |
) |
|
$ |
(0.27 |
) |
Shares used to compute net loss
per share — basic and diluted |
|
|
234,575 |
|
|
|
206,689 |
|
|
|
222,585 |
|
|
|
195,584 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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