MannKind Corporation Reports 2020 First Quarter Financial Results
May 06 2020 - 4:00PM
MannKind Corporation (NASDAQ:MNKD) today reported
financial results for the quarter ended March 31, 2020.
“We are pleased to report first quarter Afrezza
net revenue of $8.0 million, which is 58% higher than the same
quarter in 2019,” said Michael Castagna, Chief Executive Officer of
MannKind Corporation. ”We believe that some of the increased
revenue this quarter reflects the impact of patients stocking up on
extra refills in advance of the stay-at-home orders that have since
been implemented across the country. In response to the
COVID-19 pandemic, we have rapidly implemented digital tools and
programs to help our sales force and our Afrezza prescribers
navigate this challenging time for our healthcare system. In
addition, our manufacturing and development team in Connecticut
remain focused on maintaining supply of Afrezza and meeting our
obligations under our collaboration with United Therapeutics.”
Total revenues were $16.2 million for the first
quarter of 2020, reflecting Afrezza net revenue of $8.0 million and
collaboration and services revenue of $8.2 million. Afrezza net
revenue increased 58% compared to $5.1 million in the first quarter
of 2019, primarily driven by higher product demand as well as a
price increase and a more favorable mix of cartridges.
Collaboration and services revenue for the first quarter of 2020
decreased $4.2 million compared to the first quarter of 2019,
primarily due to the substantial completion of the research
agreement with United Therapeutics in the second quarter of
2019.
Afrezza gross profit for the first quarter of
2020 was $3.8 million vs. $1.1 million in the same period of 2019,
a 263% increase that was driven primarily by higher Afrezza
revenue. Cost of goods sold increased by $0.1 million which
included an increase related to Afrezza unit sales growth and an
inventory write-off offset by a greater amount of costs capitalized
to inventory due to a higher volume of manufacturing activities in
the first quarter of 2020. Gross margin in the first quarter
of 2020 increased to 48%, our highest gross margin to date, from
21% for the same quarter in 2019, primarily due to higher Afrezza
revenue.
Selling, general and administrative expenses for
the first quarter of 2020 were $14.4 million compared to $25.7
million for the first quarter of 2019. This 44% decrease was
primarily due to $9.3 million spent on direct-to-consumer
television advertising in 2019, which was not repeated in 2020, a
$1.1 million decrease in promotional and marketing activities and
$0.8 million decrease in personnel and employee related costs.
Net interest expense for the first quarter of
2020 was $2.2 million compared to $1.4 million for the first
quarter of 2019. This $0.8 million increase was due to a higher
balance of outstanding principal and an increase in the interest
rate of certain promissory notes.
The net loss for the first quarter of 2020 was
$9.3 million, or $0.04 per share, compared to a $14.9 million net
loss in the first quarter of 2019, or $0.08 per share. The lower
net loss is mainly attributable to a decrease in operating expenses
of $7.6 million. The reduction in the net loss per share was
impacted by the lower operating expenses and a greater number of
outstanding shares.
Cash, cash equivalents and restricted cash at
March 31, 2020 was $39.2 million compared to $50.2 million at
December 31, 2019, which also included short-term investments of
$20.0 million. The decrease was primarily due to net cash used in
operating activities of $11.2 million in the first quarter of
2020.
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 March 31, |
|
|
|
2020 |
|
|
2019 |
|
|
$ Change |
|
|
% Change |
|
Net cash used in operating activities |
|
$ |
(11,219 |
) |
|
$ |
(11,597 |
) |
|
$ |
(378 |
) |
|
|
(3 |
%) |
Exclude United Therapeutic
milestone payment received |
|
|
— |
|
|
|
(12,500 |
) |
|
|
(12,500 |
) |
|
|
(100 |
%) |
Non-GAAP cash used in operating activities |
|
$ |
(11,219 |
) |
|
$ |
(24,097 |
) |
|
$ |
(12,878 |
) |
|
|
(53 |
%) |
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 http://www.mannkindcorp.com under News &
Events.
A telephone replay of the call will be
accessible for approximately 14 days following completion of the
call by dialing (844) 512-2921 or (412) 317-6671 and use the
participant passcode: 7127207#. A replay will also 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 diseases such as diabetes and pulmonary
arterial hypertension. 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. 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. Words such as
"believes," "anticipates," "plans," "expects," "intends," "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 various risks and uncertainties detailed
in MannKind's filings with the SEC, including risks
related to the COVID-19 pandemic. For a discussion of these and
other factors, please refer to MannKind’s annual report on Form
10-K for the year ended December 31, 2019 as well as
MannKind’s other filings with the SEC. 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.
Company Contact:
818-661-5000 ir@mannkindcorp.com
MANNKIND
CORPORATIONCONDENSED CONSOLIDATED BALANCE
SHEETS(Unaudited)(In thousands except share data)
|
March 31, 2020 |
|
|
December 31, 2019 |
|
ASSETS |
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
38,868 |
|
|
$ |
29,906 |
|
Restricted cash |
|
316 |
|
|
|
316 |
|
Short-term investments |
|
— |
|
|
|
19,978 |
|
Accounts receivable, net |
|
5,032 |
|
|
|
3,513 |
|
Inventory |
|
3,231 |
|
|
|
4,155 |
|
Prepaid expenses and other current assets |
|
1,901 |
|
|
|
2,889 |
|
Total current assets |
|
49,348 |
|
|
|
60,757 |
|
Property and equipment,
net |
|
26,517 |
|
|
|
26,778 |
|
Other assets |
|
4,347 |
|
|
|
6,190 |
|
Total assets |
$ |
80,212 |
|
|
$ |
93,725 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' DEFICIT |
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
Accounts payable |
$ |
6,731 |
|
|
$ |
4,789 |
|
Accrued expenses and other current liabilities |
|
18,326 |
|
|
|
15,904 |
|
Short-term note payable |
|
5,101 |
|
|
|
5,028 |
|
Deferred revenue — current |
|
30,840 |
|
|
|
32,503 |
|
Recognized loss on purchase commitments — current |
|
7,250 |
|
|
|
7,394 |
|
Total current liabilities |
|
68,248 |
|
|
|
65,618 |
|
Promissory notes |
|
70,022 |
|
|
|
70,020 |
|
Accrued interest — promissory
notes |
|
3,259 |
|
|
|
2,002 |
|
Long-term Midcap credit
facility |
|
38,893 |
|
|
|
38,851 |
|
Senior convertible notes |
|
5,000 |
|
|
|
5,000 |
|
Recognized loss on purchase
commitments — long term |
|
82,987 |
|
|
|
84,639 |
|
Operating lease liability |
|
2,155 |
|
|
|
2,514 |
|
Deferred revenue — long
term |
|
1,772 |
|
|
|
8,344 |
|
Milestone rights
liability |
|
5,926 |
|
|
|
7,263 |
|
Total liabilities |
|
278,262 |
|
|
|
284,251 |
|
Stockholders' deficit: |
|
|
|
|
|
|
|
Undesignated preferred stock, $0.01 par value — 10,000,000 shares
authorized; no shares issued or outstanding as of March 31,
2020 and December 31, 2019 |
|
— |
|
|
|
— |
|
Common stock, $0.01 par value - 280,000,000 shares authorized,
213,137,684 and 211,787,573 shares issued and outstanding at
March 31, 2020 and December 31, 2019, respectively |
|
2,131 |
|
|
|
2,118 |
|
Additional paid-in capital |
|
2,801,044 |
|
|
|
2,799,278 |
|
Accumulated other comprehensive loss |
|
— |
|
|
|
(19 |
) |
Accumulated deficit |
|
(3,001,225 |
) |
|
|
(2,991,903 |
) |
Total stockholders'
deficit |
|
(198,050 |
) |
|
|
(190,526 |
) |
Total liabilities and stockholders' deficit |
$ |
80,212 |
|
|
$ |
93,725 |
|
|
|
|
|
|
|
|
|
MANNKIND
CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(Unaudited)(In thousands, except per share
amounts)
|
Three Months Ended March 31, |
|
|
2020 |
|
|
2019 |
|
Revenues: |
|
|
|
|
|
|
|
Net revenue — commercial product sales |
$ |
8,000 |
|
|
$ |
5,076 |
|
Revenue — collaborations and services |
|
8,235 |
|
|
|
12,372 |
|
Total revenues |
|
16,235 |
|
|
|
17,448 |
|
Expenses: |
|
|
|
|
|
|
|
Cost of goods sold |
|
4,164 |
|
|
|
4,020 |
|
Cost of revenue — collaborations and services |
|
3,362 |
|
|
|
1,537 |
|
Research and development |
|
1,755 |
|
|
|
1,667 |
|
Selling, general and administrative |
|
14,350 |
|
|
|
25,673 |
|
Impairment of commitment asset |
|
1,521 |
|
|
|
— |
|
Gain on foreign currency translation |
|
(1,796 |
) |
|
|
(1,935 |
) |
Total expenses |
|
23,356 |
|
|
|
30,962 |
|
Loss from operations |
|
(7,121 |
) |
|
|
(13,514 |
) |
Other (expense) income: |
|
|
|
|
|
|
|
Interest income |
|
133 |
|
|
|
318 |
|
Interest expense on notes |
|
(1,071 |
) |
|
|
(593 |
) |
Interest expense on promissory notes |
|
(1,259 |
) |
|
|
(1,080 |
) |
Other expense |
|
(4 |
) |
|
|
(14 |
) |
Total other expense |
|
(2,201 |
) |
|
|
(1,369 |
) |
Loss before provision for income
taxes |
|
(9,322 |
) |
|
|
(14,883 |
) |
Provision for income taxes |
|
— |
|
|
|
— |
|
Net loss |
$ |
(9,322 |
) |
|
$ |
(14,883 |
) |
Net loss per share - basic and
diluted |
$ |
(0.04 |
) |
|
$ |
(0.08 |
) |
Shares used to compute basic and
diluted net loss per share |
|
212,467 |
|
|
|
187,434 |
|
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