MannKind Reduces Legacy Debt by Approximately $49.5 Million and Restructures Remaining Obligations, including Extended Maturi...
April 26 2021 - 9:00AM
MannKind Corporation (Nasdaq: MNKD) announced that
on April 22, 2021 it and MidCap Financial Trust, as agent, entered
into an amendment of the credit and security agreement dated August
6, 2019 (the “MidCap Credit Facility”). In addition, MannKind and
Mann Group, LLC entered into an amendment of the terms of the Mann
Group convertible note and repaid in full outstanding amounts under
the Mann Group non-convertible note on April 22, 2021. In
connection with these transactions, MannKind reduced its
outstanding amount of indebtedness, yet retained flexibility to
borrow additional amounts under tranche 3 of the MidCap Credit
Facility, which is available to borrow until June 30, 2022, subject
to the satisfaction of certain milestone conditions associated with
Tyvaso DPI™.
The MidCap Credit Facility was amended to modify
several terms, including: (i) increasing the funds available in
tranche 3, if drawn by the Company, from $25.0 million to $60.0
million; (ii) revising the conditions to drawing tranche 3,
including milestone conditions associated with Tyvaso DPI™; (iii)
providing for an exit fee of $1.0 million in connection with the
prepayment described below in lieu of the existing prepayment
penalty and exit fees; (iv) removing the requirement to issue a
warrant to purchase shares of MannKind’s common stock upon the
drawdown of tranche 3; (v) decreasing the interest rate on the
remaining outstanding debt; (vi) extending the interest-only period
and maturity of term loans under the MidCap Credit Facility; (vii)
reducing the minimum cash covenant from $30.0 million to $10.0
million, effective immediately, and eliminating such covenant in
the event that Tyvaso DPI™ is approved by the FDA; (viii)
eliminating the requirement to test compliance with the minimum
Afrezza net revenue covenant so long as the Company has $90.0
million or more of unrestricted cash; (ix) permitting the
Company to make certain acquisitions subject to certain conditions;
and (x) permitting the Company to make investments of up to an
additional $9.0 million so long as the Company has $90.0 million or
more of unrestricted cash following such investment. In connection
with the amendment of the MidCap Credit Facility, MannKind prepaid
$10.0 million in cash to reduce the principal balance under the
MidCap Credit Facility from $50.0 million to $40.0 million.
The Mann Group convertible note was amended to
lower the interest rate to 2.5% (from 7.0%), effective April 22,
2021, and to extend the maturity to December 2025 (from November
2024). In addition, MannKind repaid the entire principal amount of
$35.1 million outstanding, together with accrued and unpaid
interest thereon, under the Mann Group non-convertible note and
paid all accrued and unpaid interest outstanding under the Mann
Group convertible note.
MannKind also announced that it is evaluating
the considerations underlying a potential sale-leaseback of its
manufacturing facility in Connecticut, which is being negotiated
under a previously announced letter of intent. The Company will
update investors regarding its plans for the facility at a future
date.
MannKind’s Chief Financial Officer, Steven B.
Binder commented, “Starting with the convertible debt offering in
March and ending with these debt reductions and restructurings, we
have positioned the Company with ample cash and a manageable debt
load to fund our near-term priorities, enabling us to focus on the
development of our product pipeline, investing behind growing
Afrezza and supporting our collaborations.”
Further details about both transactions will be
provided in a Current Report on Form 8-K filed with the Security
and Exchange Commission.
TYVASO DPI is a trademark of United Therapeutics
Corporation.
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 was established in 1991, and is headquartered in Westlake
Village, Calif. with a state-of-the-art manufacturing facility
based in Danbury, Conn. The Company also employs field sales and
medical representatives across the U.S. For further information,
visit www.mannkindcorp.com.
Forward-Looking StatementsThis
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 these risks and
uncertainties, which include, without limitation, uncertainties
regarding the need to raise additional capital, MannKind’s ability
to satisfy conditions required to draw additional loans under the
MidCap Credit Facility, and whether MannKind will be able to make
required payments under its debt obligations in the future. 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, 2020 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: Phone: (818) 661-5000 Email:
ir@mannkindcorp.com
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