MannKind Corporation (Nasdaq: MNKD) today reported
financial results for the third quarter and nine months ended
September 30, 2022.
“In the third quarter, we grew total revenues by 48% over 2021
as our collaboration with United Therapeutics had its first full
quarter during which we recognized both manufacturing revenue and
royalties associated with the launch of Tyvaso DPI,” said Michael
Castagna, PharmD, Chief Executive Officer of MannKind Corporation.
“In addition, our Endocrine Business Unit grew revenues 67% over
2021 as we integrated the V-Go acquisition and continued to grow
Afrezza demand.”
Third Quarter 2022 Results
Total revenues were $32.8 million for the third quarter of 2022,
reflecting Afrezza® net revenue of $10.8 million, V-Go® net revenue
of $5.4 million, collaborations and services revenue of $10.3
million, and royalties of $6.2 million. Afrezza net revenue
increased 11% compared to $9.8 million in the third quarter of 2021
as a result of price (including a more favorable gross-to-net
adjustment) and higher patient demand, partially offset by
wholesaler inventory ordering patterns which resulted in lower
inventory levels for the third quarter of 2022. Collaborations and
services revenue decreased $2.1 million compared to the third
quarter of 2021 primarily due to the completion of the research and
development (“R&D”) services associated with our collaboration
with United Therapeutics (“UT”), which was mostly offset by
manufacturing revenue from sales of Tyvaso DPI® to UT following the
launch of Tyvaso DPI in June 2022.
Afrezza gross profit for the third quarter of 2022 was $8.7
million compared to $5.9 million in the same period of 2021, an
increase of $2.8 million, or 47%, 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 $1.7 million, or 45%, compared to
the same period in 2021, primarily due to a $2.0 million decrease
in excess capacity costs. Afrezza gross margin in the third quarter
of 2022 was 81% compared to 61% for the same period in 2021. V-Go
gross profit for the third quarter of 2022 was $2.5 million with a
gross margin of 46%.
Cost of revenue – collaborations and services in the third
quarter of 2022 was $12.4 million compared to $6.1 million for the
same period in 2021, an increase of $6.4 million, primarily due to
an increase in manufacturing activities for the production of
Tyvaso DPI.
R&D expenses for the third quarter of 2022 were $4.1 million
compared to $3.6 million for the third quarter of 2021. This $0.5
million increase was mainly related to personnel costs for
headcount hired in the second half of 2021, partially offset by a
decrease in the Afrezza pediatrics clinical study (INHALE-1) due to
study startup costs incurred in the third quarter of 2021.
Selling, general and administrative (“SG&A”) expenses for
the third quarter of 2022 were $22.6 million compared to $17.2
million for the third quarter of 2021. This $5.4 million increase
was primarily attributable to V-Go promotional efforts, the
elimination of a co-promotion collaboration (which permitted some
expenses associated with the sales force to be recognized as cost
of revenue for collaborations and services in the third quarter of
2021), higher stock-based compensation, the net impact of
personnel-related costs due to Afrezza sales force restructuring
and increased professional fees.
For the third quarter of 2022, the gain on foreign currency
translation (for insulin purchase commitments denominated in Euros)
was $1.8 million compared to $2.1 million for the third quarter of
2021. The fluctuation was due to a change in the U.S. dollar to
Euro foreign currency exchange rate.
Interest income, consisting of interest on investments net of
amortization, increased $0.6 million for the third quarter of 2022
to $0.7 million primarily due to higher yields on our marketable
securities and money market funds.
Interest expense on the financing liability was $2.5 million for
the third quarter of 2022, representing interest incurred on the
November 2021 sale and lease-back of our manufacturing facility in
Danbury, CT.
The net loss for the third quarter of 2022 was $14.4 million, or
$0.06 per share, compared to $4.4 million in the third quarter of
2021, or $0.02 per share. The $10.0 million increase in net loss
was primarily due to an increase in selling, general and
administrative expense, interest on the financing liability, and
the $4.9 million gain on extinguishment of debt in the third
quarter of 2021.
Nine Months September 30, 2022
Total revenues were $63.7 million for the nine months ended
September 30, 2022, reflecting Afrezza net revenue of $31.3
million, V-Go net revenue of $7.5 million, collaborations and
services revenue of $18.4 million and royalties of $6.5 million.
Afrezza net revenue increased 13% compared to $27.8 million in the
nine months ended September 30, 2021 as a result of price
(including a more favorable gross-to-net adjustment) higher product
demand and a more favorable cartridge mix. Collaborations and
services revenue for the nine months ended September 30, 2022
decreased $16.7 million compared to the same period in the prior
year, primarily due to the completion of the R&D services
associated with our collaboration with UT, which was partially
offset by revenues associated with Tyvaso DPI of $15.8 million. As
of September 30, 2022, $32.2 million of revenue associated with UT
remains deferred and will be recognized as commercial product is
sold to UT.
Afrezza gross profit for the nine months ended September 30,
2022 was $23.6 million, compared to $15.3 million in the same
period of 2021, an increase of $8.3 million, or 54%, 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 nine months ended
September 30, 2022 decreased by $4.8 million, or 38%, compared to
the same period in 2021, primarily due to a $3.8 million decrease
in excess capacity costs and a $2.0 million fee incurred for the
amendment of the Insulin Supply Agreement in the prior year period.
Afrezza gross margin for the nine months ended September 30, 2022
was 75% compared to 55% for the same period in 2021. V-Go gross
profit for the nine months ended September 30, 2022 was $3.3
million with a gross margin of 44%.
Cost of revenue – collaborations and services for the nine
months ended September 30, 2022 was $29.5 million compared to $14.9
million for the same period in 2021, an increase of $14.6 million,
primarily due to an increase in manufacturing activities for the
production of Tyvaso DPI.
R&D expenses for the nine months ended September 30, 2022
were $12.6 million compared to $8.4 million for the same period in
2021. This $4.2 million increase was primarily attributable to
personnel costs for headcount hired in the second half of 2021,
development activities on our product pipeline, and the Afrezza
pediatrics clinical study (INHALE-1).
SG&A expenses for the nine months ended September 30, 2022
were $69.4 million compared to $54.7 million for the same period in
2021. This $14.7 million increase was primarily attributable to a
pilot promotional effort aimed at primary care physicians that
began in Q4 2021, elimination of a co-promotion collaboration
(which permitted some expenses associated with the sales force to
be recognized as cost of revenue from collaborations and services
in the same period of 2021), promotional expenses to support V-Go,
higher stock-based compensation and increased professional and
consulting fees.
For the nine months ended September 30, 2022, the gain on
foreign currency translation (for insulin purchase commitments
denominated in Euros) was $8.3 million compared to $5.0 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 income, consisting of interest on investments net of
amortization, increased $1.5 million for the nine months ended
September 30, 2022 to $1.6 million primarily due to higher yields
on our marketable securities and money market funds.
Interest expense on the financing liability was $7.3 million for
the nine months ended September 30, 2022, representing interest
incurred on the November 2021 sale and lease-back of our
manufacturing facility in Danbury, CT.
The net loss for the nine months ended September 30, 2022 was
$69.5 million, or $0.27 per share, compared to $52.9 million in the
same period of 2021, or $0.21 per share. The $16.6 million increase
in the net loss was primarily due to higher cost of revenue for
collaborations and services due to increased manufacturing
activities for Tyvaso DPI, higher selling, general and
administrative expenses, interest on the financing liability and
increased research and development expenses, offset by a $17.2
million loss on the extinguishment of debt in 2021.
As of September 30, 2022, cash and cash equivalents and
investments were $177.8 million.
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
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.TYVASO DPI is a registered
trademark of United Therapeutics Corporation.
AFREZZA, MANNKIND, and V-GO are registered trademarks of
MannKind Corporation.
MannKind Contact:Rose Alinaya, Investor
Relations(818) 661-5000IR@mannkindcorp.com
MANNKIND CORPORATION AND
SUBSIDIARY CONDENSED CONSOLIDATED
BALANCE SHEETS (In thousands, except share and per
share data)
|
September 30, 2022 |
|
|
December 31, 2021 |
|
ASSETS |
|
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
54,308 |
|
|
$ |
124,184 |
|
Short-term investments |
|
110,738 |
|
|
|
79,932 |
|
Accounts receivable, net |
|
23,493 |
|
|
|
4,739 |
|
Inventory |
|
18,273 |
|
|
|
7,152 |
|
Prepaid expenses and other current assets |
|
11,569 |
|
|
|
3,482 |
|
Total current assets |
|
218,381 |
|
|
|
219,489 |
|
Property
and equipment, net |
|
41,182 |
|
|
|
36,612 |
|
Goodwill |
|
3,067 |
|
|
|
— |
|
Other
intangible asset |
|
1,169 |
|
|
|
— |
|
Long-term investments |
|
12,728 |
|
|
|
56,619 |
|
Other
assets |
|
17,310 |
|
|
|
8,441 |
|
Total assets |
$ |
293,837 |
|
|
$ |
321,161 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' DEFICIT |
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
Accounts payable |
$ |
9,871 |
|
|
$ |
6,956 |
|
Accrued expenses and other current liabilities |
|
30,350 |
|
|
|
27,419 |
|
Financing liability — current |
|
9,525 |
|
|
|
6,977 |
|
Deferred revenue — current |
|
1,786 |
|
|
|
827 |
|
Recognized loss on purchase commitments — current |
|
8,065 |
|
|
|
6,170 |
|
Total current liabilities |
|
59,597 |
|
|
|
48,349 |
|
Senior
convertible notes |
|
225,034 |
|
|
|
223,944 |
|
Midcap
credit facility |
|
39,155 |
|
|
|
38,833 |
|
Mann
Group convertible note |
|
8,829 |
|
|
|
18,425 |
|
Accrued
interest — promissory note |
|
56 |
|
|
|
404 |
|
Financing liability — long term |
|
94,484 |
|
|
|
93,525 |
|
Recognized loss on purchase commitments — long term |
|
62,173 |
|
|
|
76,659 |
|
Operating lease liability |
|
5,666 |
|
|
|
1,040 |
|
Deferred
revenue — long term |
|
31,996 |
|
|
|
19,543 |
|
Milestone liabilities |
|
4,524 |
|
|
|
4,838 |
|
Deposits
from customer |
|
— |
|
|
|
4,950 |
|
Total liabilities |
|
531,514 |
|
|
|
530,510 |
|
Stockholders' deficit: |
|
|
|
|
|
|
|
Undesignated preferred stock, $0.01 par value — 10,000,000 shares
authorized; no shares issued or outstanding as of September 30,
2022 and December 31, 2021 |
|
— |
|
|
|
— |
|
Common
stock, $0.01 par value - 400,000,000 shares authorized, 263,156,165
and 251,477,562 shares issued and outstanding at September 30, 2022
and December 31, 2021, respectively |
|
2,632 |
|
|
|
2,515 |
|
Additional paid-in capital |
|
2,960,419 |
|
|
|
2,918,205 |
|
Accumulated other comprehensive loss |
|
(1,206 |
) |
|
|
— |
|
Accumulated deficit |
|
(3,199,522 |
) |
|
|
(3,130,069 |
) |
Total
stockholders' deficit |
|
(237,677 |
) |
|
|
(209,349 |
) |
Total
liabilities and stockholders' deficit |
$ |
293,837 |
|
|
$ |
321,161 |
|
MANNKIND CORPORATION AND
SUBSIDIARY CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(In thousands, except per share
data)
|
Three Months EndedSeptember
30, |
|
|
Nine Months EndedSeptember
30, |
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue — commercial product sales |
$ |
16,259 |
|
|
$ |
9,753 |
|
|
$ |
38,807 |
|
|
$ |
27,828 |
|
Revenue — collaborations and services |
|
10,346 |
|
|
|
12,458 |
|
|
|
18,380 |
|
|
|
35,099 |
|
Royalties — collaborations |
|
6,220 |
|
|
|
— |
|
|
|
6,524 |
|
|
|
— |
|
Total revenues |
|
32,825 |
|
|
|
22,211 |
|
|
|
63,711 |
|
|
|
62,927 |
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold |
|
5,021 |
|
|
|
3,812 |
|
|
|
11,922 |
|
|
|
12,538 |
|
Cost of revenue — collaborations and services |
|
12,439 |
|
|
|
6,075 |
|
|
|
29,451 |
|
|
|
14,885 |
|
Research and development |
|
4,136 |
|
|
|
3,655 |
|
|
|
12,565 |
|
|
|
8,426 |
|
Selling, general and administrative |
|
22,638 |
|
|
|
17,221 |
|
|
|
69,378 |
|
|
|
54,690 |
|
Gain on foreign currency translation |
|
(1,799 |
) |
|
|
(2,068 |
) |
|
|
(8,285 |
) |
|
|
(5,003 |
) |
Loss on purchase commitments |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
339 |
|
Total expenses |
|
42,435 |
|
|
|
28,801 |
|
|
|
115,031 |
|
|
|
85,981 |
|
Loss
from operations |
|
(9,610 |
) |
|
|
(6,590 |
) |
|
|
(51,320 |
) |
|
|
(23,054 |
) |
Other
(expense) income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income, net |
|
663 |
|
|
|
36 |
|
|
|
1,556 |
|
|
|
64 |
|
Interest expense on financing liability |
|
(2,466 |
) |
|
|
— |
|
|
|
(7,280 |
) |
|
|
— |
|
Interest expense on notes |
|
(2,812 |
) |
|
|
(2,803 |
) |
|
|
(12,202 |
) |
|
|
(12,435 |
) |
Gain (loss) on extinguishment of debt, net |
|
— |
|
|
|
4,930 |
|
|
|
— |
|
|
|
(17,200 |
) |
Other (expense) income |
|
(207 |
) |
|
|
1 |
|
|
|
(207 |
) |
|
|
(240 |
) |
Total other expense |
|
(4,822 |
) |
|
|
2,164 |
|
|
|
(18,133 |
) |
|
|
(29,811 |
) |
Loss
before provision for income taxes |
|
(14,432 |
) |
|
|
(4,426 |
) |
|
|
(69,453 |
) |
|
|
(52,865 |
) |
Provision for income taxes |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Net
loss |
$ |
(14,432 |
) |
|
$ |
(4,426 |
) |
|
$ |
(69,453 |
) |
|
$ |
(52,865 |
) |
Net loss
per share - basic and diluted |
$ |
(0.06 |
) |
|
$ |
(0.02 |
) |
|
$ |
(0.27 |
) |
|
$ |
(0.21 |
) |
Shares
used to compute net loss per share - basic and diluted |
|
259,300 |
|
|
|
249,910 |
|
|
|
254,974 |
|
|
|
248,624 |
|
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