MannKind Corporation (Nasdaq: MNKD) today reported
financial results for the fourth quarter and full year ended
December 31, 2021.
“We had a solid fourth quarter with Afrezza net revenue hitting
a record $11.3 million and we ended the year with over $260 million
in cash and investments on our balance sheet,” said Michael
Castagna, PharmD, Chief Executive Officer of MannKind Corporation.
“Although the extension of the Tyvaso DPI review is frustrating,
our manufacturing team remains focused on producing pre-launch
supplies of Tyvaso DPI for our collaboration partner, United
Therapeutics.”
Fourth Quarter 2021 Results
Total revenues were $12.5 million for the fourth quarter of
2021, reflecting Afrezza net revenue of $11.3 million and
collaborations and services revenue of $1.2 million. Afrezza net
revenue increased 13% compared to $10.1 million in the fourth
quarter of 2020 as a result of higher demand, a more favorable
cartridge mix, price, and lower gross-to-net deductions.
Collaborations and services revenue decreased $7.2 million compared
to the fourth quarter of 2020 due to a decrease in revenue
recognized from the initial License Agreement with United
Therapeutics (“UT”), which was substantially completed in the third
quarter of 2021. Revenue associated with the commercial production
of Tyvaso DPI was deferred in the fourth quarter of 2021 and will
be recognized over the period when commercial product is sold to
UT.
Afrezza gross profit for the fourth quarter of 2021 was $7.0
million compared to $6.4 million in the same period of 2020, an
increase of $0.6 million, or 10%, which was driven by an increase
in Afrezza sales, partially offset by an increase in cost of goods
sold. Cost of goods sold increased by $0.6 million, or 18%,
compared to the same period in 2020, primarily due to a $2.0
million increase in inventory write-offs partially offset by $1.8
million in reduced manufacturing-related spending. Afrezza gross
margin in the fourth quarter of 2021 was 62% compared to 64% for
the same period in 2020.
Cost of revenue – collaborations and services increased by $4.5
million in the fourth quarter compared to 2020 due to increased
pre-approval manufacturing activity for Tyvaso DPI.
Research and development (“R&D”) expenses for the fourth
quarter of 2021 were $3.9 million compared to $1.5 million for the
fourth quarter of 2020. This $2.4 million increase was mainly
related to pre-clinical development of inhaled clofazimine as well
as the Afrezza pediatrics clinical study (INHALE-1).
Selling, general and administrative (“SG&A”) expenses for
the fourth quarter of 2021 were $22.7 million compared to $17.1
million for the fourth quarter of 2020. This $5.6 million increase
was primarily attributable to higher Afrezza promotional expenses
and patient support services as well as increased stock-based
compensation.
For the fourth quarter of 2021, the gain on foreign currency
translation (for insulin purchase commitments denominated in Euros)
was $1.6 million compared to a loss of $4.0 million for the fourth
quarter of 2020. The fluctuation was due to a change in the U.S.
dollar to Euro foreign currency exchange rate.
Interest expense on financing liability was $1.4 million for the
fourth quarter of 2021 and represented interest incurred on the
sale lease-back transaction for our manufacturing facility in
Danbury, CT.
Interest expense on debt for the fourth quarter of 2021 was $2.8
million compared to $2.4 million for the fourth quarter of 2020.
This increase of $0.4 million was the result of interest on the
$230.0 million 2.5% senior convertible notes issued in the first
quarter of 2021, partially offset by a decrease in interest expense
on Mann Group promissory notes as a result of (i) the repayment of
$35.1 million of outstanding principal under the Mann Group
non-convertible note, (ii) the $10.0 million reduction of principal
and interest on the Mann Group convertible note from a conversion
to our common stock and (iii) a decrease of the interest rate from
7.00% to 2.50% on the remaining promissory note.
The net loss for the fourth quarter of 2021 was $28.1 million,
or $0.11 per share, compared to $26.4 million in the fourth quarter
of 2020, or $0.11 per share. The $1.7 million increase in the net
loss was primarily due to a decrease in revenues from collaboration
and services as well as increases in cost of revenue for
collaborations and services and in SG&A expenses, partially
offset by a gain on purchase commitment as well as the effect of
the one-time acquisition of in-process R&D from QrumPharma in
the fourth quarter of 2020.
Twelve Months Ended December 31, 2021
Total revenues were $75.4 million for the year ended December
31, 2021 reflecting Afrezza net revenue of $39.2 million and
collaborations and services revenue of $36.3 million. Afrezza net
revenue increased 21% compared to $32.3 million for the year ended
December 31, 2020, primarily driven by higher demand, a more
favorable cartridge mix, price, and lower gross-to-net deductions.
Collaborations and services revenue increased $3.5 million compared
to 2020 due to additional development work associated with our
collaboration with UT.
Afrezza gross profit was $22.3 million for the year ended
December 31, 2021, an increase of $5.1 million, or 30%, compared to
a gross profit of $17.2 million in the prior year, which was
attributable to an increase in Afrezza sales, partially offset by
an increase in cost of goods sold. Cost of goods sold increased by
$1.8 million, or 12%, for the year ended December 31, 2021 compared
to the prior year, primarily due to a $2.0 million fee for the
amendment of the Insulin Supply Agreement, a $1.5 million increase
in inventory write-offs, and a $1.0 million increase related to
reduced manufacturing activities. The increase in cost of goods
sold was partially offset by $2.3 million in reduced
manufacturing-related spending, lower per-unit cost from increased
manufacturing efficiencies and the termination of a free goods
program in December 31, 2020.R&D expenses for the year ended
December 31, 2021 were $12.3 million compared to $6.2 million for
the prior year. This $6.1 million increase was primarily
attributable to costs incurred to develop our product pipeline and
to begin the Afrezza pediatrics clinical study (INHALE-1).
SG&A expenses for the year ended December 31, 2021 were
$77.4 million compared to $59.0 million for the prior year. This
$18.4 million increase was primarily attributable to higher Afrezza
promotional expenses, patient support services, increased headcount
and stock-based compensation and our voluntary reduction in
compensation in the prior year in response to the COVID-19
pandemic.
For the year ended December 31, 2021, the gain on foreign
currency translation (for insulin purchase commitments denominated
in Euros) was $6.6 million compared to a loss of $8.0 million for
the prior year. The fluctuation was due to a change in the U.S.
dollar to Euro foreign currency exchange rate.
Interest expense on financing liability was $1.4 million for the
year ended December 31, 2021 and represented interest incurred on
the sale lease-back transaction for our manufacturing facility in
Danbury, CT.
Interest expense on debt for the year ended December 31, 2021
was $15.2 million compared to $9.5 million for the prior year. This
$5.7 million increase was primarily due to interest expense on the
$230.0 million 2.5% senior convertible notes as well as a $3.7
million milestone obligation that was achieved during the first
quarter of 2021, partially offset by a decrease in interest expense
on Mann Group promissory notes as a result of (i) the repayment of
$35.1 million of outstanding principal under the Mann Group
non-convertible note, (ii) the $10.0 million reduction of principal
and interest on the Mann Group convertible note from a conversion
to our common stock and (iii) a decrease of the interest rate from
7.00% to 2.50% on the remaining promissory note.
The net loss for the year ended December 31, 2021 was $80.9
million, or $0.32 per share, compared to $57.2 million net loss for
the year ended December 31, 2020, or $0.26 per share. The higher
net loss was mainly attributable to the $22.1 million non-cash loss
on extinguishment of the Mann Group convertible note net of a $4.9
million non-cash gain on extinguishment of the PPP loan, as well as
an increase in SG&A expenses and in cost of revenue –
collaboration and services, partially offset by an increase in
Afrezza net revenues and revenues from collaboration and services,
a gain on purchase commitment as well as the effect of the one-time
acquisition of in-process R&D from QrumPharma in the prior
year. On a non-GAAP basis, excluding the expense incurred for the
loss on extinguishment of the Mann Group convertible note offset by
the gain on extinguishment of the PPP loan, and the Amphastar
amendment fee, the net loss for the year ended December 31, 2021
was $61.7 million, or $0.25 per share.
Cash, cash equivalents, restricted cash, and investments as of
December 31, 2021 was $260.7 million compared to $67.2 million as
of December 31, 2020. The increase was mainly due to the sale of
senior convertible notes in the first quarter of 2021 for $230.0
million and the cash received from the sale-leaseback of our
Danbury, CT manufacturing facility of approximately $100 million,
offset by operating costs for 2021.
Non-GAAP Measures
To supplement our unaudited condensed consolidated financial
statements presented under U.S. generally accepted accounting
principles (GAAP), we are presenting certain non-GAAP financial
measures. We are providing these non-GAAP financial measures to
disclose additional information to facilitate the comparison of
past and present operations, and they are among the indicators
management uses as a basis for evaluating our financial
performance. We believe that these non-GAAP financial measures,
when considered together with our GAAP financial results, provide
management and investors with an additional understanding of our
business operating results, including underlying trends.
These non-GAAP financial measures are not meant to be considered
in isolation or as a substitute for comparable GAAP measures;
should be read in conjunction with our unaudited condensed
consolidated financial statements prepared in accordance with GAAP;
have no standardized meaning prescribed by GAAP; and are not
prepared under any comprehensive set of accounting rules or
principles. In addition, from time to time in the future there may
be other items that we may exclude for purposes of our non-GAAP
financial measures; and we may in the future cease to exclude items
that we have historically excluded for purposes of our non-GAAP
financial measures. Likewise, we may determine to modify the nature
of its adjustments to arrive at our non-GAAP financial measures.
Because of the non-standardized definitions of non-GAAP financial
measures, the non-GAAP financial measures as used by us in this
report have limits in their usefulness to investors and may be
calculated differently from, and therefore may not be directly
comparable to, similarly titled measures used by other
companies.
The following table reconciles our gross margin financial
measure to a non-GAAP presentation as adjusted for the nonrecurring
amendment fee related to an amendment to our Insulin Supply
Agreement.
| |
Twelve Months EndedDecember
31, |
|
| |
2021 |
|
|
2020 |
|
|
Net revenue — commercial product sales |
$ |
39,168 |
|
|
$ |
32,324 |
|
| Less cost of goods sold |
|
(16,833 |
) |
|
|
(15,084 |
) |
|
GAAP gross profit — Afrezza |
|
22,335 |
|
|
|
17,240 |
|
| Exclude Amphastar amendment
fee |
|
2,000 |
|
|
|
— |
|
|
Non-GAAP gross profit — Afrezza |
$ |
24,335 |
|
|
$ |
17,240 |
|
|
Non-GAAP gross margin |
|
62 |
% |
|
|
53 |
% |
The following table reconciles our financial measure for net
loss and net loss per share as reported in our consolidated
statement of operations to a non-GAAP presentation as adjusted for
the $22.1 million non-cash loss on extinguishment of the Mann Group
convertible note net of the $4.9 million gain on extinguishment of
the PPP loan for the year ended December 31, 2021, which did not
result in a change in our financial position, as well as the $2.0
million Amphastar amendment fee.
|
|
|
Three Months
EndedDecember 31, |
|
|
Twelve Months EndedDecember
31, |
|
| |
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
| GAAP to Non-GAAP Net Loss and
EPS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(28,061 |
) |
|
$ |
(26,411 |
) |
|
$ |
(80,926 |
) |
|
$ |
(57,240 |
) |
|
GAAP net loss per share — basic and diluted |
|
$ |
(0.11 |
) |
|
$ |
(0.11 |
) |
|
$ |
(0.32 |
) |
|
$ |
(0.26 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Less non-cash loss on
extinguishment of debt, net |
|
|
— |
|
|
|
— |
|
|
|
17,200 |
|
|
|
— |
|
| Less Amphastar amendment fee |
|
|
— |
|
|
|
— |
|
|
|
2,000 |
|
|
|
— |
|
|
Non-GAAP net loss |
|
$ |
(28,061 |
) |
|
$ |
(26,411 |
) |
|
$ |
(61,726 |
) |
|
$ |
(57,240 |
) |
|
Non-GAAP net loss per share — basic and diluted |
|
$ |
(0.11 |
) |
|
$ |
(0.11 |
) |
|
$ |
(0.25 |
) |
|
$ |
(0.26 |
) |
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
mannkindcorp.com under Events & Presentations. 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 was
established in 1991, and is located in Danbury, Conn., and Westlake
Village, Calif. The Company also employs field sales and medical
representatives across the U.S. Please visit mannkindcorp.com to
learn more.
Forward-Looking Statements
Statements in this press release that are not statements of
historical fact are forward-looking statements that involve risks
and uncertainties. These statements include, without limitation,
statements regarding MannKind’s future commercial growth and
pipeline advancement, and MannKind’s ability to 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
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, risks associated
with product commercialization, risks associated with developing
product candidates, risks associated with MannKind’s ability to
manage its existing cash resources or raise additional cash
resources, the impact of the COVID-19 pandemic, stock price
volatility and other risks detailed in MannKind’s filings with the
Securities and Exchange Commission (“SEC”), including under the
“Risk Factors” heading of its Quarterly Report on Form 10-Q for the
quarter ended September 30, 2021, as filed with the SEC on November
9, 2021, and under the “Risk Factors” heading of its Annual Report
on Form 10-K for the year ended December 31, 2021, being filed with
the SEC on February 24, 2022. 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 is an investigational combination product that is not
approved for any use in any country. The Tyvaso DPI tradename is
pending final FDA review. TYVASO DPI is a trademark of United
Therapeutics Corporation.
AFREZZA is a registered trademark 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)
|
|
|
December 31, |
|
|
|
|
2021 |
|
|
2020 |
|
|
|
|
(In thousands except share and per share
data) |
|
|
ASSETS |
|
|
|
|
|
|
|
|
| Current assets: |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
124,184 |
|
|
$ |
67,005 |
|
|
Restricted cash |
|
|
— |
|
|
|
158 |
|
|
Short-term investments |
|
|
79,932 |
|
|
|
— |
|
|
Accounts receivable, net |
|
|
4,994 |
|
|
|
4,218 |
|
|
Inventory |
|
|
7,152 |
|
|
|
4,973 |
|
|
Prepaid expenses and other current assets |
|
|
3,482 |
|
|
|
3,122 |
|
|
Total current assets |
|
|
219,744 |
|
|
|
79,476 |
|
| Property and equipment, net |
|
|
36,612 |
|
|
|
25,867 |
|
| Long-term investments |
|
|
56,619 |
|
|
|
— |
|
| Other assets |
|
|
8,186 |
|
|
|
3,265 |
|
|
Total assets |
|
$ |
321,161 |
|
|
$ |
108,608 |
|
| |
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' DEFICIT |
|
|
|
|
|
|
|
|
| Current liabilities: |
|
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
6,956 |
|
|
$ |
5,582 |
|
|
Accrued expenses and other current liabilities |
|
|
27,419 |
|
|
|
19,707 |
|
|
Financing liability — current |
|
|
6,977 |
|
|
|
— |
|
|
Paycheck Protection Program loan — current |
|
|
— |
|
|
|
4,061 |
|
|
Deferred revenue — current |
|
|
827 |
|
|
|
33,275 |
|
|
Recognized loss on purchase commitments — current |
|
|
6,170 |
|
|
|
11,080 |
|
|
Total current liabilities |
|
|
48,349 |
|
|
|
73,705 |
|
| Promissory notes |
|
|
18,425 |
|
|
|
63,027 |
|
| Accrued interest — promissory
notes |
|
|
404 |
|
|
|
4,150 |
|
| Financing liability — long
term |
|
|
93,525 |
|
|
|
— |
|
| Long-term Midcap credit
facility |
|
|
38,833 |
|
|
|
49,335 |
|
| Senior convertible notes |
|
|
223,944 |
|
|
|
— |
|
| Recognized loss on purchase
commitments — long term |
|
|
76,659 |
|
|
|
84,208 |
|
| Operating lease liability |
|
|
1,040 |
|
|
|
1,202 |
|
| Deferred revenue — long term |
|
|
19,543 |
|
|
|
1,662 |
|
| Milestone rights liability |
|
|
4,838 |
|
|
|
5,926 |
|
| 2024 convertible notes |
|
|
— |
|
|
|
5,000 |
|
| Paycheck Protection Program loan
— long term |
|
|
— |
|
|
|
812 |
|
| Deposits from customer |
|
|
4,950 |
|
|
|
— |
|
|
Total liabilities |
|
|
530,510 |
|
|
|
289,027 |
|
| Stockholders' deficit: |
|
|
|
|
|
|
|
|
| Undesignated preferred stock,
$0.01 par value — 10,000,000 shares authorized; no shares
issued or outstanding at December 31, 2021 and 2020 |
|
|
— |
|
|
|
— |
|
| Common stock, $0.01 par value —
400,000,000 shares authorized, 251,477,562 and 242,117,089
shares issued and outstanding at December 31, 2021 and 2020,
respectively |
|
|
2,515 |
|
|
|
2,421 |
|
| Additional paid-in capital |
|
|
2,918,205 |
|
|
|
2,866,303 |
|
| Accumulated other comprehensive
loss |
|
|
— |
|
|
|
— |
|
| Accumulated deficit |
|
|
(3,130,069 |
) |
|
|
(3,049,143 |
) |
|
Total stockholders' deficit |
|
|
(209,349 |
) |
|
|
(180,419 |
) |
|
Total liabilities and stockholders' deficit |
|
$ |
321,161 |
|
|
$ |
108,608 |
|
MANNKIND CORPORATION AND
SUBSIDIARY CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (In thousands, except per
share data)
|
|
|
Three Months EndedDecember
31, |
|
|
Twelve Months EndedDecember
31, |
|
|
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue — commercial product sales |
|
$ |
11,340 |
|
|
$ |
10,064 |
|
|
$ |
39,168 |
|
|
$ |
32,324 |
|
|
Revenue — collaborations and services |
|
|
1,175 |
|
|
|
8,379 |
|
|
|
36,274 |
|
|
|
32,820 |
|
|
Total revenues |
|
|
12,515 |
|
|
|
18,443 |
|
|
|
75,442 |
|
|
|
65,144 |
|
| Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold |
|
|
4,295 |
|
|
|
3,652 |
|
|
|
16,833 |
|
|
|
15,084 |
|
|
Cost of revenue — collaborations and services |
|
|
7,139 |
|
|
|
2,631 |
|
|
|
22,024 |
|
|
|
9,557 |
|
|
Research and development |
|
|
3,886 |
|
|
|
1,545 |
|
|
|
12,312 |
|
|
|
6,248 |
|
|
Acquired In-Process R&D |
|
|
— |
|
|
|
13,233 |
|
|
|
— |
|
|
|
13,233 |
|
|
Selling, general and administrative |
|
|
22,727 |
|
|
|
17,121 |
|
|
|
77,417 |
|
|
|
59,040 |
|
|
Impairment of assets |
|
|
— |
|
|
|
— |
|
|
|
106 |
|
|
|
1,889 |
|
|
(Gain) loss on foreign currency translation |
|
|
(1,564 |
) |
|
|
4,008 |
|
|
|
(6,567 |
) |
|
|
8,006 |
|
|
Loss on purchase commitments |
|
|
— |
|
|
|
— |
|
|
|
339 |
|
|
|
— |
|
|
Total expenses |
|
|
36,483 |
|
|
|
42,190 |
|
|
|
122,464 |
|
|
|
113,057 |
|
| Loss from operations |
|
|
(23,968 |
) |
|
|
(23,747 |
) |
|
|
(47,022 |
) |
|
|
(47,913 |
) |
| Other (expense) income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
48 |
|
|
|
2 |
|
|
|
112 |
|
|
|
167 |
|
|
Interest expense on financing liability |
|
|
(1,373 |
) |
|
|
— |
|
|
|
(1,373 |
) |
|
|
— |
|
|
Interest expense on notes |
|
|
(2,769 |
) |
|
|
(2,401 |
) |
|
|
(15,204 |
) |
|
|
(9,471 |
) |
|
Loss on extinguishment of debt |
|
|
— |
|
|
|
(264 |
) |
|
|
(17,200 |
) |
|
|
(264 |
) |
|
Other (expense) income |
|
|
1 |
|
|
|
(1 |
) |
|
|
(239 |
) |
|
|
23 |
|
|
Total other expense |
|
|
(4,093 |
) |
|
|
(2,664 |
) |
|
|
(33,904 |
) |
|
|
(9,545 |
) |
| Loss before income tax
expense |
|
|
(28,061 |
) |
|
|
(26,411 |
) |
|
|
(80,926 |
) |
|
|
(57,458 |
) |
| Benefit from income taxes |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
218 |
|
| Net loss |
|
$ |
(28,061 |
) |
|
$ |
(26,411 |
) |
|
$ |
(80,926 |
) |
|
$ |
(57,240 |
) |
| Net loss per share — basic and
diluted |
|
$ |
(0.11 |
) |
|
$ |
(0.11 |
) |
|
$ |
(0.32 |
) |
|
$ |
(0.26 |
) |
| Shares used to compute net loss
per share — basic and diluted |
|
|
251,083 |
|
|
|
234,575 |
|
|
|
249,244 |
|
|
|
222,585 |
|
MannKind (NASDAQ:MNKD)
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From Mar 2024 to Apr 2024
MannKind (NASDAQ:MNKD)
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From Apr 2023 to Apr 2024
