Clofazimine inhalation suspension(MannKind Corporation)

Conference Call to Begin Today at 5:00 p.m. (ET) 2Q 2023 Total revenues of $49M; +157% vs. 2Q 2022 2Q 2023 Tyvaso DPI royalties of $19M; +63% vs. 1Q 20232Q 2023 Endocrine Business Unit net revenues of $18M; Afrezza net revenues +27% vs. 2Q 20222Q 2023 Income from operations of $2M; Non-GAAP income from operations of $8M DANBURY, Conn. and WESTLAKE VILLAGE, Calif., Aug. 07, 2023 (GLOBE NEWSWIRE) -- MannKind Corporation (Nasdaq: MNKD) today reported financial results for the quarter ended June 30, 2023. “We are excited to report positive income from operations in the second quarter driven by growing patient demand for Tyvaso DPI® and Afrezza as well as manufacturing revenues from Tyvaso DPI,” said Michael Castagna, PharmD, Chief Executive Officer of MannKind Corporation. “In addition, we have optimized our commercial operations supporting Afrezza® and V-Go®, which is expected to get our Endocrine Business Unit to profitability starting in 2024.” Second Quarter 2023 Results Revenue Highlights Three Months Ended June 30, 2023 2022 $ Change % Change (Dollars in thousands) Net revenue – Afrezza $13,527 $10,649 $2,878 27%Net revenue – V-Go 4,818 2,073 $2,745 * Revenue – collaborations and services 11,211 5,868 $5,343 91%Royalties – collaborations 19,055 304 $18,751 * Total revenues $48,611 $18,894 $29,717 157% ________________________* Not meaningful Afrezza net revenue for the second quarter of 2023 increased $2.9 million, or 27%, compared to the same period in 2022 as a result of higher product demand and price. V-Go was acquired in the second quarter of 2022 and achieved $22.0 million in cumulative net revenues one year post-acquisition, which was at the high end of our forecasted range. The increase in collaborations and services revenue was primarily attributable to revenues associated with the commercial supply agreement (the "CSA") with United Therapeutics ("UT"). In the second quarter of 2022, revenue associated with the CSA was deferred until we began commercial manufacturing and subsequently selling Tyvaso DPI in June 2022. Royalties related to Tyvaso DPI, launched in late second quarter of 2022 by UT, were $19.0 million in the second quarter of 2023 and continued to grow based on strong patient demand. Commercial product gross margin in the second quarter of 2023 was 72% compared to 64% for the same period in 2022, primarily attributable to an increase in Afrezza net revenue, which has a higher gross margin than V-Go. Cost of revenue – collaborations and services for the second quarter of 2023 was $9.0 million compared to $8.3 million for the same period in 2022, an increase of $0.7 million, due to an increase in manufacturing activities for Tyvaso DPI. Research and development ("R&D") expenses for the second quarter of 2023 were $6.5 million compared to $4.9 million for the same period in 2022. The $1.6 million increase was primarily attributed to development activities for MNKD-101 (inhaled clofazimine) and an Afrezza post-marketing clinical study (INHALE-3), which commenced in the second quarter of 2023. Selling expenses for the second quarter of 2023 were $14.0 million compared to $15.9 million for the same period in 2022. The $1.9 million decrease was primarily attributable to the termination of an Afrezza pilot promotional effort targeting primary care physicians, which ended in the third quarter of 2022, partially offset by increased headcount after the acquisition of V-Go in the second quarter of 2022. General and administrative expenses for the second quarter of 2023 were $11.9 million compared to $10.2 million for the same period in 2022. The $1.8 million increase was primarily attributable to higher stock-based compensation and increased headcount. Interest income was $1.5 million for the second quarter of 2023 compared to $0.5 million for the same period in 2022. The increase was primarily due to higher yields on our marketable securities and money market funds. Interest expense on financing liability was $2.4 million for the second quarter of 2023 and remained consistent with the same period in 2022. Interest expense was $6.9 million in the second quarter of 2023 compared to $6.6 million for the same period in 2022, which remained consistent due to fixed interest rates on notes and consistent recognition of interest expense related to the achievement of Afrezza milestones. Gain on available-for-sale securities for the second quarter of 2023 was $0.9 million as a result of the change in the fair value of the investment that related to credit risk. First half of 2023 Revenue Highlights Six Months Ended June 30, 2023 2022 $ Change % Change Net revenue — Afrezza $25,951 $20,475 $5,476 27%Net revenue — V-Go 9,956 2,073 $7,883 * Revenue — collaborations and services 22,597 8,034 $14,563 181%Royalties — collaborations 30,733 304 $30,429 * Total revenues $89,237 $30,886 $58,351 189% ________________________* Not meaningful Afrezza net revenue for the first half of 2023 increased $5.5 million, or 27%, compared to the same period in 2022 primarily as a result of higher product demand and price. V-Go was acquired in the second quarter of 2022 and achieved $22.0 million in net revenues one year post-acquisition, which was at the high end of our forecasted range. The increase in collaborations and services revenue was primarily attributable to the deferral of revenue associated with the CSA until we began commercial manufacturing and subsequently selling Tyvaso DPI in June 2022. Royalties related to Tyvaso DPI, launched in the late second quarter of 2022 by UT, reached $30.7 million in the first half of 2023 based on strong patient demand. Commercial product gross margin in the first half of 2023 was 70%, which was consistent with the same period in 2022. Cost of revenue – collaborations and services for the first half of 2023 was $19.7 million compared to $17.0 million for the same period in 2022, an increase of $2.7 million, due to an increase in manufacturing activities for Tyvaso DPI. R&D expenses for the first half of 2023 were $12.1 million compared to $8.4 million for the same period in 2022. The $3.6 million increase was primarily attributed to development activities for MNKD-101 and INHALE-3. Selling expenses for the first half of 2023 were $27.3 million compared to $28.6 million for the same period in 2022. The $1.3 million decrease was primarily due to the termination of an Afrezza pilot promotional effort targeting primary care physicians, which ended in the third quarter of 2022, partially offset by increased headcount and promotional expenses after the acquisition of V-Go in the second quarter of 2022. General and administrative expenses for the first half of 2023 were $22.5 million compared to $18.1 million for the same period in 2022. The $4.3 million increase was primarily attributable to higher stock-based compensation and increased headcount. Interest income was $2.8 million for the six months ended June 30, 2023 compared to $0.9 million for the same period in 2022. The increase was primarily due to higher yields on our marketable securities and money market funds. Interest expense on financing liability was $4.9 million for the first half of 2023 and remained consistent with the same period in 2022. Interest expense on notes was $9.7 million in the first half of 2023 compared to $9.4 million for the same period in 2022, which remained consistent due to fixed interest rates on notes and consistent recognition of interest expense related to the achievement of Afrezza milestones. Gain on available-for-sale securities for the first half of 2023 was $0.9 million as a result of the change in the fair value of the investment that related to credit risk. Cash, cash equivalents and investments as of June 30, 2023 were $146.6 million. Non-GAAP Measures To supplement our unaudited condensed consolidated financial statements presented under U.S. generally accepted accounting principles (GAAP), we are presenting non-GAAP income (loss) from operations, non-GAAP net loss and non-GAAP net income (loss) per share, which are 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 tables reconcile our financial measure for income (loss) from operations, net loss and earnings (loss) per share ("EPS") for basic and diluted weighted average shares as reported in our condensed consolidated statement of operations to a non-GAAP presentation as adjusted for the non-cash stock-based compensation expense and non-cash gain (loss) on foreign currency transactions for the periods presented: Three Months Six Months Ended June 30, Ended June 30, 2023 2022 2023 2022 (In thousands except per share data) GAAP Income (loss) from operations$1,721 $(20,454) $(4,277) $(41,710)Increase (decrease) for excluded non-cash items: Stock compensation 5,580 4,422 9,235 7,228 Loss (gain) on foreign currency transaction 251 (4,503) 1,205 (6,486)Non-GAAP income (loss) from operations$7,552 $(20,535) $6,163 $(40,968) GAAP net loss$(5,265) $(29,023) $(15,060) $(55,021)Increase (decrease) for excluded non-cash items: Stock compensation 5,580 4,422 9,235 7,228 Loss (gain) on foreign currency transaction 251 (4,503) 1,205 (6,486) Gain on available-for-sale securities (932) — (932) — Non-GAAP net loss$(366) $(29,104) $(5,552) $(54,279) GAAP net loss per share - basic and diluted$(0.02) $(0.11) $(0.06) $(0.22)Increase (decrease) for excluded non-cash items: Stock compensation 0.02 0.02 0.03 0.03 Loss (gain) on foreign currency transaction 0.00 (0.02) 0.00 (0.03) Gain on available-for-sale securities 0.00 0.00 0.00 0.00 Non-GAAP net loss per share - basic and diluted$0.00 $(0.11) $(0.03) $(0.22) Weighted average shares - basic and diluted 265,626 253,644 264,802 252,775 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 MannKind Corporation (Nasdaq: MNKD) focuses on the development and commercialization of inhaled therapeutic products for patients 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. 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 the optimization of our commercial operations for Afrezza and V-Go and the potential for our Endocrine Business Unit to reach profitability starting in 2024. 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 various risks and uncertainties, which include, without limitation, risks associated with manufacturing and supply, 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, and other risks detailed in MannKind’s filings with the Securities and Exchange Commission (“SEC”), including under the “Risk Factors” heading of its Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 23, 2023, and under the “Risk Factors” heading of its Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, being filed with the SEC later today. 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 a 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 STATEMENTS OF OPERATIONS Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 (In thousands except per share data) Revenues: Net revenue – commercial product sales $18,345 $12,722 $35,907 $22,548 Revenue – collaborations and services 11,211 5,868 22,597 8,034 Royalties – collaborations 19,055 304 30,733 304 Total revenues 48,611 18,894 89,237 30,886 Expenses: Cost of goods sold 5,224 4,617 10,754 6,901 Cost of revenue – collaborations and services 9,013 8,298 19,696 17,012 Research and development 6,453 4,893 12,058 8,429 Selling 14,002 15,868 27,312 28,596 General and administrative 11,947 10,175 22,489 18,144 Loss (gain) on foreign currency transaction 251 (4,503) 1,205 (6,486)Total expenses 46,890 39,348 93,514 72,596 Income (loss) from operations 1,721 (20,454) (4,277) (41,710)Other income (expense): Interest income, net 1,547 516 2,849 893 Interest expense on financing liability (2,449) (2,443) (4,873) (4,814)Interest expense (6,873) (6,642) (9,659) (9,390)Gain on available-for-sale securities 932 — 932 — Other expense (143) — (32) — Total other expense (6,986) (8,569) (10,783) (13,311)Loss before income tax expense (5,265) (29,023) (15,060) (55,021)Benefit from income taxes — — — — Net loss $(5,265) $(29,023) $(15,060) $(55,021)Net loss per share – basic and diluted $(0.02) $(0.11) $(0.06) $(0.22)Weighted average shares used to compute net loss per share – basic and diluted 265,626 253,644 264,802 252,775 MANNKIND CORPORATION AND SUBSIDIARY CONDENSED CONSOLIDATED BALANCE SHEETS June 30, 2023 December 31, 2022 (In thousands except share and per share data) ASSETS Current assets: Cash and cash equivalents $86,184 $69,767 Short-term investments 58,163 101,079 Accounts receivable, net 27,789 16,801 Inventory 25,290 21,772 Prepaid expenses and other current assets 32,807 25,477 Total current assets 230,233 234,896 Property and equipment, net 69,510 45,126 Goodwill 1,931 2,428 Other intangible asset 1,113 1,153 Long-term investments 2,282 1,961 Other assets 8,353 9,718 Total assets $313,422 $295,282 LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities: Accounts payable $17,127 $11,052 Accrued expenses and other current liabilities 36,833 35,553 Financing liability – current 9,686 9,565 Midcap credit facility – current 16,667 — Deferred revenue – current 3,489 1,733 Recognized loss on purchase commitments – current 13,164 9,393 Total current liabilities 96,966 67,296 Mann Group convertible note 8,829 8,829 Accrued interest – Mann Group convertible note 55 55 Financing liability – long term 94,395 94,512 Midcap credit facility – long term 22,811 39,264 Senior convertible notes 226,124 225,397 Recognized loss on purchase commitments – long term 56,063 62,916 Operating lease liability 4,646 5,343 Deferred revenue – long term 60,248 37,684 Milestone liabilities 3,772 4,524 Total liabilities 573,909 545,820 Stockholders' deficit: Undesignated preferred stock, $0.01 par value – 10,000,000 shares authorized; no shares issued or outstanding as of June 30, 2023 and December 31, 2022 — — Common stock, $0.01 par value – 800,000,000 and 400,000,000 shares authorized as of June 30, 2023 and December 31, 2022, respectively, and 268,235,145 and 263,793,305 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively 2,682 2,638 Additional paid-in capital 2,968,917 2,964,293 Accumulated other comprehensive income 443 — Accumulated deficit (3,232,529) (3,217,469)Total stockholders' deficit (260,487) (250,538)Total liabilities and stockholders' deficit $313,422 $295,282