Full Press Release Details
MannKind Corporation Reports 2016 Fourth Quarter and Full Year Financial Results
Conference Call to Begin Today at 5:00 PM ET
VALENCIA, Calif., March 16, 2017 (GLOBE NEWSWIRE) MannKind Corporation (NASDAQ:MNKD) (TASE:MNKD) today reported financial results for the
fourth quarter and full year ended December 31, 2016. Key results include:
Fourth Quarter Results
For the fourth quarter of 2016,
total net revenue of $12.4 million was comprised primarily of $10.2 million from the sale of bulk insulin to Sanofi under the terms of the settlement agreement, in addition to $1.3 million of recognized Afrezza product sales as dispensed to
patients. As of December 31, 2016, deferred net revenue included $1.7 million of Afrezza product shipped to the third-party logistics provider and wholesale distributors, but not yet recognized as revenue.
Research and development expenses were $1.6 million for the fourth quarter of 2016 compared to $6.2 million in the fourth quarter of 2015, a decrease of
74.2%, primarily due to $1.9 million in decreased collaboration development work and $1.6 million in decreased consulting support for research and development projects.
Selling, general and administrative expenses were $15.3 million for the fourth quarter of 2016 compared to $8.3
million for the same quarter of 2015, an increase of 84.3%, primarily due to $8.8 million in sales and marketing expense associated with the commercialization of Afrezza, offset by a $1.8 million decrease in general and administrative costs, mainly
due to the effects of the 2015 and 2016 reductions in force.
Full Year 2016 Results
Total net revenue for 2016 of $174.8 million is comprised primarily of $172.0 million net revenue previously deferred from the collaboration with Sanofi. Net
revenue from commercial product sales by the Company was $1.9 million, after giving effect to gross to net adjustments on gross revenue of $2.7 million of Afrezza product dispensed to patients. Commercial product sales commenced in August 2016,
after Afrezza transitioned from Sanofi to MannKind. During 2015, there was no recognition of revenue or cost of revenue related to the collaboration.
Research and development costs for 2016 were $14.9 million compared to $29.7 million for 2015, a decrease of 49.8%, primarily due to $6.2 million of reduced
expenses associated with the reductions in force, $3.3 million of decreased facility spending, $3.1 million in lower project costs, and $2.1 million of reduced clinical trial costs. These decreases were partially offset by the FDA filing fee of $1.0
million for the supplemental new drug application submitted in 2016.
Selling, general and administrative expenses for 2016 were $46.9 million compared to
$41.0 million for 2015, an increase of 14.4%, primarily due to increased costs for the sales and marketing of Afrezza, offset by decreased general and administrative expenses. Sales and marketing expenses were $19.8 million for 2016 compared to $1.6
million for 2015. General and administrative expenses for 2016 were $27.1 million compared to $39.4 million in 2015, a decrease of 31.2%, primarily due to decreased costs associated with the effects of the reductions in force of $9.0 million, $1.7
million in decreased professional fees and $1.7 million in reduced facility spending.
The $72.0 million gain from extinguishment of debt in 2016 resulted
from the forgiveness of the full outstanding loan balance of the Sanofi Loan Facility as part of the settlement agreement with Sanofi.
2016 was $125.7 million, or $1.37 net income per share, compared to the net loss of $368.4 million, or $4.54 net loss per share in 2015.
2017, following stockholder approval of the Reverse Split Proposal, the Company s board of directors approved a reverse stock split of the Company s common stock at a ratio of 1-for-5. On March 1, 2017, the Company filed with the
Secretary of State of the State of Delaware a Certificate of Amendment of its Amended and Restated Certificate to (i) implement a one-for-five reverse stock split of the Company s outstanding common stock and (ii) reduce the
authorized number of shares of the Company s common stock from 700 million to 140 million shares. As a result, all common stock share amounts included in this release were retroactively reduced by a factor of five and all common stock
per share amounts were increased by a factor of five.
Cash and cash equivalents at December 31, 2016 were $22.9 million, compared to $35.5 million at the end of
the third quarter of 2016. During the fourth quarter of 2016, cash receipts were $10.2 million from the sale of insulin to Sanofi, $4.8 million from shipments of Afrezza, $2.2 million from sales of insulin to a third party and $1.1 million from the
collaboration with Receptor. Currently, $30.1 million remains available to borrow under the amended loan arrangement with The Mann Group.
MannKind will host a conference call and presentation webcast to discuss these results today at 5:00 p.m. Eastern Time. To view and listen to the
earnings call webcast, visit MannKind s website at http://www.mannkindcorp.com and click on the Q4 2016 MannKind Earnings Conference Call link in the Webcast section of News & Events. To participate in the live call by
telephone, please dial (888) 771-4371 or (847) 585-4405 and use the participant passcode: 44096370.
A telephone replay will be accessible for
approximately 14 days following completion of the call by dialing (888) 843-7419 or (630) 652-3042 and use the participant passcode: 4409 6370#. A replay will also be available on MannKind s website for 14 days.
About MannKind Corporation
MannKind Corporation (NASDAQ
and TASE: MNKD) focuses on the discovery, development and commercialization of therapeutic products for patients with diseases such as diabetes. MannKind maintains a website at http://www.mannkindcorp.com to which MannKind regularly
posts copies of its press releases as well as additional information about MannKind. Interested persons can subscribe on the MannKind website to e-mail alerts that are sent automatically when MannKind issues press releases, files its reports with
the Securities and Exchange Commission or posts certain other information to the website.
Forward-Looking Statements
This press release contains forward-looking statements that involve risks and uncertainties, including statements regarding MannKind s ability to directly
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 the 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, the ability to generate significant product sales for MannKind, MannKind s ability to manage its existing cash resources or raise additional cash
resources, stock price volatility and other risks detailed in MannKind s filings with the Securities and Exchange Commission, including the
Annual Report on Form 10-K for the year ended December 31, 2016 and subsequent periodic reports on Form 10-Q and current reports on Form 8-K. 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.
MannKind Corporation
Condensed Consolidated Statements of Operations
except per share amounts)
| Three months ended December 31, | Twelve months ended December 31, | |||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Revenue: | ||||||||||||||||
| Net revenue collaboration | $ | 10,184 | $ | $ | 171,965 | $ | ||||||||||
| Net revenue commercial product sales | 1,322 | 1,895 | ||||||||||||||
| Revenue bulk insulin sales | 898 | 898 | ||||||||||||||
| Total net revenue | 12,404 | 174,758 | ||||||||||||||
| Expenses: | ||||||||||||||||
| Cost of revenue collaboration | 10,230 | 32,971 | ||||||||||||||
| Cost of goods sold | 1,553 | 49,057 | 17,121 | 64,745 | ||||||||||||
| Research and development | 1,559 | 6,218 | 14,917 | 29,674 | ||||||||||||
| Selling, general and administrative | 15,333 | 8,311 | 46,928 | 40,960 | ||||||||||||
| Property and equipment impairment | 1,259 | 140,412 | 1,259 | 140,412 | ||||||||||||
| (Gain) loss on foreign currency translation | (3,433 | ) | 2,697 | (3,433 | ) | 2,697 | ||||||||||
| (Gain) loss on purchase commitments | (2,265 | ) | 66,167 | (2,265 | ) | 66,167 | ||||||||||
| Total expenses | 24,236 | 272,862 | 107,498 | 344,655 | ||||||||||||
| Income (loss) from operations | (11,832 | ) | (272,862 | ) | 67,260 | (344,655 | ) | |||||||||
| Other income (expense): | ||||||||||||||||
| Change in fair value of warrant liability | (2,510 | ) | 5,369 | |||||||||||||
| Interest income | 15 | 10 | 85 | 18 | ||||||||||||
| Interest expense on notes | (3,010 | ) | (3,331 | ) | (15,576 | ) | (21,231 | ) | ||||||||
| Interest expense on note payable to principal stockholder | (729 | ) | (729 | ) | (2,901 | ) | (2,894 | ) | ||||||||
| Gain (loss) on extinguishment of debt | 72,024 | 72,024 | (1,049 | ) | ||||||||||||
| Other income (expense) | 18 | (106 | ) | (597 | ) | 1,366 | ||||||||||
| Net income (loss) | $ | 53,976 | $ | (277,018 | ) | $ | 125,664 | $ | (368,445 | ) | ||||||
| Net income (loss) per share basic | $ | 0.56 | $ | (3.30 | ) | $ | 1.37 | $ | (4.54 | ) | ||||||
| Net income (loss) per share diluted | $ | 0.56 | $ | (3.30 | ) | $ | 1.36 | $ | (4.54 | ) | ||||||
| Shares used to compute basic net income (loss) per share | 95,676 | 83,862 | 92,053 | 81,233 | ||||||||||||
| Shares used to compute diluted net income (loss) per share | 96,510 | 83,862 | 92,085 | 81,233 |
MannKind Corporation
Condensed Consolidated Balance Sheets
| December 31, 2016 | December 31, 2015 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 22,895 | $ | 59,074 | ||||
| Accounts receivable | 302 | |||||||
| Receivable from Sanofi | 30,557 | 23 | ||||||
| Inventory | 2,331 | |||||||
| Asset held for sale | 16,730 | |||||||
| Deferred costs from commercial product sales | 309 | |||||||
| Deferred costs from collaboration | 13,539 | |||||||
| Prepaid expenses and other current assets | 4,364 | 4,018 | ||||||
| Total current assets | 77,488 | 76,654 | ||||||
| Property and equipment net | 28,927 | 48,749 | ||||||
| Other assets | 648 | 1,009 | ||||||
| Total assets | $ | 107,063 | $ | 126,412 | ||||
| Liabilities and Stockholders Deficit | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 3,263 | $ | 15,599 | ||||
| Accrued expenses and other current liabilities | 7,937 | 7,929 | ||||||
| Facility financing obligation | 71,339 | 74,582 | ||||||
| Deferred revenue net | 3,419 | |||||||
| Deferred payments from collaboration | 1,000 | 140,231 | ||||||
| Deferred sales from collaboration | 17,503 | |||||||
| Recognized loss on purchase commitments current | 5,093 | 12,475 | ||||||
| Total current liabilities | 92,051 | 268,319 | ||||||
| Note payable to principal stockholder | 49,521 | 49,521 | ||||||
| Accrued interest note payable to principal stockholder | 9,281 | 6,380 | ||||||
| Senior convertible notes | 27,635 | 27,613 | ||||||
| Sanofi loan facility and loss share obligation | 62,371 | |||||||
| Recognized loss on purchase commitments long term | 95,942 | 53,692 | ||||||
| Warrant liability | 7,381 | |||||||
| Milestone rights liability and other liabilities | 8,845 | 8,845 | ||||||
| Total liabilities | 290,656 | 476,741 | ||||||
| Total stockholders deficit | (183,593 | ) | (350,329 | ) | ||||
| Total liabilities and stockholders deficit | $ | 107,063 | $ | 126,412 |