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8-K - FORM 8-K - MANNKIND CORP | v58649e8vk.htm |
Exhibit 99.1
Company Contact:
Matthew J. Pfeffer
Chief Financial Officer
661-775-5300
mpfeffer@mannkindcorp.com
MANNKIND CORPORATION REPORTS 2010 FOURTH QUARTER AND FULL
YEAR FINANCIAL RESULTS
YEAR FINANCIAL RESULTS
- Conference Call to Begin Today at 4:30 PM EST -
VALENCIA, Calif., February 10, 2011 MannKind Corporation (Nasdaq: MNKD) today reported financial
results for the fourth quarter and year ended December 31, 2010.
For the fourth quarter of 2010, total operating expenses were $32.1 million, compared to $55.8
million for the fourth quarter of 2009, a decrease of $23.7 million. Research and development (R&D)
expenses were $24.2 million for the fourth quarter of 2010 compared to $43.1 million for the same
quarter in 2009, a decrease of $18.9 million. This 44% decrease was primarily due to the
non-recurrence of a $12.8 million loss on disposal of fixed assets in 2009 as well as
reduced costs associated with the clinical development of AFREZZA® after the submission of its new
drug application (NDA) to the U.S. Food & Drug Administration (FDA) in March 2009, partially offset
by an increase in raw materials purchases. General and administrative (G&A) expenses decreased by
$4.8 million to $7.9 million for the fourth quarter of 2010 compared to $12.7 million in the fourth
quarter of 2009, primarily due to reduced salary related costs.
The net loss applicable to common stockholders for the fourth quarter of 2010 was $38.3 million, or
$0.33 per share based on 114.9 million weighted average shares outstanding, compared with a net
loss applicable to common stockholders of $59.5 million, or $0.53 per share based on 112.9 million
weighted average shares outstanding for the fourth quarter of 2009. The number of common shares
outstanding at December 31, 2010 was 127,793,178.
For the year ended December 31, 2010, total operating expenses were $152.6 million, compared with
$209.8 million for 2009, a decrease of $57.2 million. R&D expenses were $112.3 million in 2010,
compared to $156.3 million in 2009, a decrease of $44.1 million. The 28% decrease was primarily
due to the non-recurrence of the $12.8 million loss on disposal of fixed assets in 2009, decreased
costs associated with the clinical development of AFREZZA and reduced salary related and other
research costs as a result of a reduction in force in April 2009, partially offset
by increased raw materials purchases. G&A expenses decreased by $13.1 million to $40.3
million for 2010 as compared to $53.4 million for 2009 primarily due to decreased salary related
costs resulting from the April 2009 reduction in force as well as the non-recurrence of costs
related to the insulin acquisition transaction with Pfizer, Inc. during the second quarter of 2009
and decreased professional fees related to market studies conducted in 2009.
The net loss applicable to common stockholders for the year ended December 31, 2010 was $170.6
million, or $1.50 per share based on 113.7 million weighted average shares outstanding, compared
with a net loss applicable to common stockholders of $220.1 million, or $2.07 per share based on
106.5 million weighted averages shares outstanding for 2009.
Cash, cash equivalents and marketable securities were $70.4 million at December 31, 2010 and $32.5
million at December 31, 2009. In the fourth quarter of 2010, the Company issued and sold 2.1
million shares of common stock to Seaside 88, LP (Seaside) for net proceeds of $14.4 million in
accordance with the Companys common stock purchase agreement with Seaside. Concurrently, with the
Seaside closing, the Company issued and sold 2.1 million shares of common stock to The Mann Group,
an entity controlled by the Companys principal stockholder, for a total purchase price of $16.7
million, which was paid by the cancellation of outstanding principal under the Companys $350.0
million loan agreement with The Mann Group. After taking into account the debt cancellation of
$16.7 million during the fourth quarter, as of December 31, 2010, the principal amount outstanding
under the loan agreement was $235.3 million, and the Company has $98.0 million of available
borrowings under the loan agreement.
The year ahead will be focused on the activities that are necessary to secure the approval of
AFREZZA, said Alfred Mann, Chairman and Chief Executive Officer of MannKind. We are requesting
guidance from the FDA in order to clarify the regulatory path for AFREZZA and we will promptly implement
their recommendations as soon as possible after our requested
meeting. In the meantime, we are restructuring our organization to be focused on securing the
approval of AFREZZA, which today resulted in the elimination of approximately 41% of our workforce. We remain
committed to our goal of making AFREZZA available for the millions of patients with diabetes.
Conference Call
MannKind management will host a conference call to discuss these results today at 4:30 p.m. Eastern
Time. To participate in the call please dial (888) 282-0429 or (415) 228-3901 and use the
participant passcode: MANNKIND. To listen to the call via the Internet please visit
http://www.mannkindcorp.com. The web site replay will be available for 14 days. A telephone replay
will be accessible for approximately 14 days following completion of the call by dialing (866)
445-8299 or (203) 369-1142.
Presenting from the Company will be:
| Chairman and Chief Executive Officer Alfred Mann | ||
| President and Chief Operating Officer Hakan Edstrom | ||
| Corporate Vice President and Chief Financial Officer Matthew Pfeffer | ||
| Corporate Vice President and Chief Scientific Officer Peter Richardson |
About MannKind Corporation
MannKind Corporation (Nasdaq: MNKD) focuses on the discovery, development and
commercialization of therapeutic products for patients with diseases such as diabetes and cancer.
Its lead product candidate, AFREZZA®, is in late stage clinical investigation for the treatment of
adults with type 1 or type 2 diabetes for the control of hyperglycemia. MannKind is also evaluating
an investigational cancer immunotherapy product, MKC1106-MT, in a phase 2 clinical trial. 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, including statements related to the
potential of AFREZZA and the Companys other products, that involve risks and uncertainties. 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 Companys 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 inherent in the
progress, timing and results of clinical trials, difficulties or delays in seeking or obtaining
regulatory approval, MannKinds ability to manage its existing cash resources or raise additional
cash resources, stock price volatility and other risks detailed in MannKinds filings with the
Securities and Exchange Commission, including the Annual Report on Form 10-K for the year ended
December 31, 2009 and periodic reports on Form 10-Q and 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.
(Tables to follow)
MannKind Corporation
(A Development Stage Company)
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)
(A Development Stage Company)
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)
Cumulative | ||||||||||||||||||||
period from | ||||||||||||||||||||
February 14, | ||||||||||||||||||||
1991 (date of | ||||||||||||||||||||
Three months ended | Twelve months ended | inception) to | ||||||||||||||||||
December 31, | December 31, | December 31, | ||||||||||||||||||
2010 | 2009 | 2010 | 2009 | 2010 | ||||||||||||||||
Revenue |
$ | | $ | | $ | 93 | $ | | $ | 3,081 | ||||||||||
Operating expenses: |
||||||||||||||||||||
Research and development |
24,217 | 43,100 | 112,279 | 156,331 | 1,266,092 | |||||||||||||||
General and administrative |
7,877 | 12,719 | 40,312 | 53,447 | 339,601 | |||||||||||||||
In-process research and development
costs |
| | | | 19,726 | |||||||||||||||
Goodwill impairment |
| | | | 151,428 | |||||||||||||||
Total operating expenses |
32,094 | 55,819 | 152,591 | 209,778 | 1,776.847 | |||||||||||||||
Loss from operations |
(32,094 | ) | (55,819 | ) | (152,498 | ) | (209,778 | ) | (1,773,766 | ) | ||||||||||
Other income (expense) |
(626 | ) | (451 | ) | (725 | ) | 51 | (2,617 | ) | |||||||||||
Interest expense on note payable to
principal stockholder |
(2,773 | ) | (1,873 | ) | (10,249 | ) | (5,679 | ) | (17,451 | ) | ||||||||||
Interest expense on senior convertible
notes |
(2,831 | ) | (1,393 | ) | (7,128 | ) | (4,768 | ) | (17,853 | ) | ||||||||||
Interest income |
18 | 3 | 40 | 70 | 36,971 | |||||||||||||||
Loss before provision for income taxes |
(38,306 | ) | (59,533 | ) | (170,560 | ) | (220,104 | ) | (1,774,716 | ) | ||||||||||
Income taxes |
| | | | (26 | ) | ||||||||||||||
Net loss |
(38,306 | ) | (59,533 | ) | (170,560 | ) | (220,104 | ) | (1,774,742 | ) | ||||||||||
Deemed dividend related to beneficial
conversion feature of convertible
preferred stock |
| | | | (22,260 | ) | ||||||||||||||
Accretion on redeemable preferred stock |
| | | | (952 | ) | ||||||||||||||
Net loss applicable to common
stockholders |
$ | (38,306 | ) | $ | (59,533 | ) | $ | (170,560 | ) | $ | (220,104 | ) | $ | (1,797,954 | ) | |||||
Net loss per share applicable to
common stockholders basic and
diluted |
$ | (0.33 | ) | $ | (0.53 | ) | $ | (1.50 | ) | $ | (2.07 | ) | ||||||||
Shares used to compute basic and
diluted net loss per share applicable
to common stockholders |
114,932 | 112,860 | 113,672 | 106,534 | ||||||||||||||||
MannKind Corporation
(A Development Stage Company)
Condensed Consolidated Balance Sheet
(Unaudited)
(in thousands)
(A Development Stage Company)
Condensed Consolidated Balance Sheet
(Unaudited)
(in thousands)
December 31, 2010 | December 31, 2009 | |||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 66,061 | $ | 30,019 | ||||
Marketable securities |
4,370 | 2,475 | ||||||
State research and development credit exchange receivable current |
674 | 1,500 | ||||||
Prepaid expenses and other current assets |
2,849 | 3,672 | ||||||
Total current assets |
73,954 | 37,666 | ||||||
Property and equipment net |
202,356 | 208,229 | ||||||
State research and development credit exchange receivable net of current portion |
629 | 918 | ||||||
Other assets |
317 | 584 | ||||||
Total |
$ | 277,256 | $ | 247,397 | ||||
Liabilities and Stockholders Deficit |
||||||||
Current liabilities |
$ | 18,134 | $ | 28,853 | ||||
Senior convertible notes |
209,335 | 112,765 | ||||||
Note payable to principal stockholder |
235,319 | 165,000 | ||||||
Stockholders deficit |
(185,532 | ) | (59,221 | ) | ||||
Total |
$ | 277,256 | $ | 247,397 | ||||
###