MannKind Corporation Reports 2023 Fourth Quarter and Full Year Financial Results: Provides Clinical Development Update

• 2023 Total revenues of $199M; +99% vs. 2022
  
  
• 4Q 2023 Total revenues of $58M; +62% vs. 2022
• 4Q 2023 Net income of $1M; Non-GAAP net income of $7M
• $302M of cash and cash equivalents and investments at December 31, 2023

DANBURY, Conn. and WESTLAKE VILLAGE, Calif., Feb. 27, 2024 (GLOBE NEWSWIRE) -- MannKind Corporation (NASDAQ:MNKD) today reported financial results for the quarter and full year ended December 31, 2023.

"We doubled our total revenues to nearly $200 million in 2023 and ended the year with a robust fourth quarter total revenue of $58 million," said Michael Castagna, PharmD, Chief Executive Officer of MannKind Corporation. "With our strong year-end cash position of over $300 million, we are well positioned to capitalize on upcoming data read-outs for Afrezza and move MNKD-101 (clofazimine inhalation suspension) into phase 3 and MNKD-201 (nintedanib DPI) into phase 1 in the first half of 2024."

Fourth Quarter 2023 Results

Revenue Highlights

		Three Months Ended December 31,
		2023				2022				$ Change				% Change
		(Dollars in thousands)
Net revenue – Afrezza		$	15,487			$	12,006			$	3,481				29	%
Net revenue – V-Go			4,708				5,434			$	(726	)			(13	%)
Revenue – collaborations and services			17,249				9,544			$	7,705				81	%
Royalties – collaborations			21,028				9,075			$	11,953				132	%
Total revenues		$	58,472			$	36,059			$	22,413				62	%

Afrezza^® net revenue for the fourth quarter of 2023 increased $3.5 million, or 29%, compared to the same period in 2022 as a result of higher product demand and higher price (including a decrease in gross-to-net adjustments as a percentage of gross sales). V-Go^® net revenue for the fourth quarter of 2023 decreased $0.7 million, or 13%, compared to the same period in 2022 as a result of lower product demand and an increase in rebates (as a percentage of gross sales). Collaborations and services revenue increased $7.7 million, or 81%, compared to the same period in 2022 primarily attributable to an increase in manufacturing Tyvaso DPI for United Therapeutics ("UT"). Royalties related to Tyvaso DPI for the fourth quarter of 2023 increased $12.0 million, or 132%, primarily as a result of increased patient demand. 

Commercial product gross margin in the fourth quarter of 2023 was 70% compared to 77% for the same period in 2022. The decrease in gross margin was primarily attributable to an increase in cost of goods sold for Afrezza due to the timing of the capitalization of costs to inventory and lower net revenue for V-Go.

Cost of revenue – collaborations and services was $12.0 million for the fourth quarter of 2023 and remained consistent with the same period in 2022. Higher manufacturing volumes resulted in efficiencies which contributed to a lower effective cost per unit.

Research and development ("R&D") expenses for the fourth quarter of 2023 were $9.2 million compared to $7.2 million for the same period in 2022. The $2.1 million increase was primarily attributed to increased development activities for INHALE-3 which commenced in the second quarter of 2023, INHALE-1 and other research and development activities, partially offset by a decrease in development activities for MNKD-101 due to the completion of a toxicology study in 2022.

Selling expenses were $11.0 million in the fourth quarter of 2023 compared to $11.6 million for the same period in 2022. The $0.6 million decrease was primarily due to lower promotional activities.

General and administrative expenses for the fourth quarter of 2023 were $9.5 million compared to $10.5 million for the same period in 2022. The $1.0 million decrease was primarily attributable to a decrease in personnel and consulting costs.

Interest income was $1.7 million for the fourth quarter of 2023 compared to $1.0 million for the same period in 2022. The $0.8 million increase was primarily due to higher yields on our marketable securities and money market funds.

Interest expense on notes was $2.5 million and interest expense on financing liability (related to the sale-leaseback of our Danbury manufacturing facility) was $2.7 million for the fourth quarter of 2023 and remained consistent with the same period in 2022.

Loss on available-for-sale securities for the fourth quarter of 2023 was $1.1 million as a result of the change in fair value of the investment which related to credit risk.

Year Ended December 31, 2023

Revenue Highlights

		Year Ended December 31,
		2023				2022				$ Change				% Change
		(Dollars in thousands)
Net revenue – Afrezza		$	54,914			$	43,316			$	11,598				27	%
Net revenue – V-Go			19,115				12,931			$	6,184				48	%
Revenue – collaborations and services			52,954				27,924			$	25,030				90	%
Royalties – collaborations			71,979				15,599			$	56,380			*
Total revenues		$	198,962			$	99,770			$	99,192				99	%

________________________

* Not meaningful

Afrezza net revenue for the year ended December 31, 2023 increased $11.6 million, or 27%, compared to the same period in 2022 primarily as a result of higher product demand and price (including a decrease in gross-to-net adjustments as a percentage of gross sales). V-Go net revenue for the year ended December 31, 2023 increased $6.2 million, compared to the same period in 2022. The increase reflects a full year of sales in 2023 compared to seven months in 2022 after V-Go was acquired in May of that year. Net revenue from collaborations and services for the year ended December 31, 2023 increased $25.0 million, or 90%, primarily as a result of an increase in manufacturing Tyvaso DPI for UT and the deferral of manufacturing revenue in the prior year period until we began commercial manufacturing in May 2022. Royalties related to Tyvaso DPI, launched in the late second quarter of 2022 by UT, reached $72.0 million for the year ended December 31, 2023, reflecting a full year of sales and increasing patient demand over the period.

Commercial product gross margin was 72% for the year ended December 31, 2023 and remained consistent with the same period in 2022.

Cost of revenue – collaborations and services for the year ended December 31, 2023 was $41.9 million and remained consistent with the same period in 2022 as manufacturing activities shifted from preproduction efforts in the first five months of 2022 to full commercial production of Tyvaso DPI thereafter. Higher manufacturing volumes resulted in efficiencies which contributed to a lower effective cost per unit.

R&D expenses for the year ended December 31, 2023 were $31.3 million compared to $19.7 million for the same period in 2022. The $11.6 million increase was primarily attributed to increases in development activities for MNKD-101, costs for INHALE-3, which commenced in the second quarter of 2023, costs for INHALE-1 and other research and development activities.

Selling expenses for the year ended December 31, 2023 were $51.8 million compared to $53.8 million for the same period in 2022. The $2.0 million decrease was primarily due to the termination of an Afrezza pilot promotional effort with a contract sales force targeting primary care physicians, which ended in the third quarter of 2022, partially offset by increased personnel and promotional activities related to the acquisition of V-Go in the second quarter of 2022.

General and administrative expenses for the year ended December 31, 2023 were $42.5 million compared to $37.7 million for the same period in 2022. The $4.8 million increase was primarily attributable to increased personnel and consulting costs, including stock-based compensation and headcount.

Interest income was $6.2 million for the year ended December 31, 2023 compared to $2.5 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 notes and milestone rights was $15.2 million and interest expense on financing liability was $9.8 million for the year ended December 31, 2023 and remained consistent with the same period in 2022.

Loss on available-for-sale securities for the year ended December 31, 2023 was $0.2 million as a result of the change in the fair value of the investment which related to credit risk.

Cash, cash equivalents and investments as of December 31, 2023 were $302.3 million.

Non-GAAP Measures

To supplement our consolidated financial statements presented under U.S. generally accepted accounting principles (GAAP), we are presenting non-GAAP income (loss) from operations, non-GAAP net income (loss) and non-GAAP net income (loss) per share - basic, 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 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 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 financial measure for income (loss) from operations, net income (loss) and net income (loss) per share ("EPS") for basic and diluted weighted average shares as reported in our consolidated statement of operations to a non-GAAP presentation as adjusted for select non-cash items: 1% royalty on net revenues for Tyvaso DPI ("Sold portion of royalty revenue") and interest expense on the related liability, stock-based compensation expense, gain on foreign currency transaction and gain on available-for-sale securities for the periods presented (in thousands, except per share amounts):

	Three Months						Year
	Ended December 31,						Ended December 31,
	2023			2022			2023			2022
	(In thousands except per share data)
GAAP income (loss) from operations	$	7,858		$	(12,790	)	$	8,678		$	(64,110	)
Select non-cash adjustments:
Sold portion of royalty revenue (1)		(2,103	)		—			(2,103	)		—
Stock compensation		3,786			2,597			17,649			13,447
Loss (gain) on foreign currency transaction		2,776			3,474			1,916			(4,811	)
Non-GAAP income (loss) from operations	$	12,317		$	(6,719	)	$	26,140		$	(55,474	)
GAAP net income (loss)	$	1,401		$	(17,947	)	$	(11,938	)	$	(87,400	)
Select non-cash adjustments:
Sold portion of royalty revenue (1)		(2,103	)		—			(2,103	)		—
Stock compensation		3,786			2,597			17,649			13,447
Loss (gain) on foreign currency transaction		2,776			3,474			1,916			(4,811	)
Interest expense on liability for sale of future royalties		185			—			185			—
Loss on available-for-sale securities		1,102			932			170			932
Non-GAAP net income (loss)	$	7,147		$	(10,944	)	$	5,879		$	(77,832	)
GAAP net income (loss) per share - basic	$	0.01		$	(0.07	)	$	(0.04	)	$	(0.34	)
Select non-cash adjustments:
Sold portion of royalty revenue		(0.01	)		0.00			(0.01	)		0.00
Stock compensation		0.01			0.01			0.07			0.05
Loss (gain) on foreign currency transaction		0.01			0.01			0.01			(0.02	)
Interest expense on liability for sale of future royalties		0.00			0.00			0.00			0.00
Loss on available-for-sale securities		0.00			0.00			0.00			0.00
Non-GAAP net income (loss) per share - basic	$	0.02		$	(0.05	)	$	0.03		$	(0.31	)
Weighted average shares - basic		269,648			263,378			267,014			257,092

__________________________

(1)	Represents the non-cash portion of the 1% royalty on net sales of Tyvaso DPI earned during 4Q 2023 which is remitted to the royalty purchaser and recognized as royalties from collaborations in our consolidated statements of operations.  Our revenues from royalties from collaborations during 4Q 2023 totaled $21.0 million, of which $2.1 million will be remitted to the royalty purchaser.

Clinical Development Update

Afrezza INHALE-1 (pediatric phase 3 clinical trial)

• Enrollment completed in February 2024
• Upcoming expected data read-outs:
  • Primary endpoint analysis in 4Q 2024
  • Full results in 1H 2025
  • FDA submission for label expansion expected in 2025

Afrezza INHALE-3 (T1DM, Afrezza vs. standard of care including AID pumps; phase 4 clinical trial)

• Enrollment completed ahead of schedule in 4Q 2023
• Upcoming expected data read-outs:
  • First meal dosing – ATTD oral presentation in March 2024
  • 17-week top-line data/primary endpoints to be presented at ADA in June 2024
  • Additional data to be presented at ADCES August conference

MNKD-101 (clofazimine inhalation suspension)

• Phase 3 development program aligned with the FDA – IND expected to be filed in 1Q 2024
• Co-primary endpoints of sputum conversion and patient-reported outcomes
• Up to 100 global sites, first patient expected to enroll in 2Q 2024

MNKD-201 (nintedanib DPI)

• Phase 1 development program in healthy volunteers, expected to dose first patient in 2Q 2024
• Results expected in late 2024

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 commencement of clinical studies of MNKD-101 and MNKD-201, FDA submissions and the data read-outs from clinical studies of Afrezza and MNKD-201. 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 developing product candidates, 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, 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) 661-5000

[email protected] 

MANNKIND CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
		Three Months Ended December 31,								Year Ended December 31,
		2023				2022				2023				2022
		(In thousands except per share data)
Revenues:
Net revenue – commercial product sales		$	20,195			$	17,440			$	74,029			$	56,247
Revenue – collaborations and services			17,249				9,544				52,954				27,924
Royalties – collaborations			21,028				9,075				71,979				15,599
Total revenues			58,472				36,059				198,962				99,770
Expenses:
Cost of goods sold			6,114				4,081				20,863				16,003
Cost of revenue – collaborations and services			11,953				12,043				41,908				41,494
Research and development			9,236				7,156				31,283				19,721
Selling			11,024				11,616				51,776				53,753
General and administrative			9,511				10,479				42,538				37,720
Loss (gain) on foreign currency transaction			2,776				3,474				1,916				(4,811	)
Total expenses			50,614				48,849				190,284				163,880
Income (loss) from operations			7,858				(12,790	)			8,678				(64,110	)
Other income (expense):
Interest income, net			1,725				957				6,154				2,513
Interest expense on financing liability			(2,493	)			(2,478	)			(9,825	)			(9,758	)
Interest expense			(2,677	)			(2,809	)			(15,151	)			(15,011	)
Interest expense on liability for sale of future royalties			(185	)			—				(185	)			—
Loss on available-for-sale securities			(1,102	)			(932	)			(170	)			(932	)
Other income (expense)			(164	)			105				122				(102	)
Total other expense			(4,896	)			(5,157	)			(19,055	)			(23,290	)
Income (loss) before income tax expense			2,962				(17,947	)			(10,377	)			(87,400	)
Income tax expense			(1,561	)			—				(1,561	)			—
Net income (loss)		$	1,401			$	(17,947	)		$	(11,938	)		$	(87,400	)
Net income (loss) per share – basic		$	0.01			$	(0.07	)		$	(0.04	)		$	(0.34	)
Weighted average shares used to compute net income (loss) per share – basic			269,648				263,378				267,014				257,092
Net income (loss) per share – diluted		$	0.00			$	(0.07	)		$	(0.04	)		$	(0.34	)
Weighted average shares used to compute net income (loss) per share – diluted			323,880		(1)		263,378				267,014				257,092

__________________________

(1)

Diluted weighted average shares differs from basic due to the weighted average number of shares that would be outstanding upon conversion of our Senior convertible notes (44,120 shares) and Mann Group convertible note (3,370 shares), and exercise or vesting of outstanding share-based payments to employees (6,742 shares). These adjustments to weighted average shares are only applied to periods with net income.

       

MANNKIND CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
		December 31, 2023				December 31, 2022
		(In thousands except share and per share data)
ASSETS
Current assets:
Cash and cash equivalents		$	238,480			$	69,767
Short-term investments			56,619				101,079
Accounts receivable, net			14,901				16,801
Inventory			28,545				21,772
Prepaid expenses and other current assets			34,848				25,477
Total current assets			373,393				234,896
Property and equipment, net			84,220				45,126
Goodwill			1,931				2,428
Other intangible asset			1,073				1,153
Long-term investments			7,155				1,961
Other assets			7,426				9,718
Total assets		$	475,198			$	295,282
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable		$	9,580			$	11,052
Accrued expenses and other current liabilities			42,036				35,553
Financing liability – current			9,809				9,565
Midcap credit facility – current			20,000				—
Liability for sale of future royalties – current			9,756				—
Deferred revenue – current			9,085				1,733
Recognized loss on purchase commitments – current			3,859				9,393
Total current liabilities			104,125				67,296
Mann Group convertible note			8,829				8,829
Accrued interest – Mann Group convertible note			56				55
Financing liability – long term			94,319				94,512
Midcap credit facility – long term			13,019				39,264
Senior convertible notes			226,851				225,397
Liability for sale of future royalties – long term			136,054				—
Recognized loss on purchase commitments – long term			60,942				62,916
Operating lease liability			3,925				5,343
Deferred revenue – long term			69,794				37,684
Milestone liabilities			3,452				4,524
Total liabilities			721,366				545,820
Stockholders' deficit:
Undesignated preferred stock, $0.01 par value – 10,000,000 shares  authorized; no shares issued or outstanding as of December 31, 2023 and 2022			—				—
Common stock, $0.01 par value – 800,000,000 and 400,000,000 shares    authorized as of December 31, 2023 and 2022, respectively,    and 270,034,495 and 263,793,305 shares issued and outstanding as of    December 31, 2023 and 2022, respectively			2,700				2,638
Additional paid-in capital			2,980,539				2,964,293
Accumulated other comprehensive income			—				—
Accumulated deficit			(3,229,407	)			(3,217,469	)
Total stockholders' deficit			(246,168	)			(250,538	)
Total liabilities and stockholders' deficit		$	475,198			$	295,282