VALENCIA, Calif., Nov. 3, 2014 (GLOBE NEWSWIRE) -- MannKind Corporation (Nasdaq:MNKD) today reported financial results for the third quarter ended September 30, 2014.
For the third quarter of 2014, total operating expenses were $38.3 million, compared to $44.8 million for the third quarter of 2013, a decrease of $6.5 million. Research and development (R&D) expenses decreased $8.1 million from $27.3 million for the third quarter of 2013 to $19.2 million for the same quarter in 2014. This 30% decrease in R&D expense was primarily due to decreased non-cash stock compensation expense of $8.2 million resulting from the settlement value of modified performance awards and an overall decrease in stock-based compensation expense related to performance milestones substantially recorded in 2013 but were achieved and settled in 2014. General and administrative (G&A) expenses increased by $1.6 million to $19.1 million for the third quarter of 2014 compared to $17.5 million in the third quarter of 2013. This 9% increase in G&A expense was primarily due to increased professional fees of $13.6 million associated with the closing of the collaboration and license agreement with Sanofi partially offset by a decrease in non-cash stock compensation expense of $12.5 million resulting from the reduced settlement value of modified performance awards and an overall decrease in stock-based compensation expense related to performance milestones substantially recognized in 2013 but were achieved and settled in 2014.
For the first nine months of 2014, operating expenses totaled $149.5 million, compared to $122.8 million for the first nine months of 2013, an increase of $26.7 million. Total R&D expenses for the nine months ended September 30, 2014 increased by $2.0 million, or 2%, to $82.7 million compared to $80.7 million for the same period in 2013, primarily due to increased non-cash stock compensation expense of $7.3 million and increased spending on commercial readiness of $5.7 million partially offset by decreased clinical expenses of $10.3 million due to the completion of the Affinity studies in 2013. G&A expenses increased by $24.7 million, or 59%, to $66.8 million for the nine months ended September 30, 2014 as compared to $42.1 million in the same period in 2013, primarily due to an $8.2 million increase in non-cash stock compensation expense, increased professional fees of $13.6 million associated with the closing of the collaboration and license agreement with Sanofi, and an increase of $1.5 million in professional fees related to financing transactions and associated filings.
The net loss applicable to common stockholders for the third quarter of 2014 was $36.5 million, or $0.09 per share based on 394.2 million weighted average shares outstanding, compared to a net loss applicable to common stockholders for the third quarter of 2013 of $50.8 million, or $0.17 per share based on 296.4 million weighted average shares outstanding. The number of common shares outstanding at September 30, 2014 was 405,469,034.
Cash and cash equivalents were $172.5 million at September 30, 2014, compared to $41.2 million in the second quarter of 2014. In the third quarter of 2014, the Company received:
- $150.0 million in an upfront payment from Sanofi in connection with the closing of the collaboration and licensing agreement;
- $40.0 million from the Tranche 4 notes purchased by Deerfield in July 2014; and
- $17.3 million in proceeds from warrant and stock option exercises.
Currently, up to $70.0 million of additional sales of Tranche B notes may be made to Deerfield and $30.1 million of borrowings remain available under the amended loan arrangement with The Mann Group.
Conference Call
MannKind management will host a conference call to discuss these results today at 5:00 p.m. Eastern Time. To participate in the call please dial (800) 708-4540 or (847) 619-6397 and use the participant passcode: 36435007. Those interested in listening to the conference call live via the Internet may do so by visiting the Company’s website at http://www.mannkindcorp.com.
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: 3643 5007#. A replay will also be available on MannKind’s website for 14 days.
About MannKind Corporation
MannKind Corporation (Nasdaq:MNKD) focuses on the discovery, development and commercialization of therapeutic products for patients with diseases such as diabetes. MannKind maintains a website at 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. 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 Company’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 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, 2013 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) | |||||
| Cumulative period | |||||
| from February 14, | |||||
| 1991 (date of | |||||
| Three months ended | Nine months ended | inception) to | |||
| September 30, | September 30, | September 30, | |||
| 2014 | 2013 | 2014 | 2013 | 2014 | |
| Revenue | $ — | $ — | $ — | $ — | $ 3,166 |
| Operating expenses: | |||||
| Research and development | 19,178 | 27,281 | 82,684 | 80,731 | 1,659,976 |
| General and administrative | 19,088 | 17,481 | 66,840 | 42,053 | 552,226 |
| In-process research and development costs | — | — | — | — | 19,726 |
| Goodwill impairment | — | — | — | — | 151,428 |
| Total operating expenses | 38,266 | 44,762 | 149,524 | 122,784 | 2,383,356 |
| Loss from operations | (38,266) | (44,762) | (149,524) | (122,784) | (2,380,190) |
| Other income (expense) | 7,898 | 10 | 1,638 | 48 | (1,264) |
| Interest expense on note payable to related party | (729) | (1,745) | (2,164) | (5,123) | (47,298) |
| Interest expense on senior convertible notes | (5,424) | (4,323) | (11,895) | (10,052) | (66,981) |
| Interest income | 1 | 2 | 4 | 4 | 37,008 |
| Loss before benefit for income taxes | (36,520) | (50,818) | (161,941) | (137,907) | (2,458,725) |
| Income tax benefit | — | — | — | — | 382 |
| Net loss | (36,520) | (50,818) | (161,941) | (137,907) | (2,458,343) |
| 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 | $ (36,520) | $ (50,818) | $ (161,941) | $ (137,907) | $ (2,481,555) |
| Net loss per share applicable to common stockholders — basic and diluted | $ (0.09) | $ (0.17) | $ (0.42) | $ (0.48) | |
| Shares used to compute basic and diluted net loss per share applicable to common stockholders | 394,163 | 296,386 | 381,332 | 286,889 | |
| MannKind Corporation | ||
| (A Development Stage Company) | ||
| Condensed Consolidated Balance Sheet | ||
| (Unaudited) | ||
| (in thousands) | ||
| September 30, 2014 | December 31, 2013 | |
| Assets | ||
| Cash and cash equivalents | $ 172,465 | $ 70,790 |
| Prepaid expenses and other assets | 23,430 | 11,299 |
| Property and equipment — net | 190,923 | 176,557 |
| Total | $ 386,818 | $ 258,646 |
| Liabilities and Stockholders’ Equity (Deficit) | ||
| Deferred up-front due to collaboration agreement | $ 150,000 | $ — |
| Senior convertible notes (due August 2015) | 99,120 | 98,439 |
| Facility financing obligation | 72,625 | 102,300 |
| Note payable to related party | 49,521 | 49,521 |
| Other liabilities | 56,230 | 39,099 |
| Stockholders’ equity (deficit) | (40,678) | (30,713) |
| Total | $ 386,818 | $ 258,646 |
CONTACT: Company Contact: Matthew J. Pfeffer Chief Financial Officer 661-775-5300 mpfeffer@mannkindcorp.com
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