www.globenewswire.com/news-release/2019/08/07/1898640/0/en/MannKind-Corporation-Reports-2019-Second-Quarter-Financial-Results-and-Recent-Business-Highlights.html- 2Q 2019 Total Revenues of $15.0 million; +285% vs. 2Q 2018
- 2Q 2019 Afrezza Net Revenue was $6.1 million; +62% vs. 2Q 2018
- 2Q 2019 Collaboration and Services Revenue was $8.9 million
- Afrezza approved in Brazil
- Entered into exclusive marketing and distribution agreement with AMSL for Australia
- Completed debt financing, which replaces previous secured debt facility and provides up to $75 million in non-dilutive capital
WESTLAKE VILLAGE, Calif., Aug. 07, 2019 (GLOBE NEWSWIRE) -- MannKind Corporation (NASDAQ:MNKD) today reported financial results for the quarter and six months ended June 30, 2019.
“We continue to execute our commercial strategy for Afrezza, which resulted in product growth of 62% versus the second quarter of 2018,” said Michael Castagna, Chief Executive Officer of MannKind Corporation. “Our partner in Brazil, Biomm, received marketing approval for Afrezza and expects to launch in the second half of this year. Meanwhile, our partnership with United Therapeutics continues to gain strength as we celebrated the completed construction of a new high-potency manufacturing suite in our Danbury facility in July.”
Second Quarter 2019 Results
Total revenues were $15.0 million for the second quarter of 2019, reflecting Afrezza net revenue of $6.1 million and collaboration and services revenue of $8.9 million. Afrezza net revenue increased 62% compared to $3.8 million in the second quarter of 2018, primarily driven by higher product demand, a more favorable mix of Afrezza cartridges and price. Collaboration and services revenue increased $8.9 million compared to the second quarter of 2018, reflecting the licensing and research agreements signed with United Therapeutics in September 2018.
Afrezza gross profit was $1.7 million for the second quarter of 2019, an increase of $3.1 million, or 230%, compared to a gross loss of $1.3 million for the same period in 2018, primarily due to an increase of $2.3 million in net revenue, a $0.4 million decrease in realized currency loss associated with a foreign exchange contract and a $0.2 million decrease in inventory write-offs, partially offset by increased costs due to higher sales.
Research and development (R&D) expenses for the second quarter of 2019 were $1.6 million compared to $3.0 million for the second quarter of 2018. This 45% decrease was primarily attributable to a $0.5 million decrease in clinical trial spending and a $0.5 million decrease in personnel costs.
Selling, general and administrative (SG&A) expenses for the second quarter of 2019 were $16.6 million compared to $21.7 million for the second quarter of 2018. This decrease of $5.1 million, or 24%, was primarily attributable to a $2.3 million decrease in personnel related costs, a $1.3 million decrease in professional fees and a $1.0 million decrease in marketing spending.
Interest expense on notes (facility financing obligation and senior convertible notes) for the second quarter of 2019 was $0.6 million compared to $1.7 million for the second quarter of 2018. This $1.1 million decrease was primarily due to a reduction in debt principal balances.
The net loss for the second quarter of 2019 was $12.4 million, or $0.07 per share compared to a $22.7 million net loss in the second quarter of 2018 or $0.16 per share. The decrease was primarily the result of total revenues increasing from higher Afrezza commercial demand and from our licensing and research agreements with United Therapeutics.
Six Months Ended June 30, 2019
Total revenues were $32.5 million for the six months ended June 30, 2019, reflecting Afrezza net revenue of $11.1 million and collaboration and services revenue of $21.3 million. Afrezza net revenue increased 56% compared to $7.2 million for the six months ended June 30, 2018, primarily due to higher product demand, a more favorable mix of Afrezza cartridges and price. Collaboration and services revenue increased $21.2 million compared to the six months ended June 30, 2018, reflecting the licensing and research agreements signed with United Therapeutics in September 2018.
Afrezza gross profit was $2.8 million for the six months ended June 30, 2019, an increase of $4.7 million or 243% compared to a gross loss of $1.9 million in the same period in 2018, primarily due to an increase of $4.0 million in net revenue, a $0.8 million decrease in inventory write-offs, partially offset by increased costs due to higher sales.
R&D expenses for the six months ended June 30, 2019 were $3.3 million compared to $5.6 million for the six months ended June 30, 2018. This 41% decrease was primarily attributable to a $1.0 million decrease in personnel related costs and a $0.7 million decrease in clinical trial spending.
SG&A expenses for the six months ended June 30, 2019 and June 30, 2018 were both $42.3 million. The first half of 2019 included a $9.3 million expenditure for a television campaign for Afrezza offset by a $4.5 million decrease in personnel related costs, a $2.0 million decrease in professional fees, a $1.6 million decrease in marketing spending and a $0.4 million decrease in sponsorship expense.
Interest expense on notes (facility financing obligation and senior convertible notes) for the six months ended June 30, 2019 was $1.2 million compared to $3.5 million for the six months ended June 30, 2018. This $2.3 million decrease was primarily due to a reduction in debt principal balances.
The net loss for the six months ended June 30, 2019 was $27.3 million, or $0.15 per share compared to a $53.1 million net loss for the six months ended June 30, 2018 or $0.41 per share. The lower net loss was mainly attributable to a $25.1 million increase in total revenues.
Cash and Cash Equivalents
Cash, cash equivalents, restricted cash, and short-term investments at June 30, 2019 was $38.2 million compared to $71.7 million at December 31, 2018. The decrease was primarily due to net cash used in operating activities of $31.5 million for the six months ended June 30, 2019, including the receipt of a $12.5 million milestone payment from United Therapeutics, and a principal payment to Deerfield of $2.5 million.
Business Update
On August 6, 2019, MannKind Corporation and MannKind LLC entered into a Credit and Security Agreement with Apollo Investment Corporation, as lender, and MidCap Financial Trust, as lender and agent, which provides a secured term loan facility in an aggregate principal amount of up to $75.0 million and which matures on August 1, 2024 (the “MidCap Credit Facility”). MannKind borrowed the first advance of $40.0 million on August 6, 2019. In connection with the MidCap Credit Facility, MannKind also entered into privately negotiated exchange agreements with each of its existing creditors in order to pay off (in the case of Deerfield as a secured creditor) and restructure (in the case of Bruce & Co. and The Mann Group as unsecured creditors) MannKind’s existing debt obligations. When combined with a July 2019 exchange agreement with Deerfield, these exchanges reduced the principal amount of existing debt by $28.4 million and extended the maturity until November 2024 for $75.1 million (out of $80.3 million) of the remaining debt.
Conference Call
MannKind will host a conference call and presentation webcast to discuss these results today at 5:00 p.m. Eastern Time. To participate in the live call by telephone, please dial (866) 548-4713 or (323) 794-2093 and use the participant passcode: 8241782. Those interested in listening to the conference call live via the Internet may do so by visiting the Company's website at
www.mannkindcorp.com under News & Events.
A telephone replay of the call will be accessible for approximately 14 days following completion of the call by dialing (844) 512-2921 or (412) 317-6671 and use the participant passcode: 8241782#. A replay will also be available on MannKind's website for 14 days.
