MannKind Corporation Reports 2019 Fourth Quarter and Full Ye
Feb 25, 2020 8:01:50 GMT -5
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Post by kite on Feb 25, 2020 8:01:50 GMT -5
2019 Total Revenue of $63.0 million
° 2019 Afrezza Net Revenue of $25.3 million; +46% vs. 2018
° 2019 Collaborations and Services Revenue of $37.7 million; +257% vs. 2018
4Q 2019 Total Revenue of $16.0 million
° 4Q 2019 Afrezza Net Revenue of $7.8 million; +35% vs. 4Q 2018
▪ 4Q 2019 Afrezza Net Revenue grew 22% vs. 3Q 2019
▪ 4Q 2019 Afrezza Gross Profit $3.1 million; 40% Gross Margin
° 4Q 2019 Collaborations and Services Revenue of $8.2 million; -20% vs. 4Q 2018
$50.2 million of Cash, Cash Equivalents, Restricted Cash, and Short-term Investments at December 31, 2019
WESTLAKE VILLAGE, Calif., Feb. 25, 2020 (GLOBE NEWSWIRE) -- MannKind Corporation (NASDAQ:MNKD) today reported financial results for the fourth quarter and full year ended December 31, 2019.
“We ended 2019 on a strong note with fourth quarter 2019 Afrezza net revenue of $7.8 million, our best quarter to date,” said Michael Castagna, Chief Executive Officer of MannKind Corporation. He also noted, “Our collaboration with United Therapeutics on TreT continues to make progress along the clinical and commercial pathways that are expected to set up a filing with the FDA within 12 months.”
Fourth Quarter 2019 Results
Total revenues were $16.0 million for the fourth quarter of 2019, reflecting Afrezza net revenue of $7.8 million and collaborations and services revenue of $8.2 million. Afrezza net revenue increased 35% compared to $5.7 million in the fourth quarter of 2018, primarily driven by higher product demand and price. Collaborations and services revenue decreased $2.1 million compared to the fourth quarter of 2018, primarily due to lower revenue from the United Therapeutics research agreement, which was substantially completed by the second quarter of 2019.
On a GAAP basis, Afrezza gross profit was $3.1 million for the fourth quarter of 2019 compared to $0.7 million in the same period in 2018. Afrezza cost of goods sold for the fourth quarter of 2018 included a fee of $2.0 million recorded in connection with the amendment of our insulin supply agreement with Amphastar. As a result, on a non-GAAP basis, gross profit was $2.7 million or 48% gross margin for the fourth quarter of 2018, compared to a GAAP basis gross margin of 40% for the fourth quarter of 2019.
Research and development (R&D) expenses for the fourth quarter of 2019 were $2.0 million compared to $1.1 million for the fourth quarter of 2018. This 82% increase was primarily attributable to an increase of $0.6 million in personnel costs associated with the United Therapeutics research agreement, which was classified as a cost of collaborations and services revenue in 2018, and to an increase of $0.3 million in maintenance costs for our research facility in Danbury, Connecticut.
Selling, general and administrative (SG&A) expenses for the fourth quarter of 2019 were $15.7 million compared to $18.0 million for the fourth quarter of 2018. This decrease of $2.3 million, or 13%, was primarily attributable to a $1.7 million decrease in personnel related costs and a $1.1 million decrease in Afrezza marketing costs, partially offset by an increase of $0.5 million in consulting and professional services costs.
Interest expense on debt for the fourth quarter of 2019 was $2.3 million compared to $1.7 million for the fourth quarter of 2018. This $0.6 million increase, or 35%, was primarily attributable to the net increase in our debt balance as a result of our debt restructuring in the third quarter of 2019.
The net loss for the fourth quarter of 2019 was $14.3 million, or $0.07 per share compared to a $9.8 million net loss in the fourth quarter of 2018 or $0.06 per share. The increase in the net loss of $4.5 million was primarily the result of an increased loss on foreign currency translation of $4.0 million associated with our insulin supply agreement denominated in Euros and of an increase of $0.6 million in interest expense.
Twelve Months Ended December 31, 2019
Total revenues were $63.0 million for the year ended December 31, 2019, reflecting Afrezza net revenue of $25.3 million and collaborations and services revenue of $37.7 million. Afrezza net revenue increased 46% compared to $17.3 million for the year ended December 31, 2018, primarily due to higher product demand, the first sale of Afrezza to our marketing partner in Brazil (Biomm), price increases as well as a more favorable mix of Afrezza cartridges. Collaborations and services revenue increased $27.2 million compared to the full year ended December 31, 2018, which was primarily attributed to the licensing and research agreements with United Therapeutics, both of which began in the fourth quarter of 2018.
On a GAAP basis, Afrezza gross profit was $5.2 million for the year ended December 31, 2019, an improvement of $7.3 million or 347% compared to a gross loss of $2.1 million in the same period in 2018, primarily due to an increase of $8.0 million in net revenue and a $2.2 million decrease in inventory write-offs, partially offset by increased costs due to higher sales and an increase of $0.8 million in fees paid to Amphastar for amendments to our insulin supply agreement. As a result, on a non-GAAP basis, gross profit was $8.0 million, or 32%, for the year ended December 31, 2019 compared to a gross loss of $0.1 million, or 1%, for the full year ended December 31, 2018.
R&D expenses for the year ended December 31, 2019 were $6.9 million compared to $8.7 million for the year ended December 31, 2018. This decrease of $1.8 million, or 21%, was primarily attributable to a $1.7 million decrease in personnel related costs and a $0.9 million decrease in clinical trial spending, partially offset by increased expenses of $0.2 million related to the development of our BluHale inhalation profiling apparatus and increased facility maintenance and equipment repair costs of $0.5 million.
SG&A expenses for the year ended December 31, 2019 were $74.7 million compared to $79.7 million for the year ended December 31, 2018. This decrease of $5.0 million, or 6%, was primarily attributable to a $6.6 million decrease in personnel and employee related costs, decreased consulting costs of $2.5 million and a $1.2 million decrease in stock-based compensation costs, which was partially offset by a $5.6 million increase in costs for television advertising for Afrezza.
Interest income increased by $0.5 million, or 99%, for the year ended December 31, 2019 compared to the year ended December 31, 2018, primarily due to a higher average balance on money market funds and short-term investments.
Interest expense on debt for the year ended December 31, 2019 was $10.9 million compared to $9.4 million for the year ended December 31, 2018. This $1.5 million increase was primarily attributable to a $3.4 million charge realized as a result of achieving a sales milestone in the third quarter of 2019 under our milestone agreement with Deerfield, partially offset by lower interest as a result of the repayment of the Deerfield credit facility.
The net loss for the year ended December 31, 2019 was $51.9 million, or $0.27 per share, compared to $87.0 million net loss for the year ended December 31, 2018, or $0.60 per share. The lower net loss was mainly attributable to a $35.2 million increase in total revenues.
Cash, Cash Equivalents, Restricted Cash and Short Term Investments
Cash, cash equivalents, restricted cash, and short-term investments at December 31, 2019 was $50.2 million compared to $71.7 million at December 31, 2018.
Non-GAAP Measures
Certain financial information contained in this press release is presented on both a reported basis (GAAP) and a non-GAAP basis. Reported results were prepared in accordance with GAAP whereas non-GAAP measures exclude items described in the reconciliation tables below. Non-GAAP financial information is intended to portray the results of our baseline performance, supplement or enhance management, analysts and investors overall understanding of our underlying financial performance and facilitate comparisons among current and past periods. The non-GAAP financial measures are in addition to, not a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP.
Three Months Ended December 31,
2019 2018 $ Change % Change
Net revenue — Afrezza $ 7,761 $ 5,734 $ 2,027 35 %
Less cost of goods sold (4,632 ) (4,986 ) $ (354 ) (7 %)
GAAP gross profit — Afrezza 3,129 748 $ 2,381 318 %
Exclude Amphastar amendment fee — 2,000 $ (2,000 ) (100 %)
Non-GAAP gross profit — Afrezza $ 3,129 $ 2,748 $ 381 14 %
Non-GAAP gross margin 40 % 48 %
Twelve Months Ended December 31,
2019 2018 $ Change % Change
Net revenue — Afrezza $ 25,304 $ 17,276 $ 8,028 46 %
Less cost of goods sold (20,078 ) (19,392 ) $ 686 4 %
GAAP gross profit (loss) — Afrezza 5,226 (2,116 ) $ 7,342 347 %
Exclude Amphastar amendment fee 2,750 2,000 $ 750 38 %
Non-GAAP gross profit (loss) — Afrezza $ 7,976 $ (116 ) $ 8,092 6,976 %
Non-GAAP gross margin 32 % (1 %)
Conference Call
MannKind will host a conference call and presentation webcast to discuss these results today at 9:00 a.m. Eastern Time. To participate in the live call by telephone, please dial (800) 289-0438 or (323) 794-2423 and use the participant passcode: 1233728. 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: 1233728. A replay will also be available on MannKind's website for 14 days.
° 2019 Afrezza Net Revenue of $25.3 million; +46% vs. 2018
° 2019 Collaborations and Services Revenue of $37.7 million; +257% vs. 2018
4Q 2019 Total Revenue of $16.0 million
° 4Q 2019 Afrezza Net Revenue of $7.8 million; +35% vs. 4Q 2018
▪ 4Q 2019 Afrezza Net Revenue grew 22% vs. 3Q 2019
▪ 4Q 2019 Afrezza Gross Profit $3.1 million; 40% Gross Margin
° 4Q 2019 Collaborations and Services Revenue of $8.2 million; -20% vs. 4Q 2018
$50.2 million of Cash, Cash Equivalents, Restricted Cash, and Short-term Investments at December 31, 2019
WESTLAKE VILLAGE, Calif., Feb. 25, 2020 (GLOBE NEWSWIRE) -- MannKind Corporation (NASDAQ:MNKD) today reported financial results for the fourth quarter and full year ended December 31, 2019.
“We ended 2019 on a strong note with fourth quarter 2019 Afrezza net revenue of $7.8 million, our best quarter to date,” said Michael Castagna, Chief Executive Officer of MannKind Corporation. He also noted, “Our collaboration with United Therapeutics on TreT continues to make progress along the clinical and commercial pathways that are expected to set up a filing with the FDA within 12 months.”
Fourth Quarter 2019 Results
Total revenues were $16.0 million for the fourth quarter of 2019, reflecting Afrezza net revenue of $7.8 million and collaborations and services revenue of $8.2 million. Afrezza net revenue increased 35% compared to $5.7 million in the fourth quarter of 2018, primarily driven by higher product demand and price. Collaborations and services revenue decreased $2.1 million compared to the fourth quarter of 2018, primarily due to lower revenue from the United Therapeutics research agreement, which was substantially completed by the second quarter of 2019.
On a GAAP basis, Afrezza gross profit was $3.1 million for the fourth quarter of 2019 compared to $0.7 million in the same period in 2018. Afrezza cost of goods sold for the fourth quarter of 2018 included a fee of $2.0 million recorded in connection with the amendment of our insulin supply agreement with Amphastar. As a result, on a non-GAAP basis, gross profit was $2.7 million or 48% gross margin for the fourth quarter of 2018, compared to a GAAP basis gross margin of 40% for the fourth quarter of 2019.
Research and development (R&D) expenses for the fourth quarter of 2019 were $2.0 million compared to $1.1 million for the fourth quarter of 2018. This 82% increase was primarily attributable to an increase of $0.6 million in personnel costs associated with the United Therapeutics research agreement, which was classified as a cost of collaborations and services revenue in 2018, and to an increase of $0.3 million in maintenance costs for our research facility in Danbury, Connecticut.
Selling, general and administrative (SG&A) expenses for the fourth quarter of 2019 were $15.7 million compared to $18.0 million for the fourth quarter of 2018. This decrease of $2.3 million, or 13%, was primarily attributable to a $1.7 million decrease in personnel related costs and a $1.1 million decrease in Afrezza marketing costs, partially offset by an increase of $0.5 million in consulting and professional services costs.
Interest expense on debt for the fourth quarter of 2019 was $2.3 million compared to $1.7 million for the fourth quarter of 2018. This $0.6 million increase, or 35%, was primarily attributable to the net increase in our debt balance as a result of our debt restructuring in the third quarter of 2019.
The net loss for the fourth quarter of 2019 was $14.3 million, or $0.07 per share compared to a $9.8 million net loss in the fourth quarter of 2018 or $0.06 per share. The increase in the net loss of $4.5 million was primarily the result of an increased loss on foreign currency translation of $4.0 million associated with our insulin supply agreement denominated in Euros and of an increase of $0.6 million in interest expense.
Twelve Months Ended December 31, 2019
Total revenues were $63.0 million for the year ended December 31, 2019, reflecting Afrezza net revenue of $25.3 million and collaborations and services revenue of $37.7 million. Afrezza net revenue increased 46% compared to $17.3 million for the year ended December 31, 2018, primarily due to higher product demand, the first sale of Afrezza to our marketing partner in Brazil (Biomm), price increases as well as a more favorable mix of Afrezza cartridges. Collaborations and services revenue increased $27.2 million compared to the full year ended December 31, 2018, which was primarily attributed to the licensing and research agreements with United Therapeutics, both of which began in the fourth quarter of 2018.
On a GAAP basis, Afrezza gross profit was $5.2 million for the year ended December 31, 2019, an improvement of $7.3 million or 347% compared to a gross loss of $2.1 million in the same period in 2018, primarily due to an increase of $8.0 million in net revenue and a $2.2 million decrease in inventory write-offs, partially offset by increased costs due to higher sales and an increase of $0.8 million in fees paid to Amphastar for amendments to our insulin supply agreement. As a result, on a non-GAAP basis, gross profit was $8.0 million, or 32%, for the year ended December 31, 2019 compared to a gross loss of $0.1 million, or 1%, for the full year ended December 31, 2018.
R&D expenses for the year ended December 31, 2019 were $6.9 million compared to $8.7 million for the year ended December 31, 2018. This decrease of $1.8 million, or 21%, was primarily attributable to a $1.7 million decrease in personnel related costs and a $0.9 million decrease in clinical trial spending, partially offset by increased expenses of $0.2 million related to the development of our BluHale inhalation profiling apparatus and increased facility maintenance and equipment repair costs of $0.5 million.
SG&A expenses for the year ended December 31, 2019 were $74.7 million compared to $79.7 million for the year ended December 31, 2018. This decrease of $5.0 million, or 6%, was primarily attributable to a $6.6 million decrease in personnel and employee related costs, decreased consulting costs of $2.5 million and a $1.2 million decrease in stock-based compensation costs, which was partially offset by a $5.6 million increase in costs for television advertising for Afrezza.
Interest income increased by $0.5 million, or 99%, for the year ended December 31, 2019 compared to the year ended December 31, 2018, primarily due to a higher average balance on money market funds and short-term investments.
Interest expense on debt for the year ended December 31, 2019 was $10.9 million compared to $9.4 million for the year ended December 31, 2018. This $1.5 million increase was primarily attributable to a $3.4 million charge realized as a result of achieving a sales milestone in the third quarter of 2019 under our milestone agreement with Deerfield, partially offset by lower interest as a result of the repayment of the Deerfield credit facility.
The net loss for the year ended December 31, 2019 was $51.9 million, or $0.27 per share, compared to $87.0 million net loss for the year ended December 31, 2018, or $0.60 per share. The lower net loss was mainly attributable to a $35.2 million increase in total revenues.
Cash, Cash Equivalents, Restricted Cash and Short Term Investments
Cash, cash equivalents, restricted cash, and short-term investments at December 31, 2019 was $50.2 million compared to $71.7 million at December 31, 2018.
Non-GAAP Measures
Certain financial information contained in this press release is presented on both a reported basis (GAAP) and a non-GAAP basis. Reported results were prepared in accordance with GAAP whereas non-GAAP measures exclude items described in the reconciliation tables below. Non-GAAP financial information is intended to portray the results of our baseline performance, supplement or enhance management, analysts and investors overall understanding of our underlying financial performance and facilitate comparisons among current and past periods. The non-GAAP financial measures are in addition to, not a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP.
Three Months Ended December 31,
2019 2018 $ Change % Change
Net revenue — Afrezza $ 7,761 $ 5,734 $ 2,027 35 %
Less cost of goods sold (4,632 ) (4,986 ) $ (354 ) (7 %)
GAAP gross profit — Afrezza 3,129 748 $ 2,381 318 %
Exclude Amphastar amendment fee — 2,000 $ (2,000 ) (100 %)
Non-GAAP gross profit — Afrezza $ 3,129 $ 2,748 $ 381 14 %
Non-GAAP gross margin 40 % 48 %
Twelve Months Ended December 31,
2019 2018 $ Change % Change
Net revenue — Afrezza $ 25,304 $ 17,276 $ 8,028 46 %
Less cost of goods sold (20,078 ) (19,392 ) $ 686 4 %
GAAP gross profit (loss) — Afrezza 5,226 (2,116 ) $ 7,342 347 %
Exclude Amphastar amendment fee 2,750 2,000 $ 750 38 %
Non-GAAP gross profit (loss) — Afrezza $ 7,976 $ (116 ) $ 8,092 6,976 %
Non-GAAP gross margin 32 % (1 %)
Conference Call
MannKind will host a conference call and presentation webcast to discuss these results today at 9:00 a.m. Eastern Time. To participate in the live call by telephone, please dial (800) 289-0438 or (323) 794-2423 and use the participant passcode: 1233728. 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: 1233728. A replay will also be available on MannKind's website for 14 days.