MannKind Renegotiates Near-Term Maturities with Deerfield

[sla55]

investors.mannkindcorp.com/releasedetail.cfm?ReleaseID=1031797

VALENCIA, Calif., June 29, 2017 (GLOBE NEWSWIRE) -- MannKind Corporation (Nasdaq:MNKD) (TASE:MNKD) and affiliates of Deerfield Management Company L.P. ("Deerfield") have entered into an exchange and third amendment to their facility agreement (the "Facility Agreement"), pursuant to which MannKind's $10 million principal maturity previously due on July 18, 2017 will be extended to October 31, 2017, subject to certain conditions, the existing minimum liquidity covenant is reduced as fully described below, and Deerfield will exchange $5 million of the Amended and Restated 9.75% Senior Convertible Notes due December 2019 (the "Tranche 4 Notes") for 3,584,230 shares of MannKind's common stock (the "Exchange Shares"). The exchange price for the Exchange Shares is $1.395 per share. The principal amount being repaid and exchanged under the Tranche 4 Notes represents the principal amount that would have otherwise become due and payable in December 2019.

Pursuant to the terms of the exchange and amendment agreement, Deerfield has agreed to extend its existing $10 million principal maturity from July 18, 2017 to August 31, 2017 and, subject to certain conditions on that date, further extend it to October 31, 2017. These conditions include that MannKind has not experienced a Material Adverse Event or an Event of Default (as such terms are defined in the Facility Agreement), that MannKind has received approximately $19.4 million of proceeds from the Loan Arrangement between MannKind and The Mann Group LLC, and that the Company has at least $10 million in Cash and Cash Equivalents (as such terms are defined in the Facility Agreement). Subject to these conditions, Deerfield has also agreed to amend the terms of the minimum liquidity covenant under the Facility Agreement such that, on the last day of each month through October 31 and on December 31, 2017, MannKind must maintain at least $10 million of Cash and Cash Equivalents (instead of $25 million).

Michael Castagna, MannKind's Chief Executive Officer commented, "The extension of the July 2017 principal payment to Deerfield and the amendment of the Facility Agreement affords us flexibility and time to explore additional measures to strengthen our financial position. Just as with the Mann Group and its recently announced capital infusion, we appreciate the cooperation and support of Deerfield at this exciting time for MannKind."

[babaoriley]

sla scoops again! Well done! Hope they've got something good cookin'!

[gamblerjag]

Jun 29, 2017 8:32:31 GMT -5 sla55 said:

investors.mannkindcorp.com/releasedetail.cfm?ReleaseID=1031797

VALENCIA, Calif., June 29, 2017 (GLOBE NEWSWIRE) -- MannKind Corporation (Nasdaq:MNKD) (TASE:MNKD) and affiliates of Deerfield Management Company L.P. ("Deerfield") have entered into an exchange and third amendment to their facility agreement (the "Facility Agreement"), pursuant to which MannKind's $10 million principal maturity previously due on July 18, 2017 will be extended to October 31, 2017, subject to certain conditions, the existing minimum liquidity covenant is reduced as fully described below, and Deerfield will exchange $5 million of the Amended and Restated 9.75% Senior Convertible Notes due December 2019 (the "Tranche 4 Notes") for 3,584,230 shares of MannKind's common stock (the "Exchange Shares"). The exchange price for the Exchange Shares is $1.395 per share. The principal amount being repaid and exchanged under the Tranche 4 Notes represents the principal amount that would have otherwise become due and payable in December 2019.

Pursuant to the terms of the exchange and amendment agreement, Deerfield has agreed to extend its existing $10 million principal maturity from July 18, 2017 to August 31, 2017 and, subject to certain conditions on that date, further extend it to October 31, 2017. These conditions include that MannKind has not experienced a Material Adverse Event or an Event of Default (as such terms are defined in the Facility Agreement), that MannKind has received approximately $19.4 million of proceeds from the Loan Arrangement between MannKind and The Mann Group LLC, and that the Company has at least $10 million in Cash and Cash Equivalents (as such terms are defined in the Facility Agreement). Subject to these conditions, Deerfield has also agreed to amend the terms of the minimum liquidity covenant under the Facility Agreement such that, on the last day of each month through October 31 and on December 31, 2017, MannKind must maintain at least $10 million of Cash and Cash Equivalents (instead of $25 million).

Michael Castagna, MannKind's Chief Executive Officer commented, "The extension of the July 2017 principal payment to Deerfield and the amendment of the Facility Agreement affords us flexibility and time to explore additional measures to strengthen our financial position. Just as with the Mann Group and its recently announced capital infusion, we appreciate the cooperation and support of Deerfield at this exciting time for MannKind."

to be this just shows some big cash infusion is coming what it is we just don't know continue good luck

[promann]

I like this. Deerfield is working nice with MNKD. To only have to maintain 10 million in cash and cash equivalent just gave us another 2 month runway

[brotherm1]

Good call Lefty

[derek2]

Moves a risk item out by a quarter & cleans up the balance sheet a bit.

I'll be very interested to see Rx tomorrow. A case can be made that MNKD is starting to deliver on a positive narrative - with actions, not just words.

[sla55]

investors.mannkindcorp.com/secfiling.cfm?filingid=1193125-17-217588&CIK=899460

[therealisaching]

SEC filing here describing both the Mann draw & Deerfield transactions:

secfilings.nasdaq.com/filingFrameset.asp?FilingID=12150732&RcvdDate=6/29/2017&CoName=MANNKIND%20CORP&FormType=8-K&View=html

The “ Extension Conditions ” shall mean that (a) at all times after the date of this Agreement to and including the date of the notice, certification or other applicable date, (a) (i) no Event of Default has occurred and is continuing, (ii) Michael Castagna has continued to be the Chief Executive Officer of the Borrower and neither the Company nor Mr. Castagna has given any notice of any intention to terminate Mr. Castagna’s service as Chief Executive Officer of the Company, (iii) no Material Adverse Effect shall have occurred and be continuing, (iv) the Borrower has not breached any of its representations, warranties, covenants or agreements contained in this Agreement, and (v) the engagement letter, dated June 1, 2017, between the Borrower and Greenhill & Co. (“ Greenhill ”), has remained in full force and effect, neither Greenhill nor the Borrower has given any notice of its intention to terminate such engagement letter, and Greenhill has remained actively engaged in exploring capital structure and financial alternatives on behalf of the Borrower in accordance with such engagement letter, (b) after June 27, 2017, the Borrower has received not less than $19,428,393 in cash provided in respect of additional Mann Debt from The Mann Group LLC (the “ Mann Group ”), and (c) and the Borrower’s Cash and Cash Equivalents were not less than $10,000,000 as of the date of the certification. Until paid, the Tranche 4 Notes Principal Payment shall bear interest as provided in the Facility Agreement.

Greenhill has been engaged since 6/1.

[matt]

Every little bit helps at this point. It looks like Deerfield is being cooperative, but very cautious, as they move forward and the 8-K suggests that perhaps Deerfield insisted that Greenhill be engaged to look at options. Likewise it looks like Deerfield is telling the Mann Group to "show me da money" or the deal is off. Taking shares at only a 10% discount to market was pretty generous on Deerfield's part, more aggressive funds would have insisted on a lot more.

[cjm18]

So the run way is extended from September to November?

Only two months but Some of the trials should be done by then. New label at end of September too.

[compound26]

If no one else steps in, I believe Deerfield will provide further funding by September/October as long as we see continued growth in scripts. This July debt extension is as we have expected and I believe Matt Pfeffer has been working on it for quite some time.

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I had some email correspondences with Matt Pfeffer in April. 

Here is what I wrote to Matt on April 24:

    Since the May notes payment has already been addressed, I think Deefield is now in a watching mode. If the scripts show a continued upward trend in the next 4-6 weeks, say, if the scripts go over 300s and then 400 in the next few weeks, it is not unlikely that Deerfield may choose to extend the July note payment date and provide an additional financing of $25 to $30 million (which will represent about 25% additional investment for Deerfield).

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I think Deerfield now holds about $85 million notes and 8 millions shares of Mannkind after the recent debt restructuring. Deerfield’s interest is quite aligned with Mannkind at this moment. (If Mannkind is forced to BK, there is no guarantee that Deerfield will be made whole. On the other hand, if Mannkind survives and succeeds, Deerfield will benefit handsomely.)

Now that the July debt is extended and Deerfield has agreed to reduce the minimum cash holding requirement from $25 million to $10 million (which in effect is providing an additional $15 million funding), I believe if no one else steps in by September/October, Deerfield will provide further funding by then as long as we see continued growth in scripts.

[uvula]

Compound26,
Please make it clear if this is what you wrote to pfeffer or if some of this came from pfeffer.thank you.

[celo]

If you are a Mannkind creditor, you would like to see them succeed.  If Mannkind goes bankrupt, the creditors receive a lot less money.  To receive shares at a relatively high price of 1.37 does show the creditors believe a turn around could be occurring. That does put a temporary floor on the stock price.  I think if Mankind shows a rise in scripts again this week, the share price should be between the original .80 cents to a dollar before the 5 for 1 split or between 4 and 5 dollars now.  Maybe the creditors know something about the sales figure coming out tomorrow?

[compound26]

Jun 29, 2017 9:06:31 GMT -5 uvula said:

Compound26,
Please make it clear if this is what you wrote to pfeffer or if some of this came from pfeffer.thank you.

uvula, what I wrote in my post above is what I wrote to Matt Pfeffer as I prefer to not quote anything Matt wrote to me. 

[uvula]

Jun 29, 2017 9:10:31 GMT -5 compound26 said:

Jun 29, 2017 9:06:31 GMT -5 uvula said:

Compound26,
Please make it clear if this is what you wrote to pfeffer or if some of this came from pfeffer.thank you.

uvula, what I wrote in my post above is what I wrote to Matt Pfeffer as I prefer to not quote anything Matt wrote to me. 

Thank you clarifying what was originally misleading even if it unintentional.