MANNKIND CORP [MNKD] Filings

10-Q 1 mnkd-20240630.htm 10-Q 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission file number: 000-50865

MannKind Corporation

(Exact name of registrant as specified in its charter)


Delaware	13-3607736
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1 Casper Street Danbury, Connecticut	06810
(Address of principal executive offices)	(Zip Code)

(818) 661-5000

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

    Title of each class

    Trading
Symbol(s)

    Name of each exchange on which registered

    Common Stock, par value $0.01 per share

    MNKD

    The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐

		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of July 26, 2024, there were 274,995,037 shares of the registrant’s common stock, $0.01 par value per share, outstanding.

MANNKIND CORPORATION

Form 10-Q

For the Quarterly Period Ended June 30, 2024

TABLE OF CONTENTS


	Page
PART I: FINANCIAL INFORMATION	2

Item 1. Financial Statements (Unaudited)	2
Condensed Consolidated Statements of Operations: Three and six months ended June 30, 2024 and 2023	2
Condensed Consolidated Statements of Comprehensive Income (Loss): Three and six months ended June 30, 2024 and 2023	3
Condensed Consolidated Balance Sheets: June 30, 2024 and December 31, 2023	4
Condensed Consolidated Statements of Stockholders’ Deficit: Three and six months ended June 30, 2024 and 2023	5
Condensed Consolidated Statements of Cash Flows: Six months ended June 30, 2024 and 2023	6
Notes to Condensed Consolidated Financial Statements	7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	35
Item 3. Quantitative and Qualitative Disclosures About Market Risk	43
Item 4. Controls and Procedures	43

PART II: OTHER INFORMATION	44

Item 1. Legal Proceedings	44
Item 1A. Risk Factors	44
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	73
Item 3. Defaults Upon Senior Securities	73
Item 4. Mine Safety Disclosures	73
Item 5. Other Information	73
Item 6. Exhibits	74

SIGNATURES	75

PART 1: FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

MANNKIND CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


	Three Months Ended June 30,						Six Months Ended June 30,
	2024			2023			2024			2023
	(In thousands except per share data)
Revenues:
Net revenue – commercial product sales	$	20,780		$	18,345		$	39,544		$	35,907
Revenue – collaborations and services		26,014			11,211			50,862			22,597
Royalties – collaboration		25,592			19,055			48,243			30,733
Total revenues		72,386			48,611			138,649			89,237
Expenses:
Cost of goods sold		5,605			5,224			9,424			10,754
Cost of revenue – collaborations and services		14,772			9,013			29,551			19,696
Research and development		11,816			6,453			21,829			12,058
Selling		11,495			14,002			23,096			27,312
General and administrative		12,617			11,947			23,345			22,489
(Gain) loss on foreign currency transaction		(529	)		251			(1,928	)		1,205
Total expenses		55,776			46,890			105,317			93,514
Income (loss) from operations		16,610			1,721			33,332			(4,277	)
Other income (expense):
Interest income, net		3,177			1,547			6,611			2,849
Interest expense on financing liability		(2,444	)		(2,449	)		(4,891	)		(4,873	)
Interest expense		(6,051	)		(6,873	)		(8,618	)		(9,659	)
Interest expense on liability for sale of future royalties		(4,383	)		—			(8,631	)		—
(Loss) gain on available-for-sale securities		(1,550	)		932			(1,550	)		932
Loss on extinguishment of debt		(7,050	)		—			(7,050	)		—
Other expense		—			(143	)		—			(32	)
Total other expense		(18,301	)		(6,986	)		(24,129	)		(10,783	)
Income (loss) before income tax expense		(1,691	)		(5,265	)		9,203			(15,060	)
Income tax expense		323			—			587			—
Net income (loss)	$	(2,014	)	$	(5,265	)	$	8,616		$	(15,060	)
Net income (loss) per share – basic	$	(0.01	)	$	(0.02	)	$	0.03		$	(0.06	)
Weighted average shares used to compute net income (loss) per share – basic		273,056			265,626			271,706			264,802
Net income (loss) per share – diluted	$	(0.01	)	$	(0.02	)	$	0.03		$	(0.06	)
Weighted average shares used to compute net income (loss) per share – diluted		273,056			265,626			279,358			264,802

See notes to condensed consolidated financial statements.

MANNKIND CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)


	Three Months Ended June 30,						Six Months Ended June 30,
	2024			2023			2024		2023
	(In thousands)
Net income (loss)	$	(2,014	)	$	(5,265	)	$	8,616	$	(15,060	)
Other comprehensive income:
Unrealized gain on available-for-sale securities		—			443			—		443
Comprehensive income (loss)	$	(2,014	)	$	(4,822	)	$	8,616	$	(14,617	)

See notes to condensed consolidated financial statements.

MANNKIND CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)



	June 30, 2024			December 31, 2023
	(In thousands except share and per share data)
ASSETS
Current assets:
Cash and cash equivalents	$	96,643		$	238,480
Short-term investments		151,118			56,619
Accounts receivable, net		23,346			14,901
Inventory		24,753			28,545
Prepaid expenses and other current assets		30,080			34,848
Total current assets		325,940			373,393
Restricted cash		732			—
Long-term investments		13,398			7,155
Property and equipment, net		85,144			84,220
Goodwill		1,931			1,931
Other intangible asset		1,033			1,073
Other assets		15,658			7,426
Total assets	$	443,836		$	475,198

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable	$	9,556		$	9,580
Accrued expenses and other current liabilities		40,952			42,036
Liability for sale of future royalties – current		12,149			9,756
Financing liability – current		9,935			9,809
Deferred revenue – current		7,420			9,085
Recognized loss on purchase commitments – current		—			3,859
Midcap credit facility – current		—			20,000
Total current liabilities		80,012			104,125
Senior convertible notes		227,577			226,851
Liability for sale of future royalties – long term		135,365			136,054
Financing liability – long term		94,094			94,319
Deferred revenue – long term		66,116			69,794
Recognized loss on purchase commitments – long term		60,183			60,942
Operating lease liability		3,272			3,925
Financing lease liability		184			—
Milestone liabilities		2,813			3,452
Mann Group convertible note		—			8,829
Accrued interest – Mann Group convertible note		—			56
Midcap credit facility – long term		—			13,019
Total liabilities		669,616			721,366
Commitments and contingencies (Note 14)
Stockholders' deficit:
Undesignated preferred stock, $0.01 par value – 10,000,000 shares authorized; no shares issued or outstanding as of June 30, 2024 or December 31, 2023		—			—
Common stock, $0.01 par value – 800,000,000 shares authorized; 274,467,247 and 270,034,495 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively		2,740			2,700
Additional paid-in capital		2,992,271			2,980,539
Accumulated deficit		(3,220,791	)		(3,229,407	)
Total stockholders' deficit		(225,780	)		(246,168	)
Total liabilities and stockholders' deficit	$	443,836		$	475,198

See notes to condensed consolidated financial statements.

MANNKIND CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

(Unaudited)


	Common Stock
	Shares		Amount		Additional Paid-in Capital			Accumulated Other Comprehensive Income		Accumulated Deficit			Total
	(In thousands)
BALANCE, JANUARY 1, 2023		263,793	$	2,638	$	2,964,293		$	—	$	(3,217,469	)	$	(250,538	)
Issuance of common stock associated with at-the-market offering		269		3		1,196			—		—			1,199
Issuance costs associated with at-the-market offering		—		—		(24	)		—		—			(24	)
Net issuance of common stock associated with stock options and restricted stock units		206		2		50			—		—			52
Issuance of common stock pursuant to conversion of the Mann Group convertible note interest		11		—		55			—		—			55
Stock-based compensation expense		—		—		3,655			—		—			3,655
Net loss		—		—		—			—		(9,795	)		(9,795	)
BALANCE, MARCH 31, 2023		264,279	$	2,643	$	2,969,225		$	—	$	(3,227,264	)	$	(255,396	)
Issuance of common stock associated with at-the-market offering		362		4		1,579			—		—			1,583
Issuance costs associated with at-the-market offering		—		—		(17	)		—		—			(17	)
Issuance of common stock pursuant to conversion of the Mann Group convertible note interest		13		—		54			—		—			54
Net issuance of common stock associated with stock options and restricted stock units		3,279		32		(8,576	)		—		—			(8,544	)
Issuance of common stock under employee stock purchase plan		266		3		920			—		—			923
Stock-based compensation expense		—		—		5,580			—		—			5,580
Issuance of common stock from market price stock purchase plan		36		—		152			—		—			152
Cumulative gain on available-for-sale securities		—		—		—			443		—			443
Net loss		—		—		—			—		(5,265	)		(5,265	)
BALANCE, JUNE 30, 2023		268,235	$	2,682	$	2,968,917		$	443	$	(3,232,529	)	$	(260,487	)


	Common Stock
	Shares		Amount		Additional Paid-in Capital			Accumulated Other Comprehensive Income		Accumulated Deficit			Total
	(In thousands)
BALANCE, JANUARY 1, 2024		270,034	$	2,700	$	2,980,539		$	—	$	(3,229,407	)	$	(246,168	)
Issuance of common stock from market price stock purchase plan		416		—		1,361			—		—			1,361
Net issuance of common stock associated with stock options and restricted stock units		337		3		263			—		—			266
Issuance of common stock pursuant to conversion of the Mann Group convertible note interest		15		—		56			—		—			56
Stock-based compensation expense		—		—		3,885			—		—			3,885
Net income		—		—		—			—		10,630			10,630
BALANCE, MARCH 31, 2024		270,802	$	2,703	$	2,986,104		$	—	$	(3,218,777	)	$	(229,970	)
Net issuance of common stock associated with stock options and restricted stock units		1,855		19		(4,952	)		—		—			(4,933	)
Issuance of common stock pursuant to conversion of the Mann Group convertible note principal and interest		1,500		15		3,735			—		—			3,750
Issuance of common stock under employee stock purchase plan		310		3		956			—		—			959
Stock-based compensation expense		—		—		6,428			—		—			6,428
Net loss		—		—		—			—		(2,014	)		(2,014	)
BALANCE, JUNE 30, 2024		274,467	$	2,740	$	2,992,271		$	—	$	(3,220,791	)	$	(225,780	)

See notes to condensed consolidated financial statements.

MANNKIND CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Six Months Ended June 30,
	2024			2023
	(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	8,616		$	(15,060	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Stock-based compensation		10,313			9,235
Interest on liability for sale of future royalties		8,631			—
Loss on extinguishment of debt		7,050			—
Depreciation and amortization		3,092			2,276
Write-off of inventory		1,618			3,359
Loss on available-for-sale securities		1,550			(932	)
Loss on estimated returns of acquired product		1,444			—
Amortization of debt discount and issuance costs		916			941
Amortization of right-of-use assets		647			657
Interest on Mann Group convertible note		56			109
Other, net		49			(152	)
Sold portion of royalty revenue		(4,824	)		—
Net accretion of investments		(2,109	)		(77	)
(Gain) loss on foreign currency transaction		(1,928	)		1,205
Changes in operating assets and liabilities:
Accounts receivable, net		(8,890	)		(10,988	)
Inventory		2,174			(6,877	)
Prepaid expenses and other current assets		(5,294	)		(5,231	)
Other assets		(2,209	)		(20	)
Accounts payable		(24	)		6,075
Accrued expenses and other current liabilities		(1,763	)		351
Deferred revenue		(5,343	)		24,320
Recognized loss on purchase commitments		(2,690	)		(4,286	)
Operating lease liabilities		(546	)		(1,153	)
Net cash provided by operating activities		10,536			3,752
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of held-to-maturity debt securities		(187,447	)		(26,447	)
Proceeds from held-to-maturity debt securities		88,814			69,083
Purchase of property and equipment		(5,380	)		(25,180	)
Proceeds from insurance claim		396			—
Net cash (used in) provided by investing activities		(103,617	)		17,456
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal and early extinguishment payments on MidCap credit facility		(36,617	)		—
Principal and early extinguishment payments on Mann Group convertible note		(8,854	)		—
Payments for taxes related to net issuance of common stock associated with restricted stock units and stock options		(4,667	)		(8,492	)
Proceeds from market price stock purchase plan and employee stock purchase plan		2,320			1,075
Principal payments on financing liability		(203	)		(115	)
Principal payments on financing lease liability		(3	)		—
Proceeds from at-the-market-offering		—			2,782
Issuance costs associated with at-the-market offering		—			(41	)
Net cash used in financing activities		(48,024	)		(4,791	)
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH		(141,105	)		16,417
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD		238,480			69,767
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD	$	97,375		$	86,184


	Six Months Ended June 30,
	2024	2023
	(In thousands)
SUPPLEMENTAL CASH FLOWS DISCLOSURES:
Interest paid in cash	$

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