MannKind Corporation Reports 2013 Second Quarter Financial Results

  MannKind Corporation Reports 2013 Second Quarter Financial Results

Business Wire

VALENCIA, Calif. -- August 9, 2013

MannKind Corporation (Nasdaq: MNKD) today reported financial results for the
second quarter ended June 30, 2013.

For the second quarter of 2013, total operating expenses were $41.6 million,
compared to $44.1 million for the second quarter of 2012, a decrease of $2.5
million. Research and development (R&D) expenses were $27.1 million for the
second quarter of 2013 compared to $26.6 million for the same quarter in 2012,
an increase of $0.5 million primarily due to an increase in non-cash stock
compensation expense partially offset by a decrease in clinical trial related
expenses. General and administrative (G&A) expenses decreased by $2.9 million
to $14.5 million for the second quarter of 2013 compared to $17.4 million in
the second quarter of 2012. This 17% decrease in G&A expense was primarily due
to non-cash expenses of a $7.7 million litigation settlement accrual recorded
in the second quarter of 2012 partly offset by increased stock compensation
expense in the second quarter of 2013.

Operating expenses totaled $78.0 million for the first six months of 2013 and
for the same period in 2012. Total R&D expenses for the six months ended June
30, 2013 increased $2.7 million, or 5%, compared to the same period in 2012,
primarily due to an increase in non-cash stock compensation expense partially
offset by a decrease in clinical trial related expense in the first half of
2013. G&A expenses decreased by $2.6 million, or 10%, to $24.6 million for the
first half of 2013 as compared to $27.2 million in the same period in 2012.
The decrease was due to the non-recurrence of a $7.7 million litigation
settlement accrual recorded in the second quarter of 2012 partially offset by
increased stock compensation expense in the first half of 2013.

The net loss applicable to common stockholders for the second quarter of 2013
was $46.1 million, or $0.16 per share based on 284.0 million weighted average
shares outstanding, compared with a net loss applicable to common stockholders
of $36.6 million, or $0.23 per share based on 159.9 million weighted average
shares outstanding for the second quarter of 2012. The number of common shares
outstanding at June 30, 2013 was 300,869,683.

Cash and cash equivalents were $28.5 million at June 30, 2013 and $61.8
million at December 31, 2012 with $125.4 million remaining available for
future borrowings under the loan agreement with The Mann Group through
September 30, 2013.

Conference Call

As previously indicated, MannKind will hold a conference call to discuss the
financial results when the results of Studies 171 and 175 are available. The
analysis of these studies is expected to be completed shortly.

About MannKind Corporation

MannKind Corporation (Nasdaq: MNKD) focuses on the discovery, development and
commercialization of therapeutic products for patients with diseases such as
diabetes. Its lead product candidate, AFREZZA®, is in late stage clinical
investigation for the treatment of adults with type 1 or type 2 diabetes for
the control of hyperglycemia.

MannKind maintains a website at http://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, including statements
related to the reporting of top-line results, 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, difficulties or delays in obtaining regulatory
feedback or completing and analyzing the results of clinical studies,
MannKind’s ability to manage its existing cash resources or raise additional
cash resources, stock price volatility and other 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, 2012 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.

                                                                               
MannKind Corporation

(A Development Stage Company)

Condensed Consolidated Statements of Operations

(Unaudited)

(In thousands, except per share amounts)
                                                                                         
                                                                                         Cumulative
                                                                                         period

                                                                                         from February
                     Three months ended                Six months ended                  14, 1991
                     June 30,                          June 30,
                                                                                         (date of
                                                                                         inception) to

                                                                                         June 30,
                     2013          2012              2013          2012              2013
Revenue              $ —            $ —              $ —            $ —              $ 3,166      
                                                                                         
Operating
expenses:
Research and           27,052          26,638            53,450          50,794            1,521,023
development
General and            14,533          17,416            24,572          27,193            450,276
administrative
In-process
research and           —               —                 —               —                 19,726
development
costs
Goodwill              —             —               —             —               151,428    
impairment
                                                                                         
Total
operating             41,585        44,054          78,022        77,987          2,142,453  
expenses
                                                                                         
Loss from              (41,585 )       (44,054 )         (78,022 )       (77,987 )         (2,139,287 )
operations
Other income           15              13,347            38              14,729            (2,229     )
(expense)
Interest
expense on
note payable           (1,689  )       (3,028  )         (3,378  )       (6,076  )         (42,203    )
to related
party
Interest
expense on
senior                 (2,866  )       (2,844  )         (5,729  )       (5,419  )         (45,662    )
convertible
notes
Interest              1             1               2             2               36,998     
income
                                                                                         
Loss before
benefit for            (46,124 )       (36,578 )         (87,089 )       (74,751 )         (2,192,383 )
income taxes
Income tax            —             —               —             —               382        
benefit
                                                                                         
Net loss               (46,124 )       (36,578 )         (87,089 )       (74,751 )         (2,192,001 )
Deemed
dividend
related to
beneficial
conversion             —               —                 —               —                 (22,260    )
feature of
convertible
preferred
stock
Accretion on
redeemable            —             —               —             —               (952       )
preferred
stock
                                                                                         
Net loss
applicable to        $ (46,124 )     $ (36,578 )       $ (87,089 )     $ (74,751 )       $ (2,215,213 )
common
stockholders
                                                                                         
Net loss per
share
applicable to
common               $ (0.16   )     $ (0.23   )       $ (0.31   )     $ (0.49   )
stockholders —
basic and
diluted
                                                                                         
Shares used to
compute basic
and diluted
net loss per          284,044       159,859         282,062       151,506 
share
applicable to
common
stockholders
                                                                                         
                                                                                         

                                                 
MannKind Corporation

(A Development Stage Company)

Condensed Consolidated Balance Sheet

(Unaudited)

(in thousands)
                                                             
                              June 30, 2013                 December 31, 2012
Assets
Current assets:
Cash and cash                  $  28,529                     $   61,840
equivalents
Prepaid expenses and             3,633                        4,970      
other current assets
Total current assets              32,162                         66,810
Property and equipment —          179,567                        183,961
net
Other assets                     700                          543        
Total                          $  212,429                   $   251,314    
Liabilities and
Stockholders’ Deficit
Current liabilities            $  266,782                    $   144,775
Senior convertible notes          98,004                         97,583
Note payable to related           —                              119,635
party
Stockholders’ deficit            (152,357 )                    (110,679   )
Total                          $  212,429                   $   251,314    

Contact:

MannKind Corporation
Matthew J. Pfeffer
Chief Financial Officer
661-775-5300
mpfeffer@mannkindcorp.com
 
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