MannKind Corporation Reports 2013 Third Quarter Financial Results

  MannKind Corporation Reports 2013 Third Quarter Financial Results

               - Conference Call to Begin Today at 5:00 PM ET -

Business Wire

VALENCIA, Calif. -- November 4, 2013

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

For the third quarter of 2013, total operating expenses were $44.8 million,
compared to $35.5 million for the third quarter of 2012, an increase of $9.3
million. Research and development (R&D) expenses were $27.3 million for the
third quarter of 2013 compared to $25.5 million for the same quarter in 2012,
an increase of $1.8 million, or 7%, primarily due to an increase in non-cash
stock compensation expense, partially offset by a decrease in clinical trial
related expenses with the completion of studies 171 and 175 last quarter.
General and administrative (G&A) expenses increased by $7.4 million to $17.5
million for the third quarter of 2013 compared to $10.1 million in the third
quarter of 2012. This 73.3% increase in G&A expense was primarily due to an
increase in non-cash stock compensation expense of $6.7 million in the third
quarter of 2013 compared to the same quarter of the prior year.

For the nine months of 2013, operating expenses totaled $122.8 million,
compared to $113.5 million for the same period in 2012. Total R&D expenses for
the nine months ended September 30, 2013 increased $4.5 million, or 5.9%,
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 2013 with the completion of studies 171 and 175 in the
second quarter of 2013. G&A expenses increased by $4.8 million, or 12.9%, to
$42.1 million for the nine months of 2013 as compared to $37.3 million in the
same period in 2012. The increase was primarily due to increased stock
compensation expense and professional fees in 2013 partially offset by the
$7.7 million litigation settlement accrual recorded in 2012.

The net loss applicable to common stockholders for the third quarter of 2013
was $50.8 million, or $0.17 per share based on 296.4 million weighted average
shares outstanding, compared with a net loss applicable to common stockholders
of $42.8 million, or $0.22 per share based on 190.5 million weighted average
shares outstanding for the third quarter of 2012. The number of common shares
outstanding at September 30, 2013 was 309,993,285.

Cash and cash equivalents were $93.8 million at September 30, 2013 and $61.8
million at December 31, 2012. Subsequent to September 30, 2013, the Company
received $45.0 million in proceeds from the exercise of warrants issued in
MannKind’s October 2012 public offering. Additionally, The Mann Group
exercised warrants resulting in the issuance of 30,000,000 restricted shares
of MannKind’s common stock in exchange for the cancellation of $78.0 million
in outstanding principal indebtedness owed by MannKind under the parties’ loan
arrangement. Concurrently with the cancellation of principal indebtedness,
MannKind capitalized into new principal indebtedness approximately $7.9
million of accrued interest. In addition, in October 2013, the promissory note
underling the loan arrangement with The Mann Group was amended to, among other
things, extend the maturity date of the loan until January 5, 2020 and extend
the date through which the Company can borrow under the loan arrangement to
December 31, 2019.

Conference Call

MannKind management will host a conference call to discuss these results today
at 5:00 p.m. Eastern Time. To participate in the call please dial (800)
447-0521 or (847) 413-3238 and use the participant passcode: 34087264. To
listen to the call via the Internet please visit http://www.mannkindcorp.com.
The web site replay will be available for 14 days. A telephone replay will be
accessible for approximately 14 days following completion of the call by
dialing (888) 843-7419 or (630) 652-3042 and use the participant passcode:
3408 7264#.

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®, has completed Phase 3 clinical
trials.

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 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
                  Three months ended            Nine months ended               from February
                     September 30,                   September 30,                     14,
                                                                                       1991 (date of
                                                                                       inception) to
                     2013          2012            2013           2012             September 30,
                                                                                       2013
Revenue              $ —            $ 35           $ —             $ 35            $ 3,166      
                                                                                       
Operating
expenses:
Research and           27,281          25,453          80,731           76,247           1,548,304
development
General and            17,481          10,069          42,053           37,262           467,757
administrative
In-process
research and           —               —               —                —                19,726
development
costs
Goodwill              —             —             —              —              151,428    
impairment
                                                                                       
Total
operating             44,762        35,522        122,784        113,509        2,187,215  
expenses
                                                                                       
Loss from              (44,762 )       (35,487 )       (122,784 )       (113,474 )       (2,184,049 )
operations
Other income           10              (2,651  )       48               12,078           (2,219     )
(expense)
Interest
expense on
note payable
to
related party          (1,745  )       (2,245  )       (5,123   )       (8,321   )       (43,948    )
Interest
expense on
senior
convertible
notes and
facility
financing
obligation             (4,323  )       (2,859  )       (10,052  )       (8,278   )       (49,985    )
Interest              2             —             4              2              37,000     
income
                                                                                       
Loss before
benefit for            (50,818 )       (43,242 )       (137,907 )       (117,993 )       (2,243,201 )
income taxes
Income tax            —             408           —              408            382        
benefit
                                                                                       
Net loss               (50,818 )       (42,834 )       (137,907 )       (117,585 )       (2,242,819 )
Deemed
dividend
related to
beneficial
conversion
feature of
convertible
preferred              —               —               —                —                (22,260    )
stock
Accretion on
redeemable
preferred
stock                 —             —             —              —              (952       )
                                                                                       
Net loss
applicable to
common
stockholders         $ (50,818 )     $ (42,834 )     $ (137,907 )     $ (117,585 )     $ (2,266,031 )
                                                                                       
Net loss per
share
applicable to
common
stockholders —
basic and
diluted              $ (0.17   )     $ (0.22   )     $ (0.48    )     $ (0.71    )
                                                                                       
Shares used to
compute basic
and
diluted net
loss per share
applicable
to common             296,386       190,534       286,889        164,611  
stockholders



MannKind Corporation
(A Development Stage Company)
Condensed Consolidated Balance Sheet
(Unaudited)
(in thousands)
                                                      
                                   September 30, 2013       December 31, 2012
                                                             
Assets
Current assets:
Cash and cash equivalents           $   93,803               $   61,840
Prepaid expenses and other             5,526                  4,970      
current assets
Total current assets                    99,329                   66,810
Property and equipment — net            177,829                  183,961
Other assets                           10,450                 543        
Total                               $   287,608             $   251,314    
                                                             
Liabilities and Stockholders’
Deficit
Current liabilities                 $   217,387              $   144,775
Senior convertible notes                97,889                   97,583
Note payable to related party           119,635                  119,635
Other liabilities                       20,419                   —
Stockholders’ deficit                  (167,722   )            (110,679   )
Total                               $   287,608             $   251,314    

Contact:

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