VALENCIA, Calif., Aug. 11, 2014 (GLOBE NEWSWIRE) -- MannKind Corporation (Nasdaq:MNKD) today reported financial results for the second quarter ended June 30, 2014.
For the second quarter of 2014, total operating expenses were $69.8 million, compared to $41.6 million for the second quarter of 2013, an increase of $28.2 million, largely due to an increase in non-cash stock compensation expense of $30.5 million. In the second quarter of 2014, the settlement terms for certain performance-based awards were modified requiring reclassification of these performance grants from equity awards to liability awards and resulting in incremental stock-based compensation expense. Research and development (R&D) expenses increased by $10.2 million to $37.3 million for the second quarter of 2014 compared to $27.1 million for the same quarter in 2013. This 38% increase in R&D expense was primarily due to increased non-cash stock compensation expense of $13.1 million and increased commercial readiness costs of $1.4 million offset by a $4.2 million decrease in clinical trial related expenses. General and administrative (G&A) expenses increased by $18.0 million to $32.5 million for the second quarter of 2014 compared to $14.5 million in the second quarter of 2013. This 124% increase in G&A expense was primarily due to increased non-cash stock compensation expense of $17.3 million.
For the first six months of 2014, operating expenses totaled $111.3 million, compared to $78.0 million in the first half of 2013. The increase of $33.3 million was largely due to an increase in non-cash stock compensation of $36.2 million. Total R&D expenses for the six months ended June 30, 2014 increased by $10.1 million compared to the same period in 2013, primarily due to a $15.5 million increase in non-cash stock compensation expense along with a $2.7 million increase in spending on commercial readiness. This 19% increase was offset by an $8.3 million decrease in clinical expenses upon the completion of the Affinity studies in the second quarter of 2013. G&A expenses increased by $23.2 million, or 94%, to $47.8 million for the first half of 2014 as compared to $24.6 million in the same period in 2013, primarily due to increased non-cash stock compensation expense of $20.7 million and an increase in consulting and legal fees of $1.5 million related to financing transactions and associated filings.
The net loss applicable to common stockholders for the second quarter of 2014 was $73.4 million, or $0.19 per share based on 380.8 million weighted average shares outstanding, compared to a net loss applicable to common stockholders for the second quarter of 2013 of $46.1 million, or $0.16 per share based on 284.0 million weighted average shares outstanding. The number of common shares outstanding at June 30, 2014 was 394,036,984.
Cash and cash equivalents were $41.2 million at June 30, 2014, compared to $35.8 million in the first quarter of 2014. In the second quarter of 2014, $16.3 million in proceeds from warrant and stock option exercises were received in addition to $20.0 million from Tranche B notes purchased by Deerfield. Subsequently, on July 18, 2014, $40.0 million in Tranche 4 notes were purchased by Deerfield under the provisions of the facility agreement upon FDA approval of AFREZZA. Currently, up to $70.0 million of additional sales of Tranche B notes to Deerfield remain available and there is also $30.1 million of available borrowings under the amended loan arrangement with The Mann Group.
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) 708-4540 or (847) 619-6397 and use the participant passcode: 36435006. Those interested in listening to the conference call live via the Internet may do so by visiting the Company's website at http://www.mannkindcorp.com.
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: 36435006#. A replay will also be available on MannKind's website for 14 days.
About MannKind Corporation
MannKind Corporation (Nasdaq:MNKD) focuses on the discovery, development and commercialization of therapeutic products for patients with diseases such as diabetes. MannKind maintains a website at 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, the 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, 2013 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.
(Tables to follow)
| MannKind Corporation | |||||
| (A Development Stage Company) | |||||
| Condensed Consolidated Statements of Operations | |||||
| (Unaudited) | |||||
| (In thousands, except per share amounts) | |||||
| Cumulative period | |||||
| from February 14, | |||||
| 1991 (date of | |||||
| Three months ended | Six months ended | inception) to | |||
| June 30, | June 30, | June 30, | |||
| 2014 | 2013 | 2014 | 2013 | 2014 | |
| Revenue | $ — | $ — | $ — | $ — | $3,166 |
| Operating expenses: | |||||
| Research and development | 37,323 | 27,052 | 63,506 | 53,450 | 1,640,798 |
| General and administrative | 32,523 | 14,533 | 47,752 | 24,572 | 533,138 |
| In-process research and development costs | — | — | — | — | 19,726 |
| Goodwill impairment | — | — | — | — | 151,428 |
| Total operating expenses | 69,846 | 41,585 | 111,258 | 78,022 | 2,345,090 |
| Loss from operations | (69,846) | (41,585) | (111,258) | (78,022) | (2,341,924) |
| Other income (expense) | (370) | 15 | (6,260) | 38 | (9,162) |
| Interest expense on note payable to related party | (721) | (1,689) | (1,435) | (3,378) | (46,569) |
| Interest expense on senior convertible notes | (2,429) | (2,866) | (6,471) | (5,729) | (61,557) |
| Interest income | 1 | 1 | 2 | 2 | 37,006 |
| Loss before benefit for income taxes | (73,365) | (46,124) | (125,422) | (87,089) | (2,422,206) |
| Income tax benefit | — | — | — | — | 382 |
| Net loss | (73,365) | (46,124) | (125,422) | (87,089) | (2,421,824) |
| Deemed dividend related to beneficial conversion feature of convertible preferred stock | — | — | — | — | (22,260) |
| Accretion on redeemable preferred stock | — | — | — | — | (952) |
| Net loss applicable to common stockholders | $ (73,365) | $ (46,124) | $ (125,422) | $ (87,089) | $ (2,445,036) |
| Net loss per share applicable to common stockholders — basic and diluted | $ (0.19) | $ (0.16) | $ (0.33) | $ (0.31) | |
| Shares used to compute basic and diluted net loss per share applicable to common stockholders | 380,770 | 284,044 | 374,810 | 282,062 | |
| MannKind Corporation | ||
| (A Development Stage Company) | ||
| Condensed Consolidated Balance Sheet | ||
| (Unaudited) | ||
| (in thousands) | ||
| June 30, 2014 | December 31, 2013 | |
| Assets | ||
| Current assets: | ||
| Cash and cash equivalents | $ 41,214 | $ 70,790 |
| Prepaid expenses and other current assets | 3,696 | 5,485 |
| Total current assets | 44,910 | 76,275 |
| Property and equipment — net | 183,533 | 176,557 |
| Other assets | 7,863 | 5,814 |
| Total | $ 236,306 | $ 258,646 |
| Liabilities and Stockholders' Equity (Deficit) | ||
| Current liabilities | $ 119,233 | $ 127,794 |
| Senior convertible notes | 98,889 | 98,439 |
| Note payable to related party | 49,521 | 49,521 |
| Other liabilities | 15,040 | 13,605 |
| Stockholders' equity (deficit) | (46,377) | (30,713) |
| Total | $ 236,306 | $ 258,646 |