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MannKind(MNKD) - 2023 Q3 - Earnings Call Transcript
2023-11-08 01:07
Financial Data and Key Metrics Changes - Total revenues grew 56% year-over-year in Q3 2023 and 121% for the nine months ended compared to the same period in 2022, driven by the launch of Tyvaso DPI and growth in the endocrine business [15][16] - The company achieved a net income of $2 million in Q3 2023, marking its first profitable quarter in history, compared to a net loss of $14 million in the same quarter last year [21][22] - The gross margin for commercial products was reported at 78%, an increase from previous quarters, attributed to improved efficiencies in Afrezza and V-Go products [34] Business Line Data and Key Metrics Changes - Tyvaso royalty revenue exceeded $20 million in Q3 2023, with collaboration services revenue of $13 million, reflecting strong patient demand [16][17] - The endocrine business generated total revenues of $18 million, with Afrezza net revenue increasing by 24% year-over-year to $13 million, driven by higher patient demand [17][18] - V-Go net revenue was $4 million in Q3 2023, an 18% decline compared to 2022, but the downward trend has stabilized [18] Market Data and Key Metrics Changes - The company reported a current run rate of over $200 million in revenues, with approximately 40% from royalties, which contribute directly to the bottom line [20] - The insulin market remains relatively flat to a small single-digit decline year-over-year, with Afrezza showing resilience against market changes [10] Company Strategy and Development Direction - The company is focused on expanding its pipeline, particularly in the orphan lung space and diabetes business, with significant progress in clinical trials for MannKind-101 and MannKind-201 [24][26] - The management emphasized the importance of capital allocation and deleveraging to enhance shareholder value while investing in growth drivers [26] - The company aims to leverage its manufacturing capacity to serve 25,000 to 35,000 patients annually, with potential to increase to 50,000 through efficiencies [8] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, highlighting the strong position of the company and the potential for growth in both the orphan lung and endocrine markets [23][24] - The management acknowledged the impact of GLP-1 medications on the diabetes market but maintained that the need for insulin, particularly for Type 1 diabetes patients, remains strong [36] - The company expects to continue seeing growth in revenues and patient demand, particularly for Tyvaso DPI, as out-of-pocket costs for patients are capped under Medicare [45] Other Important Information - The company has begun paying down its mid-cap debt and expects to manage cash flows tightly, with only a $2 million reduction in cash and investments in Q3 2023 [22] - The management is preparing for regulatory submissions and trial initiations in 2024, with a focus on maintaining momentum in clinical development [25][48] Q&A Session Summary Question: How will the INHALE trials shape the trajectory of Afrezza? - Management indicated that data from the INHALE trials will drive decisions regarding the commitment to the endocrine business and Afrezza, with expectations for improved efficacy and tolerability based on trial outcomes [30] Question: What are the economics of Tyvaso DPI? - The royalty rate for Tyvaso DPI is fixed at 10% on net sales, with collaboration services revenue on a cost-plus basis, leading to a margin of over 20% [31] Question: What is the outlook for gross margins? - The gross margin for commercial products was reported at 78%, with expectations for this level to be sustainable moving forward [34] Question: Is there any impact from GLP-1s on the diabetes business? - Management noted that while GLP-1s may slow growth in the diabetes market, they do not expect a significant impact on Afrezza, as Type 1 patients will still require insulin [36] Question: What are the next steps for IND submissions and trial designs? - The company is on track to file INDs for MannKind-101 and MannKind-201, with ongoing discussions with the FDA to streamline trial designs [48]
MannKind(MNKD) - 2023 Q3 - Quarterly Report
2023-11-06 16:00
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 September 30, 2023 Or ☐ 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 o ...
MannKind(MNKD) - 2023 Q2 - Earnings Call Transcript
2023-08-08 05:09
Financial Data and Key Metrics Changes - Total revenues grew 157% year-over-year in Q2 2023, with a 189% increase for the first half of 2023 compared to the same period in 2022 [18][19] - The company achieved its first operating income of $2 million in Q2 2023, a significant improvement from a loss of $21 million in the prior year [23][24] - Non-GAAP operating income for Q2 2023 was $8 million after adjusting for non-cash items [24] Business Line Data and Key Metrics Changes - Orphan lung disease business generated $19 million in royalty revenue, reflecting a 63% growth from the previous quarter [4] - Endocrine revenues totaled $18 million, with Afrezza net revenue at $14 million (up 27% year-over-year) and V-Go net revenue at $5 million [20][21] - Afrezza TRxs grew 16% year-over-year, driven by improved Medicare access [5][10] Market Data and Key Metrics Changes - The company expects annual revenue demand of $250 million to $300 million for every 10,000 paying patients for Tyvaso DPI [8] - The company reported strong patient demand for Tyvaso DPI, with consistent quarter-over-quarter revenue growth [9] Company Strategy and Development Direction - The company is focused on expanding its orphan lung pipeline, with plans to file 2 INDs and enter Phase 1 and Phase 3 trials within the next 12 months [4] - A unified sales force for Afrezza and V-Go has been established to enhance mealtime control for diabetes patients [5] - The company aims to launch new products annually starting in 2025, with a focus on R&D investments [28][34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth trajectory of Tyvaso DPI and the overall business, citing strong patient demand and operational improvements [9][25] - The management team highlighted the importance of maintaining profitability while investing in R&D and pipeline development [57] Other Important Information - The company appointed Dr. Burkhard Blank as the new Executive Vice President, Head of R&D and Chief Medical Officer to enhance governance and management of R&D assets [26][27] - The company is on track to complete high-volume capacity expansion for Tyvaso DPI by the end of next year [8] Q&A Session Summary Question: How is the company balancing profitability with the need to promote Afrezza? - Management noted that high approval ratings among Medicare patients provide confidence to push for growth while managing profitability [38] Question: What are the expectations for DPI royalties in the upcoming quarters? - Management refrained from providing specific guidance but indicated strong patient demand is expected to continue [41] Question: Can you discuss the interim look at INHALE-1? - The interim look was planned in the original statistical design, and results will inform whether to continue the trial [45] Question: What is driving the increase in DPI revenue assumptions? - The increase is attributed to improved clarity on pricing, packaging, and dosing as the company refines its approach [47] Question: How does the company plan to manage R&D spending while maintaining profitability? - The company intends to seek partnerships for international launches to mitigate costs while focusing on U.S. trials [55][57]
MannKind(MNKD) - 2023 Q2 - Quarterly Report
2023-08-06 16:00
PART I: FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=2&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) MannKind Corporation's unaudited condensed consolidated financial statements for Q2 2023 and 2022 are presented, covering operations, balance sheets, and cash flows [Condensed Consolidated Statements of Operations](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Net loss significantly narrowed for Q2 2023, driven by a substantial increase in total revenues, primarily from collaborations Condensed Consolidated Statements of Operations (In thousands, except per share data) | | **Three Months Ended June 30,** | **Six Months Ended June 30,** | | :--- | :--- | :--- | | | **2023** | **2022** | **2023** | **2022** | | **Total revenues** | $48,611 | $18,894 | $89,237 | $30,886 | | **Total expenses** | $46,890 | $39,348 | $93,514 | $72,596 | | **Income (loss) from operations** | $1,721 | $(20,454) | $(4,277) | $(41,710) | | **Net loss** | $(5,265) | $(29,023) | $(15,060) | $(55,021) | | **Net loss per share – basic and diluted** | $(0.02) | $(0.11) | $(0.06) | $(0.22) | [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2023, total assets increased, total liabilities rose, and cash and cash equivalents improved, resulting in an increased stockholders' deficit Condensed Consolidated Balance Sheet Highlights (In thousands) | | **June 30, 2023** | **December 31, 2022** | | :--- | :--- | :--- | | **Cash and cash equivalents** | $86,184 | $69,767 | | **Total current assets** | $230,233 | $234,896 | | **Total assets** | $313,422 | $295,282 | | **Total current liabilities** | $96,966 | $67,296 | | **Total liabilities** | $573,909 | $545,820 | | **Total stockholders' deficit** | $(260,487) | $(250,538) | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities significantly improved for the six months ended June 30, 2023, contributing to an overall increase in cash and cash equivalents Cash Flow Summary (Six Months Ended June 30, In thousands) | | **2023** | **2022** | | :--- | :--- | :--- | | **Net cash provided by (used in) operating activities** | $3,752 | $(50,230) | | **Net cash provided by (used in) investing activities** | $17,456 | $(37,484) | | **Net cash used in financing activities** | $(4,791) | $(963) | | **Net increase (decrease) in cash and cash equivalents** | $16,417 | $(88,677) | | **Cash and cash equivalents, end of period** | $86,184 | $35,507 | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes detail the company's accounting policies and financial results, covering revenue recognition, product acquisitions, investments, debt, and significant commitments - The company's main commercial products are **Afrezza®** (insulin human) Inhalation Powder and the **V-Go®** wearable insulin delivery device. A key collaboration is with **United Therapeutics (UT)** for **Tyvaso DPI®**, for which MannKind receives royalties and manufacturing revenue[27](index=27&type=chunk) - In **May 2022**, the company acquired assets related to the **V-Go** wearable insulin delivery device from **Zealand Pharma** for up-front consideration of **$15.3 million** and potential sales-based milestones up to **$10.0 million**[82](index=82&type=chunk) - The collaboration with **United Therapeutics (UT)** for **Tyvaso DPI** is a major revenue driver, with three distinct performance obligations: **R&D Services and License**, **Next-Gen R&D Services**, and **Manufacturing Services**[45](index=45&type=chunk)[139](index=139&type=chunk) - The company has a significant insulin supply commitment with **Amphastar**, with remaining purchase commitments totaling approximately **€63.5 million** from **2023 through 2027**[179](index=179&type=chunk)[180](index=180&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance, highlighting significant revenue growth and a narrowed net loss, while affirming sufficient liquidity for the next twelve months [Results of Operations](index=35&type=section&id=Results%20of%20Operations_MD%26A) Total revenues for Q2 2023 surged **157%**, primarily driven by collaboration royalties and services related to Tyvaso DPI, alongside growth in commercial product sales Revenue Comparison (in thousands) | | **Three Months Ended June 30,** | **Six Months Ended June 30,** | | :--- | :--- | :--- | | | **2023** | **2022** | **% Change** | **2023** | **2022** | **% Change** | | **Net revenue – commercial product sales** | $18,345 | $12,722 | 44% | $35,907 | $22,548 | 59% | | **Revenue – collaborations and services** | $11,211 | $5,868 | 91% | $22,597 | $8,034 | 181% | | **Royalties – collaborations** | $19,055 | $304 | * | $30,733 | $304 | * | | **Total revenues** | **$48,611** | **$18,894** | **157%** | **$89,237** | **$30,886** | **189%** | - **Afrezza** net revenue increased by **27%** for the three months ended **June 30, 2023**, compared to the prior year, driven by higher product demand and price[202](index=202&type=chunk) - **V-Go**, acquired in **May 2022**, contributed significantly to revenue growth, with net revenue increasing **132%** for the three months ended **June 30, 2023**, compared to the same period in the prior year[205](index=205&type=chunk) - **R&D expenses** increased **32%** in **Q2 2023** YoY due to development activities for **MNKD-101** (inhaled clofazimine) and the **Afrezza INHALE-3 study**[214](index=214&type=chunk) - **Selling expenses** decreased **12%** in **Q2 2023** YoY, primarily due to the termination of a pilot promotional effort for **Afrezza** targeting primary care physicians[214](index=214&type=chunk) [Liquidity and Capital Resources](index=39&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity is supported by cash, equivalents, and investments, deemed sufficient for the next twelve months despite significant outstanding debt and purchase commitments - The company believes it has **sufficient liquidity** to fund operations for the **next twelve months** based on cash on hand, investments, and projected revenues[225](index=225&type=chunk)[234](index=234&type=chunk) Outstanding Debt Principal as of June 30, 2023 | Debt Instrument | Principal Amount | | :--- | :--- | | Senior convertible notes | $230.0 million | | MidCap credit facility | $40.0 million | | Mann Group convertible note | $8.8 million | | **Total** | **$278.8 million** | - For the six months ended **June 30, 2023**, the company generated **$3.8 million** in cash from operations, a significant improvement from the **$50.2 million** used in the prior-year period[229](index=229&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=40&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks primarily from interest rate fluctuations on variable-rate debt and foreign currency exposure from Euro-denominated purchase obligations - Interest rate risk is linked to the **MidCap credit facility's** variable rate (**SOFR-based**), while other major debt instruments have fixed rates[237](index=237&type=chunk) - The company has significant foreign currency exchange risk due to its insulin supply agreement with **Amphastar**, which has obligations denominated in **Euros**. For the six months ended **June 30, 2023**, a **$1.2 million** currency loss was realized[240](index=240&type=chunk) - A hypothetical **10%** change in the U.S. dollar to Euro exchange rate as of **June 30, 2023**, would result in a foreign currency impact of approximately **$6.9 million** to the pre-tax loss[241](index=241&type=chunk) [Item 4. Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2023, with no material changes to internal control over financial reporting during the quarter - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were **effective** as of **June 30, 2023**[243](index=243&type=chunk) - **No material changes** to the internal control over financial reporting were identified during the latest fiscal quarter[245](index=245&type=chunk) PART II: OTHER INFORMATION [Item 1. Legal Proceedings](index=42&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to ordinary course legal proceedings, which management believes will not materially adversely affect its financial position or results - The company states that it is **not involved** in any legal proceedings that are expected to have a **material adverse effect** on its financial condition[247](index=247&type=chunk) [Item 1A. Risk Factors](index=42&type=section&id=Item%201A.%20Risk%20Factors) This section details significant business, operational, and financial risks, including product commercialization, supply chain, regulatory compliance, capital needs, and cybersecurity threats - **Business Risks:** The company faces risks of **limited commercial success** for its products, manufacturing challenges, reliance on **single-source suppliers** like **Amphastar** for insulin, and the need to raise **additional capital** despite a **history of losses**[250](index=250&type=chunk)[256](index=256&type=chunk)[266](index=266&type=chunk) - **Regulatory Risks:** The business is subject to **stringent government regulation**, including ongoing compliance with **cGMP**, potential for **healthcare reform** to impact pricing and reimbursement, and complex data privacy laws like **GDPR** and **CCPA**[253](index=253&type=chunk)[347](index=347&type=chunk)[362](index=362&type=chunk) - **Financial Risks:** The company may **not generate sufficient cash** to service its **significant debt and commitments**. Its stock price is **volatile**, and future equity or debt financing could be **dilutive** to existing shareholders[284](index=284&type=chunk)[394](index=394&type=chunk)[404](index=404&type=chunk) - **Operational Risks:** The company's IT systems are **vulnerable to cyber-attacks**, and a **fire** at a contract manufacturer's facility for an investigational product (**MNKD-101**) is expected to cause a **3-6 month delay** in clinical supply production[297](index=297&type=chunk)[327](index=327&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=70&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In April 2023, the company issued common stock to the Mann Group LLC for interest payment on a convertible note, exempt from registration - In **April 2023**, the company issued **13,192 shares** of common stock to the Mann Group LLC to pay approximately **$0.1 million** in quarterly interest on the **Mann Group convertible note**[410](index=410&type=chunk) [Item 5. Other Information](index=70&type=section&id=Item%205.%20Other%20Information) An executive officer adopted a Rule 10b5-1 trading plan in Q2 2023 for the sale of common stock, set to expire in May 2024 - An executive officer adopted a **Rule 10b5-1 trading plan** on **May 24, 2023**, to sell **384,020 shares** of common stock over the following year[411](index=411&type=chunk)[413](index=413&type=chunk)
MannKind(MNKD) - 2023 Q1 - Earnings Call Transcript
2023-05-10 01:29
MannKind Corporation (NASDAQ:MNKD) Q1 2023 Earnings Conference Call May 9, 2023 5:00 PM ET Company Participants Michael Castagna - CEO Steven Binder - CFO Conference Call Participants Oren Livnat - H.C. Wainwright Brandon Folkes - Cantor Fitzgerald Anish Nikhanj - RBC Capital Markets Thomas Smith - SVB Securities Steven Lichtman - Oppenheimer Anthony Petrone - Mizuho Operator Good afternoon. And welcome to the MannKind Corporation 2023 First Quarter Financial Results Earnings Call. As a reminder this call i ...
MannKind(MNKD) - 2023 Q1 - Quarterly Report
2023-05-08 16:00
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 March 31, 2023 Or ☐ 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 in ...
MannKind (MNKD) Investor Presentation - Slideshow
2023-03-22 19:00
Oppenheimer 33rd Annual Healthcare Conference Michael Castagna, PharmD Chief Executive Officer March 14, 2023 NASDAQ: MNKD 1 © Copyright 2023. All rights reserved. MannKind Corporation. / 15 March 2023 Cautionary Statement Today's presentation includes forward-looking statements relating to the development, commercialization and benefits of our products and investigational product candidates, including AFREZZA®, that are subject to certain risks and uncertainties that could cause actual results to differ ma ...
MannKind(MNKD) - 2022 Q4 - Earnings Call Transcript
2023-02-24 14:38
MannKind Corporation (NASDAQ:MNKD) Q4 2022 Results Conference Call February 23, 2023 5:00 PM ET Company Participants Michael Castagna - Chief Executive Officer Steven Binder - Chief Financial Officer Conference Call Participants Brandon Folkes - Cantor Gregory Renza - RBC Mike Kratky - SVB Operator Good afternoon, and welcome to the MannKind Corporation 2022 Fourth Quarter and Full Year Financial Results Earnings Call. As a reminder, this call is being recorded on February 23, 2023 and will be available for ...
MannKind(MNKD) - 2022 Q4 - Annual Report
2023-02-22 16:00
PART I [Business](index=6&type=section&id=Item%201.%20Business) MannKind is a biopharmaceutical company focused on endocrine and orphan lung diseases, commercializing Afrezza, V-Go, and Tyvaso DPI [Company Overview](index=6&type=section&id=1.1.%20Company%20Overview) MannKind specializes in endocrine and orphan lung diseases, leveraging proprietary dry-powder formulations for key products - MannKind focuses on developing and commercializing therapeutic products and devices for endocrine and orphan lung diseases[14](index=14&type=chunk) - Proprietary technologies include Technosphere dry-powder formulations and Dreamboat inhalation devices for deep lung delivery[14](index=14&type=chunk) - Commercial products include **Afrezza** (inhaled insulin) and **V-Go** (wearable insulin delivery device) in the U.S[15](index=15&type=chunk) - **Tyvaso DPI**, for pulmonary arterial hypertension and interstitial lung disease, is commercialized by United Therapeutics, with MannKind receiving royalties and manufacturing margins[17](index=17&type=chunk) - International strategy involves regional partnerships for Afrezza, such as with Biomm S.A. in Brazil and Cipla Ltd. in India[16](index=16&type=chunk) [Manufacturing and Supply](index=6&type=section&id=1.2.%20Manufacturing%20and%20Supply) MannKind manufactures Technosphere products in Danbury, CT, expands Tyvaso DPI capacity, and relies on sole-source suppliers - Technosphere powders (Afrezza and Tyvaso DPI) are formulated and filled at the Danbury, Connecticut facility, which is **ISO 13485:2016 certified** and regularly inspected by the FDA[22](index=22&type=chunk)[24](index=24&type=chunk)[26](index=26&type=chunk) - Production capacity for Tyvaso DPI is being expanded with additional filling lines and equipment, with costs borne by United Therapeutics[27](index=27&type=chunk) - The sole qualified source of insulin for Afrezza is Amphastar France Pharmaceuticals S.A.S., with remaining purchase commitments of **$72.3 million** as of December 31, 2022, through 2027[28](index=28&type=chunk) - V-Go is manufactured by a contract manufacturer in Southern China using MannKind-owned equipment, with components sourced from sole-source vendors managed through the global supply chain[29](index=29&type=chunk)[31](index=31&type=chunk) [Intellectual Property](index=10&type=section&id=1.3.%20Intellectual%20Property) MannKind protects its Technosphere platform, Afrezza, Tyvaso DPI, and V-Go with over 1,350 patents and trade secrets - The company's worldwide intellectual property portfolio consists of approximately **1,350 issued patents** and **215 pending patent applications**[35](index=35&type=chunk) - Afrezza is protected by approximately **670 issued patents** and **55 pending applications**, with the longest-lived expiring in **2032**[35](index=35&type=chunk) - Tyvaso DPI is protected by approximately **450 issued patents** and **40 pending applications**, with the longest-lived expiring in **2035**[35](index=35&type=chunk) - V-Go is protected by approximately **200 issued patents** and **25 pending applications**, with the longest-lived expiring in **2033**[35](index=35&type=chunk) - MannKind also relies on trade secrets and know-how for manufacturing processes and improvements, and uses trademarks for corporate and product branding (e.g., Afrezza, V-Go, Technosphere)[36](index=36&type=chunk)[37](index=37&type=chunk) [Competition](index=10&type=section&id=1.4.%20Competition) Afrezza and V-Go face intense competition from major pharmaceutical companies' injectable insulins and GLP-1 analogs - The pharmaceutical and biotechnology industries are highly competitive, characterized by rapidly evolving technology and intense R&D efforts[38](index=38&type=chunk) - Afrezza's principal competitors are rapid-acting insulin analogs for mealtime injections, marketed by Eli Lilly and Company, Sanofi S.A., and Novo Nordisk A/S[39](index=39&type=chunk) - V-Go competes with injectable mealtime insulin products and long-acting/basal injectable insulins from companies like Novo Nordisk and Sanofi[39](index=39&type=chunk) - Both Afrezza and V-Go also face competition from glucagon-like peptide-1 (GLP-1) analog injection products, manufactured by companies such as AstraZeneca PLC, Novo Nordisk A/S, and Eli Lilly and Company[39](index=39&type=chunk) [Government Regulation](index=10&type=section&id=1.5.%20Government%20Regulation) MannKind is subject to extensive FDA and international regulations across product lifecycle, with non-compliance leading to severe penalties - The FDA and comparable regulatory agencies impose substantial requirements on the research, clinical development, testing, manufacture, labeling, storage, shipping, approval, recordkeeping, advertising, promotion, and sale of medical devices and drug products[40](index=40&type=chunk)[41](index=41&type=chunk) - Failure to comply with regulatory requirements can result in sanctions such as warning letters, product recalls, production suspension, injunctions, refusal of approvals, and civil or criminal fines[42](index=42&type=chunk) - As part of Afrezza's approval, the FDA required additional clinical studies, including the ongoing Phase 3 INHALE-1 study in pediatric patients (expected to complete enrollment by end of 2023) and a long-term safety study[43](index=43&type=chunk) - Manufacturing facilities and suppliers must comply with current good manufacturing practices (cGMPs) and quality system regulations (QSR), subject to regular inspections by the FDA and other national regulatory bodies[44](index=44&type=chunk) [Pricing and Reimbursement](index=12&type=section&id=1.6.%20Pricing%20and%20Reimbursement) Government and third-party payer policies, including the IRA, exert significant pressure on product pricing and reimbursement - Government coverage and reimbursement policies, along with third-party payers (e.g., government health authorities, private insurers), directly and indirectly affect the ability to commercialize approved products[47](index=47&type=chunk) - Increased emphasis on managed healthcare and governmental scrutiny of drug pricing in the U.S. and other markets lead to pressure on product pricing, reimbursement, and usage[47](index=47&type=chunk) - The Inflation Reduction Act (IRA), signed in August 2022, limits insulin copays to **$35 per month** for Medicare Part D beneficiaries starting in 2023 and directs HHS to negotiate prices for certain single-source drugs[49](index=49&type=chunk) [Health Care Fraud and Abuse and Transparency Laws](index=13&type=section&id=1.7.%20Health%20Care%20Fraud%20and%20Abuse%20and%20Transparency%20Laws) Compliance with federal and state healthcare fraud, abuse, and transparency laws is critical to avoid substantial penalties - Compliance with federal and state healthcare laws, including fraud and abuse and health information laws, is required for drug products reimbursed by Medicare, Medicaid, or other federal/state programs[50](index=50&type=chunk) - Key laws include the federal Anti-Kickback Statute, federal civil and criminal false claims laws (e.g., False Claims Act), and the federal Health Insurance Portability and Accountability Act of 1996 (HIPAA)[51](index=51&type=chunk)[52](index=52&type=chunk)[53](index=53&type=chunk) - The Physician Payments Sunshine Act requires reporting of payments and transfers of value to physicians and certain other healthcare professionals and teaching hospitals[53](index=53&type=chunk)[54](index=54&type=chunk)[56](index=56&type=chunk) - Failure to comply with these laws can lead to significant criminal, civil, and administrative penalties, damages, fines, imprisonment, and exclusion from government healthcare programs[62](index=62&type=chunk) [Privacy](index=15&type=section&id=1.8.%20Privacy) MannKind navigates complex and evolving global data privacy laws, with non-compliance posing significant regulatory and business risks - The company is subject to data privacy and security regulation by both federal and state governments in the U.S., including HIPAA (as amended by HITECH), CCPA, and CPRA (effective January 1, 2023)[58](index=58&type=chunk)[59](index=59&type=chunk) - Foreign data privacy and security laws, such as the EU GDPR, UK GDPR, and Brazil's LGPD, impose significant and complex compliance obligations, with higher sanctions and extra-territoriality measures[60](index=60&type=chunk) - Compliance efforts are complicated by the differing and evolving nature of these laws across jurisdictions[59](index=59&type=chunk)[60](index=60&type=chunk) - Actual or perceived failure to comply could lead to regulatory investigations, actions, litigation, fines, penalties, business disruptions, reputational harm, and loss of revenue or customers[10](index=10&type=chunk)[214](index=214&type=chunk) [Other Regulation](index=15&type=section&id=1.9.%20Other%20Regulation) MannKind adheres to diverse federal, state, and local regulations on operations, environment, and safety, with non-compliance risking penalties - MannKind is subject to numerous federal, state, and local laws related to laboratory practices, experimental use of animals, hazardous substances, working conditions, manufacturing practices, environmental protection, and fire hazard control[61](index=61&type=chunk) - Non-compliance with these laws can result in significant criminal, civil, and administrative penalties, damages, fines, imprisonment, and operational restructuring[62](index=62&type=chunk) [Ethical Business Practices and Sustainability](index=16&type=section&id=1.10.%20Ethical%20Business%20Practices%20and%20Sustainability) MannKind upholds ethical marketing, drug safety, and clinical trial participant safety through its Code of Conduct and industry standards - Employees are required to abide by the Code of Business Conduct and Ethics and a policy on interactions with healthcare professionals and patients, promoting products fairly, truthfully, accurately, and on-label[63](index=63&type=chunk)[64](index=64&type=chunk) - Off-label promotion and sales activities that interfere with independent medical judgment are explicitly prohibited[64](index=64&type=chunk) - The company is committed to protecting patient health by ensuring medically sound knowledge of product benefits and risks is communicated accurately[63](index=63&type=chunk) [Drug Safety](index=16&type=section&id=1.11.%20Drug%20Safety) MannKind ensures product safety through cGMPs, serialization, and mandatory adverse event reporting from clinical trials to disposal - Approved and investigational products are manufactured in accordance with applicable cGMPs, QSR, and other regulatory requirements[66](index=66&type=chunk) - All sales packs are serialized according to the Drug Quality and Security Act to improve detection and removal of counterfeit or harmful drugs from the supply chain[66](index=66&type=chunk) - Employees and third-party call centers are required to capture and report adverse events, safety information, and product complaints to regulatory authorities[67](index=67&type=chunk) [Safety of Clinical Trial Participants](index=16&type=section&id=1.12.%20Safety%20of%20Clinical%20Trial%20Participants) MannKind prioritizes clinical trial participant safety, adhering to ethical standards, ICH Guidelines, and mandatory informed consent - The company is committed to conducting clinical trials according to uniformly high ethical standards, applicable laws, International Council for Harmonisation of Technical Requirements for Registration of Pharmaceuticals for Human Use (ICH) Guidelines, and the Declaration of Helsinki[68](index=68&type=chunk) - Informed consent is required in all trials to ensure participants understand risks, benefits, data collection, and voluntary participation[69](index=69&type=chunk) - Clinical trials are monitored through internal audits and inspections by the company and engaged Clinical Research Organizations (CROs) to verify adherence to policies, good clinical practices, and laws[69](index=69&type=chunk) - The company's policy is to disclose basic results of all Phase 2-4 clinical trials and may voluntarily disclose Phase 1 results, including serious adverse events and non-serious adverse events with a frequency of at least five percent[71](index=71&type=chunk)[72](index=72&type=chunk) [Corruption and Bribery](index=18&type=section&id=1.13.%20Corruption%20and%20Bribery) MannKind enforces strict anti-bribery and anti-corruption policies through its Code of Conduct, training, and oversight - The Code of Business Conduct and Ethics and a separate anti-corruption policy provide clear guidelines on anti-bribery and anti-corruption practices[73](index=73&type=chunk) - All new employees receive training on the Code, and existing employees are required to annually acknowledge their familiarity with its policies[73](index=73&type=chunk) - The company has adopted and implemented PhRMA's Code on Interactions with Healthcare Professionals to limit unethical interactions[74](index=74&type=chunk) [Long-Lived Assets](index=18&type=section&id=1.14.%20Long-Lived%20Assets) MannKind's long-lived assets, valued at $53.0 million in 2022, are primarily located in the U.S. and China Long-Lived Assets (in millions) | Year | Amount | | :--- | :----- | | 2022 | $53.0 | | 2021 | $38.9 | - Long-lived assets are located in the United States and China[75](index=75&type=chunk) [Employees and Human Capital](index=18&type=section&id=1.15.%20Employees%20and%20Human%20Capital) MannKind focuses on attracting and retaining talent through its Total Rewards Program, diversity, and performance monitoring - As of December 31, 2022, MannKind had **395 total at-will employees**, with **391 full-time**[77](index=77&type=chunk) Workforce Distribution by Gender and Ethnic Minority (as of Dec 31, 2022) | Grade Levels | Number | Female (%) | Ethnic minority (%) | | :-------------------------- | :----- | :--------- | :------------------ | | Vice President and above | 17 | 18% | 24% | | Executive Director, Director and Senior Manager | 115 | 48% | 25% | | Managers and below | 263 | 41% | 44% | | All employees | 395 | 42% | 37% | - The Total Rewards Program includes base salary, annual bonus, annual equity awards, health and wellness, paid time off, 401(k) retirement plan with company match, Employee Stock Purchase Plan (ESPP), and an Employee Recognition Program[80](index=80&type=chunk) - The company monitors human capital measures such as performance against corporate objectives, churn rate, regrettable losses, and responses to periodic employee surveys[78](index=78&type=chunk) [Occupational Health and Safety](index=20&type=section&id=1.16.%20Occupational%20Health%20and%20Safety) MannKind maintains strong occupational health and safety, with 2022 injury rates significantly below industry averages - Established procedures and employee training are in place to comply with governmental regulations regarding workplace safety and minimize injuries, illnesses, and environmental impact[81](index=81&type=chunk) Occupational Health and Safety Performance (2022 vs. 2021 Industry Average) | Metric | Company Rate (per 100 employees) | 2021 Industry Average | | :--------------------------------------- | :------------------------------- | :-------------------- | | Total illness and injury incidence rate | 0.3 | 1.6 | | DART (days away/restricted or job transfer) incident rate | 0.3 | 1.2 | [Corporate Information](index=20&type=section&id=1.17.%20Corporate%20Information) MannKind Corporation, incorporated in Delaware in 1991, has executive offices in Danbury, CT, with SEC filings online - MannKind Corporation was incorporated in the State of Delaware on February 14, 1991[82](index=82&type=chunk) - Principal executive offices are located at 1 Casper Street, Danbury, Connecticut 06810[82](index=82&type=chunk) - Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments are available free of charge on the company's website (http://www.mannkindcorp.com)[82](index=82&type=chunk) [Scientific Advisors](index=20&type=section&id=1.18.%20Scientific%20Advisors) MannKind consults leading scientists and physicians for R&D, clinical, patent, and market strategy advice - MannKind seeks advice from leading scientists and physicians on scientific, technical, and medical matters in endocrinology, pulmonology, and other areas[83](index=83&type=chunk) - Advisors are consulted regularly to assess R&D programs, clinical program design and implementation, patent and publication strategies, market opportunities, and new technologies[83](index=83&type=chunk)[84](index=84&type=chunk) [Information about our Executive Officers](index=22&type=section&id=1.19.%20Information%20about%20our%20Executive%20Officers) This section details biographical information for MannKind's key executive officers, including CEO, CFO, and other EVPs - Michael E. Castagna, Pharm.D. serves as Chief Executive Officer since May 2017[85](index=85&type=chunk) - Steven B. Binder serves as Chief Financial Officer since July 2017[86](index=86&type=chunk) - Sanjay Singh, M Pharm, MBA serves as Executive Vice President, Technical Operations since October 2022[87](index=87&type=chunk) - Stuart A. Tross, Ph.D. serves as Chief People and Workplace Officer since December 2016[88](index=88&type=chunk) - David B. Thomson, Ph.D., J.D. serves as General Counsel and Corporate Secretary since January 2002[89](index=89&type=chunk) [Risk Factors](index=23&type=section&id=Item%201A.%20Risk%20Factors) This section details material risks to MannKind's common stock, covering business, regulatory, stock, and general market conditions - An investment in MannKind's common stock is speculative or risky due to various material factors[7](index=7&type=chunk)[90](index=90&type=chunk) - Key risk categories include those related to the company's business, government regulation, common stock, and general market, economic, and geopolitical conditions[7](index=7&type=chunk)[8](index=8&type=chunk)[9](index=9&type=chunk)[11](index=11&type=chunk)[12](index=12&type=chunk) [Risks Related to Our Business](index=23&type=section&id=1A.1.%20Risks%20Related%20to%20Our%20Business) Business risks include limited product success, manufacturing issues, supply chain disruptions, capital needs, and substantial debt - Commercial success of products (Afrezza, V-Go, Tyvaso DPI) may be limited due to factors like market acceptance, manufacturing capacity, pricing, and competition[91](index=91&type=chunk) - Manufacturing risks, including difficulties in production, capacity, yields, and compliance with regulations, may adversely affect the ability to manufacture products and Tyvaso DPI, potentially reducing gross margin and profitability[97](index=97&type=chunk)[99](index=99&type=chunk) - Reliance on single-source suppliers for critical materials (e.g., insulin, FDKP) and contract manufacturers (e.g., for V-Go in China) poses risks of timely and sufficient delivery, compliance, and potential business harm if alternative suppliers cannot be qualified[102](index=102&type=chunk)[104](index=104&type=chunk)[107](index=107&type=chunk) - The company has a history of operating losses (accumulated deficit of **$3.2 billion** as of Dec 31, 2022) and expects to incur future losses, requiring additional capital to fund operations[119](index=119&type=chunk)[112](index=112&type=chunk) - Substantial debt (**$278.8 million** principal outstanding as of Dec 31, 2022) and associated covenants may limit operations and pose risks if payments cannot be made[121](index=121&type=chunk)[122](index=122&type=chunk)[126](index=126&type=chunk) - Health pandemics or epidemics (e.g., COVID-19) could adversely affect business, product sales, clinical trials, and access to capital[127](index=127&type=chunk)[128](index=128&type=chunk)[129](index=129&type=chunk) [Risks Related to Government Regulation](index=49&type=section&id=1A.2.%20Risks%20Related%20to%20Government%20Regulation) Regulatory risks include costly approvals, compliance burdens, healthcare legislation impacts, and penalties for non-compliance - Product candidates require costly and time-consuming nonclinical and clinical testing and regulatory approval in each jurisdiction, with uncertain outcomes and potential for delays or rejections[183](index=183&type=chunk)[185](index=185&type=chunk) - Approved products are subject to stringent, ongoing government regulation concerning manufacturing, labeling, advertising, and adverse event reporting; non-compliance can lead to fines, product removal, or criminal prosecution[189](index=189&type=chunk)[191](index=191&type=chunk)[192](index=192&type=chunk) - Healthcare legislation, such as the PPACA and the Inflation Reduction Act (IRA), may limit product prices, reduce reimbursement, and increase compliance costs, adversely affecting revenues[200](index=200&type=chunk)[202](index=202&type=chunk) - Failure to comply with federal and state healthcare fraud and abuse laws (e.g., Anti-Kickback Statute, False Claims Act) and stringent data privacy and security laws (e.g., HIPAA, GDPR, CCPA) could result in substantial penalties, investigations, litigation, and business disruptions[203](index=203&type=chunk)[206](index=206&type=chunk)[208](index=208&type=chunk)[214](index=214&type=chunk) [Risks Related to Our Common Stock](index=5&type=section&id=1A.3.%20Risks%20Related%20to%20Our%20Common%20Stock) Common stock risks include debt servicing, price volatility, potential delisting, anti-takeover provisions, and future share sales - The company may not generate sufficient cash to service its indebtedness and commitments, potentially leading to financial failure[243](index=243&type=chunk) - The trading price of common stock is volatile, influenced by factors such as product sales, regulatory approvals, clinical study results, economic conditions, and competitor announcements[244](index=244&type=chunk) - Failure to meet Nasdaq Global Market listing requirements could result in delisting, adversely impacting liquidity and market price[249](index=249&type=chunk) - Anti-takeover provisions in charter documents and Delaware law could make an acquisition more difficult and prevent attempts to replace current management[250](index=250&type=chunk) - No cash dividends are expected in the foreseeable future; investors must rely on stock appreciation for any return on investment[256](index=256&type=chunk) - Future sales of common stock (e.g., from equity/debt issuances, conversions) or the perception of such sales may depress the stock price[257](index=257&type=chunk)[258](index=258&type=chunk) [General Risk Factors](index=5&type=section&id=1A.4.%20General%20Risk%20Factors) General risks include adverse impacts from unstable market, economic, and geopolitical conditions on business and stock price - Unstable market, economic, and geopolitical conditions (e.g., volatility, inflation, conflicts like the Russia-Ukraine war) may have serious adverse consequences on the business, financial condition, and stock price[261](index=261&type=chunk)[262](index=262&type=chunk) - Such disruptions could make debt or equity financing more difficult and costly, adversely impact the investment portfolio, and affect the ability of service providers and partners to survive economic downturns[261](index=261&type=chunk) [Unresolved Staff Comments](index=71&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company has no unresolved staff comments - There are no unresolved staff comments[264](index=264&type=chunk) [Properties](index=71&type=section&id=Item%202.%20Properties) MannKind's main Danbury, CT facility supports R&D and manufacturing, supplemented by leased offices in CA and MA - The Danbury, Connecticut facility, acquired in 2001 and expanded in 2008 to approximately **328,000 square feet**, houses R&D, manufacturing, and administrative functions, with sufficient space for anticipated commercial demand for Afrezza and Tyvaso DPI[264](index=264&type=chunk) - In November 2021, a portion of the Danbury facility was sold for **$102.3 million** and subsequently leased back under a **20-year agreement**[265](index=265&type=chunk) - The company leases approximately **24,475 square feet** of office space in Westlake Village, California, with a lease expiring in July 2028[265](index=265&type=chunk) - MannKind also assumed a lease for approximately **20,000 square feet** of building space in Marlborough, Massachusetts, expiring in February 2026, as part of the May 2022 V-Go acquisition[266](index=266&type=chunk) [Legal Proceedings](index=71&type=section&id=Item%203.%20Legal%20Proceedings) Information on legal proceedings is incorporated by reference from Note 16 to the consolidated financial statements - Information regarding legal proceedings is provided in Note 16 – Commitments and Contingencies to the consolidated financial statements[267](index=267&type=chunk) [Mine Safety Disclosures](index=71&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to MannKind Corporation - This item is not applicable[267](index=267&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=72&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) MannKind's common stock trades on Nasdaq (MNKD), with no cash dividends paid or anticipated, retaining earnings for growth - MannKind's common stock has been traded on The Nasdaq Global Market under the symbol "**MNKD**" since July 28, 2004[270](index=270&type=chunk) - As of February 10, 2023, there were **263,923,726 shares** of common stock outstanding and **104 registered holders**[1](index=1&type=chunk)[270](index=270&type=chunk) - The company has never declared or paid any cash dividends on its common stock and intends to retain all available funds and future earnings for business operations and expansion[273](index=273&type=chunk) [Common Stock Market](index=72&type=section&id=5.1.%20Common%20Stock%20Market) MannKind's common stock is listed on The Nasdaq Global Market under the symbol "MNKD" since July 28, 2004 - Common stock is traded on The Nasdaq Global Market[270](index=270&type=chunk) - Trading symbol is "**MNKD**"[270](index=270&type=chunk) - Listed since July 28, 2004[270](index=270&type=chunk) [Stock Performance Graph](index=72&type=section&id=5.2.%20Stock%20Performance%20Graph) This graph compares MannKind's common stock cumulative total return against Nasdaq Composite and Biotechnology indices - The graph illustrates a comparison of the cumulative total stockholder return of MannKind's common stock with The Nasdaq Composite Index and The Nasdaq Biotechnology Index[271](index=271&type=chunk) - The comparison assumes a **$100 investment** on December 31, 2017[271](index=271&type=chunk) [Dividend Policy](index=72&type=section&id=5.3.%20Dividend%20Policy) MannKind has never paid cash dividends and plans to retain all future earnings for business development and growth - The company has never declared or paid any cash dividends on its common stock[273](index=273&type=chunk) - Current intent is to retain all available funds and future earnings for business operation and expansion[273](index=273&type=chunk) - Any future determination to pay dividends will be at the discretion of the board of directors and is restricted under the terms of the MidCap Credit Facility[273](index=273&type=chunk) [Recent Sales of Unregistered Securities](index=72&type=section&id=5.4.%20Recent%20Sales%20of%20Unregistered%20Securities) In 2022, MannKind issued 75,487 common shares to The Mann Group for interest payments under a convertible note - During the year ended December 31, 2022, MannKind issued an aggregate of **75,487 shares** of common stock to The Mann Group for quarterly interest payments under the Mann Group convertible note[274](index=274&type=chunk) - The issuance relied on an exemption from registration provided by Section 3(a)(9) or 4(a)(2) of the Securities Act of 1933, as amended[275](index=275&type=chunk) [Reserved](index=74&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information - This item is reserved and contains no information[276](index=276&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=74&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses MannKind's financial condition, operations, liquidity, and critical accounting policies for FY2022 - This discussion covers MannKind's financial condition and results of operations for the fiscal year ended December 31, 2022[276](index=276&type=chunk) - Key areas of discussion include revenues, expenses, liquidity, and critical accounting policies and estimates[276](index=276&type=chunk)[281](index=281&type=chunk) [Overview](index=74&type=section&id=7.1.%20Overview) MannKind, a biopharmaceutical company with historical losses, funds operations through product sales, collaborations, and financing - MannKind is a biopharmaceutical company focused on developing and commercializing innovative therapeutic products and devices for endocrine and orphan lung diseases[277](index=277&type=chunk) - Commercial products include Afrezza and V-Go, and Tyvaso DPI is commercialized through a partnership with United Therapeutics[277](index=277&type=chunk) Key Financial Status (as of December 31, 2022, in millions) | Metric | Amount | | :-------------------- | :----------- | | Accumulated Deficit | $3,200.0 | | Stockholders' Deficit | $250.5 | | Net Loss (2022) | $87.4 | | Net Loss (2021) | $80.9 | | Net Loss (2020) | $57.2 | - Operations are funded primarily through equity and convertible debt securities sales, upfront and milestone payments from collaborations, borrowings, sales of Afrezza and V-Go, royalties and manufacturing revenue from UT, and proceeds from a sale-leaseback transaction[279](index=279&type=chunk) [Critical Accounting Policies and Estimates](index=74&type=section&id=7.2.%20Critical%20Accounting%20Policies%20and%20Estimates) Financial statement preparation requires significant judgment and estimates for revenue, inventory, asset impairment, and compensation - The preparation of consolidated financial statements requires management to make estimates and judgments that affect reported amounts of assets, liabilities, revenues, and expenses[280](index=280&type=chunk) - Critical accounting policies include revenue recognition and gross-to-net adjustments, inventory costing and recoverability, recognized loss on purchase commitments, impairment of long-lived assets, milestone rights liability, clinical trial expenses, stock-based compensation, and accounting for income taxes[281](index=281&type=chunk) - Different estimates and assumptions could have a material impact on the consolidated financial statements[280](index=280&type=chunk) [Revenue Recognition – Net Revenue – Commercial Product Sales](index=74&type=section&id=7.3.%20Revenue%20Recognition%20%E2%80%93%20Net%20Revenue%20%E2%80%93%20Commercial%20Product%20Sales) Commercial product revenue is recognized net of variable consideration, with complex, probability-weighted estimates for reserves - Revenue on product sales is recognized when the customer obtains control of the product, typically at delivery for wholesale distributors and specialty pharmacies, and when dispensed to patients for retail pharmacies[285](index=285&type=chunk) - Product revenues are recorded net of applicable reserves for variable consideration, including trade discounts, allowances, product returns, provider chargebacks, government rebates, payer rebates, and patient assistance[286](index=286&type=chunk) - The gross-to-net adjustment was **42% of gross revenue**, or **$40.8 million**, for the year ended December 31, 2022, compared to **39% of gross revenue**, or **$24.9 million**, for the prior year[289](index=289&type=chunk) - A **10% difference** in the estimates for accruals would result in a **$2.0 million impact** to commercial product sales revenue for the year ended December 31, 2022[289](index=289&type=chunk) [Reserves for Variable Consideration](index=76&type=section&id=7.4.%20Reserves%20for%20Variable%20Consideration) Variable consideration reserves are established using probability-weighted estimates for discounts, returns, and rebates, impacting net revenue - Reserves for variable consideration are established for trade discounts and allowances, product returns, provider chargebacks and discounts, government rebates, payer rebates, and other incentives like voluntary patient assistance[286](index=286&type=chunk) - Estimates are probability-weighted using the expected value method, considering contractual/statutory requirements, market events, industry data, and customer buying patterns[287](index=287&type=chunk) - Variable consideration is included in the net sales price only to the extent that a significant reversal of cumulative revenue is not probable[288](index=288&type=chunk) - Significant judgment is required in estimating gross-to-net adjustments, historical experience, payer channel mix, unbilled claims, claim submission time lags, and inventory levels in the distribution channel[289](index=289&type=chunk) [Revenue Recognition – Collaborations and Services](index=76&type=section&id=7.5.%20Revenue%20Recognition%20%E2%80%93%20Net%20Revenue%20%E2%80%93%20Commercial%20Product%20Sales) Collaboration and services revenue is recognized based on performance obligations, with UT collaboration having three distinct obligations - Revenue from licensing, research, or other agreements with third parties is recognized based on identified performance obligations and allocated transaction prices[291](index=291&type=chunk) - For the significant collaboration and service agreement with United Therapeutics (UT), three distinct performance obligations were identified: R&D Services and License, Next-Gen R&D Services, and Manufacturing Services (including a material right)[291](index=291&type=chunk) - Revenue is recognized based on the measurement of progress as the performance obligation is satisfied, either over time or at a point in time[292](index=292&type=chunk) - A **10% difference** in estimates for the UT CSA transaction price allocation would result in a **$0.4 million impact** to collaboration and services revenue for the year ended December 31, 2022[294](index=294&type=chunk) [Stock-Based Compensation](index=78&type=section&id=7.6.%20Stock-Based%20Compensation) Share-based payments, including RSUs and options, are recognized at fair value using Monte Carlo and Black-Scholes models - Share-based payments to employees, including restricted stock units (RSUs), performance-based awards, Market RSUs, nonqualified stock options (options), and employee stock purchase plans, are recognized at fair value on the grant date[295](index=295&type=chunk) - Market RSUs are valued using a Monte Carlo valuation model, while employee options and compensatory elements of employee stock purchase plans are valued using the Black-Scholes option valuation model[295](index=295&type=chunk) Market RSU Grant Date Fair Value per Unit | Year | Fair Value per Unit | | :--- | :------------------ | | 2022 | $6.10 | | 2021 | $9.30 | | 2020 | $3.77 | - A **10% difference** in the grant date fair value of Market RSUs would impact stock-based compensation expense by **$0.6 million** for the year ended December 31, 2022[296](index=296&type=chunk) [Results of Operations](index=78&type=section&id=7.7.%20Results%20of%20Operations) Total revenues increased by **32%** to **$99.8 million** in 2022, but expenses rose **34%**, resulting in an **$87.4 million** net loss Total Revenues Comparison (in thousands) | Metric | 2022 | 2021 | $ Change | % Change | | :-------------------------------- | :------- | :------- | :------- | :------- | | Net revenue — commercial product sales | $56,247 | $39,168 | $17,079 | 44% | | Revenue — collaborations and services | 27,924 | 36,274 | (8,350) | (23%) | | Royalties — collaborations | 15,599 | — | 15,599 | * | | **Total revenues** | **$99,770** | **$75,442** | **$24,328** | **32%** | - Afrezza net revenue increased by **$4.1 million (11%)** in 2022 due to higher price, product demand, and favorable cartridge mix, with a consistent gross-to-net adjustment of **39%**[299](index=299&type=chunk) - The acquisition of V-Go on May 31, 2022, contributed **$25.9 million in gross revenue** and **$12.9 million in net revenue** for the year, with a **50.2% gross-to-net adjustment**[301](index=301&type=chunk) - Collaborations and services revenue decreased by **$8.4 million (23%)** in 2022, primarily due to the completion of UT R&D Services in 2021, partially offset by **$24.8 million** from the CSA and **$15.6 million** in Tyvaso DPI royalty revenue[302](index=302&type=chunk) Commercial Product Gross Profit Comparison (in thousands) | Metric | 2022 | 2021 | $ Change | % Change | | :-------------------------------- | :------- | :------- | :------- | :------- | | Net revenue — commercial product sales | $56,247 | $39,168 | $17,079 | 44% | | Less cost of goods sold | (16,003) | (16,833) | (830) | (5%) | | **Commercial product gross profit** | **$40,244** | **$22,335** | **$17,909** | **80%** | | Gross margin | 72% | 57% | | | Total Expenses Comparison (in thousands) | Expense Category | 2022 | 2021 | $ Change | % Change | | :-------------------------------- | :------- | :------- | :------- | :------- | | Cost of revenue — collaborations and services | $41,494 | $22,024 | $19,470 | 88% | | Research and development | 19,721 | 12,312 | 7,409 | 60% | | Selling | 53,753 | 45,528 | 8,225 | 18% | | General and administrative | 37,720 | 31,889 | 5,831 | 18% | | **Total expenses** | **$163,880** | **$122,464** | **$41,416** | **34%** | - Net loss for 2022 was **$87.4 million**, compared to **$80.9 million** in 2021[400](index=400&type=chunk) [Liquidity and Capital Resources](index=81&type=section&id=7.8.%20Liquidity%20and%20Capital%20Resources) MannKind's liquidity, from cash and investments, funds operations and debt, with sufficient resources for the next 12 months - Principal sources of liquidity are cash, cash equivalents, and investments, while primary uses of cash include product pipeline development, manufacturing and marketing of Afrezza and V-Go, manufacturing Tyvaso DPI, general and administrative expenses, and interest expense[316](index=316&type=chunk) - Operations have been funded through equity and convertible debt securities sales, upfront and milestone payments from collaborations, borrowings, sales of Afrezza and V-Go, royalties and manufacturing revenue from UT, and proceeds from the sale-leaseback transaction[317](index=317&type=chunk) Material Cash Requirements (as of December 31, 2022, in thousands) | Commitment | 2023 | 2024 | 2025 | 2026-2027 | Thereafter | Total | | :-------------------------------- | :----- | :----- | :----- | :-------- | :--------- | :------ | | Senior convertible notes (interest) | $5,750 | $11,500 | $232,875 | — | — | $250,125 | | MidCap credit facility | 9,896 | 35,541 | — | — | — | 45,437 | | Mann Group convertible note | — | 9,233 | — | — | — | 9,233 | | Financing liability | 9,774 | 20,287 | 21,382 | 188,453 | — | 239,896 | | Insulin purchase agreement | 9,390 | 32,243 | 30,674 | — | — | 72,307 | | **Total material cash requirements** | **$34,810** | **$108,804** | **$284,931** | **$188,453** | **—** | **$616,998** | - Net cash used in operating activities was **$80.7 million** in 2022, compared to **$61.7 million** in 2021[323](index=323&type=chunk) - Net cash provided by investing activities was **$4.9 million** in 2022, primarily due to maturity of debt securities, offset by V-Go acquisition and purchases of securities and property[324](index=324&type=chunk) - Net cash provided by financing activities was **$21.4 million** in 2022, primarily from at-the-market offering proceeds, partially offset by milestone payments[324](index=324&type=chunk) [Future Liquidity Needs](index=85&type=section&id=7.9.%20Future%20Liquidity%20Needs) MannKind anticipates ongoing expenditures but expects current resources and projected revenues to cover liquidity needs for 12 months - The company expects to continue incurring expenditures for manufacturing operations, sales and marketing costs for its products, and development costs for product candidates[326](index=326&type=chunk) - As of December 31, 2022, capital resources included **$69.8 million** in cash and cash equivalents, **$101.0 million** in short-term investments, and **$2.0 million** in long-term investments, with total outstanding borrowings of **$278.8 million**[326](index=326&type=chunk) - Management believes current resources, projected sales of Afrezza and V-Go, and projected royalties and manufacturing revenue from Tyvaso DPI will be sufficient to fund operations for the next twelve months[327](index=327&type=chunk) [Recent Accounting Pronouncements](index=85&type=section&id=7.10.%20Recent%20Accounting%20Pronouncements) This section refers to Note 2 for information on accounting standards adopted in 2022 and new standards not yet effective - Information regarding accounting standards adopted in 2022 and other new accounting standards not yet effective is provided in Note 2 – Summary of Significant Accounting Policies[328](index=328&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=85&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) MannKind faces interest rate risk on its variable-rate credit facility and foreign currency risk from Euro-denominated insulin purchases - Interest on borrowings under the MidCap credit facility accrues at a variable annual rate equal to one-month SOFR plus **6.25%** (subject to a **1.00% floor** and **8.25% cap**), exposing the company to interest rate risk[329](index=329&type=chunk) - A hypothetical **10% change** in the one-month SOFR interest rates on December 31, 2022, would not have a material effect on the company's annual interest payment obligation[330](index=330&type=chunk) - The company is exposed to foreign currency exchange risk due to Euro-denominated insulin supply obligations under the Insulin Supply Agreement with Amphastar[331](index=331&type=chunk) - A **10% change** in the U.S. dollar to Euro exchange rate on December 31, 2022, would have resulted in a foreign currency impact to pre-tax loss of approximately **$7.2 million**[332](index=332&type=chunk) [Interest Rate Risk](index=85&type=section&id=7A.1.%20Interest%20Rate%20Risk) MannKind's variable-rate MidCap credit facility exposes it to interest rate risk, though a **10%** SOFR change is immaterial - Interest on borrowings under the MidCap credit facility is at a variable annual rate equal to one-month SOFR plus **6.25%** (with a **1.00% SOFR floor** and **8.25% cap**)[329](index=329&type=chunk) - All other debt (Senior convertible notes, Mann Group promissory notes) has fixed interest rates[329](index=329&type=chunk) - A hypothetical **10% change** in the one-month SOFR interest rates on December 31, 2022, would not have a material effect on the annual interest payment obligation[330](index=330&type=chunk) [Foreign Currency Exchange Risk](index=86&type=section&id=7A.2.%20Foreign%20Currency%20Exchange%20Risk) MannKind faces foreign currency risk from Euro-denominated insulin purchases, with a **10%** USD-Euro change impacting pre-tax loss - The company incurs significant expenditures for insulin supply obligations under its Insulin Supply Agreement with Amphastar, which are denominated in Euros[331](index=331&type=chunk) - Foreign currency hedging transactions were entered into in July and October 2022 to mitigate exposure to short-term currency fluctuations for the current year's purchase obligation, resulting in a **$0.1 million loss** in 2022[331](index=331&type=chunk) - A **10% change** in the U.S. dollar to Euro exchange rate on December 31, 2022, would have resulted in a foreign currency impact to pre-tax loss of approximately **$7.2 million**[332](index=332&type=chunk) [Financial Statements and Supplementary Data](index=86&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This item incorporates audited consolidated financial statements, including balance sheets, statements of operations, and cash flows - The information required by this Item is included in Items 15(a)(1) and (2) of Part IV of this Annual Report on Form 10-K[333](index=333&type=chunk) - Financial statements include Consolidated Balance Sheets, Statements of Operations, Comprehensive Loss, Stockholders' Deficit, Cash Flows, and Notes to Consolidated Financial Statements[367](index=367&type=chunk)[384](index=384&type=chunk) [Report of Independent Registered Public Accounting Firm](index=89&type=section&id=8.1.%20Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) Deloitte & Touche LLP issued an unqualified opinion on MannKind's financial statements and internal controls for 2022 - Deloitte & Touche LLP issued an unqualified opinion on the consolidated financial statements as of and for the year ended December 31, 2022[342](index=342&type=chunk)[387](index=387&type=chunk) - An unqualified opinion was also expressed on the effectiveness of the company's internal control over financial reporting as of December 31, 2022, based on COSO (2013) criteria[342](index=342&type=chunk)[388](index=388&type=chunk) - A critical audit matter identified was the estimation of government rebates within net revenue from commercial product sales, due to the complexity of assumptions and judgments involved[391](index=391&type=chunk)[392](index=392&type=chunk) [Consolidated Balance Sheets](index=108&type=section&id=8.2.%20Consolidated%20Balance%20Sheets) The consolidated balance sheets present MannKind's financial position as of December 31, 2022, and 2021, showing total assets, liabilities, and stockholders' deficit Consolidated Balance Sheet Highlights (as of December 31, in thousands) | Metric | 2022 | 2021 | | :-------------------------------- | :------- | :------- | | **ASSETS** | | | | Cash and cash equivalents | $69,767 | $124,184 | | Short-term investments | 101,079 | 79,932 | | Accounts receivable, net | 16,801 | 4,739 | | Inventory | 21,772 | 7,152 | | Prepaid expenses and other current assets | 25,477 | 3,482 | | Total current assets | 234,896 | 219,489 | | Property and equipment, net | 45,126 | 36,612 | | Goodwill | 2,428 | — | | Other intangible asset | 1,153 | — | | Long-term investments | 1,961 | 56,619 | | Other assets | 9,718 | 8,441 | | **Total assets** | **$295,282** | **$321,161** | | **LIABILITIES AND STOCKHOLDERS' DEFICIT** | | | | Accounts payable | $11,052 | $6,956 | | Accrued expenses and other current liabilities | 35,553 | 27,419 | | Financing liability — current | 9,565 | 6,977 | | Deferred revenue — current | 1,733 | 827 | | Recognized loss on purchase commitments — current | 9,393 | 6,170 | | Total current liabilities | 67,296 | 48,349 | | Promissory notes | 8,829 | 18,425 | | Accrued interest — promissory notes | 55 | 404 | | Financing liability — long term | 94,512 | 93,525 | | Midcap credit facility | 39,264 | 38,833 | | Senior convertible notes | 225,397 | 223,944 | | Recognized loss on purchase commitments — long term | 62,916 | 76,659 | | Operating lease liability | 5,343 | 1,040 | | Deferred revenue — long term | 37,684 | 19,543 | | Milestone liabilities | 4,524 | 4,838 | | Deposits from customer | — | 4,950 | | Total liabilities | 545,820 | 530,510 | | Common stock | 2,638 | 2,515 | | Additional paid-in capital | 2,964,293 | 2,918,205 | | Accumulated deficit | (3,217,469) | (3,130,069) | | Total stockholders' deficit | (250,538) | (209,349) | | **Total liabilities and stockholders' deficit** | **$295,282** | **$321,161** | [Consolidated Statements of Operations](index=109&type=section&id=8.3.%20Consolidated%20Statements%20of%20Operations) The consolidated statements of operations detail MannKind's revenues, expenses, and net loss for the years ended December 31, 2022, 2021, and 2020 Consolidated Statements of Operations Highlights (for the years ended December 31, in thousands) | Metric | 2022 | 2021 | 2020 | | :-------------------------------- | :------- | :------- | :------- | | Net revenue — commercial product sales | $56,247 | $39,168 | $32,324 | | Revenue — collaborations and services | 27,924 | 36,274 | 32,820 | | Royalties — collaborations | 15,599 | — | — | | **Total revenues** | **99,770** | **75,442** | **65,144** | | Cost of goods sold | 16,003 | 16,833 | 15,084 | | Cost of revenue — collaborations and services | 41,494 | 22,024 | 9,557 | | In-process research and development | — | — | 13,233 | | Research and development | 19,721 | 12,312 | 6,248 | | Selling | 53,753 | 45,528 | 34,365 | | General and administrative | 37,720 | 31,889 | 24,675 | | Asset impairment | — | 106 | 1,889 | | (Gain) loss on foreign currency translation | (4,811) | (6,567) | 8,006 | | Loss on purchase commitments | — | 339 | — | | **Total expenses** | **163,880** | **122,464** | **113,057** | | Loss from operations | (64,110) | (47,022) | (47,913) | | Interest income, net | 2,513 | 112 | 167 | | Interest expense on financing liability | (9,758) | (1,373) | — | | Interest expense on notes | (15,011) | (15,204) | (9,471) | | Loss on available-for-sale securities | (932) | — | — | | Loss on extinguishment of debt | — | (17,200) | (264) | | Other (expense) income | (102) | (239) | 23 | | **Total other expense** | **(23,290)** | **(33,904)** | **(9,545)** | | Loss before income tax expense | (87,400) | (80,926) | (57,458) | | Benefit from income taxes | — | — | 218 | | **Net loss** | **$(87,400)** | **$(80,926)** | **$(57,240)** | | Net loss per share — basic and diluted | $(0.34) | $(0.32) | $(0.26) | | Shares used to compute net loss per share — basic and diluted | 257,092 | 249,244 | 222,585 | [Consolidated Statements of Comprehensive Loss](index=110&type=section&id=8.4.%20Consolidated%20Statements%20of%20Comprehensive%20Loss) The consolidated statements of comprehensive loss present MannKind's net loss and other comprehensive loss components for the years ended December 31, 2022, 2021, and 2020 Consolidated Statements of Comprehensive Loss Highlights (for the years ended December 31, in thousands) | Metric | 2022 | 2021 | 2020 | | :-------------------------------- | :------- | :------- | :------- | | Net loss | $(87,400) | $(80,926) | $(57,240) | | Other comprehensive loss: Cumulative translation loss | — | — | (19) | | **Comprehensive loss** | **$(87,400)** | **$(80,926)** | **$(57,259)** | [Consolidated Statements of Stockholders' Deficit](index=111&type=section&id=8.5.%20Consolidated%20Statements%20of%20Stockholders'%20Deficit) This statement details changes in equity accounts, including common stock, paid-in capital, and accumulated deficit Consolidated Statements of Stockholders' Deficit Highlights (as of December 31, in thousands) | Metric | 2022 | 2021 | 2020 | | :-------------------------------- | :------- | :------- | :------- | | Common Shares | 263,793 | 251,478 | 242,118 | | Common Stock Amount | $2,638 | $2,515 | $2,421 | | Additional Paid-in Capital | $2,964,293 | $2,918,205 | $2,866,303 | | Accumulated Deficit | $(3,217,469) | $(3,130,069) | $(3,049,143) | | **Total Stockholders' Deficit** | **$(250,538)** | **$(209,349)** | **$(180,419)** | [Consolidated Statements of Cash Flows](index=112&type=section&id=8.6.%20Consolidated%20Statements%20of%20Cash%20Flows) The consolidated statements of cash flows present the cash inflows and outflows from operating, investing, and financing activities for the years ended December 31, 2022, 2021, and 2020 Consolidated Statements of Cash Flows Highlights (for the years ended December 31, in thousands) | Activity | 2022 | 2021 | 2020 | | :-------------------------------- | :------- | :------- | :------- | | Net cash used in operating activities | $(80,679) | $(61,709) | $(28,128) | | Net cash provided by (used in) investing activities | 4,874 | (151,537) | 15,216 | | Net cash provided by financing activities | 21,388 | 270,267 | 49,853 | | **NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS** | **$(54,417)** | **$57,021** | **$36,941** | | CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD | $69,767 | $124,184 | $67,163 | Supplemental Cash Flow Disclosures (for the years ended December 31, in thousands) | Item | 2022 | 2021 | 2020 | | :-------------------------------- | :------- | :------- | :------- | | Interest paid in cash | $8,852 | $11,268 | $3,558 | | Payments on debt and interest through common stock issuance | 10,270 | 15,143 | 15,549 | | Forgiveness of PPP loan | — | (4,873) | — | [Notes to Consolidated Financial Statements](index=114&type=section&id=8.7.%20Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed disclosures for financial statement amounts, covering policies, acquisitions, debt, and equity - The notes provide detailed disclosures and explanations for the amounts presented in the consolidated financial statements[413](index=413&type=chunk) - Topics covered include business description, summary of significant accounting policies, acquisitions, investments, accounts receivable, inventories, property and equipment, goodwill and other intangible assets, accrued expenses and other current liabilities, borrowings, collaboration, licensing and other arrangements, fair value of financial instruments, common and preferred stock, earnings per common share, stock award plans, commitments and contingencies, employee benefit plans, and income taxes[414](index=414&type=chunk)[417](index=417&type=chunk)[483](index=483&type=chunk)[495](index=495&type=chunk)[501](index=501&type=chunk)[504](index=504&type=chunk)[509](index=509&type=chunk)[512](index=512&type=chunk)[515](index=515&type=chunk)[518](index=518&type=chunk)[551](index=551&type=chunk)[588](index=588&type=chunk)[596](index=596&type=chunk)[604](index=604&type=chunk)[608](index=608&type=chunk)[628](index=628&type=chunk)[646](index=646&type=chunk)[649](index=649&type=chunk) [Description of Business](index=114&type=section&id=8.7.1.%20Description%20of%20Business) MannKind is a biopharmaceutical company focused on endocrine and orphan lung diseases, operating as a single segment in the U.S - MannKind is a biopharmaceutical company focused on developing and commercializing innovative therapeutic products and devices for endocrine and orphan lung diseases[414](index=414&type=chunk) - Current commercial products include Afrezza (inhaled insulin) and V-Go (wearable insulin delivery device); Tyvaso DPI is commercialized by United Therapeutics[414](index=414&type=chunk) - Consolidated financial statements are prepared in accordance with GAAP and include the accounts of the company and its wholly-owned subsidiaries[415](index=415&type=chunk) - The company views its operations and manages its business as one segment operating in the United States of America[416](index=416&type=chunk) [Summary of Significant Accounting Policies](index=114&type=section&id=8.7.2.%20Summary%20of%20Significant%20Accounting%20Policies) This note details MannKind's significant accounting policies and estimates, requiring substantial management judgment across key financial areas - Significant estimates and judgments are required for revenue recognition (including gross-to-net adjustments), inventory costing and recoverability, recognized loss on purchase commitments, impairment of long-lived assets, milestone rights liability, clinical trial expenses, stock-based compensation, and income taxes[417](index=417&type=chunk) - Revenue recognition follows ASC Topic 606, involving a five-step model to identify contracts, performance obligations, transaction price, allocation, and recognition[418](index=418&type=chunk)[419](index=419&type=chunk) - Commercial product sales revenue is recorded net of variable consideration (discounts, rebates, returns), with estimates based on probability-weighted outcomes[423](index=423&type=chunk)[424](index=424&type=chunk)[425](index=425&type=chunk) - Collaboration and services revenue is recognized from licensing, research, and other services, with transaction price allocated to distinct performance obligations based on stand-alone selling price[435](index=435&type=chunk)[436](index=436&type=chunk) - Milestone payments are included in the transaction price if probable of achievement; otherwise, recognized when achieved[439](index=439&type=chunk)[441](index=441&type=chunk) - Stock-based compensation is recognized at fair value on the grant date, using models like Monte Carlo for Market RSUs and Black-Scholes for options[478](index=478&type=chunk) [Acquisitions](index=124&type=section&id=8.7.3.%20Acquisitions) MannKind acquired V-Go in 2022 for **$15.3 million**, recognizing goodwill and intangibles, and QrumPharma in 2020 for **$13.2 million** - In May 2022, MannKind acquired V-Go from Zealand Pharma for **$15.3 million** upfront consideration, plus potential one-time, sales-based milestone payments up to **$10.0 million**[483](index=483&type=chunk) - The V-Go acquisition was accounted for using the acquisition method, resulting in **$2.4 million in goodwill** and **$1.2 million in developed technology intangible asset**[484](index=484&type=chunk)[486](index=486&type=chunk) - Net revenue and loss from operations for V-Go from the acquisition date (May 31, 2022) to December 31, 2022, were **$12.9 million** and **$0.3 million**, respectively[490](index=490&type=chunk) - In December 2020, MannKind acquired QrumPharma, Inc. for **$13.2 million**, expensing the in-process research and development (IPR&D) asset (MNKD-101) at acquisition due to its stage of development and lack of alternative future use[492](index=492&type=chunk)[493](index=493&type=chunk) [Investments](index=131&type=section&id=8.7.4.%20Investments) MannKind's investments include cash, debt securities, and a convertible note, totaling **$172.9 million** in short-term assets Cash and Cash Equivalents (in millions) | Year | Amount | | :--- | :----- | | 2022 | $69.8 | | 2021 | $124.2 | Held-to-Maturity Investments (Amortized Cost Basis, in thousands) | Maturity | Dec 31, 2022 | Dec 31, 2021 | | :-------------------------------- | :----------- | :----------- | | Due in one year or less | $152,862 | $103,733 | | Due after one year through five years | 1,961 | 56,619 | | **Total** | **$154,823** | **$160,352** | - An available-for-sale convertible promissory note from Thirona Bio, Inc. (total **$8.0 million** purchased in 2021-2022) had a fair value of **$7.1 million** as of December 31, 2022, and a **$0.9 million credit loss** was recognized in 2022[496](index=496&type=chunk) - Interest income from the amortization or accretion of investments was approximately **$0.7 million** in 2022 and **$0.5 million** in 2021[497](index=497&type=chunk) [Accounts Receivable](index=132&type=section&id=8.7.5.%20Accounts%20Receivable) Net accounts receivable totaled **$16.8 million** in 2022, with **79%** from three wholesale distributors Accounts Receivable, Net (as of December 31, in thousands) | Category | 2022 | 2021 | | :-------------------------------- | :------- | :------- | | Accounts receivable – commercial, net | $12,715 | $3,446 | | Accounts receivable – collaborations and services, net | 4,086 | 1,293 | | **Total accounts receivable, net** | **$16,801** | **$4,739** | - The allowance for credit losses was de minimis as of December 31, 2022 and 2021[501](index=501&type=chunk) - Three wholesale distributors represented approximately **79%** of accounts receivable as of December 31, 2022[501](index=501&type=chunk) Discounts and Allowances for Commercial Product Sales (in thousands) | Metric | 2022 | 2021 | | :-------------------------------- | :------- | :------- | | Beginning balance | $4,227 | $3,688 | | Provisions | 17,471 | 11,494 | | Deductions | (15,320) | (10,874) | | **Ending balance** | **$6,644** | **$4,493** | [Inventories](index=132&type=section&id=8.7.6.%20Inventories) Inventories, valued at lower of cost or net realizable value, totaled **$21.8 million** in 2022, with **$2.2 million** in write-offs - Inventories are stated at the lower of cost or net realizable value, using the first-in, first-out (FIFO) method[459](index=459&type=chunk) Inventory Composition (as of December 31, in thousands) | Category | 2022 | 2021 | | :---------------- | :------- | :------- | | Raw materials | $5,739 | $2,703 | | Work-in-process | 13,815 | 2,522 | | Finished goods | 2,218 | 1,927 | | **Total inventory** | **$21,772** | **$7,152** | - Raw materials inventory included **$0.8 million** of pre-launch FDKP as of December 31, 2022 and 2021, for an enhanced manufacturing process expected to receive FDA approval in 2024[504](index=504&type=chunk) - Inventory write-offs were **$2.2 million** for the year ended December 31, 2022, compared to **$1.9 million** in 2021 and **$0.5 million** in 2020[505](index=505&type=chunk)[506](index=506&type=chunk) [Property and Equipment](index=134&type=section&id=8.7.7.%20Property%20and%20Equipment) Net property and equipment totaled **$45.1 million** in 2022, including assets from a failed Danbury facility sale-leaseback - Property and equipment are recorded at historical cost, net of accumulated depreciation, with depreciation expense recorded over the assets' useful lives on a straight-line basis[461](index=461&type=chunk) Property and Equipment, Net (as of December 31, in thousands) | Category | 2022 | 2021 | | :-------------------------------- | :------- | :------- | | Land | $875 | $875 | | Buildings | 17,389 | 17,389 | | Building improvements | 38,952 | 38,651 | | Machinery and equipment | 58,542 | 55,334 | | Furniture, fixtures and office equipment | 2,976 | 2,969 | | Computer equipment and software | 8,246 | 8,163 | | Construction in progress | 16,706 | 10,892 | | Less accumulated depreciation | (98,560) | (97,661) | | **Total property and equipment, net** | **$45,126** | **$36,612** | - Depreciation expense for property and equipment was **$3.3 million** in 2022, **$2.0 million** in 2021, and **$1.8 million** in 2020[510](index=510&type=chunk) - The November 2021 sale-leaseback of a portion of the Danbury facility for **$102.3 million** was accounted for as a failed sale-leaseback, meaning the property remains on the company's balance sheet and is depreciated[511](index=511&type=chunk) [Goodwill and Other Intangible Asset](index=134&type=section&id=8.7.8.%20Goodwill%20and%20Other%20Intangible%20Asset) Goodwill of **$2.4 million** and **$1.2 million** in other intangibles arose from the V-Go acquisition in 2022 - Goodwill of approximately **$2.4 million** was recorded as of December 31, 2022, resulting from the V-Go acquisition in May 2022[512](index=512&type=chunk) - Goodwill is tested for impairment annually at the beginning of the fourth fiscal quarter and between annual tests if circumstances indicate impairment[468](index=468&type=chunk) Other Intangible Asset (as of December 31, 2022, in thousands) | Category | Estimated Useful Life (Years) | Cost | Accumulated Amortization | Net Book Value | | :---------------- | :---------------------------- | :----- | :----------------------- | :------------- | | Developed technology | 15 | $1,200 | $(47) | $1,153 | - Estimated annual amortization expense for the other intangible asset is approximately **$0.1 million** per year through 2027[513](index=513&type=chunk) - No impairments to goodwill or other intangible assets were recorded during the year ended December 31, 2022[469](index=469&type=chunk) [Accrued Expenses and Other Current Liabilities](index=135&type=section&id=8.7.9.%20Accrued%20Expenses%20and%20Other%20Current%20Liabilities) Accrued expenses and other current liabilities increased to **$35.6 million** in 2022, driven by salary and sales allowances Accrued Expenses and Other Current Liabilities (as of December 31, in thousands) | Category | 2022 | 2021 | | :-------------------------------- | :------- | :------- | | Salary and related expenses | $14,906 | $14,022 | | Discounts and allowances for commercial product sales | 8,504 | 4,227 | | Retur
MannKind(MNKD) - 2022 Q3 - Earnings Call Transcript
2022-11-08 20:14
MannKind Corporation (NASDAQ:MNKD) Q3 2022 Results Conference Call November 8, 2022 9:00 AM ET Company Participants Michael Castagna - Chief Executive Officer Steven Binder - Chief Financial Officer Conference Call Participants Brandon Folkes - Cantor Fitzgerald Gregory Renza - RBC Capital Markets Robert Hazlett - BTIG Operator Good morning, and welcome to the MannKind Corporation Third Quarter 2022 Earnings Call. As a reminder, this call is being recorded on November 8, 2022, and will be available for play ...