MannKind(US:MNKD)2023-05-08 16:00PART I: FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) This section presents the unaudited condensed consolidated financial statements for MannKind Corporation and its subsidiaries for the quarter ended March 31, 2023, including statements of operations, balance sheets, comprehensive loss, stockholders' deficit, and cash flows, along with detailed notes on business description, accounting policies, acquisitions, investments, and various financial instruments and liabilities Condensed Consolidated Statements of Operations For the three months ended March 31, 2023, MannKind Corporation reported a significant increase in total revenues, primarily driven by collaborations and royalties, leading to a reduced net loss compared to the prior year period Metric (In thousands) | Metric | Three Months Ended March 31, 2023 (In thousands) | Three Months Ended March 31, 2022 (In thousands) | | :--------------------------------------| :-----------------------------------------------| :-----------------------------------------------| | Net revenue – commercial product sales | $17,562 | $9,826 | | Revenue – collaborations and services | $11,386 | $2,166 | | Royalties – collaborations | $11,678 | — | | Total revenues | $40,626 | $11,992 | | Cost of goods sold | $5,530 | $2,284 | | Cost of revenue – collaborations | $10,683 | $8,714 | | Research and development | $5,605 | $3,536 | | Selling | $13,310 | $12,728 | | General and administrative | $10,542 | $7,969 | | Loss from operations | $(5,998) | $(21,256) | | Net loss | $(9,795) | $(25,998) | | Net loss per share – basic and diluted | $(0.04) | $(0.10) | - Total revenues increased by 239% to $40.6 million for the three months ended March 31, 2023, compared to $12.0 million in the prior year, primarily due to increased collaboration and royalty revenues8195 - Net loss decreased from $(26.0) million in Q1 2022 to $(9.8) million in Q1 2023, reflecting improved operational performance8 Condensed Consolidated Balance Sheets As of March 31, 2023, MannKind Corporation's total assets slightly increased, with a notable rise in cash and cash equivalents, while total liabilities also saw an increase, primarily in current liabilities Asset/Liability (In thousands) | Asset/Liability | March 31, 2023 (In thousands) | December 31, 2022 (In thousands) | | :------------------------------------| :------------------------------| :-------------------------------| | Cash and cash equivalents | $85,869 | $69,767 | | Short-term investments | $80,273 | $101,079 | | Total current assets | $223,299 | $234,896 | | Property and equipment, net | $54,837 | $45,126 | | Total assets | $298,137 | $295,282 | | Total current liabilities | $81,853 | $67,296 | | Senior convertible notes | $225,761 | $225,397 | | Total liabilities | $553,533 | $545,820 | | Total stockholders' deficit | $(255,396) | $(250,538) | - Cash and cash equivalents increased by $16.1 million from December 31, 2022, to March 31, 202311 - Total current liabilities increased by $14.6 million, driven by increases in accounts payable and current portion of Midcap credit facility11 Condensed Consolidated Statements of Comprehensive Loss The company reported a comprehensive loss of $(9.8) million for the three months ended March 31, 2023, a significant improvement from the $(27.1) million comprehensive loss in the prior year, primarily due to a reduced net loss and no unrealized loss on available-for-sale securities in the current period Metric (In thousands) | Metric | Three Months Ended March 31, 2023 (In thousands) | Three Months Ended March 31, 2022 (In thousands) | | :---------------------------------------| :-----------------------------------------------| :-----------------------------------------------|\n| Net loss | $(9,795) | $(25,998) |\n| Unrealized loss on available-for-sale securities | — | $(1,076) |\n| Comprehensive loss | $(9,795) | $(27,074) | Condensed Consolidated Statements of Stockholders' Deficit The stockholders' deficit increased to $(255.4) million as of March 31, 2023, from $(250.5) million at the beginning of the year, primarily due to the net loss incurred during the period, partially offset by equity issuances Metric (In thousands) | Metric | March 31, 2023 (In thousands) | January 1, 2023 (In thousands) | | :--------------------------------------| :----------------------------| :-----------------------------| | Common Stock Amount | $2,643 | $2,638 | | Additional Paid-in Capital | $2,969,225 | $2,964,293 | | Accumulated Deficit | $(3,227,264) | $(3,217,469) |\n| Total Stockholders' Deficit | $(255,396) | $(250,538) | - Issuance of at-the-market placement generated $1.2 million in proceeds, contributing to additional paid-in capital16 - Stock-based compensation expense contributed $3.7 million to additional paid-in capital16 Condensed Consolidated Statements of Cash Flows For the three months ended March 31, 2023, MannKind generated positive cash flow from operating activities, a significant improvement from the prior year, and positive cash flow from investing activities, while financing activities also provided cash Cash Flow Activity (In thousands) | Cash Flow Activity | Three Months Ended March 31, 2023 (In thousands) | Three Months Ended March 31, 2022 (In thousands) | | :--------------------------------------| :-----------------------------------------------| :-----------------------------------------------| | Net cash provided by (used in) operating activities | $1,156 | $(18,248) | | Net cash provided by (used in) investing activities | $13,792 | $(39,506) | | Net cash provided by financing activities | $1,154 | $813 | | Net increase (decrease) in cash and cash equivalents | $16,102 | $(56,941) | | Cash and cash equivalents, end of period | $85,869 | $67,243 | - Operating activities generated $1.2 million in cash in Q1 2023, a substantial improvement from the $18.2 million cash used in Q1 202219216 - Investing activities provided $13.8 million, primarily from maturity of debt securities, contrasting with $39.5 million used in the prior year for purchases of debt and available-for-sale securities19216217 Notes to Condensed Consolidated Financial Statements This section provides detailed explanations of MannKind's business, significant accounting policies, and specific financial statement line items, including revenue recognition, asset valuation, liabilities, and equity. It also covers recent acquisitions, collaboration agreements, and commitments 1. Description of Business and Significant Accounting Policies MannKind Corporation is a biopharmaceutical company focused on endocrine and orphan lung diseases, commercializing Afrezza and V-Go, and partnering with United Therapeutics for Tyvaso DPI. The company's financial statements are prepared in accordance with GAAP, with significant judgment applied to estimates like revenue recognition, inventory valuation, and long-lived asset impairment. Revenue recognition follows a five-step model, distinguishing between commercial product sales and collaboration arrangements, with detailed policies for variable consideration and milestone payments - MannKind is a biopharmaceutical company focused on endocrine and orphan lung diseases, commercializing Afrezza (inhaled insulin) and V-Go (wearable insulin delivery device)[24](index=24&