MannKind second-quarter total operating expenses decrease to $16.0 million

MannKind CorporationAug 2 2010

MannKind Corporation (Nasdaq:MNKD) today reported financial results for the second quarter ended June 30, 2010.

“The second quarter was particularly busy, as we prepared for our meeting with the FDA and then submitted our response to the agency's Complete Response letter of March 2010”

For the second quarter of 2010 total operating expenses were $37.4 million, compared to $53.4 million for the second quarter of 2009, a decrease of $16.0 million. Research and development (R&D) expenses were $26.2 million for the second quarter of 2010 compared to $39.8 million for the same quarter in 2009, a decrease of $13.7 million. This 34% decrease in R&D expense was primarily due to reduced costs associated with the clinical development of AFREZZA™ after the submission of its NDA in March 2009. General and administrative (G&A) expenses decreased by $2.3 million to $11.2 million for the second quarter of 2010 compared to $13.5 million in the second quarter of 2009. This 17% decrease in G&A expense was mainly due to decreased salary related costs resulting from the April 2009 reduction in force and the non-recurrence of professional fees related to the insulin acquisition transaction with Pfizer, which was completed during the second quarter of 2009.

For the first six months of 2010, operating expenses totaled $78.0 million, compared to $111.2 million in the first half of 2009. R&D expenses for the first six months of 2010 were $56.7 million, compared to $82.7 million in the first six months of 2009, a decrease of $26.1 million. The 32% decrease in R&D expenses for the first six months of 2010 was primarily due to decreased costs associated with the clinical development of AFREZZA™ after the submission of its NDA in March 2009, as well as decreases in clinical supplies costs. G&A expenses decreased by $7.1 million or 25% to $21.3 million for the first half of 2010 as compared to $28.5 million in the same period in 2009. The decrease in G&A expenses for the first six months of 2010 was primarily due to decreased salary related costs resulting from the April 2009 reduction in force and the non-recurrence of professional fees related to the negotiation and completion of the insulin acquisition transaction with Pfizer during the first half of 2009.

The net loss applicable to common stockholders for the second quarter of 2010 was $42.3 million, or $0.37 per share based on 113.1 million weighted average shares outstanding, compared with a net loss applicable to common stockholders of $55.6 million, or $0.54 per share based on 102.3 million weighted average shares outstanding for the second quarter of 2009. The number of common shares outstanding at June 30, 2010 was 113,674,221.

The net loss for the first half of 2010 was $87.0 million, or $0.77 per share based on 113.1 million weighted average shares outstanding, compared with a net loss of $115.0 million, or $1.13 per share based on 102.2 million weighted average shares outstanding, for the first half of 2009.

Cash, cash equivalents and marketable securities were $30.8 million at June 30, 2010 and $32.5 million at December 31, 2009. As of June 30, 2010, the Company had $108.0 million of available borrowings under the loan agreement with an entity controlled by the Company's principal stockholder.

"The second quarter was particularly busy, as we prepared for our meeting with the FDA and then submitted our response to the agency's Complete Response letter of March 2010," said Alfred Mann, Chairman and Chief Executive Office of MannKind Corporation. "With a Class 2 designation for this resubmission, our focus for the next six months will be to work closely with the FDA as it evaluates our next-generation delivery system and the other information that we provided in our resubmission. In the coming months, we will also initiate the installation and validation of equipment for the new device in our Danbury, Connecticut manufacturing facility. Everyone at MannKind is committed to the goal of making AFREZZA available to patients as soon as possible."