MannKind fourth quarter total operating expenses increase to $33.5 million

MannKind CorporationFeb 12 2013

MannKind Corporation (Nasdaq: MNKD) today reported financial results for the fourth quarter and year ended December 31, 2012.

For the fourth quarter of 2012, total operating expenses were $33.5 million, compared to $30.6 million for the same quarter of 2011, an increase of $2.9 million. Research and development (R&D) expenses were $25.3 million for the fourth quarter of 2012 compared to $20.2 million for the same quarter of 2011, an increase of $5.1 million. This 25.2% increase was primarily due to increased clinical trial related activities for the fourth quarter of 2012 as compared to the same quarter of 2011. General and administrative (G&A) expenses were $8.2 million for the fourth quarter of 2012 as compared to $10.3 million for the same quarter of 2011, a decrease of $2.1 million. This 20.4% decrease in G&A expense was primarily due to decreased legal expenses during the fourth quarter of 2012, as compared to the same quarter of 2011.

Other expense of $13.3 million for the fourth quarter of 2012 was primarily due to an adjustment in the fair value of a forward purchase contract with a related party settled in December 2012.

For fiscal year 2012, operating expenses totaled $147.0 million, compared to $140.6 million for fiscal year 2011, an increase of $6.4 million. Total R&D expenses were $101.5 million for fiscal year 2012, compared to $100.0 million for fiscal year 2011, an increase of $1.5 million. This 1.5% increase was primarily due to increased clinical trial-related expenses of $24.9 million, offset by the non-recurrence of $16.0 million in expenses recorded during fiscal year 2011 in connection with the settlement of the terminated insulin supply agreement and decreased salary-related expenses of $8.6 million resulting from the February 2011 restructuring. G&A expenses were $45.5 million for fiscal year 2012, compared to $40.6 million for fiscal year 2011, an increase of $4.9 million. This 12.1% increase was primarily due to $6.5 million in non-cash litigation settlement expenses incurred during fiscal year 2012, partially offset by decreased salary-related costs as a result of the February 2011 reduction in force.

Other expense for fiscal year 2012 was $1.2 million compared to other income of $1.5 million in the prior year. For 2012, other expense reflects the adjustment in fair value of forward purchase contracts. In 2011, other income was primarily realized gains on the termination of foreign exchange hedging contracts.

Net loss applicable to common stockholders for fiscal year 2012 was $(169.4) million, or $(0.94) per share based on 180.9 million weighted average shares outstanding, compared to net loss applicable to common stockholders of $(160.8) million, or $(1.32) per share based on 121.8 million weighted average shares outstanding for fiscal year 2011. The number of common shares outstanding at December 31, 2012 was 286,035,082.

Cash and cash equivalents were $61.8 million at December 31, 2012 and $2.7 million at December 31, 2011.