MannKind Corporation (MNKD) is a biopharmaceutical company focused on the discovery, development, and commercialization of therapeutic products for diseases such as diabetes. Its only approved product, Afrezza, is a rapid-acting inhaled insulin that was approved by the FDA on June 27, 2014 to improve glycemic control in adult patients with diabetes. Afrezza became available by prescription in United States retail pharmacies in February 2015. According to the Centers for Disease Control and Prevention, 30.3 million people in the United States had diabetes in 2015. Globally, the International Diabetes Federation has estimated that approximately 415.0 million people had diabetes in 2015 and approximately 642.0 million people will have diabetes by 2040.1

Afrezza is a rapid-acting inhaled insulin used to control high blood sugar in adults with type 1 and type 2 diabetes. The product consists of a dry powder formulation of human insulin delivered from a small portable inhaler. Administered at the beginning of a meal, Afrezza dissolves rapidly upon inhalation to the lung and delivers insulin quickly to the bloodstream. Peak insulin levels are achieved within 12-15 minutes of administration.

On August 11, 2014, MannKind executed the Sanofi License Agreement, pursuant to which Sanofi was responsible for global commercial, regulatory and development activities for Afrezza.

On January 4, 2016, The company received written notification from Sanofi of its election to terminate in its entirety the Sanofi License Agreement. The effective date of termination was April 4, 2016, which was when the company assumed responsibility for worldwide development and commercialization of Afrezza. Under the terms of the transition agreement, Sanofi continued to fulfill orders for Afrezza in the United States until t he company began distributing MannKind-branded Afrezza product to major wholesalers in late July 2016. The company began recognizing commercial product sales revenue when MannKind-branded Afrezza was dispensed from pharmacies to patients in August 2016.

During the initial transition of the commercial responsibilities from Sanofi, The company utilized a contract sales organization to promote Afrezza while the company focused its internal resources on establishing a channel strategy, entering into distribution agreements and developing co-pay assistance programs, a voucher program, data agreements and payor relationships. In early 2017, The company recruited its own sales force to promote Afrezza to endocrinologists and certain high-prescribing primary care physicians. In the future, The company may seek to supplement its sales force through a co-promotion arrangement – an agreement with a third party that has an underutilized primary care sales force, which can be used to promote Afrezza to greater number of primary care physicians.

MannKind current strategy for future commercialization of Afrezza outside of the United States, subject to receipt of the necessary foreign regulatory approvals, is to seek and establish regional partnerships in foreign jurisdictions where there are appropriate commercial opportunities.

MannKind also believe its Technosphere formulations of active pharmaceutical ingredients have the potential to demonstrate clinical advantages over existing therapeutic options in a variety of therapeutic areas. In addition to its collaboration with Receptor (See Note 7, Collaboration Agreements of the Notes to the Condensed Consolidated Financial Statements in this report), The company are actively exploring other opportunities to out-license its proprietary Technosphere formulation and device technologies. The company continue the development of certain products related to its Technosphere formulations and will continue to do so if the company is able to obtain the required funding.

As of June 30, 2017, MannKind had an accumulated deficit of $2.8 billion and a stockholders’ deficit of $221.2 million. The company had a net loss of approximately $35.3 million and $51.7 million for the three and six months ended June 30, 2017, respectively. The company have historically funded its operations primarily through the sale of equity securities and convertible debt securities, borrowings under the Facility Agreement with Deerfield, borrowings under The Mann Group Loan Arrangement, which it can no longer borrow under as the company has used all amounts available for borrowing, and the Sanofi License Agreement, which was terminated in 2016. As discussed below in “Liquidity and Capital Resources,” if the company is unable to obtain additional funding, there will be substantial doubt about its ability to continue as a going concern. As of June 30, 2017, The company had cash and cash equivalents of $43.4 million, which, together with its debt obligations, including a $10.0 million principal repayment that is scheduled to become due on August 31, 2017 (subject to a possible extension to October 31, 2017), raises substantial doubt about its solvency and ability to continue as a going concern. The company estimate that its net operating cash flow for the second half of 2017 will be approximately $18 to $24 million per quarter assuming that the company continue as a going concern during this period. However, The company cannot provide assurance that its plans will not change or that changed circumstances will not result in net operating cash flow that are greater than the company currently estimate.

MannKind business is subject to significant risks, including but not limited to its need to raise additional capital to fund its operations, its ability to successfully commercialize Afrezza and manufacture sufficient quantities of Afrezza and the risks inherent in its ongoing clinical trials and the regulatory approval process for its product candidates. Additional significant risks also include the results of its research and development efforts, competition from other products and technologies and uncertainties associated with obtaining and enforcing patent rights.

References

  1. ^ https://fintel.io/doc/sec-mnkd-mannkind-10q-2018-august-02-17962
Tags: US:MNKD
Created by Asif Farooqui on 2019/11/25 14:05
     
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