MannKind net loss for 2011 decreases to $160.8 million

MannKind Corporation (Nasdaq: MNKD) today reported financial results for the fourth quarter and year ended December 31, 2011.

For the fourth quarter of 2011, total operating expenses were $30.6 million, compared to $32.1 million for the fourth quarter of 2010, a decrease of $1.5 million. Research and development (R&D) expenses were $20.2 million for the fourth quarter of 2011 compared to $24.2 million for the same quarter in 2010, a decrease of $4.0 million. This 16% decrease was primarily due to the termination of our insulin supply agreement as the Company did not purchase insulin in the current quarter, partially offset by an increase in clinical trial related activities as two clinical trials were initiated in the fourth quarter of 2011. General and administrative (G&A) expenses increased by $2.4 million to $10.3 million for the fourth quarter of 2011 compared to $7.9 million in the fourth quarter of 2010.

The net loss applicable to common stockholders for the fourth quarter of 2011 was $36.4 million, or $0.30 per share based on 122.4 million weighted average shares outstanding, compared with a net loss applicable to common stockholders of $38.3 million, or $0.33 per share based on 114.9 million weighted average shares outstanding for the fourth quarter of 2010. The number of common shares outstanding at December 31, 2011 was 131,522,945.

For the year ended December 31, 2011, total operating expenses were $140.6 million, compared with $152.6 million for 2010, a decrease of $12.0 million. R&D expenses were $100.0 million in 2011, compared to $112.3 million in 2010, a decrease of $12.3 million. The 11% decrease was primarily due to lower purchases of raw materials as a result of the termination of our insulin supply agreement. The final shipment of recombinant human insulin from Organon was received in the third quarter of 2011. Additionally, the Company incurred reduced salary and other compensation expenses as a result of a reduction in force in February 2011. G&A expenses were $40.6 million for 2011 as compared to $40.3 million for 2010.

The net loss applicable to common stockholders for 2011 was $160.8 million, or $1.32 per share based on 121.8 million weighted average shares outstanding, compared with a net loss applicable to common stockholders of $170.6 million, or $1.50 per share based on 113.7 million weighted averages shares outstanding for 2010.

Cash, cash equivalents and marketable securities were $3.2 million at December 31, 2011 and $70.4 million at December 31, 2010. As of December 31, 2011, the Company had $45.0 million of available borrowings under the loan agreement compared to $98.0 million as of December 31, 2010.

On January 16, 2012, the Company amended its note with The Mann Group LLC, an entity controlled by the Company's principal stockholder. The amendment extends the maturity date of the $350.0 million loan arrangement from December 31, 2012 to March 31, 2013. The Company can continue to borrow under the amended terms of the note until June 30, 2012. Since December 31, 2011, the Company borrowed $6.3 million under the loan agreement and $38.8 million remains available to borrow.

On February 8, 2012, the Company sold $86.3 million of units in an underwritten public offering, with each unit consisting of one share of common stock and a warrant to purchase 0.6 of a share of common stock, and reflects the full exercise of an over-allotment option granted to the underwriters. Net proceeds from this offering were approximately $80.6 million, excluding any warrant exercises. Concurrent with this public offering, The Mann Group LLC purchased $77.2 million worth of restricted shares of common stock which will be paid by cancellation of principal indebtedness under the amended loan arrangement.