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MannKind Corporation (



Q3 2010 Earnings Conference Call

October 29, 2010 9 AM ET


Matthew Pfeffer – CFO and Corporate VP

Hakan Edstrom – President and COO

Peter Richardson – Corporate VP and Chief Scientific Officer

Alfred Mann – Chairman and CEO


Simos Simeonidis – Rodman & Renshaw, LLC

Keith Markey – Griffin Securities

Steve Byrne – Bank of America Merrill Lynch

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Jon Lecroy – Hapoalim Securities

Anthony Espiduda – Imperial Capital

Leah Hartman – CRT Capital Group



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» Mannkind Corp. Q2 2010 Earnings Call Transcript
» MannKind Corporation Q1 2010 Earnings Call Transcript
» MannKind Corporation Q4 2009 Earnings Call Transcript
» MannKind Corporation Q3 2009 Earnings Call Transcript

Ladies and gentlemen, thank you for standing by. Welcome to the MannKind Corporation’s Third Quarter 2010 Conference Call. (Operator Instructions) Joining us today from MannKind are Chairman and CEO, Alfred Mann; President and COO, Hakan Edstrom; Chief Financial Officer, Matthew Pfeffer; and Chief Scientific Officer, Dr. Peter Richardson.

I would now like to turn the call over to Matthew Pfeffer, Chief Financial Officer of MannKind Corp. Please go ahead.

Matthew Pfeffer

Good morning, and thank you for participating in today’s call. I will summarize our financial results for the third quarter of 2010 as reported earlier today. Next, Hakan and Peter will provide an update on key events. Finally, Al will comment on the current situation and our outlook going forward. We’ll then open up the call to your questions.

Before we proceed further, please note that comments made during this call will include forward-looking statements within the meaning of Federal Securities laws. It is possible that the actual results could differ from these stated expectations. For factors which could cause actual results to differ from expectations, please refer to the reports filed by the company with the Securities and Exchange Commission under the Securities and Exchange Act of 1934.

This conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, October 29, 2010. MannKind’s management undertakes no obligation to revise or update any statements to reflect events or circumstances after the date of this call.

Let’s start with the financials. For the third quarter of 2010, total operating expenses were $42.5 million compared to $42.8 million for the third quarter of 2009 and $37.4 million for the second quarter of 2010.

R&D expenses were $31.4 million for the third quarter of 2010 compared with $30.5 million for the third quarter of 2009 and $26.2 million for the second quarter of 2010. The increase in R&D expenses for the third quarter of 2010 compared to the same quarter in 2009 was primarily due to raw material purchases in the third quarter of 2010 offset by decreased costs associated with the clinical development of AFREZZA, and after the submission of its NDA in March of 2009.

General and administrative expenses were $11.1 million for third quarter of 2010 compared to $12.3 million for the third quarter of 2009 and $11.2 million for second quarter of 2010.

The net loss applicable to common stockholders for the third quarter of 2010 was $45.3 million or $0.40 per share compared with the net loss applicable to common stockholders of $45.6 million or $0.42 per share for the third quarter of 2009.

Our cash, cash equivalents and marketable securities at the end of the quarter totaled $98 million. Our available financial resources including both cash on hand and remaining credit facility from Al amounted to $196 million as of September 30th, 2010.

Our cash burn for the quarter was essentially flat with $38.5 million spent in Q3 compared to $37.8 million in Q2. With our cash on hand and the amount still available under the credit facility from Al, but not including any potential proceeds from future sales of equity Seaside 88, we believe we’ll able to fund our operations into the third quarter of 2011.

We continue to assess our operational plan for the balance of 2010 in order to find ways of extending our cash runway further.

With that, I would now like to turn the call over to Hakan Edstrom. Hakan?

Hakan Edstrom

Thank you, Matt. Good morning. During this third quarter, we have focused our strength of the progression of the NDA, interactions with potential partners, preparation for commercialization and the initiation of the Oncology 1106 Phase 2 Trial.

Recording the NDA resubmission, we understand that the FDA is currently reviewing our submission and as of this moment, we have not received any feedback that would indicate a concern with our resubmission or the PDUFA date. We will certainly continue to work with the FDA in collaborative manner going forward.

Also, we get ask from time to time about the minutes on the end of the review meeting held last June. Around this standing is that the FDA is focused on our resubmission of the NDA, so the minutes may have taken a lower priority.

With the recent CRLs to Amylin, ALKS and Arena that seems to be concerning the industry that FDA actions are becoming less predictable. But the CRL to Amylin regarding Bydureon was specific to a requirement both the FDA’s guidelines for a QT study, apparently Amylin did not perform the specific test and that led to the CRL.

We do not anticipate any such issue for AFREZZA because we did conduct the QT study following an in-depth discussion with the FDA on the study protocol.

Nevertheless, the uneven industry can certainly affect our biggest transaction. We believe that it’s prudent for us to be patient in our partnership discussion because deal negotiations will probably be more productive and deal terms more favorable once AFREZZA is approved or at least when the label is finalized.

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