Valencia pharmaceutical developer MannKind Corp. cut its expenses and trimmed its losses slightly in 2011, and recently extended the repayment schedule of the loan from its principal shareholder, billionaire investor Alfred Mann.
Founded by Mann in 1991, the company doesn’t yet have an approved product and was dealt a setback in early 2011 when the FDA refused to sign off on its candidate diabetes-control product, Afrezza, instead ordering more clinical trials. MannKind initiated the trials during the fourth quarter.
The company posted fourth-quarter losses of $36.4 million (30 cents per share) and full-year losses of $160.8 million ($1.32) for the year ending Dec. 31, compared to respective losses of $38.3 million (33 cents) and $170.6 million ($1.50).
The improvement is largely related to the fact that the company spent $4 million less during the fourth quarter and $12.3 million less all year on research and development when it canceled a major order for insulin, which it would have needed if the FDA had approved Afrezza on schedule.
In January 2012, MannKind amended its $350 million note from Alfred Mann’s company, The Mann Group LLC, to extend the maturity date by an additional three months to March 31, 2013. It has borrowed $6.3 million so far in calendar 2012 and has another $38.8 million available under the note, which it can borrow through June 30, 2012.
On Feb. 8, underwriters exercised an over-allotment option and sold $86.3 million worth of “units” in a public offering, each unit consisting of one share of common stock and a warrant to purchase 0.6 of a share of common stock. Simultaneously, Mann’s company, 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,” the company said.
Based in the Valencia Commerce Center, MannKind is planning to start a Phase II study of a product for patients with advanced melanoma, and Phase I clinical trials of a product to treat tumors, metastatic and refractory diseases. It also conducts preclinical studies of drug candidates intended to treat certain other cancers, inflammatory diseases and obesity.
The company made its earnings announcement after Wednesday’s close on Wall Street.