MannKind stock dips on report of 2020 losses, but company touts fourth quarter comeback
MannKind Corp. struggled during 2020, but impressive financial results from its final quarter could be a sign of good things to come for the Westlake Village biotech company.
MannKind, which develops drugs and treatments for those suffering from diabetes and pulmonary arterial hypertension, reported a net loss of $57.2 million in fiscal year 2020, up from a net loss of $51.9 million in 2019, in an earnings report on Feb. 25. The company’s net loss was 26 cents per share.
MannKind released its earnings before the markets opened and closed the day down 6.1%, to $5.61.
In the final quarter of 2020, MannKind saw more success than in the rest of the year, thanks to its inhaled insulin treatment for patients with type 1 and type 2 diabetes, Afrezza.
In the fourth quarter, Afrezza generated $10.1 million in net revenue, a record for the company and 30% more than in the fourth quarter of 2019.
It also accounted for more than half of the $18.1 million in revenue MannKind made in the fourth quarter, which was up 28% from the same quarter in 2019.
“This was during a timeframe that we thought our full sales force would be out there but was not, due to the COVID shutdowns,” MannKind CEO Michael Castagna said during the company’s earnings call.
Afrezza gross profit for the fourth quarter of 2020 was $6.4 million, compared to $3.1 million in the same period of 2019.
For the full year, Afrezza generated revenue of $32.2 million, a 28% increase from 2019.
“We think we have really established Afrezza now and continue to see expanded sales in 2021 and beyond,” Castagna said.
Castagna said that Afrezza sales lagged over the previous three to four years because of confusion surrounding efficacy and dosing. This has been fixed due to “a significant amount of publications and presentations,” he said.
“The underlying dosing parameters were one of the biggest hurdles that the market didn’t clearly understand, as well as the packaging and all those things have now been fixed. They are now established,” Castagna said.
MannKind suffered a net loss of $26.4 million in the fourth quarter of 2020, an 85% bigger loss than the same quarter in 2019. This was chiefly due to the write-off of in-process research and development related to the recent acquisition of QrumPharma.
MannKind said it was acquiring QrumPharma for the drugs it has in development, including inhalation treatments for severe chronic and recurrent pulmonary infections, which are expected to enter phase 1 clinical trials in late 2021.
“It was a milestone for our company,” Castagna said. “It added a nebulized version of clofazimine to our pipeline of therapies for orphan lung diseases, and we can see it is highly potent in the minimum inhibitory concentration activity versus NTM (Nontuberculous mycobacterial lung disease).”
MannKind ended the fiscal year with $67.2 million in assets including cash and cash equivalents.