MANNKIND CORP
For the period ended Dec 31, 2024. Filed Feb 26, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Feb 26, 2025
MNKD$3.90+3.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-02-27.
0000950170-24-021423
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-02-26.
0000950170-25-027735
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 88 previous paragraphs and 89 current paragraphs.
38 unchanged; 37 reworded; 14 added; 12 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 6 previous and 6 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (14)
Current report
Interest Expense– Liability for Sale of Future Royalties —In December 2023, we sold a portion of our rights to future royalties on UT’s sale of Tyvaso DPI. The upfront proceeds received from the royalty purchaser were recorded as a royalty liability in the consolidated balance sheets. As royalty payments are earned by and remitted to the royalty purchaser, the balance of the royalty liability will be effectively repaid as it is amortized over the life of the underlying purchase agreement. To amortize the royalty liability, we estimate the total amount of future royalty payments to be made to the royalty purchaser. The excess of those future estimated royalty payments over the upfront proceeds received is recognized in the consolidated statements of operations as non-cash interest expense utilizing an imputed effective interest rate. The effective interest rate is calculated based on the rate that would enable the debt to be repaid in full over the anticipated life of the arrangement. The interest rate may vary during the term of the agreement depending on a number of factors, including the amount and timing of forecasted royalty payments which affects the timing and ultimate amount of reductions to the liability.
Current report
The Company evaluates the effective interest rate periodically based on its forecasted royalty payments utilizing the prospective method. The Company periodically assesses the forecasted royalty payments using a combination of historical results, internal projections and forecasts from external sources. To the extent such payments, or the timing of such payments, are materially different than original estimates, the Company will prospectively adjust the effective interest rate and amortization of the royalty liability. If there is a 10% difference in the estimated future royalty payments, the impact to our interest expense with respect to our royalty liability would be $4.6 million for the year ended December 31, 2024.
Current report
(dollars in thousands):
Current report
Cost of revenue — collaborations and services increased by $17.3 million, or 41%, for the year ended December 31, 2024 compared to the prior year primarily as a result of increased manufacturing volume of Tyvaso DPI.
Current report
Research and development expenses increased by $14.6 million, or 47%, for the year ended December 31, 2024 compared to the prior year. The increase was primarily attributable to increased expenditures for development activities, including a Phase 3 clinical study of MNKD-101 and a Phase 1 clinical study of MNKD-201, and personnel costs primarily due to increased headcount as a result of the Pulmatrix Transaction.
Current report
Selling, general and administrative expenses for the year ended December 31, 2024 remained consistent compared to the prior year. This was primarily attributable to a loss of $1.4 million for estimated returns associated with sales of V-Go that pre-date our acquisition of the product and increases in personnel costs, professional fees and promotional activities, offset by a decrease in selling expenses related to sales force restructuring activities completed during the first quarter of 2024.
Current report
Interest expense on liability for sale of future royalties was $16.2 million and $0.2 million for the years ended December 31, 2024 and 2023, respectively, and was attributable to imputed interest and amortization of debt issuance costs on the liability recorded in connection with the sale of 1% of our Tyvaso DPI royalties in December 2023. See Note 16– Commitments and Contingencies.
Current report
Interest expense decreased by $3.2 million for the year ended December 31, 2024 compared to the prior year. The decrease was primarily due to repayment of the MidCap credit facility and Mann Group convertible note in April 2024. See Note 10– Borrowings.
Current report
Gain on bargain purchase of $5.3 million for the year ended December 31, 2024 was the result of the excess of net assets acquired over consideration paid in the Pulmatrix Transaction. See Note 3 –Pulmatrix Transaction.
Current report
Loss on settlement of debt includes repayment of a portion of the senior convertible notes pursuant to private exchange agreements with certain note holders in December 2024, resulting in an inducement expense of $13.4 million. Additionally, in April 2024, a loss on early extinguishment of debt of $7.0 million was incurred for the year ended December 31, 2024 in connection with the repayment of the MidCap credit facility and Mann Group convertible note. See Note 10 –Borrowings.
Current report
$13.3 million remaining lease payments under an operating lease of a building located in Bedford, Massachusetts (the "Bedford Lease"). In July 2024, the Company assumed the Bedford Lease in connection with the Pulmatrix Transaction. The monthly base rent payments of $101,282 are subject to 3% annual increases, plus the estimated cost of maintaining the property and common areas by the landlord. The Company also assumed from Pulmatrix a $0.7 million obligation to repay landlord-funded tenant improvements at a rate of $6,000 per month through the end of the lease term in November 2033. The Company has the right to extend the lease term for an additional five-year term. Interest expense is calculated using an incremental borrowing rate of approximately 7.3%.
Current report
During the year ended December 31, 2024, we generated $42.5 million of cash from our operating activities, which consisted primarily of $261.2 million in cash receipts from customers (net of approximately $14.1 million of non-cash collaborations and services revenue which was previously deferred, $10.2 million of non-cash revenue for the 1% sold portion of our royalties and $1.1 million in milestone revenue for which we had not received payment as of December 31, 2024), partially offset by $81.1 million of selling, general and administrative expenses, $78.7 million of cost of goods sold, $42.1 million of research and development and $14.2 million of net cash paid for interest.
Current report
Cash used in investing activities of $96.6 million for the year ended December 31, 2024 was primarily due to the purchase of $273.8 million of held-to-maturity securities, $9.7 million of property and equipment and $7.0 of available-for-sale securities, partially offset by the maturity of $135.3 million of held-to-maturity debt securities and $58.1 million of available-for-sale securities.
Current report
Cash used in financing activities of $137.3 million for the year ended December 31, 2024 was primarily due to principal and early extinguishment payments on the senior convertible notes of $87.7 million, MidCap credit facility of $36.6 million, and Mann Group convertible note of $8.9 million and $6.1 million of payments to taxing authorities from equity withheld upon vesting of RSUs and stock options, partially offset by $3.1 million in proceeds from the market price stock purchase plan ("MPSPP") and ESPP.
Removed paragraphs (12)
Previous report
Manufacturing risks may adversely affect our ability to manufacture our products and could reduce our gross margin or impact our collaboration with UT.
Previous report
Cost of revenue — collaborations and services increased by $0.4 million, or 1%, for the year ended December 31, 2023 compared to the prior year. The cost of revenue for collaborations and services remained consistent with the prior year as manufacturing activities shifted from preproduction efforts in the first five months of 2022 to full commercial production of Tyvaso DPI thereafter. Higher manufacturing volumes resulted in efficiencies which contributed to a lower effective cost per unit.
Previous report
Research and development expenses increased by $11.6 million, or 59%, for the year ended December 31, 2023 compared to the prior year. The increase was primarily attributable to increases in development activities for clofazimine inhaled suspension (MNKD-101), costs for an Afrezza post-marketing clinical study (INHALE-3) which commenced in the second quarter of 2023, costs for the Afrezza pediatric clinical study (INHALE-1) and other research and development activities.
Previous report
Selling expenses decreased by $2.0 million, or 4%, for the year ended December 31, 2023, compared to the prior year. The decrease was primarily attributable to the termination of an Afrezza pilot promotional effort with a contract sales force targeting primary care physicians, which ended in the third quarter of 2022, partially offset by increased personnel and promotional activities related to the acquisition of V-Go in May 2022.
Previous report
General and administrative expenses increased by $4.8 million, or 13%, for the year ended December 31, 2023 compared to the prior year. This increase was primarily attributable to increased personnel costs, including stock-based compensation and headcount.
Previous report
Interest expense on notes for the year ended December 31, 2023 was comparable to the prior year. See Note 10 —Borrowings.
Previous report
Other income for the year ended December 31, 2023 consisted primarily of a gain on disposal of property and equipment of $0.3 million and fair value adjustment of a milestone liability of $0.3 million, partially offset by a write off of an investment of $0.3 million and a loss on settlement of $0.2 million. Other expense for the year ended December 31, 2022 consisted of a loss associated with a foreign currency hedging transaction that was entered into to mitigate our exposure to foreign currency exchange risks associated with our insulin purchase obligation under the Insulin Supply Agreement with Amphastar.
Previous report
$33.3 million principal amount under the MidCap credit facility, bearing interest at an annual rate equal to one-month Secured Overnight Financing Rate (“SOFR") plus 6.25% (capped at a total of 8.25%), subject to a one-month SOFR floor of 1.00%. Interest is payable monthly in arrears. Principal is payable in equal monthly installments beginning in September 2023 through maturity in August 2025.
Previous report
$8.8 million principal amount of indebtedness under the Mann Group convertible note bearing interest at a fixed rate of 2.50% per annum compounded quarterly and maturing in December 2025, which is convertible into shares of our common stock at the option of Mann Group at a conversion price of $2.50 per share. Interest is payable quarterly in arrears in-kind or in shares at our option.
Previous report
During the year ended December 31, 2022, we used $80.7 million of cash for our operating activities, which primarily consisted of $75.1 million of selling, general and administrative expenses, $58.5 million of cost of goods sold, $23.8 million of costs for research and development, $8.9 million of cash paid for interest on notes and $9.6 million of cash paid for interest on the financing liability, partially offset by $108.3 million of revenue.
Previous report
Cash provided by investing activities of $4.9 million for the year ended December 31, 2022 was primarily due to the maturity of $107.3 million of debt securities, partially offset by the up-front consideration of $15.3 million for certain assets and assumed liabilities related to V-Go, $5.0 million purchase of available-for-sale securities, the purchase of $74.5 million of debt securities and $7.6 million purchase of property and equipment.
Previous report
Cash provided by financing activities of $21.4 million for the year ended December 31, 2022 was primarily due to net proceeds from at-the-market offering of $19.4 million and proceeds from market price stock purchase plan and employee stock purchase plan of $2.8 million, partially offset by the milestone payment of $1.1 million.
Reworded paragraphs (37)
Previous wording
In our endocrine business unit, we currently commercialize two products: Afrezza (insulin human) Inhalation Powder, an ultra rapid-acting inhaled insulin indicated to improve glycemic control in adults with diabetes, and the V-Go wearable insulin delivery device, which provides continuous subcutaneous infusion of insulin in adults that require insulin. Afrezza was developed by us and received approval from the FDA in June 2014. Afrezza consists of a dry powder formulation of human insulin delivered from a small portable inhaler. V-Go received 510(k) clearance by the FDA in 2010 and has been available commercially since 2012. In May 2022, we acquired V-Go from Zealand Pharma A/S and Zealand Pharma US, Inc. (together “Zealand”) and began integrating the product into our endocrine business unit. V-Go is a mechanical basal-bolus insulin delivery system that is worn like a patch and can eliminate the need for taking multiple daily shots.
Current wording
In our endocrine business unit, we currently commercialize two products: Afrezza (insulin human) Inhalation Powder, an ultra rapid-acting inhaled insulin indicated to improve glycemic control in adults with diabetes, and the V-Go wearable insulin delivery device, which provides continuous subcutaneous infusion of insulin in adults that require insulin. Afrezza was developed by us and received approval from the FDA in June 2014. Afrezza consists of a dry powder formulation of human insulin delivered from a small portable inhaler. V-Go received 510(k) clearance by the FDA in 2010 and has been available commercially since 2012. In May 2022, we acquired V-Go from Zealand. V-Go is a mechanical basal-bolus insulin delivery system that is worn like a patch and can eliminate the need for taking multiple daily injections.
Previous wording
The lead program in our pipeline of potential treatments for orphan lung diseases is MNKD-101, a nebulized formulation of clofazimine, for the treatment of severe chronic and recurrent pulmonary infections, including nontuberculous mycobacterial (NTM) lung disease. We believe an orally inhaled formulation of clofazimine could potentially provide several clinical advantages over the current solid oral dosage form of this drug. The FDA has designated MNKD-101 as both an orphan drug and a qualified infectious disease product for the treatment of pulmonary NTM infections. We plan to initiate a Phase 3 registrational study of MNKD-101 in the United States in the second quarter of 2024.
Current wording
Our pipeline of potential treatments for orphan lung diseases includes MNKD-101, a nebulized formulation of clofazimine, for the treatment of severe chronic and recurrent pulmonary infections, including NTM lung disease. We believe an orally inhaled formulation of clofazimine could potentially provide several clinical advantages over the current solid oral dosage form, including directly targeting the site of the infection while lowering the systemic exposure of patients to the drug. The FDA has designated MNKD-101 as both an orphan drug and as a qualified infectious disease product for the treatment of pulmonary NTM infections. It has also granted Fast Track designation to our development program. In June 2024, we initiated a Phase 3 clinical study of MNKD-101, with sites in the United States, Japan, South Korea, Taiwan and Australia. We expect enrollment of subjects into this study to continue into 2026.
Previous wording
The next most advanced program in our pipeline is MNKD-201, a dry-powder formulation of nintedanib, for the treatment of idiopathic pulmonary fibrosis (IPF). An oral dosage form of nintedanib was approved for IPF by the FDA in 2014. However, a fairly large oral dose is required in order to achieve sufficient drug levels in lung tissue. Our goal with an inhaled formulation is to deliver a therapeutic amount of nintedanib to the lungs while avoiding high levels of the drug in other tissues, where it is associated with undesirable side effects. We plan to initiate a Phase 1 clinical study of MNKD-201 in the second quarter of 2024.
Current wording
The other major program in our pipeline is MNKD-201, a dry-powder formulation of nintedanib, for the treatment of IPF. An oral dosage form of nintedanib was approved for IPF by the FDA in 2014. However, a fairly large oral dose is required in order to achieve sufficient drug levels in lung tissue. Our goal with an inhaled formulation is to deliver a therapeutic amount of nintedanib to the lungs while avoiding high levels of the drug in other tissues, where it is associated with undesirable side effects. In 2024, we conducted a Phase 1 clinical study of MNKD-201, which met its primary objective of demonstrating positive safety results and good tolerability in healthy volunteers. We plan to meet with the FDA in the first half of 2025 to discuss the late-stage development of MNKD-201.
Previous wording
As of December 31, 2023, we had an accumulated deficit of $3.2 billion and a stockholders’ deficit of $246.2 million. We had net loss of $11.9 million, $87.4 million and $80.9 million in the years ended December 31, 2023, 2022 and 2021, respectively. To date, we have funded our operations primarily through the sale of our equity and convertible debt securities, from the receipt of upfront and milestone payments from collaborations, from borrowings, from sales of Afrezza and V-Go, from royalties and manufacturing revenue from UT, from proceeds of the sale-leaseback of our manufacturing facility in Danbury, CT and from the sale of a portion of future royalties that we receive from UT.
Current wording
As of December 31, 2024, we had cash, cash equivalents and investments of $202.7 million, an accumulated deficit of $3.2 billion and a total stockholders’ deficit of $78.8 million. We had net income of $27.6 million in the year ended December 31, 2024, and net loss of $11.9 million and $87.4 million in the years ended December 31, 2023 and 2022, respectively. To date, we have funded our operations primarily through the sale of our equity and convertible debt securities, from the receipt of upfront and milestone payments from collaborations, from borrowings, from sales of Afrezza and V-Go, from royalties and manufacturing revenue from UT, from proceeds of the sale-leaseback of our manufacturing facility in Danbury, CT and from the sale of a portion of future royalties that we receive from UT.
Previous wording
We consider our critical accounting policies to be those related to revenue recognition and gross-to-net adjustments, inventory costing and recoverability, recognized loss on purchase commitments, impairment of long-lived assets, milestone rights liability, clinical trial expenses, stock-based compensation and accounting for income taxes. These critical accounting policies are also considered significant accounting policies and are more fully described in Note 2 –Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements included in Part II, Item 8 — Financial Statements and Supplementary Data.
Current wording
We consider our critical accounting policies to be those related to revenue recognition and gross-to-net adjustments, inventory costing and recoverability, recognized loss on purchase commitments, impairment of long-lived assets, milestone rights liability, clinical trial expenses, stock-based compensation, interest expense related to liability for sale of future royalties and accounting for income taxes. These critical accounting policies are also considered significant accounting policies and are more fully described in Note 2 –Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements included in Part II, Item 8 – Financial Statements and Supplementary Data.
Previous wording
Our reserves for variable consideration are reflected in our gross-to-net adjustments which were 43% of gross product revenue, or $56.4 million, for the year ended December 31, 2023, compared to 42% of gross product revenue, or $40.8 million, for the year ended December 31, 2022. If there is a 10% difference between the estimates for accruals and the actual liability in the reserves for variable consideration, the impact to our revenue for commercial product sales would be $2.0 million or a 1.5% change in the gross-to-net adjustment percentage for the year ended December 31, 2023.
Current wording
Significant judgment is required in estimating gross-to-net adjustments, historical experience, payer channel mix unbilled claims, claim submission time lags and inventory levels in the distribution channel. Our reserves for variable consideration related to our commercial products are reflected in our gross-to-net adjustments which were 40% of gross product revenue, or $53.8 million, for the year ended December 31, 2024, compared to 43% of gross product revenue, or $56.4 million, for the year ended December 31, 2023. If there is a 10% difference between the estimates for accruals and the actual liability in the reserves for variable consideration, the impact to our revenue for commercial product sales would be $1.7 million or a 1.2% change in the gross-to-net adjustment percentage for the year ended December 31, 2024.
Previous wording
Revenue Recognition – Collaborations and Services — We enter into licensing, research or other agreements under which we license certain rights to our product candidates to third parties, conduct research or provide other services to third parties. The terms of these arrangements may include but are not limited to payment to us of one or more of the following: up-front license fees; development, regulatory, and commercial milestone payments; payments for commercial manufacturing and clinical supply services we provide; and royalties on net sales of licensed products and sublicenses of the rights. As part of the accounting for these arrangements, we must develop assumptions that require judgment such as determining the performance obligation in the contract and determining the stand-alone selling price for each performance obligation identified in the contract. With respect to our significant collaboration and service agreement with UT that includes a long-term commercial supply agreement (as amended, the “CSA”), we have identified three distinct performance obligations: (1) the license, supply of product to be used in clinical development, and continued development and approval support for Tyvaso DPI (“R&D Services and License”); (2) development activities for the next generation of the product (“Next-Gen R&D Services”); and (3) a material right associated with current and future commercial manufacturing and supply of product (“Manufacturing Services”). Pre-production activities under the CSA, such as facility expansion services and other administrative services, were considered bundled services under the Manufacturing Services performance obligation as required by ASC 606. Following the FDA’s approval of Tyvaso DPI, UT began issuing purchase orders for the supply of product, which represent distinct contracts and performance obligations under ASC 606. Revenue is recognized for the supply of product at a point in time, once control is transferred to UT. See Note 11 –Collaboration, Licensing and Other Arrangements of the Notes to Consolidated Financial Statements included in Part II, Item 8 — Financial Statements and Supplementary Data.
Current wording
Revenue Recognition – Collaborations and Services — We enter into licensing, research or other agreements under which we license certain rights to our product candidates to third parties, conduct research or provide other services to third parties. The terms of these arrangements may include but are not limited to payment to us of one or more of the following: up-front license fees; development, regulatory, and commercial milestone payments; payments for commercial manufacturing and clinical supply services we provide; and royalties on net sales of licensed products and sublicenses of the rights. As part of the accounting for these arrangements, we must develop assumptions that require judgment such as determining the performance obligation in the contract and determining the stand-alone selling price for each performance obligation identified in the contract.
Previous wording
If an arrangement has multiple performance obligations, the allocation of the transaction price is determined from observable market inputs, and we use key assumptions to determine the stand-alone selling price, which may include development timelines, reimbursement rates for personnel costs, discount rates, and probabilities of technical and regulatory success. Revenue is recognized based on the measurement of progress as the performance obligation is satisfied and consideration received that does not meet the requirements to satisfy the revenue recognition criteria is recorded as deferred revenue. Current deferred revenue consists of amounts that are expected to be recognized as revenue in the next 12 months. Amounts that we expect will not be recognized within the next 12 months are classified as long-term deferred revenue.
Current wording
If an arrangement has multiple performance obligations, the allocation of the transaction price is determined from observable market inputs, and we use key assumptions to determine the stand-alone selling price, which may include development timelines, reimbursement rates for personnel costs, discount rates, and probabilities of technical and regulatory success. Revenue is recognized based on the measurement of progress as the performance obligation is satisfied and consideration received that does not meet the requirements to satisfy the revenue recognition criteria is recorded as deferred revenue.
Previous wording
If there is a 10% difference in the estimates used to determine the transaction price for the CSA entered into in December 2022 with UT and the related allocation of the transaction price between performance obligations, the difference between the estimates for accruals and the actual liability for deferred revenue and revenue recognized for collaborations and services would be $1.8 million for the year ended December 31, 2023.
Current wording
With respect to our significant collaboration and service agreement with UT, which was entered into in December 2022 and includes a long-term commercial supply agreement (as amended, the "CSA"), if there is a 10% difference in (i) the estimates used to determine the transaction price for the CSA or (ii) the related allocation of the transaction price between performance obligations, the difference between the estimates for accruals and the actual liability for deferred revenue and revenue recognized for collaborations and services would be $2.6 million for the year ended December 31, 2024.
Previous wording
Revenue Recognition — Royalties — We recognize royalty revenue for a sales-based or usage-based royalty if it is promised in exchange for an intellectual property license. The royalty revenue is recognized as the latter of the subsequent sale of the product occurs or if the performance obligation to which the royalty has been allocated has been satisfied or partially satisfied. Our collaboration agreement with UT entitles us to receive a royalty on net sales of Tyvaso DPI for the license of our IP that was considered to be interdependent with the development activities that supported the approval of Tyvaso DPI.
Current wording
Revenue Recognition– Royalties — We recognize royalty revenue for a sales-based or usage-based royalty if it is promised in exchange for an intellectual property license. The royalty revenue is recognized as the latter of the subsequent sale of the product occurs or if the performance obligation to which the royalty has been allocated has been satisfied or partially satisfied. Our collaboration agreement with UT entitles us to receive a royalty on net sales of Tyvaso DPI for the license of our intellectual property that was considered to be interdependent with the development activities that supported the approval of Tyvaso DPI.
Previous wording
The grant date fair value for the Market RSUs was $9.40 per unit for the Market RSUs granted during the year ended December 31, 2023, compared to $6.10 per unit for the Market RSUs granted during the year ended December 31, 2022. If there is a 10% difference in the grant date fair value of the Market RSUs, the impact to our stock-based compensation expense would be $0.8 million for the year ended December 31, 2023.
Current wording
The grant date fair value for the Market RSUs was $10.30 per unit for the Market RSUs granted during the year ended December 31, 2024, compared to $9.40 per unit for the Market RSUs granted during the year ended December 31, 2023. If there is a 10% difference in the grant date fair value of the Market RSUs, the impact to our stock-based compensation expense would be $1.1 million for the year ended December 31, 2024.
Previous wording
Our collaboration agreement with UT entitles us to receive a 10% royalty on net sales of Tyvaso DPI, subject to the sale by us in December 2023 of a 1% royalty on future net sales to a royalty purchaser (leaving us with a 9% royalty). See Note 16 –Commitments and Contingenciesof the Notes to Consolidated Financial Statements included in Part II, Item 8 — Financial Statements and Supplementary Data. Our royalty revenue reflects the upward trend in demand for Tyvaso DPI in the marketplace.
Current wording
Our collaboration agreement with UT entitles us to receive a 10% royalty on net sales of Tyvaso DPI, subject to our sale of a 1% royalty on future net sales to a royalty purchaser (leaving us with a 9% royalty) in December 2023. See Note 16 –Commitments and Contingenciesof the Notes to Consolidated Financial Statements included in Part II, Item 8– Financial Statements and Supplementary Data. Our royalty revenue reflects the upward trend in demand for Tyvaso DPI in the marketplace.
Previous wording
Afrezza — Gross revenue from sales of Afrezza increased by $16.8 million, or 24%, for the year ended December 31, 2023 compared to the prior year. The increase reflects a combination of higher product demand and higher price (including a more favorable gross-to-net adjustment). The gross-to-net adjustment was 38% of gross revenue, or $33.0 million, for the year ended December 31, 2023 compared to 39% of gross revenue, or $27.8 million, for the prior year. The decrease in the gross-to-net percentage was primarily impacted by decreases in co-pay assistance and anticipated product returns partially offset by an increase in government rebates (as a percentage of gross sales). As a result, net revenue from sales of Afrezza increased by $11.6 million, or 27%, for the year ended December 31, 2023 compared to the prior year.
Current wording
Afrezza — Gross revenue from sales of Afrezza increased by $11.0 million, or 13%, for the year ended December 31, 2024 compared to the prior year. The increase was driven primarily by higher demand and price. The gross-to-net adjustment was 35% of gross revenue, or $34.9 million, for the year ended December 31, 2024 compared to 38% of gross revenue, or $33.0 million, for the prior year. The improved gross-to-net percentage was primarily attributable to a decrease in anticipated product returns (as a percentage of gross sales). As a result, net revenue from sales of Afrezza increased by $9.1 million, or 17%, for the year ended December 31, 2024 compared to the prior year.
Previous wording
V-Go — Gross revenue from sales of V-Go increased by $16.6 million, or 64%, for the year ended December 31, 2023 compared to the prior year. The increase was a result of a full year of sales in 2023 compared to seven months in the prior year as V-Go was acquired in May 2022. The gross-to-net adjustment was 55% of gross revenue, or $23.4 million, for the year ended December 31, 2023 compared to 50% of gross revenue, or $13.0 million, for the prior year. The increase in gross-to-net percentage was mainly attributable to increased commercial and government rebates (as a percentage of gross sales). As a result, net revenue from sales of V-Go increased by $6.2 million, or 48%, for the year ended December 31, 2023 compared to the prior year.
Current wording
V-Go — Gross revenue from sales of V-Go decreased by $5.3 million, or 13%, for the year ended December 31, 2024 compared to the prior year and was primarily a result of lower demand partially offset by increased price. The gross-to-net adjustment was 51% of gross revenue, or $18.9 million, for the year ended December 31, 2024 compared to 55% of gross revenue, or $23.4 million, for the prior year. The improved gross-to-net percentage was mainly attributable to a decrease in rebates. As a result, net revenue from sales of V-Go decreased by $0.8 million, or 4%, for the year ended December 31, 2024 compared to the prior year.
Previous wording
Collaborations and Services — Net revenue from collaborations and services increased by $25.0 million, or 90%, for the year ended December 31, 2023 compared to the prior year. The increase in revenue was primarily attributable to manufacturing revenues being deferred in the prior year period until we began commercial manufacturing in May 2022 and an increase in product sold to UT. During the year ended December 31, 2023, we recognized $52.0 million of revenue under the CSA compared to $24.8 million in the prior year. Royalty revenue increased $56.4 million for the year ended December 31, 2023 compared to the prior year primarily due to a full year of Tyvaso DPI sales in the current year and an increase in patient demand.
Current wording
Collaborations and Services — Net revenue from collaborations and services increased by $47.9 million, or 90%, for the year ended December 31, 2024 compared to the prior year. The increase in revenue was primarily attributable to increased manufacturing volume for product sold to UT. Royalty revenue from UT increased by $30.4 million, or 42%, for the year ended December 31, 2024 compared to the prior year due to UT's increase in net revenue from sales of Tyvaso DPI due to higher patient demand.
Previous wording
See Note 11 – Collaboration, Licensing and Other Arrangementsin the consolidated financial statements included in Part II, Item 8 – Financial Statements and Supplementary Data.
Current wording
See Note 11 – Collaborations, Licensing and Other Arrangementsin the consolidated financial statements included in Part II, Item 8 – Financial Statements and Supplementary Data.
Previous wording
The following table provides a comparison of the commercial product gross profit categories for the years ended December 31, 2023 and 2022 (dollars in thousands):
Current wording
The following table provides a comparison of the commercial product gross profit categories for the years ended December 31, 2024 and 2023
Previous wording
Commercial product gross profit increased by $12.9 million, or 32%, for the year ended December 31, 2023 compared to the prior year. The increase in gross profit was primarily attributable to an increase in Afrezza net revenue and gross margin. The acquisition of V-Go in May 2022 contributed to the increase in commercial product sales and related cost of goods sold. As a result, gross margin remained consistent with the prior year at 72%.
Current wording
Commercial product gross profit increased by $11.7 million, or 22%, for the year ended December 31, 2024 compared to the prior year. The increase in gross profit and gross margin was primarily attributable to an increase in Afrezza net revenue, improved gross-to-net adjustments related to V-Go rebates and decreased cost of goods sold as a result of reduced sales of V-Go and efficiencies gained from increased production volumes of all products manufactured at our Danbury facility.
Previous wording
Loss on foreign currency transaction was $1.9 million for the year ended December 31, 2023 compared to a gain of $4.8 million for the prior year. Under the Insulin Supply Agreement with Amphastar, payment obligations are denominated in Euros. We are required to record the foreign currency transaction impact of the U.S. dollar to Euro exchange rate associated with the recognized loss on purchase commitments. The year-over-year change was due to the conversion of Euro to U.S. dollar exchange rates.
Current wording
Gain on foreign currency transaction was $3.9 million for the year ended December 31, 2024 compared to a loss of $1.9 million for the prior year. Under the Insulin Supply Agreement with Amphastar, payment obligations are denominated in Euros. We are required to record the foreign currency transaction impact of the U.S. dollar to Euro exchange rate associated with the recognized loss on purchase commitments. The year-over-year change was due to fluctuations in the Euro to U.S. dollar exchange rates.
Previous wording
Interest income, consisting of interest on investments net of amortization, increased by $3.6 million compared to the prior year primarily due to higher yields on our marketable securities and money market funds.
Current wording
Interest income, net, consisting of interest and accretion on investments net of amortization, increased by $6.5 million compared to the prior year primarily due to an increase in the underlying investments from the proceeds of the sale of 1% of our Tyvaso DPI royalties in December 2023 and higher yields on our securities portfolio.
Previous wording
Interest expense on financing liability was $9.8 million for each of the years ended December 31, 2023 and 2022, and represented interest incurred on the sale lease-back transaction for our manufacturing facility in Danbury, CT, which was entered into in the fourth quarter of 2021.
Current wording
Interest expense on financing liability was $9.8 million for each of the years ended December 31, 2024 and 2023, and represented interest incurred on the sale lease-back transaction for our manufacturing facility in Danbury, CT.
Previous wording
Loss on available-for-sale securities for the years ended December 31, 2023 and 2022 was $0.2 million and $0.9 million, respectively, as a result of the change in the fair value of the investment that related to credit risk.
Current wording
Loss on available-for-sale securities for the year ended December 31, 2024 was $1.6 million as a result of modification of the Thirona investment. Loss on available-for-sale securities for the year ended December 31, 2023 was $0.2 million as a result of the change in the fair value of the investment that related to credit risk.
Previous wording
To supplement our consolidated financial statements presented under GAAP, we are presenting non-GAAP income (loss) from operations, non-GAAP net income (loss) and non-GAAP net income (loss) per share - basic, which are non-GAAP financial measures. We are providing these non-GAAP financial measures to disclose additional information to facilitate the comparison of past and present operations, and they are among the indicators management uses as a basis for evaluating our financial performance. We believe that these non-GAAP financial measures, when considered together with our GAAP financial results, provide management and investors with an additional understanding of our business operating results, including underlying trends.
Current wording
To supplement our consolidated financial statements presented under GAAP, we are presenting non-GAAP net income (loss) and non-GAAP net income (loss) per share - basic, which are non-GAAP financial measures. We are providing these non-GAAP financial measures to disclose additional information to facilitate the comparison of past and present operations, and they are among the indicators management uses as a basis for evaluating our financial performance. We believe that these non-GAAP financial measures, when considered together with our GAAP financial results, provide management and investors with an additional understanding of our business operating results, including underlying trends.
Previous wording
The following table reconciles our financial measures as reported in our consolidated statement of operations to a non-GAAP presentation as adjusted for the following select non-cash items: revenue from the 1% portion of sold royalties and interest expense on the related liability, stock-based compensation expense, gain on foreign currency transaction and gain on available-for-sale securities for the periods presented (in thousands, except per share amounts):
Current wording
The following table reconciles our financial measures for net income (loss) and net income (loss) per share ("EPS") for basic weighted average shares as reported in our consolidated statement of operations to a non-GAAP presentation:
Previous wording
Represents the non-cash portion of the 1% royalty on net sales of Tyvaso DPI earned during the fourth quarter of 2023 which is remitted to the royalty purchaser and recognized as royalties from collaborations in our consolidated statements of operations. Our revenues from royalties from collaborations during the fourth quarter of 2023 totaled $21.0 million, of which $2.1 million will be remitted to the royalty purchaser.
Current wording
Represents the non-cash portion of the 1% royalty on net sales of Tyvaso DPI earned during the year ended December 31, 2024 and fourth quarter of 2023 which is remitted to the royalty purchaser and recognized as royalties from collaborations in our consolidated statements of operations. Our revenues from royalties from collaborations during the year ended December 31, 2024 and fourth quarter of 2023 totaled$102.3 million and $21.0 million, respectively, of which$10.2 million and $2.1 million, respectively, is remitted to the royalty purchaser.
Previous wording
Our principal sources of liquidity are our cash, cash equivalents, and investments. Our primary uses of cash include the development of our product pipeline, the manufacturing and marketing of Afrezza and V-Go, manufacturing Tyvaso DPI, the funding of general and administrative expenses, and principal and interest payments on our financing liability and debt.
Current wording
Our principal sources of liquidity are our cash, cash equivalents, and investments. Our primary uses of cash include the development of our product pipeline, the manufacturing and marketing of Afrezza and V-Go, manufacturing Tyvaso DPI, the funding of selling, general and administrative expenses, and principal and interest payments on our financing liability and debt.
Previous wording
To date, we have funded our operations primarily through the sale of equity and convertible debt securities, from the receipt of upfront and milestone payments from collaborations, from borrowings, from sales of Afrezza and V-Go, from royalties and manufacturing revenue from UT as well as from proceeds from the sale of certain assets and the sale of a portion of our future royalties that we receive from UT.
Current wording
Historically, we have funded our operations primarily through the sale of equity and convertible debt securities, from the receipt of upfront and milestone payments from collaborations, from borrowings, from proceeds from the sale of certain assets and the sale of a portion of our future royalties that we receive from UT. More recently, sales of Afrezza and V-Go, and royalties and manufacturing revenue from UT, have become a more significant source of funding for our operations. In combination with our cash, cash equivalents and investments on hand, we believe that these sources of revenue, as well as the potential financing sources currently available to us, will allow us to meet our liquidity needs over the next 12 months and in the longer term.
Previous wording
We believe we will be able to meet our liquidity needs over the next twelve months, as well as longer-term needs, based on the balance of cash, cash equivalents and investments on hand, projected sales of Afrezza and V-Go, and projected royalties and manufacturing revenue from the production and sale of Tyvaso DPI. The following table presents our material cash requirements as of December 31, 2023 associated with contractual commitments for future periods (in thousands):
Current wording
We believe we will be able to meet our liquidity needs over the next 12 months, as well as longer-term needs, based on the balance of cash, cash equivalents and investments on hand, projected sales of Afrezza and V-Go, and projected royalties and manufacturing revenue from the production and sale of Tyvaso DPI. The following table presents our material cash requirements as of December 31, 2024 associated with contractual commitments for future periods (in thousands, except footnotes):
Previous wording
$104.1 million principal amount of indebtedness under the Sale-Leaseback Transaction, plus $123.3 million of imputed interest and $2.7 million in unamortized debt issuance costs. On November 8, 2021, we sold a portion of our manufacturing facility located in Danbury, CT to an affiliate of Creative Manufacturing Properties (the “Purchaser”) for a sales price of $102.3 million. We leased the property from the Purchaser for an initial term of 20 years, with four renewal options of five years each. The total annual rent under the lease started at approximately $9.5 million per year, subject to a 50% rent abatement during the first year of the lease, and increases annually by (i) 2.5% in the second through fifth year of the lease and (ii) 3% in the sixth and each subsequent year of the lease, including any renewal term. We are responsible for payment of operating expenses, property taxes and insurance for the leased property. Pursuant to the terms of the lease, we have four options to repurchase the property, in 2026, 2031, 2036 and 2041, for the greater of (i) $102.3 million or (ii) the fair market value of the leased property. Interest expense is calculated using an incremental borrowing rate of approximately 9%.
Current wording
$106.4 million principal amount of indebtedness under the Sale-Leaseback Transaction, plus $113.7 million of imputed interest. On November 8, 2021, we sold a portion of our manufacturing facility located in Danbury, CT to an affiliate of Creative Manufacturing Properties (the “Purchaser”) for a sales price of $102.3 million. We leased the property from the Purchaser for an initial term of 20 years, with four renewal options of five years each. The total annual rent under the lease started at approximately $9.5 million per year, subject to a 50% rent abatement during the first year of the lease, and increases annually by (i) 2.5% in the second through fifth year of the lease and (ii) 3% in the sixth and each subsequent year of the lease, including any renewal term. We are responsible for payment of operating expenses, property taxes and insurance for the leased property. Pursuant to the terms of the lease, we have four options to repurchase the property, in 2026, 2031, 2036 and 2041, for the greater of (i) $102.3 million or (ii) the fair market value of the leased property. Interest expense is calculated using an incremental borrowing rate of approximately 9.0%
Previous wording
$230.0 million aggregate principal amount of Senior convertible notes bearing interest at 2.50% payable semi-annually in arrears on March 1 and September 1 of each year, beginning on September 1, 2021 and maturing on March 1, 2026, unless earlier converted, redeemed or repurchased by us. The Senior convertible notes are convertible at an initial conversion price of approximately $5.21 per share of common stock. The conversion rate is subject to adjustment under certain circumstances in accordance with the terms of the Indenture.
Current wording
$36.3 million aggregate principal amount of senior convertible notes bearing interest at 2.50% payable semi-annually in arrears on March 1 and September 1 of each year, beginning on September 1, 2021 and maturing on March 1, 2026, unless earlier converted, redeemed or repurchased by us. The senior convertible notes are convertible at an initial conversion price of approximately $5.21 per share of common stock. The conversion rate is subject to adjustment under certain circumstances in accordance with the terms of the Indenture.
Previous wording
To date, we have been able to timely make our required interest payments, but we cannot guarantee that we will be able to do so in the future. If we fail to repay, repurchase or redeem our outstanding notes when required, we will be in default under the applicable instrument for such indebtedness, and may also suffer an event of default under the terms of other borrowing arrangements that we may enter into from time to time. Any of these events could have a material adverse effect on our business, results of operations and financial condition, up to and including the noteholders initiating bankruptcy proceedings or causing us to cease operations altogether. We may from time to time seek to retire or purchase our outstanding debt, including the Senior convertible notes, through cash purchases and/or exchanges for equity securities, in open market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions, and other factors. The amounts involved in any such transactions, individually or in the aggregate, may be material.
Current wording
To date, we have been able to timely make our required interest payments on our indebtedness. If we fail to repay, repurchase or redeem our outstanding notes when required, we will be in default under the applicable instrument for such indebtedness, and may also suffer an event of default under the terms of other borrowing arrangements that we may enter into from time to time. Any of these events could have an adverse effect on our business, results of operations and financial condition. We may from time to time seek to retire or purchase our outstanding debt, including the remaining senior convertible notes, through cash purchases and/or exchanges for equity securities, in open market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions, and other factors. The amounts involved in any such transactions, individually or in the aggregate, may be material.
Previous wording
In July 2013, we issued the Milestone Rights pursuant to the Milestone Rights Agreement to the Original Milestone Purchasers. The Milestone Rights were subsequently assigned the Milestone Purchasers. The Milestone Rights provide the Milestone Purchasers certain rights to receive payments of up to $90.0 million upon the occurrence of specified strategic and sales milestones, $55.0 million of which remain payable as of December 31, 2023. See Note 9 –Accrued Expenses and Other Current Liabilities, Note 10 –Borrowings and Note 16–Commitments and Contingencies for further information related to the Milestone Rights.
Current wording
In July 2013, we issued the Milestone Rights pursuant to the Milestone Rights Agreement to the Original Milestone Purchasers. The Milestone Rights were subsequently assigned the Milestone Purchasers. The Milestone Rights provide the Milestone Purchasers certain rights to receive payments of up to $90.0 million upon the occurrence of specified strategic and sales milestones, $50.0 million of which remain payable as of December 31, 2024. See Note 9 –Accrued Expenses and Other Current Liabilities and Note 16 –Commitments and Contingencies for further information related to the Milestone Rights.
Previous wording
In February 2018, we entered into a controlled equity offering sales agreement (the “CF Sales Agreement”) with Cantor Fitzgerald & Co. (“Cantor Fitzgerald”), as sales agent, pursuant to which we may offer and sell, from time to time, through Cantor Fitzgerald, shares of our common stock. Under the Sales Agreement, Cantor Fitzgerald may sell shares by any method deemed to be an “at-the-market offering” as defined in Rule 415 under the Securities Act of 1933, as amended. In February 2022, we filed a sales agreement prospectus under a registration statement on Form S-3 (File No. 333-262981) covering the sale of up to $50.0 million of our common stock through Cantor Fitzgerald under the CF Sales Agreement, of which $23.3 million remained available as of December 31, 2023.
Current wording
In February 2018, we entered into a controlled equity offering sales agreement (the “CF Sales Agreement”) with Cantor Fitzgerald & Co. (“Cantor Fitzgerald”), as sales agent, pursuant to which we may offer and sell, from time to time, through Cantor Fitzgerald, shares of our common stock. Under the CF Sales Agreement, Cantor Fitzgerald may sell shares by any method deemed to be an “at-the-market offering” as defined in Rule 415 under the Securities Act of 1933, as amended. In February 2022, we filed a sales agreement prospectus under a registration statement on Form S-3 covering the sale of up to $50.0 million of our common stock through Cantor Fitzgerald under the CF Sales Agreement, of which $23.3 million remained available as of December 31, 2024. The foregoing registration statement expired on February 24, 2025. On February 27, 2025, we and Cantor Fitzgerald amended and restated the CF Sales Agreement.
Previous wording
During the year ended December 31, 2023, we generated $34.1 million of cash from our operating activities, which primarily consisted of $241.3 million of reimbursements from a customer, which is inclusive of approximately $40.0 million of deferred revenue for collaborations and services, partially offset by $84.1 million of cost of goods sold, $46.7 million of selling expenses, $33.4 million of general and administrative expenses, $28.1 million of costs for research and development, $9.6 million of cash paid for interest on the financing liability and $8.7 million of cash paid for interest on notes.
Current wording
During the year ended December 31, 2023, we generated $34.1 million of cash from our operating activities, which consisted primarily of $241.3 million in cash receipts from customers (net of approximately $40.0 million of non-cash collaborations and services revenue which was previously deferred), partially offset by $84.1 million of cost of goods sold, $80.1 million of selling, general and administrative expenses, $28.1 million of research and development and $18.3 million of net cash paid for interest.
Previous wording
Cash used in investing activities of $2.0 million for the year ended December 31, 2023 was primarily due to the maturity of $119.2 million of debt securities, partially offset by the purchase of $79.1 million of debt securities and $42.4 million purchase of property and equipment.
Current wording
Cash used in investing activities of $2.0 million for the year ended December 31, 2023 was primarily due to the purchase of $79.1 million of held-to-maturity securities and $42.4 million of property and equipment, partially offset by the maturity of $119.2 million of held-to-maturity securities.
Previous wording
We believe we will be able to meet our near-term liquidity needs based on our cash, cash equivalents and investments on hand, sales of Afrezza and V-Go, and royalties and manufacturing revenue from the production and sale of Tyvaso DPI as well as through debt or equity financing, if necessary, for our long-term liquidity needs. Although net cash provided by operating activities reflected in our consolidated statements of cash flows was $34.1 million during the year ended December 31, 2023, we have not generated cash flows from operating activities on a consistent basis and we incurred a net loss during the year ended December 31, 2023. In addition, we expect to continue to incur expenditures for the foreseeable future in support of our manufacturing operations, sales and marketing costs for our products and development costs for other product candidates in our pipeline. As of December 31, 2023, we had capital resources of $238.5 million in cash and cash equivalents, $56.6 million in short-term investments and $7.2 million in long-term investments, and total principal amount of outstanding borrowings of $272.1 million.
Current wording
Although we have not generated net income or cash flows from operating activities on a consistent basis, we believe we will be able to meet our near-term liquidity needs based on our cash, cash equivalents and investments on hand, sales of Afrezza and V-Go, and royalties and manufacturing revenue from the production and sale of Tyvaso DPI as well as through debt or equity financing, if necessary, for our long-term liquidity needs. We expect to continue to incur expenditures for the foreseeable future in support of our manufacturing operations, sales and marketing costs for our products and development costs for other product candidates in our pipeline. As of December 31, 2024, we had cash, cash equivalents and investments of $202.7 million, which was comprised of capital resources of $46.3 million in cash and cash equivalents, $150.9 million in short-term investments and $5.5 million in long-term investments, and total principal amount of outstanding borrowings of $36.3 million.
Previous wording
We believe our resources will be sufficient to fund our operations for the next twelve months from the date of issuance of our consolidated financial statements included in Part II, Item 8 – Financial Statements and Supplementary Data.
Current wording
We believe our resources will be sufficient to fund our operations for the next 12 months from the date of issuance of our consolidated financial statements included in Part II, Item 8 – Financial Statements and Supplementary Data.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Significant judgment is required in estimating gross-to-net adjustments, historical experience, payer channel mix unbilled claims, claim submission time lags and inventory levels in the distribution channel.