On March 1, 2021 Perrigo Company plc (NYSE; TASE: PRGO), a leading provider of Quality, Affordable Self-Care Products, reported financial results for the fourth quarter and fiscal year ended December 31, 2020 (Press release, Perrigo Company, MAR 1, 2021, View Source [SID1234575860]).

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President and CEO, Murray S. Kessler commented, "I am deeply proud of how our Perrigo team safely managed through the complications brought on by the COVID-19 pandemic and, at the same time, continued to make major progress on our Consumer Self-Care transformation. Thanks to their relentless dedication, we were able to provide our essential and affordable products to consumers who needed them, while delivering value to customers and growing our business. Our 2020 financial results reflect strong performance across the business as we delivered record Worldwide Consumer net sales, despite the fourth quarter impact from the extremely low incidence of cough/cold illnesses worldwide and the incremental costs associated with keeping our facilities safely running without interruption. We remain focused on creating value for shareholders through our commitment to delivering 3% net sales growth, 5% adjusted operating income growth and 7% adjusted earnings per share growth from continuing operations in 2021 and beyond."

Kessler continued, "With today’s agreement to divest the RX Pharmaceuticals business, we have now completed our portfolio reconfiguration to return Perrigo to a pure-play consumer self-care company, while providing us with the financial flexibility to build our business and deliver on our growth targets."

Kessler concluded, "At this point all of the commercial pieces of our transformation are in place and Perrigo is poised to create significant value. That is why I have agreed to the Board’s request to extend my contract by 3 years – to finish the job on Perrigo’s transformation. I am excited about what we have accomplished to date, and even more excited by all that remains to accomplish going forward."

Refer to Tables I – IV at the end of this press release for a reconciliation of non-GAAP adjustments to the current year and prior year periods and additional non-GAAP information. The Company’s reported results are included in the attached Consolidated Statements of Operations, Balance Sheets and Statements of Cash Flows.

Fourth Quarter 2020 Consolidated Results Versus Fourth Quarter 2019

Consolidated net sales for the fourth quarter were $1.3 billion, a decrease of $33 million or 2.5%. Organic net sales declined 4.7%, which included a negative 5.0 percentage points impact due to lower worldwide net sales of cough/cold products.

Consolidated net sales gains were driven by 1) $30 million from the Dr. Fresh and Eastern European dermatology brands acquisitions, 2) organic growth in Worldwide Consumer, excluding the impact from cough/cold, of $23 million, and 3) $17 million in net favorable currency movements. These consolidated gains were more than offset by 1) a decline of $65 million across all segments due to lower cough/cold net sales, 2) a $19 million decline in the RX Pharmaceuticals ("RX") segment, excluding cough and cold prescription products, and 3) $19 million from divested businesses.

Reported net loss was $175 million, or $1.29 per diluted share, versus a net loss of $19 million, or $0.14 per diluted share in the prior year period. Excluding certain charges as outlined in Table I, fourth quarter 2020 adjusted net income was $127 million, or $0.93 per diluted share, versus $145 million, or $1.06 per diluted share, for the same period last year resulting in a 12.3% decrease in adjusted diluted EPS. This decrease was due primarily to the impact from cough/cold products of approximately $0.11 per diluted share and divested businesses of $0.05 per diluted share.

Fourth Quarter 2020 Worldwide Consumer Self-Care Results Versus Fourth Quarter 2019

Worldwide Consumer is comprised of the CSCA segment, the Consumer Self-Care International ("CSCI") segment and Corporate.

Worldwide Consumer Self-Care fourth quarter net sales decreased $14 million, or 1.3%, to $1.1 billion. Organic net sales decreased 3.8%, which included a negative 6.0 percentage point impact due to lower net sales of cough/cold products compared to the prior year.

Fourth quarter reported gross profit margin was 36.5%. Adjusted gross profit margin of 38.7%, was 60 basis points lower year-over-year as favorable product mix was more than offset by higher input costs and the impact from divested businesses.

Reported operating margin was 4.2%. Adjusted operating margin decreased 320 basis points year-over-year to 11.1% due primarily to gross profit flow-through, higher advertising and promotion expenditures in CSCI and higher corporate expenses.

CSCA Fourth Quarter 2020 Results Versus Fourth Quarter 2019

Consumer Self-Care Americas fourth quarter net sales of $701 million, were 1.4% or $10 million lower than the prior year. Organic net sales decreased 4.7% and included a negative 5.4 percentage point impact due to lower net sales of cough/cold products compared to the prior year and a negative 0.7 percentage point impact related to a timing benefit in the prior year of a pre-build of contract pack inventory in the infant nutrition business.

OTC net sales were driven by 1) strong e-commerce growth as consumers continued to shift purchasing towards online where Perrigo has greater market share, which more than offset lower traditional brick and mortar purchases as measured by IRI MULO, 2) favorable consumer conversion to Perrigo products in the Digestive Health category, 3) the incremental benefit from new product sales led by Prevacid, Diclofenac sodium topical gel 1%, and Esomeprazole Mini, and 4) the Skincare and Personal Hygiene category led by store brand minoxidil. More than offsetting these drivers were 1) lower cough/cold net sales resulting from extremely low levels of cough/cold and flu illnesses, which impacted the Upper Respiratory and Pain & Sleep Aids categories, and 2) normal pricing pressure.

Perrigo omnichannel POS (point of sale) declined 0.6% for the 13-weeks ending December 27, 2020, compared to an estimated decline in store brand OTC omnichannel POS data of 5.7%, leading to a Perrigo store brand share gain of 100 basis points. Total OTC omnichannel POS data declined an estimated 3.5% in the categories in which Perrigo competes, resulting in a Perrigo penetration share gain of 14 basis points versus national brands.

Net sales growth in the Oral Self-Care category were driven by 1) the Dr. Fresh acquisition, 2) base business growth led by record quarterly shipments to customers and growth in the Plackers brand, and 3) continued momentum in e-commerce.

In the Nutrition category, net sales growth in e-commerce was more than offset by 1) operational challenges that caused a shortfall in achieving normal customer service levels leading to a decline in market share, and 2) a benefit in the prior year quarter due to a pre-build of contract pack inventory.

Fourth quarter reported gross margin was 32.3%. Adjusted gross margin of 33.0% was 80 basis points lower than the prior year as favorable product mix, including higher margin new products, were more than offset by normal pricing pressure and lower manufacturing efficiencies in infant formula.

Reported operating margin was 16.8%. Adjusted operating margin decreased 160 basis points to 18.8%, due primarily to gross margin flow-through and planned investments in current and future OTC brand launches.

Fourth Quarter 2020 CSCI Results Versus Fourth Quarter 2019

Consumer Self-Care International net sales were $352 million, a decrease of $4 million, or 1.1%. Organic net sales were 1.9% lower and included a negative 7.1 percentage point impact due to lower net sales of cough/cold products compared to the prior year.

The decline in net sales was due primarily to 1) lower cough/cold net sales resulting from extremely low levels of cough/cold and flu illnesses, which impacted the Upper Respiratory category, 2) lower consumer demand for anti-parasite products within the Skincare & Personal Hygiene category due primarily to COVID-19 related school closings and limited travel, and 3) divested businesses of $19 million and discontinued products of $5 million. These were partially offset by 1) new products, including line extensions in the ACO dermatology product line, 2) higher net sales in both the VMS (vitamins, minerals and supplements) category and the Pain & Sleep Aids category, each of which benefited from consumer behavior surrounding COVID-19, and 3) $18 million in favorable currency movements.

Reported gross margin was 44.8%. Adjusted gross margin of 50.0% declined 40 basis points due primarily to the impact from divested businesses.

Reported operating margin was (3.8)%. Adjusted operating margin decreased 430 basis points to 9.6% due to higher advertising and promotion spend and the impact from divested businesses.

RX Fourth Quarter 2020 Results Versus Fourth Quarter 2019

RX net sales of $236 million were $20 million, or 7.7%, lower than the prior year due primarily to $13 million in discontinued lower-margin distribution products and $2 million due to lower net sales of cough/cold products compared to the prior year. These were partially offset by improved customer service levels and higher net sales in the Israeli distribution business.

Reported gross margin was 35.9% while adjusted gross margin was 44.9%, an increase of 170 basis points. The increase in adjusted gross margin was due primarily to an improvement in customer service levels and favorable product mix. These benefits were partially offset by normal pricing pressure.

Reported operating margin was (40.8)% driven primarily by a $144 million goodwill impairment charge taken in the quarter. Adjusted operating margin was 29.4%, an increase of 540 basis points due to gross margin flow-through and lower operating expenses, of which $11 million was related to the generic albuterol pre-commercialization R&D costs in the prior year that did not reoccur.

Fiscal Year 2020 Results

Consolidated Fiscal 2020 Results Versus Fiscal 2019

Consolidated net sales were $5.1 billion, an increase of 5.0% compared to the prior year. Excluding the impact of currency and divested businesses, net sales increased 6.4%. This increase was driven by 1) new product sales of $304 million, 2) net sales from acquisitions of $214 million, which included a half-year benefit from the prior year Ranir acquisition and 9-months from the Dr. Fresh acquisition, 3) strong organic growth in CSCA, and 4) robust e-commerce growth. These drivers were partially offset by 1) divested businesses of $60 million and discontinued products of $51 million, 2) normal levels of pricing pressure, and 3) lower net sales of cough/cold products compared to the prior year. Consolidated organic net sales growth of 1.9% included a negative 1.4 percentage point impact due to lower worldwide net sales of cough/cold products.

Reported net loss was $163 million, or a loss of $1.19 per diluted share, versus reported net income of $146 million, or $1.07 per diluted share, in the prior year. Excluding certain charges as outlined in Table I, fiscal 2020 adjusted net income was $552 million, or $4.02 per diluted share, versus $550 million, or $4.03 per diluted share, in fiscal 2019. Strong organic performance in CSCA, robust e-commerce growth across the portfolio and the Oral Self-Care acquisitions offset lower worldwide net sales of cough/cold products, the impact from divested businesses and COVID-19 related costs.

Fiscal 2020 Worldwide Consumer Self-Care Results Versus Fiscal 2019

Worldwide Consumer net sales were a fiscal year record $4.1 billion, an increase of 6.0% compared to the prior year. Excluding the impact of currency and divested businesses, net sales were 7.9% higher year-over-year. Organic net sales were up 2.3%, despite a negative 1.7 percentage point impact due to lower net sales of cough/cold products compared to the prior year.

Fiscal 2020 reported gross profit margin was 36.7%. Adjusted gross profit margin of 38.9% was 140 basis points lower due primarily to 1) the Oral Self-Care acquisitions, 2) changes in global product mix associated with store brand products growing at a faster rate than branded products, and 3) COVID-19 related costs.

Reported operating margin was 7.2%. Adjusted operating margin was 13.2%, or 90 basis points lower as gross profit flow-through and higher corporate costs were partially offset by cost savings from Project Momentum and lower advertising and promotion expenditures.

CSCA Fiscal 2020 Results Versus Fiscal 2019

Consumer Self-Care Americas achieved record fiscal year net sales of $2.7 billion, an increase of $222 million, or 9.0%, which included $168 million attributable to the Ranir and Dr. Fresh acquisitions and a negative $11 million impact from foreign currency. Organic net sales were up 3.4%, including a negative 1.6 percentage point impact due to lower net sales of cough/cold products compared to the prior year.

The increase in OTC net sales were driven by 1) favorable consumer conversion to products in the Digestive Health category, 2) the increase of consumer COVID-19 related demand experienced in the first half of 2020 in the Pain and Sleep Aids category, and 3) the incremental impact of new product sales led by Prevacid, Diclofenac sodium topical gel 1%, and Esomeprazole Mini, and 4) continued robust e-commerce growth. These increases were partially offset by 1) lower cough/cold net sales resulting from extremely low levels of cough/cold and flu illnesses, which impacted the Upper Respiratory and Pain & Sleep Aids categories, and 2) normal pricing pressure.

Higher net sales in the Oral Self-Care category were driven by 1) a half-year benefit from the prior year Ranir acquisition and 9-months from the current year Dr. Fresh acquisition, 2) growth in the base business and the Plackers brand, and 3) continued momentum in e-commerce.

The decrease in Nutrition net sales was due primarily to the prior year pre-build of contract pack inventory and operational challenges that led to a shortfall in achieving normal customer service levels, which more than offset new product sales from the launch of infant formula at a major retailer in December 2019.

Perrigo omnichannel POS data increased 7.1% for the 52-weeks ending December 27, 2020, compared to an estimated increase in store brand OTC omnichannel POS data of 1.9%, leading to Perrigo store brand share gains versus competitors of 100 share points. Total OTC omnichannel POS data grew an estimated 4.8% in the categories in which Perrigo competes, resulting in Perrigo penetration share gains of 13 share points.

Reported gross profit margin was 31.9%. Adjusted gross profit margin of 32.7% was 90 basis points lower as favorable product mix and savings on raw materials were more than offset by normal pricing pressure, COVID-19 related costs and lower manufacturing efficiencies in infant formula.

Reported operating margin was 17.5%. Adjusted operating margin of 19.6% was 10 basis points lower as gross profit flow-through was mostly offset by cost savings from Project Momentum.

Fiscal 2020 CSCI Results Versus Fiscal 2019

CSCI net sales increased 0.8% to $1.4 billion. Excluding divested businesses of $40 million and favorable currency movements of $4 million, net sales were higher by 3.6%. Organic net sales were flat and included a negative 1.8 percentage point impact due to lower net sales of cough/cold products compared to the prior year.

Net sales growth was driven by 1) new product sales of $98 million driven by additions to the XLS-Medical Forte 5 brand and new products in the ACO dermatology portfolio, 2) an incremental $45 million in net sales from the acquisitions of Ranir and the Eastern European dermatology brands, 3) strong consumer demand in the VMS and Pain & Sleep Aids categories, each of which benefited from consumer behavior surrounding COVID-19, and 4) solid performance in the U.K. store brand business. CSCI also benefited from strong growth in e-commerce.

This growth was partially offset by 1) lower consumer demand for anti-parasite and weight management products within the Skincare & Personal Hygiene and Healthy Lifestyle categories, respectively, due primarily to consumer behavior surrounding COVID-19, including related school closings and country-specific lockdowns, 2) lower cough/cold net sales resulting from extremely low levels of cough/cold and flu illnesses, which impacted the Upper Respiratory category, and 3) divested businesses of $40 million and discontinued products of $10 million.

Reported gross margin was 45.9%. Adjusted gross margin of 50.8% declined 160 basis points due primarily to 1) the full-year inclusion of Ranir and improved performance in the U.K. store brand business, both of which have relatively lower gross margins than the overall portfolio, 2) impact from divested businesses, and 3) higher input costs on a particular OTC brand.

Reported operating margin was 2.3%. Adjusted operating margin of 14.3% declined 140 basis points as gross margin flow-through and transformation investments were offset by the relatively higher operating margin in Ranir, Project Momentum cost savings and lower advertising and promotion expense.

RX Fiscal 2020 Results Versus Fiscal 2019

RX net sales increased $8 million to $975 million due primarily to new product sales of $165 million, which were mostly offset by 1) normal pricing pressure, 2) discontinued lower-margin distribution products of $35 million, 3) a $31 million impact from the reserve for the estimated generic albuterol sulfate recall costs, and 4) fewer patient visits to dermatologists and other physicians related to COVID-19, which led to lower U.S. prescription volumes.

Reported gross margin was 32.3% and adjusted gross margin was 41.0%. The 260 basis point decline in adjusted gross margin was due primarily to less favorable product mix and costs for the generic albuterol recall in the third quarter of 2020.

Reported operating margin of (18.2)% was driven primarily by $347 million in goodwill impairment charges. Adjusted operating margin of 26.2% was 110 basis points lower as gross margin flow-through was partially offset by lower operating expenses, of which $11 million was related to the generic albuterol pre-commercialization R&D costs in the prior year that did not reoccur.

Share Repurchase

In the fourth quarter, the Company repurchased 3.4 million of its shares for approximately $164 million under its approved $1 billion share repurchase authorization program.

Reached Agreement to Sell RX Pharmaceuticals Business

Perrigo announced today, in a separate release, a definitive agreement to sell its Generic Rx Pharmaceuticals business to Altaris Capital Partners, LLC for total consideration of $1.55 billion, including $1.5 billion in cash and more than $50 million in other considerations. This transaction establishes Perrigo as a pure-play global consumer self-care leader with top-tier Consumer Packaged Goods fundamentals.

Fiscal 2021 Outlook

For fiscal 2021, Perrigo Worldwide Consumer is committed to delivering 3% organic net sales growth, 5% adjusted operating income growth and 7% adjusted diluted EPS growth, in line with CPG peers that trade at much higher multiples. Based on a preliminary estimate of the accounting treatment to classify Rx as discontinued operations, translates to an adjusted diluted EPS range of $2.50 to $2.70.

The Company cannot reconcile its expected adjusted diluted earnings per share to diluted earnings per share under "Fiscal 2021 Outlook" without unreasonable effort because certain items that impact net income and other reconciling metrics are out of the Company’s control and/or cannot be reasonably predicted at this time.

On March 1, 2021 Athenex, Inc., (NASDAQ: ATNX), a global biopharmaceutical company dedicated to the discovery, development, and commercialization of novel therapies for the treatment of cancer and related conditions, reported a corporate and financial update for the fourth quarter and full year ended December 31, 2020 (Press release, Athenex, MAR 1, 2021, View Source [SID1234575859]).

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Oral Paclitaxel Plus Encequidar Update

As announced by Athenex in a separate press release this morning, the U.S. Food and Drug Administration (FDA) has issued a complete response letter (CRL) for the Company’s New Drug Application (NDA) for oral paclitaxel and encequidar for the treatment of metastatic breast cancer. In the CRL, the FDA expressed the following:

Concerns about safety risks associated with increase in neutropenia-related sequelae
Concerns regarding the primary endpoint assessment conducted by the Blinded Independent Central Review (BICR)
Recommendation that Athenex conduct a new clinical trial in a patient population with metastatic breast cancer representative of the population in the U.S.
"We are surprised and disappointed by the FDA’s decision to issue a complete response letter for oral paclitaxel and encequidar," said Johnson Lau, Chief Executive Officer of Athenex. "Based on the clinical benefits demonstrated by the Phase III trial results, we are committed to exploring our available options to obtain approval for oral paclitaxel and encequidar. Additionally, we will undertake a thorough review of our organization to best position ourselves to create value for all stakeholders as we move forward."

Fourth Quarter 2020 and Recent Business Updates

Clinical Programs:

Oral Paclitaxel Plus Encequidar for Metastatic Breast Cancer

Athenex received a Complete Response Letter from the FDA for the NDA for oral paclitaxel for metastatic breast cancer
On December 9, 2020, the Company presented four abstracts associated with oral paclitaxel plus encequidar for the treatment of metastatic breast cancer and angiosarcoma at the 2020 San Antonio Breast Cancer Symposium
Klisyri for Actinic Keratosis

On December 14, 2020, the U.S. Food and Drug Administration (FDA) approved Klisyri (tirbanibulin), 1% for the treatment of actinic keratosis of the face or scalp
In February 2021, the New England Journal of Medicine published Phase 3 trial results on the efficacy and safety of tirbanibulin ointment for the topical treatment of actinic keratosis of the face or scalp
Almirall, S.A. (BLM: ALM), Athenex’s U.S. partner, launched Klisyri in the U.S. on February 18, 2021
Commercial Business:

Product sales growth in the fourth quarter were primarily driven by sales of specialty pharmaceutical products used to treat patients hospitalized with COVID-19
Athenex Pharmaceutical Division (APD) currently markets a total of 34 products with 63 SKUs
Athenex Pharma Solutions (APS) currently markets 6 products with 19 SKUs
Key Anticipated Future Milestones

Request a meeting with the FDA to discuss and align on next steps to obtain approval for oral paclitaxel plus encequidar in metastatic breast cancer
Identify and undertake appropriate adjustments for the company pending the outcome of the FDA meeting
Begin expansion portion of the oral paclitaxel plus pembrolizumab Phase I trial
Present the oral paclitaxel plus pembrolizumab Phase I trial data at a medical conference in 2021
Anticipate EMA approval of Klisyri in 2021
TCR-T NY-ESO-1 IRB approval and initiate P1 trial enrollment in 1H 2021
Anticipate results from the I-SPY 2 trial of oral paclitaxel plus anti PD-1 in 2022
Fourth Quarter and Full Year 2020 Financial Highlights

Product sales for the three months ended December 31, 2020 were $21.8 million, up from $14.1 million for the three months ended December 31, 2019, which represents a 54% increase. Product sales for the full year in 2020 were $105.3 million, up from $80.5 million for the full year in 2019, which represents a 31% increase. The increase was primarily driven by the impact of the global health pandemic which led to the increased demand for COVID-19 related drugs, and the launch of additional products, resulting in a significant increase in specialty product sales. The product sales increase was partially offset by a decrease in API and 503B products sales, which was attributable to the reduced production and external sales of API, and the discontinued vasopressin sales.

Collaboration and license revenue for the three months and year ended December 31, 2020 were $28 thousand and $39.1 million, respectively, compared to $20.3 million and $20.7 million, respectively, for the same periods in 2019. The collaboration and license revenue recognized in the full year of 2020 was primarily attributable to the 2019 Xiangxue License Agreement, while the revenue in the full year of 2019 was primarily attributable to a milestone achieved pursuant to the license agreement entered with Almirall in December 2017.

Total revenues for the three months and year ended December 31, 2020 were $21.8 million and $144.4 million, respectively, compared to $34.4 million and $101.2 million, respectively, for the same periods in 2019.

Cost of sales totaled $18.3 million for the three months ended December 31, 2020, an increase of 16%, as compared to $15.7 million for the three months ended December 31, 2019. Cost of sales totaled $95.4 million for the full year in 2020, an increase of 37%, as compared to $69.6 million for the full year in 2019. The increase in cost of specialty product sales was generally in-line with the increase in revenue, and we continued to incur fixed costs despite decreased production at our API and 503B facilities. in the fourth quarter, the increase in product sales outpaced that of cost of sales, primarily as a result of an uptake in the blended product margin of our specialty product portfolio.

Research & Development (R&D) expenses totaled $18.3 million for the three months ended December 31, 2020, a decrease of 16%, as compared to $21.8 million for the three months ended December 31, 2019. R&D expenses totaled $75.9 million for the full year in 2020, a decrease of 10%, as compared to $84.4 million for the full year in 2019. This was primarily attributable to a decrease in clinical operations expenses, drug development costs for specialty products and certain licensing costs. The decrease in R&D expenses in the full year of 2020 was partially offset by an increase in medical affairs expenses related to preparing our proprietary drugs for commercialization, API development costs, and expenses related to the expansion of our R&D teams in Latin America and Taiwan.

Selling, General & Administrative (SG&A) expenses totaled $31.4 million for the three months ended December 31, 2020, an increase of 73%, as compared to $18.1 million for the three months ended December 31, 2019. SG&A expenses totaled $96.9 million for the full year in 2020, an increase of 45%, as compared to $66.7 million for the full year in 2019. This was primarily attributable to an increase in commercial preparations costs associated with the possible approval of Oral Paclitaxel, expanded work forces at our manufacturing facilities and an increase in general and administrative costs related to professional service fees, IT costs, insurance and other operational costs. In addition, in the three months ended December 31, 2020, we recorded a provision for a potential credit loss of $8.9 million related to an outstanding balance due from Xiangxue and associated expenses resulting from currency conversion. This provision is related to the license revenue we recognized in the third quarter of 2020. As of February 28, 2021, we have received $1.5 million from Xiangxue.

Interest expense totaled $4.4 million and $1.7 million for the three months ended December 31, 2020 and 2019, respectively. Interest expense totaled $11.2 million and $7.0 million for the full year in 2020 and 2019, respectively. In June 2020, we refinanced the $50 million long-term debt with Perceptive, with an up to $225 million long-term credit facility with Oaktree. In the three months ended December 31, 2020, we received net proceeds of $24.25 million from the Oaktree facility upon achievement of the tirbanibulin FDA approval milestone. As of December 31, 2020, we had drawn down $150 million, out of the $225 million Oaktree facility.

We recognized a $7.2 million loss on the extinguishment of debt related to the termination of the senior secured loan agreement with Perceptive and a $3.0 million loss on the partial extinguishment of debt related to the assignment of a portion of the senior secured loan from Oaktree’s co-investors to Sagard during the year ended December 31, 2020. We did not incur expenses of similar nature in 2019.

For the full year in 2020, we incurred income tax expense of $4.1 million, compared to $0.9 million for the same period in 2019. The increase was primarily attributable to foreign income tax withholdings on our revenue earned under our out-license arrangements.

Net losses attributable to Athenex for the three months and year ended December 31, 2020 were $49.5 million and $146.2 million, respectively, or ($0.53) and ($1.72) per diluted share, respectively, as compared to a net loss of $21.7 million and $123.7 million, or ($0.28) and ($1.67) per diluted share, for the same periods in 2019. Excluding the credit loss provision of $8.9 million during the three months ended December 31, 2020, net loss attributable to Athenex for the quarter was $40.6 million or ($0.43) per diluted share. Excluding the one-time debt extinguishment expenses of $10.3 million and the $8.9 million credit loss provision during the year ended December 31, 2020, net loss attributable to Athenex for the full year in 2020 was $127.0 million, or ($1.49) per diluted share.

As of December 31, 2020, the Company had cash, cash equivalents and restricted cash of $86.1 million and short-term investments of $138.6 million.

2021 Financial Guidance

In terms of product sales guidance, the Company is limiting financial guidance to only the existing product portfolio, which excludes any proprietary products, until meaningful sales data from the proprietary product Klisyri becomes available. In 2020, the Company recorded a significant amount of revenues from international customers as a result of the global pandemic. However, the Company does not see these revenues as recurring in nature, while it has been continuing to expand its product portfolio. The Company currently expects its product sales in 2021, excluding any royalties from Klisyri, to be in line with 2020 levels.

The Company expects that its cash, cash equivalents, restricted cash, and short-term investments as of December 31, 2020, will enable it to meet its current operational liquidity needs and fund operations into the second quarter of 2022. The Company’s estimates are based on relevant conditions that are known and reasonably knowable at the date of these consolidated financial statements being available for issuance, and are subject to change due to changes in business, industry or macroeconomic conditions. The cash runway described above does not reflect additional funding available through the existing Senior Credit Agreement with Oaktree, or the Revenue Interest Financing Agreement with Sagard.

Conference Call and Webcast Information

Athenex will host a conference call and live audio webcast today, Monday, March 1, 2021, before the market open, at 8:00 am Eastern Time to discuss the financial results and provide a business update.

To participate in the call, dial (877) 407-0784 (domestic) or (201) 689-8560 (international) fifteen minutes before the conference call begins and reference the conference passcode 13715950. The live conference call and replay can also be accessed by audio webcast here and also on the Investor Relations section of the Company’s website, located at View Source

On March 1, 2021 Zai Lab Limited (NASDAQ: ZLAB; HKEX: 9688), an innovative commercial-stage biopharmaceutical company, reported financial results for the second half and full year of 2020, along with corporate updates (Press release, Zai Laboratory, MAR 1, 2021, View Source [SID1234575858]).

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"2020 was another year of great accomplishment for Zai Lab," said Dr. Samantha Du, Founder, Chairperson and Chief Executive Officer of Zai Lab. "We successfully launched ZEJULA for both second-line and first-line ovarian cancer and Optune for glioblastoma in China. We submitted NDAs and were granted priority reviews by China’s National Medical Products Administration (NMPA) for both QINLOCK for advanced gastrointestinal stromal tumors (GIST) and NUZYRA for community-acquired bacterial pneumonia (CABP) and acute bacterial skin and skin structure infections (ABSSSI) in China. We continued to expand our pipeline by forming new strategic partnerships with four companies for five compounds that we believe can address significant unmet medical needs. We and our partners continued to execute in clinical development, and we now have 21 product candidates, including 17 in clinical development, 11 in late-stage development and five that have been approved in the United States. Our pipeline of internally developed products with global rights grew to seven, including three in global clinical development.

"Looking ahead to 2021, we expect to receive approval for and launch QINLOCK and NUZYRA in China, bringing our total number of commercial products to four. In addition, ZEJULA for second-line ovarian cancer has been included in the National Reimbursement Drug List (NRDL), and we expect this will drive strong volume growth for the product this year and beyond. We also plan to submit regulatory filings for Tumor Treating Fields in mesothelioma and for MARGENZA in HER2-positive breast cancer in China in 2021. We expect to hold regulatory discussions with the NMPA regarding a potential accelerated regulatory pathway for efgartigimod, which has already been filed by our partner argenx for generalized myasthenia gravis in the United States. And we expect to obtain new clinical data for many products and product candidates.

"We are focused on building disease strongholds in China in three therapeutic areas — oncology, autoimmune disorders and infectious diseases. Within oncology, we have focused on five cancer franchises that account for over half of all new cancer patients in China. These cancer franchises include lung cancer and gastric cancer, where we have a world-class portfolio of product candidates, as well as women’s cancer, brain cancer and hematology. We plan to continue to expand this product pipeline both vertically within these areas of focus and horizontally into new therapeutic areas of significant unmet medical need.

"Over the next three years, our mission is to become a leading global biopharmaceutical company. In addition to seeking to deliver a steady stream of approvals and launches in China from our existing pipeline and forming new strategic collaborations and transformative partnerships, we aim to discover and develop innovative medicines. To accomplish our mission, we will continue to build upon our current scale, which currently consists of nearly 1,200 employees across eight operational locations around the world. While the challenges of COVID-19 continue for all of us, we at Zai Lab remain committed to extending our track record of execution in pursuit of our overall goal of improving human health globally."

Recent Product Highlights and Anticipated Milestones

Oncology

ZEJULA (niraparib)

ZEJULA is an oral, once-daily small-molecule poly ADP-ribose polymerase (PARP) 1/2 inhibitor. It is the only PARP inhibitor approved in the United States, the European Union and China as a monotherapy for patients with advanced ovarian cancer, regardless of their biomarker status.

Second-half 2020 Accomplishments

In December 2020, we announced that ZEJULA was included in the NRDL released by China’s National Healthcare Security Administration.

In September 2020, the NMPA approved the supplemental New Drug Application (sNDA) for ZEJULA as a maintenance treatment for adult patients with advanced epithelial ovarian, fallopian tube or primary peritoneal cancer who are in a complete or partial response to first-line platinum-based chemotherapy.

In September 2020, we announced detailed positive results from the NORA study, the Phase 3 randomized, double-blind, placebo-controlled study of ZEJULA as a maintenance therapy in patients in China with recurrent ovarian cancer. The NORA study demonstrated a significant progression-free survival (PFS) benefit for ZEJULA, regardless of biomarker status, with an improved safety profile when given in an individualized starting dose regimen.

Since its commercial launch in January 2020 in China, ZEJULA has been listed in 67 commercial health insurance plans and 44 supplemental insurance plans initiated by provincial or municipal governments.
Anticipated 2021 Zai Milestones

Complete enrollment of the Phase 1b study of ZEJULA in combination with tebotelimab (PD-1 x LAG-3) in gastric cancer.

Announce topline results of the China Phase 3 PRIME study of ZEJULA in patients with first-line ovarian cancer in the second half.

Submit the sNDA for late-line ovarian cancer treatment in the second half.
Continue to explore additional indications and combination opportunities.
Tumor Treating Fields

Tumor Treating Fields is a cancer therapy that uses electric fields tuned to specific frequencies to disrupt cell division, inhibiting tumor growth and potentially causing cancer cell death.

Second-half 2020 Accomplishments

In August 2020, we launched Optune LuaTM for the treatment of malignant pleural mesothelioma (MPM) in Hong Kong.

Since its launch in June 2020, Optune has been listed in 10 supplemental insurance plans and is the first innovative medical device supported by commercial health insurance in China.
Anticipated 2021 Zai Milestones

Submit a Marketing Authorization Application (MAA) for MPM.

Join the global Phase 3 pivotal LUNAR trial in non-small cell lung cancer (NSCLC), the Phase 3 pivotal PANOVA-3 trial in locally advanced pancreatic cancer, the Phase 3 pivotal INNOVATE-3 trial in recurrent ovarian cancer and the Phase 3 pivotal METIS trial in brain metastases from non-small cell lung cancer.

Complete enrollment of the Phase 2 pilot trial in first-line gastric adenocarcinoma.
Anticipated 2021 Partner Milestones

Obtain final data from the Phase 2 HEPANOVA trial in advanced liver cancer in the first half.

Complete the interim analysis of the Phase 3 pivotal INNOVATE-3 trial in recurrent ovarian cancer in the second half.

Complete the interim analysis of the Phase 3 pivotal LUNAR trial in NSCLC in the second half.
QINLOCK (ripretinib)

QINLOCK is a switch-control tyrosine kinase inhibitor engineered to broadly inhibit KIT- and PDGFRα-mutated kinases. It is the only therapeutic approved in the United States for advanced GIST patients who have received prior treatment with three or more kinase inhibitors in the all-comer setting.

Second-half 2020 and 2021 Accomplishments

In March 2021, the Hong Kong Department of Health approved QINLOCK in Hong Kong for the treatment of adult patients with advanced GIST who have received prior treatment with imatinib, sunitinib, and regorafenib.

In December 2020, we announced dosing of the first patient with QINLOCK in Greater China for the second-line GIST registrational bridging study.

In August 2020, the NMPA granted priority review for the New Drug Application (NDA) for QINLOCK for the treatment of fourth-line GIST.

In July 2020, the NMPA accepted the NDA submission of QINLOCK for the treatment of fourth-line GIST.
Anticipated 2021 Zai Milestone

Potential NMPA approval and commercial launch of QINLOCK for the treatment of fourth-line GIST in the first half.
Anticipated 2021 Partner Milestone

Obtain topline data from the INTRIGUE Phase 3 study of QINLOCK in patients with second-line GIST in the second half.
Odronextamab

Odronextamab is a bispecific monoclonal antibody designed to trigger tumor killing by linking and activating a cytotoxic T-cell (binding to CD3) to a lymphoma cell (binding to CD20).

Anticipated 2021 Zai Milestone

Enroll the first patient in Greater China in the global Phase 2 potentially pivotal program in the first half, subject to feedback from the U.S. Food and Drug Administration (FDA).
Anticipated 2021 Partner Milestones

Complete enrollment of the Phase 2 potentially pivotal program in B-cell non-Hodgkin lymphoma (B-NHL).

Initiate confirmatory OLYMPIA Phase 3 trials in combination with chemotherapy in follicular lymphoma (FL) and diffuse large B-cell lymphoma (DLBCL) and explore other combination opportunities.

Initiate development of a subcutaneous formulation.
Repotrectinib

Repotrectinib is a next-generation tyrosine kinase inhibitor (TKI) designed to effectively target ROS1 and TRK A/B/C, with the potential to treat TKI-naïve or TKI-pretreated patients.

Anticipated 2021 Zai Milestone

Enroll the first patient in Greater China in the global TRIDENT-1 Phase 2 registrational study in the first half.
Anticipated 2021 Partner Milestones

Plan to discuss the regulatory path of repotrectinib in patients with TKI-naïve ROS1-positive NSCLC with the FDA in the first half.

Initiate a Phase 2 combination study in KRAS-mutant NSCLC.

Provide clinical data updates from cohorts of the ongoing TRIDENT-1 study in the second half.
MARGENZA (Margetuximab)

MARGENZA is an Fc-optimized monoclonal antibody that targets the human epidermal growth factor receptor 2 (HER2).

Second-half 2020 Accomplishments

In December 2020, our partner MacroGenics announced that the FDA approved MARGENZA, in combination with chemotherapy, for the treatment of adult patients with metastatic HER2-positive breast cancer who have received two or more prior anti-HER2 regimens, at least one of which was for metastatic disease.

In October 2020, we announced dosing of the first patient in Greater China in the global MAHOGANY study evaluating margetuximab as an investigational agent in combination with a checkpoint inhibitor, with or without chemotherapy, as a potential first-line treatment for patients with HER2-positive gastric cancer or gastroesophageal junction (GEJ) cancer.
Anticipated 2021 Zai Milestone

Submit an NDA for pretreated metastatic HER2-positive breast cancer.
Anticipated 2021 Partner Milestones

Obtain initial data from Module A of the MAHOGANY study.

Complete the final overall survival (OS) analysis of the SOPHIA study, a randomized, open-label Phase 3 study evaluating margetuximab plus chemotherapy compared to trastuzumab plus chemotherapy in patients with HER2-positive metastatic breast cancer who have previously been treated with HER2-targeted therapies.
Bemarituzumab

Bemarituzumab is a first-in-class antibody that is being developed in gastric and GEJ cancer as a targeted therapy for tumors that overexpress FGFR2b.

Second-half 2020 Accomplishment

In November 2020, our partner Five Prime Therapeutics announced positive topline results from the global, randomized, double-blind, placebo-controlled Phase 2 FIGHT trial. All three efficacy endpoints in the FIGHT trial – PFS, OS and objective response rate (ORR) – achieved pre-specified statistical significance in the bemarituzumab arm compared to the placebo arm. The trial results were later presented at the 2021 ASCO (Free ASCO Whitepaper) Gastrointestinal Cancers Virtual Annual Symposium (ASCO GI) in January 2021.
Anticipated 2021 Zai Milestone

Initiate a pivotal Phase 3 trial in gastric cancer with our partner Five Prime Therapeutics.
Anticipated 2021 Partner Milestone

Initiate a pivotal Phase 3 trial in gastric cancer and clinical development in other FGFR2b+ cancers.
CLN-081

CLN-081 is an orally available, small-molecule, next-generation, irreversible epidermal growth factor receptor (EGFR) inhibitor designed to selectively target cells expressing mutant EGFR variants, including EGFR exon 20 insertions.

Anticipated 2021 Zai Milestone

Enroll the first patient in Greater China in the global potentially pivotal study in the second half.
Anticipated 2021 Partner Milestone

Provide a clinical data update from the Phase 1/2a global study.
TPX-0022

TPX-0022 is an orally bioavailable, multi-targeted kinase inhibitor with a novel three-dimensional macrocyclic structure that inhibits the MET, CSF1R (colony stimulating factor 1 receptor) and SRC kinases.

Anticipated 2021 Partner Milestone

Provide updated data from the Phase 1 SHIELD-1 study and initiate the Phase 2 portion of the SHIELD-1 study pending FDA feedback in the second half.
Tebotelimab

Tebotelimab is an investigational, first-in-class, bispecific, tetravalent DART molecule targeting PD-1 and LAG-3.

Second-half 2020 Accomplishments

In November 2020, our partner MacroGenics presented Phase 1 clinical data for tebotelimab in combination with margetuximab in advanced HER2-positive neoplasms at the Society for Immunotherapy of Cancer (SITC) (Free SITC Whitepaper) annual meeting.

In December 2020, our partner MacroGenics presented Phase 1 cohort data in relapsed or refractory DLBCL at the ASH (Free ASH Whitepaper) Annual Meeting and Exposition.
Anticipated 2021 Zai Milestones

Make go/no-go decision on tebotelimab in combination with brivanib for hepatocellular carcinoma based on the Phase 1/2 proof-of-concept trial.
Anticipated 2021 Partner Milestone

Provide a clinical update, including future development plans.
Retifanlimab

Retifanlimab is an investigational monoclonal antibody that inhibits PD-1.

Second-half 2020 Accomplishments

In October 2020, we announced dosing of the first patient in Greater China in the global Phase 3 study evaluating retifanlimab in combination with platinum-based chemotherapy in patients with first-line metastatic NSCLC.

In October 2020, we announced dosing of the first patient in Greater China in the global potentially registrational study of retifanlimab in patients with previously treated microsatellite-instability-high endometrial cancer.
2021 Partner Accomplishment

In January 2021, our partner Incyte announced that FDA had accepted for Priority Review its Biologics License Application (BLA) for retifanlimab in patients with pretreated advanced squamous cell anal cancer (SCAC), with a PDUFA date of July 25, 2021.
Autoimmune Diseases

Efgartigimod

Efgartigimod is an antibody fragment designed to reduce disease-causing immunoglobulin G (IgG) antibodies and block the IgG recycling process. Efgartigimod binds to the neonatal Fc receptor (FcRn), which is widely expressed throughout the body and plays a central role in rescuing IgG antibodies from degradation.

Anticipated 2021 Zai Milestones

Discuss with the NMPA the potential accelerated regulatory pathway for efgartigimod in generalized myasthenia gravis (gMG).

Continue to explore and advance additional indications in coordination with argenx.
Anticipated 2021 Partner Milestones

Potential FDA approval and global commercial launch of efgartigimod for the treatment of patients with gMG.

Continue enrollment of the registrational ADHERE trial in chronic inflammatory demyelinating polyneuropathy (CIDP).

Initiate clinical trials in fifth and sixth indications.
Infectious Disease

NUZYRA (Omadacycline)

NUZYRA is a once-daily oral and intravenous antibiotic for the treatment of adults with CABP and ABSSSI.

Anticipated 2021 Zai Milestone

Potential NMPA approval and commercial launch of NUZYRA for the treatment of CABP and ABSSSI.
Sulbactam-Durlobactam (SUL-DUR)

Sulbactam-Durlobactam is a beta-lactam/beta-lactamase inhibitor combination that provides unique activity against Acinetobacter organisms, including carbapenem-resistant strains.

Anticipated 2021 Zai Milestone

Complete enrollment of patients in Greater China in the global Phase 3 ATTACK trial.
Internal Programs with Global Rights

ZL-2309 (CDC7)

ZL-2309 is an orally active, selective and ATP-competitive cell division cycle 7 (CDC7) kinase inhibitor.

Anticipated 2021 Zai Milestone

Initiate a biomarker-driven POC study in selected tumors.
ZL-1201 (CD47)

ZL-1201 is a humanized, IgG4 monoclonal antibody, engineered to reduce effector function, that specifically targets CD47. Its therapeutic potential will be assessed in both solid tumors and hematological malignancies, in both monotherapy and combination opportunities.

In June 2020, first-in-human dosing was achieved in the Phase 1 study.
ZL-1102 (IL-17)

ZL-1102 is a novel human nanobody targeting IL-17 with high affinity and avidity. Unlike other anti-IL-17 products, ZL-1102 is being developed as a topical treatment for chronic plaque psoriasis (CPP).

In July 2020, first-in-human dosing was achieved in the Phase 1 study.
Business Development

Second-half 2020 and Early 2021 Accomplishments

In January 2021, we expanded the collaboration with Turning Point Therapeutics with an exclusive license agreement for the development and commercialization of TPX-0022 in Greater China.

In January 2021, we announced an exclusive license agreement with argenx for the development and commercialization of efgartigimod in Greater China.

In December 2020, we announced an exclusive license agreement for the development, manufacturing and commercialization of CLN-081 in Greater China.

In July 2020, we announced an exclusive license agreement with Turning Point Therapeutics for the development and commercialization of repotrectinib in Greater China.
Anticipated 2021 Zai Milestone

Continue to pursue bolt-on and transformational business development opportunities.
Corporate Updates

Zai Lab continues to build its presence and capabilities in the United States in discovery, clinical development, business development and legal teams. The research center in the San Francisco Bay Area and the Cambridge office have been expanded.

Zai Lab continues to enhance R&D and other operational capabilities with a new campus under development in Suzhou, China.

Zai Lab continues to expand and hire talented professionals. As of January 31, 2021, Zai Lab employed 1,194 full-time employees, including 450 and 592 employees engaged in R&D and commercial activities, respectively.

Zai Lab appointed several executives with extensive global experience, including Alan Sandler, M.D., as President and Head of Global Development, Oncology; Ty Edmondson as Chief Legal Officer; and Ann Beasley as Chief Compliance Officer.
In September 2020, Zai Lab achieved a secondary listing on the Main Board of the Stock Exchange of Hong Kong, with total proceeds, before deducting underwriting discounts and commissions and other offering expenses, of approximately HK$6.83 billion ($881 million).

Zai Lab has been added to the Hang Seng Composite MidCap Index as of December 7, 2020.
Full-Year 2020 Financial Results

Revenues for the full year of 2020 were $49.0 million, compared to $13.0 million in 2019. Revenues for the period were comprised of $32.1 million in sales of ZEJULA, compared to $6.6 million in 2019; and $16.4 million in sales of Optune, compared to $6.4 million in 2019.

R&D expenses were $222.7 million for 2020, compared to $142.2 million for 2019. The increase in R&D expenses was primarily attributable to the upfront and milestone payments for licensing agreements, ongoing and newly initiated late-stage clinical trials, payroll and payroll-related expenses from increased R&D headcount and expansion of research efforts to support internal development programs.

Selling, General & Administrative expenses were $111.3 million for 2020, compared to $70.2 million for 2019. The increase was primarily due to payroll and payroll-related expenses from increased commercial headcount and related costs as Zai Lab continued to expand its commercial operations in China.

For the full year of 2020, Zai Lab reported a net loss of $268.9 million, or a loss per share attributable to common stockholders of $3.46, compared to a net loss of $195.1 million, or a loss per share attributable to common stockholders of $3.03, for the full year of 2019.

As of December 31, 2020, cash and cash equivalents, short-term investments and restricted cash totaled $1,187.5 million compared to $276.4 million as of December 31, 2019.
Conference Call and Webcast Information

Zai Lab will host a live conference call and webcast on March 1, 2021 at 8:00 a.m. ET. Listeners may access the live webcast by visiting the Company’s website at View Source Participants must register in advance of the conference call. Details are as follows:

Registration Link: View Source

Conference ID: 3008148
All participants must use the link provided above to complete the online registration process in advance of the conference call. Upon registering, each participant will receive a dial-in number, a Direct Event passcode and a unique access PIN, which can be used to join the conference call.

A replay will be available shortly after the call and can be accessed by visiting the Company’s website at View Source

On March 1, 2021 Syndax Pharmaceuticals, Inc. ("Syndax," the "Company" or "we") (Nasdaq: SNDX), a clinical stage biopharmaceutical company developing an innovative pipeline of cancer therapies, reported that it will release its fourth quarter and year-end 2020 financial results on Monday, March 8, after the close of the U.S. financial markets (Press release, Syndax, MAR 1, 2021, View Source [SID1234575857]).

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In connection with the earnings release, Syndax’s management team will host a conference call and live audio webcast at 4:30 p.m. ET on Monday, March 8, to discuss the Company’s financial results and provide a general business update.

The live audio webcast and accompanying slides may be accessed through the Events & Presentations page in the Investors section of the Company’s website at www.syndax.com. Alternatively, the conference call may be accessed through the following:

On March 1, 2021 MannKind Corporation (NASDAQ:MNKD) reported that it intends to offer, subject to market conditions and other factors, $150.0 million aggregate principal amount of Convertible Senior Notes due 2026 (the "notes") in a private placement (the "offering") to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act") (Press release, Mannkind, MAR 1, 2021, View Source [SID1234575856]). MannKind also intends to grant the initial purchasers of the notes an option to purchase, within a 13-day period beginning on, and including, the date on which the notes are first issued, up to an additional $22.5 million aggregate principal amount of notes.

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

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The notes will be general unsecured obligations of MannKind and will accrue interest payable semiannually in arrears. Upon conversion, MannKind will pay or deliver, as the case may be, cash, shares of MannKind’s common stock or a combination of cash and shares of MannKind’s common stock, at its election. The interest rate, initial conversion rate and other terms of the notes will be determined at the time of pricing of the offering.

MannKind intends to use the net proceeds from this offering for working capital and other general corporate purposes, including a Phase 3 clinical trial of Afrezza in pediatric subjects and further development of product candidates in MannKind’s pipeline. MannKind may use a portion of the proceeds from this offering to pay down a portion of existing debt or for acquisitions or strategic investments in complementary businesses or technologies, although MannKind does not currently have any plans for any such debt repayment, acquisitions or investments.

The notes and any shares of MannKind’s common stock issuable upon conversion of the notes have not been and will not be registered under the Securities Act, any state securities laws or the securities laws of any other jurisdiction, and unless so registered, may not be offered or sold in the United States absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and other applicable securities laws.

This press release is neither an offer to sell nor a solicitation of an offer to buy any of these securities nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to the registration or qualification thereof under the securities laws of any such state or jurisdiction.