MannKind Corporation reduces debt by $194 million and increases cash position to over $180 million through note exchanges.
Quiver AI Summary
MannKind Corporation has announced a significant reduction in its debt by entering into exchange agreements with holders of its 2.50% Convertible Senior Notes due 2026, leading to a decrease in outstanding debt by approximately $194 million and lowering annual interest expense by $4.9 million. As part of this transaction, MannKind will exchange about $193.7 million of Notes for 26,749,559 shares of common stock and will make an additional cash payment of $89.2 million to the noteholders. Following this, MannKind's cash position will exceed $180 million, supporting its strategic initiatives in commercial growth and pulmonary pipeline development. The completion of the transaction is expected in two closings, with the first on or about December 20, 2024.
Potential Positives
- Company debt reduced by approximately $194 million, representing an 84% decrease in total outstanding debt.
- Annual interest expense will be reduced by $4.9 million, significantly improving the company's financial position.
- Post-transaction cash position will exceed $180 million, providing the company with ample liquidity for strategic initiatives.
- Potential savings of approximately 10.4 million shares in dilution from the exchange of convertible notes enhances shareholder value.
Potential Negatives
- The issuance of approximately 26.7 million new shares could lead to significant dilution for existing shareholders, despite the stated potential savings of 10.4 million shares in dilution.
- The press release highlights the need to negotiate exchange agreements for debt reduction, indicating financial instability and reliance on temporary solutions rather than sustainable financial health.
- The non-registration of the shares under the Securities Act may limit the liquidity and marketability of the newly issued shares, potentially affecting investor confidence.
FAQ
What recent financial changes were announced by MannKind Corporation?
MannKind Corporation announced a reduction in debt by $194 million and a cash balance exceeding $180 million after closing.
How will the exchange of convertible notes impact MannKind's debt?
The exchange will reduce MannKind's total outstanding debt by approximately 84%, decreasing it from $230 million to about $36.3 million.
What will be the expected cash position after the transaction closes?
Following the transaction, MannKind expects to have a cash balance in excess of $180 million.
What is the purpose of the exchange agreements for MannKind?
The exchange agreements aim to help MannKind focus on growth and support its pulmonary pipeline programs.
How many shares will MannKind issue as part of the exchange?
MannKind will issue approximately 26,749,559 shares of common stock as part of the exchange agreement.
Disclaimer: This is an AI-generated summary of a press release distributed by GlobeNewswire. The model used to summarize this release may make mistakes. See the full release here.
$MNKD Insider Trading Activity
$MNKD insiders have traded $MNKD stock on the open market 11 times in the past 6 months. Of those trades, 0 have been purchases and 11 have been sales.
Here's a breakdown of recent trading of $MNKD stock by insiders over the last 6 months:
- STEVEN B. BINDER has traded it 4 times. They made 0 purchases and 4 sales, selling 142,966 shares.
- STUART A TROSS (Chief People & Workpl Officer) has traded it 4 times. They made 0 purchases and 4 sales, selling 160,000 shares.
- MICHAEL CASTAGNA (Chief Executive Officer) sold 85,106 shares.
- DAVID THOMSON (EVP Genl Counsel & Secretary) has traded it 2 times. They made 0 purchases and 2 sales, selling 8,668 shares.
To track insider transactions, check out Quiver Quantitative's insider trading dashboard.
$MNKD Hedge Fund Activity
We have seen 119 institutional investors add shares of $MNKD stock to their portfolio, and 80 decrease their positions in their most recent quarter.
Here are some of the largest recent moves:
- MILLENNIUM MANAGEMENT LLC removed 3,093,569 shares (-65.2%) from their portfolio in Q3 2024
- JACOBS LEVY EQUITY MANAGEMENT, INC added 1,947,813 shares (+inf%) to their portfolio in Q3 2024
- FEDERATED HERMES, INC. added 1,902,398 shares (+101030.2%) to their portfolio in Q3 2024
- DIMENSIONAL FUND ADVISORS LP added 1,810,962 shares (+620.2%) to their portfolio in Q3 2024
- SOLEUS CAPITAL MANAGEMENT, L.P. removed 1,558,537 shares (-100.0%) from their portfolio in Q2 2024
- BANK OF AMERICA CORP /DE/ added 1,358,321 shares (+109.5%) to their portfolio in Q3 2024
- ARROWSTREET CAPITAL, LIMITED PARTNERSHIP added 1,300,125 shares (+inf%) to their portfolio in Q3 2024
To track hedge funds' stock portfolios, check out Quiver Quantitative's institutional holdings dashboard.
Full Release
Company debt reduced by $194 million
Cash position after closing will be in excess of $180 million
DANBURY, Conn. and WESTLAKE VILLAGE, Calif., Dec. 18, 2024 (GLOBE NEWSWIRE) --
MannKind Corporation (Nasdaq: MNKD)
today announced today that it has entered into separate, privately negotiated exchange agreements with certain holders (the "Holders") of its 2.50% Convertible Senior Notes due 2026 (the "Notes"). Under the terms of the exchange agreements, the Holders agreed to exchange an aggregate principal amount of approximately $193.7 million of Notes held by them in exchange for an aggregate of 26,749,559 shares of the Company's common stock ("Shares"). In addition, pursuant to the exchange agreements, MannKind will make an aggregate cash payment of approximately $89.2 million to the Holders for additional exchange consideration.
The transaction is expected to close in two closings, with the first closing on or about December 20, 2024 and the second closing on or about December 23, 2024, in each case, subject to customary closing conditions.
This repurchase decreases MannKind's total outstanding debt by 84%. In addition, there were 37.2 million shares reserved for conversion of the approximately $193.7 million principal amount of Notes, corresponding to a potential savings of approximately 10.4 million shares of dilution. This transaction is expected to help the Company to focus on its strategic priorities of delivering continued growth of its commercial business and supporting the development of its pulmonary pipeline programs.
Immediately following the exchange of the Notes contemplated by the exchange agreements, the aggregate principal amount of the Notes will be reduced from $230 million to approximately $36.3 million, and annual interest expense will be reduced by $4.9 million to approximately $0.9 million. Following the exchange of the Notes, MannKind's cash balance will be in excess of $180 million with approximately 302.5 million shares outstanding.
The shares of MannKind's common stock being issued have not been, and will not be, registered under the Securities Act of 1933 or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from (or in a transaction not subject to) registration requirements. This press release shall not constitute an offer to sell or a solicitation of an offer to buy MannKind's common stock or any other securities and will not constitute an offer, solicitation, or sale in any state or jurisdiction in which such an offer, solicitation, or sale would be unlawful.
A
bout MannKind
MannKind Corporation (Nasdaq: MNKD) focuses on the development and commercialization of innovative inhaled therapeutic products and devices to address serious unmet medical needs for those living with endocrine and orphan lung diseases.
We are committed to using our formulation capabilities and device engineering prowess to lessen the burden of diseases such as diabetes, nontuberculous mycobacterial (NTM) lung disease, pulmonary fibrosis, and pulmonary hypertension. Our signature technologies – dry-powder formulations and inhalation devices – offer rapid and convenient delivery of medicines to the deep lung where they can exert an effect locally or enter the systemic circulation, depending on the target indication.
With a passionate team of Mannitarians collaborating nationwide, we are on a mission to give people control of their health and the freedom to live life.
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mannkindcorp.com
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Forward-Looking Statements
Statements in this press release that are not statements of historical fact are forward-looking statements that involve risks and uncertainties. These statements include, without limitation, statements regarding closing of the transaction, and timing thereof, MannKind's financial position, including cash position and interest expense, savings in potential shareholder dilution related to the exchange of convertible notes and potential operating benefits from reduced debt. Words such as "believes," "anticipates," "plans," "expects," "intend," "will," "goal," "potential" and similar expressions are intended to identify forward-looking statements. These forward-looking statements are based upon MannKind's current expectations. Actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of various risks and uncertainties, which include, without limitation, risks detailed in MannKind's filings with the Securities and Exchange Commission ("SEC"), including under the "Risk Factors" heading of its Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 27, 2024, and subsequent periodic reports on Form 10-Q. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. All forward-looking statements are qualified in their entirety by this cautionary statement, and MannKind undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this press release.
MANNKIND is a registered trademark of MannKind Corporation.
