On February 25, 2021 MannKind Corporation (NASDAQ:MNKD) reported financial results for the fourth quarter and full year ended December 31, 2020 (Press release, Mannkind, FEB 25, 2021, View Source [SID1234575584]).

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"Our fourth quarter produced exceptional results, with $10.1 million in Afrezza net revenue and positive clinical data for Tyvaso DPI from the BREEZE study conducted by United Therapeutics," said Michael Castagna, Chief Executive Officer of MannKind Corporation. "UT also announced their plan to submit a new drug application for Tyvaso DPI to the FDA in April 2021. During the fourth quarter, we solidified our new direction with the acquisition of QrumPharma, which added a nebulized version of clofazimine to our pipeline of therapies for orphan lung diseases, and we entered into a collaboration agreement with Vertice for the co-promotion of Thyquidity, which is indicated for hyperthyroidism and is expected to expand our reach into endocrine diseases."

Fourth Quarter 2020 Results

Total revenues were $18.4 million for the fourth quarter of 2020, reflecting Afrezza net revenue of $10.1 million and collaborations and services revenue of $8.4 million. Afrezza net revenue increased 30% compared to $7.8 million in the fourth quarter of 2019, primarily driven by higher product demand with a more favorable mix of Afrezza cartridges and more favorable gross-to-net deductions. Collaborations and services revenue increased $0.2 million compared to the fourth quarter of 2019.

Afrezza gross profit for the fourth quarter of 2020 was $6.4 million compared to $3.1 million in the same period of 2019, an increase of $3.3 million, or 105%, that was driven by a combination of increased Afrezza revenue and a reduction in cost of goods sold.

In-process research and development expense for the fourth quarter of 2020 was $13.2 million, reflecting the acquisition of QrumPharma for approximately $12.8 million in total consideration and approximately $0.4 million in transaction costs. The acquisition of QrumPharma was accounted for as an asset acquisition and expensed on the date of acquisition as substantially all of the fair value of the assets acquired was concentrated in a single asset that consisted of in-process research and development in a pre-clinical development state.

Research and development expenses for the fourth quarter of 2020 were $1.5 million compared to $2.0 million for the fourth quarter of 2019. This decrease was mainly related to lower clinical trial spending.

Selling, general and administrative expenses for the fourth quarter of 2020 were $17.1 million compared to $15.7 million for the fourth quarter of 2019. This increase of $1.4 million, or 9%, was primarily attributable to a $1.2 million increase in personnel costs related to the expansion of our sales and medical field force.

During the fourth quarter of 2020, loss on foreign currency translation for insulin purchase commitments, which are denominated in Euros, was $4.0 million compared to $2.6 million for the fourth quarter of 2019. The fluctuation was due to a change in the U.S. dollar to Euro foreign exchange rate.

Interest expense on debt for the fourth quarter of 2020 was $2.4 million compared to $2.3 million for the fourth quarter of 2019.

The net loss for the fourth quarter of 2020 was $26.4 million, or $0.11 per share, compared to $14.3 million in the fourth quarter of 2019, or $0.07 per share. The increase in the net loss of $12.1 million was primarily due to the write-off of in-process research and development related to the acquisition of QrumPharma. On a non-GAAP basis, excluding the expense incurred for the acquisition of QrumPharma, the net loss for the fourth quarter of 2020 was $13.2 million, or $0.06 per share.

Twelve Months Ended December 31, 2020

Total revenues were $65.1 million for the year ended December 31, 2020, reflecting Afrezza net revenue of $32.3 million and collaborations and services revenue of $32.8 million. Afrezza net revenue increased 28% compared to $25.3 million for the year ended December 31, 2019, primarily driven by higher product demand with a more favorable mix of Afrezza cartridges, a price increase and more favorable gross-to-net deductions, all of which was partially offset by a reduction in sales to Biomm (Brazil). Collaborations and services revenue decreased $4.9 million compared to the full year ended December 31, 2019, primarily driven by a $5.8 million decrease in revenue recognized from the UT Research Agreement, which was substantially completed in the second quarter of 2019.

Afrezza gross profit was $17.2 million for the year ended December 31, 2020, an increase of $12.0 million, or 230%, compared to a gross profit of $5.2 million in the same period in 2019, primarily due higher commercial product sales combined with a reduction in cost of goods sold.

In-process research and development expense for the year ended December 31, 2020 was $13.2 million, reflecting the research and development acquired and expensed from the acquisition of QrumPharma for approximately $12.8 million in total consideration and approximately $0.4 million in transaction costs.

Research and development expenses for the year ended December 31, 2020 were $6.2 million compared to $6.9 million for the year ended December 31, 2019. This decrease of $0.7 million, or 9%, was primarily attributable to lower clinical trial spending.

Selling, general and administrative expenses for the year ended December 31, 2020 were $59.0 million compared to $74.7 million for the year ended December 31, 2019. This decrease of $15.6 million, or 21%, was primarily attributable a $9.3 million decrease in costs for television advertising for Afrezza, a $4.1 million decrease in promotional and marketing activities in response to the COVID-19 pandemic and a $2.5 million decrease in professional fees.

An impairment of $1.9 million was recognized for the year ended December 31, 2020 on a commitment asset and debt issuance costs related to future funding commitments of the MidCap Credit Facility. There were no asset impairments for the year ended December 31, 2019.

For the year ended December 31, 2020, foreign currency translation for insulin purchase commitments, which are denominated in Euros, resulted in a loss of $8.0 million compared to a gain of $1.9 million for the year ended December 31, 2019. The fluctuation was due to a change in the U.S. dollar to Euro foreign exchange rate.

Interest expense on debt for the year ended December 31, 2020 was $9.5 million compared to $10.9 million for the year ended December 31, 2019. This $1.4 million decrease was primarily attributable to a $3.4 million milestone obligation to Deerfield that was achieved in the third quarter of 2019 and a decrease of $0.8 million of interest expense related to the Deerfield Credit Facility, which was extinguished in the third quarter of 2019. This decrease was partially offset by an increase in interest expense from the MidCap Credit Facility of $2.3 million and an increase in interest expense from our Mann Group promissory notes of $0.6 million in 2020.

The net loss for the year ended December 31, 2020 was $57.2 million, or $0.26 per share, compared to $51.9 million net loss for the year ended December 31, 2019, or $0.27 per share. The higher net loss was mainly attributable to the write-off of in-process research and development related to the acquisition of QrumPharma and a loss on foreign currency translation related to insulin purchase commitments denominated in Euros, offset by a decrease in selling, general and administrative expenses. On a non-GAAP basis, excluding the expense incurred for the acquisition of QrumPharma, the net loss for the year ended December 31, 2020 was $44.0 million, or $0.20 per share.

Cash, cash equivalents, restricted cash, and short-term investments at December 31, 2020 was $67.2 million compared to $50.2 million at December 31, 2019.

Debt Reductions Subsequent to December 31, 2020

Pursuant to the terms of the senior convertible notes, the Company forced the conversion of all $5.0 million in principal of such notes into 1,666,667 shares of the Company’s common stock.

In addition, the Mann Group converted $9.6 million of principal and $0.4 million of accrued interest on its convertible promissory note into 4.0 million shares of the Company’s common stock. As of the date hereof, $53.4 million in principal remains outstanding under the promissory notes held by the Mann Group ($18.4 of which is convertible).

Sale-Leaseback of the Danbury Manufacturing Facility

Subsequent to December 31, 2020, the Company entered into a non-binding letter of intent ("LOI") with a third party to sell and lease back a portion of the Company’s Danbury manufacturing facility and administrative offices. The terms of the LOI include a sales price of approximately $95 million – $105 million, a lease term of 20 years with four 5-year renewal options, and annual rent of approximately $10 million – $11 million at the beginning of the lease. If the transaction is completed, the Company intends to use the proceeds for general corporate purposes, and may also pay down a portion of its senior secured debt. The completion of the transactions contemplated by the LOI is subject to certain conditions, including the negotiation of satisfactory definitive agreements and satisfactory results of the buyer’s inspections and other investigations, all of which are anticipated to be completed during the first quarter of 2021. However, there can be no assurances that this proposed transaction will be completed in the timeframe or on the principal terms set forth above, or at all.

Non-GAAP Measures

Certain financial information contained in this press release is presented on both a reported basis (GAAP) and a non-GAAP basis. Reported results were prepared in accordance with GAAP whereas non-GAAP measures exclude items described in the reconciliation tables below. Non-GAAP financial information is intended to portray the results of our baseline performance, supplement or enhance management, analysts and investors overall understanding of our underlying financial performance and facilitate comparisons among current and past periods. The non-GAAP financial measures are in addition to, not a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP.

Conference Call

MannKind will host a conference call and presentation webcast to discuss these results today at 9:00 a.m. Eastern Time. Those interested in listening to the conference call live via the Internet may do so by visiting the Company’s website at View Source under News & Events. A replay will be available on MannKind’s website for 14 days.

On February 24, 2021 Orna Therapeutics, a biotechnology company dedicated to designing and delivering a new class of fully engineered circular RNA therapeutics (oRNAs), reported the completion of its $80 million Series A financing (Press release, OrnaTherapeutics, FEB 24, 2021, View Source [SID1234626172]). Founded on groundbreaking research from the Massachusetts Institute of Technology (MIT) and built by MPM Capital, Orna utilizes elegant molecular design and delivery technologies to overcome the limitations of linear mRNA therapeutics and unlock RNA’s full therapeutic potential to treat a wide range of diseases including cancer, autoimmune, and genetic disorders. Led by Thomas M. Barnes, Ph.D., as Chief Executive Officer, Orna’s team of skilled scientists, molecular engineers, and industry veterans leverage their broadly applicable oRNA platform to dramatically change and improve current approaches to treatment with the potential to make a difference in the lives of patients. The financing was co-led by MPM Capital, Taiho Ventures, and F2 Ventures, with participation from leading strategic investors: Kite, a Gilead Company, Bristol Myers Squibb, Astellas Venture Management, Novartis Institutes for Biomedical Research, and the PAGS Group.

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Orna’s engineered circular RNAs have several key advantages, including superior protein expression, simpler and more cost-effective manufacturing, and improved delivery. Unlike other RNA therapies, oRNA does not require the addition of cap or tail structures and does not require the use of modified nucleotides to address innate immune responses. In addition, oRNAs are designed to drive unparalleled protein production while resisting degradation inside the body.

"Our elegant solution to the circular RNA engineering problem has allowed us to reveal that oRNA is simply the better format for long coding RNA," said Dr. Barnes. "Furthermore, our initial combination of oRNAs with technology to deliver them to immune cells has paved the way to create groundbreaking new therapies to fundamentally change the way we treat cancer and autoimmune diseases."

The company was founded by (Robert) Alex Wesselhoeft, Ph.D., Raffaella Squilloni, M.B.A. and Professor Dan Anderson, Ph.D. (MIT), and was seeded and incubated by MPM Capital, with Shinichiro Fuse, Ph.D. serving as the interim CEO, and Brian Goodman, Ph.D. as head of Business Development. "We believe that oRNA is the future, and Orna has built the right team to execute on this vision," said Ansbert Gadicke, M.D., co-founder and Managing Director, MPM Capital, Board Chair of Orna Therapeutics. "Orna’s elegant and meticulously calculated approach has the potential to forever change the field of mRNA therapeutics."

The potential applications of Orna’s technology are far reaching. In particular, Orna believes it can apply its oRNA technology to potentially address the limitations of current immunotherapies by delivering chimeric antigen receptors (CARs) directly to patient’s immune cells within the body (in situ CAR therapy). The Series A financing will enable Orna to bring its initial programs to IND enablement, while continuing to advance its robust platform and build the capabilities to support Orna’s mission in its new office and laboratory space located in Cambridge, Massachusetts. Orna is supported by an experienced and seasoned Board of Directors and scientific advisors, including:

Daniel Anderson, Ph.D., Professor, MIT
Sakae Asanuma, CFA, MBA, President, Taiho Ventures
Thomas M. Barnes, Ph.D., CEO, Orna Therapeutics
Shinichiro Fuse, Ph.D., Managing Director, MPM Capital
Ansbert Gadicke, M.D. (chair), co-founder and Managing Director, MPM Capital
Morana Jovan-Embiricos, Managing Partner, F2 Ventures
Francesco Marincola, M.D., SVP and Global Head of Cell Therapy Research of Kite

On February 24, 2021 Verity Pharmaceuticals reported that it has received a notice of compliance with conditions (NOC/c) from Health Canada for the VERITY-BCG (Bacillus Calmette-Guérin [BCG]: Strain Russian BCG-I) (Press release, veritypharma, FEB 24, 2021, View Source [SID1234605586]). This approval is welcome news for patients and health care providers who have endured a Canadian and global shortage of this important bladder cancer drug.

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Bacillus Calmette-Guérin (BCG) is a proven immunotherapy of choice for bladder cancer. It is used as first-line intravesical therapy following tumor resection of non-muscle-invasive bladder cancer. Primary producers of BCG announced shortages within the last decade, leading to a worldwide scarcity of the treatment. This new source of BCG from Verity Pharma is expected to be available by mid 2021.

"Canada’s multi-year BCG drug shortage will now be a thing of the past with this approval," said Howard Glase, Chief Executive Officer, Verity Pharma. "We know these drug shortages were leading to rationing and dose sparing of this crucial bladder cancer drug and patients had delayed or even cancelled treatments. Canadian patients will now have full access to this life-saving therapy."

According to an article by the National Centre for Biotechnology Information, "physicians treating patients affected by non-muscle invasive bladder cancer (NMIBC) have been in shock during the last six years since manufacturing restrictions on the production of the first-option medicine, Mycobacterium bovis Bacillus Calmette-Guérin (BCG), have resulted in worldwide shortages."i

Bladder Cancer Canada states that bladder cancer is the 5th most common cancer in Canada and almost 12,000 people will be diagnosed with bladder cancer this year alone.

Verity has partnered with Serum Institute of India, which manufactures BCG. Serum Institute is the world’s largest manufacturer of vaccines.

"Verity is proud to continue bringing critical drugs to Canadians. VERITY-BCG is an example of our expertise in supplying life-saving therapeutic options to help fulfill unmet patient needs," said Glase.

About VERITY-BCG

VERITY-BCG is an adjuvant therapy after transurethral resection (TUR) of a primary or relapsing superficial papillary urothelial cell carcinoma of the bladder stage Ta (grade 2 or 3) or T1 (grade 1, 2, or 3), without concomitant carcinoma in situ. It is only recommended for stage Ta grade 1 papillary tumors, when there is judged to be a high risk (>50%) of tumor recurrence.

More information is available here: View Source

On February 24, 2021 Rapha Capital Management, LLC (View Source), an investment management firm located in Miami, Florida, reported that on February 17, 2021, its portfolio company, NexImmune, Inc. ("NexImmune"), closed an upsized initial public offering raising gross proceeds, before deducting underwriting discounts and commissions and offering expenses, of approximately $126.5 million (Press release, Ponce Therapeutics, FEB 24, 2021, View Source;utm_medium=rss&utm_campaign=rapha-capital-management-announces-successful-initial-public-offering-of-portfolio-company-neximmune-inc [SID1234578720]). The gross proceeds included the exercise in full by the underwriters of their option to purchase additional shares. NexImmune’s shares are traded on the Nasdaq Global Market under the symbol "NEXI". Rapha Capital Investment II, LLC ("RCI II") (an entity managed by Rapha Capital), participated in NexImmune’s Series A financing in July, 2018 and Series A-2 financing in January, 2019, investing a total of $1.8 million.

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Rapha Capital Management is an investment management firm focused on managing strategic investments in early stage, non-public biotechnology companies, through special purpose investment vehicles ("SPIVs"). Rapha Capital was founded by its President, Kevin Slawin, M.D., a successful and experienced oncologic and robotic surgeon. After leaving practice, Dr. Slawin has been serving as a biotech consultant, investor, and founder, focusing on disruptive technologies in oncology, T cells and immunotherapy, and other breakthrough healthcare technologies. He is the founder of Bellicum Pharmaceuticals, Inc. ("Bellicum"), a publicly traded company listed on NASDAQ, leading Bellicum to a successful $161 million IPO in December, 2014. He also plays a guiding role in several of the investments managed by Rapha Capital in certain companies, serving as a board member at 3DBio Therapeutics, Inc. (View Source), FIZE Medical, Inc. (www.fizemedical.com), and Demeetra AgBio, Inc. (www.demeetra.com). He served as a board member and interim CEO of portfolio company AsclepiX Therapeutics, Inc. (www.asclepix.com) in 2020, engineering their $35 million Series A financing led by Perceptive Xontogeny Venture Fund in mid 2020. Rapha Capital Management manages thirteen legacy SPIVs, Rapha Capital Investment I – XIII. Rapha Capital Management will be offering alternative asset management services to its inaugural venture capital fund, launching at the end of 1Q21, which will be the vehicle for all future investments managed by Rapha Capital Management.

"We recognized the transformative potential of immunotherapy early on, founding Bellicum Pharmaceuticals, one of the first cellular immunotherapy companies in 2004, and have been an expert in identifying other potentially disruptive technologies, since 2017, when Rapha Capital Management was founded," commented Kevin Slawin, MD. "RCI II’s investment in NexImmune is another example of our commitment to use our unique abilities to identify at the earliest stage, those companies that we believe will go on to profoundly improve peoples’ lives while building great value, from a sea of seemingly indistinguishable, less compelling, opportunities," he added.

On February 24, 2021 Cerus Corporation (Nasdaq: CERS) and Shandong Zhongbaokang Medical Implements Co. Ltd. (ZBK) reported that they are forming a joint venture (JV) with the intent to develop, obtain regulatory approval for, manufacture and commercialize the INTERCEPT Blood System for platelets and red blood cells in China (Press release, Cerus, FEB 24, 2021, View Source [SID1234575789]). The JV, which will be named "Cerus ZBK Biomedical" (CEZB), will be headquartered in Zibo, Shandong Province in eastern China.

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"We are honored to join forces with ZBK in China, furthering our mission to make INTERCEPT the standard of care for patients globally," said Pascal Maillard, Cerus’ vice president of commercial operations for the Asia Pacific region. "We believe that ZBK’s experience with local clinical and regulatory requirements, ISO-certified manufacturing infrastructure, and existing sales channels will facilitate accelerated and broad access to INTERCEPT across China’s transfusion medicine community."

China represents one of the largest potential blood transfusion markets globally for INTERCEPT, with red blood cell collections in excess of 23 million unit-equivalents each year, and an estimated production of 1.8 million platelet doses per year. The healthcare system in China continues to grow at a rapid pace, enabling expanded access to blood components expected to benefit from pathogen inactivation.

"We are delighted to collaborate with Cerus to work to bring INTERCEPT to China as the market for platelets continues to grow rapidly," said Mr. Xu Junfeng, chief executive officer of ZBK. "INTERCEPT-treated platelets would address an unmet clinical need in the blood transfusion market in China and would offer an important new, prospective measure of safety against known and emerging pathogens during this new era of pandemic preparedness planning."

ZBK is a subsidiary of the Taibao Group and a leading developer, manufacturer and marketer of blood transfusion, blood safety, and infusion products in China. ZBK markets and sells its products through its own sales force network to over 280 blood centers nationwide.

Under the terms of the JV agreement, Cerus and ZBK are the sole shareholders in CEZB, with Cerus owning a majority (51%) of the entity. Cerus anticipates that it will consolidate the results of CEZB in its consolidated financial statements. Additionally, Cerus will contribute an exclusive license to the INTERCEPT Blood System for platelets and red blood cells for CEZB to market across China. ZBK will contribute its significant local expertise to help perform necessary clinical studies and seek regulatory approval. Ultimately it is expected that ZBK will establish local manufacturing and leverage its commercial expertise and presence in the region.