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What changed in MANNKIND CORP's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of MANNKIND CORP's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+364 added−384 removedSource: 10-K (2025-02-26) vs 10-K (2024-02-27)

Top changes in MANNKIND CORP's 2024 10-K

364 paragraphs added · 384 removed · 298 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

71 edited+16 added−19 removed104 unchanged
Biggest changeUnder his guidance, four products received approval including Spiriva® (for COPD) for which he oversaw development and led the presentation at the FDA advisory committee meeting. Dr. Blank received his medical degree from Universitaet Marburg, Germany, and is board-certified in internal medicine. Lauren Sabella has been our Chief Operating Officer since March 2023. Prior to joining us, Ms.
Biggest changeEarlier in his career, Dr. Blank spent 20 years between Boehringer Ingelheim Pharmaceuticals in Ridgefield, CT, and Boehringer Ingelheim GmbH in Germany, serving in progressive leadership roles. Under his guidance, four products received approval including Spiriva® (for COPD) for which he oversaw development and led the presentation at the FDA advisory committee meeting. Dr.
Singh worked in various leadership roles at Cipla Ltd (2000 – 2007, 2008-2011), Glenmark Pharma (2007-2008), Nicholas Piramal India Ltd (1992-2000) and Cadila Laboratories (1990-1991). Mr. Singh has been associated with the Parenteral Drug Association (PDA) and was the founding president of the PDA, India chapter before 16 moving to the US in 2015. Mr. Singh received an M.
Singh worked in various leadership roles at Cipla Ltd (2000 – 2007, 2008 – 2011), Glenmark Pharma (2007-2008), Nicholas Piramal India Ltd (1992-2000) and Cadila Laboratories (1990-1991). Mr. Singh has been associated with the Parenteral Drug Association (PDA) and was the founding president of the PDA, India chapter before moving to the US in 2015. Mr. Singh received an M.
HITECH also increased the civil and criminal penalties that may be imposed against 11 covered entities, business associates and possibly other persons, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce HIPAA and seek attorneys’ fees and costs associated with pursuing federal civil actions.
HITECH also increased the civil and criminal penalties that may be imposed against covered entities, business associates and possibly other persons, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce HIPAA and seek attorneys’ fees and costs associated with pursuing federal civil actions.
In all cases, interactions with patients and patient groups may only 12 be conducted in settings that are suitable for patient education and separate from the usual place(s) of clinical business of healthcare providers or institutions. In addition, our sponsorship of such events, if any, must be clearly disclosed through prominent signage.
In all cases, interactions with patients and patient groups may only be conducted in settings that are suitable for patient education and separate from the usual place(s) of clinical business of healthcare providers or institutions. In addition, our sponsorship of such events, if any, must be clearly disclosed through prominent signage.
The products in this category are marketed by Eli Lilly and Company, Sanofi S.A. and Novo Nordisk A/S. V-Go is typically used by patients as part of a basal-bolus insulin regimen. Like Afrezza, it competes with injectable mealtime insulin products but also with long-acting, or basal, injectable insulins.
The products in this category are marketed by Eli Lilly and Company, Sanofi S.A. and Novo Nordisk A/S. V-Go is typically used by patients as part of a basal-bolus insulin regimen. Like Afrezza, it competes with injectable mealtime insulin products but also with 8 long-acting, or basal, injectable insulins.
We intend to continue our internal training programs and oversight over collaborators on anti-bribery, anti-corruption and other unethical practices in order to reduce these risks. 13 Bribing healthcare professionals to use or recommend our products can create adverse publicity and damage our ability to use a critical channel of influence.
We intend to continue our internal training programs and oversight over collaborators on anti-bribery, anti-corruption and other unethical practices in order to reduce these risks. Bribing healthcare professionals to use or recommend our products can create adverse publicity and damage our ability to use a critical channel of influence.
We anticipate that over time we may expand our business operations to include operations in the EU, including potentially conducting preclinical and clinical trials. With such expansion, we would be subject to increased governmental regulation in the EU countries in which we might operate, including the EU GDPR.
We anticipate that over time we may expand our business operations to 11 include operations in the EU, including potentially conducting preclinical and clinical trials. With such expansion, we would be subject to increased governmental regulation in the EU countries in which we might operate, including the EU GDPR.
Our Total Rewards program is offered to each employee and currently consists of the seven components: • Base salary – We offer a market-competitive base salary. • Annual bonus program – We offer quarterly sales incentive bonuses to our sales force and annual bonuses to the remainder of our employees. • Annual equity program – We offer a new hire and annual equity awards that consist of time- and, in some cases, performance-based restricted stock units and non-qualified stock options. 14 • Health and wellness program – A variety of insurance plans that allow employees to select among different options, including a health maintenance organization, a preferred provider organization and a high-deductible health plan, as well as flexible spending and health savings accounts. • Paid time off program – In addition to the paid time off that is accrued throughout the year, we offer paid holidays, including two week-long company shutdowns in July and December. • Retirement savings program – A 401(k) retirement plan pursuant to which we match 50% of employee contributions up to a specified limit on their annual eligible earnings. • Employee stock purchase plan (“ESPP”) program – The ESPP provides the opportunity to purchase shares of our common stock through payroll deductions every six months at a 15% discount to the market price at the beginning or end of each offering period, whichever is lower. • Employee Recognition Program – We provide a company-wide Spot and Peer to Peer Recognition Program to more directly reward performance and behaviors and drive cultural improvement.
Our Total Rewards program is offered to each employee and currently consists of the seven components: • Base salary – We offer a market-competitive base salary. • Annual bonus program – We offer quarterly sales incentive bonuses to our sales force and annual bonuses to the remainder of our employees. • Annual equity program – A portion of our employees are eligible for a new hire and annual equity awards that consist of time- and, in some cases, performance-based restricted stock units and non-qualified stock options. • Health and wellness program – A variety of insurance plans that allow employees to select among different options, including a health maintenance organization, a preferred provider organization and a high-deductible health plan, as well as flexible spending and health savings accounts. • Paid time off program – In addition to the paid time off that is accrued throughout the year, we offer paid holidays, including two week-long company shutdowns in July and December. • Retirement savings program – A 401(k) retirement plan pursuant to which we match 50% of employee contributions up to a specified limit on their annual eligible earnings. • Employee stock purchase plan (“ESPP”) program – The ESPP provides the opportunity to purchase shares of our common stock through payroll deductions every six months at a 15% discount to the market price at the beginning or end of each offering period, whichever is lower. • Employee Recognition Program – We provide a company-wide Spot and Peer to Peer Recognition Program to more directly reward performance and behaviors and drive cultural improvement.
We compete with companies, including major global pharmaceutical companies, and other institutions that have 8 substantially greater financial, research and development, marketing and sales capabilities and have substantially greater experience in undertaking preclinical and clinical testing of products, obtaining regulatory approvals and marketing and selling biopharmaceutical products.
We compete with companies, including major global pharmaceutical companies, and other institutions that have substantially greater financial, research and development, marketing and sales capabilities and have substantially greater experience in undertaking preclinical and clinical testing of products, obtaining regulatory approvals and marketing and selling biopharmaceutical products.
Similarly, if a drug product is reimbursed by Medicare or Medicaid, pricing and rebate programs must comply with, as applicable, the Medicaid rebate requirements of the Omnibus Budget Reconciliation Act of 1990, as amended, and the Medicare Prescription Drug Improvement and Modernization Act of 2003.
Similarly, if a drug product is reimbursed by Medicare or Medicaid, pricing and rebate programs must comply with, as 10 applicable, the Medicaid rebate requirements of the Omnibus Budget Reconciliation Act of 1990, as amended, and the Medicare Prescription Drug Improvement and Modernization Act of 2003.
We have established procedures to comply with governmental regulations regarding workplace safety, including training employees to enable them to recognize risks and empower them to learn, discover, work safely, and to minimize injuries, illnesses, environmental impact and regulatory risks.
We have established procedures to comply with governmental regulations regarding workplace safety, including training employees 14 to enable them to recognize risks and empower them to learn, discover, work safely, and to minimize injuries, illnesses, environmental impact and regulatory risks.
For example, on January 5, 2024, the FDA approved Florida’s Section 804 Importation Program (SIP) proposal to import certain drugs from Canada for specific state healthcare programs. It is unclear how this program will be implemented, including which drugs will be chosen, and whether it will be subject to legal challenges in the United States or Canada.
For example, in January 2024, the FDA approved Florida’s Section 804 Importation Program (SIP) proposal to import certain drugs from Canada for specific state healthcare programs. It is unclear how this program will be implemented, including which drugs will be chosen, and whether it will be subject to legal challenges in the United States or Canada.
Other regulation In addition to the foregoing, we are subject to numerous federal, state and local laws relating to such matters as laboratory practices, the experimental use of animals, the use and disposal of hazardous or potentially hazardous substances, controlled drug substances, safe working conditions, manufacturing practices, environmental protection and fire hazard control.
Other regulation In addition to the foregoing, we are subject to numerous federal, state and local laws relating to such matters as laboratory practices, the experimental use of animals, the use and disposal of hazardous or potentially hazardous substances, controlled drug substances, safe working conditions, manufacturing practices, product distribution practices, environmental protection and fire hazard control.
We face competition based on, among other things, product efficacy and safety, the timing and scope of regulatory approvals, product ease of use and price. Afrezza is administered at the beginning of a meal, so its principal competitors are rapid-acting” insulin analogs that are used for mealtime insulin injections.
We face competition based on, among other things, product efficacy and safety, the timing and scope of regulatory approvals, product ease of use and price. Afrezza is administered at the beginning of a meal, so its principal competitors are “rapid-acting” insulin analogs that are used for mealtime insulin injections.
In our Danbury, Connecticut facility, we can develop novel Technosphere formulations of different pharmaceutical ingredients and manufacture clinical and commercial supplies of these powders. In this facility, we currently formulate both the Afrezza and Tyvaso DPI inhalation powders at commercial scale, fill plastic cartridges with the powders and package the cartridges into blister packs.
In our Danbury, Connecticut facility, we can develop novel Technosphere formulations of different pharmaceutical ingredients and manufacture clinical and commercial supplies of these powders. In our facility, we formulate both the Afrezza and Tyvaso DPI inhalation powders at commercial scale, fill plastic cartridges with the powders and package the cartridges into blister packs.
Additional patents and patent applications are expected to provide protection for products in our pipeline, including MNKD-101, MNKD-201, our BluHale inhalation-profiling apparatus and various development tools. Our entire worldwide portfolio consists of approximately 1,200 issued patents and approximately 200 pending patent applications We expect to file further patent applications as our research and development efforts continue.
Additional patents and patent applications are expected to provide protection for products in our pipeline, including MNKD-101, MNKD-201, our BluHale inhalation-profiling apparatus and various development tools. Our entire worldwide portfolio consists of approximately 1,125 issued patents and approximately 225 pending patent applications. We expect to file further patent applications as our research and development efforts continue.
We manufacture both the clofazimine inhalation solution being evaluated in the MNKD-101 program and the nintedanib dry powder formulation being evaluated in the MNKD-201 program in our Danbury facility. We purchase clofazimine and nintedanib from suppliers of generic drug substances.
In our Connecticut facility, we manufacture both the clofazimine inhalation solution being evaluated in the MNKD-101 program and the nintedanib dry powder formulation being evaluated in the MNKD-201 program. We purchase clofazimine and nintedanib from suppliers of generic drug substances.
We use trademarks and service marks to protect our corporate brand as well as the branding associated with Afrezza, V-Go, our Technosphere formulation technology, our device platform and the product support programs that we have developed. Our current portfolio consists of approximately 265 registered trademarks and 35 applications in the U.S. and selected foreign jurisdictions.
We use trademarks and service marks to protect our corporate brand as well as the branding associated with Afrezza, V-Go, our Technosphere formulation technology, our device platform and the product support programs that we have developed. Our current portfolio consists of approximately 300 registered trademarks and 44 applications in the U.S. and selected foreign jurisdictions.
Our development and marketing partner (sometimes referred to as our collaboration partner), United Therapeutics Corporation (“United Therapeutics” or “UT”) began commercializing Tyvaso DPI in June 2022 and is obligated to pay us a royalty on net sales of the product. We also receive a margin on supplies of Tyvaso DPI that we manufacture for UT.
Our development and marketing partner (sometimes referred to as our collaboration partner), United Therapeutics Corporation (“United Therapeutics” or “UT”) began commercializing Tyvaso DPI in June 2022 and is obligated to pay us a royalty on net sales of the product. We also receive revenue for the supply of Tyvaso DPI that we manufacture for UT.
Thomson obtained his B.S., M Sc. and Ph.D. degrees from Queens University and obtained his J.D. degree from the University of Toronto. 17
Thomson obtained his B.S., M Sc. and Ph.D. degrees from Queens University and obtained his J.D. degree from the University of Toronto. 16
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.
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 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.
Currently, the longest-lived patent protection for Tyvaso DPI in our portfolio will expire in 2035. Various features of the commercial V-Go device are protected by a portfolio of approximately 110 issued patents and another 18 pending patent applications, the longest-lived of which will expire in 2033.
Currently, the longest-lived patent protection for Tyvaso DPI in our portfolio will expire in 2035. Various features of the commercial V-Go device are protected by a portfolio of approximately 56 issued patents and another 14 pending patent applications, the longest-lived of which will expire in 2033.
In April 2014, we entered into a supply agreement with Amphastar (as amended, the “Insulin Supply Agreement”) to purchase certain annual minimum quantities with an aggregate purchase commitment of €120.1 million over a term that currently extends through at least December 31, 2034. As of December 31, 2023, there was €59.5 million remaining in aggregate purchase commitments under this agreement.
In April 2014, we entered into a supply agreement with Amphastar (as amended, the “Insulin Supply Agreement”) to purchase certain annual minimum quantities with an aggregate purchase commitment of €120.1 million over a term that currently extends through at least December 31, 2034. As of December 31, 2024, there was €55.2 million remaining in aggregate purchase commitments under this agreement.
The costs of this expansion project are being borne by UT. Currently, the only source of insulin that we have qualified for Afrezza is manufactured by Amphastar France Pharmaceuticals S.A.S. (“Amphastar”).
The costs of this expansion project were primarily borne by UT. Currently, the only source of insulin that we have qualified for Afrezza is manufactured by Amphastar France Pharmaceuticals S.A.S. (“Amphastar”).
In 2023, our total illness and injury incidence rate was 0.8 per 100 employees compared to the 2022 industry average of 1.6, as reported by the U.S. Department of Labor, and our DART (days away/restricted or job transfer) incident rate was 0.4 per 100 employees compared to the 2022 industry average of 1.2.
In 2024, our total illness and injury incidence rate was 1.4 per 100 employees compared to the 2023 industry average of 1.7, as reported by the U.S. Department of Labor, and our DART (days away/restricted or job transfer) incident rate was 0.9 per 100 employees compared to the 2023 industry average of 1.2.
Twenty-one of these employees had a Ph.D. degree and/or M.D. degree and were engaged in activities relating to research and development, manufacturing, quality assurance or business development.
Thirteen of these employees had a Ph.D. degree 13 and/or M.D. degree and were engaged in activities relating to research and development, manufacturing, quality assurance or business development.
The Physician Payments Sunshine Act within PPACA, and its implementing regulations, require certain manufacturers of drugs, devices, biological and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to (i) report information related to certain payments or other transfers of value made or distributed to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain other healthcare professionals (such as physician assistants and nurse practitioners), and teaching hospitals, or to entities or individuals at the request of, or designated on behalf of, the physicians and teaching hospitals and (ii) report annually certain ownership and investment interests held by physicians and their immediate family members.
The Physician Payments Sunshine Act within PPACA, and its implementing regulations, require certain manufacturers of drugs, devices, biological and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to (i) report information related to certain payments or other transfers of value made or distributed to physicians, certain other healthcare professionals, and teaching hospitals, or to entities or individuals at the request of, or designated on behalf of, the physicians and teaching hospitals and (ii) report annually certain ownership and investment interests held by physicians and their immediate family members.
Safety of Clinical Trial Participants When we are actively conducting clinical trials, the safety of our clinical trials plays a crucial role in the development of new products and our continuing prosperity. We take numerous steps to maximize the safety of our clinical trial participants.
Safety of Clinical Trial Participants When we are actively conducting clinical trials, the safety of our clinical trials plays a crucial role in the development of new products and our continuing prosperity.
Overall, Afrezza is protected by approximately 630 issued patents and 40 pending patent applications in the United States and selected jurisdictions around the world, the longest-lived of which will expire in 2032. Similarly, Tyvaso DPI is protected by approximately 400 issued patents in the United States and elsewhere and an additional 45 pending patent applications.
Overall, Afrezza is protected by approximately 620 issued patents and 35 pending patent applications in the United States and selected jurisdictions around the world, the longest-lived of which will expire in 2032. Similarly, Tyvaso DPI is protected by approximately 500 issued patents in the United States and elsewhere and an additional 63 pending patent applications.
For example, on March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 into law, which eliminated the statutory Medicaid drug rebate cap, currently set at 100% of a drug’s average manufacturer price, for single source and innovator multiple source drugs, beginning January 1, 2024.
For example, in March 2021, the American Rescue Plan Act of 2021 was signed into law, which eliminated the statutory Medicaid drug rebate cap, previously set at 100% of a drug’s average manufacturer price ("AMP"), for single source and innovator multiple source drugs, effective January 1, 2024.
The first product to come out of our orphan lung disease pipeline, Tyvaso DPI (treprostinil) inhalation powder, received FDA approval in May 2022 for the treatment of pulmonary arterial hypertension (PAH) and pulmonary hypertension associated with interstitial lung disease (PH-ILD). Tyvaso DPI is the first and only approved dry powder inhaled treatment for PAH and PH-ILD.
Our first product to address an orphan lung disease, Tyvaso DPI (treprostinil) inhalation powder, received FDA approval in May 2022 for the treatment of pulmonary arterial hypertension (PAH) and pulmonary hypertension associated with interstitial lung disease (PH-ILD).
Long-Lived Assets Our long-lived assets are located in the United States and China and totaled $90.0 million and $53.0 million as of December 31, 2023 and 2022, respectively. Employees and Human Capital Our human capital helps us develop and commercialize new products, conduct clinical trials and navigate government regulations.
Long-Lived Assets Our long-lived assets comprised of our property, equipment, right-of-use assets and developed technology are located in the United States and China and totaled $99.5 million and $90.0 million as of December 31, 2024 and 2023, respectively. Employees and Human Capital Our human capital helps us develop and commercialize new products, conduct clinical trials and navigate government regulations.
Other states have also submitted 10 SIP proposals that are pending review by the FDA. Any such approved importation plans, when implemented, may result in lower drug prices for products covered by those programs.
Other states have also submitted SIP proposals that are pending review by the FDA. Any such approved importation plans, when implemented, may result in lower drug prices for products covered by those programs. Further, it is possible that other healthcare reform measures may be adopted in the future.
We believe that, if necessary, alternative sources of supply for such components would be available in a relatively short period of time and on commercially reasonable terms once such alternate suppliers have the appropriate tooling in place. The BluHale device is assembled for us by a CMO using components that are sourced from multiple vendors.
We believe that, if necessary, alternative sources of supply for such components would be available in a relatively short period of time and on commercially reasonable terms once such alternate suppliers have the appropriate tooling in place.
We strive to conduct employee surveys approximately every six months. We offer our employees a portfolio of rewards (our “Total Rewards Program”) to recruit and retain a high level of talent across the Company.
We offer our employees a portfolio of rewards (our “Total Rewards Program”) to recruit and retain a high level of talent across the Company.
(“Altus”) from May 2006 to September 2008, with responsibility for all aspects of commercialization. Prior to joining Altus, Ms. Sabella was employed by Boehringer Ingelheim Pharmaceuticals for 18 years in positions of increasing responsibility, which included over ten years of marketing experience during which she led several product launches including Mobic, an NSAID that became a $1 billion brand.
Sabella was employed by Boehringer Ingelheim Pharmaceuticals for 18 years in positions of increasing responsibility, which included over ten years of marketing experience during which she led several product launches including Mobic, an NSAID that became a $1 billion brand.
We utilize a contract packager to assemble the blister packs of Afrezza and Tyvaso DPI cartridges along with inhalers and the applicable package inserts, into final kits for sale. Our Technosphere powders are intended to be administered with our innovative, breath-powered, dry powder inhalers.
The blister packs of Afrezza and Tyvaso DPI cartridges are combined with inhalers and the applicable package inserts into final kits for sale. Some of this final packaging occurs in our Connecticut facility, with a contract packager providing additional services. Our Technosphere powders are intended to be administered with our innovative, breath-powered, dry powder inhalers.
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. V-Go administers a continuous preset basal rate of insulin over 24 hours and provides discreet on-demand bolus dosing at mealtimes. We are solely responsible for the commercialization of Afrezza and V-Go in the United States.
V-Go administers a continuous preset basal rate of insulin over 24 hours and provides discreet on-demand bolus dosing at mealtimes. We are solely responsible for the commercialization of Afrezza and V-Go in the United States.
Some of the parts and components of V-Go are purchased from single-source vendors, and we manage any single-source components and suppliers through our global supply chain operation.
We also utilize a full-time dedicated contractor based in China. 7 Some of the parts and components of V-Go are purchased from single-source vendors, and we manage any single-source components and suppliers through our global supply chain operation.
We believe these production lines will have the ability to meet our current and expected near-term demand for V-Go. Additional CMOs in China perform release testing, sterilization, inspection and packaging functions. V-Go is assembled from components that are manufactured to our specifications. Each completed device is tested to ensure compliance with our engineering and quality assurance specifications.
Additional CMOs in China perform release testing, sterilization, inspection and packaging functions. V-Go is assembled from components that are manufactured to our specifications. Each completed device is tested to ensure compliance with our engineering and quality assurance specifications.
We believe relations with our employees are good. In managing our business, we monitor several human capital measures, including: • performance against a set of specified corporate objectives for each calendar year, some of which are milestone-based, such as achieving deliverables under our collaboration agreements, and some of which are quantitative, such as achieving target net sales of Afrezza.
In managing our business, we monitor several human capital measures, including: • performance against a set of specified corporate objectives for each calendar year, some of which are milestone-based, such as achieving development milestones relating to our investigational products, and some of which are quantitative, such as achieving target net sales of commercial products.
We maintain a team of 7 product and process engineers, supply chain and quality personnel who provide product and production line support for V-Go. We also utilize a full-time dedicated contractor based in China.
We maintain a team of product and process engineers, supply chain and quality personnel who provide product and production line support for V-Go.
We have adopted and implemented PhRMA’s Code on Interactions with Healthcare Professionals as part of our policy on interactions with healthcare professionals and patients. We believe that training on, and enforcement of, these codes will limit the incidence of unethical interactions between our personnel and healthcare professionals.
We believe that training on, and enforcement of, these codes will limit the incidence of unethical interactions between our personnel and healthcare professionals.
As of December 31, 2023, our workforce was distributed among gender and ethnic minorities as follows: Grade Levels Number Female (%) Ethnic minority (%) Vice President and above 20 25% 25% Executive Director, Director and Senior Manager 114 46% 28% Managers and below 280 41% 45% All employees 414 41% 40% None of our employees are subject to a collective bargaining agreement.
As of December 31, 2024, our workforce was distributed among gender and ethnic minorities as follows: Grade Levels Number Female (%) Ethnic minority (%) Vice President and above 23 22% 22% Executive Director, Director and Senior Manager 119 46% 27% Managers and below 265 38% 46% All employees 407 39% 39% None of our employees are subject to a collective bargaining agreement.
He received his pharmacy degree from the University of the Sciences-Philadelphia College of Pharmacy, a PharmD. from Massachusetts College of Pharmacy & Sciences and an MBA from The Wharton School of Business at the University of Pennsylvania. Steven B. Binder has been our Chief Financial Officer since July 2017. Before joining us, since 2013 Mr.
He received his pharmacy degree from the University of the Sciences-Philadelphia College of Pharmacy, a PharmD. from Massachusetts College of Pharmacy & Sciences and an MBA from The Wharton School of Business at the University of Pennsylvania. Christopher B. Prentiss has been our Chief Financial Officer since April 2024. From September 2022 until March 2024, Mr.
Intellectual Property Our success will depend in large measure on our ability to continue enforcing our intellectual property rights, effectively maintain our trade secrets and avoid infringing the proprietary rights of third parties.
Our CMO facilities and the facilities of our critical suppliers are subject to periodic inspection by the FDA and corresponding state and foreign agencies. Intellectual Property Our success will depend in large measure on our ability to continue enforcing our intellectual property rights, effectively maintain our trade secrets and avoid infringing the proprietary rights of third parties.
If warranted by demand, we expect to be able to qualify additional packaging service providers. V-Go is manufactured for us by a contract manufacturer (“CMO”) in Southern China using MannKind-owned, custom-designed, semi-automated manufacturing equipment and production lines that can be brought online and/or staffed up as demand increases.
V-Go is manufactured for us by a contract manufacturer (“CMO”) in Southern China using MannKind-owned, custom-designed, semi-automated manufacturing equipment and production lines that can be brought online and/or staffed up as demand increases. We believe these production lines will have the ability to meet our current and expected near-term demand for V-Go.
Whether or not FDA approval has been obtained, approval of a product by the comparable regulatory authorities of foreign countries usually must be obtained prior to the marketing of the product in those countries. The 9 approval process varies from jurisdiction to jurisdiction and the time required may be longer or shorter than that required for FDA approval.
Whether or not FDA approval has been obtained, approval of a product by the comparable regulatory authorities of foreign countries usually must be obtained prior to the marketing of the product in those countries.
Before that, from January 2010 to February 2015, she was Acorda’s Executive Vice President, Commercial Development. Prior to that, Ms. Sabella was the Founder and Principal of Tugboat Consulting Group, an independent consulting practice assisting companies in the commercialization process. Ms. Sabella also served as Corporate Officer and Vice President of Commercial Development at Altus Pharmaceuticals Inc.
Sabella was the Founder and Principal of Tugboat Consulting Group, an independent consulting practice assisting companies in the commercialization process. Ms. Sabella also served as Corporate Officer and Vice President of Commercial Development at Altus Pharmaceuticals Inc. (“Altus”) from May 2006 to September 2008, with responsibility for all aspects of commercialization. Prior to joining Altus, Ms.
As of December 31, 2023, we had 414 total at-will employees, of which 411 were full-time. Of our full-time employees, 227 were engaged in manufacturing, 32 in research and development, 58 in general and administrative and 94 in selling and marketing.
As of December 31, 2024, we had 407 total at-will employees, of which 403 were full-time. Of our full-time employees, 238 were engaged in manufacturing, 23 in research and development, and 142 in selling, general and administrative.
Pricing and Reimbursement Government coverage and reimbursement policies both directly and indirectly affect our ability to successfully commercialize our approved products, and such coverage and reimbursement policies will be affected by future healthcare reform measures.
The approval process varies from jurisdiction to jurisdiction and the time required may be longer or shorter than that required for FDA approval. 9 Pricing and Reimbursement Government coverage and reimbursement policies both directly and indirectly affect our ability to successfully commercialize our approved products, and such coverage and reimbursement policies will be affected by future healthcare reform measures.
From 2010 to 2012, he was Executive Director, Immunology, at Bristol-Myers Squibb Company (“BMS”), an innovative global biopharmaceutical company. Before BMS, Dr. Castagna served as Vice President & Head, Biopharmaceuticals, North America, at Sandoz, a division of Novartis. He has also held positions with commercial responsibilities at EMD (Merck) Serono, Pharmasset and DuPont Pharmaceuticals.
Castagna served as Vice President & Head, Biopharmaceuticals, North America, at Sandoz, a division of Novartis. He has also held positions with commercial responsibilities at EMD (Merck) Serono, Pharmasset and DuPont Pharmaceuticals.
This study, known as the INHALE-1 study, is expected to complete enrollment in the first quarter of 2024. When Afrezza was approved, the FDA also required us to conduct an additional long-term safety study that was originally intended to compare the incidence of pulmonary malignancy observed with Afrezza to that observed in a standard of care control group.
For example, as part of the approval of Afrezza, the FDA required us to conduct a long-term safety study that was originally intended to compare the incidence of pulmonary malignancy observed with Afrezza to that observed in a standard of care control group.
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 2/3 registrational study of MNKD-101 in the United States in the second quarter of 2024.
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 2024, we initiated a global Phase 3 registrational study of MNKD-101, with sites in the United States, Japan, South Korea, Taiwan, and Australia.
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.
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.
Department of Health and Human Services (“HHS”) to negotiate the price of certain single-source drugs and biologics covered under Medicare and (2) imposed rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation. These provisions took effect progressively starting in fiscal year 2023.
Department of Health and Human Services (“HHS”) to negotiate the price of certain single-source drugs that have been on the market for at least 7 years covered under Medicare (the "Medicare Drug Price Negotiation Program") and (2) imposed rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation.
Binder 61 Chief Financial Officer Burkhard Blank 69 Executive Vice President, Research and Development, and Chief Medical Officer Lauren Sabella 63 Chief Operating Officer Sanjay Singh, M Pharm, MBA 57 Executive Vice President, Technical Operations Stuart A. Tross, Ph.D. 57 Executive Vice President, Human Resources David B. Thomson, Ph.D., J.D. 57 General Counsel and Secretary Michael E.
Prentiss 49 Chief Financial Officer Burkhard Blank 70 Executive Vice President, Research and Development, and Chief Medical Officer Dominic Marasco 52 President, Endocrine Business Unit Lauren Sabella 64 Executive Vice President, Operations Sanjay Singh, M Pharm, MBA 58 Executive Vice President, Technical Operations Stuart A. Tross, Ph.D. 58 Executive Vice President, Human Resources David B.
Sabella served as Principal at LS Consulting Group, a strategic advisory group providing consulting services to pharmaceutical and emerging biotech companies, from September 2022 until March 2023. From September 2021 until September 2022, Ms. Sabella served as Chief Operating Officer at Acorda Therapeutics, Inc. (“Acorda”). Ms. Sabella was previously Acorda’s Chief Commercial Officer from February 2015 to September 2021.
Lauren Sabella has been our Executive Vice President, Operations since January 2025 and previously served as our Chief Operating Officer from March 2023 to January 2025. Prior to joining us, Ms. Sabella served as Principal at LS Consulting Group, a strategic advisory group providing consulting services to pharmaceutical and emerging biotech companies, from September 2022 until March 2023.
The health of subjects in clinical trials is a priority for us and we are committed to conducting clinical trials according to uniformly high ethical standards. We apply those standards to trials that we sponsor and conduct directly as well as those conducted on our behalf by clinical research organizations.
We apply those standards to trials that we sponsor and conduct directly as well as those conducted on our behalf by clinical research organizations.
(“Cipla”), recently submitted a marketing authorization application to the Drug Controller General of India. The proprietary formulation and inhaler technologies used in Afrezza have also been deployed in our efforts to develop products to treat orphan lung diseases.
(“Cipla”), recently obtained approvals for Afrezza from the Drug Controller General of India and the Central Drugs Standard Control Organisation. We expect to ship product once Cipla obtains the registration certificate and import license. The proprietary formulation and inhaler technologies used in Afrezza have also been deployed in our efforts to develop products to treat orphan lung diseases.
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.
We expect enrollment of subjects into this study to continue into 2026. The other major 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.
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 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”). 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.
Manufacturing and Supply Technosphere powders are based on our proprietary excipient, fumaryl diketopiperazine (“FDKP”), which is a pH-sensitive organic molecule that self-assembles into small particles under acidic conditions. Certain drugs can be loaded onto these particles by combining a solution of the drug with a solution or suspension of Technosphere material, which is then dried to powder form.
Manufacturing and Supply Technosphere powders, such as Afrezza and Tyvaso DPI, are based on our proprietary excipient, fumaryl diketopiperazine (“FDKP”), which is a pH-sensitive organic molecule that self-assembles into small particles under acidic conditions.
The resulting powder has a consistent and 6 narrow range of particle sizes with good aerodynamic properties that enable efficient delivery deep into the lungs.
Certain drugs can be loaded onto these 6 particles by combining a solution of the drug with a solution or suspension of Technosphere material, which is then dried to powder form. The resulting powder has a consistent and narrow range of particle sizes with good aerodynamic properties that enable efficient delivery deep into the lungs.
The CPRA established a new California Privacy Protection Agency to implement and enforce the CPRA, which could increase the risk of enforcement. Other states have enacted data privacy laws. For example, Virginia passed the Consumer Data Protection Act, and Colorado passed the Colorado Privacy Act, both of which became effective in 2023.
The CPRA established a new California Privacy Protection Agency to implement and enforce the CPRA, which could increase the risk of enforcement. At this time, at least 19 states have enacted some sort of data privacy law, with bills introduced in many other states.
While at Acorda, he oversaw the Phase 3 development in North America and in Europe for Inbrija® (levodopa inhalation powder) for Parkinson’s disease with subsequent one-cycle approvals by the FDA and the EMA. Earlier in his career, Dr. Blank spent 20 years between Boehringer Ingelheim Pharmaceuticals in Ridgefield, CT, and Boehringer Ingelheim GmbH in Germany, serving in progressive leadership roles.
Before joining us, since 2022, Dr. Blank served as CMO/Head of R&D at Pharnext SA after serving seven years in the same position at Acorda Therapeutics. While at Acorda, he oversaw the Phase 3 development in North America and in Europe for Inbrija® (levodopa inhalation powder) for Parkinson’s disease with subsequent one-cycle approvals by the FDA and the EMA.
Castagna, Pharm.D. has been our Chief Executive Officer since May 2017 and was our Chief Commercial Officer from March 2016 until May 2017. From November 2012 until he joined us, Dr. Castagna was at Amgen, Inc., where he initially served as Vice President, Global Lifecycle Management, and subsequently, Vice President, Global Commercial Lead for Amgen’s Biosimilar Business Unit.
Castagna was at Amgen, Inc., where he initially served as Vice President, Global Lifecycle Management, and subsequently, Vice President, Global Commercial Lead for Amgen’s Biosimilar Business Unit. From 2010 to 2012, he was Executive Director, Immunology, at Bristol-Myers Squibb Company (“BMS”), an innovative global biopharmaceutical company. Before BMS, Dr.
On December 8, 2023, the National Institute of Standards and Technology published for comment a Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights which for the first time includes the price of a product as one factor an agency can use when deciding to exercise march-in rights.
In December 2023, an initiative to control the price of prescription drugs through the use of march-in rights under the Bayh-Dole Act was announced which includes the price of a product as one factor an agency can use when deciding to exercise march-in rights.
On August 29, 2023, HHS announced the list of the first ten drugs that will be subject to price negotiations, although the Medicare drug price negotiation program is currently subject to legal challenges. It is currently unclear how the IRA will be implemented but is likely to have a significant impact on the pharmaceutical industry.
These provisions began to take effect progressively in fiscal year 2023. On August 15, 2024, HHS announced the agreed-upon price of the first ten drugs that were subject to price negotiations, although the Medicare Drug Price Negotiation Program is currently subject to legal challenges.
U.S. federal and state consumer protection laws require us to publish statements that accurately and fairly describe how we handle personal data and choices individuals may have about the way we handle their personal data. Foreign data privacy and security laws impose significant and complex compliance obligations on entities that are subject to those laws.
Foreign data privacy and security laws impose significant and complex compliance obligations on entities that are subject to those laws.
A partial listing of our current scientific advisors is maintained on our corporate website at www.mannkindcorp.com . 15 Information about our Executive Officers The following table sets forth our current executive officers and their ages: Name Age Position(s) Michael E. Castagna, Pharm.D. 47 Chief Executive Officer Steven B.
The contents of our websites are not incorporated into this Annual Report. Further, our references to the URLs for these websites are intended to be inactive textual reference only. Information about our Executive Officers The following table sets forth our current executive officers and their ages: Name Age Position(s) Michael E. Castagna, Pharm.D. 48 Chief Executive Officer Christopher B.
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To aid in the development of oral inhalation products, we have created a number of innovative tools, including a novel inhalation profiling apparatus, known as BluHale that uses miniature sensors to assess the drug delivery process at the level of an individual inhaler.
Added
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.
Removed
The BluHale apparatus medical device provides real-time data regarding patient usage and delivery system performance that is transmitted to a user interface, such as a smartphone application. During 2020, we released a BluHale Professional version of the apparatus for use as a training tool in certain physicians' offices.
Added
In July 2024, we closed a transaction with Pulmatrix, Inc. pursuant to which we acquired an exclusive license to the Pulmatrix iSPERSE formulation technology for clofazimine and insulin and a non-exclusive license for iSPERSE formulations of active pharmaceutical ingredients for the treatment of NTM lung disease, endocrine disease, and interstitial lung diseases.
Removed
A consumer version of the apparatus, with additional features, was used as part of a clinical study of Afrezza (the INHALE-3 study) in 2023. The learnings from this study will help guide future releases of the apparatus and its corresponding smartphone application.
Added
With this transaction, we now have additional formulation options to utilize in our development of viable powders for certain drug candidates, such as clofazimine, that may require a higher drug payload than our Technosphere formulation technology can provide.
Removed
We also have an agreement with the contractor that performs the final packaging of Afrezza and Tyvaso DPI overwraps, inhalers and printed material into patient kits. In 2024, we expect that we will package some of the Tyvaso DPI stock-keeping units in our Danbury facility, which will supplement our revenue from collaborations and services.
Added
On January 17, 2025, HHS selected fifteen additional products covered under Part D for price negotiations in 2025. Each year thereafter more Part B and Part D products will become subject to the Medicare Drug Price Negotiation Program.
Removed
Our CMO facilities and the facilities of our critical suppliers are subject to periodic inspection by the FDA and corresponding state and foreign agencies.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn addition, because each third-party payer individually approves coverage and reimbursement levels, obtaining coverage and adequate reimbursement is a time-consuming and costly process. We may be required to provide scientific and clinical support for the use of any product to each third-party payer separately with no assurance that approval would be obtained.
Biggest changeWe may be required to provide scientific and clinical support for the use of any product to each third-party payer separately with no assurance that approval would be obtained. Even if favorable coverage and reimbursement status is attained from some payers for our products, less favorable coverage policies and reimbursement rates may be implemented in the future.
The degree of market acceptance of our or a collaboration partner’s products depends on many factors, including the following: • approved labeling claims; • effectiveness of efforts by us and/or any current or future collaboration or marketing partner to support and educate patients and physicians about the benefits and proper administration of our products, and the perceived advantages of our products and the disadvantages of competitive products; • willingness of the healthcare community and patients to adopt new technologies; • ability to manufacture the product in sufficient quantities with acceptable quality and cost; • perception of patients and the healthcare community, including third-party payers, regarding the safety, efficacy and benefits compared to competing products or therapies; • convenience and ease of administration relative to existing treatment methods; • coverage and reimbursement, as well as pricing relative to other treatment therapeutics and methods; and • marketing and distribution support.
The degree of market acceptance of our or a collaboration partner’s products depends on many factors, including the following: • approved labeling claims; • effectiveness of efforts by us and/or any current or future collaboration or marketing partner to support and educate patients and physicians about the benefits and proper administration of our products, and the perceived advantages of our products and the disadvantages of competitive products; • willingness of the healthcare community and patients to adopt new technologies or therapies; • ability to manufacture the product in sufficient quantities with acceptable quality and cost; • perception of patients and the healthcare community, including third-party payers, regarding the safety, efficacy and benefits compared to competing products or therapies; • convenience and ease of administration relative to existing treatment methods; • coverage and reimbursement, as well as pricing relative to other treatment therapeutics and methods; and • marketing and distribution support.
Similarly, if UT does not effectively engage or maintain its sales force for Tyvaso DPI, our ability to recognize royalties and manufacturing revenue from this collaboration will be adversely affected. Manufacturing risks may adversely affect our ability to manufacture our products and Tyvaso DPI, which and could reduce our gross margin and profitability.
Similarly, if UT does not effectively engage or maintain its sales force for Tyvaso DPI, our ability to recognize royalties and manufacturing revenue from this collaboration will be adversely affected. Manufacturing risks may adversely affect our ability to manufacture our products and Tyvaso DPI, which could reduce our gross margin and profitability.
If long-term use of an approved therapeutic product results in adverse health effects or reduced efficacy or both, the FDA or other regulatory agencies may terminate our or any marketing or collaboration partner’s ability to market and sell the product, may narrow the approved indications for use or otherwise require restrictive product labeling or marketing, or may require further clinical studies, which may be time-consuming and expensive and may not produce favorable results.
If long-term use of an approved therapeutic product results in adverse health effects or reduced efficacy or both, the FDA or other regulatory agencies may terminate our or any collaboration partner’s ability to market and sell the product, may narrow the approved indications for use or otherwise require restrictive product labeling or marketing, or may require further clinical studies, which may be time-consuming and expensive and may not produce favorable results.
Our future revenues and ability to generate positive cash flow from operations may be affected by the continuing efforts of government and other third-party payers to contain or reduce the costs of healthcare through various means.
Our future revenues and ability to generate positive cash flow from operations may be affected by the continuing efforts of government and other third-party payers to contain or reduce the costs of healthcare through various means.
Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation.
Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation.
In addition, during the course of this kind of litigation, there could be public announcements of the results of hearings, motions or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, the market price of our common stock and other securities may decline.
In addition, during the course of this kind of litigation, there could be public announcements of the results of hearings, motions or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, the market price of our common stock and other securities may decline.
This provision does not apply to suits brought to enforce a duty or liability created by the Exchange Act. Furthermore, Section 22 of the Securities Act of 1933, as amended, or the Securities Act, creates concurrent jurisdiction for federal and state courts over all such Securities Act actions. Accordingly, both state and federal courts have jurisdiction to entertain such claims.
This provision does not apply to suits brought to enforce a duty or liability created by the Exchange Act. Furthermore, Section 22 of the Securities Act of 1933, as amended (the "Securities Act"), creates concurrent jurisdiction for federal and state courts over all such Securities Act actions. Accordingly, both state and federal courts have jurisdiction to entertain such claims.
The key laws that may affect our ability to operate include, among others: • The federal Anti-Kickback Statute (as amended by PPACA, which modified the intent requirement of the federal Anti-Kickback Statute so that a person or entity no longer needs to have actual knowledge of the Statute or specific intent to violate it to have committed a violation), which constrains our business activities, including our marketing practices, educational programs, pricing policies, and relationships with healthcare providers or other entities by prohibiting, among other things, knowingly and willfully soliciting, receiving, offering or paying remuneration, directly or indirectly, to induce, or in return for, either the referral of an individual or the purchase or recommendation of an item or service reimbursable under a federal healthcare program, such as the Medicare and Medicaid programs; • Federal civil and criminal false claims laws, including without limitation the False Claims Act, and civil monetary penalties laws, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid, or other federal healthcare programs that are false or fraudulent, and knowingly making, or causing to be made, a false record or statement material to a false or fraudulent claim to avoid, decrease or conceal an obligation to pay money to the federal government, and under PPACA, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal false claims laws; • The federal Physician Payments Sunshine Act under PPACA, which requires certain manufacturers of drugs, devices, biologics, and medical supplies to report annually to Centers for Medicare & Medicaid Services (“CMS”) information related to payments and other transfers of value to physicians (defined to include defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain other healthcare professionals (such as physician assistants and nurse practitioners), and teaching hospitals, and ownership and investment interests held by physicians and their immediate family members. • The federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which created new federal criminal statutes that prohibit, among other things, knowingly and willfully executing a scheme to defraud any healthcare benefit program or falsifying, concealing, or covering up a material fact in connection with the delivery of or payment for health care benefits. • HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (“HITECH”), and their respective implementing regulations, which impose certain requirements relating to the privacy, security and transmission of individually identifiable health information on entities subject to the law, such as certain healthcare providers, health plans, and healthcare clearinghouses and their respective business associates that perform services for them that involve the creation, use, maintenance or disclosure of, individually identifiable health information as well as their covered subcontractors. • Other state and foreign law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payer, including commercial insurers, and state and foreign laws governing the privacy and security and other processing of personal data (including health information) in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts; state laws that require pharmaceutical companies to comply with the industry’s voluntary compliance guidelines and the applicable compliance guidance promulgated by the federal government that otherwise restricts certain payments that may be made to healthcare providers and entities; state and local laws that require the registration of pharmaceutical sales representatives; and state laws that require drug manufacturers to report information related to payments and other transfer of value to physicians and other healthcare providers and entities, marketing expenditures or drug pricing.
The key laws that may affect our ability to operate include, among others: • The federal Anti-Kickback Statute (as amended by PPACA, which modified the intent requirement of the federal Anti-Kickback Statute so that a person or entity no longer needs to have actual knowledge of the Statute or specific intent to violate it to have committed a violation), which constrains our business activities, including our marketing practices, educational programs, pricing policies, and relationships with healthcare providers or other entities by prohibiting, among other things, knowingly and willfully soliciting, receiving, offering or paying remuneration, directly or indirectly, to induce, or in return for, either the referral of an individual or the purchase or recommendation of an item or service reimbursable under a federal healthcare program, such as the Medicare and Medicaid programs; • Federal civil and criminal false claims laws, including without limitation the False Claims Act, and civil monetary penalties laws, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid, or other federal healthcare programs that are false or fraudulent, and knowingly making, or causing to be made, a false record or statement material to a false or fraudulent claim to avoid, decrease or conceal an obligation to pay money to the federal government, and under PPACA, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal false claims laws; • The federal Physician Payments Sunshine Act under PPACA, which requires certain manufacturers of drugs, devices, biologics, and medical supplies to report annually to the CMS information related to payments and other transfers of value to physicians (defined to include defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain other healthcare professionals (such as physician assistants and nurse practitioners), and teaching hospitals, and ownership and investment interests held by physicians and their immediate family members. • The federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which created new federal criminal statutes that prohibit, among other things, knowingly and willfully executing a scheme to defraud any healthcare benefit program or falsifying, concealing, or covering up a material fact in connection with the delivery of or payment for health care benefits. • HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (“HITECH”), and their respective implementing regulations, which impose certain requirements relating to the privacy, security and transmission of individually identifiable health information on entities subject to the law, such as certain healthcare providers, health plans, and healthcare clearinghouses and their respective business associates that perform services for them that involve the creation, use, maintenance or disclosure of, individually identifiable health information as well as their covered subcontractors. • Other state and foreign law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payer, including commercial insurers, and state and foreign laws governing the privacy and security and other processing of personal data (including health information) in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts; state laws that require pharmaceutical companies to comply with the industry’s voluntary compliance guidelines and the applicable compliance guidance promulgated by the federal government that otherwise restricts certain payments that may be made to healthcare providers and entities; state and local laws that require the registration of pharmaceutical sales representatives; and state laws that require drug manufacturers to report information related to payments and other transfer of value to physicians and other healthcare providers and entities, marketing expenditures or drug pricing.
Potential difficulties that may be encountered in the integration process include the following: • unanticipated liabilities related to acquired assets, companies or joint ventures; • integrating personnel, operations and systems, while maintaining focus on producing and delivering consistent, high quality products; • coordinating geographically dispersed organizations; 27 • diversion of management time and focus from operating our business to management of strategic alliances or joint ventures or acquisition integration challenges; • retention of key employees; • increases in our expenses and reductions in our cash available for operations and other uses; • retaining existing customers and attracting new customers; • managing inefficiencies associated with integrating the operations of our company; and • possible write-offs or impairment charges relating to acquired assets, businesses or joint ventures.
Potential difficulties that may be encountered in the integration process include the following: • unanticipated liabilities related to acquired assets, companies or joint ventures; • integrating personnel, operations and systems, while maintaining focus on producing and delivering consistent, high quality products; • coordinating geographically dispersed organizations; • diversion of management time and focus from operating our business to management of strategic alliances or joint ventures or acquisition integration challenges; • retention of key employees; • increases in our expenses and reductions in our cash available for operations and other uses; • retaining existing customers and attracting new customers; • managing inefficiencies associated with integrating the operations of our company; and • possible write-offs or impairment charges relating to acquired assets, businesses or joint ventures.
If there is no lawful manner for us to transfer personal data from the EEA, the UK or other jurisdictions to the United States, or if the requirements for a legally-compliant transfer are too onerous, we could face significant adverse consequences, including the interruption or degradation of our operations, the need to relocate part of or all of our business or data processing activities to other jurisdictions (such as Europe) at significant expense, increased exposure to regulatory actions, substantial fines and penalties, the inability to transfer data and work with partners, vendors and other third parties, and injunctions against our processing or transferring of personal data necessary to operate our business.
If there is no lawful manner for us to transfer personal data from the EEA, the UK or other jurisdictions to the United States, or if the requirements for a legally-compliant transfer are too onerous, we could face significant adverse consequences, including the interruption or degradation of our operations, the need to relocate part of or all of our business or data processing activities to other jurisdictions (such as Europe) at significant expense, increased exposure to regulatory actions, substantial fines and penalties, the inability to transfer data and work 34 with partners, vendors and other third parties, and injunctions against our processing or transferring of personal data necessary to operate our business.
In addition, there is a risk that we would have to pay the other party damages for having violated the other party’s patents (which damages may be increased, as well as attorneys’ fees ordered paid, if infringement is found to be willful), or that we will be required to obtain a license from the other party in order to continue to commercialize the affected products, or to design our products in a manner that does not infringe a valid patent.
In 37 addition, there is a risk that we would have to pay the other party damages for having violated the other party’s patents (which damages may be increased, as well as attorneys’ fees ordered paid, if infringement is found to be willful), or that we will be required to obtain a license from the other party in order to continue to commercialize the affected products, or to design our products in a manner that does not infringe a valid patent.
Some of the factors that could cause our operating results to fluctuate from period to period include the factors that will affect our funding requirements described above under “Risk Factors — We may need to raise additional capital to fund our operations.” In addition, the current inflationary environment related to increased aggregate demand and supply chain constraints has the potential to adversely affect our operating expenses.
Some of the factors that could cause our operating results to fluctuate from period to period include the factors that will affect our funding requirements described above under “Risk Factors – 22 We may need to raise additional capital to fund our operations.” In addition, the current inflationary environment related to increased aggregate demand and supply chain constraints has the potential to adversely affect our operating expenses.
Some patients may not be able or willing to comply with clinical trial protocols if quarantines impede patient movement or interrupt healthcare services. Similarly, our ability to recruit and retain patients and principal investigators and site staff would adversely impact our clinical trial operations. A pandemic or epidemic also has the potential for disruption of global financial markets.
Some patients may not be able or willing to comply with clinical trial protocols if quarantines impede patient movement or interrupt healthcare services. Similarly, our ability to recruit and retain patients and principal investigators and site staff would adversely impact our clinical trial operations. 23 A pandemic or epidemic also has the potential for disruption of global financial markets.
It may be difficult to find or maintain collaboration partners that are able and willing to devote the time and resources necessary to successfully 25 commercialize our products. Collaborations with third parties may require us to relinquish material rights, including revenue from commercialization, agree to unfavorable terms or assume material ongoing development obligations that we would have to fund.
It may be difficult to find or maintain collaboration partners that are able and willing to devote the time and resources necessary to successfully commercialize our products. Collaborations with third parties may require us to relinquish material rights, including revenue from commercialization, agree to unfavorable terms or assume material ongoing development obligations that we would have to fund.
A patent owner may claim that we are making, using, selling or offering for sale an invention covered by the owner’s patents and may go to court to stop us from engaging in such activities. Such litigation is not uncommon in our industry. 40 Patent lawsuits can be expensive and would consume time and other resources.
A patent owner may claim that we are making, using, selling or offering for sale an invention covered by the owner’s patents and may go to court to stop us from engaging in such activities. Such litigation is not uncommon in our industry. Patent lawsuits can be expensive and would consume time and other resources.
In particular, supply-chain attacks have increased in frequency and severity, and we 22 cannot guarantee that third parties and infrastructure in our supply chain or our third-party partners’ supply chains have not been compromised or that they do not contain exploitable defects or bugs that could result in a breach of or disruption to our information technology systems (including our products) or the third-party information technology systems that support us and our services.
In particular, supply-chain attacks have increased in frequency and severity, and we cannot guarantee that third parties and infrastructure in our supply chain or our third-party partners’ supply chains have not been compromised or that they do not contain exploitable defects or bugs that could result in a breach of or disruption to our information technology systems (including our products) or the third-party information technology systems that support us and our services.
These consequences may include, but are not limited to, government enforcement actions (e.g., investigations, fines, penalties, audits, inspections, and similar); litigation (including class-related claims) and mass arbitration demands; additional reporting requirements and/or oversight; bans on processing personal data; orders to destroy or not use personal data; and imprisonment of company officials.
These consequences may include, but are not limited to, government enforcement actions (e.g., investigations, fines, penalties, audits, inspections, and similar); litigation (including class-related claims) and mass arbitration demands; additional reporting requirements and/or oversight; bans or restrictions on processing personal data; orders to destroy or not use personal data; and imprisonment of company officials.
In addition, the Office of Inspector General of the HHS and other Congressional, enforcement and administrative bodies have recently increased their focus on pricing requirements for products, including, but not limited to the methodologies used by manufacturers to calculate 38 AMP and best price (“BP”) for compliance with reporting requirements under the Medicaid Drug Rebate Program.
In addition, the Office of Inspector General of the HHS and other Congressional, enforcement and administrative bodies have recently increased their focus on pricing requirements for products, including, but not limited to the methodologies used by manufacturers to calculate AMP and best price (“BP”) for compliance with reporting requirements under the Medicaid Drug Rebate Program.
These restrictions could include limitations on additional borrowing and specific restrictions on the use of our assets, as well as prohibitions on our ability to create liens, pay dividends, redeem our stock or make investments. We may also raise additional capital by pursuing opportunities for the licensing or sale of certain intellectual property and other assets.
These restrictions could include limitations on 20 additional borrowing and specific restrictions on the use of our assets, as well as prohibitions on our ability to create liens, pay dividends, redeem our stock or make investments. We may also raise additional capital by pursuing opportunities for the licensing or sale of certain intellectual property and other assets.
V-Go received pre-market clearance in 2010 under Section 510(k) of the U.S. Federal Food, Drug, and Cosmetic Act, or FDCA. This process typically requires the submission of less supporting documentation than other FDA approval processes and does not always require long-term clinical studies.
V-Go received pre-market clearance in 2010 under Section 510(k) of the U.S. Federal Food, Drug, and Cosmetic Act ("FDCA"). This process typically requires the submission of less supporting documentation than other FDA approval processes and does not always require long-term clinical studies.
Adverse developments affecting the financial services industry could adversely affect our current and projected business operations and our financial condition and results of operations. 31 Adverse developments that affect financial institutions, such as events involving liquidity that are rumored or actual, have in the past and may in the future lead to bank failures and market-wide liquidity problems.
Adverse developments affecting the financial services industry could adversely affect our current and projected business operations and our financial condition and results of operations. Adverse developments that affect financial institutions, such as events involving liquidity that are rumored or actual, have in the past and may in the future lead to bank failures and market-wide liquidity problems.
Unless the United States Department of the Treasury issues 29 regulations that narrow the application of this provision to a smaller subset of our research and development expenses or the provision is deferred, modified, or repealed by Congress, it could harm our future operating results by effectively increasing our future tax obligations.
Unless the United States Department of the Treasury issues regulations that narrow the application of this provision to a smaller subset of our research and development expenses or the provision is deferred, modified, or repealed by Congress, it could harm our future operating results by effectively increasing our future tax obligations.
If we or any collaboration or marketing partner is unable to obtain and maintain coverage of, and adequate third-party reimbursement for, our approved products, physicians may limit how much or under what circumstances they will prescribe or administer them and patients may decline to purchase them.
If we or any collaboration partner is unable to obtain and maintain coverage of, and adequate third-party reimbursement for, our approved products, physicians may limit how much or under what circumstances they will prescribe or administer them and patients may decline to purchase them.
Products that we commercialize ourselves (including any products that we may develop or acquire in the future) and the product that is commercialized by our current collaboration partner (including future products that may be commercialized by our collaboration partner) may not gain market acceptance among physicians, patients, third-party payers and the healthcare community.
Products that we commercialize ourselves (including any products that we may develop or acquire in the future) and the product that is commercialized by our current collaboration partner (including future products that may be commercialized by a collaboration partner) may not gain market acceptance among physicians, patients, third-party payers and the healthcare community.
We may be required to enter into relationships with 21 third parties to develop or commercialize products or technologies that we otherwise would have sought to develop independently, and any such relationships may not be on terms as commercially favorable to us as might otherwise be the case.
We may be required to enter into relationships with third parties to develop or commercialize products or technologies that we otherwise would have sought to develop independently, and any such relationships may not be on terms as commercially favorable to us as might otherwise be the case.
Effective January 1, 2022, the Tax Act eliminated the option to deduct research and development expenses for tax purposes in the year incurred and requires taxpayers to capitalize and subsequently amortize such expenses over five years for research activities conducted in the United States and over 15 years for research activities conducted outside the United States.
Effective January 1, 2022, the Tax Act eliminated the option to deduct research and development expenses for tax purposes in the year incurred and requires taxpayers to capitalize and subsequently amortize such expenses over five years for research activities conducted in the United 27 States and over 15 years for research activities conducted outside the United States.
We may experience numerous unforeseen events during, or as a result of, the testing process that could delay or impact commercialization of any of our product candidates, including the following: • safety and efficacy results obtained in our nonclinical and early clinical testing may be inconclusive or may not be predictive of results that we may obtain in our future clinical studies or following long-term use, and we may as a result be forced to stop developing a product candidate or alter the marketing of an approved product; • the analysis of data collected from clinical studies of our product candidates may not reach the statistical significance necessary, or otherwise be sufficient to support FDA or other regulatory approval for the claimed indications; • after reviewing clinical data, we or any collaborators may abandon projects that we previously believed were promising; • our product candidates may not produce the desired effects or may result in adverse health effects or other characteristics that preclude regulatory approval or limit their commercial use once approved; and • disruptions caused by man-made or natural disasters or public health pandemics or epidemics or other business interruptions.
We may experience numerous unforeseen events during, or as a result of, the testing process that could delay or impact commercialization of any of our product candidates, including the following: • safety and efficacy results obtained in our nonclinical and early clinical testing may be inconclusive or may not be predictive of results that we may obtain in our future clinical studies or following long-term use, and we may as a result be forced to stop developing a product candidate or alter the marketing of an approved product; • the analysis of data collected from clinical studies of our products and product candidates may not reach the statistical significance necessary, or otherwise be sufficient to support FDA or other regulatory approval for the claimed indications; • after reviewing clinical data, we or any collaborators may abandon projects that we previously believed were promising; • our product candidates may not produce the desired effects or may result in adverse health effects or other characteristics that preclude regulatory approval or limit their commercial use once approved; and • disruptions caused by geopolitical conflicts, man-made or natural disasters or public health pandemics or epidemics or other business interruptions.
If we or any future partner fails to comply with federal and state healthcare laws, including fraud and abuse and health information laws, we could face substantial penalties and our business, results of operations, financial condition and prospects could be adversely affected.
If we or any partner fails to comply with federal and state healthcare laws, including fraud and abuse and health information laws, we could face substantial penalties and our business, results of operations, financial condition and prospects could be adversely affected.
In addition, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which generally prohibits stockholders owning 15% or more of our outstanding voting stock from merging or combining with us in certain circumstances.
In addition, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which generally prohibits stockholders owning 15% or more of our outstanding voting stock from merging or combining 39 with us in certain circumstances.
This in turn could affect our or any collaboration or marketing partner’s ability to successfully commercialize such products and would impact our profitability, results of operations, financial condition, and prospects. We may need to raise additional capital to fund our operations.
This in turn could affect our or any collaboration partner’s ability to successfully commercialize such products and would impact our profitability, results of operations, financial condition, and prospects. We may need to raise additional capital to fund our operations.
FDA regulations and the regulations of comparable foreign regulatory authorities are wide-ranging and govern, among other things: 32 • product design, development, manufacture and testing; • product labeling; • product storage and shipping; • pre-market clearance or approval; • advertising and promotion; and • product sales and distribution.
FDA regulations and the regulations of comparable foreign regulatory authorities are wide-ranging and govern, among other things: • product design, development, manufacture and testing; • product labeling; • product storage and shipping; • pre-market clearance or approval; • advertising and promotion; and • product sales and distribution.
Any required refunds to the U.S. government or responding to a government investigation or enforcement action would be expensive and time consuming and could have a material adverse effect on our business, results of operations and financial condition.
Any required refunds to the U.S. government or responding to a government investigation or enforcement action would be expensive and time consuming and could 35 have a material adverse effect on our business, results of operations and financial condition.
Our anti-takeover provisions include provisions such as a prohibition on 42 stockholder actions by written consent, the authority of our board of directors to issue preferred stock without stockholder approval, and supermajority voting requirements for specified actions.
Our anti-takeover provisions include provisions such as a prohibition on stockholder actions by written consent, the authority of our board of directors to issue preferred stock without stockholder approval, and supermajority voting requirements for specified actions.
Any such event or consequence, including penalties, damages, fines, and curtailment or restructuring of our operations, could materially adversely affect our ability to operate our business, including our ability to run clinical trials, and our financial results and harm our reputation.
Any such event or consequence, including penalties, damages, fines, and curtailment or restructuring of our operations, could materially adversely affect our ability to operate 33 our business, including our ability to run clinical trials, and our financial results and harm our reputation.
If our cash flows and capital resources are insufficient to fund our obligations, we may be forced to reduce or delay capital expenditures, sell assets or operations, seek additional capital or restructure or refinance our lease obligations.
If our cash flows and capital resources are insufficient to fund our obligations, we may be forced to reduce or delay capital expenditures, sell assets or operations, seek additional capital or restructure or refinance our obligations.
Additional 30 contract manufacturers in China perform release testing, sterilization, inspection and packaging functions. These facilities and the specialized manufacturing equipment we use at them would be costly to replace and could require substantial lead-time to repair or replace. We depend on our facilities and on collaborators, contractors and vendors for the continued operation of our business.
Additional contract manufacturers in China perform 41 release testing, sterilization, inspection and packaging functions. These facilities and the specialized manufacturing equipment we use at them would be costly to replace and could require substantial lead-time to repair or replace. We depend on our facilities and on collaborators, contractors and vendors for the continued operation of our business.
Security incidents and attendant consequences may cause customers to stop using our products, deter new customers from using our products, and negatively impact our ability to grow and operate our business.
Security incidents and material attendant consequences may cause customers to stop using our products, deter new customers from using our products, and negatively impact our ability to grow and operate our business.
In addition, our contract manufacturers in China could be impacted by that country’s recent policy of strict lockdowns in order to reduce the spread of disease.
In addition, our contract manufacturers in China could be impacted by that country’s policy of strict lockdowns in order to reduce the spread of disease.
Additionally, these obligations may be subject to differing applications and interpretations, which may be inconsistent or conflict among jurisdictions. Preparing for and complying with these obligations requires significant resources and may necessitate changes to our information technologies, systems, and practices and to those of any third parties that process personal data on our behalf.
Additionally, these obligations may be subject to differing applications and interpretations, which may be inconsistent or conflict among jurisdictions. Preparing for and complying with these obligations requires us to devote significant resources and may necessitate changes to our information technologies, systems, and practices and to those of any third parties that process personal data on our behalf.
For example, the European Union's General Data Protection Regulation (“EU GDPR”), the United Kingdom’s GDPR (“UK GDPR”) (EU GDPR and UK GDPR, collectively “GDPR”), Brazil’s General Data Protection Law (Lei Geral de Proteção de Dados Pessoais, or “LGPD”) (Law No. 13,709/2018), and Australia’s Privacy Act impose strict requirements for processing personal data.
For example, the European Union's General Data Protection Regulation (“EU GDPR”) and the United Kingdom’s GDPR (“UK GDPR”) (collectively “GDPR”), Brazil’s General Data Protection Law (Lei Geral de Proteção de Dados Pessoais, or “LGPD”) (Law No. 13,709/2018), and Australia’s Privacy Act impose strict requirements for processing personal data.
We currently 18 have limited resources compared to some of our competitors, and the continued development of our own commercial organization to market our products and any additional products we may develop or acquire will be expensive and time-consuming. We also cannot be certain that we will be able to continue to successfully develop this capability.
We currently have limited 17 resources compared to some of our competitors, and the continued development of our own commercial organization to market our products and any additional products we may develop or acquire will be expensive and time-consuming. We also cannot be certain that we will be able to continue to successfully develop this capability.
From time to time, we publicly announce the expected timing of some of these 26 milestones. All of these milestones are based on a variety of assumptions.
From time to time, we publicly announce the expected timing of some of these milestones. All of these milestones are based on a variety of assumptions.
If successful, a citizen petition can significantly delay, or even prevent, the approval of a drug product. 34 We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either in the United States or abroad.
If successful, a citizen petition can significantly delay, or even prevent, the approval of a drug product. 31 We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either in the United States or abroad.
There is a risk that changes in ownership may occur in tax years after December 31, 2023. If a change in ownership were to occur, our net operating loss carryforwards and other tax attributes could be further limited or restricted.
There is a risk that changes in ownership may occur in tax years after December 31, 2024. If a change in ownership were to occur, our net operating loss carryforwards and other tax attributes could be further limited or restricted.
Data Privacy Framework and the UK extension thereto (which 37 allows for transfers to relevant U.S.-based organizations who self-certify compliance and participate in the Framework)these mechanisms are subject to legal challenges, and there is no assurance that we can satisfy or rely on these reasons to lawfully transfer personal data to the United States.
Data Privacy Framework and the UK extension thereto (which allows for transfers to relevant U.S.-based organizations who self-certify compliance and participate in the Framework) these mechanisms are subject to legal challenges, and there is no assurance that we can satisfy or rely on these measures to lawfully transfer personal data to the United States.
These requirements include submissions of safety and other post-marketing information and reports, registration, as well as continued compliance with cGMPs and good clinical practice guidelines for any clinical trials that we conduct 33 post-approval.
These requirements include submissions of safety and other post-marketing information and reports, registration, as well as continued compliance with cGMPs and good clinical practice guidelines for any clinical trials that we conduct 30 post-approval.
While we cannot predict the broader consequences, these conflicts and retaliatory and counter-retaliatory actions could materially adversely affect global trade, currency exchange rates, inflation, regional economies, and the global 44 economy, which in turn may increase our costs, disrupt our supply chain, impair our ability to raise or access additional capital when needed on acceptable terms, if at all, or otherwise adversely affect our business, financial condition, and results of operations. 45 Item 1B.
While we cannot predict the broader consequences, these conflicts and retaliatory and counter-retaliatory actions could materially adversely affect global trade, currency exchange rates, inflation, regional economies, and the global economy, which in turn may increase our costs, disrupt our supply chain, impair our ability to raise or access additional capital when needed on acceptable terms, if at all, or otherwise adversely affect our business, financial condition, and results of operations.
We have completed a Section 382 analysis beginning from the date of our initial public offering through December 31, 2023, to determine whether additional limitations apply to the net operating loss carryforwards and other tax attributes, and no additional changes in ownership that met Section 382 study ownership change threshold has been identified through December 31, 2023.
We have completed a Section 382 analysis beginning from the date of our initial public offering through December 31, 2024, to determine whether additional limitations apply to the net operating loss carryforwards and other tax attributes, and no additional changes in ownership that met Section 382 study ownership change threshold have been identified through December 31, 2024.
Our general business strategy may be adversely affected by any such economic downturn, volatile business environment, actual or anticipated bank failures, higher inflation, or continued unpredictable and unstable market conditions. If the current equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult, more costly and more dilutive.
Our general business strategy may be adversely affected by any such economic downturn, volatile business environment, actual or anticipated bank failures, tariffs and trade wars, higher inflation, or continued unpredictable and unstable market conditions. If the current equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult, more costly and more dilutive.
For example, over the last several years, the U.S. government has shut down several times and certain regulatory agencies, such as the FDA and the SEC, have had to furlough critical government employees and stop critical activities.
For example, over the last decade, the U.S. government has shut down several times and certain regulatory agencies, such as the FDA and the SEC, have had to furlough critical government employees and stop critical activities.
Although we endeavor to comply with all applicable data privacy and security obligations, we may at times fail (or be perceived to have failed) to do so. Moreover, despite our efforts, our personnel or third parties upon whom we rely may fail to comply with such obligations, which could negatively impact our business operations and compliance posture.
Although we endeavor to comply with all applicable data privacy and security obligations, we may at times fail (or be perceived to have failed) to do so. Moreover, despite our efforts, our personnel or third parties with whom we work may fail to comply with such obligations, which could negatively impact our business operations and compliance posture.
If we are unable to maintain an effective sales force for our products, including any other potential future approved products, we may not be able to generate sufficient product revenue in the United States. We are required to expend significant time and resources to train our sales force to educate physicians about our products.
If we are unable to maintain an effective sales force for our products, including potential future products, we may not be able to generate sufficient product revenue in the United States. We are required to expend significant time and resources to train our sales force to educate physicians about our products.
In order to increase adoption and sales of our products, we need to continue to develop our commercial organization, including maintaining and growing a highly experienced and skilled workforce with qualified sales representatives. We have built a sales force that promotes Afrezza and V-Go to endocrinologists and selected primary care physicians.
In order to increase adoption and sales of our products, we need to continue to develop our commercial organization, including maintaining and growing a highly experienced and skilled workforce with qualified sales representatives. We have built a sales force that promotes our products to endocrinologists and selected primary care physicians.
Additionally, in October 2023, Hamas initiated an attack against Israel, provoking a state of war and the risk of a larger conflict. Furthermore, following Hamas’ attack on Israel, the Houthi movement, which controls parts of Yemen, launched a number of attacks on commercial marine vessels in the Red Sea.
Additionally, in October 2023, Hamas initiated an attack against Israel, provoking a state of war and subsequently a larger regional conflict. Furthermore, following Hamas’ attack on Israel, the Houthi movement, which controls parts of Yemen, launched a number of attacks on commercial marine vessels in the Red Sea.
The integration of any acquired business, product or other assets into our company may be complex and time-consuming and, if such businesses, products or assets are not successfully integrated, we may not achieve the anticipated benefits, cost-savings or growth opportunities.
The integration of any acquired business, product, technology or other assets into our company may be complex and time-consuming and, if such businesses, 25 products, technologies or assets are not successfully integrated, we may not achieve the anticipated benefits, cost-savings or growth opportunities.
We and the third parties upon which we rely may be subject to a variety of evolving threats, including but not limited to social-engineering attacks (including through deep fakes, which may be increasingly more difficult to identify as fake, and phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks (such as credential stuffing), credentials harvesting, personnel misconduct or error, ransomware attacks, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, telecommunications failures, earthquakes, fires, floods, attacks enhanced or facilitated by artificial intelligence, and other similar threats.
We and the third parties with whom we work may be subject to physical threats, such as telecommunications failures, earthquakes, fires or floods, as well as a variety of evolving threats, including but not limited to social-engineering attacks (including through deep fakes, which may be increasingly more difficult to identify as fake, and phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks (such as credential stuffing), credentials harvesting, personnel misconduct or error, ransomware attacks, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, attacks enhanced or facilitated by artificial intelligence, and other similar threats.
We may rely on third-party service providers and technologies to operate critical business systems to process sensitive information in a variety of contexts, including, without limitation, cloud-based infrastructure, data center facilities, encryption and authentication technology, employee email, and other functions. We may also rely on third-party service providers to provide other products or services, or otherwise to operate our business.
We rely on third parties and technologies to operate critical business systems to process sensitive information in a variety of contexts, including, without limitation, cloud-based infrastructure, data center facilities, encryption and authentication technology, employee email and productivity software, and other functions. We also rely on third-party service providers to provide other products or services, or otherwise to operate our business.
These risks are likely to be exacerbated by our limited experience with V-Go and its manufacturing processes. 19 If our suppliers fail to deliver materials and services needed for commercial manufacturing in a timely and sufficient manner or fail to comply with applicable regulations, and if we fail to timely identify and qualify alternative suppliers, our business, financial condition and results of operations would be harmed and the market price of our common stock and other securities could decline.
These risks may be exacerbated by our limited experience with V-Go and its manufacturing processes. 18 If our suppliers fail to deliver materials and services needed for commercial manufacturing in a timely and sufficient manner or fail to comply with applicable regulations, and if we fail to timely identify and qualify alternative suppliers, our business, financial condition and results of operations would be harmed and the market price of our common stock and other securities could decline.
If any one or more of our suppliers cease to provide us with sufficient quantities of components in a timely manner or on terms acceptable to us, we would have to seek alternative sources of supply.
If any one or more of our suppliers cease to provide us with sufficient quantities of components in a timely manner or on pricing and quality terms acceptable to us, we would have to seek alternative sources of supply.
Any of the previously identified or similar threats could cause a security incident or other interruption that could result in unauthorized, unlawful, or accidental acquisition, modification, destruction, loss, alteration, encryption, disclosure of, or access to our sensitive information or our information technology systems, or those of the third parties upon whom we rely.
Any of the previously identified or similar threats could cause a security incident or other interruption that could result in unauthorized, unlawful, or accidental acquisition, modification, destruction, loss, alteration, encryption, disclosure of, or access to our sensitive information or our information technology systems, or those of the third parties with whom we work.
Our business and the market price of our 41 common stock may be influenced by a large variety of factors, including: • our ability to obtain marketing approval for our products outside of the United States and to find collaboration partners for the commercialization of our products in foreign jurisdictions; • future estimates of product sales, royalties, prescriptions or other operating metrics; • our ability to successfully commercialize other products based on our Technosphere drug delivery platform; • the progress and results of preclinical and clinical studies of our product candidates and of post-approval studies of approved products that are required by the FDA; • general economic, political or stock market conditions, especially for emerging growth and pharmaceutical market sectors; • geopolitical events, such as the current Russia-Ukraine and Israel-Hamas conflicts and Houthis rebel attacks on commercial marine vessels in the Red Sea; • legislative developments; • disruptions caused by man-made or natural disasters or public health pandemics or epidemics or other business interruptions; • changes in the structure of the healthcare payment systems; • announcements by us, our collaborators, or our competitors concerning clinical study results, acquisitions, strategic alliances, technological innovations, newly approved commercial products, product discontinuations, or other developments; • the availability of critical materials used in developing and manufacturing our products and product candidates; • developments or disputes concerning our relationship with any of our current or future collaborators or third party manufacturers; • developments or disputes concerning our patents or proprietary rights; • the expense and time associated with, and the extent of our ultimate success in, securing regulatory approvals; • announcements by us concerning our financial condition or operating performance; • changes in securities analysts’ estimates of our financial condition or operating performance; • sales of large blocks of our common stock, including sales by our executive officers, directors and significant stockholders; • the trades of short sellers; • our ability, or the perception of investors of our ability, to continue to meet all applicable requirements for continued listing of our common stock on The Nasdaq Global Market, and the possible delisting of our common stock if we are unable to do so; • the status of any legal proceedings or regulatory matters against or involving us or any of our executive officers and directors; and • discussion of our products, competitors’ products, or our stock price by the financial and scientific press, the healthcare community and online investor communities such as chat rooms.
Our business and the market price of our common stock may be influenced by a large variety of factors, including: • our ability to obtain marketing approval for our products outside of the United States and to find collaboration partners for the 38 commercialization of our products in foreign jurisdictions; • future estimates of product sales, royalties, prescriptions or other operating metrics; • our ability to successfully commercialize other products; • the progress and results of preclinical and clinical studies of our product candidates and of post-approval studies of approved products that are required by the FDA; • general economic, political or stock market conditions, especially for emerging growth and pharmaceutical market sectors; • geopolitical events; • legislative developments; • disruptions caused by man-made or natural disasters or public health pandemics or epidemics or other business interruptions; • changes in the structure of the healthcare payment systems; • announcements by us, our collaborators, or our competitors concerning clinical study results, acquisitions, strategic alliances, technological innovations, newly approved commercial products, product discontinuations, or other developments; • the availability of critical materials used in developing and manufacturing our products and product candidates; • developments or disputes concerning our relationship with any of our current or future collaborators or third party manufacturers; • developments or disputes concerning our patents or proprietary rights; • the expense and time associated with, and the extent of our ultimate success in, securing regulatory approvals; • announcements by us concerning our financial condition or operating performance; • changes in securities analysts’ estimates of our financial condition or operating performance; • sales of large blocks of our common stock, including sales by our executive officers, directors and significant stockholders; • the trades of short sellers; • our ability, or the perception of investors of our ability, to continue to meet all applicable requirements for continued listing of our common stock on The Nasdaq Global Market, and the possible delisting of our common stock if we are unable to do so; • the status of any legal proceedings or regulatory matters against or involving us or any of our executive officers and directors; and • discussion of our products, competitors’ products, or our stock price by the financial and scientific press, the healthcare community and online investor communities such as chat rooms.
We may not realize the anticipated benefits of any future acquisition or strategic transaction; we may be unable to successfully integrate new products or businesses we may acquire. We periodically evaluate and pursue acquisition of therapeutic products.
We may not realize the anticipated benefits of any future acquisition or strategic transaction; we may be unable to successfully integrate new products, technologies or businesses we may acquire. We periodically evaluate and pursue acquisition of therapeutic products or product candidates and technologies.
In addition, interested parties (such as individuals, advocacy groups and competing pharmaceutical companies) can file a citizen petition with the FDA to request policy change or some form of administrative action on the FDA’s part, including with respect to an NDA.
In addition, interested parties (such as individuals, advocacy groups and competing pharmaceutical companies) can file a citizen petition with the FDA to request policy change or some form of administrative action on the FDA’s part, including with respect to a New Drug Application ("NDA").
In addition, 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.
In addition, we may from time to time seek to retire or purchase our outstanding debt 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.
A security incident or other interruption could disrupt our ability (and that of third parties upon whom we rely) to provide our products. We may expend significant resources or modify our business activities (including our clinical trial activities) to try to protect against security incidents.
A security incident or other interruption could disrupt our ability (and that of third parties with whom we work) to provide our products. We may expend significant resources or modify our business activities (including our clinical trial activities) to try to protect against security incidents.
Although Afrezza has been approved in the United States by the FDA and in Brazil by ANVISA, we have not yet obtained approval in any other jurisdiction. Similarly, V-Go has received 510(k) clearance from the FDA, but has not received a comparable approval in any other country.
Afrezza has been approved in the United States, Brazil and India, but we have not yet obtained approval in any other jurisdiction. Similarly, V-Go has received 510(k) clearance from the FDA, but has not received a comparable approval in any other country.
Likewise, the issuance of additional shares of our common stock upon the exchange or conversion of the Mann Group convertible note, or the Senior convertible notes, could adversely affect the market price of our common stock and other securities.
Likewise, the issuance of additional shares of our common stock upon the exchange or conversion of the senior convertible notes could adversely affect the market price of our common stock and other securities.
Interference proceedings brought by the USPTO, may be necessary to determine the priority of inventions with respect to our pre-AIA patent applications or those of our collaborators or licensors. Additionally, the AIA has greatly expanded the options for post-grant review of patents that can be brought by third parties.
Interference proceedings brought by the United States Patent and Trademark Office ("USPTO"), may be necessary to determine the priority of inventions with respect to our pre-AIA patent applications or those of our collaborators or licensors. Additionally, the AIA has greatly expanded the options for post-grant review of patents that can be brought by third parties.
If our information technology systems or data, or those of third parties upon which we rely, are or were compromised, we could experience adverse consequences resulting from such compromise, including but not limited to regulatory investigations or actions; litigation; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; loss of customers or sales; and other adverse consequences.
If our data or information technology systems, or those of third parties with whom we work, are or were compromised, we could experience adverse consequences resulting from such compromise, including but not limited to regulatory investigations or actions; litigation; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; loss of customers or sales; and other adverse consequences.
The extent of our additional funding requirements will depend on a number of factors, including: • the degree to which we are able to generate revenue from products that we or a collaboration partner commercialize; • the costs of developing Afrezza and of commercializing Afrezza and V-Go on our own in the United States; • the degree to which revenue from Afrezza exceeds or not the minimum revenue covenants under our credit and security agreement with MidCap Financial Trust (the “MidCap credit facility”), if applicable; • the demand by any or all of the holders of our debt instruments to require us to repay or repurchase such debt securities if and when required; • our ability to repay or refinance existing indebtedness, and the extent to which our notes with conversion options or any other convertible debt securities we may issue are converted into or exchanged for shares of our common stock; • the rate of progress and costs of our clinical studies and R&D activities; • the costs of procuring raw materials and operating our manufacturing facility; • our success in establishing additional strategic business collaborations or other sales or licensing of assets, and the timing and amount of any payments we might receive from any such transactions; • actions taken by the FDA and other regulatory authorities affecting Afrezza, V-Go, Tyvaso DPI, our product candidates or competitive products; • the emergence of competing technologies and products and other market developments; • the costs of preparing, filing, prosecuting, maintaining and enforcing patent claims and other intellectual property rights or defending against claims of infringement by others; • the level of our legal and litigation expenses; and • the costs of discontinuing projects and technologies, and/or decommissioning existing facilities, if we undertake any such activities.
The extent of our additional funding requirements will depend on a number of factors, including: • the degree to which we are able to generate revenue from products that we or a collaboration partner commercialize; • the costs of developing Afrezza and of commercializing Afrezza and V-Go on our own in the United States; • the demand by any or all of the holders of our senior convertible notes to require us to repay or repurchase such debt securities if and when required; • our ability to repay or refinance existing indebtedness, and the extent to which our senior convertible notes or any other convertible debt securities we may issue are converted into or exchanged for shares of our common stock; • the rate of progress and costs of our clinical studies and R&D activities; • the costs of procuring raw materials and operating our manufacturing facility; • our success in establishing additional strategic business collaborations or other sales or licensing of assets, and the timing and amount of any payments we might receive from any such transactions; • actions taken by the FDA and other regulatory authorities affecting Afrezza, V-Go, Tyvaso DPI, our product candidates or competitive products; • the emergence of competing technologies and products and other market developments; • the costs of preparing, filing, prosecuting, maintaining and enforcing patent claims and other intellectual property rights or defending against claims of infringement by others; • the level of our legal and litigation expenses; and • the costs of discontinuing projects and technologies, and/or decommissioning existing facilities, if we undertake any such activities.
Our ability to achieve and sustain positive cash flow from operations and profitability depends heavily upon successfully commercializing our products, and although we had positive cash flows from operations during the year ended December 31, 2023, we may not generate positive cash flow from operations or be profitable in the future.
Our ability to achieve and sustain positive cash flow from operations and profitability depends heavily upon successfully commercializing our products, and although we had positive cash flows from operations and net income in the year ended December 31, 2024, we may not generate positive cash flow from operations or be profitable in the future.
During times of war and other major conflicts, we and the third parties upon which we rely may be vulnerable to a heightened risk of these attacks, including retaliatory cyber-attacks, that could materially disrupt our systems and operations, supply chain, and ability to produce, sell and distribute our goods and services.
During times of war and other major conflicts, we and the third parties with whom we work may be vulnerable to a heightened risk of these attacks, including retaliatory cyber-attacks, that could materially disrupt our systems and operations, supply chain, and ability to produce, sell and distribute our goods and services.
In addition, a substantial number of shares of our common stock is reserved for issuance upon the exercise of stock options, the vesting of restricted stock unit awards and purchases under our employee stock purchase program.
In addition, a substantial number of shares of our common stock is reserved for issuance upon the exercise of stock options, the vesting of restricted stock unit awards and purchases under our ESPP.
We use our Danbury, Connecticut facility to formulate both the Afrezza and Tyvaso DPI inhalation powders, fill plastic cartridges with the powders, and package the cartridges into secondary packaging. We also assemble the inhalers from their individual molded parts. These semi-finished goods are then assembled into the final kits for commercial sale by a contract packager.
We use our Danbury, Connecticut facility to assemble the inhalers from their individual molded parts, formulate both the Afrezza and Tyvaso DPI inhalation powders, fill plastic cartridges with the powders, package the cartridges into secondary packaging and assemble final kits for certain stock-keeping units. Other semi-finished goods are assembled into the final kits for commercial sale by a contract packager.
Our actual or perceived failure to comply with such obligations could lead to regulatory investigations or actions; litigation (including class claims) and mass arbitration demands; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; loss of customers or sales; and other adverse business consequences.
Our actual or perceived failure, or that of the third parties with whom we work, to comply with such obligations could lead to regulatory investigations or actions; litigation (including class claims) and mass arbitration demands; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; loss of customers or sales; and other adverse business consequences.
Furthermore, if we or a third-party manufacturer fail to deliver the required commercial quantities of the product or any raw material on a timely basis, and at commercially reasonable prices, sustainable compliance and acceptable quality, and we were unable to promptly find one or more replacement manufacturers capable of production at a substantially equivalent cost, in substantially equivalent volume and quality on a timely basis, we would likely be unable to meet demand for such drug products and we would lose potential revenues.
If we fail to deliver the required commercial quantities of the product on a timely basis, at commercially reasonable prices and at acceptable quality, and we were unable to promptly find on a timely basis one or more replacement manufacturers capable of production at a substantially equivalent cost, in substantially equivalent volume and quality, we would likely be unable to meet demand for such drug products and we would lose potential revenues.
Our business, including our ability to manufacture drug products and conduct clinical trials, therefore depends on the continuous, effective, reliable and secure operation of our information technology resources and those of third parties acting on our behalf, including computer hardware, software, networks, Internet servers and related infrastructure.
Our business, including our ability to manufacture drug products and conduct clinical trials, therefore depends on the 21 continuous, effective, reliable and secure operation of our information technology resources and those of third parties with whom we work, including computer hardware, software, networks, Internet servers and related infrastructure.
This process could delay the market acceptance of any product and could have a negative effect on our future revenues and operating results. Even if we succeed in bringing more products to market, we cannot be certain that any such products would be considered cost-effective or that coverage and adequate reimbursement to the consumer would be available.
Such 19 less favorable coverage could impact the market acceptance of any product and could have a negative effect on our revenues and operating results. Even if we succeed in bringing more products to market, we cannot be certain that any such products would be considered cost-effective or that coverage and adequate reimbursement to the consumer would be available.
Moreover, achieving and sustaining compliance with applicable federal and state fraud laws may prove costly. We are subject to stringent and changing U.S. and foreign laws, regulations, and rules, contractual obligations, industry standards, policies and other obligations related to data privacy and security.
Moreover, achieving and sustaining compliance with applicable federal and state fraud laws may prove costly. We and the third parties with whom we work are subject to stringent and evolving U.S. and foreign laws, regulations, and rules, contractual obligations, industry standards, policies and other obligations related to data privacy and security.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur cybersecurity risk assessment and management processes are implemented and maintained by certain Company management, including our Executive Director of Information Technology, and a dedicated information security analyst with more than 15 years of experience.
Biggest changeOur cybersecurity risk assessment and management processes are implemented and maintained by certain Company management, including our Executive Director of Information Technology, who has more than 30 years of experience of building and managing critical systems that house sensitive data, and a dedicated information security analyst with more than 15 years of experience in providing protection and resilience against evolving threats .
Cybersecurity Risk management and strategy We have implemented and maintain various information security processes designed to identify, assess and manage material risks from cybersecurity threats to our critical computer networks, third party hosted services, communications systems, hardware and software, and our critical data, including intellectual property, confidential information that is proprietary, strategic or competitive in nature, and manufacturing-related data (“Information Systems and Data”).
Cybersecurity Risk management and strategy We have implemented and maintain various information security processes designed to identify, assess and manage material risks from cybersecurity threats to our critical computer networks, third party hosted services, communications systems, hardware and software, and our critical data, including intellectual property, confidential information that is proprietary, strategic or competitive in nature, and manufacturing-related data (collectively “Information Systems and Data”).
Depending on the environment, we implement and maintain various technical, physical, and organizational measures, processes, standards and policies designed to manage and mitigate material risks from cybersecurity threats to our Information Systems and Data, including, for example: • our security incident response and communication plan; • our disaster recovery plan; • ongoing risk assessments; • implementation of security standards; • encryption of data; • network security controls; • access controls; • physical security; • asset management, tracking and disposal; • systems monitoring; • employee training; • penetration testing; • cybersecurity insurance; and • dedicated cybersecurity personnel. 46 Our assessment and management of material risks from cybersecurity threats are integrated into our enterprise risk management processes.
Depending on the environment, we implement and maintain various technical, physical, and organizational measures, processes, standards and policies designed to manage and mitigate material risks from cybersecurity threats to our Information Systems and Data, including, for example: • our security incident response and communication plan; • our disaster recovery plan; • ongoing risk assessments; • implementation of security standards; • encryption of data; • network security controls; • access controls; • physical security; • asset management, tracking and disposal; • systems monitoring; • employee training; • penetration testing; • cybersecurity insurance; and • dedicated cybersecurity personnel. 43 Our assessment and management of material risks from cybersecurity threats are integrated into our enterprise risk management processes.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeOur obligations under the MidCap Credit Facility are secured by a portion of the facility in Danbury and other assets. 47 On November 8, 2021, we sold a portion of the Danbury facility to an affiliate of Creative Manufacturing Properties (the “Purchaser”) for a sales price of $102.3 million and entered into a 20-year lease agreement with the Purchaser, with four renewal options of five years each.
Biggest changeWe believe the Danbury facility has sufficient space, including unimproved manufacturing space, to satisfy anticipated commercial demand for Afrezza and Tyvaso DPI. 44 On November 8, 2021, we sold a portion of the Danbury facility to an affiliate of Creative Manufacturing Properties (the “Purchaser”) for a sales price of $102.3 million and entered into a 20-year lease agreement with the Purchaser, with four renewal options of five years each.
As of December 31, 2023, we leased a total of approximately 24,475 square feet of office space in Westlake Village, California pursuant to a lease that expires in July 2028. See Note 16 – Commitments and Contingencies in the consolidated financial statements included in Part II, Item 8 – Financial Statements and Supplementary Data.
As of December 31, 2024, we leased a total of approximately 24,475 square feet of office space in Westlake Village, California pursuant to a lease that expires in July 2028. See Note 16 – Commitments and Contingencies in the consolidated financial statements included in Part II, Item 8 – Financial Statements and Supplementary Data.
As of December 31, 2023, we leased a total of approximately 20,000 square feet of building space pursuant to a lease that expires in February 28, 2026. See Note 16 – Commitments and Contingencies in the consolidated financial statements included in Part II, Item 8 – Financial Statements and Supplementary Data.
As of December 31, 2024, we leased a total of approximately 20,000 square feet of building space pursuant to a lease that expires in February 28, 2026. See Note 16 – Commitments and Contingencies in the consolidated financial statements included in Part II, Item 8 – Financial Statements and Supplementary Data.
Removed
We believe the Danbury facility has sufficient space, including unimproved manufacturing space, to satisfy anticipated commercial demand for Afrezza and Tyvaso DPI.
Added
In July 2024, we assumed certain leased real property (the "Bedford Lease") in connection with the Pulmatrix Transaction. The Bedford Lease pertains to approximately 20,000 square feet in a building located in Bedford, Massachusetts.
Added
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. We 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.
Added
We have the right to extend the lease term for an additional five-year term.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proc eedings See Note 16 – Commitments and Contingencies in the consolidated financial statements included in Part II, Item 8 – Financial Statements and Supplementary Data. Item 4. Mine Saf ety Disclosures Not applicable. 48 PART II
Biggest changeItem 3. Legal Proc eedings See Note 16 – Commitments and Contingencies in the consolidated financial statements included in Part II, Item 8 – Financial Statements and Supplementary Data. Item 4. Mine Saf ety Disclosures Not applicable. 45 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeWe do not anticipate paying any cash dividends on our common stock in the foreseeable future. Any future determination to pay dividends will be at the discretion of our board of directors.
Biggest changeWe do not anticipate paying any cash dividends on our common stock in the foreseeable future. Any future determination to pay dividends will be at the discretion of our board of directors. 46 Recent Sales of Unregistered Securities None. Item 6. [Re served]
The graph assumes a $100 investment, on December 31, 2018, in (i) our common stock, (ii) the securities comprising The Nasdaq Composite Index and (iii) the securities comprising The Nasdaq Biotechnology Index. Dividend Policy We have never declared or paid any cash dividends on our common stock.
The graph assumes a $100 investment, on December 31, 2019, in (i) our common stock, (ii) the securities comprising The Nasdaq Composite Index and (iii) the securities comprising The Nasdaq Biotechnology Index. Dividend Policy We have never declared or paid any cash dividends on our common stock.
Item 5. Market for Registrant’s Common Equity, Related S tockholder Matters and Issuer Purchases of Equity Securities Common Stock Market Our common stock has been traded on The Nasdaq Global Market under the symbol “MNKD” since July 28, 2004. On February 16, 2024, there were 102 registered holders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related S tockholder Matters and Issuer Purchases of Equity Securities Common Stock Market Our common stock has been traded on The Nasdaq Global Market under the symbol “MNKD” since July 28, 2004. On February 14, 2025, there were 94 registered holders of record of our common stock.
Removed
In addition, under the terms of the MidCap Credit Facility, we are restricted from declaring and distributing a cash dividend to our stockholders. 49 Recent Sales of Unregistered Securities Under the Mann Group convertible note, we pay quarterly interest payments on the first day of each calendar quarter, payable at our election in shares of our common stock.
Removed
During the year ended December 31, 2023, we elected to pay our January 1 st , April 1 st , July 1 st and October 1 st quarterly interest payments under the Mann Group convertible note by issuing the Mann Group an aggregate of 50,844 shares of common stock. See Note 10 – Borrowings .
Removed
We relied on an exemption from registration provided by Section 3(a)(9) or 4(a)(2) of the Securities Act of 1933, as amended, for the issuance of the shares described above. Item 6. [Re served]

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe 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): 55 Year Ended December 31, 2023 2022 GAAP income (loss) from operations $ 8,678 $ (64,110 ) Select non-cash adjustments: Sold portion of royalty revenue (1) (2,103 ) — Stock compensation 17,649 13,447 Loss (gain) on foreign currency transaction 1,916 (4,811 ) Non-GAAP income (loss) from operations $ 26,140 $ (55,474 ) GAAP net loss $ (11,938 ) $ (87,400 ) Select non-cash adjustments: Sold portion of royalty revenue (1) (2,103 ) — Stock compensation 17,649 13,447 Loss (gain) on foreign currency transaction 1,916 (4,811 ) Interest expense on liability for sale of future royalties 185 — Loss on available-for-sale securities 170 932 Non-GAAP net income (loss) $ 5,879 $ (77,832 ) GAAP net loss per share - basic $ (0.04 ) $ (0.34 ) Select non-cash adjustments: Sold portion of royalty revenue (0.01 ) 0.00 Stock compensation 0.07 0.05 Loss (gain) on foreign currency transaction 0.01 (0.02 ) Interest expense on liability for sale of future royalties 0.00 0.00 Loss on available-for-sale securities 0.00 0.00 Non-GAAP net income (loss) per share - basic $ 0.03 $ (0.31 ) Weighted average shares - basic 267,014 257,092 _________________________ (1) 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.
Biggest changeThe 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: Year Ended December 31, 2024 2023 2022 Net Income Basic EPS Net Loss Basic EPS Net Loss Basic EPS (In thousands except per share data) GAAP reported net income (loss) $ 27,588 $ 0.10 $ (11,938 ) $ (0.04 ) $ (87,400 ) $ (0.34 ) Non-GAAP adjustments: Sold portion of royalty revenue (1) (10,234 ) (0.04 ) (2,103 ) (0.01 ) — — Interest expense on liability for sale of future royalties 16,172 0.06 185 — — — Stock compensation 21,358 0.08 17,649 0.07 13,447 0.05 (Gain) loss on foreign currency transaction (3,907 ) (0.01 ) 1,916 0.01 (4,811 ) (0.02 ) Gain on bargain purchase (5,259 ) (0.02 ) — — — — Loss on settlement of debt 20,444 0.07 — — — — Loss on available-for-sale securities 1,550 0.01 170 — 932 — Non-GAAP adjusted net income (loss) $ 67,712 $ 0.25 $ 5,879 $ 0.03 $ (77,832 ) $ (0.31 ) Weighted average shares used to compute net income (loss) per share – basic 274,415 267,014 257,092 _________________________ (1) 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.
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.
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, 47 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.
(“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.
(“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.
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.
We are responsible for payment of operating expenses, property taxes and insurance for the leased property. Pursuant to the terms of the 53 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.
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.
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.
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.
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.
Our analysis also contemplates application of the constraint in accordance with the guidance, under which we determined a material reversal of revenue would not occur in a future period for the estimates of gross-to-net adjustments as of December 31, 2023 and, therefore, the transaction price was not reduced further during the year ended December 31, 2023.
Our analysis also contemplates application of the constraint in accordance with the guidance, under which we determined a material reversal of revenue would not occur in a future period for the estimates of gross-to-net adjustments as of December 31, 2024 and, therefore, the transaction price was not reduced further during the year ended December 31, 2024.
Recent Accounting Pronouncements See 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 for information regarding new accounting standards that have been issued by the FASB but are not effective until after December 31, 2023.
Recent Accounting Pronouncements See 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 for information regarding new accounting standards that have been issued by the FASB but are not effective until after December 31, 2024.
(5) The July 2014 Insulin Supply Agreement with Amphastar to manufacture and supply us certain quantities of recombinant human insulin for use in Afrezza was amended in May 2021 and again on December 22, 2023 to purchase certain minimum quantities over a term that currently extends through at least December 31, 2034.
(3) The July 2014 Insulin Supply Agreement with Amphastar to manufacture and supply us certain quantities of recombinant human insulin for use in Afrezza was amended in May 2021 and again on December 22, 2023 to purchase certain minimum quantities over a term that currently extends through at least December 31, 2034.
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. In addition to the above, we also expect to have material cash requirements relating to paying our employees and consultants, professional services fees, marketing expenses, manufacturing expenditures, and clinical trial expenses.
See Note 9 – Accrued Expenses and Other Current Liabilities and Note 16 – Commitments and Contingencies for further information related to the Milestone Rights. In addition to the above, we also expect to have material cash requirements relating to paying our employees and consultants, professional services fees, marketing expenses, manufacturing expenditures, and clinical trial expenses.
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.
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.
Likewise, we may determine to modify the nature of its adjustments to arrive at our non-GAAP financial measures.
Likewise, we may determine to modify the nature of its 52 adjustments to arrive at our non-GAAP financial measures.
A discussion of changes in our results of operations during the year ended December 31, 2022 compared to the year ended December 31, 2021 has been omitted from this Annual Report on Form 10-K but may be found in “Item 7.
A discussion of changes in our results of operations during the year ended December 31, 2023 compared to the year ended December 31, 2022 has been omitted from this Annual Report on Form 10-K but may be found in “Item 7.
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.
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.
Non-GAAP Measures 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.
Non-GAAP Measures 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.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 23, 2023, which discussion is incorporated herein by reference and which is available free of charge on the SEC’s website at www.sec.gov.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 27, 2024, which discussion is incorporated herein by reference and which is available free of charge on the SEC’s website at www.sec.gov.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
There is a high rate of failure inherent in the R&D process for new drugs. As a result, there is a high risk that the funds we invest in research programs will not generate sufficient financial returns. Products may appear promising in development but fail to reach market within the expected or optimal timeframe, or at all.
As a result, there is a high risk that the funds we invest in research programs will not generate sufficient financial returns. Products may appear promising in development but fail to reach market within the expected or optimal timeframe, or at all.
Future Liquidity Needs 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.
Future Liquidity Needs 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.
Research and development expenses increased by $11.6 million, or 59%, for the year ended December 31, 2023 compared to the prior year.
Research and development expenses increased by $14.6 million, or 47%, for the year ended December 31, 2024 compared to the prior year.
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.
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.
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.
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.
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.
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.
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. Liquidity and Capital Resources Our principal sources of liquidity are our cash, cash equivalents, and investments.
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. Liquidity and Capital Resources Our principal sources of liquidity are our cash, cash equivalents, and investments.
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.
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.
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. 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.
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. 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.
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.
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. 54 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.
Other significant risks also include the risk that our products may only achieve a limited degree of commercial success and the risks inherent in drug development, clinical trials and the regulatory approval process for our product candidates, which in some cases depends upon the efforts of our partners. 50 As of December 31, 2023, we had an accumulated deficit of $3.2 billion and a stockholders’ deficit of $246.2 million.
Other significant risks also include the risk that our products may only achieve a limited degree of commercial success and the risks inherent in drug development, clinical trials and the regulatory approval process for our product candidates, which in some cases depends upon the efforts of our partners.
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.
See Note 16 – Commitments and Contingencies . 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.
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.
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.
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.
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.
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).
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.
We also receive a margin on supplies of Tyvaso DPI that we manufacture for UT. 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.
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.
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.
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. 48 These reserves are further detailed under Reserves for Variable Consideration 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.
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.
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.
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.
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.
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 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.
We plan to initiate a Phase 1 clinical study of MNKD-201 in the second quarter of 2024. Our business is subject to significant risks, including but not limited to our ability to manufacture sufficient quantities of our products and Tyvaso DPI.
Our business is subject to significant risks, including but not limited to our ability to manufacture sufficient quantities of our products and Tyvaso DPI.
Results of Operations 52 Trends and Uncertainties 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).
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. 49 Results of Operations Trends and Uncertainties 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.
Years ended December 31, 2023 and 2022 Revenues The following table provides a comparison of the revenue categories for the years ended December 31, 2023 and 2022 (dollars in thousands): Year Ended December 31, 2023 2022 $ Change % Change Net revenue – commercial product sales: Gross revenue from product sales $ 130,461 $ 97,048 $ 33,413 34 % Less: Wholesaler distribution fees, rebates and chargebacks, product returns and other discounts 56,432 40,801 $ 15,631 38 % Net revenue – commercial product sales $ 74,029 $ 56,247 $ 17,782 32 % Gross-to-net revenue adjustment percentage 43 % 42 % Revenue – collaborations and services 52,954 27,924 $ 25,030 90 % Royalties – collaborations 71,979 15,599 $ 56,380 361 % Total revenues $ 198,962 $ 99,770 $ 99,192 99 % 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.
Years ended December 31, 2024 and 2023 Revenues The following table provides a comparison of the revenue categories for the years ended December 31, 2024 and 2023 (dollars in thousands): Year Ended December 31, 2024 2023 $ Change % Change Revenues Commercial product sales: Gross revenue from commercial product sales $ 136,127 $ 130,461 $ 5,666 4 % Less: Wholesaler distribution fees, rebates and chargebacks, product returns and other discounts 53,798 56,432 $ (2,634 ) (5 %) Commercial product sales $ 82,329 $ 74,029 $ 8,300 11 % Gross-to-net revenue adjustment percentage 40 % 43 % Collaborations and services 100,840 52,954 $ 47,886 90 % Royalties 102,335 71,979 $ 30,356 42 % Total revenues $ 285,504 $ 198,962 $ 86,542 43 % 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.
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.
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.
The amounts involved in any such transactions, individually or in the aggregate, may be material. 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.
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. In July 2013, we issued the Milestone Rights pursuant to the Milestone Rights Agreement to the Original Milestone Purchasers.
We plan to initiate a Phase 3 registrational study of MNKD-101 in the United States in the second quarter of 2024. 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.
We expect enrollment of subjects into this study to continue into 2026. 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.
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. 51 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.
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.
The year-over-year change was due to the conversion of Euro to U.S. dollar exchange rates. 54 Other Income (Expense) The following table provides a comparison of the other income (expense) categories for the years ended December 31, 2023 and 2022 (dollars in thousands): Year Ended December 31, 2023 2022 $ Change % Change Interest income $ 6,154 $ 2,513 $ 3,641 145 % Interest expense on financing liability (9,825 ) (9,758 ) $ 67 1 % Interest expense (15,151 ) (15,011 ) $ 140 1 % Interest expense on liability for sale of future royalties (185 ) — $ 185 * Loss on available-for-sale securities (170 ) (932 ) $ (762 ) (82 %) Other income (expense) 122 (102 ) $ (224 ) (220 %) Total other expense $ (19,055 ) $ (23,290 ) $ (4,235 ) (18 %) _________________________ * Not meaningful 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.
The year-over-year change was due to fluctuations in the Euro to U.S. dollar exchange rates. 51 Other Income (Expense) The following table provides a comparison of the other income (expense) categories for the years ended December 31, 2024 and 2023 (dollars in thousands): Year Ended December 31, 2024 2023 $ Change % Change Interest income, net $ 12,615 $ 6,154 $ 6,461 105 % Interest expense on liability for sale of future royalties (16,172 ) (185 ) $ (15,987 ) * Interest expense on financing liability (9,828 ) (9,825 ) $ 3 0 % Interest expense (11,981 ) (15,151 ) $ (3,170 ) (21 %) Gain on bargain purchase 5,259 — $ 5,259 * Other income 32 122 $ (90 ) (74 %) Loss on settlement of debt (20,444 ) — $ (20,444 ) * Loss on available-for-sale securities (1,550 ) (170 ) $ (1,380 ) * Total other expense $ (42,069 ) $ (19,055 ) $ 23,014 121 % _________________________ * Not meaningful 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.
The first product to come out of our orphan lung disease pipeline, Tyvaso DPI (treprostinil) inhalation powder, received FDA approval in May 2022 for the treatment of PAH and PH-ILD. Our development and marketing partner, United Therapeutics, began commercializing Tyvaso DPI in June 2022 and is obligated to pay us a royalty on net sales of the product.
Our development and marketing partner, United Therapeutics, began commercializing Tyvaso DPI in June 2022 and is obligated to pay us a royalty on net sales of the product. We also receive a margin on supplies of Tyvaso DPI that we manufacture for UT.
See Note 11 – Collaboration, Licensing and Other Arrangements in the consolidated financial statements included in Part II, Item 8 – Financial Statements and Supplementary Data. 53 Commercial product gross profit 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): Year Ended December 31, 2023 2022 $ Change % Change Commercial product gross profit: Net revenue – commercial product sales $ 74,029 $ 56,247 $ 17,782 32 % Less: Cost of goods sold 20,863 16,003 $ 4,860 30 % Commercial product gross profit: $ 53,166 $ 40,244 $ 12,922 32 % Gross margin 72 % 72 % Commercial product gross profit increased by $12.9 million, or 32%, for the year ended December 31, 2023 compared to the prior year.
Commercial product gross profit The following table provides a comparison of the commercial product gross profit categories for the years ended December 31, 2024 and 2023 50 (dollars in thousands): Year Ended December 31, 2024 2023 $ Change % Change Commercial product gross profit: Commercial product sales $ 82,329 $ 74,029 $ 8,300 11 % Less: Cost of goods sold 17,429 20,863 $ (3,434 ) (16 %) Commercial product gross profit: $ 64,900 $ 53,166 $ 11,734 22 % Gross margin 79 % 72 % Commercial product gross profit increased by $11.7 million, or 22%, for the year ended December 31, 2024 compared to 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.
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.
Expenses The following table provides a comparison of the expense categories for the years ended December 31, 2023 and 2022 (dollars in thousands): Year Ended December 31, 2023 2022 $ Change % Change Expenses: Cost of goods sold $ 20,863 $ 16,003 $ 4,860 30 % Cost of revenue — collaborations and services 41,908 41,494 $ 414 1 % Research and development 31,283 19,721 $ 11,562 59 % Selling 51,776 53,753 $ (1,977 ) (4 %) General and administrative 42,538 37,720 $ 4,818 13 % Loss (gain) on foreign currency transaction 1,916 (4,811 ) $ (6,727 ) * Total expenses $ 190,284 $ 163,880 $ 26,404 16 % _________________________ * Not meaningful 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.
Expenses The following table provides a comparison of the expense categories for the years ended December 31, 2024 and 2023 (dollars in thousands): Year Ended December 31, 2024 2023 $ Change % Change Expenses: Cost of goods sold $ 17,429 $ 20,863 $ (3,434 ) (16 %) Cost of revenue – collaborations and services 59,173 41,908 $ 17,265 41 % Research and development 45,893 31,283 $ 14,610 47 % Selling, general and administrative 94,329 94,314 $ 15 0 % (Gain) loss on foreign currency transaction (3,907 ) 1,916 $ (5,823 ) * Total expenses $ 212,917 $ 190,284 $ 22,633 12 % _________________________ * Not meaningful 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.
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.
See Note 11 – Collaborations, Licensing and Other Arrangements in the consolidated financial statements included in Part II, Item 8 – Financial Statements and Supplementary Data.
Unless terminated earlier, the agreement can be renewed for additional, successive two-year terms upon 12 months’ written notice given prior to the end of the initial term or any additional two-year term. 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.
Unless terminated earlier, the agreement can be renewed for additional, successive two-year terms upon 12 months’ written notice given prior to the end of the initial term or any additional two-year term. (4) $13.3 million remaining lease payments under an operating lease of a building located in Bedford, Massachusetts (the "Bedford Lease").
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%.
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.
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.
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.
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.
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.
Selling expenses decreased by $2.0 million, or 4%, for the year ended December 31, 2023, compared to the prior year.
Selling, general and administrative expenses for the year ended December 31, 2024 remained consistent compared to the prior year.
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 57 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.
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.
Manufacturing risks may adversely affect our ability to manufacture our products and could reduce our gross margin or impact our collaboration with UT. Our future success is dependent on our, and our current and future collaboration partners’, ability to effectively commercialize approved products. Our future success is also dependent on our pipeline of new products.
Our future success is dependent on our, and our current and future collaboration partners’, ability to effectively commercialize approved products. Our future success is also dependent on our pipeline of new products. There is a high rate of failure inherent in the R&D process for new drugs.
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.
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. The first product to come out of our orphan lung disease pipeline, Tyvaso DPI (treprostinil) inhalation powder, received FDA approval in May 2022 for the treatment of PAH and PH-ILD.
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 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.
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.
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.
Interest expense on notes for the year ended December 31, 2023 was comparable to the prior year. See Note 10 — Borrowings .
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 .
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.
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.
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.
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.
Removed
These reserves are further detailed under Reserves for Variable Consideration 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.
Added
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.
Removed
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”).
Added
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.
Removed
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.
Added
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.
Removed
Amounts that we expect will not be recognized within the next 12 months are classified as long-term deferred revenue.
Added
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.
Removed
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.
Added
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.
Removed
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.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeFor the year ended December 31, 2023, we realized a $1.9 million currency loss, which was included in loss (gain) on foreign currency transaction in the consolidated statements of operations. Exchange rate fluctuations may adversely affect our expenses, results of operations, financial position and cash flows.
Biggest changeAs a result, our business is affected by fluctuations in exchange rates between the U.S. dollar and the Euro. For the year ended December 31, 2024, we realized a $3.9 million currency gain, which was reflected as a gain on foreign currency transaction in the consolidated statements of operations.
If a change in the U.S. dollar to Euro exchange rate equal to 10% of the U.S. dollar to Euro exchange rate on December 31, 2023 were to have occurred, this change would have resulted in a foreign currency impact to our pre-tax loss of approximately $6.5 million. Item 8.
If a change in the U.S. dollar to Euro exchange rate equal to 10% of the U.S. dollar to Euro exchange rate on December 31, 2024 were to have occurred, this change would have resulted in a foreign currency impact to our pre-tax income of approximately $5.8 million.
Such obligations are denominated in Euros. At the end of each reporting period, the recognized gain or loss on purchase commitment is converted to U.S. dollars at the then-applicable foreign exchange rate. As a result, our business is affected by fluctuations in exchange rates between the U.S. dollar and the Euro.
Foreign Currency Exchange Risk We incur and will continue to incur significant expenditures for insulin supply obligations under our Insulin Supply Agreement. Such obligations are denominated in Euros. At the end of each reporting period, the recognized gain or loss on purchase commitment is converted to U.S. dollars at the then-applicable foreign exchange rate.
Item 7A. Quantitative and Qualitat ive Disclosures about Market Risk Interest Rate Risk Interest on borrowings under the MidCap credit facility accrues interest at an annual rate equal to the lesser of (i) 8.25% and (ii) the one-month SOFR (subject to a one-month SOFR floor of 1.00%) plus 6.25%.
We were subject to interest rate risk pursuant to our MidCap credit facility which accrued interest at an annual rate equal to the lesser of (i) 8.25% and (ii) one month SOFR (subject to a one month SOFR floor of 1.00%) plus 6.25%. Our MidCap credit facility was repaid in April 2024.
Specifically, the interest rate on the amount borrowed under the Mann Group convertible note is fixed at 2.50% and the interest rate under the Senior convertible notes is fixed at 2.50%. See Note 10 – Borrowings for information about the principal amount of outstanding debt.
Item 7A. Quantitative and Qualitat ive Disclosures about Market Risk Interest Rate Risk The senior convertible notes have a fixed interest rate of 2.50% and therefore the interest expense associated with such debt is not exposed to changes in market interest rates. See Note 10 – Borrowings for information about the principal amount of outstanding debt.
Removed
Accordingly, our interest expense under the MidCap credit facility is subject to changes in the one-month SOFR rate. All other debt has fixed interest rates, so the interest expense associated with such debt is not exposed to changes in market interest rates.
Added
Exchange rate fluctuations may adversely affect our expenses, results of operations, financial position and cash flows.
Removed
If a hypothetical 10% change in the one-month SOFR interest rates on December 31, 2023 were to have occurred, this change would not have had a material effect on our annual interest payment obligation. 58 Foreign Currency Exchange Risk We incur and will continue to incur significant expenditures for insulin supply obligations under our Insulin Supply Agreement with Amphastar.
Removed
Financial Statemen ts and Supplementary Data The information required by this Item is included in Items 15(a) (1) and (2) of Part IV of this Annual Report on Form 10-K. Item 9. Changes in and Disagreements with Accou ntants on Accounting and Financial Disclosure None.

Other MNKD 10-K year-over-year comparisons