MannKind raises $102M in sale-leaseback of manufacturing plant to fund operations

Sales of the inhaled insulin Afrezza lagged in recent years due to confusion surrounding efficacy and dosing, Michael Castagna, CEO of MannKind, has said. (MannKind)

MannKind, the maker of an inhaled insulin treatment for diabetes, inked a sale-leaseback deal of its manufacturing plant for $102.25 million, which will help shore up its finances as it continues to work on other inhaled endocrine and orphan lung disease products.

Under the terms of the deal, signed with an affiliate of Creative Manufacturing Properties, MannKind agreed to a 20-year lease of the 263,900-square-foot plant, located in Danbury, Connecticut. The site produces MannKind’s Afrezza, the only FDA-approved inhaled insulin on the market. The California-based company’s R&D facility was not part of the deal.

MannKind, which has struggled over the past years to gain widespread acceptance of Afrezza, plans to manufacture Tyvaso DPI in collaboration with United Therapeutics at the facility. Tyvaso DPI, which the FDA is currently reviewing, is an inhalant for pulmonary arterial hypertension and pulmonary hypertension associated with lung disease.

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Sales of Afrezza lagged in recent years due to confusion surrounding efficacy and dosing, Michael Castagna, CEO of MannKind, told the Pacific Coast Business Times in February, adding that those issues were fixed through “a significant amount of publications and presentations.” Afrezza notched sales of $17.2 million in 2020, which was up from $5.2 million in 2019.

Nonetheless, earlier this year, MannKind reported a net loss of $57.2 million for 2020, which it attributed mainly to costs associated with its $12.8 million acquisition of QrumPharma. The company recorded a net loss of $51.9 million in 2019.

“We are pleased to enter into this sale-leaseback transaction and unlock value tied up in our manufacturing facility that translates directly into nondilutive capital to support our company’s growth and development strategy,” Castagna said in a statement. “The company is well-capitalized to invest further in our growing product pipeline as well as targeted scale-up of Afrezza commercial activities and clinical trials.”