MannKind Corporation (NASDAQ:MNKD) and affiliates of Deerfield Management Company L.P. have entered into an exchange and third amendment to their facility agreement, pursuant to which MannKind’s $10 million principal maturity previously due on July 18, 2017 will be extended to October 31, 2017, subject to certain conditions, the existing minimum liquidity covenant is reduced as fully described below, and Deerfield will exchange $5 million of the Amended and Restated 9.75% Senior Convertible Notes due December 2019 (the “Tranche 4 Notes”) for 3,584,230 shares of MannKind’s common stock. The exchange price for the Exchange Shares is $1.395 per share. The principal amount being repaid and exchanged under the Tranche 4 Notes represents the principal amount that would have otherwise become due and payable in December 2019.
Pursuant to the terms of the exchange and amendment agreement, Deerfield has agreed to extend its existing $10 million principal maturity from July 18, 2017 to August 31, 2017 and, subject to certain conditions on that date, further extend it to October 31, 2017. These conditions include that MannKind has not experienced a Material Adverse Event or an Event of Default (as such terms are defined in the Facility Agreement), that MannKind has received approximately $19.4 million of proceeds from the Loan Arrangement between MannKind and The Mann Group LLC, and that the Company has at least $10 million in Cash and Cash Equivalents. Subject to these conditions, Deerfield has also agreed to amend the terms of the minimum liquidity covenant under the Facility Agreement such that, on the last day of each month through October 31 and on December 31, 2017, MannKind must maintain at least $10 million of Cash and Cash Equivalents.
Michael Castagna, MannKind’s Chief Executive Officer commented, “The extension of the July 2017 principal payment to Deerfield and the amendment of the Facility Agreement affords us flexibility and time to explore additional measures to strengthen our financial position. Just as with the Mann Group and its recently announced capital infusion, we appreciate the cooperation and support of Deerfield at this exciting time for MannKind.”
Shares of MannKind are down nearly 4.5% to $1.48 in Thursday’s trading session. MNKD has a 1-year high of $6.05 and a 1-year low of $0.67. The stock’s 50-day moving average is $1.44 and its 200-day moving average is $1.11.
On the ratings front, MannKind has been the subject of a number of recent research reports. In a report issued on May 11, J.P. Morgan analyst Cory Kasimov reiterated a Sell rating on MNKD. Separately, on the same day, Piper Jaffray’s Joshua Schimmer reiterated a Sell rating on the stock and has a price target of $0.54.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Cory Kasimov and Joshua Schimmer have a yearly average return of 0.9% and a loss of -4.6% respectively. Kasimov has a success rate of 42% and is ranked #2215 out of 4600 analysts, while Schimmer has a success rate of 41% and is ranked #4408.
MannKind Corp. is a biopharmaceutical company. It focuses on the discovery, development and commercialization of therapeutic products for diseases, such as diabetes and cancer.