What changed in this filing

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Item 1. Business

2022-02-24 compared with 2021-02-25 · 127 added, 113 removed, 275 unchanged (47% of the section changed)

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We are a biopharmaceutical company focused on the development and commercialization of inhaled therapeutic products for patients with endocrine and orphan lung diseases.

Our development team is capable of taking a compound from early formulation feasibility studies to a full commercial-scale manufacturing operation.

Our commercial team includes a specialty sales force that calls on endocrinologists and selected primary care physicians as well as supporting functions that are directed to improving market access and delivering patient and physician support programs.

Endocrine diseases

Our lead product is Afrezza (insulin human) Inhalation Powder, which was approved by the U.S.

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In the U.S., we are solely responsible for the commercialization of Afrezza.

Our sales representatives promote Afrezza to endocrinologists and selected primary care physicians located throughout the United States.

Our sales efforts are aided by support programs, such as our AfrezzaAssist program that helps patients and physicians navigate through access, reimbursement and training questions, and savings programs, such as our co-pay assistance program for patients with commercial insurance and our cash pay program for patients with no insurance.

Outside of the U.S., our strategy has been to establish regional partnerships in foreign jurisdictions where there are commercial opportunities, subject to the receipt of necessary foreign regulatory approvals.

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(“Biomm”), commenced commercialization of Afrezza in January 2020.

Our partners in India and Australia are engaged in activities to prepare for regulatory submissions and have not yet commenced commercialization in their respective territories.

As part of the approval of Afrezza, the FDA required us to conduct certain additional clinical studies of Afrezza .

We expect to initiate one of these studies, a Phase 3 clinical trial to evaluate the safety and efficacy of Afrezza in 8-17 year-old children and adolescents, later in 2021, subject to the easing of restrictions due to COVID-19.

We are also required to conduct a five-year, randomized, controlled trial in 8,000-10,000 patients with type 2 diabetes to assess the potential risk of pulmonary malignancy with Afrezza use.

We have an ongoing dialogue with the FDA regarding the endpoints and goals for this long-term trial and have not yet commenced this trial.

In addition to studies sponsored and conducted by us, we expect to participate in collaborative clinical studies of Afrezza that are sponsored and conducted by independent investigators.

In December 2020, we entered into a sales and marketing collaboration agreement with an affiliate of Vertice Pharma, pursuant to which we will co-promote Thyquidity™ (levothyroxine sodium) oral solution through our sales force to adult endocrinologists, pediatric endocrinologists and other U.S.

healthcare providers who treat hypothyroidism.

Thyquidity is indicated as a replacement therapy in primary (thyroidal), secondary (pituitary), and tertiary (hypothalamic) congenital or acquired hypothyroidism.

Under this agreement, Vertice will book all sales of Thyquidity.

In consideration of our sales and marketing efforts, Vertice will make a specified quarterly payment to us and will pay us royalties on gross profit resulting from all sales of Thyquidity.

We believe that this arrangement with Vertice Pharma will allow us to strengthen our relationships with our current physician customers, expand into pediatric endocrinology and leverage the capabilities of our sales force and reimbursement support systems.

We expect to begin promoting Thyquidity in collaboration with Vertice Pharma in the first quarter of 2021.

Orphan Lung Diseases

Our partner in India, Cipla Ltd.

(“Cipla”), is currently conducting a clinical study of Afrezza in order to meet the requirements for a regulatory submission to the Drug Controller General of India.

As part of the approval of Afrezza, the FDA required us to conduct certain additional clinical studies of Afrezza in pediatric patients .

In the third quarter of 2021, we initiated a Phase 3 clinical trial to evaluate the safety and efficacy of Afrezza in combination with basal insulin versus multiple daily injections of insulin in children and adolescents aged 4-17 who are living with type 1 or type 2 diabetes.

This study, known as the INHALE-1 study, is a 26-week open-label, randomized clinical trial with a 26-week extension period.

The primary endpoint is change in HbA1c level after 26 weeks.

Secondary endpoints include change in fasting plasma glucose after 26 weeks, and rate of hypoglycemic events.

We do not expect to complete the INHALE-1 study until 2023 at the earliest.

When Afrezza was approved, the FDA also required us to conduct a five-year, randomized, controlled trial in 8,000-10,000 patients with type 2 diabetes to assess the long-term safety of Afrezza.

In discussions with the FDA during 2021, the agency indicated that this requirement could potentially be satisfied through a retrospective analysis or a prospective registry study rather than a randomized controlled trial.

The details of such a modified requirement will be elaborated in further discussions with the FDA that are planned for later in 2022.

Afrezza utilizes our proprietary Technosphere formulation technology, which we believe represents a versatile drug delivery platform that may allow the oral inhalation of a wide range of active pharmaceutical ingredients.

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Our inhalers show very little change in performance (i.e., efficient cartridge emptying) over a wide range of inhalation efforts.

We advanced an inhaled formulation of treprostinil Technosphere ( initially known as “ TreT ”) into clinical development, completing a Phase 1 dose-escalation trial in June 2018.

In September 2018, we entered into a license and collaboration agreement with United Therapeutics Corporation (“United Therapeutics” or “UT”), pursuant to which UT became responsible for global development, regulatory and commercial activities with respect to TreT (the “UT License Agreement”) while we retained responsibility for manufacturing clinical and commercial supplies.

UT subsequently branded TreT as “Tyvaso DPI” subject to FDA review.

In January 2021, UT disclosed that it intends to submit a n ew d rug a pplication ( “ NDA ” ) for Tyvaso DPI to the FDA in April 2021 .

This NDA will seek approval for Tyvaso DPI for the indications of pulmonary arterial hypertension and pulmonary hypertension associated with interstitial lung disease .

UT has announced that it plans to apply a priority review voucher to the Tyvaso DPI NDA, which w ould provide for an expedited FDA review period .

One of our key focuses during 2021 will be to support the NDA submission by UT and to prepare our facility for the potential commercial production of Tyvaso DPI.

Under the UT License Agreement, we are entitled to receive a margin on commercial supplies that we manufacture for UT and low double-digit royalties on all net sales of Tyvaso DPI.

Using our formulation and inhaler technology, we advanced an inhaled formulation of treprostinil Technosphere into clinical development in June 2018.

In September 2018, we entered into a license and collaboration agreement (the “UT License Agreement”) with United Therapeutics Corporation (“United Therapeutics” or “UT”), pursuant to which UT assumed responsibility for global development, regulatory and commercial activities with respect to a product that UT has branded as Tyvaso DPI, while we retained responsibility for manufacturing clinical and commercial supplies.

In April 2021, United Therapeutics submitted a new drug application (“NDA”) to the FDA seeking approval of Tyvaso DPI for the treatment of pulmonary arterial hypertension (PAH) and pulmonary hypertension associated with

interstitial lung disease (PH-ILD) .

In October 2021, the FDA provided UT with a complete response letter (CRL) in which it declined to approve the Tyvaso DPI NDA , citing an open inspection issue at a third-party analytical testing facility for the treprostinil drug substance as the single deficiency preventing approval of Tyvaso DPI .

The CRL noted, but did not cite as a deficiency, that the FDA had not yet completed its review of a c itizen p etition submitted to the FDA in July 2021 concerning the safety of an excipient in Tyvaso DPI.

In December 2021, UT resubmitted the NDA to the FDA, addressing the single deficiency cited in the CRL.

In January 2022, the FDA accepted the resubmitted NDA for review, and designated it as a class 1 resubmission with an expected two-month review period ending in February 2022.

In mid- February 2022, the FDA requested additional information from UT concerning the pulmonary safety of Tyvaso DPI related to the citizen petition .

UT promptly responded to the FDA’s request .

T he FDA subsequently indicated that the response constitutes a major amendment to the Tyvaso DPI NDA, which extends to May 2022 the FDA’s deadline to complete its review of the pending NDA.

In December 2020, we acquired QrumPharma, Inc., a privately held pharmaceutical company developing inhalation treatments for severe chronic and recurrent pulmonary infections, including nontuberculous mycobacterial (NTM) lung disease.

QrumPharma is now our wholly owned subsidiary.

Its lead program (QRM-003) is an inhaled, nebulized formulation of clofazimine, which could potentially provide several clinical advantages over the current solid oral dosage form of this drug, that is currently in preclinical development.

The FDA has designated QRM-003 as both an orphan drug and a qualified infectious disease product for the treatment of pulmonary NTM infections.

In addition to continuing the development of QRM-003, we intend to evaluate the feasibility of developing a dry-powder formulation of clofazimine using our Technosphere technology.

The lead program from this acquisition (MNKD-101) is an inhaled, nebulized formulation of clofazimine, which could potentially provide several clinical advantages over the current solid oral dosage form of this drug.

MNKD-101 is currently being evaluated in an initial clinical study in Australia.

The FDA has designated MNKD-101 as both an orphan drug and a qualified infectious disease product for the treatment of pulmonary NTM infections.

In addition to continuing the development of MNKD-101, we are evaluating the feasibility of developing a dry-powder formulation of clofazimine using our Technosphere technology.

We have formulated other drugs and biologics for the treatment of orphan lung disease and plan to continue their development as dictated by the results achieved in preclinical studies and by resource requirements.

For diseases outside of our areas of focus, our current intention is to seek partnerships to continue the development of our dry-powder formulations.

As an example of one such partnership, in January 2016, we entered into a collaboration and license agreement with Receptor Life Sciences (“Receptor”), pursuant to which Receptor assumed responsibility for the development, manufacture and commercialization of inhaled formulations of certain cannabinoid compounds utilizing our technology.

We have been informed that Receptor’s most advanced program, a dry-powder Technosphere formulation of cannabidiol, was reviewed with the FDA in a pre-IND meeting and that an investigational new drug (“IND”) submission is planned for 2021.

To aid in the development of our 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.

We have also partnered with several third parties that have proprietary rights to certain compounds in order to evaluate the feasibility of developing dry-powder formulations of such compounds.

We may seek to convert certain of these exploratory programs into full development programs funded by the external parties.

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.

The BluHale apparatus 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 physician’s offices.

New versions of the apparatus, with additional features, are in development.

A consumer version of the apparatus, with additional features, is in development.

Manufacturing and Supply

We use our Danbury, Connecticut facility to formulate both the Afrezza and Tyvaso DPI inhalation powders, fill plastic cartridges with the powders, package the cartridges in blister packs, and place the blister packs into foil pouches.

We utilize a contract packager to assemble the final kits of Afrezza foil-pouched blister packs along with inhalers and the package inserts.

The final responsibility for Tyvaso DPI packaging has not yet been determined.

The quality management systems of our Connecticut facility have been certified to be in conformance with the ISO 13485:2016 standard.

Our facility is inspected on a regular basis by the FDA, most recently in June 2018.

We were also inspected by ANVISA (Brazil National Health Surveillance Agency) in May 2018.

Neither of the regulatory inspections in 2018 gave rise to any inspectional observations (known as “483s” in the United States).

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 blister packs.

We utilize a contract packager to assemble the final kits of Afrezza and Tyvaso DPI cartridges along with inhalers and package inserts.

The quality management systems of our Danbury facility have been certified to be in conformance with the ISO 13485:2016 standard.

Our facility is inspected on a regular basis by the FDA, most recently in July 2021 when the FDA conducted a pre-approval inspection related to Tyvaso DPI and a GMP inspection related to Afrezza.

The FDA made one observation during its most recent inspection, which we corrected and addressed with the FDA following the site visit.

We were also inspected by the Agência Nacional de Vigilância Sanitária (“ANVISA”) (Brazil National Health Surveillance Agency) in May 2018.

ANVISA renewed its certificate in 2020 on the basis of a virtual inspection.

The FDA and other foreign jurisdictions are expected to conduct additional inspections of our facility from time to time.

We believe that our Connecticut facility has enough capacity to satisfy the current demand for Afrezza and Tyvaso DPI.

In addition, the facility includes expansion space to accommodate additional filling lines and other equipment, allowing production capacity to be increased based on the reasonably foreseeable demand for Afrezza, Tyvaso DPI and other potential products over the next several years.

We believe that our Danbury facility has enough capacity to satisfy the current demand for Afrezza and, if approved, Tyvaso DPI.

In addition, we are currently expanding production capacity with additional filling lines and other equipment in order to meet the demand for Tyvaso DPI projected by UT over the next several years.

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.

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See additional information in Note 13 – Commitments and Contingencies to the consolidated financial statements for further information related to the Insulin Supply Agreement.

The treprostinil used to produce Tyvaso DPI is supplied to us by our partner, United Therapeutics.

The treprostinil used to produce Tyvaso DPI is supplied to us at no cost by United Therapeutics.

Currently, we purchase FDKP, the primary component of our Technosphere powders, from a major chemical manufacturer with facilities in Europe and North America.

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We expect to be able to qualify an additional vendor of packaging services, if warranted by demand.

The BluHale device is assembled for us by a contract manufacturer using components that are sourced from multiple vendors.

In general, our suppliers and contract manufacturers are sophisticated and mature organizations, often with multinational operations, that have significant experience with pharmaceutical and medical device manufacturing.

Our quality and manufacturing personnel conduct extensive inspections to qualify new vendors and periodic GMP audits of their operations on an ongoing basis.

With the expansion of our supply chain into the electronic components that are required for BluHale devices, we have begun to require our vendors to confirm that conflict minerals are not knowingly or intentionally added during the manufacturing process for, or are unnecessary to the functionality or production of, the components that we source from such vendors.

Intellectual Property

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The longest-lived patent protection for Tyvaso DPI will expire in 2035.

Our entire portfolio consists of approximately 1,050 issued patents and approximately 215 patent applications that provide protection for our drug delivery platform, Technosphere-based products, our BluHale inhalation-profiling apparatus and various development tools.

Our entire portfolio consists of approximately 1,100 issued patents and approximately 170 patent applications that provide protection for MNKD-101, our drug delivery platform, Technosphere-based products, our BluHale inhalation-profiling apparatus and various development tools.

We expect to file further patent applications as our research and development efforts continue.

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and insulin glulisine, which is marketed by Sanofi S.A.

New formulations of two of these products – Fiasp®, a version of insulin aspart from Novo Nordisk, and Lyumjev™, a version of insulin lispro from Eli Lilly & Company – have been positioned by their manufacturers as fast(er) insulins.

New formulations of two of these

products – Fiasp®, a version of insulin aspart from Novo Nordisk, and Lyumjev™, a version of insulin lispro from Eli Lilly & Company – have been positioned by their manufacturers as fast(er) insulins.

According to prescribing information, these products have their first measurable effects within 17-30 minutes after administration and reach peak glucose-lowering effects after 90-120 minutes.

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Government Regulation

The FDA and comparable regulatory agencies in state and local jurisdictions impose substantial requirements upon the clinical development, manufacture and marketing of medical devices and new drug and biologic products.

These agencies, through regulations that implement the Federal Food, Drug and Cosmetic Act, as amended (“FDCA”), and other regulations, regulate research and development activities and the development, testing, manufacture, labeling, storage, shipping, approval, recordkeeping, advertising, promotion, sale and distribution of such products.

The FDA and comparable regulatory agencies in state and local jurisdictions impose substantial requirements upon the research, clinical development, testing, manufacture, labeling, storage, shipping, approval, recordkeeping, advertising, promotion, sale and distribution of medical devices and new drug and biologic products.

In addition, to the extent that our products are marketed abroad, they are also subject to export requirements and to regulation by foreign governments.

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In addition, the FDA imposes a number of complex regulations on entities that advertise and promote drugs, which include, among other requirements, standards for and regulation of direct-to-consumer advertising, industry sponsored scientific and educational activities, and promotional activities involving the Internet, and restrictions on off-label promotion.

The FDA has very broad enforcement authority under the FDCA, and failure to comply with these regulations can result in penalties, including the issuance of a warning letter requirements for corrective advertising to healthcare providers, a requirement that future advertising and promotional materials be pre-cleared by the FDA, and state and federal civil and criminal investigations and prosecutions.

The FDA has very broad enforcement authority, and failure to comply with these regulations can result in penalties, including the issuance of a warning letter requirements for corrective advertising to healthcare providers, a requirement that future advertising and promotional materials be pre-cleared by the FDA, and state and federal civil and criminal investigations and prosecutions.

Products manufactured in the United States and marketed outside the United States are subject to certain FDA regulations, as well as regulation by the country in which the products are to be sold.

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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.

Third-party payers, like government health administration authorities, private health insurers and other organizations that provide healthcare coverage, generally decide which drugs they will pay for and establish reimbursement levels for covered drugs.

Third-party payers, such as government health administration authorities, private health insurers and other organizations that provide healthcare coverage, generally decide which drugs they will pay for and establish reimbursement levels for covered drugs.

In particular, in the United States, private third-party payers often provide reimbursement for products and services based on the level at which the government (through the Medicare or Medicaid programs) provides reimbursement for such products and services.

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and elsewhere, there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality and/or expanding access.

In the United States, the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by major legislative initiatives, including, most recently, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act (collectively, “PPACA”), enacted in March 2010.

The PPACA substantially changed the way healthcare is financed by both governmental and private insurers.

Among other cost containment measures, PPACA established:

an annual, nondeductible fee on any entity that manufactures or imports certain branded prescription drugs and biologic agents;

a new Medicare Part D coverage gap discount program;

and a new formula that increased the rebates a manufacturer must pay under the Medicaid Drug Rebate Program.

There have been judicial and congressional challenges to certain aspects of PPACA, as well as efforts by the Trump administration to repeal or replace certain aspects of the PPACA.

President Trump signed Executive Orders and other directives designed to eliminate the implementation of certain provisions of the PPACA or otherwise circumvent some of the requirements for health insurance mandated by the PPACA.

Congress has considered legislation that would repeal portions or repeal and replace all or part of the PPACA.

While Congress has not passed comprehensive repeal legislation, several bills affecting the implementation of certain taxes under the PPACA have been signed into law.

Legislation enacted in 2017, informally titled the Tax Cuts and Jobs Act of 2017 (“Tax Act”), includes a provision repealing, effective January 1, 2019, the tax-based shared responsibility payment imposed by the PPACA on certain individuals who fail to maintain qualifying health coverage for all or part of a year that is commonly referred to as the “individual mandate”.

In addition, the 2020 federal spending package permanently eliminated, effective January 1, 2020, the PPACA-mandated “Cadillac” tax on high-cost employer-sponsored health coverage and medical device tax and, effective January 1, 2021, also eliminated the health insurer tax.

The Bipartisan Budget Act of 2018, or the BBA, among other things, amended the PPACA, effective January 1, 2019, to increase from 50% to 70% the point-of-sale discount that is owed by pharmaceutical manufacturers who participate in Medicare Part D and to close the coverage gap in most Medicare drug plans, commonly referred to as the “donut hole”.

In December 2018, CMS published a new final rule permitting further collections and payments to and from certain PPACA qualified health plans and health insurance issuers under the PPACA risk adjustment program in response to the outcome of federal district court litigation regarding the method CMS uses to determine this risk adjustment.

In December 2018, a Texas U.S.

District Court Judge ruled that the PPACA is unconstitutional in its entirety because the “individual mandate” was repealed by Congress as part of the Tax Act.

Additionally, in December 2019, the U.S.

Court of Appeals for the 5th Circuit upheld the District Court ruling that the individual mandate was unconstitutional and remanded the case back to the District Court to determine whether the remaining provisions of the PPACA are invalid as well.

Supreme Court is currently reviewing this case, but it is unknown when a decision will be reached.

Although the U.S.

Supreme Court has not yet ruled on the constitutionality of the PPACA, on January 28, 2021, President Biden issued an executive order to initiate a special enrollment period from February 15, 2021 through May 15, 2021 for purposes of obtaining health insurance coverage through the PPACA marketplace.

The executive order also instructs certain governmental agencies to review and reconsider their existing policies and rules that limit access to healthcare, including among others, reexamining Medicaid demonstration projects and waiver programs that include work requirements, and policies that create unnecessary barriers to obtaining access to health insurance coverage through Medicaid or the PPACA.

It is unclear how the Supreme Court ruling, other such litigation, and the healthcare reform measures of the Biden administration will impact the PPACA and our business.

Other legislative changes have been proposed and adopted in the United States since PPACA.

For example, through the process created by the Budget Control Act of 2011, there are automatic reductions of Medicare payments to providers up to 2% per fiscal year, which went into effect in April 2013 and, following passage of the BBA, remained in effect through 2020 unless additional Congressional action is taken.

However, COVID-19 relief support legislation suspended the 2% Medicare sequester from May 1, 2020 through March 31, 2021.

In January 2013, President Obama signed into law the American Taxpayer Relief Act of 2012, which, among other things, further reduced Medicare payments to several providers.

In the future, there are likely to be additional proposals relating to the reform of the U.S.

In the United States, the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by major legislative initiatives, including the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act (collectively, “PPACA”), which was enacted in March 2010.

In the years since the PPACA was enacted, t here have been a number of executive, judicial and congressional challenges to certain aspects of PPACA .

While Congress has not passed comprehensive repeal legislation, several bills affecting the implementation of certain provisions of the PPACA have been signed into law.

For example, l egislation enacted in 2017, informally titled the Tax Cuts and Jobs Act of 2017 (“Tax Act”), includes a provision repealing, effective January 1, 2019, the tax-based shared responsibility payment imposed by the PPACA on certain individuals who fail to maintain qualifying health coverage for all or part of a year that is commonly referred to as the “individual mandate”.

Subsequently , a Texas U.S.

District Court Judge ruled in December 2018 that the PPACA is unconstitutional in its entirety because the “individual mandate” was repealed by Congress as part of the Tax Act.

Ultimately, in June 2021 the Supreme Court dismissed this challenge to the constitutionality of the PPACA, so it remains in effect in its current form.

However, i n the future, there are likely to be additional proposals relating to the reform of the U.S.

health care system, some of which could further limit the prices we are able to charge for our products, or the amounts of reimbursement available for our products.

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All of these activities are also potentially subject to federal and state consumer protection and unfair competition laws.

Moreover, in the United States, there have been several congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for products.

For example, at the federal level, the Trump administration previously released a “Blueprint” to lower drug prices and reduce out of pocket costs of drugs that contain ed proposals to increase manufacturer competition, increase the negotiating power of certain federal healthcare programs, incentivize manufacturers to lower the list price of their products and reduce the out of pocket costs of drug products paid by consumers.

In addition, the Trump administration’s budget proposal for fiscal year 2021 included a $135 billion allowance to support legislative proposals seeking to reduce drug prices, increase competition, lower out-of-pocket drug costs for patients, and increase patient access to lower-cost generic and biosimilar drugs.

Further, on March 10, 2020, the Trump administration sent “principles” for drug pricing to Congress, calling for legislation that would, among other things, cap Medicare Part D beneficiary out-of-pocket pharmacy expenses, provide an option to cap Medicare Part D beneficiary monthly out-of-pocket expenses, and place limits on pharmaceutical price increases.

On July 24, 2020 and September 13, 2020, the Trump administration announced several executive orders related to prescription drug pricing that attempt to implement several of the administration’s proposals.

The FDA also released a final rule, effective November 30, 2020, implementing a portion of the importation executive order providing guidance for states to build and submit importation plans for drugs from Canada.

Further, on November 20, 2020, the U.S.

Department of Health and Human Services, or HHS, finalized a regulation removing safe harbor protection for price reductions from pharmaceutical manufacturers to plan sponsors under Part D, either directly or through pharmacy benefit managers, unless the price reduction is required by law.

The implementation of this rule has been delayed by the Biden administration from January 1, 2022 to January 1, 2023 in response to ongoing litigation .

The rule also creates a new safe harbor for price reductions reflected at the point-of-sale, as well as a new safe harbor for certain fixed fee arrangements between pharmacy benefit managers and manufacturers, the implementation of which have also been delayed pending review by the Biden administration until March 22, 2021.

On November 20, 2020, CMS issued an interim final rule implementing President Trump’s Most Favored Nation executive order, which would tie Medicare Part B payments for certain physician-administered drugs to the lowest price paid in other economically advanced countries, effective January 1, 2021.

On December 28, 2020, the United States District Court in Northern California issued a nationwide preliminary injunction against implementation of the interim final rule.

However, it is unclear whether the Biden administration will work to reverse these measures or pursue similar policy initiatives.

Moreover, in the United States, there have been several presidential executive orders, congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for products.

For example, July 2021, the Biden administration released an executive order, “Promoting Competition in the American Economy,” with multiple provisions aimed at prescription drugs.

In response to Biden’s executive order, on September 9, 2021, the U.S.

Department of Health and Human Services (“HHS”) released a Comprehensive Plan for Addressing High Drug Prices that outlines principles for drug pricing reform and sets out a variety of potential legislative policies that Congress could pursue as well as potential administrative actions HHS can take to advance these principles.

No legislation or administrative actions have been finalized to implement these principles.

It is unclear whether these or similar policy initiatives will be implemented in the future.

Additionally, on March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 into law, which eliminates 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.

In addition, Congress is considering additional health reform measures.

At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.

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The federal healthcare Anti-Kickback Statute prohibits, among other things, persons or entities from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, overtly or covertly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made under a federal healthcare program such as Medicare and Medicaid.

In addition, federal civil and criminal false claims laws, including the civil False Claims Act, which can be enforced through civil whistleblower or qui tam actions, and civil monetary penalty laws impose criminal and civil penalties against individuals or entities for knowingly presenting, or causing to be presented, to the federal government, including the Medicare and Medicaid programs, claims for payment or approval that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government.

In addition, federal civil and criminal false claims laws, including the civil False Claims Act, which can be enforced through civil whistleblower or qui tam actions, and civil monetary penalty laws impose criminal and civil penalties against individuals or entities for, among other things, knowingly presenting, or causing to be presented, to the federal government, including the Medicare and Medicaid programs, claims for payment or approval that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government.

The federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) imposes criminal and civil liability for, among other things, executing a scheme to defraud any healthcare benefit program and also created federal criminal laws that prohibit knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statements in connection with the delivery of or payment for healthcare benefits, items or services.

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) 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.

Beginning in 2022, applicable manufacturers also will be required to report such information regarding its payments and other transfers of value to physician assistants, nurse practitioners, clinical nurse specialists, anesthesiologist assistants, certified registered nurse anesthetists and certified nurse midwives during the previous year.

M any states have similar healthcare statutes or regulations that apply to items and services reimbursed under Medicaid and other state programs, or, in several states, that apply regardless of the payer.

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.

In 2020, we reported approximately $383,700 in payments to physicians under the Physician Payments Sunshine Act, which consisted of $216,140 in speaking fees, $121,740 in meals, $31,600 in consulting fees and $14,220 in other payments.

We also reported approximately $294,190 in research payments to teaching hospitals.

Our report for payments to physicians and teaching hospitals for 2021 is due to be submitted to the Centers for Medicare & Medicaid Services (“CMS”) by March 31, 2022.

Many states have similar healthcare statutes or regulations that apply to items and services reimbursed under Medicaid and other state programs, or, in several states, that apply regardless of the payer.

Additional state laws require pharmaceutical companies to implement a comprehensive compliance program, comply with industry’s compliance guidelines and relevant compliance guidance promulgated by the federal government and register pharmaceutical sales representatives and limit expenditure for, or payments to, individual medical or health professionals.

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We are subject to data privacy and security regulation by both the federal government and the states in which we conduct our business.

The federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), as amended by the Health Information Technology and Clinical Health Act (“HITECH”), and their respective implementing regulations, imposes certain requirements relating to the privacy, security and transmission of individually identifiable health information.

HIPAA, as amended by the Health Information Technology and Clinical Health Act (“HITECH”), and their respective implementing regulations, imposes certain requirements relating to the privacy, security and transmission of individually identifiable health information.

Among other things, HITECH makes HIPAA’s privacy and security standards directly applicable to “business associates” — independent contractors or agents of covered entities, which include certain healthcare providers, health plans, and healthcare clearinghouses, that receive or obtain protected health information in connection with providing a service on behalf of a covered entity.

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.

State laws also govern the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.

The recently adopted European General Data Protection Regulation, or GDPR, contains new provisions specifically directed at the processing of health information, higher sanctions and extra-territoriality measures that are intended to bring non-EU companies under the data security and privacy legal framework specified in the regulation.

State laws also govern the privacy and security of personal data, including health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.

For example, the California Consumer Privacy Act of 2018 (“CCPA”) imposes obligations on covered businesses.

These obligations include, but are not limited to, providing specific disclosures in privacy notices and affording California residents certain rights related to their personal data.

The CCPA allows for statutory fines for noncompliance (up to $7,500 per violation).

Although the CCPA exempts some data processed in the context of clinical trials, the CCPA may increase compliance costs and potential liability with respect to other personal data we maintain about California residents.

In addition, it is anticipated that the California Privacy Rights Act of 2020 (“CPRA”), effective January 1, 2023, will expand the CCPA.

Additionally, the CPRA establishes 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 become effective in 2023.

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.

As one example, the European Union’s General Data Protection Regulation 2016/679 (“EU GDPR”), contains provisions specifically directed at the processing of health information, higher sanctions and extra-territoriality measures that are intended to bring non-EU companies under the data security and privacy legal framework specified in the regulation.

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 GDPR.

Effective January 1, 2020, the California Consumer Privacy Act (“CCPA”) created individual privacy rights for California consumers (as that word is broadly defined in the law) and placed increased privacy and security obligations on entities handling personal data of consumers or households.

The CCPA requires covered companies to provide new disclosures to California consumers, provide such consumers new ways to opt-out of certain sales of personal information, and allows for a new cause of action for data breaches.

The CCPA will likely impact (possibly significantly) our business activities and exemplifies the vulnerability of our business to not only cyber threats but also the evolving regulatory environment related to personal data and protected health information.

With such expansion, we would be subject to increased governmental regulation in the EU countries in which we might operate, including the EU GDPR.

Other regulation

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We are committed to protecting the health and well-being of patients by ensuring that medically sound knowledge of the benefits and risks of our products is understood and communicated thoroughly and accurately to patients, physicians and global health authorities.

Our policy on interactions with healthcare professionals and patients prohibits off-label promotion of our products.

Our policy on interactions with healthcare professionals and patients requires that our employees promote our products fairly, truthfully, accurately and on-label.

Off-label promotion of our products is explicitly prohibited, as are sales activities that would interfere with a healthcare provider’s independent medical judgment or the doctor-patient relationship.

All sales staff received compliance training upon hire and on an annual basis.

We also routinely monitor sales calls.

Any case where we promote off-label use of our products has the potential to have a material adverse effect on our reputation, sales and liabilities.

We expect that consistent enforcement of, and training on, our Code of Business Conduct and Ethics and our policy on interactions with healthcare professionals and patients will help us to limit the incidence of off-label promotion.

As part of our commitment to patient support and education, our employees and consultants may attend and participate in certain patient events, such as health fairs or local disease awareness and advocacy events.

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 safety of our products at all stages – from clinical trials to the administration and use and through to safe disposal – is a key area of attention for us.

We manufacture our approved and investigational products in accordance with the applicable cGMPs, QSR and other requirements enforced by the FDA and other regulatory bodies that have oversight over our products.

We acknowledge, however, that there are inherent risks associated with the use of drug products.

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This system is intended to improve detection and removal of drugs that may be counterfeit, stolen, contaminated, or otherwise harmful from the drug supply chain.

All of our employees are required to adhere to a standard operating procedure for capturing and reporting adverse events, safety information, and product complaints/adverse incidents involving any drug products marketed by us.

These reports, as well as those that are collected by our third-party call center, are evaluated, processed and reported to regulatory authorities in accordance with FDA regulations and guidance on the post-marketing reporting of adverse experiences involving drugs, medical devices and combination products.

Safety of Clinical Trial Participants

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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 conduct trials in accordance with all applicable laws, the standards of International Conference on Harmonisation of Technical Requirements for Registration of Pharmaceuticals for Human Use (ICH) Guidelines and following the ethical principles that have their origin in the Declaration of Helsinki.

We conduct trials in accordance with all applicable laws, the standards of International Conference on Harmonisation of Technical Requirements for Registration of Pharmaceuticals for Human Use Guidelines and following the ethical principles that have their origin in the Declaration of Helsinki.

We require that a three-stage informed consent process be implemented in all trials to ensure that participants understand the risks and benefits of the procedures, how personal medical data is collected and used, and that participation in the trial is voluntary, among other information.

We retain documentation that all participants in our trials have provided informed consent.

We monitor clinical trials through audits and inspections conducted by us and by third parties.

We monitor clinical trials through audits and inspections conducted by us and by clinical research organizations (CROs) that we engage.

We also inspect our CROs prior to, and during, an engagement.

These inspections verify that our policies, good clinical practices and applicable laws are being adhered to.

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We will continue to hold ourselves to high standards in our oversight and management of clinical trials.

Our policy is to disclose the basic results of all clinical trials that we conduct to test the effectiveness of investigational drugs intended to treat serious or life-threatening diseases or conditions (i.e., phase 2-4 clinical studies).

Additionally, we may voluntarily disclose the results of initial safety studies (i.e., phase 1 clinical studies).

We strive to disclose these results within one year of study completion or within 30 days of marketing authorization approval.

In our disclosure of clinical trial results, our policy is to include all serious adverse events and those non-serious adverse events that have a frequency of at least five percent.

Corruption and Bribery

Our Code of Business Conduct and Ethics reflects the business practices and principles of behavior that we expect of every employee, officer and director.

All new employees are trained on the Code of Business Conduct and Ethics and existing employees are required to acknowledge annually that they have refreshed their familiarity with the policies contained within it.

Our Code of Business Conduct and Ethics includes clear guidelines on anti-bribery and anti-corruption practices.

In addition, we have adopted an anti-corruption policy.

In addition, we have adopted a separate anti-corruption policy.

Currently, we have very limited operations outside the United States;

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Our long-lived assets are located in the United States and totaled $36.6 million and $25.9 million as of December 31, 2021 and 2020, respectively.

Employees and Human Capital

Our human capital helps us develop and commercialize new products, conduct clinical trials and navigate government regulations.

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We also have policies setting forth our expectations for nondiscrimination and a harassment-free work environment.

As of December 31, 2020, we had 241 total employees, of which 240 were full-time.

Specifically, our policy is that no aspect of employment, including hiring and promotional opportunities, will be subject to unlawful discrimination or harassment (including sexual harassment) based on race, creed, color, religion, national origin, ancestry, gender (including pregnancy, breastfeeding or medical conditions related to pregnancy or breastfeeding), age, physical or intellectual disability, sexual orientation, gender identity, gender expression, gender stereotyping, marital status, military or veteran status, citizenship, genetic characteristic or information, or any other characteristic protected by applicable federal, state or local law.

As of December 31, 2021, we had 349 total at-will employees, of which 348 were full-time.

Of our full-time employees, 147 were engaged in manufacturing, 41 in research and development, 50 in general and administrative and 110 in selling and marketing.

Thirteen of these employees had a Ph.D.

Seventeen 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.

As of December 31, 2021, our workforce was distributed along genders and ethnic minorities as follows:

Ethnic minority (%)

Vice President and above

Executive Director, Director and Senior Manager

Managers and below

All employees

None of our employees are subject to a collective bargaining agreement.

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responses to periodic employee surveys, which are designed to give us insight into employees’ perception of company culture and areas where management’s efforts are perceived positively or negatively as well as open-ended feedback in the form of anonymous comments and questions.

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.

Our Total Rewards program is offered to each employee and currently consists of the seven offerings:

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.

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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.

The majority of our employees are essential workers involved in the production of medicine for chronic diseases.

As such, they cannot work remotely and must perform their job duties in our Connecticut facility according to a 24/7 shift schedule.

Other employees have work responsibilities that can be performed somewhat asynchronously and in different locations.

For such employees, our general preference is that in-office employees be in the office during core business hours at least four days per week in order to maximize the productivity gains that come from having a collaborative culture and a common workplace;

however, we also recognize that such employees can be equally productive working from home some of the time or with a flexible workday that they can structure around significant events outside of the workplace, such as commute times or childcare responsibilities.

Occupational Health and Safety

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We were incorporated in the State of Delaware on February 14, 1991.

Our principal executive offices are located at 30930 Russell Ranch Road, Suite 300, Westlake Village, California 91362, and our telephone number at that address is (818) 661-5000.

MannKind Corporation and the MannKind Corporation logo are our service marks and trademarks.

Our principal executive offices are located at 1 Casper Street, Danbury, Connecticut 06810, and our general telephone number is (818) 661-5000.

Our website address is http://www.mannkindcorp.com.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business