MannKind announces exchange of convertible notes for stock, cash

MannKind (MNKD) has entered into separate, privately negotiated exchange agreements with certain holders of its 2.50% Convertible Senior Notes due 2026. Under the terms of the exchange agreements, the Holders agreed to exchange an aggregate principal amount of approximately $193.7M of Notes held by them in exchange for an aggregate of 26,749,559 shares of the Company’s common stock. In addition, pursuant to the exchange agreements, MannKind will make an aggregate cash payment of approximately $89.2M to the Holders for additional exchange consideration. The transaction is expected to close in two closings, with the first closing on or about December 20, 2024 and the second closing on or about December 23, 2024, in each case, subject to customary closing conditions. This repurchase decreases MannKind’s total outstanding debt by 84%. In addition, there were 37.2M shares reserved for conversion of the approximately $193.7M principal amount of Notes, corresponding to a potential savings of approximately 10.4M shares of dilution. This transaction is expected to help the Company to focus on its strategic priorities of delivering continued growth of its commercial business and supporting the development of its pulmonary pipeline programs. Immediately following the exchange of the Notes contemplated by the exchange agreements, the aggregate principal amount of the Notes will be reduced from $230M to approximately $36.3M, and annual interest expense will be reduced by $4.9M to approximately $0.9M. Following the exchange of the Notes, MannKind’s cash balance will be in excess of $180M with approximately 302.5M shares outstanding.