CEO Hakan Edstrom is out after just 10 months on the job as CEO of beleaguered biotech MannKind, and founder Alfred Mann has returned to the helm. The firm has gone from boom to bust in barely a year, as sales of its FDA-approved inhalable insulin product Afrezza have been far below expectations despite a big push by partner Sanofi.
On Friday, November 20th, MannKind Corporation announced that Hakan Edstrom has resigned as the President, CEO and as a director of MannKind. The board of directors of MannKind appointed Alfred Mann as interim Chief Executive Officer.
Also of note, Mann will continue to serve as the Executive Chairman of the firm. The BoD has already assembled a committee who will undertake a priority search for a new CEO.
MannKind in tight spot after weak secondary offering on TASE
MannKind recently tried to raise cash with a secondary offering of up to 50 million shares of common stock on the Tel Aviv Stock Exchange. The desperate and cash burning firm was hoping it could raise around $120 million in cash with the secondary. The idea was to beef up the $32.9 million in cash on hand, the $37.5 million in common stock that can still be sold on U.S. stock markets, and the $30.1 million the firm is authorized to borrow based on its loan arrangement with The Mann Group.
The bad news for MannKind and its shareholders, is that there was not much demand for shares in Israel. Given the secondary’s per share price of $2.61, the firm was only able to actually sell 13,852,435 shares of its common stock, which resulted in $36.2 million in proceeds (before fees etc.). The net result if the TASE secondary was rather than producing enough capital to buy the biotech another couple of years of time, MannKind just ended up with between three and six months of additional time based given the current cash burn rate.