Q2 2020 MannKind Corp Earnings Call

Nation in the country, followed by India.

Are you actively taxes were only down 3% and if you told me back in March said, we're only going to drop 3% in the quarter. Despite the pull ahead that we had during Q1 in prescription demand and fulfillment I wouldn't I believe you our team did a fantastic job and we can see that we grew 11% versus Q2 of 2019.

Our United Therapeutics collaboration we were able to receive our third milestone to $12.5 million in May and we expect another payment later this year during Q4.

Cobiz 19 did delay the clinical trials and we're on our opening backup for enrollment as I'll talk about in a few minutes.

As for our cash balance we ended Q3 stronger than ever with our second best quarter as 53.5 million in the last four years and our cash burn should be manageable for the rest of 2020, given the $12.5 million being we expect in Q4 and now we can invest to grow afrezza faster as I'll discuss in our second half opportunity.

[music].

Sorry.

[noise] my slides were out of order here.

Before I go ahead.

On the cash talent there I wanted to introduce L. Andro. So my statement, that's I apologize.

I want to announce our new Chief commercial officer, how under the Linda.

He joins us as the president of Medtronic as formerly the President of Medtronic diabetes. He has a great wealth of knowledge and experience in the type one space technology medical devices CGM and pumps.

And had a very successful tenured during its five years at Medtronic. You also comes from background Gd Health care, which is the company I followed over the years and as all the ups and downs.

Hundreds a tremendous leader and really looking forward to happen to be part of our management team and leaving our commercial efforts as we go forward.

Background in span in Spanish and Portuguese and multilingual really going to help us as we continue to move forward with our international expansion and as world knowledge of markets is going to be important as before.

Just for that Miss.

[noise] [noise], okay. So.

We ended with I'm, sorry, just analysts like their vote, we ended slightly but does that change here of the PPP loan was 4.9 million, which we disclosed in the past. There's also repaid our promissory note to one of our debt holders a 2.6 million as scheduled in June.

No one to talk about our business transformation during cobot.

First our primary concern was our employees and making sure they're well safe and protected we did work from home use technology within a week of making this transition.

Second we had to make sure we had adequate supply of Afrezza and we kept track tea on track. So then the manufacturing we're able to keep the facility open limits are essential workers only and we built inventory for the remainder of 2020. So we have no risk inpatient stockouts.

Third with sustaining our future you made a lot of tough choices during Q2 to reduce our spend to offset the expected sales impact from covert 19.

I will say things turned out way better in Q2 than we had expected, but we did take corrective measurements to reduce our pay by 20%.

We were able to receive the P.P. loan, which really has allowed us to keep our all of our infrastructure intact and avoid any furloughs, which we believe is critical to the success. We had in Q2 as the alternative would not have been ideal.

And lot of energy filling the EMA and the PPV loan helped us stay on track and stay on focus and pull through where we are today.

Third as our trip T. collaboration are temporary suspension of clinical trials cause concern for everybody, but I will say may kind in unit. There works very closely together, the maintaining momentum and keeping our clinical support and milestones on track as best we can talk about that in a second.

And finally Afrezza [noise].

Let me talk about a little bit and what we've done with the for the here during Tobin.

We quickly pivoted our business model at sea freight homeowners were implemented across the U.S.

First our biggest investment in the field, we had to make sure we're impactful for that impactful as possible as they were moved to were moved to a remote sales support positions. We train them on inside sales best practices, we created email templates enhanced or communication with their customers. We create digital versions of all of our marketing materials, we had over eight.

800 virtual bunches during this time and we launched several training initiatives to ensure the clinical impact as they got back out there in selling at the same time, we expanded our salesforce during co bid so that we couldn't come out of the stronger than ever.

And finally, we were able to create a virtual dreamboat training dreamboat for those who don't know is our president device and we were able to help treat patients virtually keep new starts going.

As far as our commercial operation, we were able to ship FCB, one devices to patients to make sure that patients could start a friend's if doctors desire to as into many visits were down in new starts were down during the quarter for many companies.

We also offer a sampling program, which meant we reduced not only cost, but increased customer service and our new patient initiations and reduce costs.

And then finally, we're launching several digital marketing campaigns Webinars and we had over 17 Webinars with 22 thought leaders, reaching over a thousand physicians in the last four months.

So I think when you can see his team here really executed on the commercial side access we could during Kobe 19.

And the results here during the quarter speak for themselves, we were able to stabilize trx is relatively speaking for the quarter down only 3%, but our revenue dropped.

Furthermore, due to the decline in channel inventory as Steve will discuss.

When you look at our new patient starts while they were down from Q1. They started to increase above the 300 back here as we exited Q2 and think that we continue to look forward here in Q3 will see these networks is continuing to improve as we go forward.

We continue to look for ways to innovate our business model and one of those is growth in the specialty pharmacies. This will continue to help improve margins as we go forward and you can see from Q1, there for a really from January went from 7% of our sales to 16% year in June and continues to grow.

Every single month.

We don't have any guidance on where this will plateau, but it's an area. We continue to want to see higher quality customer service to our patients in our providers through our specialty pharmacy network and this is something we think is critically important to the future and will help improve our margin.

In the final question for our turnover the Steve is where are we on track tea in the good news is this continues to be on track as we've talked about roughly a Q1 2021 filing this was in United Therapeutics control not ours, but everything we're doing it to make sure. We're on track to hit these key milestones number one the breeze trial. This is the most.

Important part of the package there is 45 patients that need to be switch for three weeks. This trials backup and enrolling there's a long term extension phase seven sites are up and running and is 26, taking total that we expect to be up and running in the near future for this trial should wrap up here in the second half of the year and will be no longer the long.

Form 10.

The next one of the pivotal PK trial. This this study was almost complete during coated we are probably five or six patients away and should be up up and running and completed burden in the near term at this point, we don't see any risk in the pivotal PK output or trial design.

The human factor study is something that than our control. It looks good it's something we've done many times here with the president and that will kick off here in Q3, and I'm just guessing left the feedback that incorporated and look in the launch that very shortly.

And then the final part of the package is the stability program and Thats, what mankind has been working on over the last year, where we had to build up of manufacturing plant running the commercial batches and get things up on stability and that will be part, but we finished up here in Q4 and looking forward to wrapping that up.

And then in if it were very excited about the future with our partnerships. We continue to look for opportunities to work together and other molecules and the potential for type basal expansion here in CRPD as another data read out in the future as exciting as well as the I'll d. as they continue ways away FDA feedback on an accelerated approval, which will be important to our Tracy.

Forecasting future.

Okay.

And we'll stop there and turnover Steve.

Thanks, Mike and good afternoon. So pleased to review our second quarter in first half 2020 financial results, which show meaningful as president net revenue growth, even with the impact from the pandemic.

Gross margins holding steady at just under 50% and our cash balance ending the second quarter at its highest levels since December 2018.

I'll be discussing select financial highlights and apps to supplement this call by reading the condensed consolidated financial statements and Mdna contained in our 10-Q, which was filed with the FCC. This afternoon.

Let's start out with looking at revenues for the second quarter in the first half of 2020.

Starting with the table on the left.

The net revenue was 7 million for the second quarter versus 6.1 million to the corresponding quarter 2019 go through the 15% second quarter include point $2 million of sales to our Brazilian marketing partner deal.

Domestic a further net revenue grew 12% versus the prior year driven by volume growth from underlying the present prescription demand, which was up 11%.

Price and a favorable mix of cartridges, but was partially offset by the impact from the coded 19 pandemic.

Dependent make affected our second quarter affected net revenues in a number of ways.

First we disclosed in our Q1 earnings call that approximately half a million dollars. It was present net revenues shifted from Q2 Q1 from increased wholesaler buying patterns in March.

The increase March 31st wholesale inventory levels have come back down by the end of the second quarter, which negatively impacted our second quarter, but the net revenue by approximately half a million dollars.

Second our Salesforce work from home for much of the second quarter and were able to and when able to meet with physicians have limited access to their offices, which impacted the effectiveness of our selling efforts and thirdly effect on new prescriptions been written by physicians.

Patients have been reluctant to visit their physicians to minimize their exposure to the virus and some positions have been increasing use of tele health C patients both of which impacted new patient starts.

Mike explained earlier, we could we pivoted our business model as the pandemic too cold two megawatts seem to better be better position for success in this new environment.

We believe that a combination of business model changes in the gradual return to normalcy will favorably impact to further prescriptions in the federal revenue for the second half of 2020.

Looking at the first half comparisons on the table to the right.

The net revenue grew 35% versus the first half of 2019, driven by volume mix, which is up 30% and price up 5%.

But looking at the first and second quarters together it helps to eliminate the fluctuations in the timing of wholesaler purchases from the first and second quarters I was just talking about.

Gross to nets were 41% that second quarter, which was slightly favorable to our expected range of 42% to 44% while the first half gross to net came in at the lower end of the range at 42%.

Revenue from collaboration services was 8.1 million to the second quarter 2020 versus 8.99 for the corresponding second quarter of 2019 reduction in revenue was expected was mainly due to the recognition of the $10 million United Therapeutics Research agreement over the period, the fourth quarter 20 night.

In the second quarter 2019, when our performance obligations is substantially completed.

Inception to date, we've recognized $53.6 million Immunotherapies license agreement and the entire $10 million from United Therapeutics Research agreement for a total of $63.6 million recognized inception to date.

The next slide shows how our product mix continues to be able to impact our present revenue growth.

Our successful commercial messaging and execution has resulted in patient tetration to higher doses.

Which has driven the 12 unit cartridge growth rate faster than the eight unit in the four unit.

As a reminder, a 12 unit cartridges price two times, the four years and eight new coaches post two times before you get cartridge.

Sure for you Couldnt headquarters is on this slide to enable easy comparison of growth rates for the first averaged 2020 versus 21 team and to show the favorable impact in a press revenues and cartridge mix.

Faster growth of the higher unit cartridges results in a higher growth, whether assessor revenue fair to prescription growth.

Moving to a further gross profit in gross margin.

The table in our top is a familiar one which shows gross margins in the first quarter 29 team into the second quarter 2020, where our gross margin was 47.4% basically flat with the first quarter 2012.

We have had and continue to have excess manufacturing capacity reserve, which results in our cost of goods sold remaining relatively flat quarter to quarter to the production volumes remained lower than our production capacity.

This results in the majority of manufacturing expenses recognized as cost of goods sold in the quarter incurred.

As Trevor see clinical product production has ramped up in 2020, we're now able to absorb crossover to products being manufactured Danbury site, resulting in a favorable impact on a further cost of goods sold as compared to the prior year.

Cost of goods sold excluding inventory write offs were $3.7 million for the first and second quarters of 2020.

First quarter of 2020, including inventory write off of the half million dollars, resulting in a higher cogs charge of $4.2 million.

The table on the bottom in this slide shows a friendly gross profit growth of 156% between the first half of 2020 and 29 team. The primary reason for such a large increase in gross profit is the growth of expressive revenue and to a lesser expense and lower level of cost of goods sold driven by manufacturing efficiencies.

And a higher level of manufacturing activity for Afrezza.

That's a further revenues increase in cost of goods sold remained relatively flat in the near term, we expect to see increases in both gross profit and gross margins.

Moving on to operating cash efficiency on the next slide we're comparing the first half of the 2020 versus 2019 versus 28 team.

The copper, which vertical bar is affecting net revenue, which is more than doubled in two years and the bottom is non-GAAP net cash used in operating activities. Please note that for non-GAAP purposes, not net cash used in operating activities has been adjusted to exclude the United Therapeutics milestone in the support license payments.

We reduced operating cash burn, but 37% in the first half of 2020 versus 2019, and an additional 14% when looking at the previous years comparison.

The increased increasing a threat afrezza net revenue helps drive down the cash burn but to a large extent. It's also been laser focused on managing our operating spend and the shows and the reduction was 27.4 million in the first half of 2020.

Our restricted cash balances and so our unrestricted cash balances at the end of June for the last three years are shown as the bottom the slide.

We ended the second quarter was $63.2 million, an unrestricted cash and cash equivalents, our highest cash balance in 18 months.

In addition to lowering our cash burn during the second quarter received the United Therapeutics milestone payment of $12.5 million.

$11.6 million from the exercise of outstanding warrants.

$11.6 million from equity sales through the ATM, including in sale to a strategic institutional investor and $4.9 million from the PPP Roe.

Wrapping things up we experienced headwinds from the coded 19, pandemic, which impacted our second quarter results, but we have repositioned the company to be successful and executing the such an environment and to be able to weather the uncertainty caused quite a pandemic or improved cash position suit enabled the company to go to navigate the changing landscape as we continue to pick up.

Corporate actions acute mankind moving into right direction for all stakeholders.

Thank you I'll now turn it back over to Mike for some additional comments.

Thank you, Steve and I want to talk about growing our future not just in the second half, but as we continue to look out.

Going forward. So so the first thing I think we were able to do their included with the get back in touch with many of our current shareholders, but also reach out to new shareholders. It's something that's been important to us and as they continue to transition to story from in a further story to a pipeline story to an expansion story, we think nows the time more than ever to start to build up our investor base.

Yes.

As part of that we've reached out to several new institutional investors as Steve highlighted some of which will buy offer ATM and build their position in mankind over time, and sometimes that helps us in short term.

Our in the industrial discussions have been a two way story, telling more stories reasons to believe in our future. We've also been listening and taken with feedback on key issues for example, and say on pay.

We're surprised at how new our story is to many of these people and you really look at our investors in one of two buckets those that have been with us on a president need a new about mankind in the history, but dropped us years ago or those that are very interested in units there and look at mankind's an opportunity to capitalize on this growth story with trustee and the additional benefit of the.

Many of the comes via further growth story.

We start to see two different bases of shareholders, forming in our future, which ultimately will converge into the growth story for the company whether that be because the people belief in the president and our growth and that story or because of the upside in the company as we look at units, there and tyvaso and other partnerships going forward.

Long story short, we're really excited to continue implementing our next part of our strip our strategy that we rolled out in January which has continued to look at opportunities in both in lung and then secondarily to supplement what we've been billing and build out our pipeline even faster it had lots of discussions with institutional investors with assets under management over 250 million as all small.

Family offices to a very interested in the story sub $250 million. These discussions are often excellent and also on top of that many great discussions with our research analyst new and current ones.

The number one question I did get from investors and perspective analysts was why do you continue to invest in Afrezza.

This is really important question that we did some research here during coded to reach out to some of the top end phone prescribers, who never tried afrezza and said what are we missing regenerate all this data and we really want to understand what more we can be doing to continue to lay the foundation for the future.

And the best news I can share with you is despite all the hard work, we still have room to improve.

The other benefit here is a frezza continues to serve an unmet need for mealtime control as four to five patients article and in fact, if you look at the latest too on the exchange data outcomes on patients living with type one diabetes have gotten worse over the last decade. Despite the adoption of CGM insulin pumps. This data has not changed.

Really inlet 20 years, and you look at percentage of people less than seven is generally about 20%. We think we have an opportunity continue enhance this as we publish our data hyperglycemia dose titration.

We lost in type one or wait different spent beneficial in type one and contain is help doctors understand how to start new patients.

What do we go in the second half is 2025.

First I want to acknowledge that David Campbell will be the part in our main contaminate to pursue other interest, but does impact here will be ever be lasting assay. Thank you David for all you've done for patients now and in the future.

Then we with us for transition period as its definitely next opportunity has also the lead author and several of our scientific publications. David has made a tremendous impact as I'll talk about all the new data coming out of them as the year.

Despite his departure I will say, we're excited with the new commercial and medical leadership, the deep dives experienced will be joining the company in fact relate to new hires in the last 24 hours and three to five more coming over the next week. It was one of things I learned in the AD boards with how much more room, we have the due to educate providers on all the clinical dataset.

That we've been able to get up over last three years and one that is due to increase our share of voice and so we've expanded our salesforce and we're expanding our medical footprint as we speak Hailstorms in enhanced with 100, joining and a few others from other diabetes companies really give us rounded outside his experience across the commercial on the medical team as we look forward.

Next within building stepping stones for an integrated care model and what that means as you look and say we're building out a presences tavakoli patient reimbursement support system to make sure it's easy and consistent experienced that our patients and doctors experience.

Second due to the nature of Tele health and where we see the future. We believe Cobra just accelerated tele health by five years and this is a great opportunity for us to help partner with some external collaborators and lots of telehealth platform to support Afrezza here as it is as early as the into Q3 here.

As we're looking at.

And we'll continue to look and enhancements with our distribution model either by expanding our specialty pharmacy or other distribution partners, which will lower our cost.

Additionally, we'll be hiring ahead of R&D self build out our R&D platform, even further than we have over the last couple of years.

And last two parts here is launching blue whale for health care providers, which found her batteries and from China devices are made and we'll be watching that very shortly with our salesforce.

For the team in place to help get Ddos detection moving faster. So excited about the connectivity in the future is now 100 background here is the very helpful. As we go forward.

And then as I talk about a second we have lots of new scientific publications and they dissemination, but David and his team worked hard to get published over last few years.

Next I want to talk about our collaborators we received we expect to receive our fourth milestone communitaire here in Q4, we will complete our clinical CMC support work too for the only eight.

And we'll continue to look for other opportunities to enhance our relationship with simpler.

On down in Brazil, and other international markets as we go forward.

On the pipeline we started this sumatriptan toxicology work and we expect it gets a pre R&D by Q1 of next year. So excited to continue to move the pipeline forward.

Next slide I won't go over in detail, but I think it's really important to lay out what we have had over 24 scientific disclosures over the last 12 months between December of 19 and by the December of 2023 of these publications of which two came out in the last two weeks in one where we expect to come out in the next week. The team has been really hard at work and this is David and sitting in.

Our warehouse for years, if not more than a decade in some cases.

Factors just aren't aware of and this is the number one reason, we're expanding our medical footprint as we speak behalf to get this information to handle providers, it's meaningful information and really answered a lot of the scientific questions I've been out there around the frezza over the last four years, but I'm happy to say most of the data will be out to now we ended the year and now the time more than ever.

To summarize everything that we've been working on wrap this up and really go out and execute.

Forward.

And last part here is the pediatric study, which I did mentioned previously we're finishing up the phase three protocol design plan a bit about FDA here in the second half and we'll be ready to kick off that trial in 2021.

I want to stop there and open up for questions and really just say thank you again to everybody. It's a tremendous effort in the quarter and I'm really happy with our performance our team work and how we pull through.

This company stronger post cosan. Thank you.

And at this time, if you do have a question that will be star one once again I want to for questions. We'll hear first today from Thomas Smith.

Okay great.

Hi, This is on the police sitting in for Tom.

Two quick questions first can you.

Give us a little insight into what are your expectations are for the new territories and the new sales reps that you brought on line or is your.

What are your expectations, how quickly the digit ramped up in Brazil at full speed and then kind of related to this what are some of your target points and metrics that you're evaluating to consider opening new Jersey, and the future and that I've. A couple of quick follow ups of this.

Okay, I apologize Mr. first.

New territories, and surgical where the expectations for the new charges are okay. So yes.

I think that the first thing as you think about we open up 11 states and those those apps are just getting out there really are less month, meaning the customers for the first time I mean, you think about those 11 states. We don't expect a rapid uptake in the first month as it's basically launching from scratch and I can tell you are going to call recently with one of the city organization.

And it's amazing to me their knowledge base is back or about four years ago and they'd just missed all the new information republish. So I think the first step of making sure that new territories are supported with good medical support and were given this does include the runway to be successful and I think we'll have that we're seeing some early success in a lot of new territory. So they are growing.

But the started from a basically zero pretty much in that so thats exciting as we continue to see that base growth.

I think the first thing we look at in terms of metrics of success is really new prescriptions.

Thats going to be the earliest indicator of success and like I said, we're looking at those an early results are encouraging and we'll look at that as we get to the end of Q3 in Q4 to decide do we expand even more territories as we go on the 2021 and see what our growth has been in the second half and a lot of this was coated dependent guys. We are being prudent with the cash.

Cash was unfortunate to bring in here in Q2.

He also know that we got to train people, giving the time and Thats just can take a little bit of energy. So one. So we're excited we're looking at this closely and the new employees of an excellent the talent base. We're recruiting is incredible.

So we've got four out of nine new managers in the field and probably over 90, new reps. This year, so 35% improvements and we.

We feel very good about that and I'm excited about because metrics and the medical support team.

We're looking to our three to 500 sales as we speak well have some support there at the new districts.

Great. Thank you and then real quick if you can give us an update on the progress being made with Amazon, Australia as well as the pediatric or maybe appreciate it.

I heard Amazon Australia.

Pete Okay. So on our famous known I just want to some of them are.

A week ago.

They obviously were if I covered and things were shut down there and then just coming out of it.

Our.

Working on filing and we're just finishing up the gaps in the filing and seeing what we need to do with anything modifying ready for filing so that now moving forward took a little longer than we would like philosophies and but how thats on track now that you start rolling forward and it's probably going to be an 18 month process from the time when it's filed so.

That's moving forward.

The next one on the piece study is we're doing couple of things right. Now are the first is we're doing to market research to hear from patients and providers on the unmet needs in pediatric space and the endpoints were looking at in our trial and really trying to get a better forecast for how big you think the pediatric segment can be for inhaled insulin we're generally internally.

Very optimistic and we really want to hear from the providers on on hearing that optimism.

The second part is would be doing some pediatric advisory boards here to get feedback on the protocol design, the endpoints and really making sure that we designed this trial for speed of enrollment balanced by risk and assessment of how quickly can move this.

Corporate system I think that's that's important and then the third part is really building up the pediatric thought leaders. Soon so we just hired a commercial person who joins us with a deep diabetes backgrounds Novo Mexican and he told me moving out here and really starting to build up our thought leadership within the Pete segment and I'm sure I Wonder you got a ton of connections in pediatrics with your background. So.

So we're excited about Peter we know it's going to take a little while to get there, but we're putting the right plan in place to launch it successfully and build that market up as we get ready for launch Procrit right. Now, we're just getting all the rate ducks in a row to get the trial program.

Yes, thank you very much.

Thank you.

Well hear next from Brendan folks with Cantor Fitzgerald.

Hi, Thanks, all my questions and congratulations on all the progress in the quarter and see you mentioned so how credit.

As a growth driver or sort of in your dynamic when moving towards.

And then just provide some feedback you've heard from physicians in terms of switching patients in the current environment in a total health environment.

Dispositions wants to patients in Paris person at some stage if so how awesome and then maybe segue from that can you talk about some of the positive.

And the way, we do business in encourage inquiry tailwind coming out of target.

Thank you.

Thank you Brandon.

So I think initially when Colgate head everybody was just trying to figure out how to survive and.

The one small benefit we havent mankind, there's a lot of our businesses in private practice owners and so they were first to open up a little bit and we can have released more interaction probably than some of our industry colleagues were.

So thats slightly different than maybe some of the academic centers, which are maybe different types of starts.

So I think a lot of us whether its mankind or other companies or just physician offices were just trying to figure out how to survive during markdown and so there wasn't a lot of new starts or interest in starting patients is really matter keeping patients on therapy, keeping them engaged making small tweaks and I think tele health is great for that and then as we realized.

'cause it's going to go on longer than four weeks, we started shifting a little bit and getting some feedback on can you start new patients virtually with Afrezza and how do you think about that with the FP. One spirometry, how you think about that what dose titration and how willing the doctors b and whats nice is the creative this program, we had over 100 requests for efficacy.

One devices come in from providers to where shutdown, but still giving virtual new patient starts. So that was a good inclination of a pilot for us to see could you make tele health work as a part of business expansion and that's a bit of the confidence to start to build up the tele health because there's been a little bit of coordination there with the spirometry.

But we think it's possible and one of the things we've heard from doctors is hey, if patients come in and asked for it.

We're going to start them during coded, but they weren't interested in a lot of switching right now, but I think that was two months ago Mcnabb. The government now where we are I think new starts are coming back we're seeing in our weekly scripts were seeing are listening with our reps.

So so I think yes, California, and Florida, probably slower in Texas, but the works pretty much back up and running New Jersey back up and running so Boston that we have moved to people. There. So we feel that.

Things are going into right direction, and as California, and Texas, and Florida Open back up I think you'll see some faster growth ahead of us, but we're happy with where things lenders in where we're going to.

Monzer short during covered we learn we can start virtual coming out of covered we have a better footprint will have tele health and we think theres a future here to get patients coming from both angles and Thats really important.

Alright, Thank you very much.

Thank you Brenda.

Your next from FERC has watch with BTG.

Yeah. Thanks, my congratulations on that you're a meaningful progress in the challenging environment.

These are clearly moving into right direction number ways with regard to trade fee and the coverage for the United Therapeutics or could be a little bit more granular about kind of the state of manufacturing again, you comment on how that's helping gross margins overall, but any other kind of timelines for additional.

Yeah.

Efforts with regard to manufacturing of Tracy would be helpful. Thank you.

However, I'm not a loss to say, meaning we built off of manufacturing facility last year. It is our big investment in millions of dollars that UTI help support it's up and running where that you called processing process be were switching over to process be and.

Independent team is working hard to kind of get that up and running because as you can imagine getting ready for the filing making sure the equipment. The packaging everything is working in sync.

The team is working like today to make sure that that's working positively and in doing that run pretty stressful working conditions. So I think you know just being down enough and being a hot and then protecting cobot is not easy and Thats. One is connected to the team because they haven't missed a beat and I'm. There we will be the contract manufacturer so even now.

Trustee in clinical supplies, sometimes human here Sterling and sometimes we're helping out but going forward in the clinical post clinical supplies.

This will be delivered by mankind in our manufacturing facility. There. So all the equipment installed all the stability batches are up and running the tests are running fine.

And everything looks really positive so we don't see our knock on wood, we don't see any major hiccups going forward as always things you work throughout as you get ready for filing.

But otherwise we feel very good about the tightness in the process the consistency and what we learn throughout throughout the last two years here. So thank you tease them incredible partner and I'm really just a great collaborations we think about the R&D side.

As a manufacturing site system, the kind of I.

I think I've had a great relationship and or compete.

Terrific. Thank you.

Yeah.

And at this time I'd like to turn things back to management for any closing remarks.

Yeah.

No I just want to say thank you again, everybody I think there was a spectacular quarter. Despite some major headwinds in a few that mean in March April how have things it turned out and none of us could predict the situation. We are in and how bucket will be and and we all expect a lot worse and I'm, just really thankful that the team pull through in the left the company in really good standing exit.

In Q2, and I feel like we got to financial resources to invest in growth. We've got the team to take us forward and the talent new people looking at us such Melissa. Thank you excited to have you on board and now under your newest employee. This week that our next week, we'll have to more so every week. We've had some new voice has been great and looking forward to live in this company for when the right direction.

And getting getting a fair there should be is really one of the standards of care for infantry diabetes. So just thank you again everybody. Thank you can see we're moving on all cylinders and I'm just really proud of the work everybody pull through in number we're going to do so before the talking here. Soon we'll have a couple of investor conferences in September and maybe one or two in between them. So I think you'll hear from US a couple of times and.

We'll try to we're working on some enhanced Investor Communications, which we know is going to big request and Thats in one of the feedback is also a pull together new letter of the shared that with you and hopefully have signed up on our website and make sure your registered their to receive that and I'm trying to say. Thank you again for everybody and let's see how are things continue to move here in Q3, but we're very excited about all the activities.

Our teams come together and execution to mid Q3 a success.

Thank you.

And that will conclude today's conference again, thank you all for joining us.

[music].