Q4 2021 MannKind Corp Earnings Call
Okay.
Okay.
Good afternoon, and welcome to the Mannkind Corporation fourth quarter and year end 2021 earnings call.
As a reminder, this call is being recorded on February 24th 2022, and will be available for playback on the Mannkind Corporation website. Shortly after the conclusion of this call until March 2022.
This call will contain forward looking statements such forward looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from those.
These stated expectations.
For further information on the company's risk factors. Please see their 10-K report filed with the.
The Securities and Exchange Commission. This afternoon, the earnings release and the slides prepared for this presentation.
Joining us today from Mannkind are Chief Executive Officer, Michael Gastonia, and Chief Financial Officer, Steven Binder, I would now like to turn the conference over to Mr. Cattaneo. Please go ahead.
Thank you. Thank you everyone for joining us this afternoon and sorry about the news this morning.
I'll talk about three things as we look back on 2021 number one we moved <unk> epi from concept to an NDA filing in passing that the infection.
After moving into ensuring commercial product is ready and upon FDA approval.
Or to recapitalize the company early last year to put it.
It is on a solid path to success and ensure that we need to make dramatic changes to our operating model or a structure.
<unk> given the types of setbacks and we did experience over the last six months.
The sale leaseback, the convertible debt and pay down debt make sure there's nothing major deal in the near term.
We continue to operate and focus on building out our strategic plan to grow in our company on the pathway to success.
And third the pipeline really good.
Pipeline forward purchase and quorum feedback.
The feedback were getting phone calls Fas that means the data. We're looking at is very positive the advisors have been give us great feedback.
Our second advisory board in the month of March.
It's been three formulation deals I think two of which were public and we continue to look at other opportunities and explore ways to use our technosphere technology and other assets other companies with their product.
As you look back on Q4, and 2022, we were able to grow total revenues over $75 million.
And a president in double digits year over year.
Q4, we had a record revenue of $11 3 million with the president.
Really exciting competitive headwinds we face from Covid.
Q4.
Focusing on the first paintbox orphan lung disease or units or collaboration is strong and going forward and are extremely excited to help patients.
Any decision.
As I talked about we're focused on building inventory and helping you to prepare for launch.
On the pipeline.
Cohort in our study the second cohort from the start.
That results in Q2 and that results in late Q2 early Q3.
And then <unk> hundred one is the first time understand this product is called the Pentamer, which as Brian and I will talk about that later in the discussion where now we're building that program.
Yes.
In the near future.
And then can be 501 I'm talking about.
This program both of these are developing and progressing.
Milestones.
Actually just continued development of Imatinib AK Mannkind 701.
All the things we tried to do this you are coming in as bring more focus and get rid of distracting.
Forward in a way that we expected.
And that also led us into a for instance.
We looked at our president and where we're heading this year one of the big strategic decisions. We have to make unfortunately was to reduce our 30 FTE to reinvest some of the money to keep a further going into right direction and tried to impact 2022.
While we saw positive script growth in 2021 wasn't what we wanted to.
We can do better.
Help us back a little bit.
However, we did launch a campaign in Q4 call seeing is believing we provided free CGM to doctors who didn't right.
Consistently and that pilot, we saw about 45% of the targets actually opt into the program.
That group grew three times National average.
What we saw in Q4.
We also lost a primary care product in Q4, we will focus on a sub part of the country with 25 additional reps focused on helping drive success in primary care or there's very low awareness of a president adoption or trial.
We also just recently filed a clinical trial.
ADC trial, President Visa combination, which was also previously referred to as the pump switch trial. This trial to provide meaningful data in a pilot study looking at keeping people on their pump, adding a <unk> to a pub or switching patients often pumps that you receive a friendly I really put about the study into the first time, we're running.
Over the history of the brand.
The liquidity side.
We've done a great job make sure of cash and investments of over $260 million.
Sure.
And we completed temporary facility non dilutive sale leaseback, which hasnt changed our operating model, but they provide as excess capital to continue to execute our plan.
As we look at Q4 performance.
On a friendly you can see our scripts continue to grow year over year quarter over quarter on the right side here I want to point to a patient demand is not visible to the public because we did move from a free goods program in 2020.
2021, sorry, ending 2020 into 2021 and that was in our Fred's assist our new competency you can see the volume growing our presence. This from 221 patients with first piloted in Q4 hour for 989 patients coming in Q4 'twenty. One. This is our first step is that removing friction in the reimbursement model and making sure the patient starting to.
President doctors prescribing afrezza and have a great experience.
Dr reimbursement process, sometimes they roll into free goods, which is FG flash paid prescriptions on cash program and you can see we're almost up to a thousand patients in the 1000 scripts I guess for the quarter and that free goods less cash programs to continue to see exponential growth in the cash payments every month, because theyre not meaningful contributors to our present sales trajectory.
They are a bolus of patients that we continue to track.
No.
As we look at 2020 to optimize our present footprint to make sure all of our sales territories survival.
Positive growth potential.
We are expanding the team is believing campaign to all of our sales Rep territories based on our Q4 pilot that will be launching in March to give everyone an opportunity to expand our pre CGM really showed a trend that can do.
Please proceed.
The brand has potential to be cash flow breakeven as we approach 2023, and that's one of the things that.
A lot of discussion around how to make sure. We continue on our present and also make sure it's not a drain on the company that it can be.
Sustaining in the years ahead.
Our peach trials, increasing enrollment every week, we've got invited to needy modeling session with the FDA.
The label change.
You're going to see good positive clinical data gets published on our president as we look out.
I wanted to put Joseph excellent support and topic of the day have ACO DPI, that's near and Dear to our hearts when it gets us a patients soon as possible. Unfortunately, the FDA requested information.
<unk> related to the citizens petition.
Very recently.
The response that you can provide them a solid and really well written and considered a major amendment. Unfortunately to the NDA as a result, the FDA extended to May 2022.
Not much we can do other than continue to feel confident in everything we're doing to prepare for this <unk> run a great study there lots of great data on the.
So we feel very good about our response to the FDA in helping you.
Utica.
Finish line.
<unk> is focused on is ensuring commercial practice available upon FDA approval and we also are anticipating continued its expansion to the plant.
<unk> been running two additional trials for market indications down the road and we'll make sure that we get well ahead of that in terms of supply and demand.
Want to thank everyone for all their help and support over the past year I apologize about the news. This morning that ideal timing. We expected. However, I think we feel very confident about the resolution and where this is going to head over the next 90 days.
It's a minor setback in the Grand scheme of the sheer grants given the life of <unk>. So we're super excited zinc fingers.
When we get there as soon as possible.
Thanks, Mike and good afternoon.
To review <unk> fourth quarter, and full year 2021 financial results.
Please supplement this call by reading the consolidated financial statements and MD&A contained in our 10-K, which was filed with the SEC. This afternoon.
Let's start by looking at revenues for the fourth quarter of 2021.
<unk> net revenue was $11 3 million versus $10 $1 million in 2020, a growth rate of 13%.
Components of growth, including more favorable gross to net deduction percentage of 35% mainly related to a onetime reversal of a reserve for product returns from a retail pharmacy, where we entered into a consignment agreement in the fourth quarter.
Plus price.
Volume increase supported by patient to your X demand growth of 8%.
A more favorable mix of cartridges sold.
Full year growth of 21% driven by a more favorable gross to net deduction percentage.
Price.
Volume increased supported by patient to your extra demand growth of 10% and a more favorable mix of cartridges.
Looking ahead, we expect the gross to net percentage for our presence to be approximately 40% to 41% in 2022.
Women of collaborations and services revenue for the fourth quarter was $1 2 million versus $8 4 million for 2020.
Revenue in the fourth quarter was mainly associated with the remaining deferred milestone recognition as discussed in the third quarter earnings call.
We expect it to have a more significant amount of manufacturing revenue in the fourth quarter from our commercial supply agreement with Ut, but the accounting literature guidance to where we can only recognize revenue associated with the agreement when we sell product Ut, which was not significant in the fourth quarter.
Revenue associated with the manufacturing activity for 2021 with deferred on the balance sheet and the amount of $13 6 million as of December 31, 2021, which I will discuss at greater length in a few minutes.
As we continue manufacturing activities in the first quarter of 2022 to support <unk> launch of Tasiast with Upi, We do not expect to recognize revenue associated with the commercial supply agreement in the first quarter as it will continue to be deferred until we start to release product <unk>, which we expect to happen in the second quarter.
From a cash standpoint, we're able to invoice and collect from United Therapeutics for these manufacturing activity.
Our full year revenue per collaborations services rose, 11% to $36 3 million and consist mainly of revenue from our collaboration with United Therapeutics in the amount of 34 4 million.
Congrats on our next slide shows the quarterly Afrezza gross margin trends, our gross margin increased in each quarter during 2021 and closed the year at 62% for the fourth quarter, even though the fourth quarter included $2 million of inventory write offs approximately $1 3 million for the REIT over present run of cartridges that.
Not pass quality inspection and approximately $7 million for inventory re purchased from a retail chain. When we entered into the consignment agreement in the fourth quarter recorded an inventory reserve for product that is at retail stores, but it is not likely to be sold before its expiration.
This inventory was repurchased at the wholesale acquisition cost.
Additionally, sales associated with the consignment agreement in the fourth quarter had no gross margin because we repurchased the inventory at WAC, which became its cost basis.
It's negatively impacted our fourth quarter gross profit by approximately $4 million.
Looking back at prior quarters, you may recall that we reported $2 million amendment fee in the second quarter of 2021, which also negatively impacted our gross profit and margin for the year.
Looking to 2022, we expect to continue our favorable gross margin trend as we grow our present revenue start to manufacture commercial scale <unk> epi on a 24 by seven basis, which helps absorb overhead costs.
I realize that the accounting for collaboration revenues associated with United Therapeutics has become complicated and confusing. So let me take some time to walk you through the manufacturing services performance obligation with beauty, which is how do we describe this in our 10-K.
The first line and this slide represents the costs incurred by Mannkind associated with this performance obligation, which are recorded in our P&L.
<unk> Therapeutics is funding this cost we have been invoicing as cost since the second quarter and have been collecting from Ut.
The manufacturing services costs as shown in the first line identifies the costs in our P&L, increasing from $2 million in the second quarter was $6 5 million.
Fourth quarter, as we geared up our manufacturing and support operations to prepare for commercial stage manufacturing.
A total of $13 8 million and cost was incurred by Mannkind associated with this performance obligation, which hit our P&L in 2021.
We recognize only $3 million in the fourth quarter for the sale of mainly <unk> DPI inhalers to Youtube.
The remaining $13 $6 million should have revenue to offset it but we can only recognize the revenue associated with this performance obligation when we sell product to Ut.
Before we get further revenue, which we recognized in later periods.
Entering 2022, we expect to defer most of the costs associated with this performance obligations in the first quarter of 2022 and start to recognize revenue in the second quarter as we sell product to U T. The support the Thai base of GPI launch.
Deferred revenue will be recognized over the manufacturing services agreement life, which currently runs into 2031.
Let me conclude with some final comments.
Today, we filed an updated F three universal shelf to replace an expiring shelf registration statement.
So cloud the new perspective linked to our ongoing ATM agreement with Cantor Fitzgerald we.
We do not have plans at this time to access the shelf or the ATM.
We have done this as a matter of good governance and financial management.
We ended 2021 of approximately $260 million in cash and investments, which you plan to use to fund our growing pipeline, which Mike will update you on in a minute and make targeted investments behind afrezza, while looking for business development opportunities that are complementary to our business.
Thank you and now I'll turn it back over to Mike for some final comments.
Thank you Stephen Thank you everyone for all the help this year.
So when you look at the Mannkind pipeline here. We've updated this slide I think this will be reflected on our website shortly.
One of the first bringing a little more clarity and then Katy 201, which is a new reveal here, which people don't know this product is the brand name is called <unk> and it goes over $3 billion a year idiopathic pulmonary fibrosis is a very difficult disease to treat and we believe that this product can be inhaled route can show, hopefully equal or better efficacy with less side effects.
Profile that exists today.
Really excited about this program is continuing to progress.
Studies in animal models.
Exactly and we will need to move forward.
Yes.
The other one here we've talked about in the past was 501 and you can see we've refocused our pipeline I think it is really critical to do a few things well for.
<unk> is growing very nicely, we had a great meeting this week, let's just preparing on how we get the phase III file there. Thanks.
To accelerate timelines as best we can so we can show this product to patients as fast.
It's possible.
There's nothing else I'll, just finally I'll talk about some of the Progressive next slide 2022 milestones.
As you see every year, we try to lay out some of the key milestones for our investors to look at quarter by quarter and then we generally scorecard ourselves against these milestones for the rest of this quarter you can see we've got <unk> BPI.
Factoring initiate our phase one and our friends at ABC Studios, IRB approved which should now could be opening for a moment as.
As we get ready for Q2, we want to make sure we have continued manufacturing inventory quantity.
Cancer genetics.
I think 80 201 in 501, the PK PD study and really look at the our model projects that we see any benefit in early stage or any talks that we can expect.
And then in Q3, we should have the readouts for <unk>, which will be the filing for the IMD. There in Q4 to get to the phase III as soon as possible.
When we take a step back number one our job is to be stewards of the capital that shareholders are provided.
And we need to sit here and look and say how do we best maximize our investments behind our growth drivers.
To drive shareholder value when you take a look back from 2017 till now, but I will take the company from a $11 7 million annual revenue all the way up to $75 million this year.
24 months, we grew despite massive setbacks on COVID-19 .
As well as continue to keep our manufacturing team in place growing against all odds in terms of Covid work environment getting through a really tough environment of the FDA inspection.
<unk> hopefully that launch here in 2022.
As you look to the future on the right side, our future is really bright we're super excited we really have a lot of opportunities to drive shareholder value number. One we continue expect our friends at a growth number two our friends in pediatrics will be a pivotal point or we think that will be an inflection of future for president once we get the signal.
Everything we tended to be the first time and led 12 years, rather than a large phase III trial head to head and we think as we're dosing the product right and we should get the exceptional results.
And the one challenge that these are kids. The kids are unpredictable so we'd have to get the data to feel good when we designed the trial based on all the inputs that we bought over the last four years of mistakes we've made in the past.
We expect to continue to see tightness of royalties upon FDA approval manufacturing revenues piece already talked about.
<unk> investors that plays a little bit little value on our pipeline and we think as these programs continue to progress there'll be additional interest either for international partners and some of the markets.
We see an opportunity that shareholders will get some value in our share price as a result of investments we're making in the pipeline.
None of this includes any new collaborations or international opportunities that we're pursuing.
So we feel very good about our future diversification of revenue and continued levers that generates shareholder value from here on through the next decade I want to thank everyone for their time.
We open up for questions.
Thank you to ask a question you will need to press star one on your telephone to withdraw your question press the pound key.
Question comes from Brandon Folkes with Cantor Fitzgerald Your line is open.
Yeah.
Hi, Thanks, Good question and congratulation for all the progress.
Yes.
Well the progress you've made as a business over the last few years.
Very strong capital position.
How do we think about business development to maybe bringing in some more commercial assets in the near to mid term obviously.
The focus of the pipeline.
But just with sort of the therapeutics.
So basically remained good opportunity, but how do you think about bringing in some more commercial assets.
It would be hurting your control. Thank you.
Thank you Brandon great.
Great question, and we find ourselves in a really good position. Despite the news today in terms of business development. We've had lots of inquiries around opportunities to continue to evaluate those and we do know theres a lot of single product companies that are struggling that are burning a lot of cash and that there are ways to harmonize those infrastructures with the infrastructure. We have we will continue to look for those opportunity.
They have to make sense, they got to fit our strategy and it has to be good for shareholders. So so we are open to those ideas will continue to be open.
But those things take time and energy and we want to make sure. They are not distracting us from driving core values that we are doing.
But we do know Theres a lot of companies will be running out of money and assets that are.
And then maybe Matt client can be a place for them. So we'll continue to evaluate things as they come forward.
Great. Thank you very much.
Thank you. Our next question comes from Gregory <unk> with RBC capital market. Your line is open.
Yes, Hey, Michael Thank you for the update today and thanks for taking my questions as well just wanted to follow up a little bit on as you explore fleshing out the pipeline and maybe just.
Layering in some of the COVID-19 impacts I think firstly as we serve exit from pandemic endemic in some degree of stability or are enormous normalcy.
How do you think about the landscape for pulmonary partnerships to what extent has the pandemic provided some learnings or opportunities where your technologies can kind of fit in to that scheme as the potential benefit and then maybe secondly to that respect COVID-19, I'm just curious if you could provide some.
<unk> how are you seeing exiting omicron in.
Afrezza trajectory could potentially.
Look sequentially throughout the year. Thank you very much.
Level it up into that question. So I'll do my best to Greg. Thank you.
I think the first thing I'm thankful that Clofazimine is where it is in terms of development because in our discussion with the advisors.
<unk> of trials backed up that are in pulmonary infectious disease are really high right now and therefore us getting bright line. If we were in phase III right. Now for example would not be ideal we'd be paying a lot of money for not a lot of progress and we see several other companies stuck in that situation with the brand cash against the pipeline without a lot of deliberate patient.
So we are optimistic that by the time capacity goes into phase III.
That backlog will be cleared out and we are anticipating the resurgence of Covid. This year I'm sure there could be pockets book, but that's not we're assuming a more normal path forward as we go.
Watch that before we go ahead and launch a larger phase II trial profiles.
In terms of the opportunity and our partnerships you saw we did a small one.
The deal that Rx pharmaceuticals, they have an opportunity for COVID-19 treatment.
Several other cobot formulations last year, maybe 2020 when it first started.
And if COVID-19 is going to become more of a chronic annual thing that we've got three one.
Our technology can be used for partners, whether that's vaccine boosters.
The beds that could be a self administration.
That's a great opportunity, but on the flip side. Unfortunately, there are millions of people, who now have damage loans and thats going to probably expand some of the market opportunity as we look out whether it's ips or COPD or ph the indications that you're going after we think this is unfortunately, a growing segment given the number of people.
So I think that unfortunately, or fortunately, it's not good for society, but I think it will set up mannkind for a multitude of opportunity in the future.
I think hopefully answers the question on the platform and how we're thinking about it as well as our own products in development.
On COVID-19, and our friends are.
That was one of our challenges as we look over the last two years, we had hired about 20. Some people maybe almost 30 people between 21 and 2020.
Dissipation of getting out and growing faster and unfortunate with the opening and closing multiple times over the last two years, we werent able to make as much impact with all the extra expense.
And as it came into this year, we are ready to middle of Covid, and we just weren't feeling like they're going to go away or come back or shut down again. So we've made the tough choice to kind of reallocate some of our expenses.
Things that we can control things that we can shuttle in our office Copa changes.
And that's how I imagine your present business. So the more confidence we have that COVID-19 has not researching and our reps are going to be locked out of Boston to more confidence will have in terms of continue to build back up that sales force as we get to it.
The team in place we have all the marketers all the managers really good focused team here driving us forward on our president and I think our first sales meeting three years will be in a few weeks I'm really looking forward to that and I think coming out of that Brendan that's when we can I'm sorry, Greg is when we can start to see that continue.
Continued growth that we start seeing right now that we expect to see coming out of that.
So I'm going to answer it a lot in there but.
So we're able to grow despite COVID-19 , mainly because a lot of our business is private practice facility together academic centers on board and they've been the last ones to open up.
Okay.
A lot there, but hopefully it gives you a little bit of clarity of how we're seeing 2022.
EBIT, that's very helpful. Thanks for taking my questions.
Our next question comes from Thomas Smith with SVP Leerink. Your line is open.
Hey, guys. Good afternoon, thanks for taking the questions and congrats on the progress just one on.
So DTI any additional color you can share on the regulatory update. This morning, I know you see is responsible for the regulatory interactions here, but can you talk about your expectations for the label any change in your expectations relative to the October communication, where I think you would see communicated the latest version of <unk>.
The draft labeling, let's say or both indications with no box warnings or country indication.
Yes, Tom Thank you so much for joining us today.
I appreciate the question here.
<unk> going to labeling the short answer is we don't know right. The update you can give us an updated label. They haven't commented on any changes in the discussions I've seen.
In the last few weeks subsequent through the journey here.
I think if you take a step back and a lot of these citizens petition was focused around bronchial spasm and SDK Pete I think the good news is we've had over 20 years of experience with SDK P running trials in people with asthma COPD placebo.
A lot of data there and I think being able to we were prepared to respond when we had to.
And I think we took all the information and package it up for <unk> I think that in front of the FDA. So I think the short answer is we believe that the VIP, we feel safe and effective excipient.
We don't believe the accusations and citizens petition to be fully true portrayed the right way.
And then we have a lot of data that is kind of misleading in the way they structured.
Yes.
And I think that's important.
Probably over 100, almost 100 patients and some of our trials, where we retrospective identified them as having lung disease.
But your asthma. They were fine there was no bronchial spasm concerns are scarce so.
I think a lot of this is.
Due process the FDA needs time to go through everything and we feel very confident that the yen to a good start casino partner.
The lethal.
What could happen who knows but I think this is a really big opportunity is going to help a lot of patients.
Whether there is a label change of warning of Black box I don't think it's going to fundamentally change the meaningful opportunity here in front of US you teed outpatient these patients have severe unmet need.
On the Nebulizer all day and this is really going to change the opportunity.
For them, it's really easy to use product compared to what you've done today.
Saw the Breeze study there is no safety concerns raised on those patients who have already on underlying lung condition.
That was just really emphasize.
Amplifies the construct hopefully prove it should suffice on some of the concerns that we have.
So we responded we feel good.
We do have a lot of data.
<unk>.
We don't see some of the bronchus.
Great.
Okay.
Got it I appreciate the perspective and then just.
And then it's hard to know program can you talk about the strategic rationale here.
Just thinking about the intended and I guess why do you think this is Ed.
Particularly strong fit for the.
The Technosphere platform and maybe kind of compare contrast, most is I think there is at least one other inhaled <unk> effort. That's out there why do you think this is Chris.
The strong candidate for your platform.
I think when it came to this class of molecules. There's two molecules. There is pirfenidone independence, we were actually developing both we did not move pirfenidone forward. This year, we killed it.
Mainly because we felt that dosing was too high and there is another percent of going out there and we didn't see a huge benefit.
Relative to that product to our platform.
On the <unk>, we do see a big opportunity because it's got very low bioavailability and be able to deliver a single cartridge to the lungs.
A very simple way, we think with Ips if you read the labels of these products. They don't improve life expectancy. The Kaplan Meier curves continue to show very little delay.
Delay and stuff.
Stop progression of that could be one but these patients are not getting better theyre not stabilized as much as anybody and I think thats, where we believe hopefully our technology getting directly into the lungs, maybe will help prove that we want to help their quality of life that maybe extended life.
It's a really tough disease, there's not a lot out there for these patients the market is littered with failures.
And we think deploying our technology this molecule in a way that gets directly into the lungs.
To help improve patients lives and whether that's going to be just the quality of life with an equal efficacy or.
Our safety profile I think the data will drive that.
Sure.
The other program that's out there.
We're aware of it we've watched it.
There's not much to say about that I think we're well funded to continue to move our products forward.
That's what differentiates us we have an FTE proven platform, we are manufacturing scalability and formulation knowhow and we feel very good in our ability to move these molecules down the road.
Something that.
Walter sometimes takes for granted.
Lot of work that goes into scaling up these products manufactured in a in a way that they can get from FDA inspection.
Drug device combo.
Well I think that is.
<unk> got a great example.
Difficult to get to where we are but we have not had many issues. When it comes to the drug device combo or passing FDA inspection.
Plenty of dry powder products that do not have that same luxury first round around so we feel pretty good about using our technology.
Yeah.
Okay, Great. That's helpful. Thanks, Mike I appreciate you taking the questions.
Thank you.
Thank you and our next question comes from Steven Lichtman.
With Oppenheimer. Your line is open.
Hey, guys. This is David Allen Christine Thanks for taking the question.
So maybe one question on.
A follow up on the Covid impact have you have you have you seen any.
Disruptions to your supply chain from employee absenteeism that could potentially.
Slow down the manufacturing is that how does it.
<unk> launched this year.
No I think the team is really good about getting ahead of any type of supply chain challenges that 2020.
Overstock to make sure it enough, but the biggest thing is around PPE equipment and stuff like that that was running short around the country. We were always able to continue.
To protect our employees and continued manufacturing.
The biggest growth kind of thing.
Factoring line going down during Covid and training and scale up.
And I think we've been able to avoid a lot of that supply chain and much more about disruption in the workplace and it's only the first week of January back I think we had a few people go down.
And one particular week, but otherwise it's been relatively well managed.
I don't expect any major challenges from your analysis supply chain.
Seamless is announced.
And then so I think the only areas that impact, but I don't think it's a major issue. It's a very minor is the number of Blue Hills that we can manufacture for launch and so I think thats and Thats what relates to the chip shortage is the COVID-19 issue.
That's it.
Okay great.
And then just one follow up.
Is there any early insights our feedback from the primary care pilot.
Sure at this point.
Yes, I think it's too early we do have some early script data we have number of prescribers that the only thing I can say that but the encouraging is I think the last two weeks they've been running speaker programs with an oversubscription to 30 40 50 attendees per.
For a week and I do think when it comes with primary care pilot, whereas that awareness stage. When we did the research before we kicked it off.
A few doctors I think one or two heard of Afrezza.
All I heard was that the need Helen so the awareness was very very low or anything related to the product. So I do think it's going to be.
About two months now so we should be coming out of the warehouse stage amongst our top 10, 20 targets and hopefully into the trial stage and I think that's where we'll start to see uptake could get people to try it prescribed it.
And then adopted and then within that pilot we did fine.
Correct.
Targeting.
$35 cash pay with no prior authorization for Walgreens and we did find there were some hiccups in that on the front lines and so we're trying to address that and I think that's been addressed it will be just this week. So that was probably the only thing that may have slowed down some some adoption early on but otherwise.
The only thing I'd add is.
90% of the scripts that we saw so far come in we're actually reimbursed.
Which is a lot higher than we would've expected because this is targeting.
Earlier lines of insulin treatment hypothetically shorts reports there should be a little harder. So we'll wait to see more data, it's very early but that was the one.
I saw that caught my eye, it's a little bit different.
Following.
We'll keep watching it but thank you for the question David.
Okay I appreciate the color.
Thank you. Our next question comes from Bert Hazlett with <unk>. Your line is open.
Thank you my questions have been answered thank you very much.
Well nothing.
Sure.
Alright, guys.
Thank you everyone. Thank you for the questions I think it's really got to show. The next couple of months out so let's get through the May deadline here with the FDA, but we're full speed ahead, we're not changing any of our plants, there's very little impact. This decision with that piece of the company. This year. So we're continuing to March one and we'll continue to hopefully drive performance and help people with diabetes.
Pulmonary hypertension is one disease as well as getting to the NTN must be lost that trial forward. So thank you again to everyone and thank you to our team here at Mannkind for all the work they did on their pretty stressful circumstances.
Looking forward to a successful 2022.
This concludes today's conference call. Thank you for participating you may now disconnect everyone have a great day.
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Yes.
[music].
Yes.
Yes.
Okay.
Yes.
[music].
Yes.
Okay.
Okay.
Okay.
[music].
Okay.
Yes.
Yes.
Okay.
Okay.
Okay.
Okay.
Right.
Okay.
Okay.
Yes.
Okay.
Okay.
Okay.
Yes.
Great.
Okay.
Okay.
[music].
[music].
[music].
[music].