Q4 2022 MannKind Corp Earnings Call
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Yeah.
Good afternoon, and welcome to the Mannkind Corporation, 2022 fourth quarter and full year.
Results earnings call.
As a reminder, this call is being recorded February 23rd 2023.
And will be available for playback on the Mannkind Corporation website. Shortly after the conclusion of this call until March nine 2023.
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 stated expectations.
For further information on the company's risk factors. Please see their 10-K report filed with 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.
Uh huh.
<unk> Chief Officer, excuse me and Chief Financial Officer, Steven Binder.
I would now like to turn the call over to the supervisor. Please go ahead Sir.
Thank you and thank you everyone for joining us today.
As we kick off it was seven years ago. This weekend that I decided to join mankind, and unfortunately, seven years and Thats the way.
It's been an amazing journey and one that was harder than anyone could have imagined.
'twenty three is special.
Beginning of our new future growth plan.
And every cycle thrown our way.
Okay.
Our capitalized prepared to enter into our next phase of growth and I want to personally. Thank all of our employees, our stock and debt holders. The Mann Foundation trustees and other stakeholders, who support us through this journey.
Our best years are in front of us I am very excited to kick off our Q4 earnings call today.
Sure remind people that our mission is to give people control of their health and the freedom to live life. Let me refer to this slide for human has never been more true as we get ready to NGL.
Whether patient stories of the year.
Basically GPI Bosch or the incredible feedback from <unk> as well as the Brexit every day, we're making people's lives more human and easier to live.
Yeah.
I just wanted to was a revolutionary year for mankind.
Look back at this time last year, we had one marketed product we're facing the delay in FDA approval for <unk> based on PPI.
One compound in clinical trials, which is a president for Mcl one.
Just started and a commercial revenue stream with just the president.
As we end the year, we definitely have three marketed products to the market one that's marketed by United Therapeutics.
Two compounds in clinical trials with our president and halfway enrolled.
Kicking off the completed phase one and revenue streams as we look this is a revolutionary milestone in the history of the company as we are approaching $100 million.
Exiting 2022.
Steve will talk about how that translates to the run rate as we go into 2023 and beyond.
Let me take a step back our collaboration royalties are up 20% versus last year.
Our endocrine business was up 44% versus last year and these three new revenue sources are going to generate the capital required to continue to fund our growth and drive a difference for patients across the disease states that we're servicing.
It's really exciting to look at the GPI.
The early stages.
When you look back over every quarter of last year continued to be revolutionary as we go through those phases of launch on the first.
Quarter really <unk>.
Getting some of the Skus off the market just getting this off the ground United Therapeutics and in Q4, you can see collaboration and services revenue was relatively flat, but the royalty revenue continues to grow and the reason that's important is the collaboration and services revenue is relatively fixed as we continue to increase volume and productivity out of the factory, but the royalty.
You should continue to grow so that's something to keep in mind as we look at will fluctuate minor from quarter to quarter, but not dramatically different as we go forward.
The EBIT business in gross profit and accelerated in 2010.
Wanted to.
When you look at our net revenue grew 44% and that drop to the bottom line with almost 80% growth year from $20 million to $40 million of gross profit on the endocrine business unit.
As important we did this without any increase in card, despite adding <unk> into our company and the costs associated with <unk>, we've been able to keep costs relatively flat and every incremental dollar starts to drop to the bottom line will continue to look for efficiency as we look at combining this business and drive future revenue growth. Additionally, we had a small primary care pilot last year, which didn't.
As planned and we exited that business.
Sure is being repurposed this year to drive future growth.
Let me focus a little bit more in Q4.
When you look at CPI, we had strong patient demand, which is to bring our manufacturing revenue.
Sure.
Our royalty revenue grew 50% versus Q3, and our manufacturing capacity expansion is in progress. So I'm just in Danbury last week, taking a tour.
The pipeline is moving forward as we have on where FDA meeting here on 101, and we expect to move this asset into a phase III.
Trial design in the second half of 2023 and will share more details sometime during Q2 and Q3.
We filed a pre NDA meeting request for mankind.
We expect to see a feedback here shortly as we progressed into a phase one study.
As I look at our.
And <unk>, 9% versus 21, 4% sequentially quarter to quarter.
As I said <unk> is on track.
You just saw yesterday, we announced the our friends with Chemo combination study showed favorable results in the first dose and office on a <unk> test and the full results of this will be presented later this year, but there is also we have seen an analysis we've seen so.
So far.
Given us the confidence to want to kick off a larger phase <unk> study as we really think about how do we capitalize and win on the investments we've already made historically in our president.
Peter type one.
Q4, net revenue of $5 4 million as I'll show you. Shortly we've stabilized that business looking forward to it we had $173 million in cash and cash equivalents at the end of last year.
But the purchase the Vigo and as the competition continues to step way mankind is really the real time solutions company. Several other installed that tried to launch over the last seven years and they failed to capitalize on the innovation and drive meaningful patient differences.
Pump companies have continued to try to drive innovation and what really happens as patients go from one to another pump to a pod, but theyre all still struggling with mealtime control at some point. We believe this product has been on the market.
At this time on <unk> and the new data, we have coming out over the next 12 months. We believe this added up terms of Afrezza and help install solution challenge that we have and Vega will really analysis helped us quite a few patients that much better and that is also demonstrated improvements in <unk> and <unk>.
But.
Some of the highlights we have for last year's number one we bolstered up our scientific understanding of Afrezza. The results of these really came out last year are put into last year's work, but should they really be built over the last five years and so the dosing that we're using and inhaled one around the <unk> round down.
Our pediatric trial and we believe that's paying off dividends as we look at the first dose ADC results that were just released yesterday literally showed you in the first two hours when you really care about to try and control our friends at something amazing versus injectable.
That hopefully will translate out two dosing over and over for each meal as you look at $3 six to 12 months.
David trial will come out hopefully we have submitted additional analysis at future conferences, and we've already published adopt study, which was doubling our package insert dose.
Our pediatric study remains on progress and will continue to show you hopefully data showing how people can safely switch from an insulin pump to a president and we've also shown the adding of friends at two pump is great, but there is no additional benefit despite people looked at adding.
Adding it will help improve mealtime control.
On a further we've enhanced our patient support services, we continue to find ways to.
See for patient reimbursement support and closing that gap prior authorization.
It happens at the Barclays.
For several years with yes.
To ensure the inhaled is included in the inflation Protection Act and are probably one of the few drug company executives were supportive of the fact, because it really did help patients around insulin and Medicare coverage.
We also improved our productivity, which people may not have realized 36 months 24 months.
Isn't as important as a good percentage of our gross to net as it relates to product returns and we believe over time as demand picks up in data.
<unk> kind of allowed returns.
That will happen over time.
We purchased this asset in the second quarter, let me just focus the team and kept separate for 2022 as we integrated into Manheim. Finally within Q1 of this year, we prepare for the integration and this is now being launched through our entire sales force.
One of our key focus is last year was driving market share of new prescriptions and you can see our <unk> growth quarter over quarter continued to grow from Q1 through Q4, where we exited with 17% growth year over year and our axis as I look at just Q1 to date.
For 24% growth over the first six week Q4 versus Q1 of this year, we continue to see positive momentum with enterprise, which translates to <unk> over time, but this is our leading indicator of how we expect our business to perform.
As we look at Veeco again back to <unk> you can look vivo has been on a real long decline. We purchased this asset Q2 got it ready in Q3 and stabilized in Q4 on <unk> and we look to expect <unk> to grow here in Q1, but most importantly that will now translate the Trs stabilizing and ultimately.
Growing as we look forward to the rest of this year.
These two products is critical to our success, we've really positioned the present, one younger population commercial insurance, even though we now have Medicare thats, great because 20% of our sales are Medicare and 40% is.
As Medicare, but at the end of the day, we want to make sure. We continue to win and lead in type one diabetes. Additionally, we continue to find ways to improve our gross to net by shifting our sales to specialty pharmacies through direct purchase agreements and making sure that patients have a better service when they receive our products on.
On the <unk> side, it's definitely a type two products older population, which is about 60% Medicare in the case of peak out in 2023, Big now puts us in a position for a president and as additional <unk> territory selling this asset.
As we look over the next 12 to 15 months there are several key milestones coming out.
Number one we have the kickoff in health <unk> really just occurred this week.
<unk>.
We have a blue held launches is really integrating CGM into a technology platform.
The afrezza device and that will start to read TGF, along with typically MPR first kind of platform as we start to think about how do you incorporate AI into our future predicted dosing. This is one point out version, which will continue to grow as we invest in technology behind that diabetes care.
We expect simply to read out our phase II trial, which we're calling and help to type two diabetes and then assuming Blue Hill limited launch goes well.
Sorry, sorry, with a full launch here.
For the year.
Any help on pediatric study enrolled by the end of this year and inhaled <unk> fully enrolled sometime.
Early next year with the readout should follow about three months later.
Now ill turn it over to Steve did a phenomenal partner with me over the last six years and thank you Steve.
Thanks, Mike and good afternoon. Please.
Please review select fourth quarter and full year 2022 financial results.
Please supplement this call by reading the consolidated financial statements MD&A contained in our 10-K, which was filed with the SEC.
This afternoon.
We're very proud of hitting $100 million Mark in total revenues for 2022.
Okay.
Sorts of commercial revenue to a company with multiple sources of commercial revenue.
Let's start with the fourth quarter.
Alright payable.
And then we'll come back to the full year results.
Revenue net revenue was $12 million versus $11 3 million in 2021, a growth rate of 6%.
The growth was mainly driven by higher patient demand with underlying <unk> growth of 9% year over year.
The previous quarters I've been discussing the adverse impact of the lowering of wholesaler inventory levels, which impacted our revenues for the first three quarters of 2022.
Now confirm if you saw the bottom out a bit in the third quarter as expected.
Year to date, a further growth came in at 11%, which was mainly due to favorable price.
Higher product demand and a more favorable cartridge mix, our gross to net held steady at 39% year on year.
Sure.
Thank you Sir.
Hey, guys.
Where we had $5 4 million the net revenue for the fourth quarter and $12.
$9 million for the year to date, which represents seven months of June through December .
We continue to see net revenue tracking of our high end of our forecast range of $18 million to $22 million for the 12 months post acquisition.
Moving to collaboration services revenue in the fourth quarter was $9 5 billion versus $1 2 million for 2021.
The main drivers for the fourth quarter of 2022 collaboration revenue associated with the manufacturing of <unk>, United Therapeutics, While the 2021 revenue was impacted by the end of the amortization.
<unk> R&D milestones and a delay in the FDA approval is going to drive which meant we had to defer revenue until we could manufacture commercial products and sell to Youtube.
The full year revenue of $27 million largely reflects manufacturing revenue recognition that began in the second quarter and has been lower in 'twenty two versus 'twenty, one because of the prior year you'd see milestone amortization and the first half of 2020 to deferral of revenue associated with the delay in the start of commercial.
Manufacturing.
In addition to UT related revenue recognized in 2022, we had $37 $9 million of deferred revenue on the year end balance sheet associated with the <unk> activity.
Which will be recognized as income through 2031, which is very unique and immersive supply agreement with ETP.
I will review the further detail in a few minutes.
Lastly.
Is that a net sales of <unk> by United Therapeutics to their customers.
$1 billion in boiler was recognized for the quarter, it's almost 50% higher than the third quarter and demonstrates strong demand for the product.
We have recognized $15 6 million of industry revenues for product.
See in June .
The next slide.
Both on a quarter to quarter basis.
This graphic really showed that accompany this passenger growing total revenue of 200% from first quarter to fourth quarter.
The second quarter of 2022 and change to multiple sources of commercial revenue when we began to benefit from commercial production of high base of GPI.
The launch of high base or DPI by <unk> for which we are in both double digit royalties and the purchase of <unk>.
As we exited 2022 and move forward to 2008.
Our fourth quarter run rate of $36 million, which is almost halfway to $200 million in total revenues.
Now, let's look at the profitability of our endocrine product Afrezza and Vega.
Further gross margin increased from 62% in the fourth quarter of 'twenty, 1% to 92% in the fourth quarter of 2022, and the gross profit associated with the present increased to $11 1 million in the quarter.
The increase in the fourth quarter gross margin versus 2021 was due to a decrease in cost of goods sold mainly from lower inventory write offs lower cost per unit lower excess manufacturing capacity cost and a high level of manufacturing activity in the fourth quarter of 2022, which capitalize a higher amount of.
Cost inventory plus an increase in our present net revenue.
When looking at the profitability for the full year of 2022, <unk> had a gross margin of 80% and gross profit of $34 6 million, which were both markedly improved from 2021.
The main drivers of the improvement were lower cost of goods sold.
Mainly from a decrease in excess manufacturing capacity costs, which is a benefit from visa DPI production absorption.
Lower cost per unit.
$2 million fee incurred for an amendment of our insulin supply agreement in the second quarter of 2021 and lower inventory write offs.
<unk> increased net revenue.
Please note that there will always be some variability in afrezza gross margin between quarters due to the timing of manufacturing spend and activities as we are not yet at maximum production capacity.
The following table shows Vigo year to date gross margin of 43%, which has remained consistent quarter to quarter since we acquired the product.
Okay.
2022 was a year focused on the commercial manufacturer of high base of GPI at our facility in Denver at Connecticut, but we're also focused on increasing the efficiency of our current manufacturing lines as well as building out increased manufacturing capacity.
These activities led to both GPI.
Epi revenue being recognized as well as being deferred in 2022.
The left hand side of the table shows our revenue recognized for the year revenues, mainly associated with the manufacturing of high base of DPI of activities for the Nexgen R&D services totaled $27 million, while royalties accumulated $60 million in revenue for a total of $43 million in Thai base or GPI related revenues for two.
<unk> thousand 22.
Moving to the right side of the table, we started the year with a deferred revenue balance of $19 million.
Another $19 million in revenue deferrals, mainly associated with the <unk> DPI facility expansion.
Are you factoring process improvements and pre commercial activities.
We expect additional revenue deferrals in 2023, while conducting activities paid for by UT related to the facility expansion and further manufacturing process improvements.
Please note that you'd see us paying men coming promptly for all activities. While the revenue was recognized as deferred so cash flow is not adversely impacted by any of these activities.
Let me conclude with some final comments around the liquidity.
We ended the fourth quarter was $173 million in cash cash equivalents and investments a decrease of $5 million from September 30.
We achieved this level of cash burn because of the fourth quarter collection of monies owed to us from <unk> Zealand, they're outstanding at September 30.
Looking ahead to 2023, we expect to reduce our cash burn as we benefit from the impact of increased cash flows from our collaboration with Ut and reduced cash burn associated with our endocrine commercial business unit as we move that unit towards profitability.
But also note that we'll be increasing investment behind the development of our product pipeline, which is quickly becoming our next lever of shareholder value.
Thank you and now I'll turn it back over to Mike.
Thank you Steve.
Excellent.
So as we look at Mannkind products and pipeline you continue to see this get all start up year after year.
It is now on track to hopefully get towards India, a filing this year pediatric will wrap ups and <unk> launched.
On the pipeline when people don't appreciate is how much time it takes into early stages of the <unk> formulation and getting the dosing right Tox data rate in order to progress these and the phase one two and three.
Rest assured 201, 301, and 501 has had a lot of work.
That will start to see the fruits of that labor over the coming couple of years.
Right now 101 is moving full speed ahead, 201 is right behind it and hope to share continued updates with you on 301 and 501 as we go forward.
This pipeline momentum over the next 24 months, whether it's at the endocrine business or the orphan models.
You can see we have two major pillars of continued momentum that will drive shareholder value over the coming quarters.
I won't go through each one of these but you can really start to see how 101 in tier one and the pipeline really starts to March ahead.
<unk> built out the scientific agenda.
I won't spend a lot of time will be <unk>. When you bought it what else are you planning to do we continue to drive innovation and ideas around how do we create other opportunities for this device biosimilars buy and bill or just clinical improvement with slow infusion as one of our thought leaders behind Vega said, if you would or the law and put a big bolus bids on one spot.
You get but when you spread that out over a launch you get green grass I think that's one of the reasons to continue to see Vigo improve people's they want to see and youre spreading that bullet and that base over a long period of time and continuing to spread over a larger space. We think that's important and we think there is other ideas that we could generate allocate time energy money.
So this product.
A lot of people ask me if I missed the run up was commenting, whereas mannkind going I think as I step away and look out we see three key value drivers our friends at growth and <unk> growth number one number two <unk> continues to grow in new patients.
<unk>.
<unk> improved coverage through Medicare Donut hole closes in 'twenty four 'twenty five.
Additionally, there is a large upside of Teton study reads out positive by United Therapeutics.
And then you have the pipeline progress, which is 101 201 and any other additional BD opportunities that come our way and we anticipate any other partnerships that we could put on the platform. So that's why a fourth pillar growth, but at the end of the day, we really look and see there's lots of upside from where we go when you look out over the last five years of history every year, we've continued to end.
On a higher note that when we started I think that's critical to our future success and believing in our shareholders and what we're doing to continue to allocate capital to do a great job for everyone to the key stakeholders.
I want to say thank you again for all the work everyone's doing Steve for your partnership, but it really feels great to be through that transition of capital balance sheet challenges product innovation business development. We are now self sustaining fully integrated mid sized pharmaceutical companies and it feels really good to kind of close out 'twenty two it kick off 23 being in that position.
Thank you and we'll open up for questions Lisa.
Thank you.
If you would like to ask a question. Please press star one on your telephone one moment, while we compile the Q&A roster.
Yes.
First question is.
It's coming from branded flow of Cantor Your line is open.
Hi, Thanks for taking my questions and congratulations on all the progress this year in the last seven years and maybe just two from me.
Any update on the highway side.
Manufacturing inventory Scanlon.
Just given comments from you about sort of how they view that product longer term how.
How should we think about manufacturing scale up there and then secondly on the ABC trial.
Can you just talk us through how should we think about the revenue pull through from the Readouts.
Obviously recently and then later this year and then.
And any very early feedback you got from the last two days since that press release. Thank you.
Great and then last question is any feedback.
Since you put out the press release on the Okay sure Yeah.
So I'll take.
Each one of those I think on the manufacturing inventory closer to the United Therapeutics Yesterday, I think one of the things I heard was the order patterns.
Had some impact but also the pharmacy days on hand inventory.
And the demand has been very strong anti beta which is great. But also puts a lot of stress and strain on our manufacturing.
Stay well ahead of the demand.
But that has allowed people to build as much inventory as they want as we continue to production goes rite aid, we can modify it each week on which cartridge strength that we feel would you pack size that we said that a packager, but we haven't reached full capacity manufacturing.
Yet as we continue to look over the last six months there was definitely lots of things to work through the equipment at scale up.
Had been worked through and we could simply expect Q1 to show much more consistent I'll say productivity impact in Q1 versus Q3 and Q4.
We don't anticipate any inventory issues, we continue to stay well ahead of demand and I think youll continue to see that productivity out of our plant and the efficiencies of this year. So we're doing things to add additional production capacity just in case demand continues to grow faster.
We would anticipate remember when we built the factory.
And that we make today so GPI, we've made it for ph ILD at a time when <unk> was doing 400 $450 million revenue with ILD expected, obviously the products now well away from $1 billion plus this year and we want to make sure. We continue to stay well ahead of that ability to convert as much of that as you take a dip.
So we don't anticipate any issues and in the factory Buildout itself.
Again, we expect that to be completed later this year.
Part of it will require an FDA inspection.
Deal with that when that time comes but we don't need that factory expansion to complete in order to keep ahead of supply. So we're pretty good with that.
The factory expansion its ability to handle IPF demand that could come in at 24 and beyond so we're well ahead of that readout for that clinical trial.
On the ABC trial in terms of revenue pull through.
Do you think about this is this is a pilot study.
For many years showing that you don't need insulin pumps that they are not adding as much control as people think and every doctor you talked to believes top therapy is the best you could do and that there is nothing better even though there is very little head to head data showing pumps is much better than that.
Multiple daily injections in fact, I believe theres, a dataset I don't know if its public yet, but it should be the suite at.
That all benefit.
AIG is happening in the first day.
So really you get this bolus of improvement and then it stops and we think that the diabetes burden awareness pump, where CGM is really starting to where people live with this disease in pumps for 2030 40 years, they're running out of real estate on their skin, perhaps sorry, there's a lot of issues. We do believe there is an opportunity that's going to be created over the next one or two years.
But the data piece readout, that's our pivotal phase III.
The next question, we're going to get is what about insulin pumps. So we're trying to get ahead of that question by running this larger pump switch trial, which will switch patients off of MTI and pumps and broth head to head.
At the end of the day. So we will have more design on that phase four other advisory meeting this week at ATT and I will get that feedback next week, but I would say the feedback so far the data has not been presented until Saturday, but the.
The feedback at the conference and the word about Mannkind is actually really nice we're hearing really good things that people are asking about it so.
So far the datasets itself has not been presented yet.
Alright, thanks, very much and.
Congratulations again.
Thanks, Brian .
Thank you one moment, while we prepare for the next question.
Our next question will be coming from Stephens.
Oppenheimer Your line is open.
Hi, guys. This is Ryan on for Steve I was hoping you guys can I saw you you're going to launch Blue Hill next month last time, you talked a little bit about the chip shortage and I Wonder if you could give us an update on how that was resolved and how youre looking forward.
Howard.
How are you looking at that looking forward.
And how are you preparing for the launch of considering that and also I can have a quick follow up that would be great.
Sure.
On Blue Hill the.
Chip shortage I don't believe is an issue I think theres other parts that became obsolete that we're updating.
Working with device a little bit so thats working through but.
I think we have devices right now to kick off the pilot and that pilot is really going to drive the human factors and the insight feedback.
We'll drive the launch investment under our plan in the second half I think what's really nice is the first time, where we're going to have dosing.
<unk> <unk> CGM integrated I would talk about going into type one we do think providing those insights to a patient into a provider are really important and that's something as a pivotal year for type two the type one on afrezza that this is going to be a critical device in the second half.
Assuming we get positive patient feedback so so thats.
Don't anticipate any type of shortage and became the next thousand devices to launch.
That'll be fine at this point, what we can see.
Okay. Thank you so much.
And then you said your.
This is going to be integrated with <unk> are there any plans to integrate with any other glucose monitors are going.
I'm going to stick with the whole way.
Hey drew.
No I think that comes with the easiest so they have open API, we're able to work with them to get that agreement done.
I think libre is obviously the next big one is specialty base rate and I also think <unk> now, they're getting to the one year sensor and starting to watch that.
That'll be a nice opportunity to look at <unk> as well so we want to be platform agnostic at the end of the day CGM, but we do believe CGM is something thats really important.
Okay.
Thank you and.
Congrats.
Thanks, Steve.
Okay.
Thank you one moment, while we prepare for the next question.
Next question.
Question is coming from Anthony Petrone.
MS. <unk>. Please go ahead.
Alright, thanks, and congratulations to the team on the execution.
Maybe one on Blue held just when you think of sensor opportunity.
You certainly have some synergies with the Fraser I just want to confirm is that going to be also used with high base. So.
And when you think of.
The ability to monitor inhalation and usage.
How do you think that plays out over time.
If you're capturing that data do you get.
Better drug adherence and ultimately does that drive better consumption.
Down the road and then I'll have a few follow ups. Thanks.
Sure.
It's been a long time coming in lots of headaches as Youre driving innovation. These types of things take time.
But I do think Youre one question Slash comment is critical which is.
Especially on the <unk> ACO and our present when you're using something for the first time as we continue to improve the number of new doctors prescribing new educators utilizing a training.
People, sometimes especially on like the lower dose cartridge you don't feel any powder.
Did I get my dose, so showing proper inhalation technique and registering that dose that would take it I think improves people's confidence and Thats one of the things we saw early on in our user trial with healthcare providers.
It improves their confidence to training and ultimately their success with a patient dramatically and so I do think thats not just for the patient. It's also for the provider for them to start to see that data the compliance of that looking at that overlap with CGM in the case of diabetes, we think will be important and long term I just think I look at what.
One drop is done with data collected data sets are predicting.
Outcomes over time I think this is where we want to go we think data in health care is going to be critical and starting to collect this data and build out the skill set capability. We're in version one point out we have a long ways to go but this is the beginning this year to really start to think about no better modeling that sugars or data collecting on sugars in predicting what's going to happen with the dose you took so we.
There's a lot there that will continue to evolve.
Start thinking about data scientists and other types of people after yet.
On the Youtube side, I don't want to comment for them other than they are using the pro version, which is the health care provider addition.
To show proper relationship technique that has launched and I believe they will also continue at <unk> for their <unk>.
Theyre doing their ph, so I don't want speak to that but I'll, let the indicate that.
That's helpful. And then follow ups would be on endocrine studies, you think a pediatric but also the India trial at JP Morgan you put some math around this so for every 10% market share in peds.
$150 million revenue opportunity or Tam opportunity, let's call it.
When you think about that in type twos, obviously much larger patient pool.
So is there an equivalent number of 10%.
Type twos, which could be facilitated by India.
How should we think about that number.
And is the right way to look at it as share gains from <unk>.
And I have one last one thanks.
Sure.
So on the Peds, yes, I would say.
Roughly is a good estimate number because every 10% share rapid acting in kids alone in the U S will be about $150 million net revenue to mankind.
So that's why when people say why are you investing trial now because we want to set pizza for success. This year in your transformation before president in terms of tightening up clearly put into profitability and moving the branding effort.
Positioning because we did two assets, but next year when all the stuffs to readout and we start to prepare for launch.
Thank you Sir to write questions on the right answers to have data around to ensure we can achieve 10 20, 30% market share and kits.
Can be a huge spillover effect as youre successful kids to adults.
That number is just for kids you can also think about these kids drove $18 2025, they're going to start to rollover. The adult market thats going to have a compound effect up back in the second half of this decade.
We have a long term view on this asset we've taken a long time to get to where we are but we do believe we're finally at that point were assuming all the data readout as we expect I think it would be very very exciting and held in place going forward.
On India. The way I'd think about India is it's going to be a very low margin business.
1 million people.
With IV and <unk>.
All right.
Controlled way at the beginning and then expand over time.
Cost.
But the real benefit for us.
SDK P, which we've already purchases utilizing our three capacity that's not utilized right now for the U S.
Firstly on the element that we've already purchased so these are things that.
Ultimately when you look at year over year, a flick of a profitable because of the fact, you become more efficient with Taipei. So you could that happening benefiting <unk> as much as mankind as we launched India production in the factory in 2024, so so thats, how I'd think about India's efficiency play utilizing soft cost and getting some of that recouping some of those.
We've already made.
And then on the type two market I think one thing that will play out over the next year is here in the U S. The <unk> have had tremendous success the weight loss category is growing.
And that's really pushing insulin either declining the market pushing or later and I think when people are going to see is that despite all the great success that <unk> patients are still going to need mealtime control. They are still going to need that gets some extra help there and I do believe inhaled influenced play a role in that both at the side as we look at our progress for the year do you wanted to was studied user.
Our friends on top of the GOP, where we have no data is that something you do or investigator does or something we wanted to.
That's kind of the next way we think about diabetes is the other thing is as we get into type one.
The center.
The brand of choice, we know those doctors will automatically use afrezza in type two by default. So there's somewhat of a really diversified was successful type two they don't think about type one.
It does work in the reverse split.
That's a pre the last quick one just Apple made some news this week about potentially happening here.
You're collaborating with CGM providers.
If you have any any sense you can add on some of the news that came out of Apple Thanks, again and congratulations.
Yes. Thank you look I think Apple Amazon.
And again, Boston healthcare technology, and health care data.
At the end of the day, and I think where we're going back to your question you'll have enough data being able to have that data predict where people are going to go and start to think about outcome contracts.
Everyone look at ways to drive better outcomes at a lower cost use data to help that.
I think it's premature for us to think about wherewith applebee in five years, because I go back to my days at Novartis, where we're going to have a contact lens that was measuring because.
If I recall and that never came out right. So so theres a lot of excitement but.
It takes time for this innovation to happen in health care is not an easy feat to kind of enter into but we'll keep watching it.
Okay.
Next question. Thank you. Thank you.
While we prepare for the next question.
The next question will be coming from Gregory Zhao of RBC. Your line is open.
Great, Hey, Mike and Steve Congrats on the year and the progress and thanks for taking my question.
Mike just maybe a quick one as you build on the success of <unk> DPI of course.
We all know about that potential option to license the platform for a second ph product with youth there and.
Their profile versus you and Steve are describing really lie in the pipeline launches over the next several years I'm. Just curious how you think about some of the parameters or potential with a second.
Option or a second license with with user and how that potentially factors into some of your goals about one indication of product per year over the next several years from your pipeline. Thanks, so much.
Yes, great question and I think over time, we have.
<unk> is going to be so large as we talk about ideas with unit. There that we wanted to make sure that that gets off on the right book, because whether it's assets of $1 2 billion plus I mean, thats really ut's purview, we want to make sure we can make supply and be ready for it not distract our collective teams on that one.
I do believe that over time, we will find other ways to help more patients I know Martina is dedicated to that focus and we'll continue to assess opportunities that come in.
Through depth NPH.
Any other areas that they're focused on I would say in general mankind.
We've gone through a pretty deep assessment with our board in the second half of last year around how much synergy do want to continue to put in a platform.
In terms of going out and seeking partnerships through large pharma midsized pharma versus continue to innovate our own assets.
And we decided that our real focus is bringing our assets forward as fast as possible dedicated to double down on new ideas within our platform or other platforms that we see out there.
And less so while trying to drive more partnerships of course every month. The next user deal, but I think we've picked a lot of the key opportunities already to develop inhaled therapeutics that we think can make a difference and now our focus is really on even earlier stage innovation.
We get out there and think about 2030 and beyond.
Probably not a repurpose assets, probably in MTBE and somewhat remote condition and so that's kind of people look and say where are you in 'twenty three.
We made three years ago with $24 three years ago. So we're working on focus for 2000 32028.
Feel like the pipeline is enough to drive a lot of innovation forward in the next couple of years.
<unk>.
But that does not meet its like everyday last couple of weeks I've added inbound business development, whether it's can we work with you because you want to sell something but there's a lot of activity out there happening is a lot of companies are running out of money or refocus on their strategy and divesting non core assets. So we'll keep looking but we feel pretty good about where we stand.
Driving that future for value.
Okay.
That's great as always appreciate the color.
Thanks, Greg.
Thank you.
One moment, while we prepare for the next question.
And the next question will be coming from Tom Smith of DB. Your line is open.
Hi, everyone. This is Mike on for Tom Thanks for taking our questions.
Are there any gating factors remaining for the adaptive phase two three study of <unk> expected in the second half this year can.
Can you just briefly describe kind of the planned study design and how quickly do you imagine we'd start to see data from that study.
How quickly I'm sorry.
Could we see data from that study.
Okay.
I don't want to comment too early on.
Some of the studies.
Details yet feeder for competitive reasons that we're still finalizing that.
But what I would say is the gating factors are really twofold one.
Open up the IMT.
To just working with international regulatory bodies to make sure. We can import drug in clinical trial sites activated that those are the two biggest gating factors we are.
Pretty close with the FDA in terms of some of the last minute trial details we're focused on.
And in particular, there's a quality life metric that people want to know about an ATM and then there is the assumption on speed of conversion and so you.
You can expect.
The trial design will incorporate some of those features and.
I can tell you it will not be established patients. We're looking at earlier treatment patients who were on general background therapies. So we're not going after naive we felt that would be too hard to enroll.
Two expenses relatively to the time it would take and so we're looking for earlier stage people not responding on GBT.
In a global way so it will be U S.
Based in Europe , Japan, South Korea, Australia.
Are the key areas. So we're focused on.
The quality of the patient consistency of the patient type and ones that aren't necessarily the erra case treatment that are the sickest that may not respond to anything.
Really trying to get a little bit earlier to treatment.
And the other gating factors just getting the IND filed which requires us to get the manufactured GMP batches up on stability and bright that document up to get that submitted.
The team's full speed ahead on that should happen in late Q2 early Q3 hopefully.
Once that's filed with good that'll that'll be the last thing we have been investigating kick this off.
Understood. Thanks, very much for the color and then just one kind of follow up.
From a modeling standpoint, how should we be thinking about the trajectory of SG&A moving forward both throughout 2023 and over the next couple of years just based on the commitment to V go relative to the present sales force restructuring.
I'll, let Steve take that sure I.
I think SG&A, we don't we don't talk too much about forward looking financial information.
Information.
We don't currently have large scale plants plants.
Scale up.
If we see opportunities such as the trial.
Readouts to come around we may put money behind.
Our <unk> business.
So what I would say is.
TBD, but.
Let's see how it goes.
Yes got it.
Great.
The thing I'll, just add to that Mike is with pediatrics as that gets closer we don't need to add a bunch of expenses. There is about 500 feet and knows of the country that make up the majority of the pediatric market. So when you think about the.
The investment for the future indications.
Infrastructure, we already have the people, maybe we add another five or 10.
But I think of a friend who is keeps going direction is going.
Upside without the slow market share there.
We can hire another 200 reps, we don't do that because we're trying to make it profitable, but if we see a real growth opportunity to expand our growth faster, we could do that and we've added three or four new territories. This year alone.
In markets, where we've never had a sales rep and so these are opportunities we look forward, but we're not.
We're looking to keep things relatively stable.
Drop to the bottom line as we go forward.
Understood Thanks very much.
Welcome.
Okay.
Thank you. Thank you we will now turn the call back over to.
Consensus for closing remarks. Please go ahead Sir.
Yes.
Thank you again, everyone. Thank you for the questions Anthony for joining us for the first time Oscar good to hear new analysts come in I think that's important as we think about the next phase of the company a lot of the questions. We're getting is from new investors is really around the pipeline in the future and whats next and so we're excited as we anticipated that the.
As we think is there an attendance right behind it.
Fred's has started off the year strong Vigo will watch over the next six weeks as we just launched that to the salesforce, but otherwise super exciting before hopefully wrapping up Q1 and about six weeks.
And sharing that with you in the next quarter here, but otherwise. Thank you everyone for everything and we're always here to answer your questions and hopefully keep creating value and helping patients.
This concludes today's conference call. Thank you all for joining everyone may disconnect and have a great evening.
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