Q2 2024 MannKind Corp Earnings Call

As a reminder, this call is being recorded, August 7, 2024, and will be available for playback on the MannKind Corporation website shortly after the conclusion of this call and available for approximately 90 days.

Operator: and will be available for playback on the MannKind Corporation website shortly after the conclusion of this call and available for approximately 90 days.

Operator: will be available for playback on the MannKind Corporation website shortly after the conclusion of this call and available for approximately 90 days. I'd like to turn the conference over to Mr. Castagna. Please go ahead.

Operator: This call will contain forward-looking statements. Such forward-looking statements are subject to risks and uncertainty, which could cause actual risks to differ from those stated expectations.

Operator: For further information on the company's risk factors, please see the 10-Q report filed with the Securities and Exchange Commission this morning, the earnings release, and the slides prepared for this presentation.

For further information on the company's risk factors, please see the 10-Q report filed with the Securities and Exchange Commission this morning, the earnings release, and the slides prepared for this presentation.

Operator: Joining us today for MannKind are Chief Executive Officer Michael Castagna and Chief Financial Officer Chris Prentiss.

Operator: I'd like to turn the conference over to Mr. Castagna. Please go ahead, sir.

Michael Castagna: Thank you, Operator. Good morning, everyone. Excited to be here, calling in from Danbury, Connecticut today, and joining me as Chris Prentiss, our Chief Financial Officer. Today we'll go over our traditional operational and pipeline highlights, quick financial review by Chris, with some closing remarks by myself, and we'll move to Q&A. Let me begin by talking about some of the second quarter of 2024 highlights.

Speaker Change: Thank you, operator. Good morning, everyone. Excited to be here calling in from Danbury, Connecticut today, and joining me is Chris Prentiss, our Chief Financial Officer. Today, we'll go over our traditional operational and pipeline highlights. Quick financial review by Chris with some closing remarks by myself, and we'll move to Q&A.

Michael Castagna: First, we had record revenue and tabaiced a DPI between manufacturing and royalty revenue coming in. Second, quite as many inhalation suspension as well on its way with fast track designation by the FDA, as well as several sites now activated and ready for patient enrollment. And thirdly, net net net DPI is well on its way, with results expected here in Q4, along with chronic talks. We're now on our third cohort of single dose patients anxiously waiting to move to the MAD section of the study shortly. In our end of crime business, we had second quarter revenue of 20.8 million driven by a president.

Speaker Change: Let me begin by talking about some of the second quarter 2024 highlights. First, we had record revenue on Tavesa DPI between manufacturing and royalty revenue coming in.

Speaker Change: Second, clavizamine inhalation suspension is well on its way with fast-track designation by the FDA, as well as several sites now activated and ready for patient enrollment.

Speaker Change: And thirdly, Nitetinib DPI is well on its way, with results expected here in Q4 along with chronic tox. We're now in our third cohort of single-dose patients anxiously awaiting to move to the MAD section of the study shortly.

Michael Castagna: In our endocrine business, we had second-quarter revenue of $20.8 million, driven by Aphreza. I'll talk about that shortly. Inhale-1 top-line results for pediatrics are expected here in Q4, and we're excited for this pivotal moment in our history to unveil these results. And then the third part of the endocrine business is inhale three.

Michael Castagna: I'll talk about that shortly. Inhale one top line results for pediatrics is expected here in Q4, and we're excited for this pivotal moment in our history to unveil these results. And then the third part of the endocrine is inhale three minutes. Primary end point 17 week data were presented ADA and were very well received. We're up we're coming up on our 30-week data read out here in the second half and implementing our ADA post success plan.

Michael Castagna: We met its primary endpoint, 17-week data were presented at ADA and were very well received. And we're coming up on our 30-week data readout here in the second half and implementing our ADA post-success plan. We ended the quarter with a strong balance sheet, and we continue to de-lever the company and reduce dilution to shareholders by paying down the manned convertible debt in cash and stock as opposed to stock homes. We look at NTM as an opportunity with two players over the coming years.

Michael Castagna: For financial results record revenue for the company of 72 million dollars of 49% with a gap net loss of 2 million a non gap of 14 million a crystal talk about shortly. We ended the quarter with a strong balance sheet, and we continue to deliver the company and reducing delusions to shareholders by paying down the man convertible debt and cash and stock as opposed to stock only.

Chris: For financial results, record revenue for the company of $72 million, or 49%, with a gap net loss of $2 million, a non-gap of $14 million that Chris will talk about shortly.

Chris: We ended the quarter with a strong balance sheet, and we continue to de-lever the company and reducing dilution to shareholders by paying down demand convertible debt in cash and stock as opposed to stock only.

Michael Castagna: Now let me talk about closed phasamine inhalation suspension. We look at NTM as an opportunity with two players over the coming years. Our case had great idea of read out an early stage and they continue to penetrate the markets in Japan and the US. As we look at the refractory population being about 10, 15, 20% of this market, we see this as a very large opportunity to bring a new entry that could be more convenient with really good lung coverage here in US as well as Japan.

Chris: We look at NTM as an opportunity with two players over the coming years.

Michael Castagna: Our case had great data read out at the early stage, and they continue to penetrate the markets in Japan and the U.S. As we look at the refractory population being about 10, 15, 20 percent of this market, we see this as a very large opportunity to bring a new entry that could be more convenient with really good lung coverage here in the U.S. as well as Japan. Let me talk to you for a second about our phase three design.

Speaker Change: Our case had great data readout in early stage and they continue to penetrate the markets in Japan and the U.S.

Michael Castagna: Let me talk to you for a second about our Phase Three design. The key attributes of this product are number one 28 days on treatment with 56 days off treatment. What that means is the patient will have one copay for the 28 days, followed two months off because the drug has a long half-life. We believe it's really important to get deep lung penetration. This disease, as the macrophages are deep in the lungs, and it'll take the copazamine in. And because of the half-life, it will take about two months for the return back to base. We see that same thing with month four coming on the treatment and then month five and six off treatment.

Michael Castagna: We see that same thing with month four coming on the treatment and then months five and six off treatment. The primary endpoint of the study will be six months. And we're looking at a dose of 80 milligrams of coplasmine and a two to one randomization. We will have an interim analysis after the first hundred people are enrolled, and that will decide whether the trial should be larger to make sure we hit our endpoints, or it's sufficiently staffed to reach the primary endpoints.

Speaker Change: We see that same thing with month four coming on the treatment and then month five and six off treatment. The primary endpoint of the study will be six months and we're looking at a dose of 80 milligrams of coplasmine in a two to one randomization.

Michael Castagna: The primary end point of the study will be six months, and we're looking at those of 80 milligrams of co-physamine and a two to one randomization. We will have an interim analysis after the first hundred people are enrolled, and that will decide whether the trial should be larger to make sure we hit our end points or it's sufficiently staff to reach the primary end point. The co-primary endpoint of U.S. is feudal culture conversion and patient reporting outcomes and the primary end point for Japan has been aligned and that is feudal conversion only. We also have orphan and QID designation along with other IP given us a minimum of 12 years exclusivity.

Michael Castagna: The co-primary endpoint in the U.S. is sputum culture conversion and patient-reported outcomes, and the primary endpoint for Japan has been aligned, and that is sputum conversion only. We also have Orphan and QID designation, along with other IP, giving us a minimum of 12 years of exclusivity.

Speaker Change: We also have orphan and QID designation along with other IP giving us a minimum of 12 years exclusivity.

Michael Castagna: Japan and FDA have aligned to a single trial, and we're also considering creating an expanded access program.

Michael Castagna: Japan and FDA have aligned to a single trial, and we're also considering creating an expanded access program. We'll keep you posted on that. On 201, as you see, this market, while it is crowded in terms of development, there are very few options on the market for patients. We're excited about what we see from United Therapeutics and Teton 1 and 2 reading out next year for Tybaso. But more importantly, this is the backbone of OFEV as the market brand leader in IPF.

Speaker Change: Japan and FDA have aligned to a single trial, and we're also considering creating an expanded access program. We'll keep you posted on that.

Michael Castagna: We'll keep you posted on that. On two of one, as you see this market, while it is crowded in terms of development, there are very few options on the market for patients. We're excited about what we see from the United Therapeutics and T-Tum 1 and 2 reading out next year for a type A so. But more importantly, this is on the backbone of OFF as a market brand leader in IPF, and we believe while that's a phenomenal drug and it's helped thousands of people live longer. We also believe it's an opportunity to enhance the quality of life that people experience when going on OFF, and that's really our main focus here as we look at this opportunity.

Michael Castagna: And we believe, while it's a phenomenal drug and it's helped thousands of people live longer, we also believe it's an opportunity to enhance the quality of life that people experience when going on OFEV. And that's really our main focus here.

Speaker Change: And we believe, while it's a phenomenal drug and it's helped thousands of people live longer.

Michael Castagna: As we look at this opportunity, how do we bring potentially improved tolerability relative to GI side effects specifically that occur with OFEV, where 50% of the people traditionally drop off treatment because of GI side effects alone? We also believe that we can dose hopefully a little bit higher directly into the lungs and get higher lung concentrations. And this is really our focus here on this product: can we dose it appropriately and is it tolerable?

Michael Castagna: How do we bring potentially improved tolerability for all to the GI side effects if we had a curve with OFF where 50% of the people traditionally drop off treatment because of GI side effects alone. We also believe that we can dose hopefully a little bit higher directly into the lungs and get higher lung concentrations. And this is really our focus here on this product: can we dose appropriately and tolerable, and does that show and improve the GI tolerability.

Speaker Change: How do we bring potentially improved tolerability relative to the GI side effects specifically that occur with OFEB where 50% of the people traditionally drop off treatment because of GI side effects alone?

Michael Castagna: And does that show an improvement in GI tolerability? The phase one data readout and chronic tox are expected to both come in here in Q4, and we will then file a meeting with the FDA to move this to a phase two, three design in 2025. Year-to-date revenue of $39.5 million, predominantly driven by Ephraza, as I'll talk about in a second. BGO was deprioritized in Q1, as you may recall, and we restructured the field team so that we had a different business model coming into the year.

Michael Castagna: The phase one data read out in chronic talks are expected to both come in here in Q4, and we will then file a meeting with FDA to move this to a phase two, three design in 2025.

Michael Castagna: Now moving on to our endocrine business. You did date revenue of 39.5 million, predominantly driven by a phrase as I'll talk about in a second. Bego was deprioritized in Q1, as you may recall, and we restructured the field team so that we've had a different business model coming into the years, and you'll see some of that result here as I talk about our script growth. Prefer the Q2 sales alone over the prior year through 20% to 16.3 million. Moving into prescriptions, you can see Q1 versus Q2 8% NRX growth leading to 5% TRX growth quarter over quarter.

Speaker Change: Now moving on to our endocrine business.

Speaker Change: Year-to-date revenue of $39.5 million, predominantly driven by Ephraza, as I'll talk about in a second.

Michael Castagna: And you'll see some of that result here as I talk about our Moving into prescriptions, you can see Q1 versus Q2, 8% NRX growth leading to 5% TRX growth quarter over quarter. The NRXs are the leading indicator of what to expect three to six months later. It's nice to see that the NRX change is paying off in TRX, and we hope to continue to see that type of growth as we go into Q3 and Q4 this year.

Speaker Change: For the Q2 sales alone, over the prior year grew 20% to $16.3 million.

Speaker Change: Moving into prescriptions, you can see Q1 versus Q2, 8% NRX growth leading to 5% TRX growth quarter over quarter.

Michael Castagna: The NRXs are the leading indicator of what to expect three to six months later. It's nice to see that the NRX change is paying off in TRX, and we hope to continue to see the type of growth as we go into Q3 and Q4 this year.

Speaker Change: The NRXs are the leading indicator of what to expect three to six months later. It's nice to see that the NRX change is paying off in TRX, and we hope to continue to see that type of growth as we go into Q3 and Q4 this year.

Michael Castagna: As you may not have read our read out on ADA with inhale free, this was presented at an oral presentation by seven world thought leaders. The subanalysis found several key attributes of this trial. Number one, inhaled insulin achieved a target A117 in 30% of participants versus 17. Additionally, 24% of our present was one in four patients versus 13% usual care met timing range greater than 70% with no increased hypoglycemia. So we're 50% of the subjects who got to the end of the trial said they'd like to continue on taking a present, and the reason that such an important number is 50% of the people in this trial were coming off the best technologies of AID systems, Omnipod, and we're generally satisfied with the treatment. And to see that even when people switch and they maintain control, they'd like to continue to have the freedom that a president brings to them.

Speaker Change: As you may or may not have read our readout on ADA with Inhale3, this was presented at an oral presentation by seven world belt leaders.

Speaker Change: Additionally, 24% of ephresimals in 1 in 4 patients versus 13% usual care met time and range greater than 70% with no increased hypoglycemia.

Speaker Change: Over 50% of the subjects

Michael Castagna: We've met our 17-week primary endpoint, and our full 30-week data is expected to read out later this year.

Michael Castagna: We've met our 17-week primary endpoint, and our full 30-week data is expected to read out later this year, and we'll likely give that information to shareholders here in Q3. When you look at the meal challenges here on the right, the RAA, the red line, clearly shows the postprandial glucose excursion. Relative to the initial dose in both groups, you can see a distinct difference in the first two hours.

Michael Castagna: And we'll likely give that information to shareholders here in Q4. When you look at the meal challenges here on the right, the RAA is the red line. Clearly, it shows the post-premial glucose excursions relative to the initial dose of both groups. You can see a distinct difference in the first two hours. And at the end of the study when people were titrated to a fresa, we did a second meal challenge. You can see greater improvement meal time controls; people learned how to use the product, and with us, gives us this hope that one properly dose of fresa can really impact post-premial control significantly over the current standard of care.

Michael Castagna: And at the end of the study, when people were titrated to Afreza, we did a second meal challenge. You can see greater improvement in mealtime control as people learned how to use the product. And what this gives us is hope that when properly dosed, Afreza can really impact post-prandial control significantly over the current standard of care. This data was just published in Diabetes Care last couple of weeks. As we look out, we see Inhale 3 is pivotal to transforming the adult population but also laying the groundwork for pediatrics, where insulin pumps are the predominant competitor of choice when it comes to choosing inhaled, injected or an alternative delivery method.

Speaker Change: And at the end of the study, when people were titrated to Afreza, we did a second meal challenge. You can see greater improvement in mealtime control as people learned how to use the product.

Speaker Change: And what this gives us is hope that when properly dosed, AFREZA can really impact post-prandial control significantly over the current standard of care. This data was just published in Diabetes Care last couple weeks ago.

Michael Castagna: This data was just published from Diabetes Care less, less, less, couple weeks ago. As we look out, we see inhale three is pivotal to transform in the adult population, but also laying the groundwork for pediatrics where insulin pumps is the predominant competitor of choice when it comes to choosing inhaled, injected, or an alternative delivery mechanism. And we believe the switch study in INHALE three showing consistent results of efficacy and the overall population as well as sub-populations will be important as the INHALE one trial was only in MDI patients and that was by design to really show and control the one one difference in the trial.

Michael Castagna: And we believe the SWITCH study and INHALE-3 showing consistent results of efficacy in the overall population as well as subpopulations will be important as the INHALE-1 trial was only in MDI patients, and that was by design to really show and control the one difference in the trial. The inhale one day will read out shortly, and we'll intend to file that next year for approval, hopefully. Ears for launch.

Michael Castagna: The inhale one day will read us shortly, and we'll intend to file that next year for approval hopefully in the future years for launch. When we look at a fresa, since I've gone here, we've continued to grow year over year, and in a really good way. As we look out over the next 10, 15 plus years, we see nothing slowing down of fresa growing year over year. Finally, we will have proper data readouts, proper label updates, and now we have a capital and talent to continue to scale this business.

Michael Castagna: When we look at Efreza since I've gotten here, we've continued to grow year over year in a really good way. As we look out over the next 10, 15 plus years, we see nothing slowing down Efreza's growth year over year. Finally, we will have proper data readouts, and proper label updates. And now we have the capital and talent to continue to scale this business. We will wait for the data readouts. We are conducting some independent market research so we can update you in the coming quarters on what our plans are and what to do with the data readouts as well as additional indication of what that will mean for shareholders. But we have grown consistently, and we will continue to grow this brand for years to come.

Speaker Change: Here's for launch.

Speaker Change: Finally, we will have proper data readouts, proper label updates, and now we have the capital and talent to continue to scale this business.

Michael Castagna: We will wait for the data readouts. We are conducting some independent market research, so we can update you in the coming quarters on what our plans are and what to do with the data readouts, as well as the additional location, what that will mean for shareholders. But we have grown consistently; we will continue to grow this brand for years to come.

Speaker Change: But we have grown consistently and we will continue to grow this brand for years to come.

Christopher Prentiss: I now would like to turn it over to Chris. Thanks, Mike, and good morning, everyone. I am pleased to review select second quarter 2024 financial results. Please refer to our press release issued earlier today for a summary of our financial results for the second quarter 2024, as well as our 10-Q, which was filed with the SEC this morning. The second quarter with total revenues of 72 million marked our ninth consecutive period of quarter-on-quarter revenue growth and a 49% increase compared to the second quarter of 2023. For the six month period, we recorded total revenues of 139 million, a 55% increase over the prior year period.

Speaker Change: I now would like to turn it over to Chris.

Chris: Thanks, Mike, and good morning, everyone. I am pleased to review select second quarter 2024 financial results.

Michael Castagna: The second quarter, with total revenues of $72 million, marked our ninth consecutive period of quarter-on-quarter revenue growth and a 49% increase compared to the second quarter of 2020. For the six-month period, we recorded total revenues of $139 million. Taibaso DPI royalties contributed $26 million in second quarter revenue, an increase of 34% over the second quarter of 2023, and $48 million, or 57%, for the six-month period. Taibaso continues to experience strong patient demand and is encouraged by the record referrals and new patient starts during the quarter for both PAH and PHILD patients.

Chris: For the six-month period, we recorded total revenues of $139 million, a 55% increase over the prior year period.

Christopher Prentiss: Let's now discuss the details. Tyvaso DPI royalties contributed 26 million in second quarter revenue, an increase of 34% over the second quarter of 2023, and 48 million for 57% for the six month period. As we heard on UT's earnings call last week, they continued to experience strong patient demand and are encouraged by the record referrals and new patient starts during the quarter for both PAH and PHILD patients. Collaboration and services revenue was 26 million and increase of 132 percent versus second quarter of 2023. The six-month period was 51 million, or 125 percent, compared to the same period of 2023.

Chris: Taibaso DPI royalties contributed $26 million in second quarter revenue, an increase of 34% over the second quarter of 2023, and $48 million, or 57%, for the six-month period.

Speaker Change: As we heard on UT's earnings call last week, they continue to experience strong patient demand and are encouraged by the record referrals and new patient starts during the quarter for both PAH and PHILD patients.

Michael Castagna: Collaboration and services revenue was $26 million, an increase of 132% versus the second quarter of 2023. The six-month period was $51 million, or 125% compared to the same period of 2022. Similarly, in the six-month period, Afreza net revenue grew 18% to $31 million, primarily driven by a reduction in growth to net percentage and price. The lower growth in that percentage was mainly the result of a change in estimate for a FRESA product. Vigo's revenue declined 7% to $4 million in the second quarter of 2024 and 11% to $9 million for the six-month comparable period.

Speaker Change: The six-month period was $51 million, or 125% compared to the same period of 2023.

Christopher Prentiss: The increase over the prior year periods resulted from a substantially higher level of production activity, which was sold through to UT. A further net revenue of 16 million grew 20 percent versus second quarter of 2023, which was primarily driven by volume growth, a lower growth to net percentage of 37 percent versus 39 percent in the prior year, and a price increase. Similarly, in the six-month period, a fresh net revenue grew 18 percent to 31 million, primarily driven by a reduction in growth to net percentage and price. The lower growth to net percentage was mainly the result of a change in estimate for a fresh product returns.

Speaker Change: Similarly, in the six-month period, AFREZA net revenue grew 18% to $31 million, primarily driven by a reduction in gross-to-net percentage and price.

Speaker Change: The lower growth to net percentage was mainly the result of a change in estimate for AFREZA product returns.

Christopher Prentiss: Vigo declined 7 percent to 4 million in the second quarter of 2024, and 11 percent to 9 million for the six-month comparable period.

Speaker Change: Vigo declined 7% to $4 million in the second quarter of 2024, and 11% to $9 million for the six-month comparable period.

Christopher Prentiss: The decline reflects lower demand as we have focused our attention on a present.

Speaker Change: The decline reflects lower demand as we have focused our attention on APHRESA.

Christopher Prentiss: The next slide shows our revenue growth by source and basic EPS on a quarter-by-quarter basis over a rolling eight-quarter period from the third quarter of 2022 through the second quarter of 2024. For the second quarter of 2024, total revenues of 72 million increased 9 percent sequentially versus the first quarter of 2024. After three quarters of positive earnings per share from Q3 2023 through the first quarter of 2024, we had a net loss in the current quarter of 2 million, or one cent per share. This was the result of our early repayment of the Man Group convertible note and mid cap senior secured notes, which we completed in April and resulted in an accounting charge of 7 million recorded as a loss on extinguishment of debt.

Speaker Change: For the second quarter of 2024, total revenues of $72 million increased 9% sequentially versus the first quarter of 2024.

Speaker Change: After three quarters of positive earnings per share from Q3 2023 through the first quarter of 2024, we had a net loss in the current quarter of $2 million, or $0.01 per share.

Speaker Change: This was the result of our early repayment of the Mann Group Convertible Notes and MidCap Senior Secured Notes, which we completed in April , and resulted in an accounting charge of $7 million recorded as a loss on extinguishment of debt.

Christopher Prentiss: Now to our gap to non-gap reconciliation. We had a gap net loss for the quarter of 2 million, which when adjusted for non-gap items results in non-gap net income of 14 million. This compares to a non-GAAP loss of approximately 400,000 in the prior year quarter. For the six-month period, we reported net income of 9 million and non-GAAP net income of 29 million. For the six-month period in 2023, we reported a net loss of 15 million and a non-GAAP net loss of 6 million. The second quarter where represents our fourth consecutive quarter of positive non-GAAP earnings, which we expect to continue as we execute on our current business plan.

Michael Castagna: We had a GAAP net loss for the quarter of $2 million, which when adjusted for non-GAAP items, results in a non-GAAP net income of $14 million. This compares to a non-GAAP loss of approximately $400,000 in the prior year quarter. For the six-month period, we reported net income of $9 million and non-GAAP net income of $29 million. Total revenues grew by 55% for the six-month period compared to the prior year, driven by growth in both our type ASO DPI-related revenue and FRESA growth.

Speaker Change: This compares to a non-gap loss of approximately $400,000 in the prior year quarter.

Speaker Change: For the six-month period, we reported net income of $9 million and non-GAAP net income of $29 million.

Speaker Change: For the six-month period in 2023, we reported a net loss of $15 million and a non-GAAP net loss of $6 million.

Christopher Prentiss: As we reflect on our progress on the first half of the year, total revenues grew by 55 percent for the six-month period compared to the prior year, driven by growth in both our Taipei so DPI-related revenue and a further growth. at $139 million. This gives us an annual run rate of over $275 million in revenues. Net income for the first half of the year was $9 million, and non-GAAP income was $29 million. This demonstrates the significant progress we have made as our revenues are supporting our pipeline development efforts. Cash and investments were $262 million at the end of the quarter.

Speaker Change: as we reflect on our progress on the first half of the year.

Michael Castagna: At $139 million, this gives us an annual run rate of over $275 million in revenue. Net income for the first half of the year was $9 million, and non-GAAP income was $29 million. Cash and investments were $262 million at the end of the quarter. This was after the repayment of both the Mann Group and MidCap notes in April, leaving only the $230 million senior convertible notes due in March 2026. This cash position, combined with our delevered balance sheet, puts us in a strong position to continue to invest in our commercial products and our exciting pipeline. With that, I will turn it back over to Mike. Thank you.

Speaker Change: At $139 million, this gives us an annual run rate of over $275 million in revenue.

Speaker Change: Net income for the first half of the year was $9 million and non-GAAP income was $29 million.

Speaker Change: This demonstrates the significant progress we have made as our revenues are supporting our pipeline development efforts.

Christopher Prentiss: This is after the repayment of both the man group and mid cap nodes in April, leaving only the $230 million senior convertible nodes due in March 2026. This cash position, combined with our de-levered balance sheet, puts us in a strong position to continue to invest in our commercial products and our exciting pipeline.

Speaker Change: Cash and investments were $262 million at the end of the quarter. This is after the repayment of both the Mann Group and MidCap notes in April , leaving only the $230 million senior convertible notes due in March 2026.

Speaker Change: This cash position combined with our de-levered balance sheet puts us in a strong position to continue to invest in our commercial products and our exciting pipeline.

Michael Castagna: With that, I will turn it back over to Mike. Thank you, Chris. As we look out over the next 12 months, here are some of the milestones we're going to talk about.

Chris: Thank you, Chris.

Michael Castagna: I want to say thank you to the hard work the team has achieved in the first half, starting with our IND submissions here in Q1, which led to a kickoff of a bunch of work that we'll be looking forward to as investors, employees, patients, and providers over the coming quarters and years. The DPI continues to progress nicely as you think about what we've been doing in Damperry between making product today to supply the market demands while preparing for hopefully positive readouts on T-TOM 1 and 2 in global expansion there with United Therapeutics. Our high speed fill finish line is now operational and certified on most of the strengths for a type of so DPI.

Speaker Change: I want to say thank you to the hard work the team has achieved in the first half, starting with our IND submissions here in Q1, which led to a kickoff of a bunch of work that we'll be looking forward to as investors and employees and patients and providers over the coming quarters and years.

Michael Castagna: supply-to-market demands while preparing for hopefully positive readouts on T-TOM 1 and 2 and global expansion there with United Therapeutics. The data readouts will happen here in the second half, and they will set the stage for continued data publication and data releases for years to come at the various diabetes conferences around the world.

Speaker Change: Our high-speed fill finish line is now operational and certified on most of the strengths for Tyvaso EPI.

Michael Castagna: The free drying capacity will be completed here in the third quarter. It's been installed, and now we're just running through the PPQ. Well, you'll see in the first half that will require some stability time and then filing with FDA for approval. We expect that to be fully operational in the first half of 25. Well in advance of T-TOM 1 and 2 reading out. As you look at Inhale 1 and Inhale 3, these are two pivotal trials we invested in over the last several years that are critical to the transformation we expect to bring to a further over the coming quarters and years ahead.

Speaker Change: The spray drying capacity will be completed here in the third quarter, it's been installed, and now we're just running through the PPQ.

Speaker Change: What you'll see is in the first half, that will require some stability time and then filing with FDA for approval. We expect that to be fully operational in the first half of 2025, well in advance of Teton 1 and 2 breeding out.

Speaker Change: As you look at INHALE-1 and INHALE-3, these are two pivotal trials we invested in over the last several years that are critical to the transformation we expect to bring to AFREZA over the coming quarters and years ahead.

Michael Castagna: The data readouts will happen here in the second half, and they will set the stage for continued data publication and data releases for years to come at the various diabetes conferences around the world. We are just getting started on what this can mean for ourselves as employees, as patients, and as shareholders, and we're looking forward to continuing to give you more information as it comes in in the coming quarters ahead. I think about the key value drivers that lay in front of us. Number one, the pipeline is not reflected in the value of our company.

Speaker Change: These data readouts will happen here in the second half.

Speaker Change: And they will set the stage for continued data publication and data releases for years to come at the various diabetes conferences around the world.

Speaker Change: We are just getting started on what this can mean for ourselves.

Speaker Change: as employees, as patients, and as shareholders.

Michael Castagna: Number one, the pipeline is not reflected in the value of our company. We continue to believe we're undervalued when we look at the value of the Tavesa DPI royalties and manufacturing revenue relative to the other assets we have ongoing in bringing this novel innovation to an unmet need population in NTM, where there are over 100,000 patients in the US and roughly 15,000 that are refractory alone. And for every 1,000 patients, this is $100 million in net revenue for mankind. When I think about OFES, the potential for this opportunity to help people living with IPS have a more tolerable option.

Speaker Change: and I think about the key value drivers that lay in front of us.

Michael Castagna: We continue to believe we're undervalued when we look at the value that's of A-C-D-P-I royalties and manufacturing revenue, where all the other assets we have ongoing in the company. Just a loan looking at 101 that we now look to be the only phase three trial in the future, bringing this novel innovation to an unmet need population in NTM, where there's over 100,000 patients in the US and roughly 15,000 that are refractory alone. And for every 1,000 patients, this is $100 million in that revenue to mankind. When I think about O-Fez, the potential for this opportunity to help people living with IPF have a more tolerable option, light alone if we can see better efficacy; that would be amazing.

Speaker Change: Number one, the pipeline is not reflected in the value of our company.

Speaker Change: We continue to believe we're undervalued when we look at the value of the Tavesa DPI royalties and manufacturing revenue relative to the other assets we have ongoing in the company.

Speaker Change: where there's over 100,000 patients in the U.S. and roughly 15,000 that are refractory alone. And for every 1,000 patients, this is $100 million in net revenue to mankind.

Speaker Change: When I think about OFES, the potential for this opportunity to help people living with IPS have a more tolerable option.

Michael Castagna: Let alone if we can see better efficacy, that would be amazing. This is a $4 billion market and growing with lots of novel innovation coming, where we see OFAB as a continued backbone of treatment. And then we upgraded our Boston R&D footprint recently. As you may know, we have a site in Marlboro that the lease will be ending in early 26.

Michael Castagna: This is a $4 billion market and growing, with lots of novel innovation coming where we see O-Fez as a continued backbone of treats. Benjamin, where hopefully our in-hell version will make a pivotal moment for patients living with IPF.

Speaker Change: let alone if we can see better efficacy. That would be amazing. This is a $4 billion market and growing with lots of novel innovation coming where we see OFAB as a continued backbone of treatment where hopefully our inhaled version will make a pivotal moment for patients living with IPF.

Michael Castagna: And then we upgraded our Boston R&D footprint recently. As you may know, we have a site in Marble that's at least will be ending in early 26. And we now have moved into a new facility here in Bedford, Massachusetts, where we have brand new R&D in space, expand our DPI technology platform. And we'll be consolidating our employees between the two sites over the coming 12 months. We're excited for that in terms of recruiting talent and continuing to have more capacity to do more research programs as we go forward. When it comes to the base of DPI, this has been a great opportunity not only for us but for patients in the United States therapeutics.

Michael Castagna: And we now have moved into a new facility here in Bedford, Massachusetts, where we have a brand new RDF space, expanded our DPI technology platform, and we'll be consolidating our employees between the two sites over the coming 12 months. We're excited about that in terms of recruiting talent and continuing to have more capacity to do more research programs as we go forward. When it comes to Tavesa DPI, this has been a great opportunity, not only for us but for patients at United Therapeutics.

Speaker Change: When it comes to Tavesa DPI, this has been a great opportunity, not only for us, but for patients in United Therapeutics. It's transformed our company and has enabled us to execute our long-term growth strategy of funding our pipeline and continue to be a self-sustaining company.

Michael Castagna: It's transformed our company and has enabled us to execute our long-term growth strategy of funding our pipeline and continue to be a self-sustaining company. As you can see here, for every 10,000 patients reimbursed, this is between 300 and 350 million total revenue to MannKind between royalties and manufacturing revenue. We will anxiously await the T-TOM 1 and 2. And we also will be starting to pay close attention to the T-TOM PPS study as that comes forward. And we see these reouts starting in the second half of 2025. And when it comes to endocrine, we've always known when you look at innovation in diabetes, especially type 1, it starts with kids.

Michael Castagna: It's transformed our company and has enabled us to execute our long-term growth strategy of funding our pipeline and continuing to be self-sustaining. As you can see here, for every 10,000 patients reimbursed, this is between $300 and $350 million in total revenue to MannKind between royalties and manufacturing.

Speaker Change: As you can see here, for every 10,000 patients reimbursed, this is between $300 and $350 million in total revenue to MannKind between royalties and manufacturing revenue.

Michael Castagna: We will anxiously await T-TOM 1 and 2, and we will also be starting to pay closer attention to the T-TOM PPS study as that comes forward, and we see these readouts starting in the second half of 2025. Pediatrics is what we look at when you think about drugs that have been on the market for a long time and have transformed, whether that's the insulin pumps that Alman built, Omnipod, or CGM and Dexcom, that all type ones use now as standard of care.

Speaker Change: We will anxiously await the T-TOM 1 and 2. We also will be starting to pay closer attention to the T-TOM PPS study as that comes forward and we see these readouts starting in the second half of 2025.

Michael Castagna: The parents will fight for the children; the doctors are more cutting edge. And we believe the payers will find an opportunity to cover a Fresno more reasonable way and give patients the opportunity to control their sugars. The pediatrics is what we look at when you think about drugs that have been on the market for a long time and transforms, whether that's the inflome pump that Alman built, Omnipod, Procedium and Dexcom that all type 1s use now standard of care. All these innovations started with kids. And we look at even GLPs today, these have been on the market nearly 20 years before we saw the inflection we've seen over the last several years in the weight loss category and wide adoption of GLPs.

Michael Castagna: All these innovations started with kids. And when we look at GLPs today, these have been on the market for nearly 20 years before we saw the inflection we've seen over the last several years in the weight loss category and the wide adoption of GLPs. I know it's frustrating for all of us to think about what we sit on with diabetes and endocrine disorders, but we are just now at the pivotal moment of new data coming out, along with hopefully, the ability to transform our future. Thank you.

Speaker Change: All these innovations started with kids, and we look at even GLPs today. These have been on the market nearly 20 years before we saw the inflection we've seen over the last several years in the weight loss category and wide adoption of GLPs.

Michael Castagna: I know it's frustrating for all of us to think about what we sit on with diabetes and endocrine, but we are just now at the pivotal moment of new data coming out, along with hopefully the ability to transform our future.

Michael Castagna: I'm going to stop there, and we'll answer any questions. Just several knows we have several upcoming scientific and investor conferences where you'll get lots of new information for updated questions and oral presentations here in the coming months.

Operator: Thank you.

Operator: As a reminder, if you'd like to ask a question at this time, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. Please stand by when we compile the Q&A roster.

Speaker Change: As a reminder, if you'd like to ask a question at this time, please press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 1 again.

Operator: Please stand by while we compile the Q&A roster. Our first question comes from a line from Olivia Brayer with Cantor.

Speaker Change: Please stand by while we compile the Q&A roster.

Olivia Brayer: Our first question comes from a line of Olivia Brayer with Cantor. Hey, good morning, guys. Thank you for the questions.

Olivia Brayer: Sorry, I heard the IP question, and then there's a second one, and then there's the stayed in hand with the IPS, as I said, and Mr.

Olivia Brayer: How are you thinking about IP and just revenue runway for your two pipeline candidates? And can you just remind us how well protected your technosphere technology is?

Speaker Change: Hey, good morning guys. Thank you for the questions. How are you thinking about IP and just revenue runway for your two pipeline candidates? And can you just remind us how well protected your technosphere of technology is?

Michael Castagna: And then on the 201 update that will get in the fourth quarter, can you give any more color on how many patients' worth of data you expect to have and just how you're thinking about next steps once you do have those healthy volunteer data in hand? Sorry, I heard the IP question, and then there's a second one, and there's the David in hand with IPF. As I said, I missed the second part. Yeah, why don't we start with IP Mike, and then I can follow up to a one. Sure, so on the IP landscape with I think was a technician, it was probably your second question.

Speaker Change: And then on the 201 update that we'll get in the fourth quarter, can you give any more color on how many patients' worth of data you expect to have and just how you're thinking about next steps once you do have those healthy volunteer data in hand?

Speaker Change: Sorry, I heard the IP question, and then there's a second one, and then there's the...

Michael Castagna: Yeah, why don't we start with I.P., Mike, and then I can follow up with 201.

Speaker Change: IPS, is that what you said? I missed a second.

Speaker Change: Why don't we start with Mike and then I can follow up with you, Owen.

Speaker Change: Sure, so on the IP landscape with, I think it was Technosphere, that was probably your second question, so Technosphere goes out into the 2030s, IP on Taiveso with pending, plus what we have is probably into the 2040-ish timeframe, 2043.

Michael Castagna: So, technostrag goes out into the 2030s IP on Taipei, so with pending plus what we have is probably into the 2040s, time frame 2043. And then the Klofazamine will have QIDP and orphan designation, as well as additional IP files, so that looks to be 2039, 2040. And then same thing with IPF and the tetanab, we look to have into the late 2030s. So, we feel pretty good about the overall IP of the company going into the next decade and a half or so. And that's assuming we don't do any innovation, right?

Michael Castagna: And then the clofazamine will have QIDP and orphan designation as well as additional IP files, so that looks to be 2039-2040, and then the same thing with IPF and the tetanib we look to have into the late late 2030s. So we feel pretty good about the overall IP of the company going into the next decade and a half or so. And that's assuming we don't do any innovation, right? And so I think there are definitely things we're gonna work on now to continue to innovate and make our products easier for patients to take. So we feel pretty good about the next seven, eight, 10 years as far as we can look out in terms of no major IP risk.

Michael Castagna: And so I think there is definitely things we're going to work on now to continue to innovate and make our products easier for patients to take. So, we feel pretty good about the next, you know, seven, eight, ten years as far as we can look out in terms of no major IP risk. Okay, understood.

Speaker Change: And that's assuming we don't do any innovation, right? And so I think there is definitely things we're gonna work on now to continue to innovate and make our products easier for patients to take. So we feel pretty good about the next, you know, 7, 8, 10 years as far as we can look out in terms of no major IP risk.

Michael Castagna: Okay, understood, and then yeah, just the second question was around 201 and the data that we'll get in 4Q, any color on how many patients' worth of data that you guys will have, and then obviously just thoughts around next steps for that program going into 2025.

Michael Castagna: And then, yeah, just a second question was around 201 and the data that we're getting in 4Q. Just any color on how many patients' worth of data that you guys will have. And then obviously just thoughts around next steps for that program going into 2025. Yeah, so we have completed the first three dosing cohorts, which was a single dose is dose escalation up to a next dose we're looking for. I have a report. No major finding so far. They're still going through the safety, but no, nothing appears to be getting in our way to go into the multiple sending dose, which will be the next phase.

Michael Castagna: Yeah, so we have completed the first three dosing cohorts, which were single doses, dose escalation up to the max dose we're looking for. I have a report; no major findings so far. They're still going through safety, but no, nothing appears to be getting in our way to go into the multiple ascending dose, which will be the next phase, and that'll happen over the next month, and then for those results, we plan to go to the FDA with a phase 2-3 design which we're still finalizing. That's why I haven't shared any details, and we'll hopefully see the FDA agree to that type of study design And so that's what we're kind of looking at, trying to work backwards from there, make sure we're on time as we can be.

Operator: Okay, great. Thanks, Mike. And congrats again on all the progress. Thank you.

Michael Castagna: And that'll happen over the next month. And then what we'll be looking for is obviously cough, tolerability, bronchi, spasm, anything around that long administration, GI toxicity, or tolerability. You know that we see any GI side effects in those patients, especially in the multiple sending dose. And then for those results, we plan to go to the FDA with a Phase Two, Three design, which we're still finalizing. That's why I'm not sure any details, and we'll hopefully see the FDA agree with that type of a study design. We've seen in some of the other competing programs there in IPF, but that's our intent.

Speaker Change: And then they'll take some time to analyze those results, so we expect that in Q4. What we'll be looking for is obviously cough, tolerability, bronchospasm, anything around that lung administration. GI toxicity or tolerability, you know, that we see any GI side effects in those patients, especially in the multiple ascending dose.

Speaker Change: agree to that type of a study design. We've seen in some of the other competing programs there in IPF, but that's our intent and hopefully that would get us to market right around when OFEB patent would expire.

Olivia Brayer: And hopefully that would get us to market right around when, when O5 patent would expire. And so that's what we're kind of looking, trying to work backwards from, make sure we're on time that we can be. Okay, great. Thanks, Mike. And congrats again on all the progress. Thank you.

Speaker Change: Okay, great. Thanks, Mike, and congrats again on all the progress.

Thomas Smith: Our next question comes from a line of Thomas Smith with leering partners. Hey guys, good morning. Thanks for taking the questions.

Operator: Our next question comes from the line of Thomas Smith with Lyrinc Partners.

Mike: Thank you.

Thomas Smith: Hey guys, good morning.

Thomas Smith: Just want to respect to the icon on Phase three design. It's wanting us to comment on the powering assumptions for the six-month primary endpoint and then for the interim analysis. It sounds like this is mostly a sample size re-estimation, but can you comment on whether there's any early stopping criteria built into this interim, either for futility or superiority? Sure. I missed your question on the assumption of six months. Sorry. Yeah, just asking about the powering assumptions on the six-month endpoint. Well, you've assumed in terms of procedure, response, and treatment. Yeah, so what I say is when we, in the design of icon one, we benchmarked as best we couldn't refract your population for a delta of what we saw in the air case for factory population.

Operator: Thanks for taking the questions. Just with respect to the ICON1 Phase 3 design, I was wondering if you could comment on the powering assumptions for the six-month primary endpoint and then for the interim analysis. It sounds like this is mostly a sample size re-estimation, but can you comment on whether there's any early stopping criteria built into this interim, either for futility or superiority?

Speaker Change: for Futility or Superiority.

Thomas Smith: Sure. I missed your question on the assumption of six months. Sorry.

Thomas Smith: Yeah, just asking about the powering assumptions on the six-month endpoint, what you've assumed in terms of placebo response and treatment effects.

Michael Castagna: So what I say is, in the design of ICON1, we benchmarked as best we could in the refractory population for a delta of what we saw in the error case for refractory population. So if it comes out better than that or placebo is not as good, you know, that will benefit us. It is a dual primary endpoint in the U.S., meaning a co-primary endpoint, I'll say, in terms of quality of life plus sputum.

Michael Castagna: So, if it comes out better than that, or placebo is not as good, you know that all will benefit us. It is a dual primary endpoint in the US, meaning, or co-primer endpoint, I'll say, in terms of quality of life plus butum. The rest of the world will be sputum only, so it'll be the same trial used with two different statistical plans. And the, and the internal analysis is on 100 patients; it'll have a futility assessment, but not a superiority assessment in terms of shutdown for my knowledge. And then we have different numbers; we need to treat it. If we feel like we're not powered appropriately, we can increase the powering the study by increasing the patient numbers.

Michael Castagna: The rest of the world will be sputum only, so it will be the same trial used with two different statistical plans. And the interim analysis is on 100 patients that will have a futility assessment but not a superiority assessment in terms of shutdown, from my knowledge. I know we have different numbers we need to treat if we feel like we're not powered appropriately. We can increase the power in the study by increasing the number of patients. So those are the... predefined in the statistical plan.

Speaker Change: and the interim analysis is on 100 patients that will have a futility assessment.

Speaker Change: but not a superiority assessment in terms of shutdown from my knowledge.

Michael Castagna: So those are the key afterwards we've tried to do, depending on which endpoint is looking, how they're looking in terms of quality of life versus. Sputum, so that's all predefined in a statistical plan. And I think, I think it's 90% power, but I need to double check that and confirm with you, back to you. I'm not pretty sure if 90% power. Got it, that makes sense.

Michael Castagna: and I think I think it's 90% power, but I need to double check that and confirm with you and get back to you about that. I'm not very sure it's 90% power.

Thomas Smith: Got it, that makes sense. And then just one on Afreza, I was wondering if you could just comment on some of the feedback you've been hearing coming out of ADA with the Inhale-3 results, reception to the data set, and how you're thinking about translating these data in the Inhale-1 data to sales growth. You know, are these data sets, do you think could potentially impact 2025 prescribing, or is it more of a longer-term dynamic?

Michael Castagna: And then just one on a fresa. I was wondering if you could just comment on some of the feedback you've been hearing coming out of ADA with the inhale three results. I guess reception to the data set and how you're thinking about translating these data and the inhale one data to sales growth, you know, are these data sets. You think it potentially impacts 2025 for striving, or is it more of a longer term dynamic? Yeah, I think so for the feedback has been very positive of those that attend the ADA and listen to our data and watch our data.

Speaker Change: Got it. That makes sense. And then just one on...

Speaker Change: of FRESA. I was wondering if you'd just comment on some of the feedback you've been hearing coming out of ADA with the in-health free results, I guess reception to the data set.

Michael Castagna: Yeah, I think so far the feedback has been very positive from those that attended ADA and listened to our data, watched our data. You know, the data is being prepared for publication. The first dose just got published in Diabetes Care. So I'd say overall receptivity has been very positive. The team had a small adboard at ADA just to get initial reaction.

Michael Castagna: You know, the data is being prepared for publication; the first dose just got published in Diabetes Care. So I'd say overall receptivity has been very positive. The team had a small abort at ADA just to get initial reactions. Again, continue to demonstrate increased confidence, and we just got back ATU research last week, which I couldn't get in time for the earnings, unfortunately. But that also signals that amongst our highest writers and that we target values, that they are positively receiving the data as well. So, so far, all looks really good in terms of ability to impact future growth of our president.

Michael Castagna: Again, continue to demonstrate increased confidence, and we just got back ATU research last week which I couldn't get in time for the earnings call, unfortunately, but, you know, will that happen in a dramatic way this year? Probably a little bit in Q4 as things roll out in Q3 and the data gets published. But realistically, it'll be 2025.

Speaker Change: Again, continue to demonstrate increased confidence. And we just got back ATU research last week, which I couldn't get in time for the earnings call, unfortunately.

Speaker Change: That also signals that amongst our highest riders and our highest target values, that they are positively receiving the data as well. So far, all looks really good in terms of ability to impact future growth of a FRESA.

Michael Castagna: You know, will that happen in a dramatic way this year? Probably a little bit in Q4 as things roll out on Q3 and the data gets published, but realistically, it'll be 2025. And what I'd say about a phrase is it's a direct reflection of our investment, meaning, you know, we've run the brand for profitability last year. And that's been able to, while we wait for the data readouts, and then make the decision to scale up and invest more. So if we want to grow it faster, it's going to probably take more investment, and just how much faster will that grow relative to the investment we make?

Speaker Change: You know, will that happen in a dramatic way this year? Probably a little bit in Q4 as things roll out in Q3 and the data gets published, but realistically it'll be 2025 and what I'd say about a FREZ is it's a direct reflection of

Michael Castagna: And what I say about a FRES is it's a direct reflection of our investment, meaning, you know, we've run the brand for profitability for the last year, and that's been able to, while we wait for the data readouts, and then make the decision to scale up and invest more. So if we want to grow it faster, it's going to probably take more investment. And just how much faster will that grow relative to the investment we make?

Speaker Change: of our investment, meaning, you know, we've run the brand for profitability the last year.

Speaker Change: And that's been able to, while we wait for a data readout, to then make the decision to scale up.

Speaker Change: and Investmore. So if we want to grow it faster, it's going to probably take more investment. And just how much faster will that grow relative to the investment we make. And those are some of the work we're doing before we

Michael Castagna: And those are some of the work we're doing before we scale up any investment so we can communicate appropriately to shareholders what we want to do. But I think right now, you know, the data is good enough to continue to drive increased growth quarters as we go out. And then in pediatrics, obviously, it's in Q4, and that will be the more important in terms of really inflection trends, I'll call them that, meaning, you know, we can grow 20% versus 24, that's not going to get anybody excited.

Michael Castagna: And those are some of the work we're doing before we scale up any investments, so we can communicate appropriately to shareholders what we want to do. But I think right now, you know, the data is good enough to continue to drive increased growth quarters, and as we go out. And then the pediatric obviously is in Q4, and that will be the more important in terms of really inflection trends, I'll call it, meaning, you know, we can grow 20% versus 24. That's not going to get anybody excited. But if we think we can grow high double digits through PEDS launch, that's going to be what's important at the end.

Speaker Change: Michael Castagna, CFP®, Financial Planners & Investment Advisors

Michael Castagna: But if we think we can grow high double digits through the peds launch, that's going to be what's important at the end, and having that date in Q4 with the filing, hopefully early next year, that will set us up for the early 25, early 26 timeframe for PEDS inflection. So I think that's what you'll probably see is my guess, but again, we're conducting additional research and insights to have some confidence before we make any big decisions here. I got it.

Speaker Change: Really, inflection trends, I'll call it, meaning, you know, we can grow 20% versus 24, that's not going to get anybody excited. But if we think we can grow high double digits through peds launch, that's going to be what's important at the end. And having that data in Q4 with the filing, hopefully early next year, that will set us up for early 25, early 26 timeframe for peds inflection.

Michael Castagna: And having that data in Q4 with a filing hopefully early next year, that will set us up for late 25 or early 26 timeframe for peds.

Michael Castagna: on Flexion. So I think that's what you'll probably see, is my guess, but again, we're conducting additional research and insights to have some confidence before we make any big decisions here. Got it. That's helpful. Thanks for taking the questions like and congrats again on the progress. Thank you. I look forward to working with you.

Speaker Change: So I think that's what you'll probably see is my guess, but again, we're conducting additional research and insights to have some confidence before we make any big decisions here.

Thomas Smith: Got it. That's helpful. Thanks for taking the questions, Mike, and congrats again on the progress.

Speaker Change: Got it. That's helpful. Thanks for taking the questions, Mike, and congrats again on the progress.

Gregory Renza: Our next question will come from the line of Gregory Renza with RBC Capital Markets. Great. Good morning, Mike and Chris, congrats on the on the quarter. Thanks for taking my question. Mike, maybe just keeping with 101 and Cofasmian in Holation. Just curious as you and the team activate sites and stand up the trial. If you had any feedback and maybe touch on how sort of the activation and the entrenchment of the site is shaping your confidence in the program and the value proposition that you see with 101. Yeah, I think it's really great. You know, the team has been to about 10 sites; August to slow down a little bit for site activation, just due to vacations and holidays, but they expect that to pick up a lot here in September.

Operator: Our next question will come from the line of Gregory Renza with RBC Capital Markets.

Speaker Change: Our next question will come from the line of Gregory Renza with RBC Capital Markets.

Gregory Renza: Great. Good morning, Mike and Chris. Congratulations on the quarter. Thanks for taking my question. Mike, maybe just keeping with 101 and colfazamine inhalation, I'm just curious, as you and the team activate sites and stand up the trial, if you have any feedback and maybe touch on how the activation and the entrenchment of the sites is shaping your confidence in the program and the value proposition that you see with 101.

Gregory Renza: Mike, maybe just keeping with 101, the clofazamine inhalation, I'm just curious as you and the team activate sites and stand up the trial, if you had any.

Gregory Renza: and any feedback and maybe touch on how sort of the activation and the entrenchment of the site is shaping your confidence in the program and the value proposition that you see with 101.

Gregory Renza: Yeah, I think it's true. Like Greg, you know, the team has been to about ten sites. August will slow down a little bit for site activation just due to vacations and holidays, but...

Michael Castagna: We already know their free screening patients, a couple of already scheduled for August. So I think it's only one month in. I wouldn't try to read too much positive or negative into it. I'd say so far, the feedback has been generally positive, as we all suspect. You know, how big is this refractory population? How quickly can we get the naive patients? How quickly can we move the dry powder along? These are things we're working on as we know that's the much bigger population to go after. But I think in terms of enrollment trial in the US and Asia Pacific area, there are enough patients to get that moving and enough patients to get hopefully ready for a good launch.

Speaker Change: We expect that to pick up a lot here in September . We already know they're pre-screening patients. A couple are already scheduled for August . So I think it's only one month in. I wouldn't try to read too much positive or negative into it. I'd say so far the feedback has been

Michael Castagna: General positive, as we all suspect, you know, how big is this refractory population? How quickly can we get the naive patients? How quickly can we move the dry powder along?

Gregory Renza: generally positive as we all suspect you know how big is this refractory population.

Speaker Change: How quickly can we get the naive patients? How quickly can we move the dry powder along?

Michael Castagna: These are things we're working on, as we know that's a much bigger population to go after. But I think in terms of enrolling patients in the U.S. and Asia-Pacific area, there are enough patients to get that moving and enough patients to get, hopefully, ready for a good launch. But the real opportunity is, obviously, the larger NTM population, but getting this trial moving is the first step into that foray. But, you know, we continue to watch our case do well. That makes us feel very good about the bets here. And the, you know, the market really has no options.

Gregory Renza: These are things we're working on, as we know that's the much bigger population to go after.

Gregory Renza: But I think in terms of enrolling the trial in the U.S. and Asia-Pacific area, there are enough patients to get that moving and enough patients to get hopefully ready for a good launch. But the real opportunity is obviously the larger NTM population, but getting this trial moving is the first step.

Michael Castagna: But the real opportunity is obviously the larger NTM population, but getting this trial moving is the first step into that for a, but, but, you know, we continue to watch our case do well. That makes us feel very good about the bets here and the, you know, market really has no options. I mean, so this is really exciting for patients. Exciting for the treaters. Exciting for the FDA as well as our employees. We worked really hard to get here. And, you know, for manufacturing standpoint, we'll be ready. And the trial, you know, I think is going a lot of interest in the top investigators.

Michael Castagna: I mean, so this is really exciting for patients. It's exciting for the researchers. It's exciting for the FDA, as well as for our employees. We worked really hard to get here. And, you know, from a manufacturing standpoint, we'll be ready. And the trial, you know, I think is going well, got a lot of interest from the top investigators. So we feel pretty good about the site that we're getting at the patient's house. We'll be recruiting very shortly.

Gregory Renza: into that foray. But, you know, we continue to watch our case do well. That makes us feel very good about the bets here and the...

Speaker Change: You know, the market really has no options. I mean, so this is really exciting for patients, exciting for the treaters, it's exciting for the FDA, as well as our employees. We worked really hard to get here and you know, from a manufacturing standpoint, we'll be ready.

Gregory Renza: And the trial, you know, I think is going, got a lot of interest from the top investigators, so we feel pretty good about the sites that we're getting and the patients that we'll be recruiting very shortly.

Michael Castagna: We feel pretty good about the sites that we're getting in the patient style. We'll be recruiting very shortly. Got it. And I think at the top of the column, like you mentioned, expanded access and made more to come. Just touch a little bit about about that. Maybe some of the timing and some of the inputs there. Thanks and congrats again on the quarter. Thank you, Craig.

Gregory Renza: And I think at the top of the column, like you mentioned, expanded access and maybe more to come. Just touch on that, maybe some of the timing and some of the inputs there. Thanks and congratulations again on the quarter. Thank you, Craig.

Speaker Change: Got it. And I think at the top of the column like you mentioned expanded access and maybe more to come. Just touch a little bit about about that maybe some of the timing and some of the inputs there. Thanks and congrats again on the quarter.

Michael Castagna: Thank you, Craig. Yeah, so I've asked the team to see if there is a way to get the EAP with the FDA sooner than later. And maybe that EAP would be for patients who don't qualify for the trial. And would the FDA allow us to provide access, given there's only one treatment option out there? We don't have any clarity on that yet, and we've not approached the FDA yet. But that's really the key part of that comment: if we could find a way to help more people sooner that don't qualify for the trial, we would be interested in that.

Michael Castagna: Yeah, so I guess the team to look to see if there isn't a way to get the EAP with the FDA sooner than later. And maybe that EAP would be for patients who don't qualify for the trial. And would the FDA allow us to provide access, given there's only one treatment option out there. We don't have clarity on that yet. We've not approached the FDA yet, but that's really the key part of that comment: if we could find a way to help more people sooner that don't qualify for the trial. We would be interested in that.

Speaker Change: Thank you, Greg. Yeah, so I've asked the team to look to see if there is a way to get the EAP with the FDA sooner than later, and maybe that EAP would be for patients who don't qualify for the trial, and would the FDA allow us to provide access given there's only one treatment option out there.

Speaker Change: We don't have clarity on that yet. We've not approached the FDA yet, but that's really the key part of that comment.

Michael Castagna: Obviously, we don't want to have an EAP or enrollment for the trial delay our ability to help get the trial recruited. So that'll be some of the focus here, can we find a way to help this patient? That'll be a collaboration with the FDA. They may want a certain number of patients first. We'll have to see where they land.

Speaker Change: If we could find a way to help more people sooner that don't qualify for the trial, we would be interested in that.

Michael Castagna: Obviously, we don't want to have an EAP hurt enrollment for the trial and delay our ability to help get the trial recruited. So that'll be some of the focus here: can we find a way to help those patients. That'll be a collaboration with the FDA, and they may want a certain amount of patients first. We'll have to see where they were. Thank you, Mike. Thank you very much.

Speaker Change: That will be a collaboration with the FDA, and they may want a certain amount of patients first. We'll have to see where they land.

Gregory Renza: Thank you, Greg. Have a good day.

Speaker Change: Sounds good. Thanks, Mike. Thank you, Greg. Have a good day.

Brandon Folkes: Our next question will come from a line of Brandon Folkes with Rodman and Renza. Alright, thanks for paying my question, and congratulations, another very good quarter. Maybe just two from me. Mike, I know you said you can't talk too much about the potential Phase Two, Three trial and Two or One. But would you want to just talk about maybe if you're considering multiple dose levels there, and just elaborate on, you know, what is first prize for you in this program? Is it something that comparable on efficacy with better GI side effects or, you know, would you prioritize perhaps sort of a potentially more efficacious drug here?

Operator: Our next question will come from a line of Brandon folks with Rodman and Renshaw.

Speaker Change: Our next question will come from the line of Brandon Foulkes with Rodman and Renshaw.

Brandon Folks: Hi, thanks for taking my question, and congratulations on another very good quarter. Maybe just two from me. Mike, I know you said you can't talk too much about the potential Phase 2-3 trial in 2019, but would you be able to just talk about maybe if you're considering multiple dose levels there? You know, what's first prize for you in this program? Is it something that's comparable in efficacy with better GI side effects? Or would you prioritize perhaps some sort of a potentially more efficacious drug here?

Brandon Foulkes: Alright, thank you for taking my questions and congratulations on another very good quarter.

Brandon Foulkes: You know, what is first prize for you in this program? Is it something that's comparable in efficacy?

Speaker Change: with better GI side effects or would you prioritize perhaps sort of a potentially more efficacious drug here?

Michael Castagna: And then secondly, just maybe on today's the DPI. Can you just talk about the manufacturing FD where you're at today? What needs to be done if Teton is successful and just, you know, so how much investment does that take? Thank you. Sure, I'll take the second one first, so that's easy. So, for the DPI manufacturing capacity, we've been able to build up a substantial amount of inventory for United Therapeutics this year. We should be well in our way ahead of any Teton results in terms of scale capacity. We don't see any limitations as far as we can see with that approval.

Speaker Change: And then secondly, just maybe on top of this, the DPI, can you just talk about the manufacturing capacity, where you're at today, what needs to be done if Teton is successful, and just how much investment does that take? Thank you.

Speaker Change: Sure, I'll take the second one first because that's easy. So from a DPI manufacturing capacity, we've been able to build up a substantial amount of inventory for U9 Therapeutics this year. We should be well on our way ahead of any Teton results in terms of scale of capacity. We don't see any limitations.

Michael Castagna: The investment in the plant has already been invested in by United Therapeutics. All the equipment has been installed and purchased. So there's no additional investment. That's a major. I'm sure there will be small things here and there, but nothing that's significant for shareholders or for United Therapeutics at this point. That doesn't account for what UT may do independently, mankind, IE building their own plan. That's a separate decision on their part, but as far as we're concerned, we'll be able to supply a substantial amount of DPI as we go forward.

Brandon Foulkes: investment that that's a major I'm sure there'll be small things here and there but nothing that's that's significant for shareholders or for United Therapeutics at this point.

Michael Castagna: In terms of what does a wind look like, it's a great question. And we've had this internal debate ourselves in that do we really want to demonstrate the safety side of this around the severe GI tolerability issues that happen. Is it important to try to go after increased efficacy, or is it a balance of both of those by getting to market as quick as we can. And I think that that that triangle in terms of efficacy, speed, and tolerability is something we're continuing to talk about. And there's various ways you could design a phase two, three trial to kind of build those attributes.

Michael Castagna: That triangle, in terms of efficacy, speed, and tolerability, is something we're continuing to talk about. And there are various ways you could design a phase two, three trial to kind of build those attributes. And the question is how, how fast can you get to market and help those patients, and what do you need to demonstrate? For example, if we were to demonstrate equal efficacy somehow, but you took existing patients on the tentative, you may not see the GI benefit as much.

Michael Castagna: And the question is how how how fast can you get to market and help those patients and what do you need to demonstrate. For example, if we were to demonstrate equal efficacy somehow, but you took existing patients on the tent, and if you may not see the GI benefit as much, maybe you'll see people take less of modium or feel quite a lot better. But you could also study an IE patients where you'll see hopefully a larger benefit in tolerability, which could be a huge benefit to outcomes and efficacy. Or you can go after higher dosing, which could generate potential for efficacy, but how much more we don't know.

Speaker Change: How fast can you get to market and help those patients? And what do you need to demonstrate? For example, if we were to demonstrate

Speaker Change: Equal efficacy somehow, but you took existing patients on the tetanib. You may not see the GI benefit as much. Maybe you'll see people take less Imodium or...

Michael Castagna: Maybe you'll see people take less Imodium or feel the quality of life better, but you could also study an IE patient where you'll hopefully see a larger benefit in tolerability, which could be a huge benefit to outcomes and efficacy, or you can go after higher doses, which could generate potential better efficacy, but how much more we don't know. And that's all the questions we have for ourselves as much as anything

Speaker Change: feel quality of life better, but you could also study in I.E. patients where you'll see hopefully a large benefit in tolerability, which could be a huge benefit to outcomes and efficacy.

Michael Castagna: And that's all the questions we have for ourselves, as much as anything. And so, because we are going into a phase two, three design, that does limit some of our forecast ability on efficacy for. for example. But we let's see the first read out here in this phase one, make sure patients can tolerate our target doses, and then we will finalize that trial design. We're also meeting some fault leaders here in coming weeks and months to try and really does exact question, but we have an idea what we want to do and we want to bounce that off with some investigators before we come out and talk about it publicly.

Michael Castagna: And so, because we are going into a Phase 2-3 design, that does limit some of our forecastability on efficacy, for example. But let's see the first readout here in phase one, make sure patients can tolerate our target doses, and then we will finalize that trial design. We're also meeting some thought leaders here in the coming weeks and months to triangulate this exact question. But we have an idea of what we want to do, and we just want to bounce that off with some investigators before we go out and talk about it publicly.

Speaker Change: into a Phase II-III design that does limit some of our forecastability on efficacy, for example.

Michael Castagna: And then you asked, do we want to go after dosing in multiple doses? And there's a strategy that could be two different doses and study them, or it could be a titrate updose effect, like you see in a triposomal type design where you try to titrate to the highest tolerable dose. So those are the things we are looking at, and they all have pros and cons.

Michael Castagna: And then you ask, and do we want to grab their dosing and multiple doses. And there's a strategy that could be two different doses and study them, or could be a titrate up those effect. Like you see in a trapezoidal type design, we try to titrate to the highest possible dose. So those are the things we are looking at, and they all have pros and cons. Brandon, so no magic answer here, but other than we want to get this drug to patients as quickly as possible. I think once we get on the market, then we can innovate even from there in terms of demonstrating and just in the trial outcomes, etc.

Michael Castagna: So we'll get there. But that could do the first step here. I think that's the most important, and then me with FDA.

Brandon Folkes: Right, thanks. That was very helpful, and congratulations again on great quotas. Thank you.

Brandon Folks: Great, thanks, that was very helpful, and congratulations again on a great quarter.

Speaker Change: Great, thanks. That was very helpful. And congratulations again on a great quarter.

Operator: That concludes today's question and answer session.

Operator: That concludes today's question and answer session. I'd like to turn the call back to Michael Castagna for closing remarks.

Michael Castagna: This concludes today's conference call. Thank you for participating. You may now disconnect.

Michael Castagna: I'd like to turn the call back to Michael Castanier for closing remarks. I'd like to say thank you to everyone. It's been a fantastic year. I'll tell you for all of us, but the company's in a great spot. We're looking to close out the year strong and really get ready for 25 and 26 as we look at multiple data read up on the clinical side across our entire platform and programs, as well as just upside into the inline revenue that we're driving with the diabetes business. So we feel very good about the future. Hopefully, awesome news on international expansions.

Speaker Change: I just want to say thank you to everyone. It's been a fantastic year, a volatile year for all of us, but the company's in a great spot. We're looking to close out the year strong and really get ready for 2025 and 2026 as we look at

Speaker Change: multiple data readouts on the clinical side across our entire platform and programs, as well as just upside into the inline revenue that we're driving with the diabetes business. So we feel very good about the future, hopeful awesome news on international expansion as we go forward for FRESA and continue to drive growth.

Michael Castagna: We go forward for a present and continue to drive growth and help more patients. I just want to say thank you to all of our employees for all our hard work, and all the shareholders for all your support.

Operator: Have a great day.

Operator: This concludes today's conference call. Thank you for participating. You may now disconnect. Thank you. .

Speaker Change: This concludes today's conference call. Thank you for participating. You may now disconnect.

Speaker Change: www.mannkindcorporation.com www.mannkindcorporation.com

Mohd.: Sound Transcript by Mohd.

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