Q4 2024 MannKind Corp Earnings Call

February 26, 2025

As a reminder, this call is being recorded on February 26, 2025, and will be available for playback on the Mannkind Corporation website. Shortly after the conclusion of this call and available for approximately 90 days.

This call will contain forward looking statements such forward looking statements are subject to risk and uncertainty, which can cause actual risks to differ materially from these stated expectations.

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

Speaker Change: Joining us today for mine kind, our Chief Executive Officer, Michael Gastonia N Chief Financial Officer, Chris Prentiss I'd now like to turn the conference over to Mr. Scott Diane. Please go ahead Sir.

Scott Diane: Thank you operator, and good afternoon, everyone.

Speaker Change: Joining our call today.

Scott Diane: It's never been a better time.

Scott Diane: To be on the journey with mankind.

Scott Diane: I look at our future we have five key pillars.

Scott Diane: We have two FDA approved products, our technosphere platform.

Scott Diane: Our strong balance sheet with double digit growth, enabling us to have flexibility in the future.

Scott Diane: And also the ability to fund our two novel pipeline opportunities with <unk> inhalation suspension.

Scott Diane: Expansion and the tenor of DPI as I'll talk about later on the call.

Scott Diane: Let me highlight Q4, and some of the year and highlights from 2024.

First our endocrine business unit had record revenues with Q4 revenue of $23 million and full year $82 million.

Part of this year by appointing Dominic <unk> President of our <unk>, which I'll talk about our growth strategy in a couple of slides.

Scott Diane: We also closed out quickly at the end of the year with an approval in India and what you expect to launch in the second half of this year.

Scott Diane: Additionally, we announced our interest our collaboration in December which enabled us to grow back see me through our U S sales force, allowing us to build up a pediatric footprint earlier than we would anticipate without this opportunity.

Scott Diane: We expect our pediatric indication to be filed here in the first half with an approval.

Scott Diane: In early 2026.

Scott Diane: <unk> ratio remains strong and we continue to be excited about the future of this important opportunity that will have on patients, especially those suffering from IPF Chris.

Scott Diane: Chris will walk through the financials in a few moments.

Scott Diane: Our core <unk> inhalation suspension programs progressing nicely with our phase III study now with 70% of sites activated enrollment is on track to hit our interim goal by the end of this year to hit 100 patients for enrollment, which will allow us to have an interim readout in 2026.

Scott Diane: On the tenant DPI.

Scott Diane: They are meeting at the end of the quarter now that we've completed.

Scott Diane: One we are looking to advance us to the next stage of development.

Scott Diane: Our financial results in Q4, we had $77 million of revenue and $286 million for the full year.

Scott Diane: Our year end cash position ended at $203 million, and we were able to reduce our debt principal by $236 million in 2024.

Scott Diane: Now, let me bridge over to our diabetes business.

Scott Diane: Our diabetes program progression is build on several pillars. The first was bringing and Dominic <unk>, who is not with US today, because you had our national sales meeting and will join us at our call in May.

Scott Diane: As we look at the four pillars to our fragrance growth it starts with our team and getting the right people on the bus and adding clinical medical liaisons.

Scott Diane: The second is the international opportunity with India, which will allow us to bring more efficiency to manufacturing and help more patients around the world.

Scott Diane: Also be looking for distributors in some international markets as we go forward.

Scott Diane: The next pillar here is pediatrics. This is something we've been waiting on and working on for seven years, and it's really important to us to transform the growth of our presence will talk about in a moment.

Scott Diane: We expect to be able to file this in the first half of 2025 with an approval in second quarter of 2026 to over 300000 kids in the U S suffering from type one diabetes.

Scott Diane: And I feel like my kids trying to give you can a vaccine or any type of injection is very difficult and we look forward to hopefully bring in an option to these patients in the future.

Scott Diane: And the fourth pillar, we're starting to explore as the gestation of all diabetes, we're able to get an investigator initiated trial also got hopefully in the first half through the JV center as our over 300000 women.

Scott Diane: Who have just national diabetes each year.

Scott Diane: As we look at the record revenue for Fred's and we had a 17% year over year increase we continue to grow afrezza, Despite GOP growth pump innovation.

Scott Diane: And as well as our focus on profitability.

Scott Diane: We are preparing to accelerate the growth of Afrezza over the next 24 months through the initiatives I just described.

Scott Diane: As we look out at the pediatric opportunity this would lead us to projected sales at a run rate of over $200 million a year, which is almost three times, where we are today.

Scott Diane: And I'll remind you every 10% market share in pediatrics is approximately $150 million in revenue. In addition to whatever adult spillover adult revenue we'd have ongoing.

Scott Diane: As you look at our market research. We just finished conducting in the second half of last year we.

Scott Diane: We saw that about 28% of patients because switch from MDI and 14% of patients because switch from AIG, which would include omnipod in tandem with.

Scott Diane: We generally with discount this type of projection by about 50%, but as I read the quotes here from the pediatric endocrinologists and type one caregivers there is a big opportunity here and kids to really help a lot of patients and whether that's reducing the complexities of counting carbs and insulin sensitivity ratios or just making it easier for parents to administer.

Scott Diane: Something for their children. So we're very very excited about pediatrics youll continue to see us prepare and scale up our investments around this so don't expect much change in the first half is we're really preparing for the second half once we know that this file will be on track with the FDA.

Scott Diane: Now I'm going to bridge to our pipeline.

Scott Diane: As we look at <unk>. So first CPI related revenues were $200 million in 2024, and this made the first $1 billion product for United Therapeutics, which we're very proud to be their partner, we're super excited to see our Technosphere platform has achieved $1 billion status.

Scott Diane: We're actually very excited about the opportunity. This provides us to fund our pipeline with non dilutive financing.

Scott Diane: As we look out we know there is a major milestone in front of US here with Teton two in the second half and if that reads out we would expect that to be reflective of a positive opportunity here for Teresa GPI potentially go into IPF in the future.

Chris Prentiss: Chris will talk about the revenues of <unk> shortly.

Speaker Change: Last year at this time, we had two other competitors ahead of us moving forward in MTM and unfortunate for patients they didn't make it to the end of 2024, we now see a clear opportunity to be the next leader in MTM.

Speaker Change: This product that we're working on has had nearly a decade of development opportunity to put into it as of today.

And we think about the MTM therapies have severe limitations, whether its efficacy safety or tolerability, we fundamentally believe activity at the site of the lung will be critical to transforming these patients' lives.

Speaker Change: We believe the good adoption rate will happen with <unk>. When we think about the guidelines support in the experienced patients and doctors have a qualified women around the world.

Speaker Change: However, making this more convenient better lung delivery and that supported the guidelines, we believe will create a great opportunity for patients and mankind in the future.

Speaker Change: One of the key questions, we get is around dosing and proof of concept of how we know.

Speaker Change: How do we know that <unk> actually works.

Speaker Change: So on to bring back some data that we used to use given the renewed focus from investors and our current stage of development.

Speaker Change: The preclinical data around Clofazimine demonstrated superiority over Oracle <unk>. This was in our preclinical data when we purchased the product that we saw significant reductions versus control and versus Oracle <unk>, we're seeing 99% reductions in.

Speaker Change: Colony, forming forming units. We think this efficacy is that reflective of what we think is encouraging for <unk> patients.

Speaker Change: And the next thing followed by dosing. So we looked at the dose and we have several choices to make as copper has been a long half life and we're worried about drug accumulation.

Speaker Change: And so the way we thought about the drug was between the payer system in the U S and duration of effect and the burdensome that could come with a nebulizer, we looked at really making this 28 days on and 56 days off and this was supported by the PK analysis. We did originally in animals, followed by our phase one study extrapolating these curves out.

Speaker Change: So our analysis insights and recommendations have now been reviewed and approved by Japan, FDA as well as several other countries.

Speaker Change: This is important and it's going to be critical to our to our current development program and opportunity to launch successfully in this market.

Speaker Change: This all led to the design of our pivotal trial icon, one which is our global phase III trial.

Speaker Change: We're on track and expect to meet our interim enrollment target of 100 patients by the end of this year.

Speaker Change: Let me translate that once we get the 100 patients that will take another six to eight months in order to get the interim analysis, which will then determine do we have this trial sized appropriately or do we have to go up in size, we do not expect to cut off enrollment while we wait for this result, and this insight so that if we are at a 100 patients and we're seeing let's just call. It 20 patients a month enroll.

Speaker Change: It was it takes six months this would give us 220 to 240 patients.

Speaker Change: So that insight will give us the opportunity that the trial does need to be scaled up we'll hopefully have already met that opportunity by not closing down enrollment as of today, we're projecting 25% to 30% of our required patients for this interim analysis to be enrolled by the end of Q1.

Speaker Change: Now I want to talk about Ips.

Speaker Change: IPF is a progressive and fatal disease that has significant unmet need for patients.

Speaker Change: Only one in five patients are currently on an FDA approved drug despite being diagnosed and despite known they are options. The current drugs have high discontinuation rates and they're very very difficult to take.

Speaker Change: Despite these drawbacks the two products on the market today over $4 billion in combined sales.

Speaker Change: As we look at the Ted Nib.

Speaker Change: Relative to <unk>, we believe we can provide comparable pulmonary exposure and efficacy and we also believe as we think about the other products come in and development.

Speaker Change: <unk> will be used as part of the backbone of treatment. So whether it is oral <unk> or inhaled. The testing that we do not see this foundation being replaced we see most of the new competition being added on to treatment as opposed to replacing one for one.

Speaker Change: We successfully completed a phase one study here in 2024 and this was the foundation of our FDA briefing book here that we're meeting with FDA in early Q2.

Speaker Change: If all goes well we continue to progress this in a second half two hopefully a phase II trial.

Speaker Change: We're super excited by what this can mean for patients, but we're still early on our discussions and look forward to bringing you more updates as the year progresses.

Chris Prentiss: Now I'd like to turn it over to Chris. Thank you.

Chris Prentiss: Thanks, Mike and good afternoon, everyone.

Speaker Change: I will now discuss our fourth quarter and full year 2020 for financial results.

Speaker Change: For a summary of our financials. Please refer to our press release issued before this call and our Form 10-K on file with the SEC.

Speaker Change: Fourth quarter revenues were $77 million or 31% increase over last year's fourth quarter.

Speaker Change: For the full year 2024, we recorded revenues of 286, million% to 43% increase over the prior year.

Speaker Change: <unk> DPI royalties contributed $27 million in the fourth quarter.

Speaker Change: Was an increase of 28% over the same quarter last year.

Speaker Change: Royalties for the year were $102 million or 42% increase due to <unk> increase in net revenue from sales of Thai base, though DPI.

Speaker Change: Collaboration and services revenue consists primarily of manufacturing revenue based on production volumes sold through to Ut and the recognition of deferred revenue.

Speaker Change: We recorded revenue of 27, Million% to 55% increase from the prior year quarter and $101 million for the full year of 2024, and 90% increase compared to the prior year.

Speaker Change: Afrezza net revenue for the fourth quarter was $18 million, an 18% increase due to higher demand and improved gross to net adjustments.

Speaker Change: For the full year 2020 for Afrezza revenue was $64 million, a 17% increase over 2023.

Speaker Change: This increase was due to higher demand pricing and improved gross to net adjustments.

Speaker Change: <unk> net revenue was approximately $5 million for the fourth quarter, an increase of 1% over the same quarter in the prior year.

Speaker Change: And the full year 2024 revenues were $18 million, a decrease of 4% over the prior year.

Speaker Change: This is due to lower product demand, partially offset by improved gross to net adjustments and increased price.

Speaker Change: As a reminder, as of the fourth quarter of 2020 for the sales force is no longer actively promoting vigo.

Speaker Change: While we continue to make the product available to patients. We believe Vigo has reached its peak annual sales given the lack of promotion behind it.

Speaker Change: As we previously mentioned on this call our business demonstrated robust double digit revenue growth compared to last year led by revenues related to <unk>, DPI, which exceeded $200 million for the year.

Speaker Change: Our annual revenue trends from 2020 through 2024 also show a consistent increase with double digit revenue growth year over year.

Speaker Change: We had a strong finish to the year delivering significant growth across the three revenue streams, resulting in an annualized run rate of $300 million.

Speaker Change: Our 2024 revenues grew by 43% driven by <unk> DPI related revenues, which provides non dilutive funding for our pipeline.

Speaker Change: For 2024, we reported net income of $28 million or <unk> <unk> per share compared to a net loss of 12 million or <unk> <unk> per share for 2023.

Speaker Change: On a non-GAAP basis, we reported $68 million of net income or <unk> 25 in earnings per share for 2024 compared to $6 million of non-GAAP net income or <unk> <unk> per share for the prior year.

Speaker Change: In 2024, we transformed our balance sheet paying down debt of 236 million across three instruments, resulting in a remaining debt balance of just $36 million related to our senior convertible notes.

Speaker Change: We used a combination of cash and stock to avoid potential dilution of 12 million shares of common stock, while also saving $9 million in interest expense through maturity.

Speaker Change: With this minimal debt balance and a robust cash position of $203 million, we have a strong balance sheet to execute on our objectives, including driving commercial growth and funding our pipeline.

Mike: With that I will now turn the call back over to Mike.

Mike: Thank you Chris and thank you for all the Great work you did in 2020 for looking forward to 2025.

Mike: As we look at our anticipated catalysts across our pillars here first is with Afrezza will prepare to launch the product in the second half of 'twenty five.

Mike: Inhaled, one our pediatric opportunity I talked about really sets us up for 2026 opportunity assuming we can file this in the first half of 'twenty five.

Mike: In <unk> III, we've had submitted a label change and we await the feedback from FDA on this opportunity to update our label in the second half of this year.

Mike: As you look to 101, we expect to have 90% of our sites activated by the first half and meet our ongoing study enrollment goals by the end of this year.

Mike: 201, we Havent meeting already set up on the books with the FDA and that will set up the stage for the next phase of development of this asset as I talked about <unk> as a huge opportunity to help those patients suffered from IPF with the Readouts of Teton, One next year and Teton two this year.

Mike: As we look at our travel schedule, it's quite robust over the coming months will be at Leerink and Barclays. There in March 11th and 12, then handing over to ATT in Amsterdam, where we have a great opportunity of five presentations in several meetings with kols as we start to get ready to scale up our diabetes business.

Mike: In addition to these conferences, we look forward to engaging with you over the next few months either through our non deal Roadshows conferences are one on one opportunities. There's a lot of interest in our turnaround story.

Mike: And our stakeholders, we've talked with are excited by the next pillars of growth that we've laid out for our future.

Mike: Forward to talking to all of you and hopefully having a great 2025.

Mike: Thank you for your time.

Mike: We will now be ready for questions operator.

Speaker Change: Thank you so much and as a reminder to our teller audience to ask a question simply press star one on your telephone and wait for your name to be announced to withdraw yourself from the queue Press Star One again, one moment for our first question.

Speaker Change: And he is from the line of Olivia Brayer with Cantor Fitzgerald. Please proceed.

Olivia Brayer: Hi, Good afternoon, guys. Thank you for the question and congrats on all the progress I appreciate the updates on all of the pipeline programs there Chris.

Speaker Change: Chris can you talk a little bit about how we should be thinking about margins over the next few quarters, but also just the coming years just given some of the investments you all plan to make in the Afrezza business later this year.

Speaker Change: And then have a couple of follow ups on <unk>.

Speaker Change: Yes, as I think about margin I am thinking about really the revenue less the cost of goods and so really the.

Speaker Change: Utilization of our manufacturing plant with the buildup of <unk> DPI. In addition to Afrezza has allowed our margins to improve those are probably getting to a fairly steady state that you can think about for going forward.

Speaker Change: Okay got it and then on DPI can you guys give any more granularity or put some numbers around the gross to net discounting and rebates that happened this quarter and whether that's the new norm going forward.

Speaker Change: And then also we are getting closer to those.

Speaker Change: Teton Readouts in IPF. So what's your base case right now in terms of when a DTI bridging study could actually happen and just what the next steps and timelines might be for DPI in IPF.

Speaker Change: Sure. It's Mike here, Thank you for the questions.

Speaker Change: I think you.

Speaker Change: Probably may have heard this morning on United call. They believe the new norm is roughly what we saw here in Q4 and it should be consistent through the year.

Speaker Change: That's our operating assumptions here on this side so.

Speaker Change: We kind of <unk>.

Speaker Change: This was increasing as we came into the end of.

Speaker Change: The new year. So I think it's nice to see that now built in to their Q4 going forward.

Speaker Change: On the bridging study I believe <unk> said publicly they are looking to do the bridging study we have a meeting coming up here in Q2 that I expect us to discuss what that could look like and how that will shape up.

Speaker Change: And that.

To me will be the next steps here, so remember they need.

Speaker Change: Teton too. It's early it's early study we'll have this year, but <unk> will be necessary I believe for the U S filing.

Speaker Change: If we get decent results here in Q3 from United. It then I think that gives you enough time to align with the FDA and the bridging study and hopefully get that done as soon as possible close to <unk> readouts to come out sometime next year.

Speaker Change: So or collaborate with them, but I think we're getting close enough that those discussions will accelerate pretty quickly going forward.

Speaker Change: Okay, great. Thank you.

Speaker Change: Thank you. Thank you one moment for our next question.

Speaker Change: And he is from the line of <unk>.

Speaker Change: <unk> with Leerink partners. Please proceed.

Speaker Change: Hey, guys. Thanks for taking the question just wanted to ask.

Speaker Change: How are you thinking about sort of like the balance of like defending operational profitability versus investment in the potential like pediatric launch for Afrezza.

Speaker Change: Yeah, I mean I think.

Speaker Change: The good news is we have to deploy capital we have capital to deploy off site.

Speaker Change: And I think we've got our best deploy that capital that drives the best return for shareholders and so we believe.

Speaker Change: We've taken out the number one that was our focus here. So I think the next big focus for us is launching pediatrics appropriately.

Speaker Change: Thank you will see an incredibly crazy spend against it but I do believe that the next best source of capital on top of the Clofazimine trial and then the tentative trial. So I think that's what you should be.

Speaker Change: Thinking about is how we best deploying the profitability that we do have and.

Speaker Change: I think investors want growth on the top line and milestones and opportunities for Readouts of clinical datasets over the next two three years. So that's really what we're aiming for.

Speaker Change: I think you've kind of fall.

Speaker Change: If we really do believe if we can get to the 200 million plus that's probably the biggest revenue.

Speaker Change: Revenue upside as we look at the next 18 to 24 months, we really want to make sure we set that up for success.

Speaker Change: Got it Okay and then how are you thinking about a potential pipeline expansion opportunities is that a priority and where does that sit kind of relative to these other goals and also kind of like again by casual stability.

Speaker Change: So we have several additional.

Speaker Change: Product opportunities I'll say that arent public yet that we are working on.

Speaker Change: And so I do believe maybe towards the end of the year Youll hear a little bit more maybe early next year, but we are working on.

Different ideas in addition to lifecycle management of Afrezza.

Speaker Change: As well as <unk>. So those are the other things that you don't see that are coming.

Speaker Change: That will give updates on as the year progresses. So just how do we get a lower dose or higher dose cartridges afrezza plasmid powder.

Speaker Change: So those are additional work capacity things that the team is working on.

Speaker Change: On top of the scale up of the facility. So I would just say there is a larger group of people working pretty hard on clinical supply manufacturing scale up manufacturing <unk> expansion.

Speaker Change: In a phrase lifecycle management. So there's just a lot going on in addition to that we got additional molecules were looking to formulate and develop and bring to patients over the coming years.

So youll continue to hear that we're not done I mean, I guess, if that's your fundamental questions.

Speaker Change: Yep sounds good all right cool thanks, taking the questions.

Speaker Change: Okay.

Speaker Change: Thank you.

Speaker Change: Our next question is from Gregory <unk> with RBC capital markets. Please proceed.

Speaker Change: Hi, guys. Its an issue on for Greg Congrats on the progress this quarter and through 'twenty four and thanks for taking our questions just a couple from us on Afrezza.

Speaker Change: First as you think about a potential launch in peds, how are you thinking about the planting of the launch trajectory and uptake what hurdles do you anticipate along the way and second maybe just on the agreement with Cipla in India, how should we be thinking about the relative contribution to our present top line over the next couple of years. Thanks, So much.

Speaker Change: I think on the piece that's the word.

Speaker Change: We are doing here as we get ready to queue for Q2 to give you guys an update hopefully on the next earnings call here, but I think if I had to say there are probably three critical success factors as we think about our president kids number one is.

Ensuring the reimbursement hub is best in class so that that process is smooth as possible for customers to access the products or get the product.

Speaker Change: We're making changes right now here in Q1 that will be ready in Q2, so that we can launch those in the commercial aspects today, but that's really important for the pediatric market and make that simple.

Speaker Change: I think the second one is historically, we've been stronger in private practice offices, which has been great to have a small sales force footprint, but as you think about where we're going we need great access and ability to sell into institutions and thats a different skill set than what our sales force has today. So we're looking to see how we can bolster that up with key account manager.

Speaker Change: <unk>, there's about 40 key academic centers they were all in our clinical trials.

Speaker Change: And so I would say institutional selling ability and capabilities will be the next.

Speaker Change: Big pillar here.

Speaker Change: And then the third one is education and awareness and I think that goes into consumer social media stuff Conference planning.

Speaker Change: Whether that's consumer conferences are physician conferences, and then just pure medical education. So the products beyond the market 10 years, there's obviously a <unk>.

Speaker Change: Always a safety overhang around the lungs, and I think as people look at the pediatric data you can see the long safety data looks really clean and therefore, we got to really manage that message that properly and clearly around the balance of.

Speaker Change: The safety profile that people may have questions around so I think it'd be nailed those three things, we will see a nice fast uptake.

Speaker Change: If were missing any one of those pillars I think that will hurt the uptake and that's why we're making some of the investments go into the second half.

Speaker Change: Get us ready for that.

Speaker Change: So hopefully that answers the three afrezza hurdles IC for peds on.

Speaker Change: On the surplus side I would say, we expect the important manufacturing approval here into Q3 timeframe.

Speaker Change: And then just depending on the packaging and the shipping and some of that aspects. We would we would expect to be able to ship. Our first order by the end of the year that that could slip in the event. There is a delay in India or the shift in packaging are printing our lead times on something critical but at this point, we are aiming to be ready by the end of the year.

Speaker Change: It's hopefully get our first shipment output, but I wouldn't.

Speaker Change: I wouldn't.

Speaker Change: Try to put a lot in there for the future years, just know that it could have.

Speaker Change: Decent volume implications, which will ultimately make the factory more efficient.

Speaker Change: Improve the overall efficiency of our of our Cogs for the company.

Speaker Change: And so that's I think as we get clearer long term supply arrangements with Cipla will be able to give you a little bit more guidance on the longer range forecast, but I think when you look out whether it's a <unk> and 'twenty six or India in 'twenty, six or maybe going back to some distributors in 2006.

Speaker Change: We should start to see an inflection in afrezza sales starting in 2006.

Speaker Change: Great. Thanks, so much.

Speaker Change: Thank you.

Speaker Change: Our next question comes from the line of Andrew <unk> with Oppenheimer. Please proceed.

Andrew: Good afternoon.

Speaker Change: Thanks for taking our questions.

Speaker Change: Providing what we got foods Congrats also on a solid year.

Speaker Change: Just wanted to follow up on a question that was asked earlier, if you could just elaborate a little bit more on the contracting dynamics.

Speaker Change: Whether it was coming off of a one time.

Speaker Change: Changed during the quarter and their potential for catch up in Q1, and then quickly thinking about updates that we're going to get on 201.

Speaker Change: This year you plan to meet with the FDA.

Speaker Change: First half what are some of the safety efficacy endpoints and you guys are considering.

Speaker Change: What kind of phase one.

Speaker Change: Sorry.

Speaker Change: A trial look like.

Speaker Change: Also after phase one.

Speaker Change: Yes.

Speaker Change: On the contracting dynamics I don't think I have much more to add other than what <unk> and United Therapeutics described today.

Speaker Change: It looks like it's starting to build up in Q3, I think Q4, they got to the even.

Speaker Change: Percentage you can see that had some I think volume and what I hear from them is volume referrals and contracts are.

Speaker Change: We're looking strong patient should have decent access to <unk> ACO DPI throughout the year.

Speaker Change: When I think that that's great I think thats, what we want and I wouldn't expect.

Speaker Change: Their comments at least publicly I wouldn't expect any additional shifts and major way in terms of gross margins or net revenue given the trends and the discounts that are built into the current dynamics, so long way of saying I expect steady state.

Speaker Change: We're budgeting in building in the rest of the year.

Speaker Change: I think someone asked earlier about the Ips and the bridging study we're not we're not building in there.

Speaker Change: That upside revenue scenario to fund our growth, we want to be able to self fund our growth our current trends and we feel very good about those plans and abilities to continue to do that so that's all upside in terms of capital allocation.

Speaker Change: Allocation of IPF hits later this year.

Speaker Change: On the 201, we meet with the FDA I.

Speaker Change: Believe in the early part of April.

Speaker Change: Albeit that meeting we have two minutes with the FDA. The same week, so it'll be a busy week between Afrezza in 201, and I think both of those meetings will lay out really what is a solid foundation of milestones over the next 12 to 18 months and whether that's the peds filing timeline to 201 progressing to phase III.

Speaker Change: With hopefully we kicked that off that could set us up for that.

Speaker Change: Midterm 26 readout on <unk>, followed by hopefully within.

Speaker Change: The short amount of time and update on the phase II 201. So all goes well I think you will see some nice clinical update though decrease the relative risk of these assets in 26 27, So thats our goal we've designed a phase III trial.

Speaker Change: Four arms, we're proposing to the FDA a control arm on.

Speaker Change: On the <unk> or <unk> patients or three different doses or dose regimens.

Speaker Change: We can really show different types of combinations and what they will look like in terms of frequency as well as dose target.

Speaker Change: In that study, we designed to be about 30 weeks.

Speaker Change: I can't remember the endpoint off the top my head, but again, that's all under discussion with the FDA. So.

Speaker Change: That's kind of how we think about the phase II is a roughly 26% to 30 weeks study.

Speaker Change: Four arms looking at different doses compared to the control arm and our goal is to get comparability.

Speaker Change: That's great.

Speaker Change: Slightly more tolerable, let's say better.

Speaker Change: But those will be the kiosk actually we started looking for it.

Speaker Change: Okay fantastic thanks for the up doing it before its all the progress and remainder of the year I appreciate it.

Speaker Change: Thank you.

Speaker Change: Next question comes from the line of Brandon Folkes with Rodman and Renshaw. Please proceed.

Brandon Folkes: Alright, Thanks for taking my questions and congratulations on the progress.

Speaker Change: Maybe just first up for me.

Brandon Folkes: Yes.

Brandon Folkes: One is successful how should we think about the potential for a manufacturing element for mannkind as well.

Brandon Folkes: What are you willing to kind of say at this stage is it on the table should we model just the royalty.

Brandon Folkes: How should we think about it in our models if we do see success with <unk> data over the next few.

Brandon Folkes: 18 arguments.

Speaker Change: Brendan came online so I'm going to repeat your question to make sure. We heard it I think your question was how do we expect things to shift with the successful Teton readout in terms of manufacturing revenue is that did I get that right.

Brandon Folkes: That is correct yes.

Brandon Folkes: Okay. So we are working pretty hard in fact, we just got some good news from the FDA on the <unk>.

Brandon Folkes: Spansion facility, so I think from a pure capacity and manufacturing ability, we will be well well ready to launch any types of supply at that come in from orders from United Therapeutics with an upside scenario in IPF. So we feel very good about our ability to handle that and deliver that really as we get into the second half when theyre going to get the data readout. So.

Brandon Folkes: Now that would as the volumes increase dramatically then that would also change our expectations on collaboration services revenue as well. So I think we will be ready and we will have the capacity available in the event that all comes through.

Speaker Change: Great. Thanks, very much and then maybe just a follow up from me on the 200 million plus on a phrase.

Speaker Change: Can you just talk about the timeline. There is this just sort of should we just think about that being in line with the label updates that should come online posted healthy and have one thank you.

Speaker Change: Yes, I think we will be looking to benchmark our launch uptake curves.

Speaker Change: Impedes to kind of.

Speaker Change: Maybe look at some of the recent launches in diabetes or diabetes devices in particular and seeing if we do the proper awareness in the proper successful execution upfront and that should have hopefully a faster uptake than we've seen in our growth historically and I'll. Just remind you we have not ever had the luxury of having excess capital to deploy.

Speaker Change: Our ability to recruit the best people or work with thought leaders in a meaningful way and I think that's why you've seen us try to do.

Speaker Change: Really good with the President we are really trying to get in with these offices and the thought leaders as we speak.

Speaker Change: So it will be important in terms of the uptake I think you saw a line in there.

Speaker Change: The deck Thats every 10% share is roughly $150 million. So I think it's a reasonable when you look at the.

Speaker Change: Expectations from the physicians, even if you discount that data 50%.

Speaker Change: Our goals really to hit that that 10% range as quickly as possible is that 12 months 18 months 24 months I think we'll get.

Speaker Change: As we get closer and as we continue to fine tune our strategy and research I think that will be.

Speaker Change: To be clear, but I think if you look at that 10% threshold plus the adult sales plus spillover from kids to adults you can really start to see how afrezza compounds over the next three years.

Speaker Change: From a.

Speaker Change: Marginally good good growth to a major transition.

Speaker Change: That's what we're aiming for and that's why we're gearing up for all that right now.

Speaker Change: Great. Thank you very much.

Speaker Change: Thank you one moment for our next question.

Speaker Change: Let me is from the line of Yun Zhong with Wedbush Securities. Please proceed.

Yun Zhong: Hi, good afternoon. Thank you very much for your questions and congratulations on the Congress.

Speaker Change: First question of personnel.

Speaker Change: Sure anecdotal feedback on RP that we use and I was curious have you heard anything.

Speaker Change: From a film lineup.

Speaker Change: All lines have held three data and the second question on 101 interim analysis.

Speaker Change: I assume will be appointed to the company is that interim analysis is going to look at both co primary endpoints and in case, you would have to increase the size.

Speaker Change: Do you have any idea about how many patients you're going to increase thank you very much.

Speaker Change: The second question, you and just clarifying is that in relation to 101 or which product are you referring to.

Speaker Change: Interim analysis 101, yes, okay. Thank you sorry, if I make sure I got it right.

Speaker Change: First of all thank you for your support and your initiation of mankind. We appreciate that.

Speaker Change: In terms of.

Speaker Change: In health three.

Speaker Change: Youre asking additional analysis, we plan to present.

Speaker Change: Yeah.

Speaker Change: So the patient and physician feedback. Thank you so I think the.

Speaker Change: And in the patient side of this about 50% of the patients in inhaled <unk> indicated they wanted to stay on our friends at the end of the study.

Speaker Change: So I think thats it.

Speaker Change: Honestly, if we switched 100 people and got 50 to state I think that's a really good.

Speaker Change: Opportunity to extend pretty quickly. So I think that just shows you the level of satisfaction, whether they were coming off an AI system or multiple daily injections.

Speaker Change: I'd be really happy if we could help that many patients of the millions of people on insulin. So I think that's kind of where the patient satisfaction was on the physician side.

Speaker Change: I will say I've talked to several of the investigators and a lot of them. This is the first time they've ever prescribed afrezza in terms of just running the trial. It's the first time they've ever seen that first dose data in the office of mealtime.

Speaker Change: <unk> tests, we were doing.

Speaker Change: And you can really see as you look at the sub results those doctors, who really understood the dosing and basal titration had really good results and they were very happy and excited and look forward to adopting it I also say as you can see some of those people got worse, there's a handful of offices, who didn't those properly who didn't titrate up we didn't follow our instructions and those patients.

Speaker Change: A little worse and Thats, probably why you see 50% want to stay on a 50% went back.

Speaker Change: Because I think a lot of that was Dr dependent and that's one of the things we're trying to correct. As we go out there is how do we make it more consistent for prescribers, whether it's the reimbursement support the dosing and titration and the follow up around the basal because thats, what we see in the trial results, whether that's in <unk> and health rate.

Speaker Change: And so that's a lot of the work that I'll say.

Speaker Change: We'll be doing as a result of these trials.

Speaker Change: And it's a lot of excitement I think I just saw omnipod launch to decision support around Omnipod and I think thats, what youre seeing at these offices need help and we can clearly see they need reminders.

Speaker Change: What were some of the work with trying to get ready for kids.

Speaker Change: On 101.

Speaker Change: There is an interim analysis after a 100 patients are reaching six month endpoint.

Speaker Change: Don't have 100, evaluable patients and so.

Speaker Change: Hopefully by that time, we'll have 100 sites up and running and if.

Speaker Change: If we had 20% of the sites, referring a patient a month that will give you roughly.

Speaker Change: 15 to 20 people enrolling so you can see while we're waiting for those interim results, we can deliver to enroll another 9100 patients and so we think that will satisfy potentially.

Speaker Change: Potentially any type of study size adjustment it could go.

$2 30 to 300 patients.

Speaker Change: Those adjustments.

Speaker Change: And I think our goal is to make sure a statistically valid results.

Speaker Change: Between the placebo and the active arm.

Speaker Change: So.

Speaker Change: Let's kind of wait and see but I think we have anticipated that it could be go from 180 to 300 and Thats why we will keep enrollment going so that we're not waiting by the time, we get that interim analysis to continue enroll and is also an FDA guidance here that we want to hit which is around the 300 patients.

Speaker Change: Safety database and so one of the other aspects. We're looking at the FDA actually just gave us the green light to consider is launching an expanded access program for <unk>. So that to me would be another opportunity to hit some in term enrollment targets to.

Speaker Change: To keep us on track. So we're evaluating all of these options as we speak but I think youll see <unk> got a lot of great options ahead to hit the marks that we have to hit to ensure we can file as quickly as possible for patients.

Speaker Change: Great. Thank you.

Thank you.

Speaker Change: Thank you and this concludes our Q&A session for today I will turn it back to Mr. Castagna for final remarks.

Speaker Change: Thank you everyone for dialing in today listening to our call I think as you can see we had a record year for 2024.

Speaker Change: We're really turning over every stone to look at how we can grow faster hire the best talent and continue to Mark just company forward the greatness and I just want to say thank you for your continued support and looking forward to a year of much progress whether it's the clinical side the commercial side of our partnership with United Therapeutics Mannkind is firing on all cylinders and it's a great time to be part of the Mannkind family. So thank you for.

Speaker Change: All your support have a great day.

Speaker Change: And with that we thank you all for participating and you may now disconnect.

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Speaker Change: Good afternoon, and welcome to the Mannkind Corporation fourth quarter and year end 2024 financial results earnings call.

Speaker Change: As a reminder, this call is being recorded on February 26, 2025, and will be available for playback on the Mannkind Corporation website. Shortly after the conclusion of this call and available for approximately 90 days.

Speaker Change: This call will contain forward looking statements such forward looking statements are subject to risk and uncertainty, which can cause actual risks to differ materially from decent stated expectations.

Speaker Change: For further information on the company's risk factors. Please see the 10-K report filed with the Securities and Exchange Commission. This afternoon, the earnings release and the slides prepared for this presentation.

Speaker Change: Joining us today for mine kind, our Chief Executive Officer, Michael Gough, Danya, and Chief Financial Officer, Chris Prentiss I'd now like to turn the conference over to Mr. Scott Diane. Please go ahead Sir.

Scott Diane: Thank you operator, and good afternoon, everyone. Thank.

Thank you for joining our call today, it's never been a better time to be on the journey with mankind.

Scott Diane: As I look at our future we have five key pillars.

Scott Diane: We have two FDA approved products on our Technosphere platform, a strong balance sheet with double digit growth, enabling us to have flexibility in the future.

Scott Diane: And also the ability to fund our two novel pipeline opportunities with <unk> inhalation suspension and the tenor of DPI as I'll talk about later on our call.

Scott Diane: Let me highlight Q4, and some of the year and highlights from 2024.

Scott Diane: First our endocrine business unit had record revenues with Q4 revenue of $23 million and full year $82 million.

Scott Diane: We started this year by appointing Dominic <unk> president of our <unk>, which I'll talk about our growth strategy in a couple of slides.

Scott Diane: We also closed out quickly at the end of the year with an approval in India and what you expect to launch in the second half of this year.

Scott Diane: Additionally, we announced our <unk> collaboration in December which enabled us for Brokeback see me through our U S sales force, allowing us to build up a pediatric footprint earlier than we would anticipate without this opportunity.

Scott Diane: We expect our pediatric indication to be filed here in the first half with an approval in Europe.

Scott Diane: Early 2026.

Scott Diane: <unk> ratio remains strong and we continue to be excited about the future of this important opportunity that will have on patients, especially those suffering from IPF.

Scott Diane: Chris will walk through the financials in a few moments.

Scott Diane: Our core <unk> and inhalation suspension programs progressing nicely with our phase III study now with 70% of sites activated enrollment is on track to hit our interim goal by the end of this year to hit 100 patients for enrollment, which will allow us to have an interim readout in 2026.

Scott Diane: On Nintendo DPI.

Scott Diane: They are meeting at the end of the quarter now that we've completed.

Scott Diane: One we are looking to advance us to the next stage of development.

Scott Diane: Our financial results in Q4, we had $77 million of revenue and $286 million for the full year our.

Scott Diane: Our yearend cash position ended at $203 million, and we were able to reduce our debt principal by $236 million in 2024.

Scott Diane: Now, let me bridge over to our diabetes business.

Scott Diane: Our diabetes program progression is built on several pillars.

Scott Diane: First was bringing and Dominic <unk>, who is not with US today, because you've got our national sales meeting and will join us at our call in May.

Scott Diane: As we look at the four pillars to our fragrance growth it starts with our team and getting the right people on the bus and adding clinical medical liaisons.

Second is the international opportunity with India, which will allow us to bring more efficiency to manufacturing and help more patients around the world and we'll also be looking for distributors in some international markets as we go forward.

Scott Diane: The next pillar here is pediatrics. This is something we've been waiting on and working on for seven years and it is really important to us to transform the growth of our presence will talk about in a moment, we expect to be able to file. This in the first half of 2025 with an approval and second quarter of 2026.

Scott Diane: With 300000 kids in the U S suffering from type one diabetes.

Scott Diane: I like my kids trying to give you kind of vaccine or any type of injection is very difficult and we look forward to hopefully bring in an option to these patients in the future.

Scott Diane: And the fourth pillar, we're starting to explore as the gestation of all diabetes, where we're able to get an investigator initiated trial also got hopefully in the first half through the JV center as our over 300000 women.

Scott Diane: Who have just national diabetes each year.

Scott Diane: As we look at the record revenue for <unk>, we had a 17% year over year increase we continue to grow afrezza, Despite GOP growth pump innovation.

Scott Diane: And as well as our focus on profitability.

Scott Diane: We are preparing to accelerate the growth of Afrezza over the next 24 months to the initiatives I just described.

Scott Diane: As we look out at the pediatric opportunity this would lead us to projected sales at a run rate of over $200 million a year, which is almost three times, where we are today.

Scott Diane: And I'll remind you every 10% market share in pediatrics is approximately $150 million in revenue. In addition to whatever adult spillover adult revenue, we would have ongoing.

Scott Diane: As you look at our market research. We just finished conducting in the second half of last year we.

Scott Diane: We saw that about 28% of patients could switch from MDI and 14% of patients could switch from AIG, which would include omnipod in tandem with.

Scott Diane: We generally with discount this type of projection by about 50%, but as I read the quotes here from the pediatric endocrinologists in the type one caregivers there is a big opportunity here and kids to really help a lot of patients and whether that's reducing the complexities of counting carbs and insulin sensitivity ratios or just making it easier for parents to administer.

Scott Diane: Now I'm going to bridge to our pipeline.

Scott Diane: As we look at <unk>. So first CPI related revenues were $200 million in 2024, and this made the first $1 billion product for United Therapeutics, which we're very proud to be their partner, we're super excited to see the Technosphere platform has achieved $1 billion status.

Scott Diane: We're actually very excited about the opportunity. This provides us to fund our pipeline with non dilutive financing.

Chris Prentiss: Chris will talk about the revenues of <unk> shortly.

Chris Prentiss: Last year at this time, we had two other competitors ahead of us moving forward in MTM and unfortunately for patients they didn't make it to the end of 2024, we now see a clear opportunity to be the next leader in MTM.

Chris Prentiss: This product that we're working on has had nearly a decade of development opportunity to put into it as of today.

Chris Prentiss: And we think about the MTM therapies have severe limitations, whether its efficacy safety or tolerability, we fundamentally believe activity at the site of the lung will be critical to transforming these patients' lives.

Chris Prentiss: We believe the good adoption rate will happen with <unk>. When we think about the guidelines support in the experienced patients and doctors have a qualified women around the world.

Chris Prentiss: However, making this more convenient better lung delivery and that supported the guidelines. We believe will create a great opportunity for patients and then kind of in the future.

One of the key questions, we get is around dosing and proof of concept of how we know.

Chris Prentiss: How do we know that Clofazimine actually works.

Chris Prentiss: So wanted to bring back some data that we used to use given the renewed focus from investors and our current stage of development.

Chris Prentiss: The preclinical data around the <unk> demonstrated superiority over Oracle <unk>. This was in our preclinical data when we purchased the product that we saw the significant reductions versus control and versus Oracle <unk>, we're seeing 99% reductions in.

Chris Prentiss: Colony, forming forming units. We think this efficacy is reflective of what we think is encouraging for <unk> patients.

Chris Prentiss: And the next thing followed by dosing. So we looked at dosing we have several choices to make as copper has been a long half life and we're worried about drug accumulation.

Chris Prentiss: And so the way we thought about the drug was between the payer system in the U S and duration of effect in the third and some that could come with a nebulizer, we looked at really making this 28 days on and 56 days off and this was supported by the PK analysis. We did originally in animals, followed by our phase one study of extrapolating these curves out.

Chris Prentiss: So our analysis insights and recommendations have now been reviewed and approved by Japan, FDA as well as several other countries.

Chris Prentiss: This is important and it's going to be critical to our to our current development program and opportunity to launch successfully in this market.

Chris Prentiss: This all led to the design of our pivotal trial icon, one which is our global phase III trial.

Chris Prentiss: We're on track and expect to meet our interim enrollment target of 100 patients by the end of this year, let me translate that once we get the 100 patients. It will take another six to eight months in order to get the interim analysis, which will then determine do we have this trial sized appropriately or do we have to go up in size, we do not expect to cutoff enrolment, while we wait for this.

Chris Prentiss: Result of this insight so that if we are at 100 patients and we're seeing let's just call. It 20 patients a month enroll it was it takes six months this would give US 220 to 240 patients.

Chris Prentiss: So that insight will give us the opportunity that the trial does need to be scaled up we will hopefully have already met that opportunity by not closing down enrollment as of today, we're projecting 25% to 30% of our required patients for this interim analysis to be enrolled by the end of Q1.

Chris Prentiss: Now I want to talk about Ips.

Chris Prentiss: IPF is a progressive and fatal disease that has significant unmet need for patients.

Chris Prentiss: Only one in five patients are currently on an FDA approved drug despite being diagnosed and despite known they have options.

Chris Prentiss: Current drugs have high discontinuation rates and they're very very difficult to take.

Chris Prentiss: Despite these drawbacks the two products on the market today over $4 billion in combined sales.

Chris Prentiss: As we look at the Ted Nib.

Chris Prentiss: Relative to <unk>, we believe we can provide comparable pulmonary exposure and efficacy.

Chris Prentiss: And we also believe as we think about the other products come in and development.

Chris Prentiss: And the <unk> will be used as part of the backbone of treatment. So whether it is oral <unk> or inhaled. The testing that we do not see this foundation being replaced we see most of the new competition being added on to treatment as opposed to replacing one for one.

We successfully completed a phase one study here in 2024.

Chris Prentiss: And this was the foundation of our FDA briefing book here that we're meeting with the FDA in early Q2.

Chris Prentiss: If all goes well we continue to progress this in a second half two hopefully a phase II trial.

Chris Prentiss: We're super excited by what this can mean for patients, but we are still early on our discussions and look forward to bringing you more updates as the year progresses.

Chris Prentiss: Now I'd like to turn it over to Chris. Thank you.

Chris Prentiss: Thanks, Mike and good afternoon, everyone.

Chris Prentiss: I will now discuss our fourth quarter and full year 2020 for financial results.

Chris Prentiss: For a summary of our financials. Please refer to our press release issued before this call and our Form 10-K on file with the SEC.

Chris Prentiss: Fourth quarter revenues were $77 million or 31% increase over last year's fourth quarter.

Chris Prentiss: For the full year 2024, we recorded revenues of $286 million, a 43% increase over the prior year.

Chris Prentiss: So DPI royalties contributed $27 million in the fourth quarter. This was an increase of 28% over the same quarter last year.

Chris Prentiss: Royalties for the year were $102 million or <unk>, 42% increase due to <unk> increase in net revenue from sales of <unk> based on DPI.

Chris Prentiss: Collaboration and services revenue consists primarily of manufacturing revenue based on production volumes sold through to Ut and the recognition of deferred revenue.

Chris Prentiss: We recorded revenue of 27, Million% to 55% increase from the prior year quarter and $101 million for the full year of 2020 for a 90% increase compared to the prior year.

Chris Prentiss: Afrezza net revenue for the fourth quarter was $18 million, an 18% increase due to higher demand and improved gross to net adjustments.

Chris Prentiss: For the full year 2020 for Afrezza revenue was $64 million, a 17% increase over 2023.

Chris Prentiss: This increase was due to higher demand pricing and improved gross to net adjustments.

Chris Prentiss: <unk> net revenue was approximately $5 million for the fourth quarter, an increase of 1% over the same quarter in the prior year.

Chris Prentiss: And the full year 2024 revenues were $18 million, a decrease of 4% over the prior year.

Chris Prentiss: This is due to lower product demand, partially offset by improved gross to net adjustments and increased price.

Chris Prentiss: As a reminder, as of the fourth quarter of 2020 for the sales force is no longer actively promoting vigo.

Chris Prentiss: While we continue to make the product available to patients. We believe Vigo has reached its peak annual sales given the lack of promotion behind it.

Chris Prentiss: As we previously mentioned on this call our business demonstrated robust double digit revenue growth compared to last year led by revenues related to <unk>, DPI, which exceeded $200 million for the year.

Chris Prentiss: Our annual revenue trends from 2020 through 2024 also show a consistent increase with double digit revenue growth year over year.

Chris Prentiss: We had a strong finish to the year delivering significant growth across the three revenue streams, resulting in an annualized run rate of $300 million.

Chris Prentiss: Our 2024 revenues grew by 43% driven by <unk> DPI related revenues, which provides non dilutive funding for our pipeline.

Chris Prentiss: For 2024, we reported net income of $28 million or <unk> 10 per share compared to a net loss of 12 million or <unk> <unk> per share for 2023.

Chris Prentiss: On a non-GAAP basis, we reported $68 million of net income or <unk> 25 in earnings per share for 2024 compared to $6 million of non-GAAP net income or <unk> <unk> per share for the prior year.

Chris Prentiss: In 2024, we transformed our balance sheet paying down debt of 236 million across three instruments, resulting in a remaining debt balance of just $36 million related to our senior convertible notes.

Chris Prentiss: We used a combination of cash and stock to avoid potential dilution of 12 million shares of common stock, while also saving $9 million in interest expense through maturity.

Chris Prentiss: With this minimal debt balance and a robust cash position of $203 million, we have a strong balance sheet to execute on our objectives, including driving commercial growth and funding our pipeline.

Mike: With that I will now turn the call back over to Mike.

Speaker Change: Thank you Chris and thank you for all the Great work you did in 2020 for looking forward to 2025.

Speaker Change: As we look at our anticipated catalysts across our pillars here first is with Afrezza will prepare to launch the product in the second half of 'twenty five.

Speaker Change: <unk>, one our pediatric opportunity I talked about really sets us up for 2026 opportunity assuming we can file this in the first half of 'twenty five.

Speaker Change: <unk> three <unk> has submitted a label change and we await the feedback from the FDA on this opportunity to update our label in the second half of this year.

Speaker Change: As you look to 101, we expect to have 90% of our sites activated by the first half and meet our ongoing study enrollment goals by the end of this year.

Speaker Change: 201, we haven't a meeting already set up on the books with the FDA and that will set up the stage for the next phase of development of this asset as I talked about <unk> as a huge opportunity to help those patients suffered from IPF, what's the readouts of Teton, one next year and Teton two this year.

As we look at our travel schedule, it's quite robust over the coming months will be at Leerink and Barclays. There in March 11th 12, then handing over to ATT in Amsterdam, where we have a great opportunity of five presentations in several meetings with kols as we start to get ready to scale up our diabetes business.

Speaker Change: In addition to these conferences, we look forward to engaging with you over the next few months either through a non deal Roadshows conferences are one on one opportunities. There's a lot of interest in our turnaround story.

Speaker Change: And our stakeholders, we've talked with are excited by the next pillars of growth that we've laid out for our future.

Speaker Change: I look forward to talking to all of you and hopefully having a great 2025.

Speaker Change: You for your time.

Speaker Change: That will be ready for questions operator.

Speaker Change: Thank you so much as a reminder to our teller audience to ask a question simply press star one on your telephone and wait for your name to be announced to withdraw yourself from the queue Press Star One again, one moment for our first question.

Speaker Change: And he is from the line of Olivia Brayer with Cantor Fitzgerald. Please proceed.

Olivia Brayer: Hi, Good afternoon, guys. Thank you for the question and congrats on all the progress I appreciate the updates on all the pipeline programs there.

Olivia Brayer: And then have a couple of follow ups on <unk>.

Olivia Brayer: Yes, as I as I think about margin I am thinking about really the revenue less the cost of goods and so really the.

Olivia Brayer: Utilization of our manufacturing plant with the buildup of <unk> DPI. In addition to Afrezza has allowed our margins to improve those are probably getting to a fairly.

Olivia Brayer: <unk> state that you can think about for going forward.

Olivia Brayer: And then also we are getting closer to those.

Olivia Brayer: Teton Readouts in IPF. So what's your base case right now in terms of when a DTI bridging study could actually happen and just what the next steps and timelines might be for DPI in IPF.

Olivia Brayer: Sure. It's Mike here, Thank you for the questions.

Olivia Brayer: I think you probably may have heard this morning on the United call. They believe the new norm is roughly what we saw here in Q4 and it should be consistent through the year. So that's our operating assumptions here on the site. So we kind of.

Olivia Brayer: New this was increasing as we came into the new year. So I think it's nice to see that now built in to their Q4 going forward.

Olivia Brayer: On the bridging study I believe <unk> said publicly they are looking to do the bridging study we have a meeting coming up here in Q2 that I expect us to discuss what that could look like and how that will shape up.

Olivia Brayer: And that to.

Olivia Brayer: It will be the next steps here, so remember they need.

Olivia Brayer: <unk> two is the early earliest study we'll have this year, but <unk> will be necessary I believe for the U S filing. So if we get decent results here in Q3 from United. It then I think that gives you enough time to align with the FDA and the bridging study and hopefully get that done as soon as possible close to <unk> readouts to come out sometime next year.

Olivia Brayer: So or collaborate with them, but I think we're getting close enough that those discussions will accelerate pretty quickly going forward.

Olivia Brayer: Okay, great. Thank you.

Olivia Brayer: Alright. Thank you. Thank you one moment for our next question.

Speaker Change: And he is from the line of <unk>.

Speaker Change: Of course, <unk> with Leerink partners. Please proceed.

Speaker Change: Hey, guys. Thanks for taking the question just wanted to ask.

Speaker Change: How are you thinking about sort of like the balance of like defending operational profitability versus investment in the potential like pediatric launch for Afrezza.

Speaker Change: Yes.

Speaker Change: The good news is we have to deploy capital we have capital to deploy off site.

Speaker Change: And I think we've got our best deploy that capital that drives the best return for shareholders and so we believe.

Speaker Change: We've taken out the number one that was our focus here. So I think the next big focus for us is launching pediatrics appropriately.

Speaker Change: Thinking about is how we best deploying the profitability that we do have and.

Speaker Change: I think investors want growth on the top line.

Speaker Change: And milestones and opportunities for Readouts of clinical datasets over the next two three years. So that's really what we're aiming for.

Speaker Change: I think you've kind of fall.

Speaker Change: We really do believe a phrase we can get to the 200 million plus that's probably the biggest.

Speaker Change: Revenue upside as we look at the next 18 to 24 months, we really want to make sure we set that up for success.

Speaker Change: So we have several additional.

Speaker Change: Product opportunities I'll say that arent public yet that we are working on.

Speaker Change: And so I do believe maybe towards the end of the year Youll hear a little bit more maybe early next year, but we are working on.

Speaker Change: Different ideas in addition to lifecycle management of Afrezza.

Speaker Change: As well as <unk>. So those are the other things that you don't see that are coming.

Speaker Change: That will give updates on as the year progresses. So just how do we get a lower dose or higher dose cartridges afrezza plasmid powder.

Speaker Change: So those are additional where capacity things that the team is working on.

Speaker Change: On top of the scale up of the facility. So I would just say there is.

Speaker Change: A larger group of people working pretty hard on clinical supply manufacturing scale up manufacturing <unk> expansion.

Speaker Change: Part of the lifecycle management. So there's just a lot going on in addition to that we got additional molecules, we're looking to formulate and develop and bring to patients over the coming years.

Speaker Change: So you'll see you'll continue to hear that we're not done I mean, I guess, if that's your fundamental questions.

Speaker Change: Yep sounds good all right cool thanks, taking the questions.

Speaker Change: Thank you.

Speaker Change: Our next question is from Gregory <unk> with RBC capital markets. Please proceed.

Speaker Change: Hi, guys its a niche on for Greg Congrats on the progress this quarter and through 'twenty four and thanks for taking our questions just a couple from us on Afrezza.

Speaker Change: First as you think about a potential launch in peds, how are you thinking about the planting of the launch trajectory and uptick what hurdles do you anticipate along the way and second maybe just on the agreement with Cipla in India, how should we be thinking about the relative contribution to our Fred's as top line over the next couple of years. Thanks, So much.

Speaker Change: I think on the peds.

Speaker Change: Work, we're doing here as we get ready to queue for Q2 to give you guys an update hopefully on the next earnings call here, but I think if I had to say there are probably three critical success factors as we think about our president kids number one is.

Speaker Change: Ensuring the reimbursement hub is best in class, so that processes smooth as possible for customers to access the products or get the product.

Speaker Change: I think the second one is historically, we've been stronger in private practice offices, which has been great to have a small sales force footprint, but as you think about where we're going we need great access and ability to sell into institutions and thats a different skill set than what our salesforce has today. So we're looking to see how we can bolster that up with key account manager.

Speaker Change: <unk>, there's about 40 key academic centers they were all in our clinical trials.

Speaker Change: And so I would say institutional selling ability and capabilities will be the next.

Speaker Change: Big pillar here.

Speaker Change: And then the third one is education and awareness and I think that goes into consumer social media stuff conference planning, whether that's consumer conferences are physician conferences, and then just pure medical education. So the product has been on the market 10 years, there's obviously a.

Speaker Change: Always a safety overhang around the lungs, and I think as people look at the pediatric data you can see that along safety data looks really clean and therefore, we've got to really manage that and message that properly and clearly around the balances.

The safety profile of people may have questions around so I think it would be those three things we will see a nice fast uptake for.

Speaker Change: If we're missing any one of those pillars I think that'll hurt the uptake and that's why we're making some of the investments go into the second half to get us ready for that.

Speaker Change: So hopefully that answers the three afrezza hurdle lessee.

Speaker Change: <unk>.

Speaker Change: On the surplus side I would say, we expect the important manufacturing approval here into Q3 timeframe and then just depending on the packaging and the shipping and some of that aspects. We would we would expect to be able to ship. Our first order by the end of the year that could slip in the event. There is a delay in India or the shift in packaging our printing <unk>.

Speaker Change: Times on something critical but at this point, we are aiming to be ready by the end of the year.

Speaker Change: It's hopefully get our first shipment output, but I wouldn't.

Speaker Change: I wouldn't.

Speaker Change: Try to put a lot in there for the future years, just know that it could have.

Speaker Change: Decent volume implications, which will ultimately make the factory more efficient and.

Speaker Change: Improve the overall efficiency of our of our Cogs for the company.

Speaker Change: And so that's I think as we get clear of long term supply arrangements with Cipla will be able to give you a little bit more guidance on the longer range forecast, but I think when you look out.

Speaker Change: It's a <unk> and 'twenty six or India in 2006, or maybe going back to some distributors in 'twenty six.

Speaker Change: Should start to see an inflection in afrezza sales starting in 'twenty six.

Speaker Change: Great. Thanks, so much.

Speaker Change: Thank you.

Speaker Change: Our next question comes from the line of Andrew is our <unk> with Oppenheimer. Please proceed.

Speaker Change: Good afternoon.

Speaker Change: Thanks for taking our questions.

Speaker Change: Providing what we got pits congrats also on a solid year.

Speaker Change: Just wanted to follow up on a question that was asked earlier, if you could just elaborate a little bit more on the contracting dynamics.

Speaker Change: Whether this was really kind of a one time.

Speaker Change: Changed during the quarter and their potential for catch up in Q1, and then quickly thinking about updates or we're going to go on 201.

Speaker Change: What are there this year, we plan to meet with the FDA and the first half.

Speaker Change: What are some of the safety efficacy endpoints and you guys are considering what kind of what kind of phase one.

Speaker Change: Sorry.

Speaker Change: The trial look like.

Speaker Change: Also after phase one.

Speaker Change: Yes.

Speaker Change: On the contracting dynamics I don't think I have much more to add other than what <unk> and United Therapeutics as described today.

Speaker Change: It looks like it's starting to build up in Q3, I think Q4, they got to the Eden <unk>.

Speaker Change: Percentage you can see that had some I think volume and what I hear from them is volume referrals and contracts.

Speaker Change: Are looking strong patient should have decent access to <unk> ACO DPI throughout the year.

Speaker Change: And I think Thats, great I think that's what we want and I wouldn't expect.

Speaker Change: From their comments at least publicly I wouldn't expect any additional shifts in a major way in terms of gross margins or net revenue given the trends and the discounts that are built into the current dynamics, so long way of saying I expect steady state.

Speaker Change: We're budgeting in building in the rest of the year.

Speaker Change: I think someone asked earlier about the Ips and the bridging study we're not building in that upside revenue scenario to fund our growth we want to be able to self fund our growth our current trends and we feel very good about those plans and abilities to continue to do that so that's all upside in terms of capital allocation.

Speaker Change: Allocation of IPF hits later this year.

Speaker Change: On the 201, we meet with FDA I believe in the early part of April.

Speaker Change: Albeit that meeting we have two meetings with FDA to same week, so it'll be a busy week between afrezza in 201, and I think both of those meetings will lay out really what is a solid foundation of milestones over the next 12 to 18 months, whether that's the peds filing timeline at 201 progressing to phase III.

Speaker Change: Well, hopefully we kicked that off that could set us up for.

Speaker Change: Midterm 26 readout on <unk>, followed by hopefully within a short amount of time and update on the phase two 201, so all goes well.

Speaker Change: I think youll see some nice clinical update so decrease the relative risk of these assets fall in 'twenty six 'twenty seven.

Speaker Change: That's our goal we've designed a phase III trial, that's four arms.

Speaker Change: Goes into the FDA a control arm.

Speaker Change: On the <unk> or naive patients or three different doses or dose regimens.

We can really show different types of combinations and what that will look like in terms of frequency as well as dose target.

Speaker Change: In that study, we designed to be about 30 weeks.

Speaker Change: I can't remember the endpoint off the top my head, but again, that's all under discussion with the FDA. So.

Speaker Change: That's kind of always think about the phase II is a roughly 26% to 30 week study.

Speaker Change: Four arms looking at different doses compared to the control arm and our goal is to get comparability better.

Speaker Change: Better Thats great.

Speaker Change: Selling more tolerable, let's say better.

Speaker Change: Those will be the kiosk at should we start we're looking for.

Speaker Change: Okay fantastic. Thanks for the update with you first of all the progress with remainder of the year I appreciate it.

Speaker Change: Thank you.

Speaker Change: Our next question comes from the line of Brandon Folkes with Rodman and Renshaw. Please proceed.

Brandon Folkes: Alright, Thanks for taking my questions and congratulations on the progress.

Speaker Change: Maybe just first up for me.

Speaker Change: Yes.

Speaker Change: Is successful how should we think about the potential for manufacturing element for Mannkind as well.

Speaker Change: What are you willing to kind of.

Speaker Change: Say at this stage is it on the table should we model just the royalty.

Speaker Change: How should we think about it in our models if we do see successful Teton data over the next few.

Speaker Change: 18 augments.

Speaker Change: Brendan I came in late as I'm going to repeat your question to make sure. We heard it I think your question was how do we expect things to shift with the successful Teton readout in terms of manufacturing revenue is that did I get that right.

Speaker Change: That is correct yes.

Speaker Change: Okay. So we are working pretty hard in fact, we just got some good news from the FDA on the <unk>.

Speaker Change: Spansion facility, so I think from a pure capacity and manufacturing ability, we will be well well ready to launch any types of supply at that come in from owners from United Therapeutics with an upside scenario in IPF. So we feel very good about our ability to handle that and deliver that really as we get into the second half when they are going to get the data readout. So.

Speaker Change: Now that would at the volumes increased dramatically then that would also change our expectations on collaboration and services revenue as well. So I think we'll be ready and we will have the capacity available in the event that all comes through.

Speaker Change: Great. Thanks, very much and then maybe just a follow up for me on the 200 million plus on a phrase.

Speaker Change: Can you just talk about the timeline. There is this just sort of should we just think about that being in line with the label update that should come on line posted healthy an inhaled one thank you.

Speaker Change: Yes, I think we will be looking to benchmark our launch uptake curves.

Speaker Change: To kind of.

Speaker Change: Ability to recruit the best people or work with thought leaders in a meaningful way and I think that's why you've seen us try to do.

Speaker Change: Good with our President we're really trying to get in with these offices and the thought leaders as we speak.

Speaker Change: So that will be important in terms of the uptake I think you saw a line in.

The deck Thats every 10% share is roughly $150 million. So I think it's a reasonable when you look at the.

Speaker Change: Expectations from the physicians, even if you discount that data 50%.

Speaker Change: Our goal is really to hit that that 10% range as quickly as possible is that 12 months 18 months 24 months I think we'll get as.

Speaker Change: As we get closer and as we continue to fine tune our strategy and research I think that will be.

Speaker Change: Be clear, but I think if you look at that 10% threshold plus the adult sales plus spillover from kids to adults you can really start to see how afrezza compounds over the next three years.

Speaker Change: From a.

Speaker Change: Marginally good good growth to a major transition.

Speaker Change: That's what we're aiming for and that's why we're gearing up for all of that right now.

Speaker Change: Great. Thank you very much.

Speaker Change: Okay. Thank you one moment for our next question.

Speaker Change: Let me is from the line of Yun Zhong with Wedbush Securities. Please proceed.

Yun Zhong: Hi, good afternoon. Thank you very much for taking my questions and congratulations on the Congress.

Speaker Change: First question personnel you sure anecdotal feedback on RP that Houston I'm, just curious have you heard anything.

From adult subjects lineup.

Yun Zhong: <unk> data set.

Speaker Change: Second question on 101 interim analysis.

Speaker Change: <unk> will be appointed to the company.

Speaker Change: Is that.

Speaker Change: Dallas is going to look at both co primary endpoints and in case, you would have to increase.

Speaker Change: Do you have any idea by how many patients are going to increase.

Thank you very much.

Speaker Change: The second question, you and just a clarifying is that in relation to 101 or which product are you referring to.

Speaker Change: Interim analysis 101, yes, okay. Thank you sorry, if I make sure I got it right.

Speaker Change: First of all thank you for your support and your initiation of mankind. We appreciate that.

Speaker Change: In terms of.

Speaker Change: In health three.

Speaker Change: Youre asking additional analysis, we plan to present.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: So the patient and physician feedback. Thank you so I think the.

Speaker Change: And the patient side of it it's about 50% of the patients and inhale three indicated they wanted to stay on our friends at the end of the study so I think thats.

Speaker Change: Honestly, if we switched 100 people and got 50 to state I think that's a really good.

Speaker Change: <unk> to expand pretty quickly. So I think that just shows you the level of satisfaction, whether they were coming off an AI system or multiple daily injections.

Speaker Change: I'd be really happy if we could help that many patients all the millions of people on insulin. So I think that's kind of where the patient satisfaction was on the physician side.

I will say I've talked to several of the investigators and a lot of them. This is the first time they've ever prescribed afrezza in terms of just running the trial so.

Speaker Change: The first time, they've ever seen that first dose data in the office of mealtime.

Speaker Change: El tolerance tests, we were doing.

Speaker Change: And you can really see as you look at the sub results those doctors, who really understood the dosing and basal titration.

Speaker Change: Had really good results and they were very happy and excited and look forward to adopting it also say as you can see some of the people got worse, there's a handful of offices.

Speaker Change: Who didn't those properly who didn't titrate up we didn't follow our instructions and those patients that are a little worse and thats, probably why you see 50% want to stay on 50% went back because I think a lot of that was Dr dependent and that's one of the things we're trying to correct. As we go out there is how do we make it more consistent for prescribers, whether it's the reimbursement support the dosing and titration.

Speaker Change: Creation and the follow up around the basal because thats, what we see in the trial results, whether thats inhaled <unk> in health right.

Speaker Change: And so that's a lot of the work that I'll say.

Speaker Change: We will be doing as a result of these trials.

Speaker Change: And it's a lot of excitement I think I just saw omnipod launch to decision support around Omnipod and I think thats, what youre seeing at these offices need help.

Speaker Change: And we can clearly see they need reminders.

Speaker Change: What were some of the work with trying to get ready for kids.

Speaker Change: On 101.

Speaker Change: There is an interim analysis after 100 patients are reaching six month endpoint.

Speaker Change: Don't have a 100 evaluable patients and so.

Speaker Change: Hopefully by that time, we'll have a 100 place up and running and if.

Speaker Change: If we add 20% of the sites, referring a patient a month that would give you roughly.

Speaker Change: 15 to 20 people enrolling so you can see while we're waiting for those interim results. We can easily enroll another 90 to 100 patients and so we think that will satisfy potentially.

Speaker Change: Potentially any type of study size adjustment it could go.

Speaker Change: $2 30 to 300 patients with those adjustments.

Speaker Change: And I think our goal is to make sure a statistically valid results.

Speaker Change: Between the placebo and the active arm.

Speaker Change: No.

Speaker Change: Let's kind of wait and see but I think we have anticipated that it could be go from $180 to 300 and Thats why we will keep enrollment going so that we're not waiting by the time, we get that interim analysis to continue enroll.

Speaker Change: And there's also an FDA guidance here that we want to hit which is around the 300 patients.

Speaker Change: The safety database and so one of the other aspects. We're looking at the FDA actually just gave us the green light to consider is launching an expanded access program for <unk>. So that to me would be another opportunity to hit some interim enrollment targets.

Speaker Change: Great. Thank you.

Speaker Change: Thank you thank.

Speaker Change: Thank you and this concludes our Q&A session for today I will turn it back to Mr. Castagna for final remarks.

Speaker Change: Thank you everyone for dialing in today and listening to our call I think as you can see we had a record year for 2024, we're really turning over every stone to look at how we can grow faster hire the best talent and continue to March This company forward to greatness and I just want to say. Thank you for your continued support and looking forward to a year of much progress whether it's the clinical side of the <unk>.

Speaker Change: <unk> side of our partnership with United Therapeutics, Mannkind is firing on all cylinders and it's a great time to be part of the Mannkind family. So thank you for all your support have a great day.

Speaker Change: And with that we thank you all for participating and you may now disconnect.

Q4 2024 MannKind Corp Earnings Call

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