Q2 2025 MannKind Corp Earnings Call
Good morning, and welcome to the MannKind Corporation. Second quarter, 2025 Financial results conference call.
As a reminder, this call is being recorded on August 6th 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 the 4 looking statements such for looking statements are suggested to risk and uncertainty which can cause actual results to differ materially from these stated expectations.
For further information on the company's risk factors please see the form 10q for the corded link, period ended June 30th 2025. Now, on file with the SEC, the earnings release and the slides prepared for this presentation.
Joining us today for MannKind, our Chief Executive Officer.
Michael cassia.
And Chief Financial Officer. Chris Apprentice.
I would now like to turn the conference over to Mr. Casta. Please go ahead.
Thank you, operator. And good morning everybody and thank you for joining us for our second quarter earnings call.
As we look out, we're focused on creating more shareholder value, minimizing dilution and enhancing our flexibility as we enter the next phase of our growth. The next 6 day, quarters are going to showcase our cumulative work over the past 7 years.
Let me talk about the 5 pillars of our success.
First, we're on the heels of Teton 2. Read out here in September and we'll actually say, wait, those results as that provides upside to our current business plans in the future.
Second of this position for continued. Growth piece, is now filed. I just want to put this in context. We target about 25% of all rapid acting Scripts.
1% of the rapid acting Market is roughly, $300 million run rate and a and fresa.
We have a strong balance sheet with the announcement today of Blackstone. We now have access to additional Capital to provide us flexibility over the coming years.
Forth in our opinion. Inhale, chamine is not getting enough credit in terms of meaningful opportunity that this has on our future.
Fifth an incentive DPI. I'm proud to announce will now move forward in the phase 2. And I want to thank our team for all the hard work they've done.
Chris will talk about further details on the Blackstone deals later in our discussion today.
Our Q2 highlights our highlights by record revenue, of tabasa DPI sales.
Also record referrals for patients in Q2, which should set us up for Q3.
Our health asamine for NTM. We expect to meet our interim Target ahead of schedule, which is 100 valuable patients.
Additionally, we've now Advanced the dry powder formulation in the pre-clinical studies and will actually wait those results to move into the earlier lines of treatment in the future.
Nintendo DPI for ipf, we plan to launch our trial called inflow by year. End 2025
on the endocrine side, we're excited about the Pediatric indications being submitted, and this now sets us up for launch prep, as we look out over the next 4 quarters,
Strong performance in Q2 with 18.3 million in revenue, or 13% growth over 2024.
And for the a opportunity, the application to submit our label update is expected here in Q4 for a decision.
On the financial side, we have Q2 revenues of 77 million or 6% over 2024 and year to-day revenues of 155 million or 12% over 2024, Chris will dig into the details shortly on this 1.
I had a strong balance sheet with 201 million in cash and we now have expansion Capital, 500 million from Blackstone off for non dilutive Capital to accelerate our growth and Innovation as we look out.
Let me start out on our offer long opportunity with mankind 101.
The NPM market is expected to exceed $1 million by the end of the decade.
Our Focus will be on the US and Japan which have the highest populations and highest opportunity for growth. It's also the 2 markets that we've seen the highest enrollment rates in our trial
this is a global Health concern, but a real issue in these 2 countries,
As we think about the inhaled plasma development program, these are the 3 pillars. We look at number 1,
Correct. Lung delivery. Could enhance the tolerability profile. Minimizing side effects.
We can confidently say after 90 patients enrolled, we have not seen significant patient. Dropout early on the trial, we do not know what arm patients are on but there's just not been a lot of dropouts. So the tolerability does look like it is holding up early on in the trial.
Our active ingredient is a guideline-endorsed antibiotic with a decades-long clinical track record. This drug is already used in clinical practice around the world. However, due to the limitations highlighted above, we believe this is a real opportunity to transform patients' lives.
With 1 month on and 2 months off, we'll provide a regimen with those 3 phases that minimizes treatment burden and potentially enhances adherence.
We presented to Icon 1 Global phase 3 trial. I try to remind people that this is a co-primary point in the US of sputum culture conversion and patient reported outcomes for the xus market is just sputum culture conversion.
We have FasTrak QIDP and orphan designation, giving us 12 years of exclusivity. To date, we are now at 90% enrolled. We need 100 valuable patients to hit our internal analysis in 2026.
Let me remind you that. Some of the Baseline patients will not have a positive student culture when they enrolled and they will not be included in the interim analysis.
Next, I'm excited to talk about Mankind, 2011.
As we highlight our last quarter, we've completed our Phase 1 Study looking at 3, doses, in single ascending and 2 doses in multiple sending.
Uh, we had to redesign the trial poster FDA meeting feedback as we went into phase 2, and I'm going to share with you today. That trial design
This trial will be named inflow as we look forward to his launching. This xus here in 2025
This thought will be looking at approximately 220 patients in a randomized. Placebo control trial with 12 weeks of active drugs, followed by 6 months of open label extension where everyone can get exposure to our product.
We'll be exploring 2 doses which is 2 milligrams. Tid or 6 milligrams a day of exposure or 4 milligrams. Bid 8 milligrams a day of exposure.
The primary objective of this study will be looking at safety and tolerability really specifically, make sure inhaled powders will be tolerable in these patient population.
The second 1 will be around the FDC and efficacy signals at the early stage of 12 weeks as the primary endpoint.
when we look at these doses, these are consistent and may provide equal or greater exposure than what we saw presented at Avalon at ATS here in May
Regardless of the doses, this range that we both achieved independently. Gives us confidence that we're in a really good spot to move this forward in the patients and hopefully see a signal here and then not too distant future.
Now we'll close the orphan long discussion here, on tabasa DPI.
Our Tabasa DPI revenue continues to grow. As we achieved $31 million in royalty here in Q2, this puts us at about $1.2 billion DPI over the last four quarters.
As you see, our manufacturing Revenue, shifted downwards from q1 to Q2 of 22 million. And this is just due to the timing of manufacturing at Chris will talk about. But as I talked about 1-on-1 201201, dry powders, these are all the things that are going on in manufacturing that we have to shift around our teams as we look forward in the future.
We will actually be waiting in the Teton 2 results as well as Teton 1 and 2026.
Now, I'm going to talk about our endocrine business unit.
Start to see how can we grow writers, and how can we grow depth of prescribing.
The devil's in the details here, as we think about enhancing prescribing amongst our top prescribers. But how do we do it? More broadly, adopt our prescribing base?
Some of the things we're doing is really enhancing our coverage at clinical conferences.
When you look at the building momentum, we've had this year starting at, at TD in March all the way through Endo Ada atdc, as well as children's for diabetes, as well as add boards and focus groups. We've engaged with over 3,000 Health Care Providers. And our booths have been packed with guests wanting to learn more information about our FSA, not just in the US but around the world.
we remain excited about the future of opportunity this product, and if the potential to help children as we go forward,
as we look at our vision for this product, we want to enhance our messaging and Field Force expansion ahead of the peace launch.
We need to produce a halo effect. Not just for kids, but what this is going to mean for the adult of freso community.
The new campaign you'll start to see roll out later this year, will be called insulin in the moment and this really establishes the foundation of the product around speed and control. And every moment of a patient's day, this is 1 of the challenges you hear when you talk to patients and providers is the stacking effect of insulin to slow effect size of insulin. And the challenges patients face whether they're using insulin through a pump or a pet.
We Believe launching this new campaign targeting not just Healthcare professionals. But consumers will resonate in the challenges, they face in everyday control of people using insulin.
We also will increase our share of voice. As we've talked about the expansion, we expect the full sales force to be up and running by the end of this year, in the first 4, 4 quarters of their impact will start in q1, and Q2 of next year,
We are deploying Medical Science liaison. Key account managers feel reimbursement, Specialists, as well as an additional 20 to 30 sales reps throughout our, our fresa footprint and adults.
This new targeting will enhance our coverage of the market to approximately 50% in 2026.
Additionally, there is future data coming that will unlock our potential in areas like gestational diabetes. Inhale, first being a completely naive patient, newly diagnosed, getting your friends within a 10. In the first 10 days of diagnosis, as well as Inhale Aid X, which is around an exercise study looking at a Fresno and a highly active patient population. These are the next steps of generational data that we expect in 2026 and beyond.
Now, I'll turn it over to Chris.
Thanks, Mike, and good morning, everyone.
Before we get into the details of the quarterly results, I want to highlight our Revenue growth over the last 3 years. As we compare the trailing 4 Quarters on an annual basis.
This annual double-digit growth, has resulted in total revenues over 300 million for the trailing 4 quarters, and we expect this growth to continue through. Both our commercial products, as well as our revenues earned through our collaboration with United Therapeutics
our overall revenues in the second quarter grew 6%, led by royalties earned on teso DPI.
Teso DPI, royalties contributed 31 million in the second quarter, and increase of 22% over the same quarter last year.
Collaboration and services Revenue consists primarily of manufacturing Revenue based on production volumes sold through to UT and the recognition of deferred revenue.
We recorded revenue of $23 million in the second quarter, a 12% decrease from the prior year as a result of the net impact of one-time items in both periods.
Of fresa net revenues for the second quarter were 18 million, a 13%, increase over the prior year.
As Mike discussed earlier, we are encouraged by the recent performance of afraa in new and recurring prescriptions over the prior year and expect this trend to continue.
Voet Revenue was approximately $4 million for the second quarter, an 8% decrease from the prior year, driven by lower product demand.
As VGo is not actively promoted, we are pleased with the results of the product thus far this year.
As we look ahead to the second half of the year, we anticipate continued growth in our royalty Revenue driven by net sales of Tabasco DPI.
We expect collaboration and services revenue for the second half of 2025 to be in line with the 51 million recorded in the first half of this year, the quarterly results of CNS Revenue have fluctuated this year.
This is primarily driven by the timing of manufacturing. As we balance the production for the period, in terms of Tisa DPI, a fresa and our development programs.
And our expanded promotional efforts.
On the expense side R&D has increased over the prior year period as enrollment. In the icon, 1, trials and preparations are underway to initiate. The phase 2 ipf study for our mankind 2011 program later this year.
Additionally, our team is developing a DPI formulation for our chosen program as well as additional potential pipeline assets.
Selling, general, and administrative expenses have increased compared to the prior period, primarily driven by investments in expanding our commercial infrastructure.
As you may recall, we had paused investment in a fresa at the beginning of 2024, while awaiting pediatric trial data and reduce the sales force,
With the potential approval of a fresa. In the Pediatric indication, we're now enhancing our commercial organization, having deployed, a medical science, Leia on team and will expand the sales force later in the year.
Today we also share that mankind is entered into a strategic financing arrangement with Blackstone providing access up to 500 million in non-dilutive funding. This Capital secured on favorable terms and combined with our quarter-end cash and Investments balance of 201. Million reinforces our strong liquidity position and is available to be strategically deployed across our key growth initiatives. Including supporting our commercial buildout for the potential, pediatric, launch of a
Presa advancing our development pipeline.
And allowing us the ability to move quickly on Business Development opportunities.
We look forward to seeing folks there. And in other forums, this quarter,
With that, I will turn the call back over to Mike.
Thank you Chris and thank you for the team's hard work on the Blackstone deal which is really going to provide us the capital. We need to produce these anticipated Catalyst over the coming quarters.
As you seen, we've executed the first half successfully and we have several planned opportunities here in the second half for continued execution of our plan.
If we look to our stairway of building value, I basically I will continue to be the foundation in the near term.
As you look out into the longer term, the endocrine builds with International expansion as well. As pediatric expansion will continue to not only make mankind more efficient but allow us to help more patients around the world as we go forward.
In health asamine is a meaningful opportunity. And let me remind you that every 1,000 patients is approximately 100 million dollars in Revenue.
We've also Advanced this dry powder inhalation because we believe in order to penetrate the earlier lines of treatment, you're going to need something that's much easier for patients versus the refractory population. We're currently studying
DPI is well underway. We've now selected the cro and we plan to initiate the inflow trial here in the near future.
As you continue to see of is a meaningful contributor to growth and the ipf space where hopefully excited to provide another option for patients as we go forward.
We'll be sharing some of the new data at upcoming scientific conferences with adcs in in August here in Phoenix.
As well as its bet which is the Pediatric conference here in the fall.
I want to thank everyone for all their hard work this quarter as we really can start to see the fruition of all of our work over the last 7 years coming together this year and next year and we look forward to continue to execute our plan and share those updates in the future quarters.
Thank you for your time today, and we'll Now open up for questions.
Thank you. As a reminder, to ask a question, you will need to press *1 1 1 on your telephone to remove yourself from the queue. You may press *1 1 1 again, please stand by while we compile the Q&A roster.
Our first question.
Comes from the line of Olivia Breer of kandare, Fitzgerald, please go ahead Olivia.
Hey, good morning guys. Thank you for the question and, and congrats on a great deal with Blackstone. Um, can you maybe walk us through? What a best case might look like, just in terms of of timelines for a potential bridging study in in ipf, I think the brief study took 2 to 3 months, and I think with DPI already on the market, maybe there's a much faster timeline to approval than than what we saw for Paw. Um, and then have a follow-up on, uh, the Nintendo did program.
Sorry, the first 1 was around with the bridge could look like for teso DPI and ipf.
Yeah, exactly. And and just how you're thinking about timelines,
But just how how that could realistically play out, right? If if Teton 2 ends up being positive and and then Teton 1,
You know what, when could this ultimately come to Market? I, I guess is what I'm thinking for DPI.
Yeah. I mean it's hard for me to comment on UT's regulatory strategy and clinical strategy here. I I think what what you could just as you lay out the data read out that UT's communicated
Let's just say it comes out September and Teton 1 is next year. You got now some time to meet with FDA and kind of
work through with that could look like and potentially get as much work done as you can before your Teton, 1 read out, because Teton 1's, really for the US, uh, Market Per Se. So that that's our optimism is around. Let's get the Teton 2 results and then hopefully UT will.
Accelerate it meet with FDA on on what that could look like. And I think some of the effect size that you'll see in the trial will drive some of the
Uh, I'll say IP opportunity to get with FDA but I think it's too soon for us to speculate the clinical strategy there.
I don't want to speak for UT.
Okay, understood. And then on your Nintendo DPI program, can you maybe just talk about how you're thinking about this drug in the context of...
Some of the new updates in that space is just basically a a replacement to current current oral background therapies and then hopefully gets used in in combination with newer treatments as as they come to Market. Um, and then also just question around whether you guys were able to come to an agreement with FDA.
Around which patients to enroll. Uh, in that Phase 2 around naive Patients, First first patients that are already on background therapy
Yeah, I think that was 1 of the challenges. I kind of heard me say we had the recreate, the trial. When we were looking at the original design, it was really about taking
The attendant patients or patients that failed in the tentative and then enrolling them in this and showing more of a non-inferiority design. I think the FDA was adamant on a placebo controlled on top of a general background therapy design, as they given the feedback to other parties.
It just doesn't work. When you think about the treatment Paradigm in the US, the IRB approvals you need? You, you really just can't do a placebo blinded trial for 6 months. Um, and so that's what made us pivot the work over the last 3 months and really look at an xus Market, where it does take call 3 months to get access to the standards of care. You could run a placebo control trial and get them through the, uh, safety and clinical irbs, um, and protect patients at the end of the day. So, so we, we kind of put all the things, the FDA requested in, in to the trial. It's just going to be done, more X us and US per se. Um,
And and I think that will give us the data. We need to have the conviction we need to move to phase 3 and we even upsized the trial a little bit from where we were thinking just to make sure the results that we do get are a little bit more robust.
The, the next phase will be the phase 3 1.
And I think if you look out in the ipf market, we would expect hopefully buys product, to get approved. We'd expect to be so DBI to be out there. And and so as we look out over the 2 year window, there could be now, 4 drugs for ipf, maybe 5 of Bristol, Myers gets there. And then you can see this really being on top of background therapy and design. The way that the FDA, uh, expects. As you as you see, those other agents about 70% of the time, those trials have
Background therapy on top of, right? And and so, that's 1 big area. The second big area is going to be the fact that majority of people cannot tolerate the 2 options that are out there today and we think there's a lot of patients who either choose to to, to not take current treatment and die. Um, because the side effects are so severe and there's a large population there that we believe and inhaled the tentative. Could could really help and hopefully buy them the time they need for, for life. And, and so, that's really where we look at the 2, those that are intolerable to the current agents,
And as the market expands with combination treatment, we think there's a huge opportunity there and and as we go to phase 3 that we think those other drugs being on the market will help us execute a better phase 3 trial.
Okay. Great. Thank you, guys appreciate it.
Thank you.
Thank you. Our next question comes from the line of fisa proceed of the Ring Partners. Please go ahead veefil.
Hey guys, thanks for taking the question. Uh, I wanted to ask also on, uh, on 2011. Can you discuss, uh, your sort of level of confidence in using, uh, Nintendo mdpi on top of background profit Zone? Uh, both from a safety perspective, uh, and also the, um, like ability to, uh, you know, clear, uh, you know, indifference versus a placebo and that includes background therapy on an efficacy basis as well.
I I have 1 theme here, uh,
Currently between oral and aural portions on. As you know, it's not happening the combination of the side effects there. So from our perspective we're going as you well know with inhaling the systemic exposure would be very low. So from a safety perspective or able to perspective, I mean obviously we need to do the trial but the drug drug interactions, there are we expected to be minimal? As far as efficacy. I mean we do have enough reason to believe that their efficacy of both perfumes and internal combined. If they are tolerated that it will be there. This is our hypothesis and I would argue the same for the upcoming potential approval of nanometers. I mean, the combination there, same same thing, and the future of ipf treatment in our opinion is really a combination therapy which as of now with the 2 currently available therapies is it's not there.
and we will be allowing
We'll be allowing both of those agents in the background treatment in this upcoming Phase 2 trial.
And then, uh, what do you need to show to bring, um, you know, the that development program into the US? And would that be something that could occur during the course of the phase 2 or would that be just, uh, for the phase 3 Downstream?
Um, I think definitely the phase 3. We feel confident if we get the results here that we need that this is a US Global trial at that point. Uh I think it's a matter of timing. So the trial enrollment could go very quickly X us from currently what we have lined up and it just be a timing issue. By the time we get x amount of patients in and go back to the FDA and show them what they want to see. Will they allow it? But I think even in the US prevented zone is not.
uh,
you know, when you think about, we can't go on top of the, and if you're not switching them, they got to have a wash out period. It's just a very difficult trial to execute in the US.
But I I don't think it's an FD issue as much as it's. An IRB Placebo study. You know, we'll investigators even enroll 12 weeks on Placebo and we just think it's going to be a very hard trial to enroll them. By the time you get it, through irbs and approval, you're going to talk minimal patients relatives to the expense and time I see your mom know if you have anything else to
Add just want, okay? So that's so we won't go out the us but I think our focus is on getting this done as as quickly as possible to move the program in the phase 3. Um and by the time you get there you actually might be done the enrollment period.
Got it. Thank you for taking the questions.
Thank you. Our next question comes from the line of Andreas arita's of Oppenheimer. Please go ahead. Andreas.
Yeah. Good morning and thanks for taking our questions. Congrats on all the progress in the quarter. Uh, also on 2011, can you talk about what you, what you expect um or what you're looking for in terms of the treatment effect, um, from The Phase 2 or given? Also that it's kind of a, a small, you know, on the other side. Um, and then also maybe rationale for like, you, you already kind of alluded to some of your rationale for for going X us. But anything else about the, the the patients, um, uh, profiles abroad that make sense as well trying to get a little read through into the the Teton 2 study here. And then, uh, Chris for you maybe just again, thinking around the, the Blackstone deal. Um, you know, the rationale to to to do a kind of a a revolving credit deal versus, uh, you know, other traditional uh uh, finances things.
I'll start off a nice question to add. I think on the effect size, the main thing we'll be looking at is tolerability and safety because that's really the Achilles heels and the 10B I think when you look at the pivotal Trials of that product, you can start to see a response in 12 weeks. And so that's why we made the primary endpoint. We thought what's a long enough period with Placebo that you can safely go and not compromise, somebody's journey and and and ethically, and roll the trial. And we fell 12 weeks as appropriate after 12 weeks, it's an open label extension. So we will have hopefully a good group of patients going on for 6 to 9 months. Uh, but it'll be at their options. So so I think we'll we'll start to see that.
Uh, effect size. Hopefully over time. Not just at the 12 week Mark but over the patients who continue uh and then remember anyone, that's
Uh, the other key aspect of the trial is really the BID and TID. So, as the market does not really know and experts don't know how Nintendo actually has the effect that it does, we don't know if it's a signaling issue, a switch issue, or a duration of effect of a binding receptor. And so, we're actually experimenting with that in this trial design in terms of T versus BID.
Obviously when you look at the Avalon data, it could even be QD but we we don't want to, you know, wind up with a wonky result and try to stretch pkpd when it may not be that parameter in terms of what you're looking at from a QD versus B. Um, so these These are insights will look and you might see a difference between those 2 dosing regimens and that'll be important for a phase 3 design. Um, otherwise we think this this will give us enough information to properly design and power a phase 3 trial globally. Um I don't know if you have any. Yeah, go ahead to that. So that's study as Mike mentioned, I mean 12 week is the double blank period. However it's really it's a 9-month study in the sense that when you include the open label extension, so we will have
And we have 2 active doses versus the SEO. So we'll have data on both safety and liability and efficacy for 9 months.
For most of the patients, and for those who are randomized to active and even the placebo, we will have all 6 months of data after pay transition. As far as treatment effect assumptions, I mean, obviously we have our thoughts about that treatment effect. But, again, this is first in patients.
Study. So this will be the basis for our assumption moving forward. You know, we did the healthy volunteers first, in the humans last year so we have those data and the molecule is not in use, right? We understand this pharmaceutical Kinetix.
The inhaler is not new, it's already into approved products, as, you know, and the powder that we're using is also not new. It's already in a food product. So so we are very comfortable with the delivery. How we're we're giving it and the Forma cook cannot Dynamics already. Well, understood of this model.
And then, Andreas, on the financing front, as we look out the next 18 to 24 months, we just see a number of key catalysts for us. We have our two late-stage development programs. We have started to focus on commercial preparation for one of those programs in CLASS, and obviously, we have the pediatric launch that we hope to have in 2026 if approved. So, as we look at all of those, having access to flexible capital at this point in time just makes a lot of sense to have this instrument in place, and then, of course,
You know, 1 of the key tenants here has had the ability to be reactive if business development opportunities, um, present themselves. And so speed in, in those situations, I think is really important. And so for us to be able to be in a position of strength on that side. Um, again, just made this instrument, the right choice for us, and really happy to be working with a partner like Blackstone,
Great. Thanks. Jump back in the chair.
Thank, thank you.
All right. Next question.
Comes from the line of Brandon. Folks of HC rain right? Please go ahead. Brandon.
Hi, thanks for taking my questions and congrats on the updates. Um, maybe just changing gears a little bit to a fresa
can you perhaps just talk about the typical freezer patient today, you know, sort of where you're gaining the most traction as we continue to see this double digit growth and if you've seen any Evolution yet, maybe over the last 12 months since the sort of inhale,
Day to the 2 data sets were published. Um, you know, just
And aided awareness of these data sets currently, you know, are they seeping into the prescribing Community as yet, um, just given the Outreach. You've done, obviously not promoting to it, but, um, you know, you can just and then sort of when we think about depth and breadth of prescribing, you know, where are you seeing the traction today on a freezer?
Yeah, I think the first time I'll make an Nic is with us um is the we just got a database breakdown and I think you can kind of indirectly. See it in the earnings is is the the breakdown of patience is roughly. 45% type 1 and 55% type 2 uh over the last year or so we've been pivoting a little bit more to type 1 and we can see 4 and 8. Units strength is growing a little bit faster than the 12 unit over the last year. So I think that would signal our execution against type 1s is growing and and the uptake, there is good, getting a little bit higher. I'll let Nick talked about a little bit more about the depth and breadth in some of what you're doing.
Is increased awareness. Um, we've changed our strategy a bit, um, by adding targets, um, across the field sales force where we're going after unique prescribers. We've had much more activity at congresses where we've had less of a presence in the past. Uh we're engaging more in scientific and clinical education to create awareness around the science and the benefits of a fresa within its competitive landscape.
So, um, overall, I, I would say, um, focusing on the adult community, um, looking to increase unique prescribers, increasing awareness, around science, and clinical data. Um, I think is where we're starting to see ourselves making good progress and we'll continue to do so focus in that area for at least the next um 2 to 3 quarters.
It did, thanks very much. And sorry, I was struggling with the mute button and I apologize. Um, yeah, maybe sir as we just think about these sales Footprints and the growth, um, as we get the Pediatric label, you know, and sort of in light of the additional Capital, you now have access to. Are you going to think about sort of going with a full footprint for Pediatrics on day, 1 on the launch? Are you thinking about sort of incremental investment? Um, you know, look, assessing the
fraction and sort of, then
Perhaps layering an additional expansion additional reps to Target the Pediatric indication over time. Just how should we think about sort of, um,
Present investment Beyond 2025.
Yeah.
I think we're we're building up the Pet's plan. I think our initial thoughts are number 1. We we decrease our sales force footprint coming into 2024. And, you know, we were running a f profitability.
In 2025 and really late 24 weeks, early 25, as we came out and got the Pediatric data, right? Our confidence level in the Peds. Launch went up right in terms of lung safety and believability and and um, yeah opportunity that exists there. And so as you see this year, we are with the hiring of Nick and the expansion of the team. Number 1 is we, when we decrease the footprint, we're only targeting about 25% of all rapid acting scripts, which is mainly our targets to maintain our business. In order to grow, we need to Target a larger percentage of the markets. The number 1 thing we hear is doctors, do not remember a fresa. It's not top of mind and it's true. Our reps are not there every week. Um, hitting them like they're getting hit with insulin pumps from 1 company or another every week. Uh, so that's important as we close out this year and we have a label change coming up in October that we we want to get the sales force expansion so that that label change can be communicated more widely.
The second thing with peas is it's a different selling Target than our traditional fresa use, most of our fresa use comes from private practice, doctors who know our data who have open access and they listen to the scientific exchange. A lot of the future is, is, is an academic centers and children's hospitals, where our reps have not traditionally, been a strong, nor our selling model. And so, we think it's really important to build a dedicated key account, manager, team with experience selling an institution. So, it's a different skill set and that's where the majority of people being almost 80% are treated. When you look at our Peach trial, we had 39 of the 50 academic Target centers in the US in the trial,
So we had a large percentage of them do the trial, and we think there's a really important opportunity to continue that education and expansion in kids. The other thing we're going through to to your, to your question on the uptake will be.
Why do we believe we'll start to communicate this information? Why do we believe the uptaking? Kids will be more, uh, accelerated than we've seen in adults and anecdotally our feedback from advisors and conferences and engagements has been very, very positive parents have been very excited. Uh, people are shocked, they didn't know and Helen was been on the market this long, and so, we just think there's a whole new opportunity to relaunch the brand and pivot the entire franchise. And so we need to keep expanding in adults as we can grow there. But more importantly, going into the Pediatric Community, early and often will be important and I'll remind you guys, we, we do co-promote vaccine me with a star so that does allow
Us to go into the Pediatric community and promote that product um, today and then that is something we're we're weighing as we go forward.
Great, thank you very much and congrats on all the updates.
Thank you.
Thank you. Our next question comes from Anthony patron of meizuo Americas, please go ahead, Anthony
Follow up on a freezer. You know, when we think about um cleyon ahead on on the interim, getting to 100 patients, you know, if you get the desired you know sputum conversion outcome at interim. You know, how does that change? Just the timeline, can it actually be uh fast tracked um you know, for clearance if if you get that speed and conversion
And then, you know, when you think about building a sales force, a pulmonology-facing sales force, like what is the size of?
Of that team. If, if you look ahead to a positive outcome and then I'll have a follow-up on a phaser.
I think on the the sputum obviously, that's where we're weighing the trial statistically. And, you know, if we get that in term result next year, uh, we're going to let the trial enrollment keep happening even if we were to hit the 180 Mark. So I think if the if it says it's good at 180, some of the debate will have at that. Time will be do we do we lock the database at 180 or do you wait for the remaining 20 30 people to hit the 6-month endpoint? Um, and that'll drive the the timeline there with FDA. It does have, um,
Qidp, uh, designation as well as um, Fast Track. So there is a opportunity for a faster review and a rolling submission. I believe with FDA and I think the FDA has been nothing but collaborative with the ctms at Google, fi as me, there is nothing else in development. That's meaningful where the last option for patients at this point. And I do think the FDA wants to see this product succeed.
And get there. If we have the data to support it,
um,
That's on that. On the pulmonary sales side, I I wouldn't speculate yet the Sizer investment there, that's 1 of the reasons. We put the capital up is we get closer. We'll, we'll make the right assessment opportunity but it's not a huge footprint, right? This is a very specialized disease, I think the biggest thing is weighing you know as we continue to watch our case in Japan, what do you do in the Japanese market and how do you either partner that or build it yourself? And I think those will be the key strategic questions. We face over the next 12 months. Um, as we look in in those markets, there is opportunity. So you have an opportunity in in Japan. As we look at trial enrollment KO support. Our theme has been an Asian for the last few weeks. Um, there's a large opportunity there and a lot of support for cliff mean, so we're we're really excited about it and I think it's going to be a meaningful opportunity for trajectory and flexion on Mankind and it's coming before we blink. I mean, literally next year, close this time, we'll be hopefully seeing what the term says and and how knowing where we are.
No, it's great. And then on a freeze uh maybe just you know that patient profile on pediatric from a a utilization. Intensity standpoint, you know, do do you imagine this is going to be, you know, kind of more meal time or will it be?
You know, even some aspect of Basil plus bolus, so just trying to get an an understanding of the intensity of a pediatric, patient on a phrasal versus an adult patient. Thanks.
I mean, Nick is Nick. He just came from the conference here in July.
I'll give you my thoughts. And then, Nick, Nick, you can add anything to the feedback here from the sessions, but
I think parents stress a lot around hypoglycemia.
And Insulin pumps and chasing their child down with injections. And
I do believe parents will want to use a fresa full-time, um, versus sometimes we hear a sporadic use on top of an insulin pump, stubborn highs holidays, things like that. So, so Nick, I I don't know what you came back, if you want to add anything from the conference in the
Parent engagements you. Yeah, I I think there's um, what we hear um, largely from the caregivers which is tends to be the parents or the patients themselves is, you know, post diagnosis, the the patients go through a series of steps which is initiation of therapy which tends to be MDI um perhaps looking to switch therapies or eventually going on an aid. And so I think that it's an opportunity for fresa to be plugged in at many different steps along the um, diagnosis pathway and the treatment pathway. I also think is Michael had mentioned
There's the opportunity for Meal Time and multiple controls throughout the day. These are younger kids that tend to be active playing sports, um, you know, grabbing meals as they go. And so I I think the opportunity for Pediatrics and Adolescence will be, um, slightly different from what we've seen in the adult, uh, community. And I think we're, uh, we're we're making adjustments as to how we fit into that Community now.
Thank you.
Thank you Anthony. Yeah we just see kids being so much more active and that's where in Hill insulin plays much better role for patients. So
Our next question comes from the line of Yun. Zhang a wedbush, please go ahead Yun.
Hi. Uh, good morning. Thank you very much for taking questions and uh the first question on q1 study, um I just wanted to confirm that. I heard it correct. Uh, that you said the placebo control. Probably treatment period is not powered for efficacy and uh, is the go-to Select 1, um, dosing regimen between the T and B and move it forward to phase 3 or um, is it possible that both those Investments can move into phase 3 and also, um, what's the possibility of uh, including um, active control arm in the phase 3, for any requirement regarding inclusion of a active control arm, please,
I think it's a little too soon. The speculate the exact phase 3 design but I think from the interactions we have with the FDA
You can see adding, you know, we have to assume more drugs to get approved and I mean, 1 of the challenges, Nintendo is the majority of scripts in the US. So it's hard to
Add on top of the tent nib and inhaling, the tent nib. So you really look at you're limited to prevented zone. So we really do hope that there, there's more drugs approved over the next year and a half.
So that when you run this trial, you have background therapy that you can add on top of in a placebo arm as the FDA is seems insistent on the placebo control, uh here. So it's not an active comparator, as much as is, as Placebo compared on top of background therapy. That's our running assumption today. Um, in terms of effect size and Power in the trial, and should it be 1 or 2 dosing regimens?
I, I think we're just
we, we have some flexibility here, you know, in terms of
Is it 2 milligrams or 4 milligrams? Twice a day or 3 times a day? I I think that's our focus is getting 1 dose regimen into phase 3. We we don't expect to see
A significant difference between these 2 arms, but but let's say there is a as you look at the subpopulations and patient characteristics, maybe we start to see signals in 1 over the other and that would drive a potential dose regimen selection. But we don't expect to go at this point with 2 different doses. In Phase 3, we expect to pick 1 and we'll we'll look for group analysis and some analysis on patient characteristics. Is that does the vid version versus tid show? Anything different. But our overall assumption is, is probably a bid exposure and, and that that's our working assumption, but we didn't want to
Get there and find out maybe T had a better effect Sizer better um, receptor binding that we can't see. So part of this is, you're you're going into a nature that no 1 else is ventured into in terms of inhaling and, and receptor binding and directly impacting the lungs. So we, we we feel very good about that exposure, but now, we just have to understand the signal. And that happens in that, that tissue
I see and then uh um question on the uh 500 million loan agreement with black stone. Um, are you able to share under what conditions will be? Will you be able we need to draw additional, um, capital and would that be based on commercial or clinical Milestones? Please, thank you very much.
No, so its up to 500 million. Uh, we we draw 75 million. Now we have 125 million. That is committed. Um, we for the most part, have the ability to draw that at our discretion. So there are no specific sales Milestones or or development related Milestones, um, that would that would be contingent upon. I think Blackstone just wants to make sure that this is growth capital and we're we're putting this forward in a, in a way that makes sense.
Great. Thank you.
Thank you. I would now like to turn the conference back to management for closing remarks.
I just want to say thank you to everyone today for listening. Uh, we were very excited about where we're going. In terms of the lease stage development pipeline is really starting to mature. We spent a lot of energy and a lot of money over the years to get to this point. We now have the flexible funding that we need to make sure we can grow these assets. Invest in these assets as, you know, funding at least, H phase 3 and at least stage Phase 2 is is important to us and being able to kind of get to the data. Readouts, will only create more value inflection for shareholders and patience. Uh, and so we're very excited about those late stage assets and the opportunity coming at us with Peds, that's now on file. That clock is ticking and we'll continue to update you guys on those opportunities and uh thank you again for your time and look forward to to follow up questions and investor meetings in September.
This concludes today's conference call, thank you for participating. You may now disconnect