Ladies and gentlemen, thank you for standing by. Welcome to the MannKind Corporation First Quarter 2008 Conference Call. At this time all participants are in a listen-only mode, later instructions will be given for the question-and-answer session. (Operator Instructions) As a reminder this call is being recorded today May 5, 2008. Joining us today from MannKind are Chairman and CEO, Alfred Mann; President and COO, Hakan Edstrom; the Chief Financial Officer, Matthew Pfeffer; and the Chief Scientific Officer, Peter Richardson. I would now like to turn the call over to Matthew Pfeffer, Chief Financial Officer of MannKind Corporation. Please go ahead.

Sorry this is Hakan Edstrom. Well, good afternoon and thank you for participating in todays call. Before we proceed further, please note that comments made during this call would include forward-looking statements within the meaning of Federal Securities Laws. It is possible that the actual results could differ from these stated expectations. And for factors, that could cause actual results to differ from expectations, please refer to our reports filed with the Securities and Exchange Commission under the Securities Exchange Act of 1934. Well let me start by recapping our activities during the past quarter. All of our key programs are on schedule and on/or the low budget. We are nearing the end of our pivotal Phase III trials and have put in place the necessary personnel assistance so that we can lock the databases this fall and conduct the analysis leading to the NDA filing. We are also approaching the completion of the construction phase of our manufacturing facility in Danbury. Much of the equipment has already been installed and our validation activities are well underway. Our target submission date for the NDA for Technosphere Insulin remains the end of December 2008. Although this stock is still considered an aggressive goal. Our clinical operations, is busy initiating study 117, a Phase IIIb clinical trial that will examine the effect of TI in patients with tightly controlled fasting glucose levels. As you know out of fear of hypoglycemia, patients today tend to be managed at high fasting levels. So high as to invite the risk of long-term complications and at these high levels fasting glucose, not prandial glucose primarily controls the A1c. Our goal in this study is to use insulin more aggressively by taking advantage of TI superior hypoglycemia profile and observe the affect of this aggressive insulin use…

Thank you, Hakan and good afternoon. Before I get into the financials, let me remind all of you this conference call contains time-sensitive information, which is accurate only as of the date of this live broadcast, May 5th, 2008. MannKind’s management undertakes no obligation to revise or update any statements to reflect events and circumstances occurring after the date of this call. In the first quarter of 2008 total operating expenses were $74.1 million compared to $77.3 million for the first quarter of 2007 and $79.1 million for the fourth quarter of 2007. R&D expenses were $58.4 million for the first quarter of 2008 compared to $63.8 million for the first quarter of 2007 and $66.8 million for the fourth quarter of 2007. The decrease in R&D expenses from the first quarter of 2007 was primarily due to lower clinical trial costs and associated costs of packaging for the clinical materials, and was partially offset by higher stock compensation expense. General and administrative expenses were $15.6 million for the first quarter of 2008 compared to $13.6 million for the first quarter of 2007 and $12.3 million for the fourth quarter of 2007. G&A expenses increased from the first quarter of 2007, primarily due to a one-time patent expense. The net loss applicable to common shareholders for the first quarter of 2008 was $71.4 million or $0.70 per share based on a weighted average 101.4 million shares outstanding, compared with a net loss applicable to common stockholders of $73.1 million or $1 per share, based on 73.4 million weighted average shares outstanding for the first quarter of 2007. Our cash and cash equivalents as of March 31, 2008 totaled $269.1 million as compared to $368.3 million as of December 31st 2007. Our cash burn during the past four quarters has been $81.6 million in Q2 '07, $79.8 million in the third quarter of '07, $85.7 million in the fourth quarter of '07 and $99.2 million in the first quarter of '08. We anticipate our cash burn may increase further over the next one to two quarters and should then decline. Fluctuations in the quarter with burn rate over the next few periods will be due in large part to the timing of our expenditures for our clinical trials and for capital costs for the Danbury plant. With our current cash and availability of the $350 million credit facility from Al, we continue to believe we will be able to fund our operations through the end of 2009. I'd now like to turn the call over to Peter Richardson, who will discuss our R&D activities. Peter.

Thanks Matt. On April 9th, 2008 the following information was added to the EXUBERA package insert and warnings in clinical trials at EXUBERA there have been six newly diagnosed cases of primary lung malignancies among EXUBERA treated patients. And one newly diagnosed case among comparative treated patients. There has also been one post-marketing report that primary lung malignancies in an EXUBERA treated patient. In controlled clinical trials of EXUBERA instance and new primary lung cancer for 100 per 100 patient-years of study drug exposure was 0.13 or 5 cases over 3,900 patient-years for EXUBERA-treated patients and 0.02 or one case over 4,100 patient-years for comparator-treated patients. There were too few cases to determine whether the emergence of these events is related to EXUBERA. All patients who were diagnosed with lung cancer had a prior history of cigarette smoking. We have limited information available on the both records, but note that in both letters to doctors and patients and as shown on the FDA website identifies that EXUBERA is considered a safe and efficacious treatment for diabetes. To-date our Technosphere Insulin clinical program has enrolled 4,849 subjects in 25 completed and seven ongoing trials, of which 2,684 subjects have been treated with Technosphere Insulin and 2,165 subjects received controlled medication. This correspondence to 2,182 patient-years as the Technosphere Insulin treatment and 1,708-patient years of controlled treatment. MannKind received a report of one case of primary lung cancer and the second case of lung involvement in a patient with metastatic colorectal cancer. In both cases, the patients had a prior history of smoking. Conservatively assuming that both reported cases in the Technosphere Insulin treated group are primary lung treatments using to this date the Technosphere Insulin is 0.091 to 100 patient years with no statistical difference to the control groups. Based on…

Thank you, Peter. Matt provided an update on first quarter financials and has reported that we are on plan, even somewhat better than plan. Hakan and Peter have spoken about our clinical program, our progress with the manufacturing facility, some of our product pipeline opportunities, and recent events about EXUBERA and Inhaled Insulin. I would like to take a few moments to make some additional comments about that EXUBERA report, and about the market's reactions to the announcement by Pfizer of a numerical imbalance in their clinical trials in the number of primary lung cancer cases among EXUBERA treated patients versus controlled patients. It is an understatement to say that we were dismayed that from a Pfizer report, so many of the analysts were quick to write off Technosphere Insulin MannKind and that investors have greatly devalued our stock in the wake of that announcement. It was almost as if we had announced a numerical imbalance of lung cancer patients for our own product or that we even acknowledge a genuine safety signal for EXUBERA. The reaction was that strong, but that is not the case. First of all, as Peter noted while there was an imbalance in the Pfizer experience and in the two cohorts. The number of cases of lung cancer in the primary patients did not of itself signal a safety risk for EXUBERA. The actual incidence of lung cancer was consistent with statistics within the general population and that incidence was actually low because every one of those patients was a smoker. According to Pfizer and the FDA, EXUBERA remains a safe and effective medicine. As to Technosphere Insulin, we have seen no lung cancer signaled in our clinical data. Our independent data safety monitoring board has consistently recommended that our trials continue without change. Even…

(Operator Instructions). Our first question is from Sa'ar Yaniv, JPMorgan.

Thank you so much for taking my call. Can you discuss the carcinogenicity study such as the design and the study length?

Peter?

Yes. The first the carcinogenicity studies is the standard 104 week or two year rat carcinogenicity study in Sprague-Dawley rats, which we do with inhalation, as they are (inaudible) exposed to inhale Technosphere Insulin or Technosphere powder for that period on a daily basis. Second study is a six month, using in that a carcinogenic mouse, where we actually treat the rodents with cutaneous Technosphere Insulin. This is one way we're trying to amplify a tumor response by looking at mice that were particularly susceptible to this and that's the one where we have so far, the macroscopic lack of findings, and are awaiting final histology report.

Would you announce the results of that final carcinogenicity data?

I would imagine, at earnings calls that they can do, but I do not anticipate there will be any special announcements around it.

Okay, that is good. We are encouraged by the fact that there has been no cancer signal to-date with TI, but we are concerned that many physicians may hold off using inhaled insulin until they see outcome studies. Is there any other way to tease out the potential for lung cancer for TI aside from outcome studies?

Really the data that we have seen in the patient database we have at the moment is one which is reassuring in terms of the numbers that we have. Clearly, in terms of how we anticipate the agency and physicians looking at this is going to be first analysis of the risk benefit. Our plans will be to maximize benefits of the drug as we have already seen in terms of what it brings to patients with diabetes, and to look at ways of minimizing the risk. As we follow those under our alternative methods, doing out some outcome studies which are normal, post marketing, surveillance approaches and we will be exploring with the agency and with our external advisors in terms of the most appropriate approaches for doing that, as we would with any new product that's being developed.

Okay. Are there any plans for longer term outcome studies, is that the Phase IV type studies?

We have not had discussions with the agency as yet as to what type of longer term studies, what size and scope of those will be required of us, or those which we would want to do in terms of launching a product in to its markets successfully.

Okay. Great thank you very much.

Jon Lecroy, Natixis Company.

Yes, thanks for taking my call. Can you guys talk a little bit about how much exposure you’ve given TI to in smokers, and may be give us an update on, I think it is the O16 Smoker Study. And then at one point, I think you were going to run COPD study as well, so if you could update on that. As far as exposure in smokers, what is the max length of time a smoker has been on the product, maybe an average exposure that you guys have had so far?

In terms of the smoker study we have not done long-term study in smokers that's been a point at which we have excluded patients on the basis of being smokers within a six month period before starting the studies and that's been across all our studies, apart from that which has been specifically designed, which I think is a study designed O16. It is the PK study in smokers, but we show no difference between smokers and non-smokers in the pharmacokinetic insulin response, which is in not contrast and that which has been reported for other insulin therapies. In terms of our other special population studies in asthma COPD, we have had one study running in terms of asthma, but has started now a second study in mix COPD asthma population in terms of looking at that, we anticipate that will be ongoing at the time of filing. This is a difficult area to improve patients. As we look back at the smoking history across our programs, approximately 30% of patients in our ongoing Phase III studies have been previous smokers.

And then length of time, the longest, previous smokers been on?

Previous smokers have now -- our longest study is up to four years exposure.

Okay. Thank you.

Elizabeth Naldi, Piper Jaffray.

Hi, thanks for taking my call. With today's announcement on the collaboration with Leukemia & Lymphoma Society, could you just comment on any in-house expertise MannKind has for developing a tyrosine kinase inhibitor?

Well, I think if I can comment, I think this is a real exciting area to be working in. Certainly from my point of view, the excitement in terms of having lived through Novartis and Gleevec is one of the reasons why this was strictly exciting program. I am very well aware of the need in this area and we're actually doing the preclinical area. How? A small but actually I think talented degree of (inaudible) drug discovery who have been looking at the dosing kinases initially in terms of information, but also now looking specifically where we have made the progress is understanding the fundamental role in terms of lot of the control of the T-cell and it's progression to malignancy, which is really a very new area. And in terms of some of our design we have in-house chemistry and we thought it’s a very external relationships as well since the suite developed the chemistry that's necessary to takes that through development.

Great, Thank you.

Tom Russo with Baird.

Thanks for taking the question. In terms of the perception issue I was wondering if there is anything that you've able to do or can do may be around the ADA meeting, to kind of take that piece of it head on with the opinion leaders, maybe while the EXUBERA issue is still fresh in folks minds?

Sorry its Peter again. At the ADA meeting when we will be -- we do have a first in terms (inaudible) study and we will be presenting those data there. Our dealing so far with the opinion leaders the first of whom is of course our own, the independent CSMB and then the investigator community has all been very reassuring in terms they fluctuate this very much as part of a normal pattern of development that is something external to Technosphere Insulin platform. We have actually worked carefully and closely with this, and we have been open with the data and share that in our dealings with the external advisory board, and we have several of those over the past couple of weeks, the reaction has been very much one way. The defense will be felt on the basis and data and experience and the important thing here is to keep a level head and to be able to deliver the data in our patients in the appropriate studies.

Please keep in mind that by the time cancer and the lung is detected by x-rays, the cancer has been there for quite a few years long before the EXUBERA trial is began.

Okay. And then just in terms of the partnership talks obviously on whole at this point, how far would you be prepared to go alone if the right kind of deal does not materialize after the pivotal data. Just I think you alluded to it earlier. But can you talk a little bit about what you might plan do in that scenario if you do not find an expectable partnership even up to the point of launch?

Yeah, this is Hakan. What we have said in the past that we are prepared to go at alone. We would probably have to look at a different way of approaching kind of the market there at that point of time from let's say global point of view. But there are certainly different alternatives that we could look at. One would be say to mention one is say the Takeda approach where you have to say went to sales force and start that way and maybe you take over the responsibilities. And we have also looked at alternative to say one global partnership would be that you might have very strong regional partnership arrangements. So without being specific and being revealing in any further detail those at least are some of the options that are certainly under consideration.

Okay. Is there a forum or an avenue for you to request a formal discussion with the FDA and to kind of revisit the development program that's been agrees to in the past, but in light of the new data that came out from EXUBERA?

I think our next steps with the agents will be the standard pre-NDA meeting and proposal to submit our file with them and that's in terms of the discussion that we had with the agency said how, what they expect from us.

And you said in a meeting that you would schedule potentially even before you have the entire pivotal Phase III rebate or will be after that time?

Yes, I'm making a schedule according to plan.

Okay. Thanks a lot.

Thank you.

(Operator Instructions). [Thomas Schroeder], your line is open.

Good afternoon.

Good afternoon.

Good afternoon

Thank you for providing the numbers about how much exposure you have seen. I guess you gave 2100 person years in your database so far. I am wondering is that a final number, how much will that number change by the time you submit. Would you give us a sense of how big the number could finally be in terms of exposure?

Off the top of my head, I can not give you an exact number. We still have patients, as you know, on treatment coming to the end of studies at the certain time. So it will increase in that. The numbers that I gave were those which we presented at the DSMB on the April 9th when we proposed and have a very accurate number there. I can not give you the numbers that will eventually end up until we know exactly what the final dates are.

Is that, say more than 75% of the total?

I would have to think about up (inaudible) recruitment in to the study, so I can not guarantee whether it's 75%. This is substantial part of the total exposure, but I can't give you an exact percentage.

Okay. Does your population look about like Pfizer, was their inclusion criteria also no smokers within six months. So are the rates, apples-to-apples rates when we finally see them?

Pfizer have more details than I do, but I know that after smokers are excluded from all that studies as they have been with all inhaled insulins my knowledge often a specific study has been done in smoking populations which you tended to be PK. So I assume that explanation criteria were similar but it's exactly six months or not I do not know.

Keep in mind that the main reason that EXUBERA and EXUBERA excluded its smokers because in that case, the smoking so greatly alter the kinetics of the drug so that they have enormous variation by availability based on how recently the patients smoke even during that day and smoking within the few hours may the big difference not just even a few months.

Right, okay.

You've seen none of that by the way with our drug.

No, I know. Okay. Thanks a lot.

Thank you, Tom.

Our last question comes from Sa'ar Yaniv, JPMorgan.

Hi, guys. Would you tell us what was the reaction any of the prospective partners that you have discussions with in the past, and although you are the one that have discontinued the discussions, have any of them expressed any continued interest?

First of all, actually the reaction from couple of them was that they thought that this was a smart move at the time where the market was kind of in turmoil and yes, there certainly is a continued expressed interest.

What would take for MannKind to continue discussions with these partners?

Well, as we said in our early script from the availability of the Phase III data, we think that the best way to address say some of the concerns in the marketplace right now, but primarily to clearly differentiate the performance of our product.

Okay, great. Thanks so much, guys.

Thank you.

That's all of the questions today. So thank you all for joining us this afternoon. We think this year is only get much more interesting as we begin to analyze our pivotal Phase III data. We look forward to sharing in our progress at the next quarterly call. Thank you for joining us today. Operator?

Thank you for participating in today's conference. All participants may disconnect at this time. Thank you.