Ladies and gentlemen, thank you for standing by. Welcome to the MannKind Corporation second 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, August 11, 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 o Hakan Edstrom, President and COO of MannKind Corporation. Please go ahead sir.

Thank you. Good afternoon and thank you for participating on today’s call. Before we proceed further, please note that comments made during this call will include forwardlooking statements within the meaning of the Federal Securities laws. It is possible that the actual results could differ from those stated expectations. For factors that could cause actual results to differ from expectation, please refer to our reports filed with the Securities and Exchange Commission under the Securities Exchange Act of 1934. To begin, I want to share with you some thoughts from an email that I recently sent to all the MannKind employees. These are exciting times for all of us at MannKind. We’ve just concluded a very successful pre-NDA meeting with the FDA. We are in the process of winding up are pivotal Phase III clinical studies. We are working furiously to assemble our NDA package and we just received the final critical piece of equipment for our commercial manufacturing facility in Danbury. We are transforming from a precommercial proactive development company to a commercial revenues company whose focus is on successful product introduction. Even though this is not scheduled to happen until 2010, the preparations need to start now. I think this email captures the mood at MannKind these days. For awhile last spring, given the external environment, there was considerable gloomy and uncertainty. But as we said at that time, Technosphere Insulin is unique and fills a very poorly met need for prandial glucose control. Also, we are a data driven company and we do not make major decisions based on inaccurate perceptions. We are seeing increasing amount of data that support the unique and important characteristics of Technosphere Insulin and Peter has a lot of information to share with you on this call, so I won’t take too…

Thank you, Hakan. For the second quarter of 2008, total operating expenses were $80.9 million compared to $75.4 million for the second quarter of 2007 and $74.1 million for the first quarter of 2008. R&D expenses were $67.6 million for the second quarter of 2008 compared to $61.5 million for the second quarter of 2007 and $58.4 million for the first quarter of 2008. The increase in research and development expenses as compared to the same period in the prior year was primarily due to increases in manufacturing costs, clinical trial costs, and stock-based compensation expenses. General and administrative expenses were $13.3 million for the second quarter of 2008 compared to $13.9 million for the second quarter of 2007 and $15.6 million for the first quarter of 2008. The decrease in general and administrative expenses was primarily due to lower professional service fees, partially offset by increases in stock-based compensation expenses and salary-related expenses. For the first six months of 2008, operating expenses totaled $154.9 million compared to $152.7 million for the first half of 2007. R&D expenses for the first six months were $126 million compared to $125.3 million in 2007, primarily related to increase in manufacturing costs and stock-based compensation expense, partially offset by lower clinical trial costs. G&A expenses increased by $1.5 million to $28.9 million for the first half of 2008, primarily related to increased stock-based compensation expenses and salary-related expenses, partially offset by lower professional service fees. The net loss applicable to common shareholders for the second quarter of 2008 was $79.8 million or $0.79 per share compared with a net loss applicable to common stockholders of $72 million or $0.98 per share for the second quarter of 2007. The net loss for the first half of 2008 was $151.2 million or $1.49 per share compared with a net loss of $145.1 million or $1.98 per share for the first half of 2007. Our cash and cash equivalents as of June 30, 2008 totaled $180.5 million – $269.1 million at March 31, 2008, and $368.3 million at December 31, 2007. Our cash burn during the past four quarters was $79.8 million in Q3 ‘07, $85.7 million in Q4 ’07, $99.2 million in Q1 ‘08, and $88.6 million in Q2 ‘08. We anticipate our cash burn could increase over the next couple of quarters and would then decline. The fluctuations in the quarterly 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 obtaining capital cost for the new Danbury manufacturing facility. With the availability of the $350 million credit facility from Al, we continue to believe we will be able to fund our operations through at least the end of 2009. I would now like to turn the call over to Peter for an update on our research and development program. Peter.

Thank you, Matt. Technosphere Insulin development program continues to progress according to plan. Our goal to submit the NDA around the end of 2008 remains the single most important objective for the organization. We have once again passed several important milestones over the past quarter, considerably increasing our confidence in achieving this goal on time and with a robust package of data for review by the FDA. One of the most important recent events is to completion of planned pre-NDA meeting with the FDA on July 14. We are encouraged by the agents these written responses to our vision [ph] and comments during the meeting about the proposed NDA. In particular, the agency accepted several chemistry manufacturing and control proposals and gave us positive indications about the overall adequacy of the development program design. The agency focused on several areas of potential clinical importance, such as the assessments of hypoglycemic episodes in the clinical studies. However, the agency gave us no indication at this stage that they will require additional specific pre-approval studies to assess cardiovascular or cancer risks. We will of course design the usual analysis of the data and adverse events from the comprehensive clinical program we have conducted over the past three years. We have agreed with the agency to conduct a bioequivalent study to compare the version of the inhaler used in clinical studies to the version that is optimized for commercial production. We are presently evaluating several scenarios in order to complete this study in the fall, so that it will be incorporated into the NDA. As the leader of MannKind’s research and development group, I’m very proud of what we have accomplished with the TI clinical program. In the planned NDA submission, 5,296 subjects will have participated in our clinical program of 42 trials.…

Thank you, Peter. Over the past few weeks, our stock had begun to recover from the nature [ph] of last spring. Then last Thursday, the stock plunged 22%. It was a bad stock day generally but that could not be the explanation. We then learned of a report that Alfred Mann had died, “Oh my God”, I said to my wife, "What, is it really true?” I assert that the role of death was greatly exaggerated, although it turns out that Alfred Mann had indeed passed away, but it was a different Alfred Mann. I think you can all recognize that Alfred Mann is still alive and is still committed to MannKind and Technosphere Insulin. Of course, we have no idea if that rumor had anything to do with the sell up but in any case MannKind's leadership is very strong, so that my departure would hardly be as catastrophic, except for me. On the other hand, on the more serious note, I’d like to take a moment to address the growing anxiety about regulatory scrutiny and the aversion to risk and the potential impact on approval of Technosphere Insulin. There is certainly widespread belief that the regulatory pendulum is one very far. Many observers asset much too far, but what drives the process of the FDA is data. The agency does not speculate and the staff pays no attention to such speculation. The FDA will base its decisions on the facts they derive from the extensive data that we have generated. Indeed, I doubt all the speculation about pulmonary insulin generally will affect the regulatory process of TI at all. But let me nevertheless comment on some of the speculations and the approval processes that might apply to Technosphere Insulin. Among the concerns that some of you have raised…

Thank you. (Operator instructions) Our first question today comes from Thomas Wie with Piper Jaffray. Sir, you may ask your question. Thomas Wie – Piper Jaffray: Thanks very much. I want to ask about – a little bit about the pre-NDA meeting, when you sat down with the FDA, did you talk about any post-approval commitments or any plans for post-approval studies that you will need to submit along with the NDA?

No. The discussion with the agency centered around what would be in the package. We didn’t address future risk management plans at that meeting, as would be normal. So as far as we are concerned, the discussion centered around what we had already completed and that comprehensive package that we are about to submit too. Thomas Wie – Piper Jaffray: Did you have a very specific discussion with them around Exubera and the lung cancer signal that had been seen? What exactly was their commentary in relation to that?

There was no discussion around Exubera with us. Thomas Wie – Piper Jaffray: Okay. And then just lastly, I know a lot of the focus is right now on the clinical data and the regulatory risks with the drug. I wanted to find out what else you have done in terms of market research around. The commercial adoption and overcoming the perception correct or incorrect that inhaled insulins are associated with lung cancer risk. What do you think is the right strategy to convince doctors that the drug is safe?

First let me say that there is no lung cancer risk even with Exubera for that matter, but certainly not with us.

What we have done, we have met in actually qualitative market research and in meetings with endocrinologists, with PCPs, and also with major managed care managers in terms of addressing what is the perception and I’m actually encouraged by the feedback that we have seen and heard from these people in regards to the fact that again, what we have seen are only the impact in previous long-term smokers and that the reception is certainly not one of panic but one of understanding that, yes, if you do include these types of patients in your studies and the site of the studies, you would eventually certainly run into these types of events. But none of them, I would say is of the opinion that this is caused by say the Exubera or any other products because the timing is such that you would not have seen that. They would not have been on the medication long enough to be able to draw any type of conclusions on the carcinogenicity of these products.

Remember that we had completed two extensive carcinogenicity studies where we’ve actually studied tissue and histology; that is a far more sensitive way to detect any carcinogenicity. We have seen nothing.

And also what I want to say is that we actually did follow up with a quantitative study in, I think, over 400 PCPs, endocrinologists and GPs and the results are still very comforting in regards to intention to prescribe the product for the appropriate patients. Thomas Wie – Piper Jaffray: And so just to paraphrase here, your understanding from those conversations that you’ve had, those market research discussions, is that if you present a data package that does not contain a lung cancer signal that you are under – your belief is that the endocrinologists, the GP community is going to be comfortable with the safety profile?

I think that is correct in terms of an understanding that is very clear when we got that there is differentiation from Exubera and Technosphere Insulin in the terms of some of the very basics. We've got a series of studies which where ongoing looking at the (inaudible) time in lung and looking to fully explain potential differences and where it’s got potential signal, but indeed Technosphere Insulin is indeed different. And I think you see that in terms of the pharmacokinetics. You see that to date in terms of the lack of other pulmonary signals and in terms of what we will then do in terms of moving on with our risk management plan is something that I look forward to in terms of attesting that this is an important time of establishing the real difference of Technosphere Insulin and the Technosphere platform in the way that it delivers peptide to the lungs. Thomas Wie – Piper Jaffray: All right. I will get back in the queue.

In five trials now, we have seen absolutely no impact on pulmonary function. Thomas Wie – Piper Jaffray: Thank you.

Our next question comes from Michael Tong with Wachovia Capital Market. You may ask your question. Michael Tong – Wachovia Capital Market: Hi good afternoon, just two quick ones. The first one is for – actually the first one has to do with cash flow and cash burn. I thought that in previous commentary, you’ve talked about cash burn peaking around mid-'08 and now I am hearing that it may go up in a short term, so just trying to understand what has changed in terms of your thought process regarding cash burn?

It has not really changed. It is really more a matter of timing. I think the actual expenditures or the commitments of cash will have peaked by then. However, any good cash manager will put off paying the bills as long as possible and our payment of the cash out the door is trailing a bit of our commitment, so we expect that some of the costs of the plant and the phase III clinical trials have yet to be paid for, so it is going to continue to stay level or rise even a little bit over the next couple of quarters but that will be over by the end of the year

But not significantly. Michael Tong – Wachovia Capital Markets: Okay. And then secondly, I thought I heard Peter say in study 103 that there was no change in pulmonary function in the TI group and the metformin group monotherapy. Is there any change when TI combines with metformin?

No. There is no change in any of the groups. Michael Tong – Wachovia Capital Markets: Okay, great. Thank you.

Thank you. Our next question comes from Jon LeCroy with Natixis. You may ask your question. Jon LeCroy – Natixis: Thanks for taking my call. I just had a question – actually I have a couple, and then I’ll start with one. The bioequivalent study that you’re doing, when would you expect that to wrap up?

It is going to be tight around the bioequivalent study and we haven’t started [ph] looking at it exactly on how to combat that. We anticipate that we will be able to complete it in quarter four. Jon LeCroy – Natixis: And so, are you still on track for a fourth quarter filing or has that been pushed lately into 2009?

We haven’t pushed it, and we haven’t change that; our organization it still gearing for that fourth quarter filing. Jon LeCroy – Natixis: Okay. And then on the cancer because I think last time you’ve said there were two cases, one may have been metastatic, and I was just wondering are those or at least the lung cancer, is that considered drug related or is that decision not made by the investigator?

In terms of the investigator, I’m sorry I can’t remember the exact causology assessment but I believe that the cancer was not related. Jon LeCroy – Natixis: Okay. And then finally on the 118 obesity molecule, is that Vepsin [ph] or is that some other hormone?

It is a peptide. Jon LeCroy – Natixis: Okay. But you are not going release what peptide.

Yes. Jon LeCroy – Natixis: Okay. Thanks.

Our next question comes from Thomas Russo with Baird. You may ask your question. Thomas Russo – Baird: Hi, thanks for taking the question. I just wanted to be clear, was the transgenic mouse histology data and the one instance of cancer available and part of the FDA meeting?

Certainly, the clinical data was fully available and the agency has been fully informed of those through the ongoing study process and it’s well aware of those cases. Actually, the read outs of the histology data came just about the time that we were with the agency that was chance to briefly update them beforehand that they had a short period of time to hear the reassuring data that we have seen. Thomas Russo – Baird: Okay. And then on the bioequivalent study, can you give any additional color, I know with some companies in this space that has become an important issue and just in terms of how you might be able to satisfy that, and what some of the options that are in play?

Yes, that was one of the major things that we wanted to discuss with the agency because in terms, we had questions on what the design should look like. I think we were successful in achieving, because the changes in the design are – they make no difference to the flow path at all. They were really quite cosmetic, superficial changes which were about the ruggedness of the device, etc., and we have been very careful not to change that. We need to discuss at length with the agency, since they could fully understand that the two devices technically perform exactly the same. So that allowed us to do a much simpler bioequivalent design than we may have feared and that is under review and we will be conducting that as I said fourth quarter. Thomas Russo – Baird: Okay, and then last question. I know the facility, you guys are taking a modular approach which makes perfect sense and I was wondering if you could comment at all about what capacity you will have available at the time of launch?

We have said in the past that at launch, we would have the capability of treating, assuming a person uses three capsules a day, about 400,000 people. Thomas Russo – Baird: Okay, thank you very much.

(Operator instructions) Thomas Wie with Piper Jaffray, you may ask your question. Thomas Wie – Piper Jaffray: Thanks for taking the follow-up. In the 103 study, can you share with us any information on weight gain or differences between the arms on weight gain?

Yes. As I said, I think the surprising thing from our point of view is that really despite significant falls in HbA1c again, we again saw weight gain in this group and that they had minimal severe hypoglycemia. So it’s very consistent what we have seen previously. No expectations. The weight profile and MTI because of this ultra rapid onset and short tail leads to a difference in terms of the effect on weight. Thomas Wie – Piper Jaffray: Thank you.

At this time, we have no further questions.

Thank you for joining us this afternoon. We are very pleased with our progress and we appreciate that we have a rare opportunity in the next few years. We thank our loyal stockholders for your patience and your support. We also appreciate those others who recognize the significance of TI and the need for such a super-fast insulin in minimizing the risk of serious complications for people suffering from the diabetes epidemic. Thank you all and we will see you again, some of you hopefully on September 16 and 17 and then on a quarterly meeting. Thank you all for joining us today.

Thank you. This does conclude today’s conference. You may disconnect at this time.