Welcome to the MannKind Corporation third quarter 2009 conference call. (Operator Instructions) Joining us today from MannKind are Chairman and CEO, Alfred Mann; President and COO, Hakan Edstrom; Chief Financial Officer, Matthew Pfeffer and Chief Scientific Officer, Dr. Peter Richardson. I would now like to turn the call over to Matthew Pfeffer, Chief Financial Officer of MannKind Corporation. Please go ahead.

Good afternoon and thank you for participating in today's call. As is typical I will summarize our financial results for the third quarter of 2009 as reported earlier today. Next, Hakan will provide an update on key accomplishments during the third quarter of 2009. Peter will then provide an update on clinical developments and finally Al will comment on the current situation and our outlook going forward. We will then open up the call to your questions. Before we proceed further please note that comments made during this call will include forward-looking statements within the meaning of federal securities laws. It is possible that actual results could differ from these stated expectations. For factors which could cause actual results to differ from expectations, please refer to the reports filed by the company with the Securities and Exchange Commission under the Securities Exchange Act of 1934. This conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, November 2, 2009. MannKind's management undertakes no obligation to revise or update any statements to reflect events and circumstances after the date of this call. So let's start with the financials. For the third quarter of 2009 total operating expenses were $42.8 million compared to $69.1 million for the third quarter of 2008 and $53.4 million for the second quarter of 2009. Research and development expenses were $30.5 million for the third quarter of 2009 compared to $55.6 million for the third quarter of 2008 and $39.8 million for the second quarter of 2009. The decrease in R&D expenses for the third quarter of 2009 was primarily due to decreased costs associated with the clinical development of AFRESA and decreased manufacturing costs associated with raw material purchases. General and administrative expenses were $12.3 million for the third quarter of 2009 compared to $13.4 million for the third quarter of 2008 and $13.5 million for the second quarter of 2009. The net loss applicable to common stockholders for the third quarter of 2009 was $45.6 million or $0.42 per share compared with a net loss of applicable to common stockholders of $68.5 million or $0.67 per share for the third quarter of 2008. Our cash, cash equivalents and marketable securities at the end of the third quarter totaled $56.6 million which compares to $40.5 million at December 31, 2008 and $34 million at June 30, 2009. Our cash burn for the third quarter of 2009 was $52.5 million in Q3 compared to $48.3 million in Q2 and $76.3 million in Q1. Our cash on hand and remaining credit facility now amounts to $256.6 million as of September 30, 2009. With that I would like to now turn the call over to Hakan Edstrom, our President and COO, who will provide an overview of the significant events during the last quarter.

Thank you Matt. Let me speak to our ongoing efforts which have been the subject of much commentary lately. As we reported last month we have updated our guidance regarding the timing of the partnership deal. Previously we had guided we were aiming for a deal by year-end with a Q3 stretch goal. However, as discussions progressed it became clear the uncertainty about the final label for AFRESA was creating a challenge to the deal structure and valuation, not just with the partner with whom we had made the most progress but for others as well. In hindsight the misalignment between our partnership timeline and the FDA timeline was inevitably going to create some uncertainty. Our proposed remedy seemed to let the regulatory process play itself out before we attempt to finalize the [inaudible] for AFRESA. We don’t see any advantage in trying to force the deal into existence by an arbitrary commencement date rather than at a point in time when both contracting parties have reached a true meeting of the minds regarding the positioning and the opportunity for AFRESA. We know our product well. We have been continuing to run small studies since we concluded our registration trials and we really understand the potential of AFRESA to change the way diabetes is treated. Peter and Al will have more to say about some of the recent data. My point is only that we have a lot of confidence in AFRESAs ability to meet a poorly met need in diabetes and we have been bringing a number of potential partners higher and higher on the learning curve. One other recurring question we have had lately is whether there will be an FDA advisory panel review process in the December 15th meeting. As we have told you, members of the agency have indicated there is no need for a panel review and we do now know that we are not scheduled to appear at that meeting. It is for another product and another company. Regarding the AFRESA NDA, the agency is now [inaudible] holding a clinical cycle suppliers. With those updates I will turn the call over to Peter.

Thank you Hakan. I would like to share with you some exciting data we reported last week at the International Society for Biological Therapy of Cancer 2009 annual meeting. The preliminary results for two Phase I studies which have demonstrated that our novel, investigative cancer vaccine, MKC1106-MT and MKC1106-PP are well tolerated and show encouraging immunoresponse rates and objective tumor response in very advanced melanoma and in prostate cancer and other solid malignancies, setting the stage for Phase II studies. Before moving to the MannKind vaccines, all patients have active disease progression following failure with conventional therapies. Now to remind you, MKC1106-MT is an active immunotherapeutic product consisting of three components; a DNA plasmid and two synthetic peptides, each of which is administered separately by the unique route of intranodal injection and together designed to target two tumor-specific antigens that are commonly expressed by melanoma tumor cells. MKC1106-PP is a similar agent that is designed to target two specific tumor antigens. [Inaudible] variety to solid tumor cells. Both MKC1106-MT and MKC1106-PP met the primary end points and in addition showed early evidence of clinical benefit which marks an important step forward for MannKind’s oncology portfolio. These encouraging results persuaded us to move into Phase II trials in innovative, targeted therapies which represent the cornerstone of our cancer immunotherapy program. In our ongoing open label multicenter trial, 18 patients with advanced melanoma have been treated with MKC1106-MT and evaluated after each therapeutic cycle at six weeks. Patients demonstrating a clinical response or no evidence of disease progression remained in the clinical trial and received up to eight cycles of treatments over one year. In all patients repeating administration of the treatments was very well tolerated with minimal adverse events. We observed an immune response in 40% defined as the percentage of…

Thank you Peter. Before I address the AFRESA opportunity let me start my comments by saying that because of the magnitude of the AFRESA program no one seems to care about our pipeline. Yet we have several other exciting product opportunities. For example, using the Technosphere process of delivery. We have reported on our GLP-1 program and we will have more to say in the near future. Moreover, as Peter has described our immunology program platform is also very promising. Both of our two cancer vaccines that are in trial present a significant opportunity. The 1106-MT vaccine for melanoma is especially exciting. In the Phase I trial involving 18 stage 4 melanoma patients that had failed all other therapies, patients were classified by whether they had visceral tumors or whether the metastases were confined to the lymphatic system. All four of the patients that were without visceral tumors had durable clinical responses with remission or stabilization in all cases. These results would help to define the patient population that would benefit most from this therapy. With the 1106-PP vaccine we have also seen objective responses in a variety of cancers, especially in hormone resistant prostate cancer, but we cannot yet conclude how significant this will be. So now let me turn to AFRESA. Hakan has spoken about the partnership situation so I am not going to comment further except to say that our overlying objective has not changed. Further, at the recent meeting of the European Association for the Study of Diabetes, just as at the ADA, MannKind did very, very well. We had a total of 15 accepted presentations. That is truly very unusual. For those of you who question whether there is interest in AFRESA clearly this is but another example of such interest. But perhaps the most…

(Operator instructions) The first question comes from the line of Michael Tong - Wells Fargo Securities LLC.

Can you give us some insight into what you think the timeline for AFRESA and Dreamboat will be? How far they might be separated from each other in terms of approval.

Clearly our goal is to accelerate Dreamboat as quickly as we can. We had a discussion with the agency as to what our strategy should be here. We want the approval at mid term, with the date of January 16th, I think you all know, and then be in a position to submit as rapidly as possible a file supporting the approval of Dreamboat which will largely be a technical file. We have well-characterized the device. As I said in this conference call I think we have a good feeling for what we need to do in terms of bioequivalents. We are waiting for the formal feedback from the agency at the moment in terms of the specifics of that design. Also given their recent concerns of what exactly we will do in terms of physicians handling data and some other information which would be normal for a device in that area. It is hard to give an exact time when we will be able to submit that file but as soon after approval of the NDA would be our goal with this which we would hope would be a matter of months.

The FDA asked us not to amend our NDA filing but rather to submit the Dreamboat as a supplemental. I shouldn’t say they asked us. They suggested it.

The next question comes from the line of Simos Simeonidis – Rodman & Renshaw. Simos Simeonidis – Rodman & Renshaw: Could you tell us when the last time you spoke with the agency was and was it during that communication or earlier ones you got any indication that the PDUFA might be pushed back? Whether it be for a panel, and I know Hakan said they told you that you don’t need a panel, or for backlog of work? Do you still expect them to reply by January 15th?

We speak with the agency every week or more. As I said the expected questions we have are in facilitating their arrangements for the inspection and audit of our sites where we conduct the clinical studies, all of which have been progressing according to plan. We see absolutely no indication in terms of the agency anticipating anything that would lead us to believe that there would be a diversion from that date. We have seen a great deal of energy and diligent review as I would expect from the agency on this and we have had a variety of questions to clarify and to deal with the things that one would expect to find in an NDA review, but nothing that has come to date which has been anything that would mean an indication around that. The information on the advisory committee has been thoroughly consistent with the discussions we have had with the agency since the beginning of this review. Although we are well prepared and would have been well prepared should we have had an advisory committee, the indication has been that they are going to progress this without one. Simos Simeonidis – Rodman & Renshaw: Peter, you mentioned about your thinking or plans about going to the pediatric population. Could you elaborate on your rationale and motivation in going after these populations?

The first thing is that we originally had discussions with the agency as to when would be an appropriate time to embark on pediatric studies. We had agreed we would wait until we demonstrated safety and efficacy in a large adult population. I think at that time it was the time when we submitted the NDA so we then look at what our plans should be with concerns of developing a plan it would be normal for the submission to the agency to cover the pediatric rule and the changes have been in terms of the requirements for studies in the pediatric population. So this is something that is a normal part of an approval to have the pediatric plan laid out and to be part of an agreement with the agency in the United States. Of course, around the world there is an interest in pediatric studies and how we do that so again having a plan in place we can discuss with the authorities there is something that is required. With regards to our thinking as well we have also been thinking now in terms of how the Dreamboat device, which because of the improvements in the device and actually reducing some of the complexity. We have a very simple device and actually has a low resistance to insulin which is well suited for children to use. We believe it would be a significant advantage of the product in that. We have also been looking in terms of our own plans in how we would study for the Dreamboat device in light of the fact that it is possibly well suited for the pediatric population. We have to go and do the handling studies and the definitive studies to show that. Simos Simeonidis – Rodman & Renshaw: You have spent some time describing the new findings about the new settings and meal titration and different trials. I am assuming this is something you would do in support of a post-marketing approval, correct?

The new indications clearly are showing that one would hope to do in a post-marketing as we expand the knowledge base on the product. Filing as you know has been based really in terms of a regulatory package which has AFRESA with a limited number of studies using that on its own but using said AFRESA combined with a long active agent. I think there is data that we are seeing indicates that for some patients as we expected given the pharmacokinetics and the results that we have been seeing in the studies that Al alluded to, this has been really the first study in positioning in the Type II population to understand how to take advantage of the fact that really the kinetics of [inaudible] aren’t easily suited to those patients who still have endogenous insulin reserve. But that with conventional insulin you actually suppress that and one of the things we have seen, as you know, is the improvement in terms of the early post-cranial response and the lack of weight gain. I think this is all pointing to what we have been talking about for some time now which is the fact that conventional insulin therapies really don’t take advantage of being what AFRESA can do which is to replace the physiologic insulin pattern and allow in those Type II patients for their own insulin to work later in terms of the later response of a meal. That I think is where we make the important benefit and the long-term and those are the things that Al is talking to in terms of whether we could see efficient long-term progression. Those are the things you would normally do in a market post-approval situation. But they offer some really fascinating opportunities that I think will be very important studies in terms of using an optimized cranial therapy. Simos Simeonidis – Rodman & Renshaw: The reason I brought that up is when I was reading the last paragraph of your press release it reads, “while we continue to be fully engaged…” every time I see that or a lot of times companies use such language to deemphasize the importance of a significant upcoming event. So please feel free to call me paranoid but that is not is indicated here, right?

No. I think we are reflecting enthusiasm for the product going forward. Certainly in terms of future events, anticipating that we will see progress in terms of the review of the midterm and also how we think we can develop the studies to optimize the use of Dreamboat and so…

Certainly with my quotation you are referring to let me say that more than ever I am excited when I see the data and some of the new trials it is truly exciting.

The next question comes from the line of John Newman - Oppenheimer & Co. John Newman - Oppenheimer & Co.: I just have a question about some of the data that has been previously presented. For the TI009 study, I am just wondering if you have ever presented the full analysis for the primary statistical analysis for that study. I know you presented in October this year or perhaps earlier where the MMRM analysis was discussed in detail, which I believe was the secondary statistical analysis. I just wondered if you ever presented the primary statistical analysis in the same type of poster form.

Absolutely. We have presented ADA, MBSD in [posters]. John Newman - Oppenheimer & Co.: I believe the conference interval for the ITT on OCF was close to 0.4 but it was not overlapping, is that correct?

It was at the margin. It was 0.04.

The next question comes from the line of Joshua Schimmer – Leerink Swann. Joshua Schimmer – Leerink Swann: Assuming you do get the AFRESA approval around the next phase, what happens to your commercial plan? Do you launch ahead of a partnership? Do you put the launch on hold until you sign a partner? Are you in the process of doing up to launch right now? Maybe you can give us a bit of color around that.

I can speak to that one. First of all please remember as we said earlier today is that we are looking at a complete approval that would include the Dreamboat. We would submit the NDA immediately upon approval of AFRESA AFRESA hopefully by the time in January. That gives us still some time to continue our discussions particularly with the clarity of the label in hand at the time and pursuing what we feel to be a good approach which would be a global partnership on sales and marketing activities. Joshua Schimmer – Leerink Swann: So there is no launch, or you don’t plan launching until Dreamboat then?

That is correct. Joshua Schimmer – Leerink Swann: And what type of discussions have you had with the FDA so far regarding the AFRESA label and the post marketing study commitments and the [rent], if any?

Clearly at the NDA meeting one of the things that we expressed in terms of an expectation of what the label would be. We presented the label in the NDA and the indications in terms of [inaudible] is that the agency would move to have discussions with us around that. We have presented our plans for the requirements as we would expect and we have not really got into a stage of further discussions as that would not be normal at this stage of review but we anticipate moving to that rather shortly. Joshua Schimmer – Leerink Swann: Amongst some of the earlier clinical data that you highlighted during your prepared remarks, what are you expecting you can have on the label and as you think now about Phase III programs that you can run in the post-approval setting what are you thinking of doing there? Again, are those programs you would run on your own or do you wait for a partner to include that in a commercialization deal to kind of help fund some of the Phase IV commitments?

First let me say we are planning those trials. We will do those ourselves or funded by our partners depending on when the partnership is finally signed. On the other hand let me address your more basic question, what do I see in this. What I see is in Type II diabetes what we are seeing is that for a huge range of meal composition, at least from even zero food intake all the way through to 100 g of carbohydrates in a meal, we look to see if that even goes higher, we see absolutely no risk of hypoglycemia and yet just a modest depression below baseline and [ex all post-cranial] controls. What is happening is we are turning off gluconeogenesis. We are turning off hepatic glucose from the liver and we are also energizing the endogenous insulin released from the pancreas that still remains until you get to late stage Type II and the body itself using AFRESA to offload the pressure on the pancreas. The pancreas is able to control glucose levels exceptionally well. That means that this could be an ideal drug throughout the entire spectrum of diabetes from the beginning or even pre-diabetes to insulin therapy at the end of the disease. Joshua Schimmer – Leerink Swann: It does sound like that is a very differentiated profile so I am wondering whether that is something you think you will be able to have on your label to actively promote it in time of the Dreamboat launch or whether that is something you will need to run additional clinical trials to get on the label as a marketing feature.

It is probably we won’t get it on the label even with Dreamboat, although we will have some more data at that point. But there will be trials that will be conducted and peer reviewed findings that will make this very compelling. You are going to change with this the entire concept of diabetes therapy. That is not going to happen overnight and we couldn’t supply the number of patients even if we could. So we need to progress this at a reasonable rate and we will have plenty of time to get the message out but the message that we see in our studies is very compelling. By the way, when we look at the earlier studies and look at the timing of hyperglycemia, I have to tell you that most of the hypos, certainly most of them if not almost all of them, are not caused by the AFRESA. They are caused by the other drugs they are being given along with AFRESA.

I think when it comes to the label the very important factor is we will be able to very clearly describe and have well characterized pharmacokinetics and once you understand the unique pharmacokinetics actually most of the other things just fall into place. We hope to communicate that from the label and it will be one of the clear differentiating factors.

The next question comes from the line of Doug Dieter – Imperial Capital. Doug Dieter – Imperial Capital : My first question, in your discussions with the FDA has there been any sense of the need for additional data? Any additional data requested that could potentially postpone the PDUFA date?

No. To date the questions we have had have been mainly complication and some further representation of data that we had already made available. We have had no requests for additional data to date. Doug Dieter – Imperial Capital : Regarding the bioequivalent study that you submitted and are waiting for hear from the FDA, you mentioned that a small trial is to be done by, I can’t remember if you said yearend or January, but will there be two bioequivalent studies necessary or are you expecting one that will be done by January?

No. We anticipate one bioequivalent. Bioequivalent is usually done on one relatively small. The specifics of bioequivalents is something that is pretty well worked out and standardized. So they usually avoid giving two studies. You do one and do it defensively. Doug Dieter – Imperial Capital : Regarding liquidity, Matt based upon your burn this quarter it looks like if you were to keep that run rate you would have six additional quarters of liquidity remaining based on a 256.6. Can we expect additional cash burn to go down a little bit further here or are we at a steady state where we are?

It is possible to come down a little further but not a whole lot. I think you are seeing most of it at this point. You are seeing it, in some ways it was a little deceptive this quarter because we paid down some of our payables and used up a little more of our cash than what would have been applied by our operating expenses. You can see the operating expenses continue to climb pretty significantly this quarter. We are getting there. I think it is going to continue to go down but it is mostly because frankly some of those payables we are paying are still some of the costs from the Phase III trial. So we probably put out close to $10 million recently in closing out all those studies. So there is still trickling costs coming out of those but we are mostly out of it now. I think we reached the last of that in this quarter. There isn’t a whole lot left and we are getting down to a more constant run rate. Of course all of that is absent what may happen with partnership, commercialization efforts and so forth. Doug Dieter – Imperial Capital : My last question would be since the partnership did not occur by the end of September, can you characterize a lot of the discussions you are having with that same partner and potential other partners in getting them up to speed and where you feel you stand right now?

We are continuing to have discussions with that partner that we were so heavily involved with but as Hakan said we would like to get a better handle on the kind of studies that might be important given the label. As we discussed today there is a number of studies that will expand the use of this product and we don’t know how many of those will be necessary given the fact we haven’t seen the agency response to the label proposal. So that is really the major issue we are trying to resolve so we can get any sort of a synchronization of our needs and the partner needs. We have also had conversations with other partners who are also anxious to see what the label is before we sit down and try and work out details. Doug Dieter – Imperial Capital : There has been a lot of discussion around the relevancy of having and not having an FDA advisory panel just shortly ahead of the PDUFA date. I know you have had commentary on this in the past but I was hoping you could just make this comment again; on your view on what it means to not to need the FDA advisory committee meeting.

I think I would like to answer that one. First, I don’t understand the basis for some of the people having a negative interpretation regarding the FDA’s decision not to call an advisory panel for AFRESA. Some time ago we were told in a telephone conversation with the agency that the FDA did not believe there was any question about AFRESA that would justify an advisory panel. Because the agency could later decide on a meeting we didn’t share that comment. However, now that it is official we can say that the FDA is not calling the panel meeting for AFRESA and that is certainly not a negative thing. That should be interpreted as a very positive factor. We continue to have interaction directly with the agency on various subjects regarding AFRESA. So far there have been no difficult questions and we are pleased with the depth of the FDA’s review and evaluation. While we were sort of looking forward to and preparing for the advisory panel, we are sort of relieved we don’t have to do it.

The next question comes from the line of Michael Tong - Wells Fargo Securities LLC.

A quick follow-up question for Matt. How should we think about R&D spend going forward for the next 2-3 quarters?

It has gone down. It may decline a little bit further. We are kind of getting down to about where I expected it to be by the end of the year. So I think you are going to see some continuing slight decline in R&D and frankly in G&A spending. Where it gets a little less certain is the things that as we get closer to launch and so forth you might start seeing some spending coming up in fixed assets and so forth. But the basic cost categories you should see at worst steady state and maybe some continued slight declines.

I am showing no further questions at this time. I will now turn it back over to Mr. Alfred Mann.

Thank you all for joining us today. We are certainly very pleased with our progress and are looking forward to the PDUFA date and we have no reason to believe that the FDA will not meet that date. They are certainly working diligently towards that goal. The more we see of AFRESA the happier we are and the more convinced we are that it will be a very significant product. Thank you all. We will see you again at the next quarterly meeting.

Thank you all for participating in today’s conference. You may disconnect your lines.