Ladies and gentlemen, thank you for standing by. Welcome to the MannKind Corporation fourth quarter 2009 and year-end results 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, February 1, 2010. 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, 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. I will summarize our financial results for the fourth quarter of 2009, as reported earlier today. Next, Hakan and Peter will provide updates on key accomplishments during the past year. 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, February 1, 2010. MannKind's management undertakes no obligation to revise or update any statements to reflect events and circumstances after the date of this call. Let us start with the financials. For the fourth quarter of 2009, total operating expenses were $55.8 million, compared to $81.8 million for the fourth quarter of 2008, and $42.8 million for the previous quarter of this year. R&D expenses were $43.1 million for the fourth quarter of 2009, compared to $68.8 million for the fourth quarter of 2008, and $30.5 million for the third quarter of this year. The decrease in R&D expenses for the fourth quarter of 2009 compared to the same quarter in 2008 was primarily due to decreased costs associated with the clinical development of AFREZZA and decreased manufacturing costs associated with raw materials purchases. The increase in R&D expenses this quarter from last quarter was primarily due to the write-off of…

Thank you, Matt. Good afternoon. The fourth quarter of 2009 certainly was eventful for MannKind. We addressed a number of matters with the FDA, including a series of clinical and CMC questions arising from their review of the AFREZZA NDA, as well as the bio-equivalency package that will form the basis for a supplemental NDA to seek approval of our next generation inhaler. The pre-approval inspection by the FDA of our facility in Danbury was successfully completed and we are very pleased with the outcome, only four minor comments that were resolved entirely prior to the departure of the FDA inspector. These are significant achievements from a startup facility, particularly where we are introducing innovative manufacturing insulin technologies on a large scale. Juergen Martens and his team are justifiably very proud of their success. Indeed, I am very proud of the work done by our clinical, regulatory, and CMC teams, all of whom have worked tirelessly to produce a top-quality submission, and to support the FDA's review throughout the year. Our technical expertise has recently been recognized externally. Our Danbury facility has been awarded two ‘Facility of the Year’ category awards. These awards are sponsored by the International Society of Pharmaceutical Engineering, by INTERPHEX and Biopharmaceutical Processing magazine. More specifically, they were the winner in two categories, Equipment Innovation and Process Innovation. Two such awards to one facility has never happened before in the history of this program. Each of the category awards winners, Biogen Idec, Genentech, Pfizer, and MannKind are eligible to win the overall Facility of the Year Award, which will be announced in November at the IFPE Annual Meeting. Of course, the recognition that is on everyone's mind these days is the actual letter from the FDA. As we announced previously, we were told by the Agency…

Thanks, Hakan, and good afternoon. The last quarter has continued to be a busy and productive time for research and development groups at MannKind. We have focused on ensuring prompt and considered response to FDA questions during the review process. I have been very pleased with the dialogs that we have had around the CMC aspects of AFREZZA and the Technosphere platform, as well as the clinical aspect of our product. This clears the time spent creating a fully electronic dossier for this large NDA, with vigorous quality control, has produced the document for this, being well able to support the FDA's review. The Agency has undertaken a number of inspections of our clinical sites and suppliers. It does not have any findings that I anticipate would impact validity and assessment of our data. As you heard, we have also had an expensive new approval inspection of our Danbury manufacturing operation. Although it is frustrating to see per due for date pass without a decision, I anticipate that the delay will only have a minor impact on the potential outcome of our review. The FDA continues to work with us on base presentations that maybe represented on our eventual label, as well as on the proposed (inaudible) that we submitted at the time of our NDA. I am pleased with the progress we made within the FDA on the pediatric program, as we announced in our press release last month. The initial device handling studies in children has progressed well. We have moved forward aggressively with the development of our next generation device. We had feedback from the FDA in November, when we reached agreements on the activities we need to complete in order to submit a supplemental new drug application. We have already completed the clinical part of the…

Thank you, Peter. 2009 was a significant year for MannKind. It was the beginning of the new beginning for the treatment of diabetes. The main activity for us this past year was the submission and review of our NDA for AFREZZA. We heard so much criticism of the FDA, but I must say that I am very impressed with the quality and professionalism that we have seen in the Agency’s review of AFREZZA. When the FDA accepted our NDA for filing on May 21, I was surprised that even in the acceptance letter, the Agency was already well along in this review process, with a number of high-quality and detailed comments and questions. In addition to its detailed review of the extensive NDA file last year, the FDA has performed a number of significant audits of the clinical sites, our suppliers, and also the pre-approval inspection of our Danbury facility. They have approved the name AFREZZA. Importantly, they have also approved our pediatric protocol as a Phase IV study and actually asked us to lower the minimum age from our proposed 12 years to four years. Yet despite all the Agency's efforts, as we have said, the PDUFA date past [ph] was on an action letter. We were told that they needed to complete the inspection of a facility belonging to one of our suppliers that is involved in manufacturing the insulin that we have been using. This brief regulatory delay is really of no consequence to us because we had already decided the delay in the commercialization until we could launch with our next generation device. All our registration trials were done with the MedTone inhaler, which is an excellent unit. However, the new device is smaller, thumb-sized, very good screen, and is much easier to use. It is…

Yes, thank you. We will now begin the question-and-answer session. (Operator instructions) Our first question? Our first question comes from Simos Simeonidis from Rodman & Renshaw. Your line is open. Simos Simeonidis – Rodman & Renshaw: Hi, guys. I know you said you cannot speak about the timing of the visit to France, but could you tell us if as far as you know, the visit to the Organon plant is the only outstanding item for the FDA to complete the review of the NDA?

Yes. As far as we know, that is. We have been obviously answering the FDA questions and continuing the dialog with them. We actually don't know further details in terms of the timing of that inspection. It actually involves cost division and communication within the agency. We communicate directly with the Endocrine Metabolic group and the group responsible for that inspection will be scheduling it separately. We have not reached out to them in terms of trying to determine the date of that. Simos Simeonidis – Rodman & Renshaw: Peter, could you tell us if all the required bio equivalency studies between MedTone and Dreamboat have been completed, and based on your thoughts for the FDA, how quickly you could file the SNDA for Dreamboat, if the MedTone NDA is approved?

Yes, well, as I said, we actually were very pleased in terms of November. We waited a little while for the Agency to give us the feedback on those studies, and we got that in November, but essentially they agreed with us in terms of the design and we were able to move relatively aggressively in conducting the bio equivalency study, which we completed by the beginning of January. So we now have all the subjects with the studies and we are in the process of conducting the rather expensive analysis of the samples for the various measures that we have to take. We also have some relatively limited handling studies to do, which show the robustness device in use, showing that it works over the two-week period and you have to get returns back from the clinical studies of that, as well as some of the CMC aspects which are around the stability of the drug and the new device and new cartridge, et cetera. So with that, we are anticipating to be able to file in the second quarter of this year. Simos Simeonidis – Rodman & Renshaw: Okay; and then finally, what can you tell us about the status of the label negotiations and the status of your discussions on the REMs program for AFREZZA?

Well, I have been pleased with the questions that we had from the Agency. About that, I think that they have been the area that I would expect the Agency to be asking. They concentrated on the clinically-important features that we hover around, the proposal that we have for the label. And we have been able to respond to those within a very short timeframe and they have provided the team stability to do that, and to do that promptly, and it is based on the data that we have had. So no data at all that would lead to something that would extend the review time in the formal sense with the Agency. As you know, we had taken the position that in this day and age, it is normal to have a REMs proposal and we put in an expensive REMs proposal at the time of the NDA submission. And we have had feedback on that, and we have not received anything that is significantly different from that which we were discussing, until we know the final details of that, of course I can’t say exactly what the REMs proposal will be, but we are comfortable with the discussion that we have had so far. Simos Simeonidis – Rodman & Renshaw: All right. Thank you.

One moment please, for our next question. Our next question comes from Keith Markey of Griffin Securities. Your line is open. Keith Markey – Griffin Securities: Hi, thank you for taking my call. I was just wondering, I know that you have been – your proposed NDA has been under review by several sections of the FDA. I was wondering if you could review those with us, and then tell us how is it that you are actually discussing the labeling with the FDA? Is it with a single group or is it within one of the subgroups?

: Keith Markey – Griffin Securities: Thank you. We have had a number of questions come in from various places regarding the status of the inspection of the French plant and I was just wondering, I assume that you are going to be notified of when the inspection takes place, but at this point, at least you are not going to make public the timing of that. Is that correct?

That is correct. We will certainly know through our friends at the facility when the inspection will actually take place. I am not sure that we will be notified by the FDA when the inspection is scheduled. Keith Markey – Griffin Securities: Okay, but you would be notified by the actual plant itself?

Perhaps. We believe so, but it is an independent company and it is a third-party investigation by the Agency. Keith Markey – Griffin Securities: Okay, thank you very much. Peter, you had mentioned that there was – you have tried to tell us a little bit of an update on the GLP-1 product and I was just wondering, I couldn't quite get that all. Could you review that please?

Yes. They were hoping that we will be able to conduct further studies this year. We have been at the surface looking at the results on our GLP-1 base and our prepared abstracts, we prevented some of the – I think we were encouraged by those data and looking how we can move forward with that in clinical studies. Of course, a lot of that is dependent on the activities we have and the focus we have at the present time. Keith Markey – Griffin Securities: Thank you very much.

Our next question comes from Doug Dieter of Imperial Capital. Your line is open. Doug Dieter – Imperial Capital: Thanks for taking my questions. In this new go around negotiations with potential partners, I guess I wanted to ask how your view has changed in approaching the negotiations to find a partner, your expectations. Have new potential partners come to the table, or are you really still actively just focused on the handful of pharmaceutical companies that you were in discussions with six to eight months ago?

Doug, as I mentioned in my commentary is that we have discussions both with companies that they have been at the table before, but we have also been approached by a number of other companies, certainly realizing that we are hopefully very quickly approaching the Agency action time. So, at this point of time, we are entertaining discussions with new partners, as well as those that have been involved with us previously. Certainly, with a minimized risk according to product and increased understanding of what is necessary going towards commercialization, the terms and the conditions on any contract arrangement will certainly be reviewed. Doug Dieter – Imperial Capital: Yes, I mean, I guess I asked this question because we are six to eight months past when we were thinking about and your liquidity position has changed somewhat. And so, I just asked the question in the sense of would you be looking for something with more upfront opportunity than backend, has that changed at all? You know, expectations on how you get paid in milestones, and so forth?

Let me say that certainly there will be some adjustments to what we were discussing before for upfront payments, because after all, we have conducted several of the studies that our partner was going to be doing. And we have also reduced the risk significantly. And we have also, in some of our III-b studies are showing significantly increased value. So we will be reviewing all of these terms as we sit down with our cash departments. Doug Dieter – Imperial Capital: Thanks, Al, and just one other question for Matt, because Matt commented that you have liquidity through, I think you said first quarter of 2011. I get a sense from the burn rate from where you stand now that is pretty similar to what you have been burning this past quarter. And I guess, I am inferring from that and just correct me if I am wrong, that you are assuming a similar R&D expense moving forward, just because of the increased studies of a future Phase II study for – you know, in your earlier stage products. Would that be correct to assume?

Well, I don't want to make it too granular, so I am not going to help you too much, but I am happy that we seem to have approached on a burn rate very much where I thought we would a year ago when we were talking about this. We do say we have $17 million of financial resources and if you do that math, that kind of assumes if you are – it ought to take us well into or through the first quarter. So it is going to be fairly similar to here, here being this last quarter. The reason I am hesitant is because you can see from our past experience that our burn rate is kind of lumpy and that we tend to get big chunks of the flow through. Usually, those are related to the timing of insulin purchases. So it varies a little bit. But, I have pretty consistently said, assume $15 million to $20 million a month and you won’t go too far wrong. Now that is a fairly consistent rate. We did that obviously in the fourth quarter of 2009, but that is a fairly safe assumption for the burn rate with all the various new trials and things we have planned. Doug Dieter – Imperial Capital: Thanks a lot.

Our next question comes from Leah Hartman of CRT Capital. Your line is open. Leah Hartman – CRT Capital: Thank you very much. I did want to focus on Mr. Mann’s loan terms. Has anything substantially changed?

No. That is because of the nature of that kind of a loan that would be very well announced. Leah Hartman – CRT Capital: Okay, I assumed so, but I just wanted to double check. With respect to the pediatric studies, assuming that there is approval for that, how soon would those studies be launched? Is that something you would look for the partner to fund, would you fund them?

Well, obviously, there is a small series of studies. One, where we look at the handling, which we have already started to actually look at with MedTone device and compare that with the Dreamboat device to look at the handling and when anticipating that the Dreamboat will be more suitable for the pediatric population. When we review those data and move that we then got the ongoing commitment now to the larger studies that define the safety and the efficacy in the pediatric population. Now this other thing would be much later in the year than what we actually had in those studies. Leah Hartman – CRT Capital: Okay, that is what I anticipated. And then, with respect to re-engaging and discussing potential partnering with additional candidates, what is your sense with respect to MedTone versus Dreamboat, you know, do you think it is something that – clearly, they wanted to – partners would like to see the label, but is it something that you think that you have the accepted supplemental new drug application or is that a major change in price?

Nobody is really concerned about the approval. The process is very straightforward; the key test has already been completed. That is the major part of the protocol. The partners, as we do, look at this next-generation device as being much more effective and much more desirable for the patient, and the difference is so significant, even though the MedTone is a wonderful device and frankly, far better than what some other people have tried to do, bottom line is that the next-generation device is so much better that we don't want to confuse the market with two different products. So it is only a difference of a matter of months. So that is why we hate the decision to wait. Leah Hartman – CRT Capital: All right. I understand that and certainly wish you good success in these coming few weeks.

Our next question comes from Tom Russo of Baird. Your line is open. Tom Russo – Baird: Hi, good afternoon. Thanks for taking the questions. Regarding the comments on label negotiations, are you able to be specific at this point whether FDA is looking for any class-type language for potential cancer risk or looking for monitoring of lung function? Can you be specific on either of those?

We have no guidance from the agency.

At this point of time, I have no guidance to give on that. Tom Russo – Baird: Okay, and then just revisiting the financial position, can you comment as partnership discussions move forward on whether there is any plans or what the plans would be to raise additional capital in parallel with that, just kind of tunnel and manage your balance sheet, so it doesn't weaken your position in negotiations.

Obviously, it will be foolish to pre-announce plans to do financing of any kind, but obviously, we are looking at opportunities in that area and anybody would be foolish to. Tom Russo – Baird: Okay, thanks.

Our next question comes from Michael Tong of Wells Fargo Securities. Your line is open. Michael Tong – Wells Fargo Securities: Hi, thanks. A quick question for Matt. I was momentarily disconnected from the call. So, if you have addressed this, I apologize. How do you think about the capital expenditure shaping out for 2010?

Well, I mean, we obviously have at this point of budget that it isn’t so very different from the past. We are not looking at huge build-outs in 2010. So you shouldn't expect anything really big. That could always be altered as we head closer to commercialization. To the extent that our productions show we need to expand capacity more quickly than we had predicted. We might consider increasing that. But at this point, it is fairly modest. Michael Tong – Wells Fargo Securities: Okay, great. Thank you.

Our next question comes from John Newman of Oppenheimer. Your line is open. John Newman – Oppenheimer: Hey guys. Thanks for taking the question. I just had a couple – the first one I had, you mentioned that you had a bit of REMs program to the FDA. I may have been mistaken, but in the past, I believe you have said that when you filed the NDA, you had submitted a risk map. So just wondering if you had submitted a risk map and then later in the process submitted a REMs or where you are in that process?

Yes, we certainly talked in terms of risk maps some time ago, and we put this in the Agency, with already talking in terms of grams, we followed that development later and we put in REMs. The Agency issued a guidance in September around the format of that and some of the things that we found put our REMs in compliance with that guidance, which came into quite a lot of detail on there. But I think we have done a pretty good job of anticipating the areas that would be appropriate for REMs. John Newman – Oppenheimer: Okay, so you had submitted something resembling a REMs in September, then?

At the time of the original submission, we submitted a REMs. John Newman – Oppenheimer: So you submitted a REMs at the original filing, okay. And then, I was just curious, you had mentioned that if all goes well, you would plan on submitting the SNDA for the Dreamboat inhaler sometime in the second quarter of 2010. So should we take that that you are assuming FDA approves AFREZZA before that time, since you would?

Well, what you can only put in the next NDA following an approval. John Newman – Oppenheimer: Right. Okay. And then, I was just curious, have you guys received any kind of note or any kind of follow-up to the FDA's phone call, just in terms of a written letter, just anything just sort of reiterating what they said on the phone call?

No, and that wouldn't be their normal policy. So we obviously continue in terms of the discussion with project management with the Agency, follow that way carefully, but I think there is no intention of issuing a written response. John Newman – Oppenheimer: Okay, and then if you – if there wasn’t a partnership in say, second quarter next year or third quarter, do you anticipate how much you might want to draw from your credit line? You mentioned that you have financing until first quarter 2011, but just curious if there was some kind of a range or –?

No. It is a simple answer. John Newman – Oppenheimer: No, okay. And, last one, you are still not anticipating any kind of FDA panel going forward?

I think we had answered for quite a long time now. In terms of neither us nor it sounds like I can make out if the Agency got any expectation of the panel and we have specific (inaudible). John Newman – Oppenheimer: Okay, great. Well, thanks a lot, guys.

Our next question comes from Josh Schimmer’s line. He is of Leerink Swann. Your line is open. Josh Schimmer – Leerink Swann: Hi, I just had a couple of questions. I was wondering, have you met with the Office of Drug Safety at the FDA yet?

Well, once you start with the REMs discussion, that is the Office of Drug Safety that is dealing with that. So yes, it has been that discussion around the REMs, we have responded to that proposal back to us, so that is the involvement of that discussion. We have not had direct discussion with them on any point. Josh Schimmer – Leerink Swann: Okay, and I was also wondering, based on raw material purchases in 2010, can you give us some sort of outlook on that, like how much you expect to be per se in 2010?

No, because that could change, so I would rather not project exactly what that will be. I hope we will have that hammered out by the time you see 10-K filing, and you will see it in there. Josh Schimmer – Leerink Swann: I just, is there a minimum requirement? Hopefully, you will have to purchase a lot more, because you will be launching minimum this year.

There is another contract that is being discussed. Josh Schimmer – Leerink Swann: Okay, thank you.

(Operator instructions) Our next question comes from Gabe Hoffman of Accipiter Capital Management. Your line is open. Gabe Hoffman – Accipiter Capital Management: Thank you for taking the question. In the press release, when you had gotten that phone call, you had indicated that there were no pending answers to any FDA questions or other deliverables due on MannKind’s part. Is that still the case? And then Al, just remembering your remarks from your presentation at the J. P. Morgan conference that your guess would be that you are back from the FDA in three to four weeks; given that we are – it is three weeks later and I was just wondering was your initial guess wrong?

What I said at that time is that we have had no guidance from the Agency, that it would be hard to imagine that if you could get a team over there and get it done in less than a couple of weeks, and my guess is it would be somewhere more like four weeks. But we never really said that it will be done in four weeks and I am not saying it won’t be done in 4 weeks. It could be done, you know, we have until the middle of February. This is the first and we have another couple of weeks and we will see.

Obviously, the real answer is we don’t know and we will know when we know.

Outstanding issues and questions to the agency. And we are continuing dialog with them, so they have questions which we turned down and that was an important base. And we are doing significant things outstanding that all and we are really in an ongoing dialog I think that is how I would describe it. Gabe Hoffman – Accipiter Capital Management: Okay, great, thanks. You are correct; you have got a couple of more weeks for guess to still prove right. Thanks.

And at this time, I m showing no further questions. I would like the call back to Mr. Mann.