Ladies and gentlemen, thank you for standing by. Welcome to the MannKind Corporation First Quarter 2012 Conference Call. [Operator Instructions] As a reminder, this call is being recorded today, May 9, 2012. Joining us today from MannKind are Chairman and CEO, Alfred Mann; President and COO, Hakan Edstrom; and Chief Financial Officer, Matthew Pfeffer. I would now like to turn the call over to Matthew Pfeffer, Chief Financial Officer of MannKind Corporation. Please go ahead.

Good afternoon, and welcome, and thank you for participating in today's call. I'll summarize our financial results for the first quarter of 2012 as reported earlier today. Then Hakan will discuss our current operations, and Al will conclude with an overview before we 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 the 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 and Exchange Act (sic) [Securities Exchange Act] of 1934. This conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, May 9, 2012. We undertake no obligation to revise or update any statements to reflect events or circumstances after the date of this call. For the first quarter of 2012, total operating expenses were $33.9 million compared to $30.6 million for the fourth quarter of 2011 and $38.1 million for the first quarter of 2011. R&D expenses were $24.2 million the first quarter of 2012 compared to $20.2 million for the fourth quarter of 2011 and $26.3 million for the first quarter of 2011. The decrease in R&D expenses for the first quarter of 2012 compared to the same quarter in 2011 was primarily due to the decreased salary-related costs, as a result of the February 2011 reduction in force. So over the increase in R&D expenses this quarter from last quarter was primarily due to an increase in clinical trial-related activities as Trials 171 and 175 were initiated in the third and fourth quarters of 2011, respectively.…

Thank you, Matt. Good afternoon. The focus of the organization during the first quarter certainly have been on the clinical trial programs, and all of our clinical trials are progressing satisfactorily. Our 2 trials, the 171 and 175, are well underway. We've opened all the planned sites in the U.S., Russia and Ukraine, and they are actively bringing in patients to the studies. As early in the month, we had screened approximately 75% of the planned patients in both trials. We have experienced higher-than-expected screen failure rates, that is patients that are evaluated but participation in the studies do not meet the protocol requirements for inclusion. To address this shortfall of patients, we have initiated more sites in the U.S. using our own monitoring staff. We've also contracted with a CRO to start up a number of additional sites. And in addition, to help our sites identify potential patients, we are working with a vendor who will identify and refer additional patients to our study sites. We expect these measures to help expedite the screening and enrollment process. As you will remember, we previously stated that we had hoped to complete enrollment in both the 171 and 175 clinical trials by the end of this quarter. While we have not yet given up on this timeline, it is foreseeable that the studies will not be fully enrolled until next quarter with last patient, last visit taking place sometime early in 2013. And now -- let's now turn over to our oncology portfolio. As you probably notice by our press release on April 30, we have successfully reported one of our promising oncology compounds with Salt Lake City-based Tolero. We are very happy with this collaboration since it will allow the program to get its focus it deserves while allowing MannKind the opportunity to participate in the success of the program or even step back into development and commercialization role at a specified point in time. And in closing, in my section, I'm sad to announce the resignation of Dr. James Shannon from our Board of Directors. As was recently announced, James had accepted the position of Global Chief Medical Officer for GSK with placements in London. James has been a prominent member of our board and provided a very valuable service to our company and our programs. In his new role at GSK, he was asked to resign his board positions given his anticipated workload. We thank James for his significant contributions to MannKind and wish him much success at GSK. And with that, let me now hand the call over to Al.

Thank you, Hakan, and good afternoon. As Hakan described, MannKind's primary focus has been on completing the MKC-171 and MKC-175 Affinity trials to enable us to reach our objective of approval. Recruitment is well underway, and our clinical team is working hard to bring even more sites online so that we can get the last patient first visit as soon as possible. I truly believe that AFREZZA will fill a very important need throughout the entire spectrum of diabetes. The extensive clinical program, to date, has shown AFREZZA to yield superior clinical benefits in so many measures, though not yet superiority in HbA1c. Occasionally, I get asked to explain why in our trials AFREZZA has only been non-inferior to standard prandial insulin therapy in terms of lowering HbA1c. The key to this is that out of fear of hypoglycemia, the physicians who have participated in our clinical trial are used to managing fasting glucose levels very high. They do so because the late postprandial persistence of current prandial insulin products create hyperinsulinemia that can cause a significant drop in glucose levels. Even though AFREZZA does not have the late postprandial persistence, basal insulins have not been separately titrated for the AFREZZA cohorts in our trials, so that fasting levels are excessively high in those patients as well. Since the HbA1c is really an average glucose level over 2 to 3 months, these high fasting glucose levels tend to mask the more physiological prandial benefits of AFREZZA. With our current study MKC-171, we are targeting this issue head on by requiring the fasting glucose level to be lower to under 110 milligram per deciliter, unless there is hypoglycemia. In earlier trials, even with AFREZZA cohorts, clinicians have generally not increased basal insulins to adjust fasting glucose to goal. In the Affinity…

[Operator Instructions] And the first question will come from the line of Karen Jay of JPMorgan. Karen E. Jay - JP Morgan Chase & Co, Research Division: This is Karen in for Cory Kasimov. I have a couple. My first, I'm just curious on the enrollment, that the trials are going a little slower. I was wondering if you could comment on the number of sites and how it might have compared with your prior late-stage trials, and if there's anything that you can pinpoint in the patient inclusion criteria or product modality or administration that might be driving this slow enrollment.

Could you make a comment on the number of sites that we're working with?

Yes, Hakan. We have 47 sites in the U.S. and 29 sites in Russia and the Ukraine currently enrolling in the 171 study, and we have 45 sites in the United States enrolling in the 175 as well as 21 additional sites in Russia. Karen E. Jay - JP Morgan Chase & Co, Research Division: And so was that fairly comparable to what -- I guess what I'm getting is if whether or not you underestimated the sites when you began the trials.

That's correct. Karen E. Jay - JP Morgan Chase & Co, Research Division: Okay. And nothing in the inclusion criteria that you think might be limiting for patients?

No, they're not. Karen E. Jay - JP Morgan Chase & Co, Research Division: Okay. And then maybe a follow-up on the cash runway. And how much was the recent deal helped to sort of extend that? And are licensing out other cancer compounds a big priority for you in the near term?

Well, this is Matt. I'll be happy to try to answer that. Certainly, first, I'll address licensing is certainly a priority but we're not prepared to address anything specific there until we have something to announce. The recent financing, as Al mentioned, was intended to be a bridge while we examine some other alternatives. We've long said we were looking for some non-dilutive or minimally dilutive financing sources. There are still some of those out there. But again, as I mentioned, we don't want to preannounce something before we have something specific to say. So we're working on that and feeling cautiously optimistic, but it's not done till it's done. In the meantime, we have cash that'll take us comfortably into the fourth quarter as we have some breathing room, and I hope we'll have more to announce on that soon.

And the next question will come from the line of Ian Somaiya, Piper Jaffray.

This is Matthew in for Ian. Just a couple of quick questions. So the first, I was just wondering if you could provide any more insight on the BTK deal, maybe any specifics on how the $130 million in upfront -- potential $130 million in upfront and milestones you've broken out, and more qualitatively, your perspective on how your BTK compares to others that are more advanced in the clinic, maybe the Pharmacyclics or the one Celgene just acquired.

Well, this is Matt. I'll try to address the $130 million, and I'll leave it to something more -- somebody with a more scientific bent to discuss the BTK program in that level. As is traditional for these kinds of deals, in order to satisfy our requirements to give an idea of the scope of the transaction, we tend to accumulate the milestone payments into a total amount. It's kind of general long-standing practice to give an idea of the scope of the transaction, but the people you've contact with these kind of deals don't want you to. And we usually ascent to not give details because that is important information in the hands of the next person that they do a deal with, and that's why it's become such a common practice. The exceptions are we try to give some idea of the scope of the transaction by accumulating the milestones, which we did. And if there were a material upfront payment, we would typically disclose that. Obviously, we didn't feel we had anything to disclose. And beyond the bounds of confidentiality, there's not much more I can say about those particular aspects.

What was the second part of your question?

Just any perspective that you might want to share on or thoughts on how you think your BTK program is different or stack or lines up against those that are a little bit further along in the clinic.

None of us here is a researcher. So I would only say that based on the assessment that we've gone on our programs in trying to find partners, we've certainly been encouraged by the reaction to the program. It is still, for us, a -- really a preclinical program. So from that point of view, I think we need to be a little bit careful in making statements beyond what we have right now and the fact that we've attracted interest and been able to close the deal for the project itself.

Okay. And if I may, just one other more housekeeping question, I guess for you Matt. What's the updated diluted share count? Did -- and does that reflect The Mann Group transfer that was sort of pending as of the last quarterly call?

It's the -- as of the end of the balance sheet, we had about 168 million shares outstanding, but that does not reflect all of the shares that will ultimately be shifted out. So you can look for an update on that shortly following our stockholder meeting next week.

[Operator Instructions] The next question will come from the line of Steve Byrne, Bank of America.

It's Tazeen here for Steve today. I just had a question on the status of the 175 and the 171 trials. Given the fact that you're a little bit behind in enrolling, what does that do towards your timeline in 2013 for responding to the CRL with FDA?

I would say that with the initial activities that we have now underway, we are still very optimistic in regards to the fact that we will be able to complete the trials in early 2013 and, say, about 90 days following that to be able to submit the NDA to the FDA. So we are not really changing our targets in regards to be able to submit the application, say, in the first half of 2013 based on where we stand today.

Okay. And then as far as your expenses for the quarter, should we expect that to be your run rate for the rest of the year?

More or less. I mean, it should start to stabilize out now. We've -- I've been checking -- projecting some increases for some time that we started seeing in this quarter. There's a chance being on how the enrollment trends go that it could in the -- at least, in the clinical trial area, go up a little bit next quarter, but I don't think it'll be substantial. And we're -- in the meantime, we're spending less in other areas. So it's hard to see how all that will wash out, but that's a fair guess from this point, Tazeen.

Okay. And my third question is maybe you could talk a little about opportunities that you see for AFREZZA in the emerging market world outside of the U.S.?

Al?

Well, we have conversations going on with a number of regions. There's a lot of interest in AFREZZA. This is, of course, a drug, a therapy that will be effective in the entire spectrum of diabetes. And so there's an enormous market potential here. And as I say, we've seen a lot of excitement, a lot of interest in a number of countries.

So would you wait for an ex U.S. partner before applying to these regions, or would you start the process at the same time that you would do the U.S. process?

Well, we've already started the process. We're in discussions with several at this time, although we can't make any announcements yet.

And there are no more questions at this time. I would now like to turn the call back to Mr. Mann for closing remarks.

Thank you all for joining us today. We look forward to our next call in August, and we'd hope to be able to present further progress on the status of our clinical trials and other developments. Thank you all, and goodbye.

Thank you, again, ladies and gentlemen, for your participation. This concludes today's conference. You may now disconnect, and have a great day.