Ladies and gentlemen, thank you for standing by. Welcome to the MannKind Corporation 2016 Third Quarter Conference Call. As a reminder, this call is recorded November 9, 2016. Joining us today from MannKind are Chief Executive Officer, Matthew Pfeffer; Chief Commercial Officer, Michael Castagna; Chief Medical Officer, Raymond Urbanski; and Principal Accounting Officer, Rose Alinaya. I’ll now turn the call over to Ms. Rose Alinaya, Principal Accounting Officer of MannKind Corporation. Please go ahead.

Thank you. Good afternoon. And thank you for joining us to discuss MannKind’s third quarter 2016 performance. Our third quarter results were released this afternoon and are available on the SEC’s Edgar system and on our corporate website. Before we proceed, I’d like to remind everyone that comments made on this call will include forward-looking statements within the meaning of federal securities laws, which are based upon current expectations that involve risks, changes and circumstances, assumptions and uncertainties. It is possible that the actual results could differ from these stated expectations. For factors which would 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 of 1934. The information we provide on this call is provided only as of today, November 9, 2016, and we undertake no obligation to update or revise publicly any forward-looking statements to reflect events or circumstances after the date of this call except is required by law. I will now turn the call over to our CEO, Matt Pfeffer. Matt?

Thank you, Rose, and good afternoon to our investors, analysts, members of the diabetes community and Afrezza users. Thank you for joining us on today’s call. I am excited about accomplishments of our leadership team, we have been able to execute on over the last several months. The intense focus to transform the company has resulted in our ability to extend our cash runway out to Q3 of 2017 without causing shareholder dilution, while simultaneously creating financial flexibility for us to take some calculated bets on Afrezza. By now you have seen our earnings release, one of the highlights of which is $126.5 million net income. This release included many new elements, including our first quarter of commercial sales, an income statement recognition of items related to the Sanofi collaboration that previous have been deferred. What is not included our two new agreements, being announced with this call, which I would like to discuss now. Next slide please. First, I am very pleased to announce that we have reached an agreement with Sanofi that contains several key elements. First, Sanofi will forgive the entire amount of our loan from them of $71.6 million and terminate the associated note and security agreement. MannKind’s also release from its obligation to pay a $0.5 million in previously uncharged costs related to the collaboration. Next, Sanofi will purchase $10.2 million worth of insulin from MannKind in early December. Note that this insulin is considered surplus to our current needs and its carried on our books at zero value. Finally, Sanofi will pay an additional $30.6 million in cash to MannKind in early January, cancelling and settling our Insulin Put agreement with them without or having to deliver any further insulin. In addition, it should be noted, that the termination of the promissory note and…

Thank you, Matt. Turning now to the financials, the third quarter of 2016 was a significant reporting period for MannKind. Our financials reflect the recognition of several previously deferred amounts related to the Afrezza collaboration, as well as the first quarter of MannKind branded Afrezza product sales. In the third quarter of 2016, we recognized total net revenue of $162.4 million, of which $161.8 million resulted from our ability to satisfy the accounting requirements for revenue recognition this quarter, following the termination of the Sanofi license agreement. The total amount recognized relates to activities from prior periods, which were previously deferred, including the upfront payment of $150 million and milestone payments of $50 million net of $64.8 million of net loss share amounts related to Sanofi, as well as $17.4 million in sales of Afrezza and $9.2 million in sale of raw insulin, both to Sanofi. Additionally, we recognized $22.7 million of previously deferred costs from the collaboration, which consisted of $13.5 million in Afrezza, manufacturing cost for products sold to Sanofi in 2015 and $9.2 million for a change in estimate in our recognized loss on purchase commitments as a result of the sale of raw insulin to Sanofi. We began distributing MannKind branded Afrezza products to major wholesalers during the week of July 25th. This being our first quarter of commercial product sales, we do not have enough sales history to reliably estimate expected product returns at the time of shipment into the distribution channel. As a result, we are currently only recognizing Afrezza revenue at the point prescription units are dispensed to patients based on reported prescription data. This model necessarily recognizes a relatively small percentage of sales into the wholesale and retail channel, and will change as a longer history of product return patterns is established.…

Thank you, Rose. Today was an important milestone for the company in order to transform us from a development and manufacturing company into a fully commercialization company. With that said, we have learned a lot about Afrezza since not only taking it back from Sanofi, but also from our own real world experience. Couple things I will share with you before I go into details is, we have learned that patients dropped off Afrezza for two reasons, one was because of cost and two was because of efficacy. And there are other reasons they dropped out, but the two predominant reasons are based on this two factors. One thing I’ll share with you as we continue to improve formulary access, we will see best drop out to the cost, but the efficacy part is important one that you will hear from why we are talking about today. We need to continue to reinforce appropriate titration early on in treatment and as we solve that we’ll continue to see increase in retention of our patients. Since we have launched we believe that continues to get better than it has been in the history. The second part we have learned is almost one out of two patients receive Afrezza as a direct result from asking their doctor to prescribe it and the other half get it because their doctor recommended it. Obviously, with our average out there over the last three months, we want to continue to shift that imbalance that doctors voluntarily want to prescribe it and feel it is a great option for their patients. However, at the same time, we need to continue to increase our focus on driving patients in to ask our product by raising awareness and opportunity. Now let me bridge into why we believe we…

Thank you, Mike. It’s important to remember that insulins are characterized and use clinical based on their pharmacokinetic profile. In this regard, Afrezza is unique among all the currently available insulins. The slow absorption of insulin from the subcutaneous tissue remains to be a limiting factor when they are used. This is true also for the current rapid acting analogs where their slow absorption does not make normal physiologic insulin accretion. Afrezza does not have these limitations. Next slide, Afrezza has characteristics of an ultra rapid acting physiomatic insulin. These unique characteristic afforded a key place in a physician [ph] on atrium to treat diabetes. Our recently completed pharmacokinetic and pharmacodynamic study clearly demonstrated Afrezza’s ultra rapid action. Based primarily on these results we have submitted a label change with the FDA. This label revision will clearly differentiate Afrezza from other existing classes of insulin. Discussions with the FDA are ongoing and we are currently expecting a Q4 2017 approval for the label. Next slide, now looking at our clinical development program for Afrezza, we recently met with several of our pediatric starring committee members and are working through some potential protocol changes for the PK portion of this program. In addition, we have identified key partners, which we have announced previous for our pediatric program and they are going to replace and already supporting our activities. Next slide, the subsequent pediatric Phase 3 trial, which with we will file for pediatric indication, we will incorporate evidence not only from the PK study that we have conducted previously, but as well as data from recent publications. These publications as you can see on this slide include dosing simulation work and the Afrezza used with the artificial pancreas. The use of Afrezza with the artificial pancreas is impressive and promising, and…

Thank you, Ray. So, in summary, for the third quarter we began reporting commercial sales and significantly cleaned up our balance sheet, recognizing many items that have previously been deferred, while creating the ability for us to extend our launch runway. Subsequent to quarter end do not reflected in these results, we announced today an important agreement with Sanofi providing near-term cash and improving our overall financial position by over $130 million. We also announced today the completion of our revision to our largest supply agreement, pushing out our next purchase commitments to the fourth quarter of 2017 and reducing our contractual cash burn under that arrangement by $65 million for the period of 2016 through 2018 compared to the prior contract. As a result of these items and steps taken previously, we have extended our financial resources comfortably into the third quarter of 2017. [Ph] Continuing the (43:11) matters of the finish line today took significant work and extraordinary efforts. And I want to thank all those involved in finalizing these two agreements during the course of the last several hours. Additionally, we’ve reported progress on the commercial side, as Michael said, we have learned a lot since we re-launched Afrezza. We confirmed the Afrezza is promotionally sensitive and planned to expand our sales efforts to grow sales more quickly, where we believe we will have an impact. We also plan to expand our targeted direct-to-consumer advertising to now include television. We continue to have success in our partnerships with payors such as our contract with Express Scripts, which covers approximately 50 million lives on commercial and Medicare Part D, and now being covered with no further prior authorizations required. Next slide, on the development side, we have filed in our discussions with FDA regarding an improvement to the…

Thank you. [Operator Instructions]

We are having a technical challenge. So I am asking everybody for bear us, we seem to be having some technical issues getting our question queue organized and pop me in and out, so bear with us for a moment and we will be right there. Okay…

And our first question, sorry, our first question comes from Stephen Weil from Oppenheimer. Please go ahead.

Yes. Hi. This is Steven Weil. MannKind Corporation has many patents for various products [inaudible]. Can you give us any information on things other than Afrezza and the epinephrine.

Yeah. We’ve done that multiple times before, I can ask, Ray, if he wants to talk them. We actually, I am laughing a little bit to myself, because Ray, actually had a section answering that very question, which we removed, because we thought the presentation was running little long and we had some other things to talk about. So, Ray, do you want to say couple words on that topic?

Yes. Certainly, so we have a range of compounds in development, slightly more than 10 on the list, some include NCEs related to sort of pain management, others are B2 type of drugs, which we’ll be looking at, some are related to diabetes such as Symlin, for example, others are related to other disorders like parathyroid hormone, for example. So we have -- we do have a fairly extensive portfolio that we are still looking at to leverage, our innovative oral inhalation technology and the pharmacokinetic profile that will provide. We believe we’ll have several compounds in development in 2017.

Thank you.

[Operator Instructions]

Once again I’ll ask everybody to bear with us a little bit. Our typical practice is always been to, we have so many retail investors, it’s impossible to take all the retail investor calls, and so we’ve tried to limit calls to analysts and 5% or more stockholders, and such as that. Today we’ve seem to be getting varied and private investor calls, so we are having little troubles weeding out the other ones. We are getting some questions coming through online now, so while we try to work this out, I guess, since Michael is good enough to hand a couple of it to me right now, I can try to address them. One of the most frequently asked questions they are coming through on the online we ask has to do with delisting. I am not sure what exactly to say about that. I am not terribly concerned about delisting, I think, the news today we’re long way to solving that problem. It’s not going to be an issue till sometime in like the second quarter of next year by which point we have -- we expect to have a lot of this accomplish that will make this whole issue go away. But I can tell you that a reverse split or such as that has not currently on the table. Doesn’t mean we never consider if we came to that. But, currently, we have no plans to do it. And I am hoping our dramatically improved financial position will help resolve some of this issue. I also have question comes through related to some confusion about our cash position and what cash is actually available, so I’ll try to answer that one, because I have actually seen that misrepresenting a bunch of times, because many talk about a requirement under the Deerfield debt agreement that we maintain $25 million worth of cash, and I say, we will take it down to as we work into the quarter, $35 million, that means you really only have $10 million available. That’s not actually true. The way that debt agreement was structured is that included not only cash, but also available burrowing. So as long as we have $25 million or more available from the Mann Group, for example, we don’t have to maintain a minimum cash balance under that agreement. So were we able to work out our other issues. No. It looks like we are done. So, well, with that, I want to thank you all very much for joining our third quarter call. Before I do close, I wanted to acknowledged World Diabetes Day on Monday, November 14th and encourage people associated with MannKind to join me in supporting the diabetes community by making a donation at the ADA or JDRF, participating in a local walk for diabetes or simply by supporting a friend or family member with diabetes. Together we can change lives. So thank you again for your support.

Thank you ladies and gentlemen, this concludes today’s conference. Thank you for participation and you may now disconnect.