Rose Alinaya - Senior Vice President and Principal Accounting Officer Matthew Pfeffer - Chief Executive Officer and Chief Financial Officer Raymond Urbanski - Chief Medical Officer Michael Castagna - Chief Commercial Officer

Ladies and gentlemen, thank you for standing by. Welcome to the MannKind Corporation 2016 Fourth Quarter and Full-Year Conference Call. My name is Eric and I will be your operator for today’s call. At this time, all participants are in a listen-only mode. As a reminder, this call is being recorded today on March 16, 2017. 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 would now like to turn the call over to Ms. Rose Alinaya, Senior Vice President and Principal Accounting Officer MannKind Corporation. Please go ahead.

Good afternoon and thank you, Eric. Thank you for joining us on today’s call. Before we proceed, please note that comments made during this call will include forward-looking statements within the meaning of federal security 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 of 1934. The conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, March 16, 2017. We undertake no obligation to revise or update any statements to reflect events or circumstances after the date of this call. Turning now to the financial. Total revenue for the fourth quarter of 2016 was $12.4 million, which included $10.2 million from insulin sales to Sanofi, with net income for the fourth quarter of $54 million, including $72 million from the extinguishment of debt owed to Sanofi as part of the settlement. For the full-year 2016, net revenue was $174.8 million, comprised primarily of $172 million of net revenue from collaboration with Sanofi. Net revenue from commercial product sales was $1.9 million related to Afrezza product dispensed to patients after giving effect to gross to net adjustments on gross revenue of $2.7 million. Research and development expenses were up $14.9 million for 2016, a decrease of 50% compared to 2015, primarily due to lower expenses associated with the reductions in force of $6.2 million, decreased facility spending of $3.3 million, lower project costs of $3.1 million and reduced clinical trial costs of $2.1 million with the completion of Afrezza trials in 2015. R&D expenses for the fourth quarter of 2016 decreased $2.4 million from the third…

Thank you, Rose. What we have on the screen at the moment is sort of an outline of what we plan to discuss today. Rose has given us a financial update. I want to discuss NASDAQ compliance after which I’m going to turn the call and most of the discussion over to Dr. Urbanski, our Chief Medical Officer to talk about some developments in the pipeline and some clinical program plans. And then a large part of the call today is going to be devoted to Michael Castagna to outline some of the things we’re doing in the commercial and marketing areas. Probably most of the people in this call heard me give a presentation just two days ago at the ROTH Capital Conference. So I’m going to take this advantage, or this opportunity to let the others do most of the speaking today having heard from me so recently. If you didn’t hear that presentation, it’s available online, you can go find it. But before I turn the call over to others, I did want to talk about NASDAQ compliance. So as it happens literally just moments ago following the close of the market, we received a letter from NASDAQ, which I’ll paraphrase for you today, suggest to me and says, as of September 14, NASDAQ had notified us that our common stock had failed to maintain a minimum bid price of $1 over the previous 30 consecutive business days, as was required by the listing rules. Since then, NASDAQ has determined that for the last 10 consecutive business days from March 3 to March 16, 2017, the closing bid price of the company’s common stock has been at greater than $1 per share. Accordingly the company has regained compliance with the listing rules and the matter is now closed, so we’re back fully in compliance with NASDAQ and that issue has now been put to bed following our successful reverse stock split earlier in this year. So with that, I want to turn it over to Ray who will talk a little bit about our pipeline and clinical development activities. And as I said, Michael will give a presentation and then I’ll make a few closing remarks and we’ll do some Q&A at the very end. So that, Ray?

Thank you, Matt. So before I address Afrezza’s specific topic, let me just give a brief update on our early development candidates. We are currently working on several products shown on this slide or six of them are most advanced one. I’ll just speak to the top two. Our inhaled epi program continues to progress. We’re involved in conversations with the FDA regarding the regulatory pathway for an anaphylaxis indication. We are also assessing the possible indications for possible other indications for epi as well. For Treprostinil, we submitted a pre-IND meeting request with the FDA on March 8, and we expect to have the meetings with the FDA sometime in May to further articulate what the Treprostinil program may look like. So now let me turn to Afrezza. We are preparing to relaunch the Afrezza pediatric program. We are approaching this activity much like we would a new product launch to garner excitement and enthusiasm for the use of Afrezza in the pediatric population. As part of these activities, we are leveraging our relationship with the JDRF, an organization dedicated to the treatment of pediatric diabetes. In addition, since the spending enrollment in the pediatric PK study at the time of the Sanofi transition, we have amended the protocol and resubmitted it to the FDA. We expect to reopen enrollment this coming quarter in parallel to our pediatric program re-launch efforts that I have mentioned briefly above. Finally, we are mapping out a strategy that will significantly reduce the time to filing for a pediatric indication. This will obviously involve some discussions with the FDA and we’ll update people as we get – as we progress. Now, to our Afrezza clinical program. It is well known and documented that diabetes is now well controlled. Over 60% of diabetics are…

Thank you, Ray. I briefly want to touch on 2016 and where we went and have gone to tell you some of the key things in Q4, and then just tell you where we’re going year-to-date and with respect in terms of the last few weeks of launch, as you see the prescriptions coming out. The first is, when we received the product back from Sanofi and one of the reasons we were told is, it wasn’t commercial responses. And so before we spent a lot of money and a lot of infrastructure investments, we really wanted to get out there as fast as possible and demonstrate that this product was commercially responsive. I think as you’ll see in a few slides, we were able to turn NRxs and TRxs up, and obviously it wasn’t to the extent that anyone would like. You have to remember this was mainly due to the fact that we were limited on resources, we were rebuilding in commercial infrastructure from scratch. And we really want to prove that this was commercially responsive and not with 200 reps, or 300 reps, but with a very small sales force of approximately 55 people. I want to clarify that, because many people sometimes think we had more reps than we had. As a result, we were able to demonstrate this. We also built and established internal processing controls. This was really important as we thought about transitioning from a contract sales rep model to a full-time MannKind employee model. We needed time to set ourselves up for growth, building out a commercial infrastructure from the ground up usually takes years. We were able to demonstrate to get a sales force up from April 1 to June 15, when we had a sales meeting to launch this product.…

All right. Thanks very much, Mike. So recapping somewhat, as Rose told us, we finished the year in a very strong cash position with a very strong record, in fact, earnings, greatly reduced debt than previous, and a very strong cash position as well. If you take the year-end cash and add back some things that we hadn’t yet received, but we’re in receivables and we’ll receive shortly after the end of the year. You’re talking over $70 million in actual cash. Take that, add that $30 million that’s still available for The Mann Group should it be needed. Clearly, we’re in a pretty strong cash position. We’ve also made, as Ray told us, continued progress with the pipeline. Obviously, we have to prioritize our spend and Afrezza is first and foremost our number one priority. So we start those programs from time-to-time. But we continue to make solid progress there in spite of that. He also talked a lot about our clinical programs. So we’re taking a fresh look and updating and reinvigorating the pediatric program, which will get started again in new in more rapid fashion very soon. But we’re also looking at some interesting programs that are really more marketing oriented that should improve access, simplify dosing, and show some clear benefit than we did with our original approval studies. Finally, Mike posted a lot of exciting things about what’s going on with the commercial team. So clearly, we’ve made a lot of progress in marketing and commercial activities. We’ve got a stronger, larger sales team out there. As is typical for any sales force, usually takes some weeks or months to start seeing the full effect. But the leading indicators are all very strong and promising. There’s also new sample packaging out starting this month, or…

Thank you. We will now begin the question-and-answer session. [Operator Instructions]

Okay So while we receive anything comes through there and I think we’re not necessarily expecting any. I want to try to get to some of the questions that were submitted in advance from general stockholder base. I’m going to group the questions together into a broad themes and try to pick those that I didn’t think were directly necessarily answered. Probably the most common question has to do with our financial position and our financial runway, burn rate, and our planning of stock offering? Well, we talked a little bit about our financial position. I think, we’re in a strong position. So we don’t have any immediate need for speed for funding. And I know some of you heard me say this before, we would never pre-announce a funding, because the one way to make sure it’s going to be difficult and not happened at all is to pre-announce it, so we’re not going to do that. At any given point in time, we have a lot of things underway. Sometimes and we always try to focus on things that are non-dilutive where we can. Sometimes those things come through and we’re able to announce them once they happen, such as the Sanofi announcement in December. Sometimes they don’t happen in the speed with which we’d like to, and we’re ultimately forced to go out to the market like we did last May and raised the money. We always have that option, but it’s not something is our first plan, or first thing we think of. Clearly, our burn rate is integral for this, I’ve been saying for as long as I can remember that it typically tends to hang around about $10 million a month. A couple of things I point out on that. It’s interesting that it…

So, Matt, typically, the FDA does not put on their website PDUFA dates for label revision. But I will tell you that, we have received an official letter from the FDA testifying or stating that our PDUFA date actually is September 30th of this year.

Okay. And always we can hope that it might happen as soon as…

We always do.

But you never know. The next question why some of those – I’m wondering, it has to do with our recent hire extra cost and why we took that step and so forth. I often call it out as an example of my continued optimism that we’re able to hire somebody like of Stewart’s caliber and retract him into the company. I shouldn’t disclose salaries. But we typically aren’t paying them with or before. Yes, they see the vision, they see the hope, and the potential in the company, and we’re able to bring him on Board. In Stewart’s case, he was very opportunistic, and I thought very helpful for us, because clearly you saw, as Mike mentioned, we’ve hired 100 people over the last couple of months. That’s a huge effort with just a couple of HR people that we had before would have been probably impossible, but sure has been hugely helpful there. At the same time, we have an in-house sales force now, which raises a whole bunch of complications, how we design properly incentivized programs and how you compensate [ph] these people and the reward success are all things we’ve not had to deal with before and having someone who with that experience has been usually helpful to make that happen and ensure maximum success. And the final question I have it’s kind of a group of questions. I’m going to wrap them up together. They get asked how are our relationships with The Mann Foundation? Are they selling a bunch of stock, because I think there were some reporting that led people to believe there was a lot of selling going on? I’ll say, our relationship at current, they remain that way. We’re in fairly regular communication. I think they are strong. The – what…

Thank you, ladies and gentlemen. This concludes today’s conference. Thank you for participating. You may now disconnect.