All participants will be in a listen-only mode for the duration of this conference. Welcome to the MannKind Corporation 2018 Third Quarter Conference Call. As a reminder, this call is being recorded on November 1, 2018, and will be available for playback on the MannKind corporate Web site shortly after the conclusion of this call, until November 15, 2018. Joining us today from MannKind are Chief Executive Officer, Michael Castagna; Chief Financial Officer, Steven Binder; and Rose Alinaya, Senior VP, Investor Relations. I would now like to turn the call over to Rose Alinaya. Please go ahead.

Good morning and thank you for joining us on today's call. 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. This conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, November 1, 2018. We undertake no obligation to revise or update any statements to reflect events or circumstances after the date of this call. I will now turn the call over to our CEO, Michael Castagna. Mike?

Thank you, Rose, and good morning to everybody, especially those in the West Coast who I know had to get up extra early, like us, to get ready. I wanted to say we continued to make tremendous progress in turning around our company. Our institutional shareholder base continues to grow, and our retail investor base is as active as it's ever been based on the number of comments I received. The story of MannKind has started to change with the closing of the United Therapeutics deal, and the announcement this week with Receptor Life Sciences closing $29 million of Series A. Additionally, we've met with several Wall Street analysts who want to get updates on the company, as well as lots of new potential institutional investors. We feel very good about the story of the company and the direction we're heading. One of the big focuses of us is enhancing our shareholder value. We are working on a cohesive strategy to transform the company with an entrepreneurial spirit that drives innovative solutions. Let me walk you through these four pillars. First, the outcome of our TreT results, back in June, confirm that for us that Technosphere is a differentiated technology platform that we have historically undervalued and underinvested in. We invested, last year, in the platform based on the feedback we heard from potential partners as we believe we could create value by moving our various Technosphere powder formulations into patients. We will seek to move several new formulations as we believe these molecules provide patients with a unique experience to manage their various disease conditions. To accomplish this, we're not only going to be looking at our own resources, but looking to external sources to accelerate our ability to move these assets forward. Second, we published our STAT trial,…

Thanks, Mike, and good morning. I am excited to discuss our third quarter and year-to-date 2018 results which show continued triple digit year-over-year growth in Afrezza revenue, the external validation of our Technosphere platform with our United Therapeutics agreements and continued progress in restructuring our balance sheet and recapitalizing our company. Let's start by reviewing the third quarter and nine month year-to-date 2018 financial results. I'll be discussing select financial highlights and urge you to read condensed consolidated financial statements and MD&A contained in our 10-Q which was filed with the SEC this morning. For the third quarter 2018, Afrezza gross revenue was $8.2 million, a 191% increase over Q3 2017 while Afrezza net revenue was $4.4 million, a 121% increase over 2017. The net revenue increase was favorably impacted by volume, which Mike discussed earlier on the TRx growth slide, cartridge mix, and price but was also unfavorably impacted by product returns for expiring product. Focusing on our gross to net, there are a number of intermediaries between MannKind and the patient that take a large bit out of our revenues which included managed care and government program rebates, charge backs, wholesaler fees, patient co-pay support, and product returns. Our third quarter gross to net percentage was 47% which is 17 percentage point higher than the prior year due primarily to increased managed care and government program rebate as a result of price increases. In addition, we now have charges for product returns which were not required in 2017 under previous revenue recognition guideline. We expect our managed care contracts to reset in 2019, which will lower the amount of rebates we paid per prescription next year. In addition, we have increased our returns reserve accrual to 3.8% of gross revenue as we have seen a higher rate of…

Thank you, Steve. Some of this I've talked about, our Q4 trends and 2019 outlook, we expect to see TRx in weekly sales continue to trend positive. It will continue to balance week-to-week. I would not let that dissuade you from paying attention to the monthly and quarterly trends that we look at versus weekly-to-weekly sales was filled every four weeks from refills that would've happened four weeks prior. Payer access discussions have been very positive. We expect that to continue to improve, and not only improve in a way that gives us more coverage, but improve in a way to actually remove some of the restrictions and friction that happens when a doctor or a patient go to get Afrezza. We expect to see reduction in prior authorizations as we go forward in 2019 and beyond. We continue to publish the scientific data supporting Afrezza, as evidenced by our meetings just a few weeks ago at EASD and several new publications coming out as well as study readouts that we [indiscernible] and others. We hopefully will complete pediatric study cohort 2 in early Q1. Our pipeline plans are in progress with several assets that are moving forward. And capital allocation remains a priority, where we continue to balance the short-term needs of reduction our cost and spending on the pipeline versus investing in Afrezza. When I think about where the company's been in the first year of Afrezza launch and how much money we've spent and how much we spent, it really pales in comparison. And so we really have not invested enough to grow Afrezza where we want it to be, and we're continuing to allocate capital to the growth drivers, such as DTC that you've seen turn back on recently. In the end, we will continue to balance these needs and enhance shareholder value, which is the major focus of ours as we go forward in terms of accelerating growth. When I look at the next five years, we see nothing but positive things in front of us between the Technosphere platform molecules which we believe will bring in-licensing opportunities as well as royalties at the top as the new [indiscernible] here today, we look at Afrezza U.S. growth continuing to happen, and hopefully accelerate as we go forward. Our Afrezza international expansion is well underway, with Brazil expecting approval in Q4, and India progressing in a phase 3 trial for filing there, as well as Mexico and Canada we continue to work towards. We continue to look at our pipeline and see what can we bring in and what can we out-license, and move assets faster down the road. And finally, our pediatric program, we believe, will be pivotal in the Type 1 market as we think about 30% of the patients in Type 1 will be eligible for Afrezza when we get this approval. We continue to file this product as we go forward. Going to stop there, and open up for questions.

Thank you. [Operator Instructions] We'll go first to Brooks O'Neil at Lake Street Capital Markets.

Well, good morning guys. You've accomplished a tremendous amount, so congratulations on that. I have a few questions. I was hoping, Mike, you might talk about the unique Afrezza mechanism of action or timeline. I know it's, obviously, fast-acting coming on as well as coming off. And I was hoping you might compare that action with some of the quote new unquote faster-acting insulin that have been announced into the marketplace recently.

Yes, thank you, Brooks. First, when we think about the Afrezza, the second you inhale the FDKP really delivers the drug directly to the lung, it gets into the blood very quickly, which we believe is the unique competitive advantage that can't be replicated in what we see today out there with injectable insulin. And all of our PKPD studies that we've done had to head against Humalog and Novolog or aspart and lispro. We've seen really unique PKPD, and we'll continue to focus on that opportunity. And I think the STAT study really demonstrated the uniqueness of our product where you can give it as quickly as one hour and not cause more hypoglycemia. That's never been done with anybody taking insulin, to say that dose your drug in one hour and get that real-time control, which we believe with the CGM out there coming and continue to penetrate the market will show real clinical meaningful benefits. So I was just presenting this week to 200 primary care providers. And I asked the question how many of them know what CGM is, and it was amazing how far we still have to go in terms of educating our audiences out there. But they don't know what CGM is, and so then it comes back to Afrezza as we continue to penetrate primary care, where half our sales today come from primary care doctors we call on. We have a long ways to go to continue to change peoples' experience and knowledge. But as that happens and as they get that experience with Afrezza we believe that unique PKPD and fast onset and fast offset will provide real-time patient benefit. To talk about in the context of the recent competitive launches as well as what you may have seen out there with -- insulin, we don't believe any of these are real competitive threats. They are incremental improvements over their old products to avoid biosimilar competition. And I'd just point out that as we look at fast-acting aspart out there for the last 12 months, while they probably had a faster uptake than we did, also they probably spent a lot more money investing in the commercial aspects than we have. But they were really converting existing patients over from one product to another. And the sad part is, when I talk to doctors what is hear is patients were disappointed that the promise there was over-delivered and they didn't really experience what they thought. So there's -- when we hear that people are starting to de-invest in that particular molecule. And so we'll find out what really happens. When we look at 500,000 scripts a week, and someone's getting 5,000 or 500, we still have a long ways to go to changing the market towards faster-acting, I'll say, insulin analogues, whether its our products or competitive ones. Doctors' reluctance to change is absolutely amazing, but I think the good products always win in the end.

Absolutely. So maybe you could just talk a little bit about the steps you're trying to take to change that behavior, and maybe you could highlight Dr. Kendall's impact or potential to move the needle with doctors in that regard.

Yes, so two questions. So the first one is, what are we doing to move that needle. I think that's exactly what we're focused on now. That we got to where we are we can choose to make Afrezza a major growth driver. And the fundamental question is what are the one or two levers that it's going to really take to change that, is that going to be a major DTC campaign, is that going to be a major educational campaign effort out there with third parties and doing regional conferences. But that's exactly what we're working on as we go into 2019. Now that we've really freed up our ability to not run the company quarter-to-quarter and think about years and how do we start to transform over the next coming years. So I think that's a major focus ours to figure out what those levers are. We have a lot of flexibility in our balance sheet to reprioritize or bring in new investment if we had to. But we're really conscious of all the dilution that's happened over the last year to fix the balance sheet and get to where we are and so just trying to balance short-term growth with long-term prospects. But once we have that plan in place, believe me we will be executing to drive that as quickly as possible. The comment on Kendall is a very interesting one. I mean, it's really changed the top echelon of endocrinologists that they really just didn't know our data, and so they'll make comments that are really not based on science, and not based on scientific information, and that's really where Kendall has brought a lot of credibility to sit there and go toe to toe with them and educate them on our historical data…

Yes. No, that's very helpful, Mike. I appreciate that. So I just wanted to ask one more. Obviously, the United Therapeutics deal is some ways -- just a huge milestone from a balance sheet perspective. It's also significant strategically. So should we expect to see a number of new collaborations like that? Do you intend to focus around United Therapeutics in the shorter intermediate term or how do you view this taking the company going forward?

On second [technical difficulty] So, Brooks, last year I engaged little bit as some of you may recall, earlier in the year, and we went to talk to a lot of potential partners and share our technology. And one of the things we heard from them was, it's great and looks interesting but do you have any data. And one of the things that -- I've been in the industry over 21 years, I've worked for most of the major pharmaceutical companies, they are risk-averse whether we like it on not unless you're betting on oncology which is life and death. And so a lot of them wanted to see some clinical data before they would talk further. And I think that's -- example, where we didn't have a lot of money last year, but we took a bet on treprostinil and said this one we think will make a unique patient benefit and provide a phenomenal outcome. And it was the first bet we were taking on Technosphere outside of Afrezza in over a decade. And so we wanted to see what could happen, because if we had to reduce our expense base it's good to know where we're going to reduce that expense base from. And what happened was it reconfirmed our commitment to Technosphere and basically reinforced that we got to invest in this a lot more. So that data gave us -- we have all the powder formulations, but sometimes you got to do the rodent toxicity studies, fine tune your powder and make sure it's stable. So that's a lot of what's going on right now. Behind the scenes, these are not high-cost investments, they just take time. And those things are already ongoing with the team that we have. And Danbury, we're doing a…

It's important. It's a big deal. So thanks a lot for your comments, and congratulations on the progress.

Thank you, Brooks. You've been following us for a while, so glad to see you.

We'll go next to Oren Livnat at HC Wainwright.

Hey, guys, thanks for taking the questions. You highlighted the quarter-over-quarter and year-over-year growth for Afrezza, but I was wondering if you could just speak to maybe the more recent trends. Obviously, I know it's been summer and things sometimes take a pause, especially with new launches there. But can you just talk about the trend since July, and where it is versus your expectations in going forward in the near-term? And just, I guess, now that we're four months post ABA, can you just talk about, I guess, the pull-through you're seeing from what you presented there, and with Dr. Kendall raising your clinical credibility which you spoke to. What's different now, four months later, than it was in June, and what do you going forward this trajectory?

Yes, Oren, great questions; first of all, in the trends post July, we continue to see incremental growth. We all want to see faster growth, so we're not happy with what we've seen. We will continue to push levers. For example, we had DTC on, and then we turned it off. We know that's a major important growth driver. It's just funny, last night literally my grandmother called me at 12:00 at night saying; hey I just saw your ad, is that new. And so it's just funny who is seeing these things and watching them. And so we continue to watch where we spend those investments to accelerate that growth. One of things that really hindered us this year was we didn't recapitalize the company as early as we wanted. And so, we didn't hire as many sales reps as we expected or backfill vacancies. So we know when you hire a sales rep you're going to lose money for six to 18 months depending on the territory and the growth in that territory. And so, because of our capital constraints we didn't hire as many people, so we held almost 20% vacancies throughout most of this year, and that really did hinder our growth. On top of that, we made several transitions throughout the year in terms of realignment of targets with our reps, so they had to rebuild those relationships. We brought in probably over 25-30 new reps in the last six to eight months who had to be retrained and get out there and build those relationships. So there's just been a lot of noise underlying the surface that most of you wouldn't be aware of. But I do feel now we got the right team in place. We got the right head of sales in…

Okay. And you mentioned gross-to-net a few times. And I think you suggested that that might improve. Are you going to hope to have a little better access with fewer restrictions or pier off next year, but also lower or reset contracts? And so I just want to make sure I'm not confused. Do you think you'll have better access and lower rebates next year, and so should I assume 2019 gross-to-net is going to be well below 50%?

Yes, I think they'll be below 50%. They're at 47% in Q3. We don't expect that as we go forward. We had to make several changes as we came in between new product launches and packaging and taken off the old packaging which has caused a lot of gross to net issues this year. Buyers had certain restrictions in their contracts. I'll be honest, we're letting some of them expire, because they really didn't stop us from growing and they didn't help us grow so why we would give gross to net in area like that. So they expired at the end of the year. And then a lot of our other contracts that we do have -- we only have a couple out there, but they will reset January 1 with new terms. So, we are kind of very optimistic as we go into '19. I think we just want to have some confidence that we see our returns come down and we see these things actually come in the way we expect rather than try to tell you exactly where it'll be, let's let another month or two go by, but we expect these to get dramatically better as we go forward in the 2019 and that's why I wanted to highlight gross sales. It's not something we'd like to talk about because net is what puts money in the bank. But I think when you look at the gross sales, this number, we're almost triple this time period year-to-date versus next year. That trend continues and we improve our gross to net and that drops to the bottom-line. And just to give you an example, I think our gross to net were about 10% up year-over-year. I mean, that's $2 million right to the bottom-line that we just didn't have because of some of the actions we had to make. So hopefully put some of that into context for you when you look at our quarterly sales on net versus gross sales which are continuing to look positive. And --

And regarding that access -- yes, go ahead.

I know u look at vouchers and I wanted to let you know we take the vouchers out of information, so when you look at our gross sales and our net sales, vouchers are not there. So that's on top of demand that you see out there. But we subtract all that before we report our net earnings.

Okay. And just regarding access in general, do you -- is there much you can do to push major access changes on your end with managed care or does it really have to come from the market, do you just have to keep boots on the ground, driving demand and pull through before managed care really even considers making any substantial changes?

I would say that there's two things happening on that question. The first is some of the lawsuits you're seeing on insulin and competitive practices going on with PBMs has really changed the contracting, I would say, barriers that we saw two years ago and even a year ago where payers are now able to -- probably more fairly evaluate the merits of a product on its individual attributes as opposed to I can't cover you because your competitor's blocking you. So I think a lot of that was happening over the last three years. I can tell you as we go forward we see that language being removed and we see those restrictions being slightly lifted as we go forward. So now our ability to work with a payer to actually get on formulary has dramatically improved. Now it comes down to price and are you going to get the volume or how do you think about that. That's all about our strategy. But we're happy to engage -- as we put great deals together with Express Scripts and CBS and others. So we feel very good about our ability to get fair prices where the payers need something and we need something and I think there is an exchange of access for patients and we're moving those -- that friction that'll help you grow faster and we've seen that with our Express Scripts contract. So I think that's number one. Number two is consolidation of payers, for example, Cigna buying Aetna. Our total revenue within the Cigna health system now just doubled and so now when Cigna looks and says Afrezza is growing and we're not able to reduce the cost because we don't have a contract, that really changes the conversation, because we're not -- not that we weren't willing to contract and gain access, they weren't willing to entertain it, because their sales were too low and there was competitive restriction. So now that sales are growing and competitive restrictions are being removed, we feel very good about continued progress on that front. And fortunately competitors just don't move in a quarter, they move over years. And so we're going in the right direction, we've been in constant dialog, I know a lot of these guys personally and so we'll continue to make good progress as we go forward and I think that's good because doctors took time to learn. They're still taking that time to learn, but as they get more educated, they get that experience and contracts get easier and friction gets removed [indiscernible]. I look out over the coming years and I see nothing but barriers removed and continued growth by more and more prescribers. So those two things go hand in hand.

If I may, just one more. I listened to United's call yesterday and those are always quite unscripted and I'll admit I was a little bit confused about the timelines that I think they were laying out for your partner product and I was just wondering -- I know it's not yours, but given what they've disclosed already, the program in terms of development and pushing forward yourself but can you maybe disclose what you think is the timeline as it's understood publicly now?

I don't want to comment on that. All I can tell you is we have certain deliverables that we are working full speed ahead and we expect to hit those deliverables which will keep the programs on track for the timelines we kind of have laid out confidentially. But I think as United is comfortable getting -- unfortunately, I just signed a deal just meeting our tech teams, we're just down there to speak with them, it's moving very, very fast. The pipeline compound asset is moving quickly, they really want to move these things forward. Fortunately, their company has a lot of resources and they're really committed to patient care and getting these drugs into patients' hand as quickly as possible. So I was happy to see Liquidia's earnings calls as well and seeing where their timelines are because I think all we're trying to do is close that gap as much as possible, because we're -- we think these drugs are going to provide a meaningful benefit, we think we're differentiated in Liquidia and we think the patients are really going to see that as we get this up and running into Phase 3. So that's our focus right now given that Phase 3 as quickly as possible. Finishing up that trial we don't have a long safety extension. Our technology is proven. So I think it'll go very quickly. It's just getting aligned with United and FDA and Phase 3 trial design and that's why we wanted to get this deal done before we did ourselves, because it's important that they meet -- if they're going to own the asset and market it, they got to feel comfortable with the data we're gathering. And I think just several things we're looking to really demonstrate how unique the product is and how much better it will be for patient experience and so we're just glad we could close the deal on time and move this forward.

So obviously, Liquidia, I guess, they gave a filing towards the end of, I think, next year, so your prior standalone guidance, I think, which is not set in stone I think with the second half 2019 filing. So there's -- I think you're less than a year behind and is that the way even before United came in and maybe could even accelerate, things of that the way you understand it?

Yes, if you looked into where were we in our previous timeline committed, we're probably less than a year based on what they communicated. But I think United has to own that now and I don't want to put them in a bucket --

Yes. Do you think it's more important to your relative profile versus their product than the timing, presumably you do, so can you comment on what you know about their product and yours and maybe how you think they stack up in terms of performance?

I think our technology is proven. I think out ability to get -- you know, we had our own blessings from the FDA in getting our CMC right and our device drug combination, which is not easy. So I think we demonstrated we know how to do that and we can do that and we can do it very effectively now. We got the right team in place to drive that forward as quickly as possible. I think our powder technology and formulation will deliver a good [technical difficulty]. We think there's -- if you are reading to [indiscernible] yesterday, there's more probably more localized effect than we expected and I think our drug delivers a lot of drug to the lung directly and so we'll get that localized effect and the pulmonary effect combined. So I believe patient experience will be a lot different and their ability to resolve their symptoms will be a lot different. I don't want to comment. We have no data of head to head on Liquidia, I'm sure once it gets approved they will look at those types of things. But I think United has over 7,000 patients, they've been doing this for 20-some years, I couldn't ask for a better partner at the table who knows that market inside and out. It is not an easy market to penetrate. I worked on generics over a decade ago, they still didn't make it into the market. So that patient base is really loyal, the doctors are loyal to companies and so we just believe we have the best partner we could expect to ensure the asset has the most success.

All right. Appreciate it.

We will move next to Michael [indiscernible].

Hi, gents, first of all, congratulations on righting the ship. And I think you're off of life support and -- but the question is going forward -- I have a number of questions and if possible some of them perhaps we should take offline, but if you could try to, I'd appreciate if you could give me answers to my questions and thank you for giving me some time.

Okay. Happy to have a conversation offline Mike, if there are one or two you think are relevant we can answer now?

Okay. Great. Yes, okay, first a qualitative question. It's a bit of a tough one, but you gave guidance before and hadn't really heard a lot of conversation about the guidance and I think it kind of touches upon visibility into the business so question is how much more visibility do you have now into the business than you did before and I'm not skirting the issue, but Afrezza also, so going forward, first of all, are we going to be hearing some type of discussion as to where you came in versus guidance at the end of this year? And then in the next quarter and also some type of discussion of guidance going forward, and your view as to -- your feelings -- your certainty on the visibility into the business and the ability to deliver the guidance, because you do carry discounts in terms of the stock price, and I think part of it is actually just a lot of uncertainty and a lot of that's not necessarily up to you guys. You discussed quite a few different issues, a lot of things have been addressed, but at the end of the day, I think when you give guidance you have to kind of give reasons how things are going, why it's not coming in, if it's coming in, etcetera. So I just want to -- kind of thinking did you guys have more visibility and more control and more view as to being able to execute on the business? So I'll show you the hard question first, and then after that I think I have some other questions for you.

Thank you, Michael. Thanks for the hard one first. The first question is on visibility, you know, so we have two things I look at. One is how our weekly our wholesaler sales, pharmacy sales co-pay card downloads. We have a whole bunch of dashboard metrics we look at weekly to kind of give us some perspective of how things are trending. So we see positive trends coming into Q4. Q4 is typically the strongest quarter of the year because of benefits expiration in the U.S., things like that. So that's positive. The second thing we have is visibility on how doctors perceive our data. And while some people want to criticize that study, I will say that doctors who read the data, who have seen the publication feel very comfortable where it is, and the description of the information and while it's not a robust 300-person study, we have 3,000 patients in trials, and numerous head-to-head trials. So it's really clarifying certain aspects of our drug that were misunderstood, and I think that's what this trial gave you, this is the first time we've ever had CGM. And we ran to market research with this, and I've said this previously, and it does show you that this dataset alone can move people from 3% market share to 25% market share to 40% market share. So, this is a $10 billion market growing couple of percentage points. We're growing obviously very faster than in the market. And just getting that information out there, getting that trial, it is way more harder than people expect to know, and I share you some of the people out there, the emails I get. I get it. I've been out there, and you sit there and ask a doctor, "Why you would not thought…

That's fair. I would sensibly agree with you. Okay. So, is it okay if I kick on to the next questions?

I think we have one more, yes.

Yes. Okay. Is it okay, I do have a couple, so -- and I think there are a lot of people who would like a couple more questions, I mean first of all, you have -- I have looked and you had a reallocation, what I would call, reallocation of resources from R&D to active marketing etcetera. So I guess the question would be how much of what you reallocated internally is due to opportunity or just simply because -- you came quite close in the last quarter, how much of that is something that we would expect to see carrying forward in terms of efficiency. So I'm looking at capital efficiency, we see putting people on the frontline, you are trying to drive Afrezza, is that something that we are going to see going forward, or was that just something that was a temporary maneuver so to speak, because you were kind of up against it?

I think you will continue to see us reallocate capital for the areas that we think are going to drive the best value for our shareholders. So, for example, even before the united deal closed we had to make some investments to purchase equipment, we thought that was a better choice to make sure that we can meet and beat timelines, because there are milestones in our agreement that bring in money earlier if we deliver. So that's kind of part of our focus is making sure the capital allocation delivers against the financial price for the company, because we do know investing behind Afrezza is important, but also meeting and beating, you know, when I look at our revenue for Afrezza and when I look at United with potentially $50 million milestones, we got to make sure we prioritize that, as well as the next compound we are working on, that's got to be a big priority which you know, they paid us $10 million to start quickly, and that can bring $30 million just really of the bat. So I just think there are things we are working on that are going to bounce, and as we find opportunity to grow things faster we are going to move. I mean that's the good thing about being small, we can allocate our people and our resources appropriately. The field force and the frontlines, we need to get more efficiency out of them. I mean I think there are sales forces passionate about what they do, they're here for the right reasons; we just need them to challenge our customers even more to help patients change their lives, and that's really our main focus with the new Head of Sales. He's done I think six out of nine, six or seven out of nine district lessoning sessions, and been with the teams getting to hear their concerns, and also talking about accountability and how we need to deliver. And I think that's an important aspect of this company is delivering on what we focus on and helping Afrezza become very successful in the future. So that's where we are on capital allocation, but we will continue to -- I think going to 2019 is really planning that out, thinking about the four mile moving forward and how we best allocate that capital, and where do we take that capital from, because we don't want to keep increasing our burn rate each year. We want to really have a view to cash or breakeven. So that's really important to us.

Speaking of cash flow breakeven, and I'm not expecting any kind of distinct answer here in terms of when you could do it, but if I look at the big picture, you basically are going to be driving increased capacity utilization in your factory. You are going to have potentially much more efficient utilization of expenditures and just general capital allocation to try to drive the top-line. So, one would expect both on the P&L, you know, on the P&L profits or the P&L line and also in cash that you guys do much better next year. And I won't try to pin you down to a quarter where we start to see some real inflection there, but the question becomes do you still have -- I think you mentioned before, maybe I'm incorrect, but I think there were some discussion of potentially going cash flow breakeven next year, is there still some view that this possible, and question is how much of that is driven by Afrezza or how much are you now relying upon Technosphere etcetera? Are you still bullish on Afrezza? And related to that by the way, there was no conversation, I mean I haven't looked through all of the stuff that was put online, Internet connections with the core right now as I'm the road, but what exactly is your responsiveness to the ads? I see the ads have picked up. So I think the cash has come in, and now you are actually kind of turning it on a bit, and the question is you know, what kind of return are you getting on that ad spending? So I think I will finish up with that, if you guys can address that. Thank you.

It's Michael. Number one, we saw -- last year we got capital raise we spent $5 million on TV alone, and we spent a lot of money in a short-term amount of time to have comfort that TV with drug behavior with this product. And we did see when you look at the data was tremendous upside when you have a great rep along with TV in the market, really, really nice returns. You don't know you'll get a one to one return that you want, but it builds that base quickly, and I think when you think at Q4 last year, that was a major growth engine for us in addition to point through the managed care contracts. As we go through this year, we turned it back on because still we got the money. We know that's important to drive growth in Q4 and beyond. And TV, it sounds like a person sees a TV commercial and they call their doctor right away, there is about four to six week lag from the time you turn it on to the time people get to their doctor and they got reminded a couple of times. So we think that's a positive investment. I think the question is should we do more, and is that really going to be drive that growth, and that is why we're not talking about when operating cash will breakeven, because we have two strategic choices to make. I'm very bullish on Afrezza, I think -- I've seen my own personal family, it just changes people's lives, and so, we are very bullish. Allman has spent a billion dollars for a reason he really -- he knew what he was doing. Maybe we didn't know always get the data published and get into everything we…

And that does conclude today's conference. Again, thank you for your participation.