Good morning and welcome to the MannKind Corporation Second Quarter 2024 Financial Results Earnings Call. As a reminder, this call is being recorded August 7, 2024 and will be available for playback on the MannKind Corporation website shortly after the conclusion of this call and available for approximately 90 days. This call will contain forward looking statements. Such forward looking statements are subject to risks and uncertainty which could cause actual risks to differ materially from those stated expectations. For further information on the Company's risk factors, please see the 10Q report filed with the Securities and Exchange Commission this morning, the earnings release and the slides prepared for this presentation. Joining us today for MannKind are Chief Executive Officer, Michael Castagna and Chief Financial Officer, Chris Prentiss. I'd like to turn the conference over to Mr. Castagna. Please go ahead, sir.

Thank you. Operator. Good morning everyone excited to be here, calling in from Danbury, Connecticut today, and joining me is Chris Prentiss, our Chief Financial Officer. Today we'll go over our traditional operational and pipeline highlights, quick financial review by Chris, with some closing remarks by myself, and we'll move to Q&A. Let me begin by talking about some of the second quarter 2024 highlights. First, we had record revenue on Tabesa DPI, between manufacturing and royalty revenue coming in. Second, clofazimine inhalation suspension is well on its way, with fast track designation by the FDA, as well as several sites now activated and ready for patient enrollment. And thirdly, nintedanib DPI is well under its way, with results expected here in Q4 along with chronic tox, we're now on our third cohort of single dose patients, anxiously awaiting to move to the MAD section of the study shortly. In our endocrine business, we had second quarter revenue with $20.8 million driven by Afrezza I'll talk about that shortly. INHALE-1 top line results for pediatrics is expected here in Q4 and we're excited for this pivotal moment in our history to unveil these results. And then the third part of endocrine is INHALE-3. We met at its primary endpoint 17 week data were present at ADA and were very well received and we're coming up on our 30 week data readout here in the second half, and implementing our ADA post success plan. For financial results, record revenue for the company of $72 million of 49% with a GAAP net loss of $2 million and non-GAAP of $14 million that Chris will talk about shortly. We ended the quarter with a strong balance sheet. We continue to delever the company and reducing dilution to shareholders by paying down demand convertible…

Thanks, Mike and good morning everyone. I am pleased to review select second quarter 2024 financial results. Please refer to our press release issued earlier today for a summary of our financial results for the second quarter 2024 as well as our 10Q, which was filed with the SEC this morning. The second quarter with total revenues of $72 million marked our 9th consecutive period of quarter-on-quarter, revenue growth and a 49% increase compared to the second quarter of 2023. For the six months period, we recorded total revenues of $139 million, a 55% increase over the prior year period. Let's now discuss the details. Tybeso DPI royalties contributed $26 million in second quarter revenue, an increase of 34% over the second quarter of 2023 and $48 million or 57% for the six months period. As we heard on UT's earnings call last week, they continue to experience strong patient demand, and are encouraged by the record referrals and new patient starts during the quarter for both PAH and PH-ILD patients. Collaboration and services, revenue was $26 million, an increase of 132% versus second quarter 2023, the six months period was $51 million or 125% compared to the same period of 2023, the increase over the prior year periods resulted from a substantially higher level of production activity, which was sold through to UT. Afrezza net revenue of $16 million grew 20% versus second quarter 2023 which was primarily driven by volume growth, a lower gross to net percentage of 37% versus 39% in the prior year, and a price increase. Similarly in the six month period, Afrezza net revenue grew 18% to $31 million, primarily driven by a reduction in gross to net percentage and price. The lower gross to net percentage was mainly the result of a change…

Thank you, Chris. As we look out over the next 12 months, here are some of the milestones we're going to talk about, I want to say thank you to the hard work the team has achieved in the first half, starting with our IND submissions here in Q1 which led to a kickoff of a bunch of work that we'll be looking forward to as investors and employees and patients and providers over the coming quarters and years. Tyvaso DPI continues to progress nicely as you think about what we've been doing in Danbury between making product today to supply the market demands, while preparing for hopefully positive readouts on TETON-1 and 2 and global expansion there with United Therapeutics. Our high-speed fill/finish line is now operational and certified on most of the strengths Tyvaso DPI. The spray drying capacity will be completed here in the third quarter. It's been installed, and now we're just running through the PPQ. What you'll see is, in the first half that will require some stability time and then filing with the FDA for approval. We expect that to be fully operational in the first half of '25 well in advance of TETON-1 and 2 reading out. As you look at INHALE-1 and INHALE-3 these are two pivotal trials we invested in over the last several years that are critical to the transformation we expect to bring to Afrezza over the coming quarters and years ahead. These data readouts will happen here in the second half, and they will set the stage for continued data publication and data releases for years to come, at the various diabetes conferences around the world. We are just getting started on what this can mean for ourselves as employees, as patients and as shareholders, and we're looking…

[Operator Instructions]. Our first question comes from the line of Olivia Brayer with Cantor Fitzgerald

Hey, good morning, guys. Thank you for the questions. How are you thinking about IP and just revenue runway for your two pipeline candidates? And can you just remind us how well protected your Technosphere technology is? And then on the 201, update that we'll get in the fourth quarter can you give any more color on how many patients worth of data you expect to have and just how you're thinking about next steps once you do have those healthy volunteer data in hand?

Sorry, I heard the IP question. And then there's a second one. Then there's the data in hand with IPF is that what you said, I missed the second part.

Yeah. Why don't we start with IP, Mike, and then I can follow up with 201.

Sure. So on the IP landscape with, I think it was Technosphere as probably your second question. So Technosphere goes out into the 2030 IP on Tyvaso with pending plus, what we have is probably another 2040-ish timeframe, 2043 and then the clofazimine will have QIDP and orphan designation as well as additional IP filed. So that looks to be 2039, 2040 and then same thing with IPF and the TETON that we look to have into the late 2030s so we feel pretty good about the overall IP of the company going into the next decade and a half or so. And that's assuming we don't do any innovation right. And so I think there is definitely things we're going to work on now to continue to innovate and make our products easier for patients to take. So we feel pretty good about the next, you know, 7, 8, 10, years as you as far as we can look out in terms of no major IP risk,

Okay, understood. And then, yeah, just second question was around 201, and the data that we get in for Q, just any color on how many patients worth of data that you guys will have, and then obviously, just thoughts around next steps for that program going into 2025

Yes. So we have completed the first three dosing cohorts, which was single doses, dose escalation up to a max dose we're looking for, having to report no major findings so far. They're still going through the safety but nothing appears to be getting in our way to go into the multiple sending dose, which will be the next phase, and that'll happen over the next month, and then they'll take some time to analyze those results. So we expect that in Q4, what we'll be looking for is obviously cough tolerability, bronchospasm, anything around that lung administration, GI toxicity or tolerability. You know that we see any GI side effects in those patients, especially in the multiple sending dose. And then for those results, we plan to go to the FDA with a Phase 2/3 design, which we're still finalizing that's why I've not shared any details. And we'll hopefully see the FDA agree that type of a study design we've seen in some of the other competing programs here in IPF, but that's our intent, and hopefully that would get us to market right around when OFEV patent would expire. And so that's what we're kind of looking trying to work backwards from make sure we're on time, that we can be

Our next question comes from the line of Thomas Smith with Leerink Partners.

Just with respect to the ICoN-1 Phase 3 design, just wondering if you could comment on the powering assumptions for the six month primary endpoint and then for the interim analysis. It sounds like this is mostly a sample size re-estimation, but can you comment on whether there's any early stopping criteria built into this interim either for futility or superiority?

Sure, I missed your question on the assumption of six months. Sorry.

Yes. Just asking about the power and assumptions on the six month end point, what you've assumed in terms of placebo response and treatment effect?

Yes. So what I say is, when we in the design of ICoN-1, we benchmarked as best we could in refractory population for a delta of what we saw in our case for factory population. So if it comes out better than that, or placebo is not as good, you know that that all will benefit us. It is a dual primary endpoint in the U.S., meaning, or co-primary endpoint, I'll say, in terms of quality of life plus sputum. The rest of the world will be sputum only. So it'll be the same trial used with two different statistical plans. And the interim analysis is on 100 patients, it'll have a futility assessment, but not a superiority assessment in terms of shutdown from my knowledge, I know we have different numbers we need to treat if we feel like we're not powered appropriately, we can increase the powering of the study by increasing the patient numbers. So those are the key attributes we've tried to do, depending on which end point is looking, how they're looking in terms of quality of life versus sputum. So that's all predefined in the statistical plan. And I think, I think it's 90% power, but I need to double check that and confirm with you. Get back to you, but I'm not pretty sure it's 90% powered.

Got it, that makes sense. And then just one on Afrezza, I was wondering if you'd just comment on some of the feedback you've been hearing coming out of ADA with the INHALE-3 results, I guess, reception to the data set, and how you're thinking about translating these data and the INHALE-1 data to sales growth. You know, are these data sets you think could potentially impact 2025 prescribing, or is it more of a longer term dynamic?

Yes, I think so far the feedback has been very positive of those that attended ADA and listened to our data and watched our data. You know, the data is being prepared for publication. The first dose just got published in diabetes care. So I'd say overall receptivity has been very positive. The team had a small ad [ph] board at ADA just to get initial reactions. Again, continue to demonstrate increased confidence and we just got back at [indiscernible] research last week, which I couldn't get in time for the earnings call, unfortunately. But that also signals that amongst our highest riders, and that we our highest target values, that they are positively receiving the data as well. So far, all looks really good in terms of ability to impact future growth of Afrezza. Will that happen in a dramatic way this year? Probably a little bit in Q4 as things roll out in Q3 and the data gets published, but realistically it'll be 2025, and what I say about Afrezza is it's a direct reflection of our investment, meaning, you know, we've run the brand for profitability last year, and that's been able to while we wait for the data readouts and then make the decision to scale up and invest more. So if we want to grow it faster, it's going to probably take more investment. And just how much faster will that grow relative to the investment we make? And those are some of the work we're doing before we scale up any investment, so we can communicate appropriately to shareholders what we want to do. But I think right now, you know, the data is good enough to continue to drive increased growth quarters, and as we go out and then in pediatric obviously, is in Q4 and that will be the more important in terms of really inflection trends I'll call it meaning, you know, we can grow 20% versus 24% that's not going to get anybody excited, but if we think we can grow high double digits through peds launch [ph], that's going to be what's important at the end. And having that date in Q4 with a filing, hopefully early next year, that will set us up for early '25, early '26 time frame for peds [ph] inflection. So I think that's what you'll probably see, is my guess. But again, we're conducting additional research and insights to have some confidence before we make any big decisions here.

Our next question will come from the line of Gregory Renza with RBC Capital Markets.

Mike, maybe just keeping with 101, clofazimine inhalation, just curious as you and the team activate sites and stand up the trial if you had any feedback, and maybe touch on how sort of the activation and the entrenchment of sites is shaping your confidence in the program and the value proposition that you see with 101?

Yeah, I think it's true like Greg, you know, the team has been to about 10 sites. August will slow down a little bit for site activation just due to vacations and holidays, but they expect that to pick up a lot here in September. We already know they're pre-screening patients, a couple already scheduled for August. So I think it's only one month in. I wouldn't try to read too much positive or negative into it. I'd say so far the feedback has been generally positive, as we all suspect you know, how big is this refractory population? How quickly can we get to naive patients? How quickly can we move the dry powder along? These are things we're working on, as we know that's the much bigger population to go after. But I think in terms of enrollment trial in the U.S. and Asia Pacific area, there are enough patients to get that moving, enough patients to get hopefully ready for a good launch but the real opportunity is obviously the larger NTM population, but getting this trial moving is the first step into that foray. But you know, we continue to watch our case do well, that makes us feel very good about the bets here and the market affiliate has no options. I mean, so this is really exciting for patients. It's exciting for the treaters. It's exciting for the FDA, as well as our employees. We worked really hard to get here and from manufacturing standpoint, we'll be ready. And the trial I think is going a lot of interest from the top investigators. We feel pretty good about the sites that we're getting in the patient style we'll be recruiting very shortly.

Got it, I think at the top of the call Mike you mentioned, expanded access and maybe more to come. Just touch a little bit about that, maybe some of the timing and some of the inputs there. Thanks and congrats again on the quarter.

Thank you, Greg, yes, so I've asked the team to look to see if there is a way to get the EAP with the FDA sooner than later, and maybe that EAP would be for patients who don't qualify for the trial. And would the FDA allow us to provide access given there's only one treatment option out there. We don't have clarity on that yet. We've not approached the FDA yet, but that's really the key part of that comment, is if we could find a way to help more people sooner that don't qualify for the trial, we would be interested in that. Obviously, we don't want to have an EAP herd enrollment for the trial, that would delay our ability to help get that trial recruited. So that'll be some of the focus here is can we find a way to help those patients? That'll be in collaboration, but the FDA may want a certain amount of patients first, we'll have to see where they land.

Our next question will come from the line of Brandon Folkes with Rodman & Renshaw.

Maybe just two for me, Mike, I know you said you can't talk too much about the potential Phase 2/3 trial in 201, but would you be able to just talk about maybe if you're considering multiple dose levels there, and just elaborate on what is first prize for you in this program? Is it something that's comparable on efficacy with better GI side effects? Or would you prioritize perhaps, sort of a potentially more efficacious drug here. And then secondly, just maybe on Tyvaso DPI can you just talk about the manufacturing capacity where you're at today, what needs to be done if TETON is successful? And just you know, sort of how much investment does that take? Thank you.

Sure. I'll take the second one first, because that's easy. So from a DPI manufacturing capacity, we've been able to build up substantial amount of inventory for United Therapeutics this year, we should be well on our way ahead of any TETON results in terms of scale and capacity, we don't see any limitations, as far as we can see with that approval, the investment in the plant has already been invested in by United Therapeutics all the equipment's been installed and purchased, so there's no additional investment that that's a major I'm sure it'll be small things here and there, but nothing that's significant for shareholders or for United Therapeutics at this point, that doesn't account for what UT may do independently MannKind, i.e. building their own plant that's a separate decision on their part. But as far as we're concerned, we'll be able to supply substantial amount of DPIs as we go forward. In terms of, what does a win look like? It's a great question, and we've had this internal debate ourselves in that, do we really want to demonstrate the safety side of this around the severe GI tolerability issues that happened? Is it important to try to go after increased efficacy, or is it a balance of both of those by getting to market as quick as we can? And I think that that triangle in terms of efficacy, speed and tolerability is something we're continuing to talk about and there's various ways you can design a Phase 2/3 trial to kind of build those attributes. And the question is, how fast can you get to market and help those patients? And what do you need to demonstrate, for example, if we were to demonstrate equal efficacy somehow, but you took existing patients on the…

That concludes today's question and answer session. I'd like to turn the call back to Michael Castagna for closing remarks.

I just want to say thank you to everyone. It's been a fantastic year, volatile year for all of us, but the Company's in a great spot. We're looking to close out the year strong and really get ready for '25 and '26 as we look at multiple data readouts on the clinical side across our entire platform and programs, as well as just upside into the inline revenue that we're driving with the diabetes business. So we feel very good about the future, hopefully awesome news on international expansion as we go forward Afrezza and continue to drive growth and help more patients, I just want to say thank you to all of our employees for all the hard work and all the shareholders for all your support. Have a great day.

This concludes today's conference call. Thank you for participating. You may now disconnect.