Ladies and gentlemen, welcome to the Q1, 2017 MannKind Earnings Conference Call. My name is Danielle and I will be your operator for today's call. At this time, all participants are in a listen-only-mode. Please note that this conference is being recorded. 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 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, May 10, 2017. We undertake no obligation to revise or update any statements to reflect events or circumstances after the date of this call. I will turn to our financials. Our total net revenue for the first quarter of 2017 was $3 million which included $1.8 million from the sale of surplus bulk insulin to a third-party and $1.2 million of recognized Afrezza product dispensed to patients, after giving effect to growth to net adjustments of $0.4 million. In addition, as of March 31, 2017, we had $1.8 million of deferred revenue related to Afrezza product that has been shipped to the third-party logistics provider and wholesale distributors, but not yet dispensed to patients and recognized as revenue. Cost of goods sold was $2.5 million in the first quarter of 2017 compared to $5.2 million in the first quarter of 2016, a decrease of approximately $2.7 million or 52%, due primarily to a decrease in under-absorbed labor and overhead as a result of the reduction in work force, and a reduction for capitalized cost related to the manufacturing of Afrezza that has not yet been sold in 2017. These decreases are partially offset by $0.3 million of cost of goods sold attributed…

Thank you, Rose. Well, clearly, the focus in the first quarter has been on increasing our sales, rehashing our sales efforts and putting out an enhanced and enlarged sales force and many new marketing efforts, most of these Michael will be talking about in just a few moments. But at the same time, we continue to focus on various savings initiatives and spending reductions. As Rose noted, we decreased our cash burn rate from roughly $10 million a month down to $7.4 million in the first quarter of 2017 in spite of having built out a fully formed commercial infrastructure over the past year. In fact, if you look at our financial position versus the time last year, we have significantly more cash and less debt than we had at that time. In spite of having taking the product back, put in place all the infrastructure to support it, and then full fledge commercial infrastructure, still managing to reduce our burn rate. So, not only -- and that does even include the clinical trials that Ray is going to be talking about later which also are factored into there. But we're becoming more and more efficient and improving our financial position on a daily basis. Now, the numbers I've talked about before did not include the changes we've made to the Deerfield debt earlier the second quarter specially in addition to that where we really $10 million of that obligation, so our current position today is even better than just spoken about. We're continuing to make changes in that regard and having further discussions with Deerfield regarding potentially extending maturities and restructuring some of those debt instruments. We think that we're also becoming more efficient in another ways. Our inventory turnover changed pretty dramatically since last year. We're now at…

Thank you, Matt. So today, I am going to cover three topics. I am going to address the Afrezza label of submission, I’ll go over the Afrezza clinical strategy and I’ll you an update on Afrezza clinical program. Hopefully, I’ll show you how they are all tie together around the key differentiating attributes of Afrezza. So, let me talk a little bit about Afrezza label of submission. So, first it provides clarity on starting dose and dose adjustment concepts. This is vitally important to ensure that patients use Afrezza appropriately. This will help us retain patients once they start using Afrezza. Other label components consist of changes to the PK/PD comparative statements. We have replacement of PK/PD graph from the one that currently is there. I’ll talk about this is a moment. We also requested, updated line goods that reflects the most recent data more actively. Some of this includes for example, direct comparative data to other rapid-acting analogs. We expect the date label approval, the PDUFA date to be September 30, 2017. Now, as it's typical for the FDA, we don’t expect to hear back from them regarding any label components and so probably up to July or August timeframe. So, this is a slide that I have shown many times before and we use it as a basis for how our clinical strategy and our clinical programs are going to be led out. These graphs are important because they demonstrate or basically show Afrezza's key differentiation from rapid-acting analogs and this particular graph is lispro. This difference is the base for our strategy and our program, as I said previously. It's the PK profile that makes it so much different in lispro and it demonstrates clearly that it starts acting within five minutes to where lispro acts much…

Thank you, Ray. Good afternoon everyone. I want to first talk about where we focus Afrezza today and where you see us going over the next three to five years. The Afrezza U.S. target population is large as we've indicated for over 18 million out of the 22 million in treatment. The reason for this reduction is obviously because of our label restrictions around patients who have COPD and asthma. I'll remind you all why we're indicated for the large population because any time a new drug launches, you have to focus on the biggest unmet need first. And so when you look at the bottom of this pyramid upside down, the next 18 months we're really focused on the 2.5 million people with diabetes who have an A1c greater than 7. The reason this is important is these particular patients are already on insulin, they're used to taking insulin. The payer coverage is much easier to achieve due to the competitors contract and strategy and it's where drug start really serving the unmet need where the people need it most. As doctors get experienced in this population, we expect them to move up to the yellow box over the next 12 to 18 to 36 months, and they start to use Afrezza earlier in the treatment. We see that happened in various markets already today, but it's unrealistic to expect every doctor to start with this giving some of the payer restrictions that do exist and the lack of experience with the product. As they get experienced, as they see the patient success, we do expect that trend to accelerate. And then finally, you look at the 22 million people in this big bucket, this is where we've had 40 new drugs approved in the last decade and mostly…

Thanks Mike. So at this point, we want to take the opportunities to answer some of your pre-submitted questions consistent with last quarter. For the most part, we tried to incorporate the answers to these questions in the prior presentation, so we wouldn't make this an extended period, but there couple within next week fit to all. So, I’ll try to -- want me try hit some of those now. First question relates to the recently filed change in control agreements. Change in control agreements, are quite common for senior executives in general as well as among our peer companies. If that every single company we track and reporting our proxy as comparable peer company have such agreements in place, we also common at MannKind, I am and other tenured executives here at MannKind have agreements in place for many years. And in Q1, our Board extended these agreements to include newer numbers to the senior leadership team. MannKind agreements are standard, double trigger arrangements, which means they're only triggered if the Company both acquired and effective losing their job as a result. The timing of the filing was to proceed the proxy statement in which the agreements were discussed and nothing should be inferred from the adjustments or the timing of this particular action by the Board. The next question, that we often asked, has to do with the pipeline and for that I am going to turn it back over to Ray for a couple of minutes.

So as I said before, the pipeline we continue to progress the multiple tablets that we have there. We did have the -- held pretty IND meeting in December, we continue to be in with dialogs with the FDA around the appropriate regulatory pathway to lead to the indication we believe that product should have. For Treprostinil for pulmonary arterial hypertension, we have a pre-IND meeting scheduled with the FDA on June 28th. We expect that to be relatively successful as well as this pathway a little bit clear and so such before anaphylaxis, but we are also progressing into pipeline. Triptans for migraines, PTH and Symlin and I’ll update everyone at our next call.

Okay. Next, I think the final question relates to whether we consider a co-promotional arrangement in future, it sounds like a question that directed to Mike.

Thanks you, Matt. So, as we go forward, one of the things we look back on is there is a large type II market that fits within the primary care audience, and one of the barrier that further face that launch was fair pay restriction, that were in place at that time. And as we continue to remove payer barrier restrictions and simply that process, it will make sense to go back out and target a larger primary care type base. And we always have to evaluate our options with pursuing that our own or pursuing that through a co-promote partner. I think there are plenty of sales force who have capacity out there and it's doesn’t always make sense to take on in expense of 300 or 500 reps calling a primary care physicians when their capacity that exist in the market place. So as we continue to get better payer coverage and simplify the access, I think we can see a nice upswing and adoption as we target primary care docs in type II market and increase our share voice in reaching frequency. As of today, we will continue to focus on driving near-term performance, which only make that option much more valuable as we go forward.

Thank you, Mike. So, with that, I think we can bring the call to a close. I want to thank you all for joining us today. And just as a reminder, our Annual Meeting for stockholders will be held on May 18, at our Danbury, Connecticut Facility. And I look forward to seeing you many of you there. Operator?

Thank you ladies and gentlemen, this concludes today's conference. Thank you for participating.