Good day, everyone. And welcome to the MannKind Corporation Third Quarter 2020 Earnings Call. As a reminder, this call is being recorded on November 4, 2020, and will be available for playback on the MannKind Corporation website shortly after the conclusion of this call until November 18, 2020. This call will contain forward-looking statements. Such forward-looking statements are subject to risks and uncertainty, which could cause actual results to differ materially from these stated expectations. For further information on the Company’s risk factors, please see their 10-Q report filed with the Securities and Exchange Commission this afternoon, the earnings release and the slides prepared for this presentation. Joining us today from MannKind are Chief Executive Officer, Michael Castagna; and Chief Financial Officer, Steven Binder. I would now like to turn the conference over to Mr. Castagna. Please go ahead, sir.

Thanks. And thank you and thank you everyone for dialing in on what appears to be a hectic election -- post-election day here. So, as we get into the agenda, we’re going to go through our Q3 highlights, the financial review of Steve and Q4 expectations and then a Q&A. I just want to remind people about our mission, which is really to give people control of their health and the freedom to live life, and we call it, life more humann. Our technology really helps provide quick relief of patients’ symptoms, such as high sugar, pulmonary hypertension, and migraine, almost at the onset of action and being able to correct that with the quick inhalation using our platform. We’re very excited to continue to expand our technology into other assets as we continue to move R&D forward. I’d also like to announce recent new addition to our team, Dr. Kevin Kaiserman, who now will be our Head of Medical Affairs and Safety. And new week, we expect to also announce a new head of regulatory. Kevin has 25 years of pediatric endocrinology experience, which we felt was very valuable, given our direction to move further into pediatrics in 2021. He is well-respected as a thought leader. He had private practice here in California and was trained at Children’s Hospital of LA. He’ll be leading our medical affairs, expanded field medical team, our safety and our pediatrics program. Let me talk about a few of the Q3 highlights. Afrezza third quarter net revenue of $7.3 million with 27% ahead of Q3 of 2019. In the U.S., our total prescription grew 8% and sequentially 3% in quarter two. The market was down 3% over -- year-over-year for rapid-acting analogs, and 2% quarter-over-quarter respectively. So, we’re outpacing the market shrinkage and we’re…

Thanks, Mike, and good afternoon. Very pleased to review our third quarter and September year-to-date 2020 financial results, which show continued U.S. Afrezza net revenue growth, Afrezza gross margin expansion rising above the 50% mark for the first time, and our continued focus on efficiently managing our cash resources. I’ll be discussing select financial highlights and ask that you supplement this call by reading the condensed consolidated financial statements and MD&A contained in our 10-Quarter, which is filed with the SEC this afternoon. Let’s start out with looking at revenues for the third quarter and September year-to-date. Starting with the table on the left, which is our third quarter results. U.S. Afrezza net revenue was $7.3 million versus $5.7 million in 2019, a growth rate of 27%. The increase was driven by volume growth from underlying Afrezza prescription demand, which was up to 8% year-over-year, price including a more favorable gross to net percentage, and the continuation of a favorable mix of higher insulin unit cartridges. Please note that a reduction of point $0.3 million in wholesale inventory has occurred between June 30th and September 30, 2020, adversely impacting our volume growth. The COVID-19 pandemic continues to impact our sales and marketing efforts in the third quarter. Physician access, including both face to face and digital interaction was constrained in varying degrees between different geographies, which impacted the effectiveness of our sales and marketing efforts. We continue to seen an impact on new Afrezza starts as some patients were reluctant to visit their physician to minimize the exposure to COVID, as well as physicians increasing the use of telehealth. Please note that we did not have an international Afrezza revenue in the third quarter of 2020, but did have revenues of $0.7 million in third quarter of 2019, which was…

Thank you, Steve. Now let’s talk about growing our future together and where we’re heading as we close out here in Q4 and start to move in 2021. First, we completed our commercial and our medical team expansion by hiring 26 new employees in Q3 and early Q4 alone, with several committed employees we expect to start over the next few weeks. We are expanding our integrated care model to improve the patient experience for Afrezza as well as the margins on the product. AfrezzaAssist you heard us talk about recently, which was streamlined the reimbursement support program, which was launched here in Q3 and is being fine tuned in Q4, with a really automated process when it comes to prior authorizations and adjudication of free goods. Additionally, we’re putting final touches on our telehealth collaboration with UpScript, [ph] which is weeks from launching. We’ve had the opportunity to also talk to another telehealth provider, called Steady Health who is already doing Afrezza prescription via telehealth here in California and Washington DC. And we’re very excited about what they’re seeing in the early results. Third, we are transitioning our Bridge program, which is also known as our Free Goods and shows up in our weekly prescription to AfrezzaAssist which will ultimately push these prescriptions into a channel that you no longer see in company and will now show up directly to us, but it will not be counted in terms of weekly prescriptions. New patients ended yesterday and all patients we expect in the Free Goods program to end by 12/31/2020. There will be some impact to NRx and TRx over next 12 weeks but we don’t expect any negative impact on revenue, because we believe it would be converted from free goods to paid prescription, as we expect people…

[Operator Instructions] We’ll take our first question from Brandon Folkes with Cantor Fitzgerald.

Maybe can you just talk a little bit about how you think about your sales force now in terms of [Technical Difficulty] And then, any color if you were to add reps [Technical Difficulty] adding new territories, or just adding additional reps in really kind of territories, are you just increasing any core points there? And then following on from that, as we look out into 2021, can you start to just talk about some of the areas you may see behind next year?

Brandon, I missed the 2021 part.

Just areas of the business, you’re going to look to invest behind in [Technical Difficulty] behind in 2021.

Great. Thank you. Sure. So, let me give some color on the sales force expansion. So, we made a decision in Q2 to expand our sales force. We hired quite a few people in Q2, we trained them in Q3, and they’re out there now running. We’ve also expanded our medical team. So, we have more medical liaison, medical education providers. Here, we still have one or two of them. We will be starting very shortly. And that’s another big expansion as we think, one of the key parts of Afrezza is, we’re finding physicians just aren’t aware of our data. But they want to learn more. They want to understand how to prescribe it, and are inviting us out. So, I think that’s exciting. I talked to a physician today, is getting four grand rounds in the next three weeks, and Afrezza is a big part of it. That’s just an example where having more people in the bus allows us to get in front of the docs who are given grand rounds and other talks, to ensure Afrezza is now being highlighted as one of the new ultra acting things out there. But that’s exciting. The other part is the expansion of the commercial team. So, we know, we get a lot of feedback, what are we doing online, so you think about 2021, I think we can scale up online presence even more, because we know that sales force as much as we try under COVID, the impact is going to be bumped a little bit as we sit here in lockdowns and opening closing academic centers. So, one of the areas we’re really focused on is increasing education amongst the educators, as well as senior education, as well as online engagement with patients. And so, that’s…

We’ll move next and take Thomas Smith with SVB Leerink.

Just a couple on my end. First one TreT, can you talk about some of the work you’re doing on the manufacturing side to prepare for the potential approval and commercialization? Sounds like it could come in 2021 or early 2022? And then, you mentioned United planning the BREEZE-2 through trial, obviously, they’re running the clinical development program. But can you talk about how you think about their strategy to expand the TreT label beyond the initial PAH indication?

Sure. On the manufacturing side, we completed build out of the factory really late last year. So, that was a multimillion dollar investment and about six-month project that’s completed. So, we’ve made commercial supplies within that batch. We really got one piece of equipment coming and finalized, the NDA package. So that’s all here and we’re just wrapping all that up here between now and the end of the year. So, the factory should be in a place to start to make scalable commercial supplies here in the roughly January timeframe. So, we’ll be ready to go on that one. On the BREEZE and UT leading the filing, what I would say is, we’re aligned on their perspective of how they think about the label, how we’re approaching the FDA with getting ILD in the label. And remember, we’re filing TreT as an NDA, not a 505B. So that gives us a little more flexibility around reference in terms of UT, the owners of ILD data, as well as the PAH indication. And there’s a small chance that we have to do the BREEZE to get the ILD and there is a chance the FDA will allow us to file with the ILD and the label. We’re waiting for FDAs feedback on that. And marginally, it makes sense, you should be able to move forward. But I think that will be in lockstep with the FDA and UT to make that decision. But we’ll have that pretty much in early Q1, to be able to get more clarity there. But from my perspective, Tyvaso looks good in ILD, TreT looks good relative to Tyvaso. There shouldn’t be additional -- or much additional work required in order to get the ILD indication. To give you a little more color on that. We’re including different types of PAH subgroups in our human factors study. So, we will have human factors data, which is probably one of the bigger things with FDA for ILD, right. And that’s additional indications beyond just people on Tyvaso. So, that’s just other ways we’re preparing to make sure we’re ready to go.

We’ll move on next to Robert Hazlett with BTIG.

Thanks. So, I appreciate all the color here. And just to follow up on that line of discussion. What would the brief to the design look like? Do you have any sense of a plan for that at this point?

I think -- I don’t have a black and white answer on this. I think, it’d be a small study, like we saw with our BREEZE-1 study. The question is probably more naïve patients than a switch is my guess. But I think that’s going to be dependent on the FDA feedback. But, I think, real question right now is do we need BREEZE-2, we’re ready to go in the event we need to and we don’t want to lose any time and getting this in TreT label. So, I think that’s the first question is, do we need to do BREEZE-2? And if we do, we’re ready to go. And if we don’t, we plan to file with ILD in label for hopefully 2021 launch.

Okay, great. Thanks for that. And then, the United Therapeutics agreement contemplates other research programs and efforts that you haven’t disclosed. Any chance on any visibility of those other efforts in the not too distant future?

Yes. What I would say is, we’re all focused on making sure TreT hits it timeline and get the patients as soon as possible. We met with the team many times on other ideas and other assets. I won’t talk much about that. I think let’s get to TreT. I think hopefully, this is a -- the plan here is not to be a one and done partnership with UT. We expect -- our platform exclusively for PAH and we would expect to find more opportunities, the outpatient in PAH with other products. So, I think let’s get TreT off the ground, and I think the rest. we’ll have further discussions and guide.

And we’ll move next to Steven Lichtman with Oppenheimer and Company.

Mike, I think, you started -- you talked about the [indiscernible] here. Can you walk through again through the mechanics of that in terms of the P&L and also the benefits that you see in terms of really opening up access?

Yes. And Steve I apologize. We’re having some issue with phone. So, to our shareholders and analyst on the phone I apologize if I broke up a little bit. We’ll look into this for next time. I think, what I heard you ask is a mechanics of Afrezza and the benefits that I see of the program in terms of the process. So, the mechanics are if you’ve heard of something like CoverMyMeds, it’s very similar, but streamlined. So, doctor will e-prescribe to a central pharmacy and that pharmacy then automatically given -- if it goes through, with no PA, it just goes through and gets filled. If there is a PA required, a PA gets immediately emailed to the doctor, and then from there they filled out, it goes electronically into the payer. And most of the time these are approved within a day or two, so we think max 72 hours. If it’s not approved within 72 hours after submission, we will provide a free code for free drug to get the patient started quickly, while we await the answer. If the answer is negative, we’ll appeal at the doctor -- obviously will appeal it. We do see maybe 20% of patients that go through an appeal. But 80% of the people generally, either get it right away with no PA or the PA is approved within a couple of days. So, we believe 8 out of 10 patients will go through automatically through this new process and they’ll be streamlined directly to a pharmacy. The benefit that on the other side of this is the pharmacy is used to seeing a present prescription. If it’s written wrong, they’ll get it correctly with the doctor immediately. They’ll have an inventory within a day. So, there’s no long-term wait…

We’ll take [indiscernible].

I meant to ask a question about gross margin. Congratulations on the progress with that, first and foremost, that’s pretty impressive over the past couple of quarters. Is there more room, more leverage there, especially as you think about additional capabilities coming on board with TreT and other programs?

Yes. There certainly is. And when I look at our costs and you look at the where we’re trending for Afrezza, call it in the 4 million [ph] a quarter range and 2 million for collaboration services, that gets adjusted a little bit if we actually add some additional resources for commercial manufacturing. But generally, that’s not going to change in the short-term. So, you take a model and model out where our revenues are going, you can see where our costs are going to be.

Got it. Thanks.

So, I think we’ll take this away to get those into the 70%, 80% range, which is going forward, there’s no reason to keep dropping to the bottom line. And that’s as far as getting efficiencies and the fact, it’s second to TreT and we’ll continue to move in the direction.

Thank you.

Yes. I don’t see any more questions here. So I want to thank. I know one [indiscernible] doing something else. So, I appreciate the message here. So, we will wrap up the call, available for any questions for analysts to follow up and any shareholders feel free to email us. We’ll try to get back to you and answer any questions you have. So, we are looking forward to wrapping up here Q4 and 2020 putting this behind us and getting ready for an exciting 2021 as we anticipate using our TreT program forward, Afrezza and the international market opportunities that exist. So, once again thank you everybody. Be safe out there. And I look forward to talking to you hopefully early New Year.

Everyone, that concludes our conference call for today. Thank you all for your participation and you may now disconnect.