Good afternoon, and welcome to the MannKind Corporation Third Quarter 2024 Financial Results Earnings Call. As a reminder, this call is being recorded on November 7th, 2024, and will be available 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 risk and uncertainties, which can cause actual risk to differ materially from those stated expectations. For further information on the company's risk factors, please see the 10-Q Report filed with the Security 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 now like to turn the conference over to Mr. Costanza. Please go ahead, sir.

Thank you, Operator, and to our entire MannKind team for all the accomplishments we've had this quarter. I've never been more excited and energized about our opportunities to grow MannKind over the coming years. Today, I'll open up with operational and pipeline highlights, followed by Chris giving a financial overview with closing remarks, going to Q&A. As we look at our third quarter highlights, Tyvaso DPI collaboration continues to be record-setting revenue and expansion opportunities as we look at our manufacturing revenue and continued opportunities with Tyvaso in IP. We're super excited by the continued strong collaboration with United Therapeutics. And now as we start to migrate from just the Tyvaso DPI and Afrezza, the pipeline is emerging as one of our focuses this year. And we're excited by the readouts in nintedanib Phase 1 here. We just completed the Phase 1 that we announced this week, as well as our Clofazamine Inhalation study is well under its way in Phase 3 site activations where we have ongoing opportunities here in the U.S. as well as Asia as we're starting that trial. The EBU net revenue for the quarter was $20 million or 10% versus last year. And we saw Afrezza overall for the year slightly impacted by headwinds throughout the first three quarters as we focused on profitable growth by realigning our salesforce back in Q1. As we look in Q4, we're looking to accelerate our growth on Afrezza in 2025. And the early indicator here are some of the changes we made that I'll talk about here where we have 8% growth in NRx year-over-year. Our pediatric study we'll be reading out very shortly here at the end of Q4. And we have a strong financial position with $268 million in cash, and we have $15 million in…

Thanks, Mike, and good afternoon, everyone. I'm pleased to discuss our third quarter 2024 financial results. For a summary of our financials, please refer to our press release issued prior to this call and our 10-Q, which is on file with the SEC. As Mike mentioned, our business demonstrated robust double-digit revenue growth compared to last year, led by revenues related to Tyvaso DPI. Third quarter revenues were $70 million, which represent a 37% increase compared to last year's quarter. For the year to date, we recorded revenues of $209 million, a 49% increase over the prior year period. Looking at the details, Tyvaso DPI royalties contributed $27 million in third quarter revenue, an increase of 34% over the same quarter last year, and $75 million, or a 48% increase for the nine-month period. On United Therapeutics Q3 earnings call, they noted the revenue growth was due to additional patients and an increase in price. They also commented that referrals and start patterns remain very robust, reinforcing their confidence in the durability of the growth profile. Collaboration and Services revenue was $23 million, a 78% increase from the third quarter of 2023. For the nine-month period, we recorded $74 million, a 108% increase compared to the same period in 2023. The increase over the prior year period was primarily attributable to increased manufacturing activities for Tyvaso DPI. Collaboration and services revenue consists primarily of manufacturing revenue based on production activities sold through to UT and a recognition of deferred revenue. In the first half of 2024 and in prior years, we also earned approximately $3 million of revenue related to certain scale-up activities in the first half of 2024, resulting in the expected slight decline in the back half of the year. Afrezza net revenue for the third quarter was…

Thank you, Chris. As we look back on 2024, we've executed all the milestones we've laid out so far, with the very last one coming up on INHALE-1, which we fully expect to share with the street here by the end of the year. We're looking forward to closing out the year. As we look at the first half, we have several key regulatory updates coming around 201 with another Phase 1 meeting, Tyvaso DPI and Afrezza expansion hopefully coming online, 101 continues site activations around the world and patient enrollment and screenings continuing. We'll also be having discussions with the agency on our INHALE-1 readout and our INHALE-3 data label change as we go forward. The next adventure of the company is extremely exciting as we look at our key value drivers going forward. We have 101 with every 1,000 patients being $100 million in revenue. As we look out in the NTM space, ARIKAYCE is approaching $400 million in annual sales as we look to 2025. We feel very good that this market, helping NTM patients, will be a very robust opportunity in the coming years. 201, as we move that one forward, we think this has a real opportunity to help impact the patient's lives and impact with IPF who suffer every day from severe diarrhea and GI side effects. As we think about Tyvaso DPI, it's hard for us to control that revenue stream, but we try to give you clarity that we continue to see very strong demand growth and manufacturing opportunities, and that for every 10,000 patients here is roughly $300 million to $350 million in revenue to MannKind. With the upcoming readouts next year of TETOM 1 and 2, we're going to be extremely excited about this IPF opportunity as well as TETOM…

Thank you. [Operator Instructions] And our first question will be coming from Andreas Argyrides of Oppenheimer. Your line is open.

Thanks, Operator. Thanks, guys, and congrats on all the progress this quarter. Two questions from us. Regarding 101, can you just give us a sense in thinking about ARIKAYCE and the number that you provided or what percentage penetration that is in the market and then where does 101 fit in that and how much bigger in that sense can it be? And then for 201, can you just give us a little bit more detail on the Phase 1 and how that helps inform the Phase 2 through design that you may have seen from an efficacy standpoint and then maybe a little bit more detail on the timeline that you said. I appreciate that. Thank you.

Sure. Thank you, Andreas. I think it came in a little blurry, but I think I heard your first question was on 101 around ARIKAYCE penetration and where does 101 fit in. And as we look at the landscape, I think the first thing is hopefully displacing ARIKAYCE in the refractory population as the administration and hopefully tolerability of 101 if it works efficacy-wise should sustain the ability to do that very well. The second area is we are down to final formulation selection very shortly on 101 and mid- to long-term we also expect to bring a dry powder formulation out that would help penetrate earlier lines of treatment. And so our ultimate goal is to be used first line and second line or refractory between a dry powder and a nebulizer. Just the nebulizer was the faster way to market and so they're right on top of each other in the grand scheme of things, but that's generally where we expect to be able to compete in early and late lines of treatment in NTM. We'll get further updates in terms of that strategy in bridging study or new study, naive study, et cetera, sometime in ‘25. The 201 details on how that informs us. I think the first thing was making sure the chronic tox data was okay because that to me was the first step in this area. And then the Phase 1 study was really looking to see what, if any, GI side effects could have occurred or is there anything related to OFEV-type side effects that would give us concern or at least confirm our thesis that they should be minimal, which is what we expected and they were. And then the second part of that is while they were healthy volunteers, it was the first time we're really putting nintedanib in a healthy volunteer lung and we're pretty confident in FDKP, as I stated earlier in the call, but demonstrating that there was no adverse reaction to nintedanib. We could clearly see in the Phase 1, whether it's the control arm or the placebo or the active, there was no indicators or any concerns for that. So that really shapes us up for the Phase 2. We know the FDA and their preliminary comments wanted a dose range finding study, so that's what we'll go to them with next year. So we're trying to get to either a Phase 2, 3 bridge or even just go into our single dose that we want to target and see whether we can down dose if somebody had tolerability issues. But until we meet with the FDA, I think it's all, we can't really predict where their heads are going to be and we have a good rationale, but whether they agree or disagree is the question. So that's where we are. We expect to get there hopefully in Q1 and we'll provide updates, as we meet with them.

Appreciate the caller and congrats on all the progress and I'll hop back in the queue. Thanks.

Thank you.

Thank you. One moment for the next question. And our next question will be coming from Olivia Brayer of Canter Fitzgerald. Your line is open.

Hey, good afternoon. Thank you for the question. What more can you tell us about MNKD 201's profile just in terms of any differentiation you've seen so far? You guys are obviously not the only ones developing an inhaled version of the drug. And did you guys look at PK as it relates to the oral formulation? If so, any comparisons there?

Sure. I think the -- I think first of all, we're probably in a speed to move this into patients in a bigger way. And I believe we have the ability to do that in the dry powder formulation in terms of CMC is pretty much ready as well as our trial design. So it's really just getting this to the FDA. I think in terms of, one can ask is there a difference in a nebulizer versus a dry powder? We probably have a little bit of a bias towards dry powder given our company history and background and the success of Tyvaso DPI and what we saw there over their nebulizer. So that's really our key points of differentiation as we go forward. I think there's always enough room in the market for two players. So it's really about making a difference in the patient's lives and letting competition compete. But we think that this disease requires hopefully some innovation that we can bring to the marketplace. In terms of the clinical differentiation, as you may or may not realize, these patients take immense amounts of Imodium just to try to stay on OFEV. And that'll be some of the stuff we look at is, do we reduce the number of Imodium, do we reduce diarrhea? Our proposal for the FDA is a combination of naive and experienced patients. So hopefully we'll be able to see a GI side effect from OFEV versus us in that profile. Again, the FDA could change our trial design and we would focus only on experienced patients potentially. But otherwise, we think the administration is not going to be the biggest burden in terms of a pill versus inhaled. But the side effect profile of OFEV is really what we're going after. And hopefully we can get higher lung concentration. We did measure plasma PK in this trial, not to compare it to OFEV, but just to kind of triangulate to our animal models to see where we were. And that data is still coming in as we speak. So we'll have that full analysis before we go to the FDA.

Okay, understood. Thanks, Mike. And then just in terms of kind of data disclosure for measuring plasma NPK, should we expect to see that sometime next year? Or is that something that you'll just go to the FDA with and not necessarily present at a medical meeting or publish?

I don't want to speculate yet because I don't know what the data says relative to our animals and how would we triangulate that or put some information out there. I do think people have been asking around the bleomycin study and this. And so we'll think about how we can bring some more articulation of our confidence as we go forward and what that trial design looks like and the data behind the support around that. And that's probably the one area I think we're still having some internal discussion on, which is, do you do a smaller phase two just to get the efficacy data so people could see that sooner. And then that'll take a little bit longer of a Phase 2 than a Phase 3, but it would give people more certainty. And so those are some of the discussions between the FDA and our internal clinical development team.

Okay, great. Thank you. I appreciate the color.

Okay.

Thank you. One moment for the next question. And our next question will be coming from the line of Faisal Khurshid of Leerink Partners. Your line is open.

Hey, guys. Thanks for taking the question. I just wanted to ask if you could say a little bit more around the adverse event profile that you saw in the Phase 1 for the inhaled and tentative. Like, with the FEV drop and cough events, could you tell us a little bit more, like, what's your hypothesis around what caused that? Like, is that excipient related? And just anything around, like, kind of time course of those events. And, yeah, just any more insight you can give around that. Thank you.

Yeah. There was no – I think in the seven-day part, we looked to see did it get worse over the seven days? Did people have it on day one, have it on day seven? The bottom line is there was no real concerns around the drop or the significance of the drop, or it didn't continue to get worse. In fact, no one just continued because of it. So people that may have got it on day one may not have had it on day seven. Some people didn't have it on day one, got it on day seven. So there was no consistency about when or how it appeared. There is one thing I'll highlight for you that I think is important is these patients had to do an FEV1, I think, like, every 15 minutes, roughly. So there was, like, four to five FEV1s in the hour to two hours post-dosing. And so that itself would have a lot of irritation of the lung. And that's something that the FDA wanted, so we did it. But I'm not sure it's going to tell us much. We'll look at the summary of all that data. But there was a lot of, I'll say, administration of FEV1 throughout the time period of measurement. And so we're looking at total FEV1 drops from the initial dose all the way through two hours. And that's after repeated FEV1s per patient. So there's a lot of data drawn, a lot to still be summarized, but there was nothing at the highest level when we looked at the data that was of concern or consistency, I'll say. And it seemed to happen in both the control as well as the active arm, so there wasn't anything specifically around the tentative that we would say. There's also, I think it's much more around putting dry powder in the lungs than anything and the frequency of FEV1 testing that was required.

Yeah, yeah, that sounds like a workout. Just to clarify, the placebo arm was, like, just a straight excipient without the tentative. It's the same kind of dry powder inhalation, just no active drug?

Yeah, just DKP is the excipient.

Got it. Great. Thanks for taking the question.

Okay. Thank you.

Thank you. One moment for the next question. Our next question will be coming from the line of Gregory Renza of RBC Capital Markets. Your line is open.

Hi, Mike and team. It's Anish on for Greg. Congrats on the progress this quarter, and thanks for taking our questions. Just firstly on 101. What's the broader value proposition from an economical standpoint for patients and physicians to use MannKind 101 over ARIKAYCE or even oral clofazamine and NTM? Maybe if you have some early thoughts on where you'd like to land on out-of-pocket cost. And then just in keying in on Tyvaso or Tyvaso DPI and the TETON IPF and PPF studies, might 201 also be clinically usable in PPF? I know there's some research out there. Just wanted to get your thoughts. Thanks so much.

Yeah. No, thank you. I do think that's, as we saw, another company switched from IPF to PPF. I think we'll see some results on IPF next year with the TETON 1 and 2. So I think there is an opportunity there, to your point. Some of that will be – we would expect to get, in my mind, extrapolation of indication. So if we look at what nintedanib’s indicated for, I think it's really picking the right population with the right trial to get the right endpoint. And I think it's part of our request with the FDA. Just like we got ILB with Tyvaso DPI, we would hope to get extrapolation with that focus. So that would be our first focus on that. But to your point, maybe we could go after PPF instead of IPF if we really wanted to. And I think that's still an ongoing discussion. But I think a lot of this is the bigger population of IPF and the predictability of enrollment in that trial. I'll bridge over to your one-on-one question on the brand value proposition. So I think when you look at clofazamine, it's in all the guidelines. Doctors really love it. Our team is over in Asia right now, in Australia, activating sites and kicking off the investigator meetings over there. And clofazamine has much more wider use, I'll say, in those markets. And so the receptivity of our nebulizer form is very high. And the belief in clofazamine as a treatment for NTM is very high. And when you think about the couple side effects of clofazamine, in particular, oral formulation, you're getting skin discoloration, QT prolongation, and potentially organ accumulation. So those are three things you don't want that with the reduced dose and the systemic circulation, but…

Great. Thanks so much.

Thank you.

I'm sorry.

No, go ahead. The next question.

All right. Thank you. One moment for the next question. And our next question will be coming from Brandon Folkes of Rodman & Renshaw. Your line is open.

Hi. Thanks for taking my question. And congratulations on the progress during the quarter. I actually want to switch gears and talk a little bit about Afrezza. Can you just talk about the growth in Afrezza and especially the growth in terms of the breadth and depth of subscribers? And what is the unaided awareness out there in the market just in the investment that MannKind has put into Afrezza data over the last year? Is there some level of anticipation of that data among your current prescribing community? And then how do we see the Afrezza commercial footprint evolving over time, just given that backdrop, especially as we sort of move into the pediatric label and then sort of really make a move on the inhale or both sets of inhaled data? Thank you.

Thank you, Brandon. I see from you there's a few questions wrapped up in there. And so I would say the unaided awareness of Afrezza amongst doctors is what we'd expect given the investment in our narrow target, meaning we target probably about 4,000 to 5,000 docs any given quarter. And the number that actually write on a consistent basis is obviously much less. And so that gets you to our focus, which is not broadening prescribers right now. It's actually going deeper with the current prescribers who have used the product. Because we got to a point this year where we really reduced our salesforce from roughly 80 people down to 50. And so with that 40% cut, we had to go narrow and deep. And that strategy seems to be working. We're seeing growth within our targets that we're really on top of. And we've seen that we've lost a little bit of scripts in the non-targets, I'll say, or in some of those docs that we had to leave with the reduction in the salesforce. But the hope was we would make up that drop on those that we are targeting. So that does appear to be kind of making that transition as we got from Q2 to Q3 to early Q4. The other part that we are seeing in the endocrine space, and you can kind of see in the insulin scripts, I think the overall TRX has dropped roughly 3% to 5% in Q3 in the overall rapid-acting mealtime market. And Afrezza obviously dropped from Q2 to Q3 a little bit. And some of that is we're seeing the endoswitch from treating diabetes to actually treating weight loss. And they're just literally wholesale shifting their focus and their patient volumes. And so we'll see how…

Great. Thank you very much. And congratulations again.

Thank you.

Thank you. And this does conclude the Q&A session for today. I would like to turn the call back over to management for closing remarks. Please go ahead.

Thank you, Lisa, for moderating today. And thank you to all the MannKind team and our shareholders. We've had a great year so far. We're going to close the year strong, looking really forward to 2025. And we'll continue to give you guys updates as things come in. But there's obviously a lot going on, all in a great way. And we look forward to continuing to open up that communication line and feel free to reach out with any questions. Thank you.

Thank you all for joining the conference call today. You may now disconnect. This does conclude today's meeting.