Mannkind Corp Q1 FY2023 Earnings Call

Good afternoon. And welcome to the MannKind Corporation 2023 First Quarter Financial Results Earnings Call. As a reminder this call is being recorded on May 9th 2023 and will be available for playback on the MannKind Corporation website shortly after the conclusion of this call until May 23rd, 2023. This call will contain forward-looking statements. Such forward-looking statements are subject to risk 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 for MannKind are Chief Executive Officer Michael Castagna and Chief Financial Officer Stephen Binder. I would now like to turn the conference over to Mr. Castagna. Please go ahead, sir.

Thank you, operator. Hope everyone is having a great afternoon. At MannKind, our mission is to give people control of their health and the freedom to live life, and what we call that is Life More Humann. We're really excited about our first quarter highlights of 2023. Number one, our UT collaboration is strong. Patient demand has driven royalty revenue growth of 29% versus Q4 of ‘22. We're currently undergoing manufacturing capacity expansion, which I'll talk about later in this call. Our pipeline is quickly moving ahead with Inhaled Clofazimine going into Adaptive Phase 2/3, and we had a very successful pre-ID meeting with FDA on MannKind 201, in which we received written comments on how to proceed. Our endocrine business is strong, with Afrezza growing 26% versus 2022, and we had sequential growth over Q4 versus the traditional decline that we see in the New Year. Additionally, we are kicking off our first large phase 4 trial in a health rate called Pump Sparing, which is going to be head-to-head against the standard of care, and that should be enrolling hopefully late this quarter, early next quarter. In V-Go, we dropped that product in our Afrezza sales bag starting in Q1, and we expect to continue growth throughout Q2 and beyond. From a liquidity perspective, we had $167 million in cash on hand, which is only a six million decrease from the end of last year, and our net loss per share decreased by 60% versus last year as well. We continue to see the progress we're making in our growth engine versus managing our cash balance. I've made the DPI a strong patient demand. As a result, there are several things we've put in place this quarter that should continue to drive strong uptake and support of the demand that UT is asking. We've improved our current manufacturing process by doubling our bulk spray drying capacity. This was a rate limiting effect right now in terms of continued increased demand that we wanted to make sure we addressed before we hit any supply constraints. We expect this to be online in June. Additionally, we are increasing yield and throughput when it comes to the fill finish and the packaging as well. All of this means that we should see an improvement in our inventory ability to supply by over 200% in the second half of 2023. Additionally, we are building out high-volume capacity expansion that we expect to be online in 2024. This is around scaling up bulk spray drying capacity for the possible IPF indication, as well as additional cartridge and blister fill capacity will be done in this expansion. From a revenue expectation, we saw strong patient growth here in Q1 and Q2. We expect for every 10,000 patients, annual revenue to MannKind should be between $200 million and $240 million, which would include the collaboration of services as well as royalties. On our endocrine business, operationally we look at Medicare as a $35 copay that happened on January 1st of this year, which is driving a favorable impact in Q1. We continue to see these patients grow and impact in our business as we look at Q2 and beyond. We had lower Afrezza growth than that, but as we continue to shift our direct purchase orders to specialty pharmacies out of the wholesale channel. Our sales force has been cross-trained, and we have about 65 reps selling both V-Go and Afrezza and about 15 reps selling V-Go only. As we previously communicated, we anticipate the endocrine business chain to be break-even by GAAP by the end of this year. Additionally, we're trying to enhance the scientific understanding of Afrezza, and we have three trials that we're expecting to read out over the next 12 months. Number one, INHALE-1, we have over 35 sites, and we've seen a lower patient dropout than expected. INHALE-2, which is what we're referring to as the CIPLA Phase 3 trial for India, we expect that data readout here momentarily in the next few weeks. I don't know if they will publicly announce or present the data at a future conference, but we will at least know the data as we go into a filing for the second half of 2023. INHALE-3, we're calling Pumps Sparing, which is Afrezza to receive a Dexcom, hence the three, versus Standard of Care. This will be the largest adult trial we've done with top tier KOLs across 20 U.S. sites. As we look at V-Go, NRx is our leading indicator, which grew for the first time in two years. We made several changes coming into 2023 that impacted our TRx. Number one, we canceled the cash pay card that could be administered at the pharmacy. Number two, in April, we ended our free goods program. And number three, we upped our copay card a little bit so that patients have to share a little bit more in the cost as we go forward. All three of these things combined would have impacted Q1 TRxs. But as we look at NRx being our leading indicator, we can see continued growth from this point forward now that we've integrated into the Afrezza sales force. Therefore, we believe we are on track to meet the high end of our forecast, $18 to $22 million. As you look at Afrezza, in 2022, we really focused on accelerating NRx growth. This was a complete shift from top to bottom in the organization, and it was a major focus of our sales force. You could see every quarter, we continue to improve NRx growth, which is what we needed to see happen faster than TRxs in order to grow TRxs. You can see NRx again is the leading indicator here, as you see Q3, 18% growth NRx, 10% growth TRx, and continuing on for Q4 and Q1. A lot of the Q1 upside has been the Medicare $35 copay, where we're seeing over 90% approval rates through our reimbursement hub. As we close out the first half, we see several key milestones in the first half going into the second half. We've already completed the first two, which is V-Go and the Afrezza sales force bag, and Medicare $35. Additionally, we have INHALE-3 kickoff. We expect to have our investigator meetings here in about a month and kick those patients off, hopefully in Q2, going into Q3. In Q3, we should have our BlueHale Viz launch, which is the visualization to integrate with Dexcom CGM data with our inhaler. In Q4, we expect to be fully enrolled with INHALE-1 and fully enrolled with INHALE-3 as we close out the year. Now I'm going to turn it over to Steve.

Thanks, Mike. And good afternoon. Pleased to review select first quarter 2023 financial results. Please supplement this call by reading the condensed consolidated financial statements and MD&A contained in our 10-Q, which was filed with the SEC this afternoon. Our total revenues grew 239% versus first quarter 2022, which highlights the revenue growth associated with Tyvaso DPI and, to a lesser extent, our endocrine business. Revenues from our collaboration with United Therapeutics totaled $23 million in the first quarter of 2023, which is made up of royalties of $12 million and collaboration and services revenue of $11 million. Royalties earned on the net sales of Tyvaso DPI of $12 million was a result of strong patient demand and a low double-digit royalty rate. We recorded $11 million of collaboration and services revenue in the first quarter, which was over four times the revenue of a year ago. We were not yet manufacturing commercial product for UT and deferred much of our revenue for recognition later in the manufacturing contract life. Moving down the table to our endocrine business, total endocrine revenues were $18 million, which are made up of Afrezza net revenue of $12 million and V-Go net revenue of $5 million. Afrezza net revenue of $12 million compares to $10 million in 2022, a growth rate of 26%. The growth is mainly driven by higher patient demand with underlying paid TRx growth at 26% year-over-year and higher price, including a more favorable growth to net adjustment. Our growth to net went from 39% to 38%, reflecting a continuing shift from using full-line wholesalers to using specialty pharmacies with lower fees. Net revenue from V-Go was $5 million for the first quarter of 2023, and there was no comparison for the prior year due to the product being purchased in the second quarter of 2022. Since acquisition, V-Go net revenue has totaled $18 million. It's on track to achieve the high end of our original forecast of $18 million to $22 million, with a period of 12 months post-acquisition. The next slide shows our revenue growth by source on a quarter-by-quarter basis from the first quarter of 2022 through the first quarter of 2023. The mix and growth of revenues has significantly changed over this period as we've added Tyvaso DPI royalty revenue, revenue associated with the commercial manufacture of Tyvaso DPI, and sales from V-Go, all starting in the second quarter of 2022. Looking across the time span, our first quarter of 2023 total revenues grew 239% versus the first quarter of 2022, reflecting not only the new sources of revenue, but also the strong growth in Tyvaso DPI-related revenues. The next slide shows the impact that cash inflows associated with Tyvaso DPI have had on our cash, cash equivalents, and investment balance. You can see the inflection point happening in mid-2022. Starting with the third quarter of 2022, our cash investments quarter-on-quarter changed, with only a single digit, the first quarter of 2023 being reduced by only $6 million. We continue to tightly manage our cash outflows while benefiting from the increasing revenues associated with Tyvaso DPI and our endocrine business, which moves the company towards profitability and being cash flow positive. Also note that we have started to increase our investment in the development of our product pipeline, which is quickly becoming our next lever of shareholder value. We believe that our current level of cash, cash equivalents, and investments, plus anticipated operating cash inflows and outflows, will allow us to adequately invest in and grow our business without a need for any follow-on stock offerings. Finally, we haven't spent much time on EPS in the past, but as we grow our revenues and manage our expenses, the loss per share has been significantly reduced as we progress down our path to profitability. The first quarter loss per share of $0.04 versus a loss of $0.10 per share in the first quarter of 2022. Thank you, and now I'll turn it back over to Mike.

Thank you, Steve. As you all can see, we have a very robust product pipeline in addition to our marketed products. We expect to be able to file in the second half and hopefully get ready to relaunch back in Brazil early next year. As we look at the pipeline, Clofazimine is on its way to get into patient care in the second half, and nintedanib is moving forward quickly as we just received dosing data in our supportive model, as well as the ongoing studies. We expect to be able to put this product in humans late this year, early next year. DNA-1000 TGS beta continues to progress nicely, and we'll have updates on those as we progress through the year. Part of the story we always get from shareholders is what's next. We don't believe we have a lot of value in our company as we look at our pipeline momentum building over the next 24 months. We have several studies on Afrezza, which is basically redoing a lot of the work that was done over a decade ago, but the new insights around dosing and how to titrate up quickly and manage basal at the same time. These new studies are based off the small pilot studies we've done over the last five years. We are excited to see these results in the near future. On the organ side, we have several assets moving forward in development over the next 24 months, as you can see here, going from IND to phase one, to submission to phase one, and continuing to progress this very rapidly. As I look out, I wanted to bring you some perspective on how these key value drivers create shareholder value as we go forward. The first is the pipeline. MannKind 101, we expect to dose. This trial should take roughly 24 months in terms of dosing and enrollment. For every 1,000 patients, once this is approved, we would expect approximately $100 million in revenue. This is an orphan disease that has somewhere between 60 patients and 100,000 patients alone here in the U.S. MannKind 201, we expect to be dosed by the first half of 2024 and progressing rapidly into phase 3 from there. Tyvaso DPI for every patient, royalties and collaboration and service revenue should be in the range of $200 to $240 million in revenue. We remind you UT has a T-hub study readout for idiopathic pulmonary fibrosis that would be upside to these forecasts. In our endocrine business, we have pediatrics. When we look at diabetes over the last 20 years, innovation continues to happen with kids. We believe once we get these results, we should be able to help many children and parents manage their kids' diabetes. Every 10% market share there is roughly $150 million in additional revenue on top of what it will be at that time. We're excited about the India launch upcoming and the data readout there, as well as this new pump sparing study that we're doing to show not that pumps are good or bad, but that there's an opportunity to delay using an insulin pump and start with inhaled insulin and delay the skin damage that can occur over the next 30 to 40 years. V-Go, we've put a stabilization and growth plan in place. You're starting to see the early fruits of this labor. As we look at the type 2 market, one of the things we see is many more people coming in with insulin delivery devices in type 2, and that should rise all the time. Thank you for that. We will talk about our annual shareholder meeting. MannKind's annual meeting will be May 25th at 10 a.m. This will be conducted live via the internet to reach more shareholders as we typically see three to four times more shareholders dial in for this than we had in a live meeting, and hence why we wanted to go this route. For those shareholders interested in joining us to see Danbury, please reach out to our investor relations. All information about this meeting and instructions for voting can be found on your website or our proxy, with several proposals that need to be voted on that were endorsed by the board and ISS supporting all eight proposals. I want to close out just letting you know over the next two to three weeks, there are several RSU grants that are scheduled events, which will be reflected in multiple Form 4s filed by executive leadership team members to represent these vesting events, as well as to sell to cover transactions that will be conducted under 10B5 trading plans set up last year to cover their tax liabilities. Rest assured that we all believe in the long-term future of MannKind, but the IRS expects to be paid in cash when RSUs vest, so we must address that obligation. I wanted to add some context for the various Form 4s that you'll see throughout this month. Thank you again, and we will open up for questions.

Ladies and gentlemen, if you have a question or comment at this time, please press star 11 on your telephone keypad. If your question has been answered or you wish to remove yourself from the queue, simply press the star 11 again. Again, if you have a question or comment, please press star 11 on your telephone keypad. Please stand by while we compile the Q&A roster. Our first question or comment comes from the line of Oren Livnat from HC Wainwright. Mr. Livnat, your line is open.

Hi. Thanks for taking the questions, and congrats on another strong quarter. So, I listened to the United Therapeutics call, and I couldn't have been any more bullish about Tyvaso DPI highlighting the demands, I think even outstripped expectations, which has actually led to some surprising dynamics with inventory and demand at specialty pharmacies not being able to be satisfied. Can you just confirm for us your expectations that through this year as you execute on the capacity expansion initiatives you highlighted in the script? And then the bigger expansions next year, are you confident that you can meet all the demands through the rest of this year and into next year? And I have follow-ups. Thanks.

Thank you, Oren. Yes, obviously we tried to give a little bit of extra clarity on this call given the UT comments last week. I think as far as we can look out, we've been close with UT on a daily and weekly basis to make sure we're supplying patients every time. We made some changes here in Q2 that will be in effect and should be in full production mode by June. Those are happening as we speak and that should make sure we have more than enough adequate supply and at the same time allow the pharmacies to build off the contracted inventory that UT has mentioned in the past. We weren't as close to some of those contracts and what that obligation was as we went out the door last year to launch. The launch took off very fast. I think the conversion has gone very well. The new starts have gone well. Overall, it's meeting and meeting expectations. We had to make sure we increased our ability to continue to supply in the second half of this year, which we're doing. Again, nothing in the short term do we see any impact. It's really getting ahead in the long term. As that patient base builds, we should be comfortable supplying from now all the way into the future.

Okay. I guess you segued into my next question. Speaking longer term, I was surprised on their call to hear that they are in fact investing half a billion dollars to build their own UT-owned plant for Tyvaso DPI to, I guess, triple or even theoretically quadruple your expanded capacity even for next year. So, I guess just, you did highlight the $200 plus million in revenue from every 10,000 patients. If they're already investing behind that now, it must mean they're pretty confident in some pretty extreme growth potential. So, how are you planning for the longer term with a real possibility of a couple extra couple hundred million a year in royalties coming in the door? How are you planning for investments on your end now that we're coming not only out of cash burn but into a pretty big surplus, whether it be pipeline investment, M&A? And on the flip side, have you even thought about potentially breaking up and maybe selling for some large amounts of dollars via the franchise to UT?

Lots of questions on that. I think we wanted to show what every 10,000 patients equal because, whether you want to assume it's 10,000, 25,000, or 75,000, you can see this as a meaningful growth driver for MannKind and our shareholders. Any company who's going to have a billion dollar plus product wants a reliable, consistent, and backup supply. We're fully supportive of UT's build-out of a second facility because, as you've been to Danbury, it's a wonderful facility. It's large and can do a lot, but it's one facility. If you really look at the future where UT is going, having a second facility come online as a backup, whether we're the backup or they're the backup, I think all that is going to take years to realize. These things take five to seven years to build sometimes and certify. We've got time to worry about some of those details, but at the end of the day, there are definitely things we're doing in IPF on the scale-up that could increase the capacity within Danbury to more than meet the needs over the next three to five years. We feel very good about Danbury meeting current demand, and UT having a backup or second facility as they look at increasing global supply will all be net-net positive for everybody and ensuring continuity of care. In terms of what MannKind will do with that excess capital coming in, you see we've been building a pipeline over the last four years in anticipation that Tyvaso would do well, and MannKind would be able to self-fund R&D and ultimately launch it. Believe me, we'd all be happier as shareholders and employees if the money coming out the door every day to UT would go into MannKind. We want to ensure we can do that, whether it's NTM or any other assets. These are real assets of real value that we've been building for the last three to four years and will finally be starting to enter patients and launching over the next three to five years. We're excited about the future and capital deployment. That's our number one job: to appropriately deploy that capital to drive the best opportunities for growth. We’ve done a lot when we didn't have a lot of capital. Now imagine what we could do to drive faster growth now that we do have adequate capital, and that's what we're doing. We're taking a bet, for example, on INHALE-3. It's a small bet, but it's one that could show that you're as good as an insulin pumper better. We couldn't take those types of bets before.

All right. Thanks. I appreciate it. I'll hop back in the queue.

Thank you. Our next question or comment comes from the line of Brandon Folkes from Cantor Fitzgerald. Mr. Folkes, your line is now open.

Hi. Thanks for taking my question, and congratulations on the quarter. Maybe just following on from the prior question, can you just help us think about the UT announcement versus potential future Danbury expansion? Was this always contemplated, and would UT have an obligation to buy from MannKind first and then use their own facility as a backup? Thank you.

Brandon, I think it's too early to speculate on some of the supply chain contracts. We have a 10-year supply agreement with UT. They've invested a lot of money in the plant and the people. I don't see that changing in the near term or in the midterm. As you look at the pipeline, we have a couple of assets we're moving into Danbury for manufacturing for commercial. So, there's going to be a lot of positive activity at Danbury regardless of UT as we look out into the future. We would expect to be able to continue to supply out of Danbury. There are some unique capabilities there that take time to duplicate, as we’re a single-purpose facility and the only one of its kind in the entire world. There’s a lot of work to get ready to do that a second time.

Thank you very much.

Our next question or comment comes from the line of Gregory Renza from RBC Capital Markets. Mr. Renza, your line is now open.

Hi. Can you guys hear me okay?

Yes.

Hi, Mike and team. It's Anish on for Greg. Congrats on the progress this quarter and thanks for taking my questions. Just a couple for me. Firstly, on the new user-owned facility to support the growing demand for Tyvaso DPI and continued ramp-up of commercialization, could you remind us of any economics or incentives in place and the degree of your involvement to get this facility up and running? And I do have a second question.

I think we have every incentive to make sure the facility is up and running as UT gets ready for the IPF. I hope that indication goes well. That's a huge upside to everybody and I think that's enough incentive for us to ensure we meet the timelines. We started this a long time ago. Some of the beginning equipment that's important for the scale just arrived yesterday. We're installing the equipment to build us moving forward. We're super excited. The team is working night and day to make sure it's ready. We'll be validating that equipment here in the fall and hope to have a commercial product come off of it at some point in 2024.

Great. Thanks for that. And then secondly, just on the macro side, do you have a sense of how the current inflationary environment has affected OPEX in terms of relative change in capital costs over the past 12 months to 24 months just to get a sense of any potential factors from under the covers? Appreciate it and thanks again.

It's Steve Binder here. Inflation and our costs are probably up in the low single digits, nothing that's unusual in the marketplace. We don't see anything unusual coming our way on the manufacturing side or the OPEX side. So, for planning purposes, I think that should be fine if you're modeling that out.

Great. Thanks.

Thank you. Again, ladies and gentlemen, if you have a question or comment at this time, please press star 11 on your telephone keypad. Our next question or comment comes from the line of Thomas Smith from SVB Securities. Mr. Smith, your line is open.

Hey, guys. Thanks for taking the questions, and congrats on the progress during the quarter. Two questions from us. First, can you comment on whether you're seeing any impact to Afrezza from some of the price reductions that were announced for injectable insulins earlier in the year? And then secondly, we saw the strong data for sotatercept and PAH back in March. Just wondering if you could comment on how you see potential sotatercept approval affecting Tyvaso DPI use, either positively or negatively? Thanks.

Let me take the first one on sotatercept. I want to defer to UT in terms of, they're the experts in the PAH market. I think it's a great drug. Everything I've seen, it's being used in combination. There are 50,000 patients in PAH. I think there's enough room for everybody. For us, Tyvaso DPI is off to a very strong start, and I think that's the best news for patients in MannKind and UT. I'm sure this probably will have a place in the market when it's approved, and I'll ultimately defer to UT on how that best looks.

On Afrezza, the insulin price reductions have not had any major impact, or even small impact, on MannKind. In fact, we're having some of our best weeks over the last month in terms of demand and outflows that we see at wholesalers. From our perspective, Afrezza is on track to meet our expectations. We don't see any risk as it pertains to the insulin price declines that happened by Novo, Sanofi, and Lilly. You have to note that they only took those prices on drugs that were exposed to Medicaid penalties in 2024 that did not reduce the price of their innovative basal insulin. They didn't do it on the non-interchangeable basal or other recent insulins. All the legacy insulin, all the newer insulin that have been approved the last five to ten years have not had price reductions. It's only the 20-year-old products that are really exposed to Medicaid best price and Medicaid penalties for the price increases they took. Many companies will have to deal with that in 2024. However, we've looked at our numbers, our price points. We're comfortable with it. We believe our value proposition and economic support to payers is warranted. That's another reason why we're going out to do the studies we're doing, to hopefully show the cost of an insulin pump plus better timing range plus A1C leads you to this total cost of care. We think that's important to payers, not just in the U.S. but globally. We do not anticipate any fundamental changes to Afrezza. We're seeing strong growth as we close out March and April, and we expect that to continue the rest of the year.

Got it. That makes sense. Thanks for taking the questions.

Thank you.

Thank you. Our next question or comment comes from the line of Steven Lichtman from Oppenheimer. Mr. Lichtman, your line is now open.

Hi, Steven, guys. Question on V-Go. Now that it's been in the field for you guys for several quarters, are you seeing cross-selling building with Afrezza? And do you see opportunities looking ahead for those types of synergies, particularly with V-Go stabilizing, as you mentioned, Mike?

Yes, Steve, thank you. I know you've followed V-Go for a long time. We committed $18 to $22 million last May. We're hitting the high end of that $22, as we expected. The question is how do we go from $22 to beyond? I think it's really important that we just put this in the sales force. It takes three to five months for those reps to get launches, in-services, follow-ups, and nurse training. All that's been happening. We're hearing really good progress locally on the front line. I think that's important. We're seeing some early indicators with the NRxs that are positive. Unfortunately, we need to offset that with the white space where there are TRxs dropping off due to the commercial changes we made to increase the profitability of the asset. That has been our main focus: optimizing V-Go given the cost structure of the manufacturing and the rebates paid to payers. Removing the patient hub and really focusing on retail is key. It's a very different product than Afrezza where we're pushing patients to a reimbursement hub and not rebating. There are two different models. We've executed that at our sales force level. V-Go doctors who have historically written V-Go are opening the door for Afrezza. Our reps are getting into places they would never have gotten, which was part of our strategic move. That integration just happened in the last 12 weeks. I think we'll continue to see a positive impact on Afrezza as a result of that integration and also continue positive momentum on V-Go as we close out Q2 and beyond. It’s a fantastic product. I've seen it firsthand. We've had recent ad boards, and we think if you look at products in the type 2 market, we’ll see more people using insulin delivery devices. At the end of the day, both Afrezza and V-Go are incredible products. We're narrowing our focus and going deeper with customers, positioning V-Go for type 2 and Afrezza for type 1. That’s consistently happening every week.

Great. That's helpful. And then, Steve, gross margin looked firm again this quarter. I apologize if I missed it, but what was the Afrezza gross margin in particular as we disaggregate that from V-Go? And what's your outlook sequentially as we look forward here on gross margin?

As we've combined Afrezza and V-Go into the endocrine business unit, we're going to be just disclosing endocrine product gross margin going forward. It's just under 70% for combined. We disclosed this in prior quarters. You can take those gross margins from a modeling perspective, and I think that would put you in the ballpark going forward.

Okay. Fair enough. Thanks, guys.

Thank you, Steve.

Thank you. Our next question or comment comes from the line of Anthony Petrone from Mizuho. Mr. Petrone, your line is open.

Thanks, and congrats on another good quarter here. A couple of questions looking ahead to ADA in the next month or so here, just what we should expect from MannKind A. And then B, just overall when we think about the discussion on GLP-1s, Ozempic, Mounjaro, some other products out there, and just how that plays into timing for the utilization of insulin in type 2 patients. Can you maybe level set us there on what we should expect into ADA, and I'll have a follow-up question.

Sure. Anthony, great to hear from you, and thank you for joining us today. We just came out of AACE last week, and it was nice to hear people like Irl Hirsch, who's world-renowned, announce on stage that he personally is taking Afrezza. That gave us a lot of proud moments. We've worked hard with him and others over the years. Physicians living with type 1 are starting to use Afrezza after eight years on the market, which gives us some good excitement, and his experience was that he was impressed. I think that's what his quote was from stage. That sparked a lot of questions around how to use it, to use it on top of a pump, and when to use it. We're getting context into the conversation, which has been missing for Afrezza for many years. As we look to ADA, we have one small presentation on the ABC trial, which was the pump switch trial. That one will be a poster, if I recall. We're going to have lots of dinner events, one-on-ones, and customer engagements. Don't expect a large booth presence there. We've redistributed that investment at the dinner events and one-on-ones. Otherwise, we'll have a presence at ADA, and I will be there and expect it to be quite a busy meeting. We're focusing on nurse practitioners, nurse educators, diabetes educators for the rest of the year. Those are deeper focuses for us as we go forward. Your question on GLPs is a good one, which is we know GLPs only delay insulin for type 2s that much further out. We know from the time a patient needed insulin to the time they got it was about a 7-10 year delay based on history. So, it will probably make that another year or two longer, as what we’re hearing from customers is that while GLPs work well, they still need post-prandial control. That's one of our main focuses, whether V-Go or Afrezza. You still need better post-prandial control. You need to cut down those highs if you're going to improve time and range. We're the only insulin that works in the body very quickly. The data is showcasing at ADA and even at ATTD, we work 30 minutes faster than the current gold standard. We reduce those highs substantially. That's not going to change. We have a nicely competitive and differentiated profile. How do we make customers understand that? That's a significant focus as we launch our INHALE-3 trial with 20 top centers in the U.S. to understand the product profile, dosing, and ultimately what that means to a patient. GLPs will do great, and they're outstanding drugs. There might be an investigator's trial of how to combine a GLP and Afrezza; that's probably an area we want to investigate for patients who have stubborn highs to bring their meal time down.

I just have a quick follow-up, but just beyond the BlueHale launch with Dexcom CGM. Just to clarify, I'm assuming that would be with Dexcom G7, and maybe just thoughts on how that can trend starting in Q3. And when you think about utilization with CGMs, is there a potential that we could see a collaboration also with Abbott for that product? Thanks.

Yeah. Look, I think when you look at where diabetes is going, it's finally getting easier. It's never going to be simple for patients, but to think about once-weekly basals, once-weekly GLPs, and inhaled insulin, it's exciting. As we look at the next 12 months with BlueHale, we're likely to have our own digital platform where we integrate CGM along with the dosing of Afrezza, your inhalation effort, and show what's happening in real-time. You can download those reports and send them to your doctor. That’s in beta testing right now. We’ll get through the next eight to ten weeks to ensure everything is tight. As you mentioned, it's with either Dexcom G6 or G7, and we would expect Abbott to allow us that Libre API in the future. We’re not there yet but are in discussions with them. I expect that we will get there, but it probably won't happen at the same time as Dexcom. We will use BlueHale ideally in the trial and collect some of this data in real-time to show the value it can bring to patients.

Okay. Helpful. Thank you. Congrats again.

Thank you, Anthony. Nice hearing from you.

Thank you. Our next question or comment comes from the line of Oren Livnat from HC Wainwright. Mr. Livnat, your line is now open.

Oh, sorry. The operator cut out. Can you hear me?

Yes.

I just wanted to follow up on 101. You mentioned that's going to be a 24-month study. So, I know there's no rush on that, but I think on the last call you mentioned as we get into this year towards Q2, maybe we can get some more color on that study and design and expectations. I'm wondering if you're able now to give us just even if it's just big picture, what are you trying to accomplish in that study? How are you trying to differentiate from existing treatments? How do you imagine, if you see what you want to see in 101 differentiating in the marketplace? And I guess longer term how you think market share, I don't want to get into specifics, but just where you think it differentiates from the existing market?

Yes, no, thank you, Oren, for asking on 101. We've had a lot of research coming in with doctors that we're doing in the U.S. and Japan specifically. The first differentiation is our 28 days of dosing. We're planning to dose for 28 days straight, stop for two months, and then dose again. A patient only needs two dosing cycles on a nebulizer for two months straight. We're continuing to work on the dry powder formulation, which will be a life-cycle management play. But in terms of pure differentiation from the only currently approved NTM treatment, we feel very good about that first step. The second step will be around tolerability. We believe Clofazimine is a well-established agent. People love the product. It's used globally through an expanded access program from Novartis. Doctors are familiar with it and understand the challenges around drug accumulation, QT prolongation, and skin discoloration. We believe by dramatically lowering the dose in our formulation, we will minimize or remove these concerns. That will be a key pivot point in the trial. The other parts will be looking at sputum conversion as well as quality of life, as these are important aspects for the FDA. Less important outside the U.S., but more important for the U.S., and we'll collect that data. The trial size is roughly 180 patients. I'm comfortable sharing that at this point. We will study a high and low dose of Clofazimine versus the standard of care. We’re not stopping the trial between phase 2 and phase 3; it’s continuous enrollment. The FDA has indicated that a single trial is appropriate. The biggest part we're working on is correlating quality of life, sputum conversion, both positive and negative. There’s some data generated around the world that we're analyzing as we finalize the statistical design, which again doesn’t have to be finalized until the trial database is locked. We have time to generate and publish that data, which will be essential to the package at the end. Right now, we're focused on getting the trial off the ground as soon as possible. Sites are very interested, and we have inbound calls from sites asking to participate. So we're excited; we believe MannKind is doing well with trials. We’ve gained great experience running them and have learned how to take appropriate risks to move them as fast as possible.

So, is there a particular type of patient you're aiming to recruit into this study in particular? If it works and you see what you want to see, how much of a registration package do you think this one, I guess it's a phase 2/3, do you think this study could represent? Do you have to do another pivotal trial after that?

No, because it's a 505(B) on a repurposed drug, we only need one pivotal trial. We’re calling it a phase 2/3. There's not a stopgap from phase 2 to phase 3; it’s continuous enrollment. The primary endpoint will be six months. We think from an overall product perspective, we're excited. We believe it will serve a unique need in this market. We will be going after patients who have progressed on TBT and are not responding. So, that's the earlier line of treatment.

All right. I appreciate the added color.

Thank you.

Thank you. I'm showing no additional questions in the queue at this time. I'd like to turn the conference back over to Mr. Castagna for any closing remarks.

Thank you everyone for dialing in today. It's been a great quarter. We're only in the first quarter, which should be a phenomenal year for our employees, shareholders, and all of our stakeholders and ultimately the patients we serve. We have multiple avenues of growth. It's an exciting time to be here. We're hiring great people. We're having higher and higher quality job applicants. Jobs are filling. People are not leaving the company. It’s a great time to be here. We're very excited about the patients we're helping, the demand we're seeing for Tyvaso, the demand we're seeing for Afrezza, the early trends of V-Go, and the pipeline. We're firing on all cylinders this year. It's been a long time to get to this point, but we see nothing but positive momentum as we go into Q2 and beyond for this year, next year, and years to come. Thank you for your support; you should finally start to see the fruits of all the labor that we've been investing in over the years. Thank you again and have a great week everyone.

Ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may now disconnect. Everyone, have a wonderful day.