Conference Transcript - MNKD 2026-06-03

Dennis Dane, Analyst — Jefferies

To the Jefferies Healthier Conference, my name is Dennis Dane, biotech and spec pharma analyst here at Jefferies. I have the wonderful pleasure of having Michael Castagna, CEO of Mankind, here with us. Welcome. So before we kick off, we'd love to get an overview around Mankind for those of, you know, for people who aren't generally familiar with the company. and maybe, of course, talk a little bit about AFRESA and some of the exciting developments there over the last week.

Michael Castagna, CEO

Good morning, everyone. Thank you for coming out today. For those of you who don't know Mankind, we've been around since 1991. Most dry powder companies don't survive 35 years with the good fortunes that we've had. We've gotten two FDA-approved products, one inhaled insulin, which got approved in 2014 and just last Friday got approved for pediatrics. We also have another product called Tavesa DPI that got approved a couple years ago, and that's in PH and now being pursued for further development with United Therapeutics. And then we've announced another partnership with them with a product called Relenopeg, and we're also working on additional dry powder inhalation products. So it's really an inhalation platform company. Last year we bought a company called SC Pharmaceuticals to bridge into more of the cardiometabolic space. And so when you really look at the company today, we're firing on all three engines. We've got a Fresno Pediatrics, we've got Furosix scaling with the auto-injector, and now we have a pipeline. And just today we announced a positive momentum going into our 201 NetTedna program for the pipeline.

Dennis Dane, Analyst — Jefferies

Sounds good. So for the pediatric approval and the expansion, maybe talk a little bit about just the history around that indication for you guys and how big of an opportunity does that label expansion unlock?

Michael Castagna, CEO

So when you think about, you know, if Fresa had been on the market 10 years and most people would say, well, any drug that's been on the market 10 years has never had a real inflection, I would agree with that conceptually. I've turned around several failed launches throughout my career. I thought if Fresa would go faster in adults. One of the challenges were the development program underdosed the product, and so we tried to fix a lot of the flaws in the initial launch that we did. But the adult segment is much more fixated on where they are in terms of they don't change a lot, and then when they do, they don't change again. So that's the good news is that as you think about evolution, GLPs have been around 20 years. They just got adopted finally. So things take time, and that's just an example here. When you look at the pediatric market, whether it's been Alman with his insulin pumps originally, Omnipod, Dexcom, they all started with kids and expanded into adults. And so that's been the footprint and blueprint we've been focusing on with peds. When you think about the pediatric market, you know, 83% of kids are actually struggling every single day to control their sugars. Parents, I was just watching a parent deal tonight, daughters crying. How do I, I've been taking insulin for a year. How do I get rid of this disease? How do you take it out of my blood? It's a horrible disease to deal with every single day as a parent. It's 24-7. So I think bringing children and families an opportunity to have something that can be inhaled and bring them equal control to what they're doing. But you take the quality of life aspects, you take those speed of action. Nothing worse than sitting on your CGM waiting two hours for your sugars to come down. With Afrezza, you can start seeing in 20, 30 minutes. And so that whole experience as a family, as a child, that initial feedback, taking it when you eat, the less predictability you have with injectable insulin that brings you predictability with Inhaled is a fundamental game changer for kids. And I think we've seen that in the first 96 hours of lunch.

Dennis Dane, Analyst — Jefferies

So remind us how much Afreza is doing right now in terms of the adult population and how much bigger can PETES be relative to what you guys are doing in adults?

Michael Castagna, CEO

So there's about 4 million people taking insulin, and what I'd say is half the population taking insulin. Those insulin units are type 1, and most type 1s start as children. So your average age of diagnosis is 10 to 12 years old. Adults last year did $70 million in sales. We have less than 1% market share there. When the kids segment, we expect 25% to 30% share. And so when you think about every 10% share of insulin of pediatrics will be about $150 million. So you're talking a $300 million to $500 million run rate just on the pediatric indication. And then those kids every year turn into adults. And so that compounds over the next 15, 20 years. So what you really are getting is a lifelong treatment of a patient who's diagnosed at 10 years old and will go to 70 or 80, hopefully.

Dennis Dane, Analyst — Jefferies

What underpins your assumption that penetration would look between 20% to 30%?

Michael Castagna, CEO

Yeah, so we've done several studies independent of, you know, mankind. We did marker research years ago funding the Phase III trial, and we just did it again right before it launched. And both of those studies came out in the 15% to 25% on the low end. And now with the new data coming out that we just had last year, we did head-to-head studies against insulin pumps. And now doctors can see that, you know, you can choose to use an insulin pump, you can choose to use inhaled insulin and a basal, your outcomes are going to be very similar, which is actually not something most people believed a year ago. And even today, if you ask most docs, is the Fresa as good as an AID system, they'd say, no, AIDs are way better. Well, that's not what the data shows. And so back to getting our marketing out there, getting our clinical data out there. We have, we published the data, it's all public now. We get more people to goal by switching away from the standard of care than staying on what you're doing. And so that perception of efficacy and speed has to translate into commercial success now.

Dennis Dane, Analyst — Jefferies

Okay. Is that a main, like a core part of your commercial messaging to doctors and patients? And I guess a follow-up to that would be like, where do you see Afreza in the pediatric population fit in relative to all the closed-loop systems that are out there?

Michael Castagna, CEO

Yeah, so there's just a doctor yesterday who was our lead investigator. He just did a Wall Street meeting yesterday, and he said, look, 25% of his patients he expects to use Afreza full-time, and up to 75% of the patients will use it on top of a pump. And so I think when you look at the, you know, Al Mann built the insulin pumps, but he also spent a billion dollars building this company. And it's not because the insulin pumps don't work. What are the insulin pumps trying to do? They're trying to modulate the insulin to try to anticipate what's going to happen in your body because the insulin doesn't work fast enough. And so when you look at what a FREZA is solving for, it's solving for that 90-minute lag effect every time you eat. And so, but there is data. We've gone out and tried to generate data showing, and we'll have some this weekend, showing what does a FREZA look like on certain pump algorithms. And I think you'll start to see some pump companies include a FREZA in their logarithm. And I think that's going to help patients who have high sugars at sporadic moments to bring that back in control. So I think the use case of a FREZA probably would be pediatrics grown into adults. that's going to teach the adult doctors how to use it i think there's going to be um not that we control it but the the pump market and aid systems will want a freza to help improve their pump algorithms and that'll be another use case in the market and then the last one is gestational diabetes so we have a trial wrapping up with 30 patients in gestational when you think about those patients those pregnant moms only have two options metformin or injectable insulin but if they could take inhaled insulin for 12 weeks, they'd love to do that. That's a couple hundred thousand patients a year. So when you look at a FREZA now, you'll have the pediatrics, you'll hopefully have gestational, and you'll have multiple segments growing that are all really important populations.

Dennis Dane, Analyst — Jefferies

Remind us what your commercial footprint looks like right now, and do you plan for any additional expansion?

Michael Castagna, CEO

Yeah. So most of the investment in the commercial infrastructure is there. When you look at our expenses in Q1, we're not adding many people here in Q2 or Q3. So really what you'll see is contractors moving over to full-time employees, but nothing significant from an incremental investment other than maybe some extra marketing spent. But again, I would say in the first 96 hours, we've had probably 50 docs registered for our hub. We've had 50 patients come into the hub. So we're seeing reimbursement support start off very strong. We're seeing that widespread adoption across multiple patients come in quickly, and we're getting them out the door through our new pharmacy network so from all that it's really there there's about a 1500 prescribers in pediatrics make up 85 percent of the volume so it's a very concentrated office and about we have about 20 key account managers calling on health systems and then we have 70 full-time reps supplementing that noise so so we think about the coverage we'll cover all 1500 docs pretty well with our sales force okay the 70 reps that you up right now i'm assuming they're they've historically just gone after adult endocrinology and then you're telling them and without expanding the sales force any further you're kind of telling them to split their time with yeah to with the pediatrics so coming into 2026 we actually scaled up the sales force from 50 to 70 and then we had to fill most of those jobs in q4 q1 and so we took some effort off the adult segment actually and put it into nephrology for 306 okay and then we just are now moving them into the pediatric segment. So when you think about adult, that's the base of AFRESA, but the growth is going to come from peas. The growth is going to come from purosics, and adult will come later. But we've had 25 requests in the first two days of this week for doctors asking our sales force to come in. I can tell you that's more requests than I've had in two years combined of people wanting to see our reps. So there is a lot of excitement. Patients are coming and asking. They're calling their docs, and all of a sudden doctors who said, we'll see you in August are saying, can you get in here next week? So that's exciting. We've never really had that type of exposure with Afreza. Okay.

Dennis Dane, Analyst — Jefferies

And I know it's super early, but in terms of reimbursement and access in these peds?

Michael Castagna, CEO

So we are removing one of the perceived access hurdles of Afreza's cost. And so we've charged $99 cash for a couple of years. And so if you talk to doctors, they'll talk about this cost perception. And I remind doctors that patients spend $200, $300 a month on pump supplies. and that most doctors don't even think about writing an insulin pump. You can get a Fresno cheaper than you get your pump, and yet that's 50% to 70% of the market. So from a cost perspective, we've made it $35 for children, and we'll run that program through the end of the year. We'll assess it and see how it worked and how it helped. We expect most patients' co-pays, even once it's approved, will still be $35 for commercial. It's $35 by law for Medicare. And Medicaid could be cheaper, right? So we expect state Medicaid to pick this up. And so far, I think of the patients that came in, I think 75%, 80% were commercial.

Dennis Dane, Analyst — Jefferies

Okay. Remind me what consensus is for Afreza this year.

Michael Castagna, CEO

And also talk a little bit about, you know, what you expect in terms of the revenue trajectory and contribution from peds, you know, this year and then over the next several years. so mankind hasn't given guidance this year so that's I think we've got it to overall we were on a run rate of about $450 million coming into 26 we've guided 406 to 110 to 120 but on a Fresa you know did 70 million last year I say traditionally a Fresa has grown 7 to 10 million a year so I think that's a base assumption and then the question is how much more upside can we get with kids and I'd say give us a few more months here at the pediatric lunch and we'll have some better guidance here well sounds like you know the early signals aren't there so you know as you go into second quarter third quarter earnings like I could like what sort of disclosure should we expect from you in terms of the pediatric much in terms of the uptake and the breadth and depth of prescribing yeah I think people should be looking at you know there's 1,500 prescribers how many of them are prescribing we never expect all 1,500 right but you know if you can start to see 50 and 100 and 200 prescribers building up quickly and then how many patients are you seeing come in and then how are the refills building and so the good news is through our we're trying to really force everything through our reimbursement hub and our pharmacy network so we should start to see how those prescriptions are building pretty quickly on the refills that's the only way to get the $35 program right and so we'll know that pretty often we'll also know how they come in and are they full-time use are they on top of a pump are they naive and I think that's that's the one big surprise for me in the last six months is that the doctors one out of four patients could be coming as a newly diagnosed patient and I thought that would happen two three years into launch it looks like it's gonna happen earlier and we're also doing this naive trial so that the first ten patients they're looking pretty good and to see a newly diagnosed child be able to go for this option and and maybe it delays a pump maybe it stops them from going for a couple years but this is a wonderful opportunity for families at what point would you consider expanding the Salesforce even further to you know as you grow revenue you know maybe in one or two years as some of you know as you hit critical mass like could you consider expanding that and perhaps like by how much yeah I would say we'll probably be roughly steady Eddie over the next 18 months I think we have enough to cover a good percent we're probably targeting right now 50 60 percent of the entire insulin market to get to the next 10 20 percent you need that like another 50 hundred reps right And so when would you do that? You do that if you're expanding more into the type 2. You'll do that if you want to just have a bigger share of voice. And I'd say our success over time will drive more of that naturally. But we'd like to get the high-dose concentration cartridges we just announced last week as well. Those we expect roughly in the 28 timeframe. And so once we know those are on the file with the FDA, we'd probably look at another expansion there because that will solve a lot of the type 2 market opportunity.

Dennis Dane, Analyst — Jefferies

And type 2 is much, much bigger. Yes, for sure. 306. So, I believe you said guidance was 110 to 120? So, I guess, you know, you guys acquired SC Pharma, you know, several years ago. Like, you know, talk a little bit about the progress you made there, the integration of SC Pharma, and just, you know, what's really driving the growth?

Michael Castagna, CEO

Yeah. So, first, the integration has gone extremely smooth. We're really happy with the acquisition. We're happy with the performance of the team. The auto-injector is on track for July approval, so we've not seen any showstoppers yet from the FDA. When you look at the phasing of last year's sales, I think two-thirds of the sales came in the second half versus the first half. If you kind of look at that same trend, we're right on track for the year to deliver these numbers. The opportunity we saw was really in the IDN segment. We did not see SC focused enough on the IDNs, and we immediately went and hired 10 people just to call on IDNs. I would say Q2, we're starting to see some impact there. The growth there is faster than the national growth overall. And I think as we get to Q3, Q4, especially with the auto-injector, we think that's really going to open up the IDN strategy even more. And for those in the room, you can see the auto-injector is so easy to see and use. And you take this versus a five-hour infusion, it's just going to leapfrog the adoption. And so we're hearing that from a lot of people that they'd much rather use this and that they'll adopt it. And we're not hearing any objections to going from a five-hour fusion to a 10-second injection. So that seems to be very exciting. And we just need the approval here in July and people from running into August.

Dennis Dane, Analyst — Jefferies

How is furosex being used? I mean, you mentioned, you know, IDNs. You know, they're making a lot of progress. But, like, you know, give a little bit more color there in terms of the use case and what patients typically come in for and where is it most used?

Michael Castagna, CEO

I would say 90% of our use has been in the prevention of patients going into the ER. So they're sitting at the community doctor, they're doubling the dose of the oral, patient's progressing, and they need something, right? And so this has become the go-to over the last three years. And the brand did, you know, roughly $70 million last year. And so when you think about that segment, that's the bread and butter that's been there. To me, the real opportunity is in the hospitals and either getting people out of the hospital two, three days early or really stopping them from going back into the hospital? Or even when they're sitting in the ER, do you hold them overnight before you admit them? And how long can you hold them and get them this dose? And so I think there's a lot of use cases, and I would say the large bulk of the future growth is going to come from those scenarios as opposed to the prevention aspect. The prevention will always be important, but if you've become the de facto standard on hospital discharge, you win. Because once patients are aware, they're not going to want to go back to the hospital.

Dennis Dane, Analyst — Jefferies

How are you thinking about the profile of 306, especially with the auto-injector relative to Ambumist?

Michael Castagna, CEO

You know, look, I think this is a whole new category, so there's more than 700,000 patients a year going to the hospital. There's enough room for all competition to do there. I mean, I'd say the competition so far in the first, we're sitting here in June now, so it's been nine months since they both got approved, and we've seen less than 150 scripts come out in nine months. We're getting 500-plus scripts a week, some days, some weeks. So we're, they're just not, they're not even remotely there. But I'm not sure, you know, at the end of the day, we're working on an inhaled version. So if you really want, you know, IV-like diuresis on our platform, we can deliver an inhaled version of Bumetanide. But the reality is Bumetanide's been cheap and available in hospitals for 50 years, and it's still got less than 20% share. So I'm not sure the go-to gold standard is furosix and furosemide, and we think that's really going to continue to be the gold standard for patients.

Dennis Dane, Analyst — Jefferies

Okay, so, I mean, I guess, you know, Asperion acquired Ambumist, or the company selling Ambumist and part of the idea there was Asperion has, you know, bigger sales force and that will help accelerate that growth relative to what that product had before in terms of the support. Maybe that's a little bit TBD with the spirit on getting acquired The brunch is curious like you know, it does make sense that You know if you are private equity you have this huge network you can sell this with a bigger sales force You know, how does that impact 06 and maybe remind me how many reps you have selling 06 and if you kind of Expect to expand that further just in anticipation of you know that dynamic kind of evolving I don't think that there's a large opportunity to react to what they're doing.

Michael Castagna, CEO

Meaning, you know, if you work for a private equity firm, if you miss your number, they cut your expenses right away. So your sales force isn't getting stock to be stay put. Their ability to thrive and grow, in my mind, will be very different than a publicly traded company that's recruiting cardiology reps. We lose reps to Pfizer. We lose reps to Bayer and AstraZeneca. We're not losing reps to these other areas. And so I think from a competition viewpoint, yes, they cover a lot of the cholesterol side of the market, but they're doing internal medicine, they're doing primary care, they're doing cardiologists. I'm not sure their strength is in hospital discharges and things like that. And honestly, they have no data. So I think the bigger problem with their product is not that it's good or bad. They just have no data. And so we don't know whether you need four doses in heart failure or eight to get IV Lasix equivalent. but they have to do those studies and show what that looks like. But we have data in discharge. We have data in admissions. We have data showing you within 48 hours you're going to the hospital. So we think that this is a tough market, and at their price point, it's even tougher because you've got to get a lot more patients just to keep your sales force employed every day.

Dennis Dane, Analyst — Jefferies

Remind me, you know, for Furo 6, what proportion of revenue comes from nephrology, cardiology, and, you know, the hospitals?

Michael Castagna, CEO

Yeah, traditionally about 10% is an IDN segment that's growing faster. Nephrology has been in the 15% range. If you look at Q4 last year, this quarter it's trending upwards the last few weeks, probably closer to 20%, so we'll keep watching that. But we've got a lot of people selling NEF now, so hopefully that just keeps compounding as we build those prescribers up. But NEF is sitting all-time highs right now on prescribers and breadth of prescribing, so we feel pretty good about that. And IDNs have been hitting pretty strong the last few weeks.

Dennis Dane, Analyst — Jefferies

So we'll see. Ideally, where would you like that split?

Michael Castagna, CEO

There's a lot of overlap in CHF and NEF. And so, you know, some of these patients have CHF, they have to be in nephrology. I think the reality is the hospital segment is where I want to see the growth continue to happen. And I think that's going to be the long-term indicator of this, getting to a multi-hundred-million-dollar opportunity for patients. And I think the OMAD need is so significant. No one, even payers, I'm shocked that they realize this is an acute episode. And so from a restriction viewpoint, 40% of our scripts have no PA. I expect that number to continue to improve. And I've been explaining to the payers, when you have a prior Roth, you're forcing people in the hospital. Because if they come in on a Friday, within 48 hours, they're in the hospital. So, like, you're forcing hospitalizations, and they didn't like to hear that. So I think the payer side of this will be, you know, whether it's MBMIST or us or anything, I think everyone's going to have access as our strategy not to block anybody. And ultimately, you want to get to this hospital segment. This is really what's going to help a lot of patients avoid infections and drug issues in the hospital.

Dennis Dane, Analyst — Jefferies

So I believe you mentioned you had 10 reps focused on IDNs. Do you think that's an appropriate number given how quickly that is growing? Maybe eventually at steady state you want IDNs to be 30% or 40% of revenue.

Michael Castagna, CEO

We can choose to either reallocate talent, right, or we can choose to put more talent there. I think part of the strategy there was we wanted to make sure peds was approved because we had 20 people calling on institutions for pediatrics. And we didn't want to employ 20 people and then not have PEDS get approved. So now that PEDS is approved, we'll continue to look at the IDN segment for 306 and look at that independently. And I'm sure we can add more headcount there as the year progresses or going into next year. But I'd like to see the early success of the people we've hired and then multiply that out and see what's necessary.

Dennis Dane, Analyst — Jefferies

So you mentioned the 201 that started today, right? So maybe you'll remind us around the profile of that product and, you know, what should we expect data from that program.

Michael Castagna, CEO

So for those of you who don't know, 201 is our inhaled natetanib, and so that's just another extension of our platform. And, you know, the big question here is tolerability, number one. Is there a cough issue in IPF patients? Is there a tolerability in IPF patients? So we did a Phase 1A healthy volunteer study last year that showed no tolerability issues, no cough concerns, no diarrhea. So, so far we've got 24 patients in. I'd say at least 22 have been dosed. And so within IPF patients, we're not seeing, again, intermittent cough, which that's the cough we see. This is not a serious, productive, or repeatable cough. It's really related to the powder hit in the back of the throat, and that's it. And so we don't see cough being an issue. We also haven't seen diarrhea, again, in another 20-plus patients now. And I'll remind you, this next dose covert that we're doing, the first one was 2 milligrams three times a day. now we're doing four milligrams twice a day so I don't believe adding a second inhalation after the first inhalation is going to add that much more call for any problems so our dose and the dose of our competition is roughly in the same ballpark which should give us some confidence that two smart companies came up with similar dosing I believe our technology will deliver higher concentration to the lungs and we're gonna find out whether this is a frequency issue meaning is given it three four times a day more impactful versus twice a day or is the c max more important getting higher doses so that's what we're going to explore in our phase two okay and once we expect phase two data um we're aiming for late next year i think it depends on how quickly this trial kicks off i mean if you told me that we were going to roll 12 patients in covert two in four weeks i wouldn't believe you but the team did an awesome job and you know four or six sites we had 12 patients come in in four weeks so you know this trial could go much faster once we get it up and running but we're just we just got the first patient dosed in phase two today and we have another 30 40 sites to activate in the next quarter so let's let's see how fast they get activated and how quickly they enroll okay um and what would be clinically meaningful on the primary endpoint and maybe remind us what that is yeah so we're not scaling for a p-value here we're looking for clinical differentiation at 12 weeks we'll be measuring cough scores we'll be measuring quality of life we'll be measuring fvc fev1 um i'll remind people that once you get to the 12-week endpoint those on the placebo because one-third will be on placebo. We'll randomize to active, and we'll be able to follow patients for another six months on the open-nevil extension. So we'll have some patients going three months. We'll have a lot of patients going for six to nine months, and hopefully we'll start to see a separation. We'll be comparing twice a day natetinib along with four times a day, that combined unit versus all the placebos. So it's not really trying to compare four times a day, twice a day. We think both work well. We just want to look at that combined analysis versus.

Dennis Dane, Analyst — Jefferies

And then what else do you have going on in the pipeline?

Michael Castagna, CEO

Yeah, so there's a couple things we're working on in public yet, but one of the ones that is public is B-Med-9 for an inhaled diuretic. We believe our technology really does give you that IV-like experience, whether it's insulin you can see, that if you really want that IV-like delivery without the delayed effects that we think a diuretic would want, that will be exciting to see how that looks, especially in these patients suffering from heart failure. for Lennon Pegg was another opportunity announced with UT we're excited about that program it's going really rapidly from a formulation that will get the patients hopefully this year early next year and it's up to UT and and just from a overall company but we're just we're cranking out on every single aspect you can imagine maybe the last few minutes just remind us the cash that you guys have currently as well as the debt and also your capital allocation priorities

Dennis Dane, Analyst — Jefferies

Yeah.

Michael Castagna, CEO

I think from a cash balance, this year we had to pay $35 million in debt down we paid in cash back in February. We have a 406 auto-injector gets approved. We have a $45 million payment due there because people ask me, where does the royalty money I'm trying to tell me we had a $30 million interest expense for buying SC. We have a $45 million payment, and we had $35 million in debt. So that's where the royalty went this year. So as you go to forward the next year, we don't have a $45 million payment. We don't have $35 million in debt. That pretty much drops to the bottom line. So when you look at 27, we expect the Fresa will grow, Fuerosos will grow. The cost of the 201 trial is not that significant that it's going to cost us a bunch of money. So I think 27 is set up for a really nice story of growth and cash flow. I think this year we expect to be roughly break even. You might burn a little bit of Q2 and Q3 as you pay off these things. But Q3 and Q4 should grow pretty substantially relative to the first half. So I think net-net, we don't need to raise money. We've not been raising money for many years. We have debt. We have a $50 million still left on the Blackstone if we want that, but we're not planning to take it right now. And so from a cash balance, we're good. From a debt, we have no major debt due in the next four or five years. The only debt we have remaining is Blackstone, and that's an acceptable interest rate, and they've been a great partner so far. So we feel pretty happy with the balance sheet there. And on BD? So BD, I think we want to see the current assets we have launch well. We do have other ideas of BD, But I think from a board perspective and our perspective, let's commercially show we can launch drugs and do an excellent job there. And then that will earn us more rights to do more BD. We've got to get the stock price up, number one. I think that's the most important thing. And I'm not sure buying another asset or buying another company is the most important distraction right now. But we'll keep looking.

Dennis Dane, Analyst — Jefferies

Makes sense. Well, thank you so much, Michael, for hanging out with us. And I hope you have a great conference.

Michael Castagna, CEO

Thanks for having us.