MannKind Q2 2024 Earnings Call Transcript

Quartr
Provided by Quartr
August 7, 2024

There are 7 speakers on the call.

Operator

Good morning, and welcome to the MannKind Corporation Second Quarter 2024 Financial Results Earnings Call. As a reminder, this call is being recorded August 7, 2024, and will be available for playback 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 risks and uncertainty, which could cause actual risks 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 Securities and Exchange Commission this morning, the earnings release and the slides prepared for this presentation.

Operator

Joining us today from MannKind are Chief Executive Officer, Michael Castagna and Chief Financial Officer, Chris Prentiss. I'd like to turn the conference over to Mr. Castagna. Please go ahead, sir.

Speaker 1

Thank you, operator. Good morning, everyone. Excited to be here calling in from Danbury, Connecticut today and joining me is Chris Prentiss, our Chief Financial Officer. Today, we'll go over our traditional operational and pipeline highlights, quick financial review by Chris with some closing remarks by myself and we'll move to Q and A. Let me begin by talking about some of the Q2 2024 highlights.

Speaker 1

First, we had record revenue on TIBSID DPI between manufacturing and royalty revenue coming in. 2nd, clofazimin inhalation suspension is well on its way with fast track designation by the FDA, as well as several sites now activated and ready for patient enrollment. And thirdly, natinib DPI is well on its way with results expected here in Q4 along with chronic tox. We're now on our 3rd cohort of single dose patients anxiously awaiting to move to the MAD section of the study shortly. In our endocrine business, we had 2nd quarter revenue of $20,800,000 driven by Afrezza.

Speaker 1

I'll talk about that shortly. INHALONE top line results for pediatrics is expected here in Q4 and we're excited for this pivotal moment in our history to unveil these results. And then the 3rd part of endocrine is INHAL3. We met its primary endpoint 17 week data represented ADA and were very well received. And we're up we're coming up on our 30 week data readout here in the second half and implementing our ADA post success plan.

Speaker 1

For financial results, record revenue for the company of $72,000,000 or 49 percent with a GAAP net loss of $2,000,000 and non GAAP $14,000,000 that Chris will talk about shortly. We ended the quarter with a strong balance sheet and we continue to delever the company and reducing dilution to shareholders by paying down the man convertible debt and cash and stock as opposed to stock only. Now let me talk about closed fasumene inhalation suspension. We look at NTM as an opportunity with 2 players over the coming years. ARIKAYCE had great data readout in early stage and they continue to penetrate the markets in Japan and the U.

Speaker 1

S. As we look at the refractory population being about 15%, 20% of this market, we see this as a very large opportunity to bring a new entrant that could be more convenient with really good lung coverage here in the U. S. As well as Japan. Let me talk to you for a second about our Phase 3 design.

Speaker 1

The key attributes of this product are number 1, 28 days on treatment with 56 days off treatment. What that means is the patient will have 1 co pay for the 28 days followed by 2 months off because the drug has a long half life. We believe it's really important to get deep lung penetration in this disease as the macrophages are deep in the lungs and they'll take the cofasmin in and because of the half life, it will take about 2 months for it to return back to baseline. We see that same thing with month 4 coming on the treatment and then month 5 and 6 off treatment. The primary endpoint of the study will be 6 months and we're looking at a dose of 80 milligrams of coflasmine in a 2:one randomization.

Speaker 1

We will have an interim analysis after the first 100 people are enrolled and that will decide whether the trial should be larger to make sure we hit our endpoints or it's sufficiently staffed to reach the primary endpoint. The co primary endpoint in the U. S. Is sputum culture conversion and patient reported outcomes and the primary endpoint for Japan has been aligned and that is sputum conversion only. We also have orphan and QIDP designation along with other IP giving us a minimum of 12 years exclusivity.

Speaker 1

Japan and FDA have aligned to a single trial and we're also considering creating an expanded access program. We'll keep you posted on that. On 201, as you see this market, while it is crowded in terms of development, there are very few options on the market for patients. We're excited at what we see from United Therapeutics and T time 1 and 2 reading out next year for Tyvaso. But more importantly, this is on the back bone of OFEV as the market brand leader in IPF.

Speaker 1

And we believe while it's a phenomenal drug and it's helped thousands of people live longer, we also believe it's an opportunity to enhance the quality of life that people experience when going on OPEB. And that's really our main focus here as we look at this opportunity, How do we bring potentially improved tolerability relative to GI side effects specifically that occur with OFEV where 50% of the people traditionally drop off treatment because of GI side effects alone. We also believe that we can dose hopefully a little bit higher directly into the lungs and get higher lung concentrations. And this is really our focus here on this product is can we dose appropriately and tolerable and does that show an improved GI tolerability. The Phase 1 data readout and chronic tox are expected to both come in here in Q4 and we will then file a meeting with the FDA to move this to a Phase twothree design in 2025.

Speaker 1

Now moving on to our endocrine business. Year to date revenue of $39,500,000 predominantly driven by Afrezza, I'll talk about in a second. V Go was deprioritized in Q1 as you may recall and we restructured the field team so that we've had a different business model coming into the year and you'll see some of that result here as I talk about our script growth. Afrezza Q2 sales alone over the prior year grew 20% to 16,300,000 dollars Moving into prescriptions, you can see Q1 versus Q2 8% NRx growth leading to 5% TRx growth quarter over quarter. The NRx's are the leading indicator of what to expect 3 to 6 months later.

Speaker 1

It's nice to see that the NRx change is paying off in TRx and we hope to continue to see that type of growth as we go into Q3 and Q4 this year. As you may or not have read our readout on ADA with inhale-three, this was presented at an oral presentation by 7 world thought leaders. The sub analysis found several key attributes of this trial. Number 1, inhaled insulin achieved a target A1C less than 7 in 30% of participants versus 17. Additionally, 24% of Afrezza was 1 in 4 patients versus 13% usual care met time in range greater than 70% with no increased hypoglycemia.

Speaker 1

Over 50% of the subjects who got to the end of the trial said they'd like to continue on taking Afrezza. And the reason that's such an important number is 50% of the people in this trial were coming off the best technologies of AID systems, Omnipod and we're generally satisfied with their treatment and to see that even when people switch and they maintain control, they'd like to continue to have the freedom that Afrezza brings to them. We've met our 17 week primary endpoint and our full 30 week data is expected to read out later this year and we'll likely give that information to shareholders here in Q4. When you look at the meal challenges here on the right, the RA is the red line, clearly shows the postprandial glucose excursions. Relative to the initial dose in both groups, you can see a distinct difference in the first two hours.

Speaker 1

And at the end of the study, when people were titrated to Afrezza, we did a second meal challenge. You can see greater improvement in mealtime control as people learned how to use the product. And what this gives us is hope that when properly dosed Afrezza can really impact host preamdeo controls significantly over the current standard of care. This data was just published in Diabetes Care, last couple of weeks ago. As we look out, we see INHAL3 is pivotal to transforming the adult population, but also laying the groundwork for pediatrics where insulin pumps is the predominant competitor of choice when it comes to choosing inhaled injected or an alternative delivery mechanism.

Speaker 1

And we believe the switch study in inhale 3 showing consistent results of efficacy in the overall population as well as subpopulations will be important as the INHEL-one trial was only in MDI patients and that was by design to really show and control the one difference in the trial. The INHEL one day will read out shortly and we'll intend to file that next year for approval hopefully in the future years for launch. When we look at Afrezza since I've gotten here, we've continued to grow year over year in a really good way. As we look out over the next 10, 15 plus years, we see nothing slowing down Afrezza growing year over year. Finally, we will have proper data readouts, proper label updates, and now we have the capital and talent to continue to scale this business.

Speaker 1

We will wait for the data readouts. We are conducting some independent market research, so we can update you in the coming quarters on what our plans are and what to do with the data readouts as well as the additional indication of what that will mean for shareholders. But we have grown consistently and we will continue to grow this brand for years to come. I now would like to turn it over to Chris.

Speaker 2

Thanks, Mike, and good morning, everyone. I am pleased to review Select's Q2 2024 financial results. Please refer to our press release issued earlier today for a summary of our financial results for the Q2 of 2024 as well as our 10 Q, which was filed with the SEC this morning. The 2nd quarter with total revenues of $72,000,000 marked our 9th consecutive period of quarter on quarter revenue growth and a 49% increase compared to the Q2 of 2023. For the 6 month period, we recorded total revenues of $139,000,000 a 55% increase over the prior year period.

Speaker 2

Let's now discuss the details. Tyvaso DPI royalties contributed $26,000,000 in 2nd quarter revenue, an increase of 34% over the Q2 of 2023 $48,000,000 or 57% for the 6 month period. As we heard on UT's earnings call last week, they continue to experience strong patient demand and are encouraged by the record referrals and new patient starts during the quarter for both PAH and PHILD patients. Collaboration and services revenue was $26,000,000 an increase of 132% versus Q2 of 2023. The 6 month period was $51,000,000 or 125% compared to the same period of 2023.

Speaker 2

The increase over the prior year periods resulted from a substantially higher level of production activity, which was sold through to UT. Afrezza net revenue of $16,000,000 grew 20% versus Q2 2023, which was primarily driven by volume growth, a lower gross to net percentage of 37% versus 39% in the prior year and a price increase. Similarly, in the 6 month period, Afrezza net revenue grew 18% to 31,000,000 dollars primarily driven by a reduction in gross to net percentage and price. The lower gross to net percentage was mainly the result of a change in estimate for Afrezza product returns. V Go declined 7% to $4,000,000 in the Q2 of 2024 and 11% to $9,000,000 for the 6 month comparable period.

Speaker 2

The decline reflects lower demand as we have focused our attention on Afrezza. The next slide shows our revenue growth by source and basic EPS on a quarter by quarter basis over a rolling 8 quarter period from the Q3 of 2022 through the Q2 of 2024. For the Q2 of 2024, total revenues of $72,000,000 increased 9% sequentially versus the Q1 of 2024. After 3 quarters of positive earnings per share from Q3 2023 through the Q1 of 2024, we had a net loss in the current quarter of $2,000,000 or $0.01 per share. This was the result of our early repayment of the Mann Group convertible note and midcap senior secured notes which we completed in April and resulted in an accounting charge of $7,000,000 recorded as a loss on extinguishment of debt.

Speaker 2

Now to our GAAP to non GAAP reconciliation. We had a GAAP net loss for the quarter of $2,000,000 which when adjusted for non GAAP items results in non GAAP net income of $14,000,000 This compares to a non GAAP loss of approximately $400,000 in the prior year quarter. For the 6 month period, we reported net income of $9,000,000 and non GAAP net income of $29,000,000 For the 6 month period in 2023, we reported a net loss of 15,000,000 dollars and a non GAAP net loss of $6,000,000 The 2nd quarter represents our 4th consecutive quarter of positive non GAAP earnings, which we expect to continue as we execute on our current business plan. As we reflect on our progress on the first half of the year, total revenues grew by 55% for the 6 month period compared to the prior year, driven by growth in both our Tyvaso DPI related revenue and Afrezza growth. At $139,000,000 this gives us an annual run rate of over $275,000,000 in revenues.

Speaker 2

Net income for the first half of the year was $9,000,000 and non GAAP income was $29,000,000 This demonstrates the significant progress we have made as our revenues are supporting our pipeline development efforts. Cash and investments were $262,000,000 at the end of the quarter. This is after the repayment of both the Mann Group and MidCap notes in April, leaving only the $230,000,000 senior convertible notes due in March 2026. This cash position combined with our delevered balance sheet puts us in a strong position to continue to invest in our commercial products and our exciting pipeline. With that, I will turn it back over to Mike.

Speaker 1

Thank you, Chris. As we look out over the next 12 months, here are some of the milestones we're going to talk about. I want to say thank you to the hard work the team has achieved in the first half, starting with our IND submissions here in Q1, which led to a kickoff of a bunch of work that we'll be looking forward to as investors and employees and patients and providers over the coming quarters years. Tabesa DPI continues to progress nicely as you think about what we've been doing in Danbury between making product today to supply the market demands while preparing for hopefully positive readouts on TCOM-one and 2 and global expansion there with United Therapeutics. Our high speed fill finish line is now operational and certified on most of the strengths for Tyvaso EPI.

Speaker 1

The fill finish the spray drying capacity will be completed here in the Q3. It's been installed and now we're just running through the PPQ. What you'll see is in the first half that we will require some stability time and then filing with FDA for approval. We expect that to be fully operational in the first half of twenty twenty five, well in advance of TON-one and 2 reading out. As you look at INHAL-one and INHAL-three, these are 2 pivotal trials we invested in over the last several years that are critical to the transformation we expect to bring to Afrezza over the coming quarters and years ahead.

Speaker 1

These data readouts will happen here in the second half and they will set the stage for continued data publication and data releases for years to come at the various diabetes conferences around the world. We are just getting started on what this can mean for ourselves, as employees, as patients and as shareholders. And we're looking forward to continuing to give you more information as it comes in, in the coming quarters ahead. I think about the key value drivers that lay in front of us. Number 1, the pipeline is not reflected in the value of our company.

Speaker 1

We continue to believe we're undervalued when we look at the value of Aviso DPI royalties and manufacturing revenue relative to the other assets we have ongoing in the company. Just alone looking at 101 that we now look to be the only Phase 3 trial in the future, bringing this novel innovation to an unmet need population in NTM, where there's over 100,000 patients in the U. S. And roughly 15,000 that are refractory alone. And for every 1,000 patients, this is $100,000,000 in net revenue to MannKind.

Speaker 1

When I think about OFEV, the potential for this opportunity to help people living with IPF have a more tolerable option, let alone if we can see better efficacy that would be amazing. This is a $4,000,000,000 market and growing with lots of novel innovation coming where we see OFAB as a continued backbone of treatment where hopefully our inhaled version will make a pivotal moment for patients living with IPF. And then we upgraded our Boston R and D footprint recently. As you may know, we have a site in Marlborough that the lease will be ending in early 'twenty six and we now have moved into a new facility here in Bedford, Massachusetts, where we have brand new R and D space, expanded our DPI technology platform and we'll be consolidating our employees between the two sites over the coming 12 months. We're excited for that in terms of recruiting talent and continue to have more capacity to do more research programs as we go forward.

Speaker 1

When it comes to Tyvasa DPI, this has been a great opportunity not only for us, but for patients in United Therapeutics. It's transformed our company and has enabled us to execute our long term growth strategy of funding our pipeline and continue to be a self sustaining company. As you can see here, for every 10,000 patients reimbursed, this is between $300,000,000 $350,000,000 in total revenue to MannKind between royalties and manufacturing revenue. We will anxiously await the TATOM-one and T2 and we also will be starting to pay closer attention to the TATOM PPS study as that comes forward and we see these readouts starting in the second half of twenty twenty five. And when it comes to endocrine, we've always known when you look at innovation in diabetes, especially type 1, it starts with kids.

Speaker 1

The parents will fight for the children, the doctors are more cutting edge and we believe the payers will find an opportunity to cover Afrezza in a more reasonable way and give patients the opportunity they need to control their sugars. The pediatrics is what we look at when you think about drugs that have been on the market for a long time and transforms, whether that's the insulin pumps that Alman built, Omnipod or CGM and Dexcom that all type 1s use now standard of care. All these innovations started with kids. And we look at even GLPs today, these have been on the market nearly 20 years before we saw the inflection we've seen over the last several years in the weight loss category and wide adoption of GLPs. I know it's frustrating for all of us to think about we sit on with diabetes and endocrine, but we are just now at the pivotal moment of new data coming out along with hopefully the ability to transform our future.

Speaker 1

I'm going to stop there and we'll answer any questions. And just so everyone knows, we have several upcoming scientific and investor conferences where you'll get lots of new information or updated questions and oral presentations here in the coming months. Thank you.

Operator

Our first question comes from the line of Olivia Breyer with Cantor.

Speaker 3

Hey, good morning guys. Thank you for the questions. How are you thinking about IP and just revenue run rate for your 2 pipeline candidates? And can you just remind us how well protected your Technosphere technology is? And then on the two zero one update that we'll get in the Q4, can you give any more color on how many patients worth of data you expect to have?

Speaker 3

And just how you're thinking about next steps once you do have those healthy volunteer data in hand?

Speaker 1

Sorry, I heard the IP question and then there's a second one and then there's the data in hand with the IPF, is that what you said? I missed the second part.

Speaker 3

Yes. Why don't we start with IP, Mike, and then I can follow-up with 201.

Speaker 1

Sure. So on the IP landscape with I think it was Technosphere, that was probably your second question. So Technosphere goes out into the 2030s, IP on Tyvaso with pending plus what we have is probably in the 20 40 ish timeframe, 2043. And then the clofazamine will have QIDP and orphan designation as well as additional IP filed. So that looks to be 2,030 nine, 2,040.

Speaker 1

And then same thing with IPF and natinib, we look to have into the late 2030s. So we feel pretty good about the overall IP of the company going into the next decade and a half or so. And that's assuming we don't do any innovation, right? And so I think there is definitely things we're going to work on now to continue to innovate and make our products easier for patients to take. So we feel pretty good about the next 7, 8, 10 years as far as we can look out in terms of no major IP risk.

Speaker 3

Okay, understood. And then yes, just second question was around 201 and the data that we'll get in 4Q. Just any color on how many patients worth of data that you guys will have? And then obviously just thoughts around next steps for that program going into 2025?

Speaker 1

Yes. So we have completed the first three dosing cohorts, which was single doses, dose escalation up to a next dose we're looking for. Have a report, no major findings so far. They're still going through the safety, but nothing appears to be getting in our way to go into the multiple ascending dose, which will be the next phase and that will happen over the next month. And then they'll take some time to analyze those results.

Speaker 1

So we expect that in Q4. What we'll be looking for is obviously cough, tolerability, bronchospasm, anything around that lung administration. Or tolerability, do we see any GI side effects in those patients, especially in the multiple ascending dose? And then for those results, we plan to go to the FDA with a Phase twothree design, which we're still finalizing. That's why I've not shared any details and we'll hopefully see the FDA agree that type of a study design.

Speaker 1

We've seen in some of the other competing programs there in IPF, but that's our intent. And hopefully that would get us to market right around when OFAB patent would expire. And so that's what we're kind of looking trying to work backwards to make sure we're on time that we can be.

Speaker 3

Okay, great. Thanks Mike and congrats again on all the progress.

Speaker 1

Thank you.

Operator

Our next question comes from the line of Thomas Smith with Leerink Partners.

Speaker 4

Hey guys, good morning. Thanks for taking the questions. Just with respect to the ICON-one Phase 3 design, just wondering if you could comment on the powering assumptions for the 6 month primary endpoint. And then for the interim analysis, it sounds like this is mostly a sample size re estimation, but can you comment on whether there's any early stopping criteria built into this interim either for futility or superiority? Sure.

Speaker 1

I missed your question on the assumption of 6 months, sorry.

Speaker 4

Yes. Just asking about the powering assumptions on the 6 month endpoint, what you've assumed in terms of placebo response and treatment effect?

Speaker 1

Yes. So what I say is when we in the design of Icon 1, we benchmarked as best we could in refractory population for a delta of what we saw in the ARIKAYCE refractory population. So if it comes out better than that or placebo is not as good, that all will benefit us. It is a dual primary endpoint in the U. S, meaning our co primary endpoint, I'll say, in terms of quality of life plus sputum.

Speaker 1

The rest of the world will be sputum only. So it will be the same trial used with different statistical plans. And the interim analysis is on 100 patients that will have a futility assessment, but not a superiority assessment in terms of shutdown from my knowledge. I know we have different numbers we need to treat if we feel like we're not powered appropriately, we can increase the powering the study by increasing the patient numbers. So those are the key attributes we've tried to do depending on which endpoint is looking, how they're looking in terms of quality of life versus sputum.

Speaker 1

So that's all predefined in the statistical plan. And I think it's 90% power, but I need to double check that and confirm with you, get back to you, but I'm not pretty sure it's 90% power.

Speaker 4

Got it. That makes sense. And then just one on Afrezza. I was wondering if you could just comment on some of the feedback you've been hearing coming out of ADA with the inhale-three results, I guess, reception to the data set and how you're thinking about translating these data in the inhale-one data to sales growth? Are these data sets you think could potentially impact 2025 prescribing or is it more of a longer term dynamic?

Speaker 1

Yes. I think so far the feedback has been very positive of those that attended ADA and listened to our data and watched our data. The data is being prepared for publication. The first dose just got published in Diabetes Care. So I'd say overall receptivity has been very positive.

Speaker 1

The team had a small eye board at ADA just to get initial reactions. Again, continue to demonstrate increased confidence and we just got back ATU Research last week, which I couldn't get in time for the earnings call unfortunately. But that also signals that amongst our highest writers and that we our highest target values, that they are positive receiving the data as well. So, so far, all looks really good in terms of ability to impact future growth of Afrezza. Will that happen in a dramatic way this year?

Speaker 1

Probably a little bit in Q4 as things roll out in Q3 and the data gets published, but realistically it will be 2025. And what I'd say about Afrezza is it's a direct reflection of our investment, meaning we've run the brand for profitability to last year and that's been able to, while we wait for the data readouts and then make the decision to scale up and invest more. So if we want to grow it faster, it's going to probably take more investment. And just how much faster will that grow relative to the investment we make. And those are some of the work we're doing before we scale up any investments so we can communicate appropriately to shareholders what we want to do.

Speaker 1

But I think right now, the data is good enough to continue to drive increased growth quarters and as we go out. And then in pediatric, obviously, is in Q4 and that will be the more important in terms of really inflection trends, I'll call it, meaning we can grow 20% versus 24%. That's not going to get anybody excited. But if we think we can grow high double digits through Peds launch, that's going to be what's important at the end. And having that data in Q4 with a filing hopefully early next year, that will set us up for late 2025, early 2026 timeframe for Peds inflection.

Speaker 1

So I think that's what you'll probably see is my guess, but again, we're conducting additional research and insights to have some confidence before we make any big decisions here.

Speaker 4

Got it. That's helpful. Thanks for taking the questions Mike and congrats again on the progress.

Operator

Our next question will come from the line of Gregory Renza with RBC Capital Markets.

Speaker 5

Great. Good morning, Mike and Chris. Congrats on the quarter. Thanks for taking my question. Mike, maybe just keeping with 101 and cofasmin inhalation, just curious as you and the team activate sites and stand up the trial,

Speaker 1

if you

Speaker 5

had any feedback and maybe touch on how sort of the activation and the entrenchment of the sites is shaping your confidence in the program and the value proposition that you see with 101?

Speaker 1

Yes. I think it's true. Like Greg, the team has been to about 10 sites, August to slow down a little bit for site activation just due to vacations and holidays, but we expect that to pick up a lot here in September. We already know they're pre screening patients, a couple already scheduled for August. So I think it's only 1 month in.

Speaker 1

I wouldn't try to read too much positive or negative into it. I'd say so far the feedback has been generally positive as we all suspect, how big is this refractory population, how quickly can we get to naive patients, how quickly can we move the dry powder along. These are the things we're working on as we know that's the much bigger population to go after. But I think in terms of enrolling the trial in the U. S.

Speaker 1

And Asia Pacific area, there are enough patients to get that moving and enough patients to get hopefully ready for a good launch. But the real opportunity is obviously the larger NTM population, but getting this trial moving is the first step into that foray. But we can continue to watch our case do well. That makes us feel very good about the bets here. And the market really has no options.

Speaker 1

I mean, so this is really exciting for patients, exciting for the treaters, it's exciting for the FDA as well as our employees. We worked really hard to get here. And from a manufacturing standpoint, we'll be ready. And the trial, I think, is going a lot of interest from the top investigators. So we feel pretty good about the sites that we're getting and the patients that we'll be recruiting very shortly.

Speaker 2

Got it. And I think

Speaker 5

at the top of the call, Mike, you mentioned expanded access and maybe more to come. Can you just touch a little bit about that, maybe some of the timing and some of the inputs there. Thanks and congrats again on the quarter.

Speaker 1

Thank you, Craig. Yes, so I've asked the team to look to see if there isn't a way to get to EAP with the FDA sooner than later. And maybe that EAP will be for patients who don't qualify for the trial and would the FDA allow us to provide access given there's only one treatment option out there. We don't have clarity on that yet. We've not approached the FDA yet, but that's really the key part of that comment is, if we could find a way to help more people sooner that don't qualify for the trial, we would be interested in that.

Speaker 1

Obviously, we don't want to have an EAP enrollment for the trial or delay our ability to help get that trial recruited. So that will be some of the focus here is can we find a way to help those patients. That will be a collaboration with the FDA and they may want a certain amount of patients first. We'll have to see where they land.

Speaker 5

Sounds good. Thanks, Mike.

Speaker 1

Thank you, Greg. Have a good day.

Operator

Our next question will come from the line of Brandon Folkes with Rodman and Renshaw.

Speaker 6

Hi, thanks for taking my questions and congratulations on another very good quarter. Maybe just 2 from me. Mike, I know you said you can't talk too much about the potential Phase twothree trial in 201. But would you be able to just talk about maybe if you're considering multiple dose levels there? And just elaborate on what is first prize for you in this program?

Speaker 6

Is it something that's comparable in efficacy with better GI side effects or would you prioritize perhaps sort of a potentially more efficacious drug here? And then secondly, just maybe on Tyvaso DPI. Can you just talk about the manufacturing capacity where you're at today? What needs to be done if Teton is successful and just sort of how much investment does that take? Thank you.

Speaker 1

Sure. I'll take the second one first because that's easy. So from DPI manufacturing capacity, we've been able to build up substantial amount of inventory for United Therapeutics this year. We should be well on our way ahead of any Teton results in terms of scale and capacity. We don't see any limitations as far as we can see with that approval.

Speaker 1

The investment in the plant has already been invested in by United Therapeutics. All the equipment has been installed and purchased. So there's no additional investment that's a major. I'm sure there will be small things here and there, but nothing that's significant for shareholders or for United Therapeutics at this point. That doesn't account for what UT may do independently of MannKind, I.

Speaker 1

E. Building their own plant. That's a separate decision on their part. But as far as we're concerned, we'll be able to supply substantial amount of DPI as we go forward. In terms of what does the wind look like, it's a great question.

Speaker 1

And we've had this internal debate ourselves in that, do we really want to demonstrate the safety side of this around the severe GI tolerability issues that happen? Is it important to try to go after increased efficacy? Or is it a balance of both of those by getting to market as we can? And I think that that triangle in terms of efficacy, speed and tolerability is something we're continuing to talk about. And there's various ways you could design a Phase twothree trial to kind of build those attributes.

Speaker 1

And the question is how fast can you get to market and help those patients and what do you need to demonstrate? For example, if we were to demonstrate equal efficacy somehow, but you took existing patients on the tatinib, you may not see the GI benefit as much. Maybe you'll see people take less Imodium or feel quality of life better, but you could also study in naive patients where you'll see hopefully a larger benefit in tolerability, which could be a huge benefit to outcomes and efficacy. Or you can go after higher dosing, which could generate potential better efficacy, but how much more we don't know. And that's all the questions we have for ourselves as much as anything.

Speaker 1

And so because we are going into a Phase twothree design that does limit some of our forecast ability on efficacy, for example. But we see the first readout here in this Phase 1, make sure patients can tolerate our target doses and then we will finalize that trial design. We're also meeting some thought leaders here in the coming weeks months to triangulate this exact question. But we have an idea of what we want to do. We try to bounce that off with some investigators before we come out and talk about it publicly.

Speaker 1

And then you were asking, do we want to go after dosing in multiple doses? And there's a strategy that could be 2 different doses and study them or it could be a titrate up dose effect, like you see in treprostinil type design where you try to titrate to the highest tolerable dose. So those are the things we are looking at and they all have pros and cons, Brandon. So no magic answer here, but other than we want to get this drug to patients as quickly as possible. And I think once we get on the market, then we can innovate even from there in terms of demonstrating additional trial outcomes, etcetera.

Speaker 1

So we'll get there. But let's get through the first step here. I think that's the most important and then meet with the FDA. Great.

Speaker 6

Thanks. That was very helpful and congratulations again on a great quarter.

Speaker 1

Thank you.

Operator

That concludes today's question and answer session. I'd like to turn the call back to Michael Castagna for closing remarks.

Speaker 1

I just want to say thank you to everyone. It's been a fantastic year, a volatile year for all of us, but the company is in a great spot. We're looking to close out the year strong and really get ready for 2025 and 2026 as we look at multiple data readouts on the clinical side across our entire platform and programs as well as just upside into the in line revenue that we're driving with the diabetes business. So we feel very good about the future. Helpful awesome news on international expansion as we go forward for Afrezza and continue to drive growth and help more patients.

Speaker 1

I just want to say thank you to all of our employees for all the hard work and all the shareholders for all your support. Have a great day.

Powered by Quartr

Key Takeaways

  • Record revenue of $72 million in Q2 2024 (up 49% year-over-year) and a strong cash position of $262 million supported by non-GAAP profitability and early repayment of convertible and senior notes.
  • Clofazimine inhalation suspension for NTM received FDA Fast Track status; Phase 3 trial features 28-day on/56-day off dosing, co-primary endpoints (sputum conversion and patient-reported outcomes) and an interim futility analysis after 100 patients.
  • Inhaled nintedanib DPI (IPF) expects single- and multiple-ascending dose safety and tolerability data in Q4 2024, with plans to finalize a Phase 2/3 design focused on improved GI tolerability and lung exposure in 2025.
  • Afrezza net revenue rose 20% year-over-year to $16.3 million in Q2, supported by INHAL3 meeting its 17-week primary endpoint and a 30-week readout due in H2 2024, while pediatric INHALONE pivotal results are expected in Q4 2024.
  • Tyvaso DPI manufacturing and spray-drying capacity are fully installed and undergoing PPQ, positioning MannKind to supply potential TATOM-1/2 approvals and global expansion with United Therapeutics.
AI Generated. May Contain Errors.
Earnings Conference Call
MannKind Q2 2024
00:00 / 00:00