MannKind Q2 2025 Earnings Report

MannKind EPS Results

• Actual EPS: $0.05
• Consensus EPS: $0.04
• Beat/Miss: Beat by +$0.01
• One Year Ago EPS: $0.05

MannKind Revenue Results

• Actual Revenue: $76.53 million
• Expected Revenue: $77.82 million
• Beat/Miss: Missed by -$1.29 million
• YoY Revenue Growth: +5.70%

MannKind Announcement Details

• Quarter: Q2 2025
• Date: 8/6/2025
• Time: Before Market Opens
• Conference Call Date: Wednesday, August 6, 2025
• Conference Call Time: 9:00AM ET

MannKind (NASDAQ:MNKD), a biopharmaceutical company, focuses on the development and commercialization of inhaled therapeutic products for endocrine and orphan lung diseases in the United States. It offers Afrezza, an inhaled insulin used to improve glycemic control in adults with diabetes, and the V-Go wearable insulin delivery device, which provides continuous subcutaneous infusion of insulin in adults. The company's product pipeline also includes Tyvaso DPI (Treprostinil), an inhalation powder for the treatment of pulmonary arterial hypertension and pulmonary hypertension associated with interstitial lung disease; MNKD-101, a nebulized formulation of clofazimine, for the treatment of severe chronic and recurrent pulmonary infections, including nontuberculous mycobacterial lung disease; MNKD-201, a dry-powder formulation of nintedanib, for the treatment of idiopathic pulmonary fibrosis (IPF). In addition, it has collaboration and license agreement with United Therapeutics Corporation for development, regulatory, and commercial activities of Tyvaso DPI; co-promotion agreement with Vertice Pharma to promote Thyquidity; and collaboration agreement with Thirona to evaluate the therapeutic for the treatment of pulmonary fibrosis. Further, the company has supply and distribution agreement with Biomm S.A. for the commercialization of Afrezza in Brazil; and license and distribution agreement with Cipla Ltd. for the marketing and distribution of Afrezza in India. MannKind Corporation was incorporated in 1991 and is headquartered in Danbury, Connecticut.

MannKind Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: MannKind secured a non-dilutive $500 million financing facility with Blackstone, bolstering its liquidity alongside a $211 million cash balance to support growth initiatives.
• Positive Sentiment: The company reported Q2 revenues of $77 million (up 6% YoY) and year-to-date revenues of $155 million (up 12%), driven by strong Tyvaso DPI royalties and Afrezza growth.
• Positive Sentiment: Enrollment for the ICON-1 inhaled clofazamine Phase III trial reached 90 of 100 evaluable patients ahead of schedule, targeting an interim analysis in 2026 under Fast Track and QIDP designations.
• Neutral Sentiment: MannKind initiated the Inflow Phase II nintedanib DPI trial (ex-US, ~228 patients) to assess two dosing regimens over 12 weeks, aiming to inform a subsequent global Phase III design.
• Positive Sentiment: Afrezza’s endocrine business achieved $18.3 million Q2 revenue (+13% YoY), with a pediatric indication submission expected in Q4 and plans to expand the sales force to boost adoption.

Presentation

[Operator]

Good morning, and welcome to the MannKind Corporation Second Quarter twenty twenty five Financial Results Conference Call. As a reminder, this call is being recorded on 08/06/2025, and will be available for playback on the MannKind Corporation website shortly after the conclusion of this call and available for approximately ninety days. This call will contain forward looking statements. Such forward looking statements are subject to risk and uncertainty, which can cause actual results to differ materially from these stated expectations. For further information on the company's risk factors, please see the Form 10 Q for the quarterly period ended 06/30/2025 now on file with the SEC, the earnings release, and the slides prepared for this presentation.

[Operator]

Joining us today for MannKind are Chief Executive Officer, Michael Cassania and Chief Financial Officer, Chris Prentiss. I would now like to turn the conference over to Mr. Castagna. Please go ahead.

[Michael Castagna, CEO & Director at MannKind]

Thank you, operator, and good morning, everybody, And thank you for joining us for our second quarter earnings call. As we look out, we're focused on creating more shareholder value, minimizing dilution and enhancing our flexibility as we enter the next phase of our growth. The next six to eight quarters are going to showcase our cumulative work over the past seven years. Let me talk about the five pillars of our success. First, we're on the heels of TETON-two readout here in September, and we'll actually say wait those results as that provides upside to our current business plans in the future.

[Michael Castagna, CEO & Director at MannKind]

Second, Afrezza's position for continued growth, PEACE is now filed. I just want to put this in context, we target about 25% of all rapid acting scripts. 1% of the rapid acting market is roughly 300,000,000 run rate in Afrezza. We have a strong balance sheet with the announcement today of Blackstone, we now have access to additional capital to provide us flexibility over the coming years. Fourth, in our opinion, inhaled clopazamine is not getting enough credit in terms of meaningful opportunity that this has on our future.

[Michael Castagna, CEO & Director at MannKind]

An incentive DPI, I'm proud to announce will now move forward into phase two, and I want to thank our team for all the hard work they've done. Chris will talk about further details on the Blackstone deal later in our discussion today. Our Q2 highlights are highlighted by record revenue of Tyvaso DPI sales, also record referrals for patients in Q2, which should set us up for Q3. Our inhaled clofazamine for NTM, we expect to meet our interim target ahead of schedule, which is 100 valuable patients. Additionally, we've now advanced the dry powder formulation into preclinical studies, and we'll actually await those results to move into earlier lines of treatment in the future.

[Michael Castagna, CEO & Director at MannKind]

Nattenda DPI for IPF, we plan to launch our trial called inflow by year end twenty twenty five. On the endocrine side, we're excited about the pediatric indications being submitted, and this now sets us up for launch prep as we look out over the next four quarters. Our endocrine business unit had strong performance in Q2, with $18,300,000 in revenue or 13% growth over 2024. And for the Afrezza Dole opportunity, the application to submit our label update is expected here in Q4 for a decision. On the financial side, we had Q2 revenues of $77,000,000 or 6% over 2024, and year to date revenues of $155,000,000 or 12 percent over 2024.

[Michael Castagna, CEO & Director at MannKind]

Chris will dig into the details shortly on this one. A strong balance sheet with $2.00 $1,000,000 in cash, and we now have expansion capital of $500,000,000 from Blackstone, offering non dilutive capital to accelerate our growth and innovation as we look out. Let me start out on our orphan lung opportunity with MannKind101. The NTM market is expected to exceed $1,000,000,000 by the end of the decade. Our focus will be on The US and Japan, which have the highest populations and highest opportunity for growth.

[Michael Castagna, CEO & Director at MannKind]

It's also the two markets that we've seen the highest enrollment rates in our trial. This is a global health concern, but a real issue in these two countries. As we think about the inhaled glophosphamide development program, these are the three pillars we look at. Number one, direct lung delivery could enhance the tolerability profile minimizing side effects. We can confidently say after ninety patients enrolled, we have not seen significant patient dropout early on the trial, we do not know what arm patients are on, but there's just not been a lot of dropout.

[Michael Castagna, CEO & Director at MannKind]

So the tolerability does look like it is holding up early on in the trial. Our active ingredient as a guideline endorsed antibiotic with decades long clinical track record. This drug is already used in clinical practice around the world, but due to limitations highlighted above, we believe this is a real opportunity to transform patients' lives. And finally, the convenient dosing cycle with one month on and two months off will provide a dose free phase that minimizes treatment burden and potentially enhances adherence. We presented the ICON-one global phase three trial.

[Michael Castagna, CEO & Director at MannKind]

I try to remind people that this is a co primary endpoint in The US of sputum culture conversion and patient reported outcomes. For the ex US market, it's just sputum culture conversion. We have fast track QIDP and orphan designation given us twelve years of exclusivity. And to date, we are now at ninety patients enrolled. We need 100 evaluable patients to hit our interim analysis in 2026.

[Michael Castagna, CEO & Director at MannKind]

Let me remind you that some of the baseline patients will not have a positive pseudoculture when they enrolled, and they will not be included in the interim analysis. Next, I'm excited to talk about MANKIND-two zero one. As we highlight in our last quarter, we've completed our phase one study looking at three doses in single ascending and two doses in multiple ascending. We had to redesign the trial post our FDA meeting feedback as we went into phase two, and I'm going to share with you today that trial design. This trial will be named inflow, as we look forward to launching this ex US here in 2025.

[Michael Castagna, CEO & Director at MannKind]

This study will be looking at approximately two twenty eight patients in a randomized placebo controlled trial with twelve weeks of active drug, followed by six months of open label extension where everyone could get exposure to our product. We'll be exploring two doses, which is two milligrams TID or six milligrams a day of exposure, or four milligrams BID, eight milligrams a day of exposure. The primary objective of this study will looking at safety and tolerability, really specifically make sure inhaled powders will be tolerable in this patient population. The second one will be around the FVC and efficacy signals at the early stage of twelve weeks as the primary endpoint. When we look at these doses, these are consistent and may provide equal or greater exposure than what we saw presented at Avalon at ATS here in May.

[Michael Castagna, CEO & Director at MannKind]

Regardless of the doses, this range that we both achieved independently gives us confidence that we're in a really good spot to move this forward in the patients and hopefully see a signal here in the not too distant future. Now, we'll close the orphan lung discussion here on Tyvaso DPI. Our Tyvaso DPI revenue continues to grow as we achieve $31,000,000 in royalty here in Q2, which put us at about $1,200,000,000 DPI over the last four quarters. As you see, our manufacturing revenue shifted downwards from Q1 to Q2 of $22,000,000 And this is just due to timing of manufacturing that Chris will talk about. But as I talked about 101, two zero one dry powders, these are all the things that are going on in manufacturing that we have to shift around our teams as we look forward in the future.

[Michael Castagna, CEO & Director at MannKind]

We'll anxiously be waiting the TETON-two results as well as TETON-one in 2026. Now I'm going to talk about our endocrine business unit. The first half year over year grew 22% on new prescriptions and 17% on TRxs. We're really looking at this performance as we start to see how can we grow writers and how can we grow depth of prescribing. And that was in the details here as we think about enhancing prescribing amongst our top prescribers, but how do we do more broadly adopt our prescribing base?

[Michael Castagna, CEO & Director at MannKind]

Some of the things we're doing is really enhancing our coverage at clinical conferences. If you look at the building momentum we've had this year, starting at ATTD in March, all the way through Endo, ADA, ATTC, as well as children's for diabetes, as well as ad boards and focus groups. We've engaged with over 3,000 healthcare providers, and our booths have been packed with guests wanting to learn more information about Afrezza, not just in The US, but around the world. We remain excited about the future opportunity of this product and the potential to help children as we go forward. As we look at our vision for this product, we want to enhance our messaging and field force expansion ahead of the PEASE launch.

[Michael Castagna, CEO & Director at MannKind]

We need to produce a halo effect, not just for kids, but what this is gonna mean for the adult Afrezza community. The new campaign you'll start to see roll out later this year will be called insulin in the moment. And this really establishes the foundation of the product around speed and control at every moment of a patient's day. This is one of the challenges you hear when you talk to patients and providers is the stacking effect of insulin, the slow effect size of insulin, and the challenges patients face whether using insulin through a pump or a pet. We believe launching this new campaign targeting not just healthcare professionals, but consumers will resonate in the challenges they face in everyday control of people using insulin.

[Michael Castagna, CEO & Director at MannKind]

We also will increase our share of voice as we've talked about the expansion, we expect the full sales force to be up and running by the end of this year, and the first full quarter of their impact will start in Q1 and Q2 of next year. We are deploying medical science liaisons, key account managers, field reimbursement specialists, as well as an additional 20 to 30 sales reps throughout our Afrezza footprint in adults. This new targeting will enhance our coverage of the market to approximately fifty percent in 2026. Additionally, there is future data coming that will unlock our potential in areas like gestational diabetes, inhale first being a completely naive patient, newly diagnosed, getting a friend within the first ten days of diagnosis, as well as Inhale A X, which is around an exercise study, looking at Afrezza and a highly active patient population. These are the next steps in generation data that we expect in 2026 and beyond. Now, I'll turn it over to Chris.

[Chris Prentiss, CFO at MannKind]

Thanks, Mike, and good morning, everyone. Before we get into the details of the quarterly results, I want to highlight our revenue growth over the last three years, as we compare the trailing four quarters on an annual basis. This annual double digit growth has resulted in total revenues over $300,000,000 for the trailing four quarters, and we expect this growth to continue through both our commercial products as well as our revenues earned through our collaboration with United Therapeutics. Our overall revenues in the second quarter grew 6%, led by royalties earned on Tyvaso DPI. Tyvaso DPI royalties contributed 31,000,000 in the second quarter, an increase of 22% over the same quarter last year.

[Chris Prentiss, CFO at MannKind]

Collaboration and services revenue consists primarily of manufacturing revenue based on production volumes sold through to UT and the recognition of deferred revenue. We recorded revenue of $23,000,000 in the second quarter, a 12% decrease from the prior year as a result of the net impact of onetime items in both periods. Afrezza net revenues for the second quarter were $18,000,000 a 13% increase over the prior year. As Mike discussed earlier, we are encouraged by the recent performance of Afrezza in new and recurring prescriptions over the prior year and expect this trend to continue. V Go net revenue was approximately $4,000,000 for the second quarter, an 8% decrease from the prior year, driven by lower product demand.

[Chris Prentiss, CFO at MannKind]

As V Go is not actively promoted, we are pleased with the results of the product thus far this year. As we look ahead to the second half of the year, we anticipate continued growth in our royalty revenue, driven by net sales of Tyvaso DPI. We expect collaboration and services revenue for the 2025 to be in line with the $51,000,000 recorded in the first half of this year. The quarterly results of CNS revenue have fluctuated this year. This is primarily driven by the timing of manufacturing as we balance the production for the period in terms of Tyvaso DPI, Afrezza, and our development programs.

[Chris Prentiss, CFO at MannKind]

Lastly, we anticipate Afrezza will continue its growth trajectory based on the recent underlying performance and our expanded promotional efforts. On the expense side, R and D has increased over the prior year period as enrollment in the ICON-one trial of inhaled clofazamine is progressing well and preparations are underway to initiate the Phase II IPF study for our MannKind-two zero one program later this year. Additionally, our team is developing a DPI formulation for our clofazamine program, as well as additional potential pipeline assets. Selling, general and administrative expense has increased compared to the prior period, primarily driven by investments in expanding our commercial infrastructure. As you may recall, we had paused investment in Afrezza at the 2024 while awaiting pediatric trial data and reduced the sales force.

[Chris Prentiss, CFO at MannKind]

With the potential approval of Afrezza in the pediatric indication, we're now enhancing our commercial organization, having deployed a medical science liaison team and will expand the sales force later in the year. Today, we also shared that MannKind has entered into a strategic financing arrangement with Blackstone, providing access up to 500,000,000 in non dilutive funding. This capital secured on favorable terms and combined with our quarter end cash and investments balance of $2.00 $1,000,000 reinforces our strong liquidity position and is available to be strategically deployed across our key growth initiatives, including supporting our commercial build out for the potential pediatric launch of Afrezza, advancing our development pipeline, and allowing us the ability to move quickly on business development opportunities. Mike and I and other members of the management team will represent the company at the Wells Fargo, Cantor, H. C.

[Chris Prentiss, CFO at MannKind]

Wainwright and Morgan Stanley conferences in September. We look forward to seeing folks there and in other forums this quarter. With that, I will turn the call back over to Mike.

[Michael Castagna, CEO & Director at MannKind]

Thank you, Chris, and thank you for the team's hard work on the Blackstone deal, which is really going to provide us the capital we need to produce these anticipated catalysts over the coming quarters. As you've seen, we've executed the first half successfully, and we have several planned opportunities during the second half for continued execution of our plan. If you look to our stairway of building value, Tyvaso DPI will continue to be the foundation in the near term. As you look out into the longer term, the endocrine build with international expansion, as well as pediatric expansion will continue to not only make mankind more efficient, but allow us to help more patients around the world as we go forward. Inhaled clobazamine is a meaningful opportunity.

[Michael Castagna, CEO & Director at MannKind]

And let me remind you that every 1,000 patients is approximately $100,000,000 in revenue. We've also advanced this dry powder inhalation, because we believe in order to penetrate the earlier lines of treatment, you're going to need something that's much easier for patients versus the refractory population we're currently studying. Nintentinib DPI is well underway, we've now selected the CRO and we plan to initiate the inflow trial here in the near future. As you continue to see OFEB as a meaningful contributor to growth in the IPF space, we're hopefully excited to provide another option for patients as we go forward. We'll be sharing some of the new data at upcoming scientific conferences with ADCS in August here in Phoenix, as well as ISPAT, which is the pediatric conference here in the fall.

[Michael Castagna, CEO & Director at MannKind]

I want to thank everyone for all their hard work this quarter, as we really can start to see the fruition of all of our work over the last seven years coming together this year and next year. And we look forward to continue to execute our plan and share those updates in the future quarters. Thank you for your time today. And we'll now open up for questions.

[Operator]

Thank you. Our first question comes from the line of Olivia Breyer of Cantor Fitzgerald. Please go ahead, Olivia.

[Olivia Brayer, Director & Senior Biotech Analyst at Cantor Fitzgerald]

Hey, good morning, guys. Thank you for the question and congrats on a great deal with Blackstone. Can you maybe walk us through what a best case might look like just in terms of timeline for a potential bridging study in IPF? I think the BREEZE study took two to three months and I think with DPI already on the market, maybe there's a much faster timeline to approval than what we saw for PAH. And then have a follow-up on tentative program.

[Michael Castagna, CEO & Director at MannKind]

The first one was around what the bridge could look like for Tyvaso DPI and IPF?

[Olivia Brayer, Director & Senior Biotech Analyst at Cantor Fitzgerald]

Yeah, exactly. And just how you're thinking about the timeline for it, Mike, just given, I know it'll be a much faster timeline than what we saw with PH, hopefully no CRLs involved, but just how that could realistically play out, right? If TETON-two ends up being positive and then TETON-one, when could this ultimately come to market, I guess is what I'm thinking for DPI.

[Michael Castagna, CEO & Director at MannKind]

Yeah, I mean, it's hard for me to comment on UT's regulatory strategy and clinical strategy here. I think what you could just, as you lay out the data readout that UT's communicated, let's just say, come down September and TETOM-one is next year. You got now some time to meet with FDA and kind of work through what that could look like and potentially get as much work done as you can before your TETOM-one readout because TETOM-one is really for The U. S. Market per se.

[Michael Castagna, CEO & Director at MannKind]

So that's our optimism is around, let's get the TETON-two results and then hopefully UT will accelerate it, meet with FDA on what that could look like. And I think some of the effect size that you'll see in the trial will drive some of the, I'll say ideal opportunity here with FDA, but I think it's too soon for us to speculate the clinical strategy there. Don't wanna speak for UT.

[Olivia Brayer, Director & Senior Biotech Analyst at Cantor Fitzgerald]

Okay, understood. Then on your intended DPI program, can you maybe just talk about how you're thinking about this drug in context of some of the new updates in that space? Is this basically a replacement to current oral background therapies and then hopefully gets used in combination with newer treatments as they come to market? Then also just a question around whether you guys were able to come to an agreement with FDA around which patients to enroll in that Phase II around naive patients patients that are already on background therapy?

[Michael Castagna, CEO & Director at MannKind]

Yeah, I think that was one of the challenges you kind of heard me say we had to recreate the trial. When we were looking at the original design, it was really about taking natinib patients or patients that failed natinib and then enrolling them in this and showing more of a non inferiority design. I think the FDA was adamant on a placebo controlled on top of general background therapy design as they've given the feedback to other parties. It just doesn't work when you think about the treatment paradigm in The U. S, the IRB approvals you need.

[Michael Castagna, CEO & Director at MannKind]

You really just can't do a placebo blinded trial for six months. And so that's what made us pivot the work over the last three months and really look at an ex US market where it does take call three months to get access to the standards of care. You could run a placebo controlled trial and get them through the safety and clinical IRBs and protect patients at the end of the day. We've kinda put all the things the FDA requested into the trial. It's just going to be done more ex U.

[Michael Castagna, CEO & Director at MannKind]

S. Than U. S. Per se. And I think that will give us the data we need to have the conviction we need to move to Phase three.

[Michael Castagna, CEO & Director at MannKind]

And we even upsized the trial a little bit from where we were thinking just to make sure the results that we do get are a little bit more robust. The next phase will be the Phase three one. And I think if you look out in the IPF market, we would expect hopefully BI's product to get approved, we'd expect Tyvaso DBI to be out there. And so as we look out over the two year window, there could be now four drugs for IPF, maybe five if Bristol Myers gets there. And then you can see this really being on top of background therapy and designed the way that the FDA expects.

[Michael Castagna, CEO & Director at MannKind]

So as you see those other agents, about 70% of the time, those trials have background therapy on top of, right? And so that's one big area. The second big area is gonna be the fact that majority of people cannot tolerate the two options that are out there today. And we think there's a lot of patients who either choose to not take current treatment and die, because the side effects are so severe. There's a large population there that we believe an inhaled nattentive could really help and hopefully buy them the time they need for life.

[Michael Castagna, CEO & Director at MannKind]

And so that's really where we look at the two populations, those that are intolerable for the current agents. And as the market expands with combination treatment, we think there's a huge opportunity there. And as we go to Phase three that we think those other drugs being on the market will help us execute a better Phase three trial.

[Olivia Brayer, Director & Senior Biotech Analyst at Cantor Fitzgerald]

Okay, great. Thank you, guys. Appreciate it.

[Michael Castagna, CEO & Director at MannKind]

Thank you, Louie.

[Operator]

Thank you. Our next question comes from the line of Prashid of Leerink Partners. Please go ahead, Faisal.

[Faisal Khurshid, Senior Research Analyst - Emerging Immunology at Leerink Partners]

Hey, guys. Thanks for taking the question. I wanted to ask also on 201. Can you discuss your sort of level of confidence in using top of background profenadone, both from a safety perspective, and also the, like ability to clear a difference first placebo arm that includes background therapy on an efficacy basis as well?

[Michael Castagna, CEO & Director at MannKind]

I have Waseem here. So, don't you comment on the profferinsone?

[Wassim Fares, SVP, Therapeutic Area Head - Rare Lung Diseases at MannKind]

Leo, good morning. This is Ying. Hello. Good to hear from you. So, the combination currently between oral and oral profferinsone, as you know, it's not happening.

[Wassim Fares, SVP, Therapeutic Area Head - Rare Lung Diseases at MannKind]

The combination of the side effects is there. So from our perspective, we're going, as you well know, with inhaled entelionib, the systemic exposure would be very low. So from a safety perspective, tolerability perspective, I mean, obviously, we need to do the trial. But the drug drug interaction there, we expect it to be minimal. As far as efficacy, I mean, we do have enough reason to believe that their efficacy of both Perfinger and Nintelenib combined, if they are tolerated, that it will be there.

[Wassim Fares, SVP, Therapeutic Area Head - Rare Lung Diseases at MannKind]

This is our hypothesis. And I would argue the same for the upcoming potential approval of Neurandomilaz. I mean, the combination there, same thing. And the future of IPF treatment in our opinion is really combination therapy, which as of now with the two currently available services, it's not there.

[Michael Castagna, CEO & Director at MannKind]

We will be allowing both of those agents in the background treatment in this upcoming Phase II trial.

[Faisal Khurshid, Senior Research Analyst - Emerging Immunology at Leerink Partners]

Yes, got it. And then, what do you need to show to bring, development program into The U. S? And would that be something that could occur during the course of the Phase II? Or would that be just for the Phase III downstream?

[Michael Castagna, CEO & Director at MannKind]

I think definitely the Phase III, we feel confident if we get the results here that we need that this is a U. S. Global trial at that point. I think it's a matter of timing. So the trial enrollment could go very quickly ex U.

[Michael Castagna, CEO & Director at MannKind]

S. From currently what we have lined up. And it'd just be a timing issue by the time we get X amount of patients in and go back to the FDA and show them what they wanna see, will they allow it? But I think even in The US, profenadone is not, when you think about we can't go on top of nitentinib and you're not switching them, they got to have a washout period.

[Michael Castagna, CEO & Director at MannKind]

It's just a very difficult trial to execute in The US. But I don't think it's an FDA issue as much as it's an IRB placebo study, will investigators even enroll twelve weeks on placebo. And we just think it's gonna be a very hard trial to enroll. And by the time you get it through IRBs and approval, you're going to talk minimal patients relative to the expense and time. Don't if you have anything else to add to that. Okay, so we won't rule out The US, but I think our focus is on getting this done as quickly as possible to move the program into Phase III. And by the time you get there, you actually might be done the enrollment period.

[Faisal Khurshid, Senior Research Analyst - Emerging Immunology at Leerink Partners]

Got it. Thank you for taking the questions.

[Operator]

Thank you. Our next question comes from the line of Andreas Arguiridis of Oppenheimer. Please go ahead,

[Andreas Argyrides, ED & Senior Analyst - Biotechnology at Oppenheimer & Co. Inc.]

Yes, good morning and thanks for taking our questions. Congrats on the progress in the quarter. Also on 02/2001, can you talk about what you expect or what you're looking for in terms of treatment effects from the Phase two or given also that it's kind of a small on the split side? And then also maybe rationale for Mike, you already kind of alluded to some of the rationale for going ex US, but anything also about the patient profiles abroad that makes sense as well. Trying to get a little read through into the TITAN-two study here.

[Andreas Argyrides, ED & Senior Analyst - Biotechnology at Oppenheimer & Co. Inc.]

And then Chris, you, maybe just again thinking around the Blackstone deal, the rationale to do a kind of revolving credit deal versus other traditional finances? Thanks.

[Michael Castagna, CEO & Director at MannKind]

I'll start off and ask Clausine to add. I think on the effect size, the main thing we'll be looking at is tolerability and safety because that's really the Achilles heel and the tetanib. I think when you look at the pivotal trials of that product, you can start to see a response in twelve weeks. And so that's why we made the primary endpoint. We felt what's a long enough period with placebo that you can safely go and not compromise somebody's journey and ethically enroll a trial.

[Michael Castagna, CEO & Director at MannKind]

And we felt twelve weeks is appropriate. After twelve weeks, it's an open label extension. So we will have hopefully a good group of patients going on for six to nine months, but it'll be at their option. So I think we'll start to see that effect size hopefully over time, not just at the twelve week mark, but over the patients who continue. And then remember, anyone that's on placebo will have the option of active drug at week twelve.

[Michael Castagna, CEO & Director at MannKind]

And so I think it's really gonna give us a nice data set to power a Phase three trial appropriately. And I think when you look at those effect sizes, obviously they have to be meaningful enough in FVC. So I think when the secondary endpoint will be efficacy, it will not be powered for efficacy per se. The other key aspect of the trial is really the BID and TID. So as the market does not really know and experts don't know how an attendant actually has the effect that it does, we don't know if it's a signaling issue, a switch issue, a duration of effect of a binding receptor.

[Michael Castagna, CEO & Director at MannKind]

And so we're actually experimenting with that in this trial design in terms of TID versus BID. Obviously, you look at the Avalon data, it could even be QD, but we don't want to wind up with a wonky result and try to stretch PKPD when it may not be that parameter in terms of what you're looking at from a QD versus BID. So these are insights we'll look and you might see a difference between those two dosing regimens and that'll be important for a Phase three design. Otherwise, we think this will give us enough information to properly design and power a Phase three trial globally. Osimam, if you have anything.

[Wassim Fares, SVP, Therapeutic Area Head - Rare Lung Diseases at MannKind]

Yeah, to add to that. So that study, as Mike mentioned, I mean, week is the double blind period. However, it's really it's a nine month study in the sense that when you include the open label extension. So we will have and we have two active doses versus placebo. So we'll have data on both safety, tolerability and efficacy for nine months for most of the patients and for those who are randomized to active and even the placebo will have about six months data after they transition.

[Wassim Fares, SVP, Therapeutic Area Head - Rare Lung Diseases at MannKind]

As far as treatment effect assumptions, I mean, obviously, we have our thoughts about that treatment effect. But again, this is first in patients study. So this will be the basis for our assumption moving forward. You know, we did the healthy volunteers first in humans last year, so we have those data. And the molecule is not new, right?

[Wassim Fares, SVP, Therapeutic Area Head - Rare Lung Diseases at MannKind]

So we understand it's pharmacokinetics. The inhaler is not new. It's already into approved products, as you know. And the powder that we're using is also not new. It's already an approved product.

[Wassim Fares, SVP, Therapeutic Area Head - Rare Lung Diseases at MannKind]

So we are very comfortable with the delivery and how we're giving it and the pharmacokinetics and pharmacodynamics already well understood of this model.

[Chris Prentiss, CFO at MannKind]

And then, Andreas, on the financing front, as we look out the next eighteen to twenty four months, we just see a number of key catalysts for us. We have our two late stage development programs. We have starting focus on commercial prep for one of those programs in clofazamine. And obviously, we have the pediatric launch that we hope to have in 2026 if approved. So, as we look at all of those, having access to flexible capital at this point in time just makes a lot of sense to have this instrument in place.

[Chris Prentiss, CFO at MannKind]

And then, of course, one of the key tenants here is to have the ability to be reactive if business development opportunities present themselves. And so, speed in in those situations, I think, is really important. And so for us to be able to be in a position of strength on that side, again, just made this instrument the right choice for us and really happy to be working with a partner like Blackstone.

[Andreas Argyrides, ED & Senior Analyst - Biotechnology at Oppenheimer & Co. Inc.]

Great. Thanks. I'll jump back in the queue.

[Chris Prentiss, CFO at MannKind]

Thanks.

[Operator]

Thank you. Our next question comes from the line of Brandon Folkes of H. C. Wainwright. Please go ahead,

[Brandon Folkes, Managing Director at H.C. Wainwright & Co.]

Hi. Thanks for taking my questions and congrats on the update. Maybe just changing gears a little bit to Afrezza. Can you perhaps just talk about the typical Afrezza patient today you know sort of where you're gaining the most traction as we continue to see this double digit growth and if you've seen any evolution yet maybe over the last twelve months since these sort of inhale data the two data sets were published you know just an aided awareness of these data sets currently you know are they seeping into the prescribing community as yet just given that outreach you've done obviously not promoting to it but just and then sort of when we think about depth and breadth of prescribing, are you seeing the traction today on Afrezza?

[Michael Castagna, CEO & Director at MannKind]

Yeah, think the first time I'll make it up Nick is with us is the we just got a database breakdown and I think you can kind of indirectly see it in the earnings, is that the breakdown of patients is roughly forty five percent Type one 55% Type two. Over the last year or so, we've been pivoting a little bit more to Type one and we can see four unit strength is growing a little bit faster than the 12 unit over the last year. So I think that would signal our execution against Type one is growing and the uptake there is good getting a little bit higher. I'll let Nick talk about a little bit more about the depth and breadth and some of work you're doing.

[Dominic Marasco, President - Endocrine Business Unit at MannKind]

Yeah, thanks, Mike. And I would agree with that. I think what we're seeing overall is increased awareness. We've changed our strategy a bit by adding targets across the field sales force where we're going after unique prescribers. We've had much more activity at congresses where we've had less of a presence in the past.

[Dominic Marasco, President - Endocrine Business Unit at MannKind]

We're engaging more in scientific and clinical education to create awareness around the science and the benefits of Afrezza within its competitive landscape. So overall, I would say focusing on the adult community, looking to increase unique prescribers, increasing awareness around science and clinical data, I think is where we're starting to see ourselves making good progress. And we'll continue to do so focus in that area for at least the next two to three quarters.

[Brandon Folkes, Managing Director at H.C. Wainwright & Co.]

Thanks very much. Sorry, I was struggling with the mute button, I apologize. Yeah, maybe so as we just think about the sales footprint and the growth, as we get the pediatric label and sort of in light of the additional capital you now have access to, are you going to think about sort of going with a full footprint for pediatrics on day one on the launch? Are you thinking about sort of incremental investment, assessing the traction and sort of then perhaps layering an additional expansion, additional reps to target the pediatric indication over time. Just how should we think about sort of a present investment beyond 2025?

[Michael Castagna, CEO & Director at MannKind]

Yes, I think we're building up the peds plan. I think our initial thoughts are number one, we decreased our sales force footprint coming into 2024. And we were running Afrezza for profitability in 2025 and really late twenty twenty four all the way into early twenty twenty five. As we came out and got the pediatric data, our confidence level in the peds launch went up, right, in terms of lung safety and believability and the opportunity that exists there. And so as you see this year, we are with the hiring of Nick and the expansion of the team.

[Michael Castagna, CEO & Director at MannKind]

Number one is when we decrease the footprint, we're only targeting about 25% of all rapid acting scripts, which is mainly our targets to maintain our business. In order to grow, we need to target a larger percentage of markets. The number one thing we hear is doctors do not remember Afrezza, it's not top of mind and it's true. Our reps are not there every week, hitting them like they're getting hit with insulin pumps from one company or another every week. So that's important as we close out this year and we have a label change coming up in October that we want to get the sales force expansion so that that label change can be communicated more widely.

[Michael Castagna, CEO & Director at MannKind]

The second thing with peds is it's a different selling target than our traditional Afrezza use. Most of our Afrezza use comes from private practice doctors who know our data, who have open access and they listen to the scientific exchange. A lot of the future is in academic centers and children's hospitals where our reps have not traditionally been a strong nor our selling model. And so we think it's really important to build a dedicated key account manager team with experience selling an institution. So it's a different skill set and that's where the majority of peds being almost 80% are treated.

[Michael Castagna, CEO & Director at MannKind]

When you look at our peds trial, had 39 of the 50 academic target centers in The U. S. In the trial. So we had a large percentage of them do the trial. And we think there's a really important opportunity to continue that education and expansion in kids.

[Michael Castagna, CEO & Director at MannKind]

The other thing we're going through to your question on the uptake will be, why do we believe and we'll start to communicate this information? Why do we believe the uptake in kids will be more accelerated than we've seen in adults? And anecdotally, feedback from advisors and conferences and engagements has been very, very positive. Parents have been very excited. People are shocked.

[Michael Castagna, CEO & Director at MannKind]

They didn't know Inhale and Slim has been on the market this long. And so we just think there's a whole new opportunity to relaunch the brand and pivot the entire franchise. And so we need to keep expanding in adults as we can grow there, but more importantly, going into the pediatric community early and often will be important. And I'll remind you guys, we do co promote Baqsimi with Amphastar. So that does allow us to go into the pediatric community and promote that product today.

[Michael Castagna, CEO & Director at MannKind]

And that is something we're weighing as we go forward.

[Brandon Folkes, Managing Director at H.C. Wainwright & Co.]

Great.

[Brandon Folkes, Managing Director at H.C. Wainwright & Co.]

Thank you very much and congrats on all the updates.

[Operator]

Thank you. Thank you. Our next question comes from Anthony Petrone of Mizuho Americas. Please go ahead, Anthony.

[Anthony Petrone, MD - Equity Research at Mizuho Financial Group]

Great. Thanks on all the updates and the Blackstone agreement. Maybe a couple on clofazamine and a follow-up on Afrezza. When we think about clofazamine, ICON ahead on the interim, getting to 100 patients, if you get the desired sputum conversion outcome at interim, How does that change just the timeline? Can it actually be fast tracked for clearance if you get that sputum conversion?

[Anthony Petrone, MD - Equity Research at Mizuho Financial Group]

And then when you think about building a sales force, a pulmonology facing sales force, like what is the size of that team if you look ahead to a positive outcome? And then I'll have a follow-up on Afrezza.

[Michael Castagna, CEO & Director at MannKind]

I think on the sputum, obviously, that's where we're weighing the trial statistically. And if we get that interim result next year, we're gonna let the trial enrollment keep happening even if we were to hit the 180 mark. So I think if it says it's good at 180, some of the debate we'll have at that time will be, do we lock the database at 180 or do you wait for the remaining twenty, thirty people to hit the six month endpoint? And that'll drive the timeline there with FDA. It does have QIDP designation as well as fast track.

[Michael Castagna, CEO & Director at MannKind]

So there is a opportunity for a faster review and a rolling submission, I believe with FDA. And I think the FDA has been nothing but collaborative with this NTMS and colposcopy. There is nothing else in development that's meaningful. We're the last option for patients at this point. And I do think the FDA wants to see this product succeed and get there if we have the data to support it.

[Michael Castagna, CEO & Director at MannKind]

That's on that. On the pulmonary cell side, I wouldn't speculate yet the size or investment there. That's one of reasons we put the capital up as we get closer. We'll make the right assessment opportunity, but it's not a huge footprint, right? This is a very specialized disease.

[Michael Castagna, CEO & Director at MannKind]

I think the biggest thing is weighing, as we continue to watch our case in Japan, what do you do in the Japanese market and how do you either partner that or build it yourself? And I think those will be the key strategic questions we face over the next twelve months. As we look in those markets, there is opportunity, significant opportunity in Japan. As we look at trial enrollment KOL support, while SEMA has been in Asia for the last few weeks, there's a large opportunity there and a lot of support for clofazamine. So we're really excited about it.

[Michael Castagna, CEO & Director at MannKind]

I think it's going be a meaningful opportunity for trajectory inflection on mankind and it's coming before we blink. I mean, literally next year, close to this time we'll be hopefully seeing what the interim says and calling it knowing where we are.

[Anthony Petrone, MD - Equity Research at Mizuho Financial Group]

No, it's great. And then on Afrezza, maybe just that patient profile in pediatric from a utilization intensity standpoint, Do imagine this is going to be more mealtime or will it be even some aspect of basal plus bolus? So just trying to get an understanding of the intensity of a pediatric patient on a Fraser versus an adult patient? Thanks.

[Michael Castagna, CEO & Director at MannKind]

Mean, Nick just came from the conference here in July. I'll give you my thoughts. Then Nick, you can add any anecdotal feedback you have from the sessions. But I think parents stress a lot around hypoglycemia and insulin pumps and chasing their child down with injections. And I do believe parents will want to use Afrezza full time versus sometimes we hear sporadic use on top of an insulin pump, stubborn highs, holidays, things like that.

[Michael Castagna, CEO & Director at MannKind]

Nick, I don't know what you came back, if you want add anything from the conference in the parent engagement you Yeah,

[Dominic Marasco, President - Endocrine Business Unit at MannKind]

I think there's what we hear largely from the caregivers, which tends to be the parents or the patients themselves is, post diagnosis, the patients go through a series of steps, which is initiation of therapy, which tends to be MDI, perhaps looking to switch therapies or eventually going on an AID. And so I think that it's an opportunity for Afrezza to be plugged in at many different steps along the diagnosis pathway and the treatment pathway. I also think as Michael had mentioned, there's the opportunity for mealtime and multiple controls throughout the day. These are younger kids that tend to be active playing sports, grabbing meals as they go. And so I think the opportunity for pediatrics and adolescents will be slightly different from what we've seen in the adult community.

[Dominic Marasco, President - Endocrine Business Unit at MannKind]

And I think we're making adjustments as to how we fit into that community now.

[Anthony Petrone, MD - Equity Research at Mizuho Financial Group]

Thank

[Michael Castagna, CEO & Director at MannKind]

Thank you, Anthony. Yeah, we just see kids being so much more active and that's where inhaled insulin plays much better role for patients.

[Operator]

You. Our next question comes from the line of Yun Zhong of Wedbush. Please go ahead, Yun.

[Yun Zhong, SVP - Equity Research at Wedbush Securities]

Hi, good morning. Thank you very much for taking the questions. And the first question on Q1 study, I just wanted to confirm that I heard it correct, that you said the placebo controlled probably treatment period is not powered for efficacy? And is the goal to select one dosing regimen between the TID and BID and move it forward to Phase III? Or is it possible that both dosing regimens can move into Phase three?

[Yun Zhong, SVP - Equity Research at Wedbush Securities]

And also, what's the possibility of including active control arm in the Phase three or any requirement regarding inclusion of an active control arm, please?

[Michael Castagna, CEO & Director at MannKind]

I think it's a little too soon to speculate the exact Phase three design, but I think from the interactions we have with the FDA, you can see adding, we have to assume more drugs get approved. And I mean, one of the challenges natinib is the majority of scripts in The U. S. So it's hard to add on top of natinib and inhale natinib. So you really look at you're limited to profanidone.

[Michael Castagna, CEO & Director at MannKind]

So really do hope that there's more drugs approved over the next year and a half. So that when you run this trial, you have background therapy that you can add on top of in a placebo arm as the FDA seems insistent on a placebo control here. So it's not an active competitor as much as it's placebo compared on top of background therapy. That's our running assumption today. In terms of effect size and power in the trial and should it be one or two dosing regimens?

[Michael Castagna, CEO & Director at MannKind]

I think we're just we have some flexibility here in terms of is it two milligrams or four milligrams twice a day or three times a day? Think that's our focus is getting one dose regimen into phase three. We don't expect to see a significant difference between these two arms. But let's say there is a, as you look at the subpopulations and patient characteristics, maybe we start to see signals in one or the other and that would drive a potential dose regimen selection. But we don't expect to go at this point with two different doses in Phase three, we expect to pick one and we'll look for group analysis and sub analysis on patient characteristics is that does the BID versus TID show anything different.

[Michael Castagna, CEO & Director at MannKind]

But our overall assumption is it's probably a BID exposure and that's our working assumption, but we didn't want to get there and find out maybe TID had a better effect size or better perceptive binding that we can't see. So part of this is you're going into a nature that no one else has ventured into in terms of inhaling the tetanib and perceptive binding and directly impacting the lungs. We feel very good about that exposure, but now we just have to understand the signaling that happens in that tissue.

[Yun Zhong, SVP - Equity Research at Wedbush Securities]

I see. And then a question on the 500,000,000 loan agreement with Blackstone. Are you able to share under what conditions will be will you be able we need to draw additional capital? And would that be based on commercial or clinical milestones, please? Thank you very much.

[Chris Prentiss, CFO at MannKind]

No, so it's up to $500,000,000 We draw $75,000,000 now. We have $125,000,000 that is committed. We, for the most part, have the ability to draw that at our discretion, so there are no specific sales milestones or development related milestones that would be contingent upon. I think Blackstone just wants to make sure that this is growth capital, and we're putting this forward in a way that makes sense.

[Yun Zhong, SVP - Equity Research at Wedbush Securities]

Great. Thank you.

[Operator]

Thank you. I would now like to turn the conference back to management for closing remarks.

[Michael Castagna, CEO & Director at MannKind]

I just want to say thank you to everyone today for listening. We are very excited about where we're going in terms of the late stage development pipeline is really starting to mature. We've spent a lot of energy and a lot of money over the years to get to this point. We now have the flexible funding that we need to make sure we can grow these assets, invest in these assets as funding at late stage Phase three and a late stage Phase two is important to us and being able to kind of get to the data readouts will only create more value inflection for shareholders and patients. And so we're very excited about those late stage assets and the opportunity coming at us with peds.

[Michael Castagna, CEO & Director at MannKind]

That's now on file. That clock is ticking and we'll continue to update you guys on those opportunities. And thank you again for your time and look forward to follow-up questions in investor meetings in September.

[Operator]

This concludes today's conference call. Thank you for participating. You may now disconnect.

Participants

Executives

• Michael Castagna, CEO & Director
• Chris Prentiss, CFO
• Wassim Fares, SVP, Therapeutic Area Head - Rare Lung Diseases
• Dominic Marasco, President - Endocrine Business Unit

Analysts

• Olivia Brayer, Director & Senior Biotech Analyst at Cantor Fitzgerald
• Faisal Khurshid, Senior Research Analyst - Emerging Immunology at Leerink Partners
• Andreas Argyrides, ED & Senior Analyst - Biotechnology at Oppenheimer & Co. Inc.
• Brandon Folkes, Managing Director at H.C. Wainwright & Co.
• Anthony Petrone, MD - Equity Research at Mizuho Financial Group
• Yun Zhong, SVP - Equity Research at Wedbush Securities