MannKind Corporation

Good afternoon, and welcome to the Mankind Corporation 2023 First Quarter Financial Results Earnings Call. As a reminder, this call is being recorded on May 9, 2023, and will be available for playback on the Mankind Corporation website shortly after the conclusion of this call until May 23, 2023. This call will contain forward-looking statements. Such forward-looking statements are subject to risk and uncertainty. which could cause actual results to differ materially from these stated expectations. For further information on the company's risk factors, please see their 10-key report filed with the Securities and Exchange Commission this afternoon, the earnings release, and the slides prepared for this presentation. Joining us today for Mankind are Chief Executive Officer Michael Castagna and Chief Financial Officer Steven Binder. I would now like to turn the conference over to Mr. Constagna.

Please go ahead, sir. Thank you, operator.

Hope everyone is having a great afternoon. At Mankind, our mission is to give people control of their health and the freedom to live the life, and what we call that is life more humane. We're really excited about our first quarter highlights of 2023. Number one, our UT collaboration is strong. Patient demand has driven royalty revenue growth of 29% versus Q4 of 22. We're currently undergoing manufacturing capacity expansion, which I'll talk later in this call. And our pipeline is quickly moving ahead with inhaled clopidazomine going into adaptive phase 2.3. And we had a very successful pre-IND meeting with FDA on Mankind 201, in which we received written comments on how to proceed. Our endocrine business, underlying business, the strong with the friends are growing 26% versus 2022, and we had sequential growth over Q4 versus the traditional decline that we see in the new year. Additionally, we are kicking off our first large phase four trial in an inhaled rate called pump sparing, which is going to be head-to-head against the standard of care, and that should be enrolling hopefully late this quarter, early next quarter. And in Vigo, we dropped that product in our Fresno sales bag starting in Q1, and we expect to continue to grow throughout Q2 and beyond. From a liquidity perspective, we had $167 million in cash on hand, which is only a $6 million decrease from the end of last year, and our net loss per share decreased by 60% versus last year as well. So you can continue to see the progress we're making in our growth engine versus managing our cash balance. The base of DPI is strong patient demand. As a result, there's several things we've put in place this quarter that should continue to drive strong uptake and support of the demand that UT is asking. Number one, we've improved our current manufacturing process by doubling our bulk spray drying capacity. This was the rate limiting effect right now in terms of continued increased demand that we wanted to make sure we addressed before we hit any supply constraints. We expect this to be online in June. Additionally, we're increasing yield and throughput when it comes to the fill finish and the packaging as well. All of this means that we should see an improvement in our inventory ability to supply by over 200% in the second half of 2023. Additionally, we are building out a high volume capacity expansion that we expect to be online in 2024. This is around scale-up bulk spray drying capacity for the possible IPF indication as well as additional cartridge and blister fill capacity will be done in this expansion. From a revenue expectation, we saw strong patient growth here in Q1 and Q2. We expect for every 10,000 patients, annual revenue to mankind should be between 200 and 240 million, which would include the collaboration of services as well as royalties. On our endocrine business, Operationally, we look at Medicare as $35 copay that happened in January 1st of this year is driving favorable impact in Q1. We continue to see these patients grow and impact in our business as we look at Q2 and beyond. We had lower Afreza gross to net as we continue to shift our direct purchase orders to specialty pharmacies out of the wholesale channel. And now our sales force has been cross-trained, and we have about 65 reps selling both Vigo and Afreza, and about 15 reps selling Vigo only. As we've previously communicated, we anticipate the endocrine business units will be breakeven by GAP by the end of this year. Additionally, we're trying to really enhance the scientific understanding of what's present, and we have three trials that we're expecting to read out over the next 12 months. Number one, inhale one, we have over 35 sites, and we've seen a lower patient dropout than expected. Inhale two, which is what we're referring to as the syphilis phase three trial for India, we expect that data readout here momentarily in the next few weeks. I don't know if they will publicly announce or present the data at a future conference, but we will at least know the data as we go into a filing for the second half of 2023. And in Hale 3, we're calling PUPS Sparing, which is a Fresa, Tristeva, Dexcom, hence the 3, versus Standard of Care. This will be the largest adult trial we've done with top-tier KOLs across 20 U.S. sites. As we look at VGOV, NRX is our leading indicator, which grew for the first time in two years. We made several changes coming into 2023 that impacted our TRX. Number one, we canceled the cash pay card, such as a good RX that could be administered at the pharmacy. Number two, in April, we ended our free goods program. And number three, we upped our copay card a little bit so that patients have to share a little bit more in the cost as we go forward. All three of these things combined would have impacted Q1 TRXs. But as we look at NRX being our leading indicator, we can see continued growth from this point forward now that we've integrated into the Afreza Salesforce. Therefore, we do see we're on track to meet the high end of our forecast, $18 to $22 million. As you look at Afreza, in 2022, we really focused on accelerating NRX growth. This was a complete shift from top to bottom of the organization, and it was a major focus of our Salesforce. And you can see every quarter we continue to improve NRX growth, which is what we needed to see, happen faster than TRXs in order to grow TRXs. And you can see NRX, again, is the leading indicator here, as you see Q3, 18% growth NRX, 10% growth TRX, and continuing on for Q4 and Q1. So a lot of the Q1 upside has been the Medicare $35 copay, where we're seeing over 90% approval rates through our reimbursement hub. As we close out the first half, we see several key milestones in the first half go into the second half. We've already completed the first two, which is Figo and the Apresa Salesforce bag, and Medicare $35. Additionally, we have INHALE 3 kickoff. We expect to have our investigator meetings here in about a month and kick those patients off, hopefully in Q2, going to the Q3. In Q3, we should have our BlueHail Viz launch, which is the visualization to integrate with Dexcom CGM data with our inhaler. And in Q4, we expect to be fully enrolled with INHALE 1, fully enrolled within HealthREIT as we close out the year. Now I'm going to turn it over to Steve.