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spk09: 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.
spk08: Please go ahead, sir. Thank you, operator.
spk04: 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.
spk06: Thanks, Mike, and good afternoon. Pleased to review select first quarter 2023 financial results. Please supplement this call by reading the condensed consolidated financial statements and MD&A contains our 10-Q, which was filed with the SEC this afternoon. Our total revenues grew 239% versus first quarter 2022, which highlights the revenue growth associated with Tidasa DPI and, to a lesser extent, our endocrine business. Revenues from our collaboration with United Therapeutics totaled $23 million in the first quarter of 2023, which is made up of royalties of $12 million and collaboration with services revenue of $11 million. Royalties earned on the net sales of Tidasa DPI of $12 million was a result of strong patient demand and a low double-digit royalty rate. We recorded $11 million of collaboration and services revenue in the first quarter, which was over four times the revenue of a year ago. We were not yet manufacturing commercial product for UT and deferred much of our revenue for recognition later in the manufacturing contract life. Moving down the table to our endocrine business, total endocrine revenues were $18 million, which are made up of a Fresa net revenue of $12 million and Vigo net revenue of $5 million. A spread to net revenue of $12 million compares to $10 million in 2022, a growth rate of 26%. The growth is mainly driven by higher patient demand, with underlying paid TRX growth at 26% year-over-year and higher price, including a more favorable growth to net adjustment. Our growth to nets went from 39% to 38%, reflecting a continuing shift from using full-line wholesalers using specialty pharmacies with lower fees. Net revenue from Vigo was $5 million for the first quarter of 2023, and there was no comparison to the prior year due to the product being purchased in the second quarter of 2022. Since acquisition, Vigo net revenue has totaled $18 million and is on track to achieve the high end of our original forecast of $18 to $22 million for the period of 12 months post-acquisition. The next slide shows our revenue growth by source on a quarter-by-quarter basis from the first quarter of 2022 to the first quarter of 2023. The mix and growth of revenues has significantly changed over this period as we've added Tyveso DPI royalty revenue, revenue associated with the commercial manufacture of Tyveso DPI, and sales from Vigo, all starting in the second quarter of 2022. Looking across the time span, Our first quarter of 2023 total revenues grew 239% versus the first quarter of 2022, reflecting not only the new sources of revenue, but also the strong growth in Tyvesa DPI-related revenues. The next slide shows the impact that cash inflows associated with Tyvesa DPI have had on our cash, cash equivalents, and investment balances. You can see the inflection point happening in mid-2022. Starting with the third quarter of 2022, our cash investments quarter-on-quarter change was only in a single digit, the first quarter of 2023 being reduced by only $6 million. We continue to tightly manage our cash outflows while benefiting from the increasing revenues associated with Tyvesa DPI and our endocrine business to move the company towards profitability and being cash flow positive. Also note that we have started to increase our investment in the development of our product pipeline, which is quickly becoming our next lever of shareholder value. We believe that our current level of cash, cash equivalents and investments, plus anticipated operating cash inflows and outflows, will allow us to adequately invest in and grow our business without a need for any follow-on stock offerings. And finally, we haven't spent much time on EPS in the past, But as we grow our revenues and manage our expenses, the loss per share has been significantly reduced as we progress down our path to profitability. The first quarter loss per share of 4 cents versus a loss of 10 cents per share in the first quarter of 2022. Thank you, and now I'll turn it back over to Mike.
spk04: Thank you, Steve. As you all can see, we have a very robust product pipeline in addition to our market of products. We expect to be able to file an Indian in the second half and hopefully get ready to relaunch back in Brazil early next year. As we look at the pipeline, colfazomib is on its way to get into patients here in the second half, and the tetanib is really moving forward quickly as we just received dosing data in our important model, as well as the tox data is ongoing. We expect to be able to put this product in humans late this year, early next year. DNA cells and TGS beta continue to progress nicely, and we'll have updates on those as we progress the year. Part of the story we always get from shareholders is what's next? We don't believe we have a lot of value in our company as we look at our pipeline momentum building over the next 24 months. We have several studies on Apresa, which is basically redoing a lot of the work that was done over a decade ago with the new insights around dosing and how do you titrate up quickly and manage basal at the same time. These new studies are based off the small pilot studies we've done over the last five years, and we're excited to see these results in the near future. On the orphan side, We have several assets moving forward development over the next 24 months, as you can see here, going from IMD to Phase I to submission to Phase I, and continue to progress this very rapidly. As I look out, I wanted to bring you some perspective on how these key value drivers create shareholder value as we go forward. The first is the pipeline. Mankind 101, we expect a dose. This trial should take roughly 24 months in terms of dosing and enrollment. For every 1,000 patients, once this is approved, we would expect approximately $100 million in revenue. This is an orphan disease that has somewhere between 60 and 100,000 patients alone here in the US. Mankind 201, we expect to be dosed by the first half of 2024 and progressing rapidly into phase three from there. Tyvesa DPI, for every 10 patients, royalties and collaboration and service revenue should be in the range of $200 to $240 million in revenue. And we remind you, UT has a study readout for idiopathic pulmonary fibrosis that would be upside to these forecasts. And in our endocrine business, we have pediatrics. When we look at diabetes over the last 20 years, innovation continues to happen with kids. We really do believe once we get these results, we should be able to help a lot of children and parents manage their kids' diabetes. And every 10% market share there is roughly $150 million in additional revenue on top of what will be at that time. We're excited about the India launch upcoming and the data readout there, as well as this new pump sparing study that we're doing, to really show not that pumps are good or bad, but that there's an opportunity to delay using an insulin pump and start with an enhanced insulin and delay the skin damage that can occur over the next 30, 40 years. We've put a stabilization and growth plan in place. You're starting to see the early fruits of this labor. As we look at the Type 2 market, one of the things we do see is a lot more people coming in with insulin delivery devices in Type 2, and that should rise all the time. So thank you for that. We will talk about our annual shareholder meeting. Mankind annual meeting will be May 25th at 10 a.m. This will be conducted live via the Internet to reach more shareholders, as we typically are seeing three, four times more shareholders dialing for this than we had in a live meeting, and hence why we wanted to go this route. For those shareholders interested in joining us to see Stanbury at some point in the future, please reach out to our investor relations. All information on this meeting and instructions for voting can be found on your website or our proxy. And there are several proposals that need to be voted on that were endorsed by the board and ISS, supporting all eight proposals. I want to close out just letting you know over the next two or three weeks, there are several RSU grants that are scheduled to vest that were granted in years past. As a result, you will see multiple Form 4s being filed by executive leadership team members to reflect these vesting events, as well as to sell to cover transactions that will be conducted under 10b-5 trading plans that they set up last year to cover their tax liabilities. Rest assured that we all believe in the long-term future of mankind, but the IRS expects to be paid in cash when our issues vest, so we need to address that obligation. I just want you to have some context for the various forms that you'll see throughout this month. I want to thank you again, and we will open up for questions.
spk09: Ladies and gentlemen, if you have a question or comment at this time, please press star 1-1 on your telephone keypad. If your question has been answered or you wish to remove yourself from the queue, simply press the star 1-1 again. Again, if you have a question or comment, please press star 1-1 on your telephone keypad. Please stand by while we compile the Q&A roster. Our first question or comment comes from the line of Oren Livnat from HC Wainwright. Mr. Livnat, your line is open.
spk01: Hi. Thanks for taking the questions and congrats on another strong quarter. So I listened to the United Therapeutics call, and I guess I couldn't have been any more bullish about Typhesa DPI highlighting that demands, I think, even outstripped expectations, which has actually led to some surprising dynamics with inventory and demand at specialty pharmacies not being able to be satisfied. So can you just confirm for us your expectations that through this year as you execute on the capacity expansion initiatives you highlighted in the script, and then the bigger expansions next year. Are you confident that you can meet all the demands through the rest of this year and into next year? And I have follow-ups. Thanks.
spk04: Thank you, Warren. Can you hear me okay, hopefully? Yep. Okay. So, yeah, obviously we tried to give a little bit extra clarity on this call given the UT comments last week. I think as far as we can look out, we've been close with UT on a daily and weekly basis to make sure we're supplying patients every time. We made some changes here in Q2 that will be in effect and should be in full production mode by June. Those are happening as we speak and that should make sure we have more than enough adequate supply and at the same time allow the pharmacy to build up the contracted inventory that UT has mentioned in the past. We weren't as close to some of those contracts and what that obligation was. As we went up the door last year to launch, the launch took off very fast. I think the conversion's going very well. The new starts have gone well. I think overall, you know, it's meeting and beating expectations, and we had to make sure we increased our ability to continue to supply in the second half of this year, which we're doing, and again, nothing in the short term do we see any impact. It's really getting ahead of long term, and as that patient base builds, we should be more than comfortable to be able to supply from now all the way through the future.
spk01: Okay, and I guess you sort of segued into my next question, you know, speaking longer term, I was surprised on their call to hear that they are, in fact, investing half a billion dollars to build their own UT-owned plant for Tyveso DPI to, I guess, triple or even theoretically quadruple your expanded capacity even for next year. So I guess just, you know, you did highlight the you know, 200-plus million in revenue from every 10,000 patients. And I guess if they're already investing behind that now, it must mean they're pretty confident in some pretty extreme growth potential. So how are you planning for the longer term with, you know, a real possibility of an extra couple hundred million a year in royalties coming in the door? How are you planning for investments on your end now that, you know, we're coming not only out of cash burn but into, you know, pretty – a pretty big surplus, whether it be a pipeline investment, M&A, and on the flip side, have you even thought about potentially breaking up and maybe selling for some large amounts of dollars the franchise to UT?
spk04: Yeah, lots of questions on that. Yeah, yeah, sorry.
spk01: Run-on question.
spk04: You know, I think... We wanted to show kind of what every 10,000 patients equal because, you know, whether you want to assume it's 10,000, 25,000, 75,000, you can see this is a meaningful engine growth driver for Mankline and our shareholders. I think, you know, any company who's going to have a billion-dollar-plus product wants to have a reliable, consistent, and backup supply. So we're fully supportive of UT build out of a second facility because, as you know, you've been to Danbury. It's a wonderful facility. It's large. It can do a lot, but it's one facility. And so I think if you're really looking at the future where UT is going, having a second facility come online as a backup, whether we're the backup or they're the backup, I think all that's going to be years in the making. It's not going to, you know, these things take five to seven years to build sometimes and certify. So I think we've got time to worry about some of those details, but at the end of the day, there's definitely things we're doing in IPF on the scale up that could increase you know, the capacity within Danbury to more than meet the needs over the next three to five years. So we feel very good about Danbury meeting current demand, UT having a backup facility or a second facility as they look at increasing global supply. It's all net positive for everybody and ensuring continuity of care. In terms of what Mankind will do with that excess capital coming in, I think you see we've been building a pipeline over the last four years in anticipation that Tyvesa would do well, Mankind would be able to self-fund our R&D and ultimately launches because, believe me, we'd all be happier as shareholders and employees if the money coming out of the door at WDUT was going to Mankind. And I think that's one of the things we want to make sure we can do, whether it's NTM, it's Natendem. These are real assets of real value that we've been building for the last three, four years and will now finally be starting to enter patients and launching over the next three to five years. So... So we're excited about the future and the capital deployment. And that's our number one job, right, is to make sure we are appropriately deploying that capital to drive the best opportunities for growth. And you look at the company, we've done a lot when we didn't have a lot of capital. Now imagine what we could do to drive faster growth. Now that we do have adequate capital, and that's what we're doing. We're taking a bet, for example, on NL3. It's a small bet, but it's a big bet that you could show you're as good as an insulin pump or better. We could take those types of bets, but that's how you're going to really change for the company.
spk01: All right. Thanks. I appreciate it. Back in the queue. Thank you.
spk09: Thank you. Our next question or comment comes from the line of Brandon Folks from Cantor Fitzgerald. Mr. Folks, your line is now open.
spk07: Hi. Thanks for taking my questions and congratulations on the quarter. Maybe just following on from the prior question, can you just help us think about the UT announcement versus potential future Danbury expansions? Was this always contemplated, and would UT have an obligation to buy from mankind first and then use their own facility as a backup?
spk04: Thank you. I think it's too early to speculate some of the supply chain contracts. We have a 10-year supply agreement with UT. They've invested a lot of money in the plant and the people. I don't see that changing in the near term or in the midterm. You know, as you look at the pipeline, we have a couple assets we're moving into Danbury for manufacturing, for commercial. And so there's going to be a lot of activity positive in Danbury regardless of UT as we look out in the future. And, you know, we would expect to be able to continue to supply out of Danbury. There's some unique capabilities there that take time to duplicate as if we're a single-purpose facility and the only one of its kind in the entire world. So there's a lot of work to get ready to do that a second time.
spk08: Thank you. Thank you very much. Thank you.
spk09: Our next question or comment comes from the line of Gregory Renza from RBC Capital Markets. Mr. Renza, your line is now open. Hi.
spk02: Can you guys hear me okay?
spk08: Yes.
spk02: Hi, Mike and team. It's Anish on for Greg. Congrats on the progress this quarter, and thanks for taking my questions. Just a couple from me. Firstly, on the new Youth Their Own facility to support growing demand for Tyvese with DPI and continued ramp-up of commercialization. Could you remind us of any economics or incentives in place in the degree of your involvement to get this facility up and running? And I do have a second question.
spk04: I think we have every incentive to make sure the facility is up and running as UT gets ready for the IPF. I hope that that indication goes well. That's a huge upside to everybody, and I think that's enough incentive for us to make sure we meet the timelines. We started this a long time ago. Honestly, some of the beginning equipment that's important for the scale just arrived yesterday. So we're installing the equipment to build up moving forward. We're super excited. The team's working night and day to make sure it's ready. And we'll be validating that equipment here in the fall and hopefully having a commercial product come off it at some point in 2024.
spk02: Great, great. Yeah, thanks for that. And then secondly, just on the macro side, do you have a sense of how the current inflationary environment has affected OPEX in terms of relative change in capital costs over the past 12 to 24 months, just to get a sense of any potential factors from under the covers. Appreciate it, and thanks again.
spk06: It's Steve Binder here. I'll take that one. Inflation and our costs are probably up in the low single digits, nothing that's unusual in the marketplace. We don't see anything unusual coming our way on the manufacturing side or the OPEC side. So planning purposes, I think that should be fine if you're modeling that out.
spk09: Great. Thanks. Thank you. Again, ladies and gentlemen, if you have a question or comment at this time, please press star 1-1 on your telephone keypad. Our next question or comment comes from the line of Thomas Smith from SVB Securities. Mr. Smith, your line is open.
spk00: Hey, guys. Thanks for taking the questions, and congrats on the progress during the quarter. Two questions from us. First, can you comment on whether you're seeing any impact to Afreza from some of the price reductions that were announced for injectable insulins earlier in the year? And then, secondly, you know, we saw the strong data for cetatercept and PAH back in March. Just wondering if you could comment on how you see potential cetatercept approval affecting tidase or DPI use, either positively or negatively. Thanks.
spk04: I think, let me take the first one on Sirtanisib. I want to defer to UT in terms of, you know, they're the experts in the pH market. I think it's a great drug. Everything I've seen is being used in combination. There's 50,000 patients in pH. I think there's enough room for everybody. And, you know, for us, Avaza GPI is off to a very strong start. And, you know, I think that's the best use for patients and mankind in UT. I'm sure this probably will have a place in the market when it's approved, and I'll ultimately defer to UT on how that best looks. On Afrezza, the insulin price reductions have not had any major impact or even small impact on mankind. In fact, we're having some of our best weeks over the last month in terms of demand and outflows that we see in wholesalers. So from our perspective, Afrezza is on track to meet our expectations. We don't see any risk as it pertains to the insulin price declines that happened by Novo, Sanofi, and Lilly. And you have to note that they only took those prices on drugs that were exposed to Medicaid penalties in 2024. They did not reduce the price of their innovative basal insulin. They didn't do it on the non-interchangeable Basaglark, for example, and they didn't do it on Fios and Lumgev. So all the legacy insulins, all the newer insulins that have been approved the last five to ten years, have not had price reductions. It's only the 20-year-old products that are really exposed to Medicaid best price and Medicaid penalties for the price increases they took. So a lot of companies are going to have to deal with that in 2024. I'm sure the first couple were these three because they're the biggest in terms of what's happened over the last 20 years. However, we've looked at our numbers, our price points. We're comfortable with it. We think our value proposition economic support to payers is warranted. And that's another reason why we're going out to do the studies we're doing to hopefully show, you know, cost of an insulin pump plus better timing range plus A1C leads you to this total cost of care. So we think that's really important to payers, not just in the U.S., but globally. But we don't anticipate any fundamental changes to AFREZA. We're seeing strong growth as we closed out March and April, and we expect that to continue the rest of the year.
spk00: Got it. That makes sense. Thanks for taking the questions, Seth.
spk09: Thank you. Thank you. Our next question or comment comes from the line of Stephen Lickman from Oppenheimer. Mr. Lickman, your line is now open.
spk05: Hi. Evening, guys. Question on Vigo. Now that it's been in the field for you guys for several quarters, are you seeing cross-selling building with Afrezza? And do you see opportunities
spk04: uh looking ahead for those types of synergies uh you know particularly with with vego uh stabilizing it as you mentioned right yes steve thank you and i know you've followed vego for a long time um you know we we committed 18 to 22 million last may we're hitting the high end of that 22 uh as we expected i think the question is how do we go from 22 to beyond and i think it's really important that you know we just put this in the sales force we know it takes three to five months for those reps to get lunches, in-services, follow-up, nurse training. All that's been happening. We're hearing really good progress locally on the front line. So I think that's important. We're seeing some early indicators with the NRXs that that's positive. We've got to, you know, unfortunately offset that with the white space where there's TRXs dropping off due to either the commercial changes we made to increase the profitability of the asset. And that's been our main focus here is how do we optimize Vigo given the cost structure of the manufacturing, the rebates that are paid to payers. So, for example, removing the patient hub really focused on retail. It's a very different product than a FREZA where we're pushing patients to a reimbursement hub and not rebating. And so, you know, there are two different models. We've kind of executed that at our Salesforce level. I think we are hearing that Vigo doctors who have written Vigo historically are opening the door for a FREZA. Our reps are getting into places they would have never gotten in. which was part of our strategic move. And that integration just happened in the last 12 weeks. And I think we'll continue to see positive impact on Afrez as a result of that integration, but also continue positive momentum on Vigo as we close out Q2 and beyond. It's a great product. I've seen it firsthand. We've had some recent ad boards. We think if you look at Omnipod Go, in fact, some more type 2, I'll call it insulin delivery devices, come into market. That should rise everybody up in terms of demand in Type 2. We think we have a very simple-to-use patch pump. You know, at the end of the day, it's an incredible product. Fresno's an incredible product, and now we have reasons to show up to offices, you know, across 7,000 customers. And so that's really been our major focus this year is narrow our focus and go deeper with customers, position Vigo for Type 2 and Fresno for Type 1. And that's happening consistently as we look out every week.
spk05: Great. That's helpful. And then, Steve, gross margin looked firm again this quarter. I apologize if I missed it, but what was the AFREZA gross margin in particular as we disaggregate that from Vigo? And what's your outlook sequentially as we look forward here on gross margins?
spk06: Steve, as we've combined Afreza and Vigo into the endocrine business unit, we're going to be just disclosing endocrine product gross margin going forward. So as you can see, it's just under 70% for combined. We disclosed this in prior quarters. You can take those gross margins from a modeling perspective, and I think that would put you in the ballpark going forward.
spk05: Okay, fair enough. Thanks, guys. Thank you, Steve.
spk09: Thank you. Our next question or comment comes from the line of Anthony Patron from Missoula. Mr. Patron, your line is open.
spk03: Thanks, and congrats on another good quarter here. A couple just on looking ahead to ADA in the next month or so here, just what we should be expecting from Mankind A, and then B, just overall when we think about the discussion on GLP-1s, Ozempic Mujaro, some other products out there, and just how that plays into timing for utilization of insulin in type 2 patients. Just can you maybe level set us there on what we should expect into ADA, and I'll have a follow-up question.
spk04: Sure. Anthony, great to hear from you, and thank you for joining us today. We just came out of ACE last week, which is the other diabetes conference every year, and It was really nice to hear people like Earl Hirsch, who's world-renowned, announce from stage that he personally is taking Afrezza. That gave us a lot of proud moments. We've worked really hard with him and others over the years. And to finally see physicians living with type 1 starting to use Afrezza after eight years on the market kind of gives us some good excitement, and his experience was wow. I think that's what his quote was from stage. And that sparked a whole bunch of questions around how to use it. Do you use it on top of a pump? When do you use it? So I think we're starting to get in the context of conversation, which is really what's been missing for Fresno for many, many years. As we look to ADA, we have one small presentation on the ABC trial, which was the pump switch trial. I think that'll be a poster, if I recall. We are going to be present there. We're going to have lots of dinner events, one-on-one customer engagements. Don't expect a large booth presence there. We kind of redistributed that investment at the dinner events and one-on-ones. But otherwise, you know, we'll have a presence at ADA. I'll be there, and I think it'll be quite a busy meeting. We're going to focus on the nurse practitioners, nurse educators, diabetes educators the rest of the year. Those are deeper focuses for us as we go forward. Your question on GLP is a good one, which is, you know, we do know GLPs are only delaying insulin for type 2s that much further out. We already know for the time a patient needed insulin, So the time they got, I think it was about a seven to 10 year delay based on history. So it's probably just going to make that another year or two longer because what I'm hearing from customers is, yes, the GLPs work amazing, but they still need postprandial control. And that's one of our main focuses, whether it's Vigo or Fresa, you still need better postprandial control. You need to cut those highs down if you're going to improve time and range. And we're the only insulin that really gets the outside. It works in the body. The data is showing at ADA and the data showed at ATTD. We work 30 minutes faster than the current gold standard. We reduce those highs substantially. And so that's not going to change. We have a nice competitive differentiated profile. How do we start to make customers understand that? That's a big focus as we launch our INHALE-3 trial with 20 top centers in the US around understanding the product, the product profile, the dosing, and ultimately what that means to a patient. So GLPs will do great. They're great drugs. I think there'll be a study we're looking at, maybe an investigator's trial. You know, how do we use a GLP plus a Fresen, right? That's probably the areas we want to try to help patients who have stubborn highs to bring their mealtime down. So I hope that helps bring some clarity.
spk03: Tell everyone a quick follow-up would just be on the blue hail launch with Dexcom CGM. Just to clarify, I'm assuming that would be with Dexcom G7. And maybe just thoughts on, you know, how that can trend starting in 3Q. And when you think about utilization with CGMs, is there a potential that we could see a collaboration also with Abbott for that product? Thanks.
spk04: Look, I think when you look at where diabetes is going, it's finally getting easier. It's never going to be easy for patients. But to think about once-weekly basals, once-weekly GLPs, inhaled insulin, we're starting to get to really a differentiated place in life where someone's not sticking their fingers, they're not sticking their skin, they're not having to wear insulin pumps every day. It's really exciting when we look at it over the next 12 months. I think in the context of Blue Hill, one of the things we're excited about is we're finally going to have our own digital platform where we integrate CGM along with the dosing of Afrezza, your inhalation effort, and start to show you what's happening real time. And then you can download those reports and send them to your doctor. So that's in beta testing right now. We'll kind of get through the next 8 to 10 weeks, make sure it's all tight. And you're right, it's currently with Dexcom G6 or G7. And we would fully expect Abbott to allow us to have Libre API at some point in the future. We're not there yet. We've been in discussions with them. I expect that we will get there. It just probably won't happen at the same time from as Dexcom. But, you know, we're going to be using BlueHail hopefully in the trial and collecting some of this data real time. showing what value it can bring to patients.
spk03: Okay, helpful. Thank you. Congrats again.
spk04: Thank you, Anthony. Nice hearing from you.
spk09: Thank you. Our next question or comment comes from the line of Oren Livnett from H.C. Wainwright. Mr. Livnett, your line is now open. Oh, sorry. The operator cut out.
spk01: Can you hear me?
spk04: We hear you already. Sorry, I wasn't growling. I was clearing my throat.
spk01: I just wanted to follow up on 101. You mentioned that's going to be a 24-month study, so I know there's no rush on that, but I think on the last call you mentioned as we get into this year towards Q2, maybe we can get some more color on that study and design and expectations. I'm wondering if you're able now to give us just even if it's just big picture, you know, what are you trying to accomplish in that study? How are you trying to differentiate from existing treatments? And, you know, how do you imagine, if you see what you want to see, 101 differentiating in the marketplace? And I guess, I guess longer term, how you think, you know, market share, you know, I don't want to get into specifics, but just, you know, where you think it differentiates from the existing markets?
spk04: Yeah, no, thank you, Oren, for asking a one-on-one. I think we've had a lot of research coming in with doctors that we're doing in the U.S. and Japan specifically. And I think the first thing with differentiation that, you know, it's turning out to be a real good competitive advantage is our 28 days of dosing. So we're planning to dose for 28 days straight, stop for two months, and then dose again. So a patient is only going to need two dosing cycles on a nebulizer for two months straight. We're continuing to work on the dry powder formulation. That will be a life cycle management play. But in terms of pure differentiation from the only currently available approved NTM treatment, we feel very good about that first step. The second step is going to be around tolerability. And so we believe, we know Clovasme is a well-established agent out there. People love the product. It's used globally through an expanded access program from Novartis. And so doctors know it, and they know the challenges with it around drug accumulation, QT prolongation, and accumulation of skin discoloration. We really do believe lowering the dose dramatically like we are in our formulation, we will minimize or remove those types of concerns, and that will be one of the key pivot points we want to understand in the trial. The other parts we'll be looking at will be sputum conversion as well as quality of life. As we know, those are important aspects for the FDA. Less important outside the U.S., but more important for the U.S., and we'll collect that data. The trial size is roughly 180 patients. I'm comfortable sharing that at this point. And we will study a high and low dose of clofazamine versus the standard of care. And so we're not – we're just going to take people on general background therapy and randomize them one-to-one-to-one. protocol that's going into the FDA that we've had multiple discussions with, and it's really exciting. So anyway, from the time that IND is approved, we will be activating sites very shortly thereafter, and clinical supply will be available at that time. And the tox studies going on for one year will also be wrapping up. So we'll be able to dose patients for a year and get chronic dosing in this trial. The primary endpoint will be six months. I think that You know, from an overall product, we're excited. We think it's going to serve a unique need in this market. And we are going after pretty much, you know, after you're on GBT and not responding. So earlier line of treatment.
spk01: So is there a particular type of patient you're aiming for to recruit into this study in particular? Oh, and if it works and you see what you want to see, how much of a registration package do you think this one, I guess it's a phase two slash three? do you think this study could represent? Do you have to do another pivotal after that?
spk04: No, because it's a 505B on a repurposed drug, we only need one pivotal trial. We're calling it a phase 2-3. There's really not a stopgap, I'll say, from phase 2 to phase 3. It's a continuous enrollment all the way through. So from that perspective, it's pretty straightforward. The FDA has indicated that a single trial is appropriate. Probably the biggest part that we're working on is, How do you show the correlation of quality of life, dispute of conversion, positive and negative? And there's some data generated around the world that we're trying to make sure we analyze as we finalize the statistical design, which, again, doesn't have to be done until the trial database is locked. So we have time to get that data, generate that data, present and publish that data. That will be really important to the package at the end of the day. But right now we're focused on getting the trial off the ground. as soon as possible. And, you know, sites are very interested. We have inbound calls from sites asking to participate. So we're excited. We think there's going to be, you know, I always feel like trials never go as planned. They always take longer. But so far we've had luck with ABC, NHEL-1, NHEL-3. We've had a lot of inbound. So we feel pretty good that mankind is doing good trials. We're getting more and more experience running these trials. And we're learning how to take appropriate risks as fast as possible. all right appreciate the out of color thank you thank you i'm sure no additional questions in the queue at this time i'd like to turn the conference back over to mr castano for any closing remarks uh thank you everyone for dialing in today it's been a great quarter we're only in the first quarter which should be a phenomenal year for uh our employees our shareholders and all of our stakeholders and ultimately the patients we serve we have multiple avenues of growth It's an exciting time to be here. We're hiring great people. We're having higher and higher quality job applicants. Jobs are filling. People are not leaving the company. It's just a great time to be here, and we're very, very excited about the patients we're helping, the demand we're seeing on Tyveso, the demand we're seeing on Afrezza, the early trends of Vigo and the pipeline. We're really firing all cylinders this year, and it's been a long time to get to this point, but we see nothing but very positive momentum as we go into Q2 and beyond for this year, next year, and years to come. come. So thank you, everybody. I know it's been a long ride for our shareholders, but you should finally start to see the fruits of all the labor that we've been investing in over the years. So thank you again and have a great week, everyone.
spk09: Ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may now disconnect. Everyone have a wonderful day.
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