MannKind Corporation

Good afternoon and welcome to the Mankind Corporation 2024 First Quarter Financial Results Earnings Call. As a reminder, this call is being recorded on May 8, 2024 and will be available for playback on the Mankind Corporation website shortly after the conclusion of this call until May 22, 2024. This call will contain forward-looking statements. Such forward-looking statements are subject to risk and uncertainty, which can cause actual risks to differ materially from these stated expectations. For further information on the company's risk factors, please see their 10Q report filled with the Securities and Exchange Commission this afternoon. The earnings released in the slides prepared for this presentation. Joining us today for Mankind are Chief Executive Officer Michael Castana, EVP and former Chief Financial Officer Steven Binder, and Chief Financial Officer Chris Prentice. I'd like to turn the conference over to Mr. Castana. Please go ahead, sir.

Good evening, everyone, and welcome to my 28th earnings call. I'm thrilled to report another exceptional quarter of growth for mankind. Over the past eight quarters, our revenue has surged by over 250%, a testament to the dedication and innovation of our team. This puts us on a run rate of over $250 million in revenue for 2024. We have made tremendous progress in the field of inhaled insulin that we believe will continue to be a growth driver for years to come. I'm also excited to share with you our progress in addressing rare orphan lung diseases today. Thank you for joining us in this journey of growth and societal impact around the world. Just to remind everyone, our mission at Mankind is to get people to control their health and the freedom to live life. When we think about that, it translates into how our products make a meaningful impact on patients every single day. As I look at Q1, we had record Tabeza DPI revenue of almost $48 million due to strong sales by United Therapeutics and record production Q1 as we continue to scale up the expansion facility we've been building over the last several years. Number two, Mankind 101 made several strategic advancements with the IND being cleared, fast track designation, as well as a setup to meet with the Japanese authorities. to get a clearance on how we expect to pursue Japanese registration approval down the road, but also activate clinical trial sites in the second half. 201 also received the green light to proceed to phase one. We expect that to start momentarily. In our diabetes business, things are going nicely, given the upset that we all had with changed healthcare. As we look at April, we're growing 7% on volume year over year, And we believe the challenges that happened in Q1 will be behind us as we look at Q2 going forward. And I'll provide more comments as we get into the discussion today. And on the financials, Steve will go into great detail, but I want to say thank you for all the work that the team has done as we end the Q1 with $304 million in cash, which was $2 million above the previous quarter, and gap that income of $11 million and continue to reduce leverage as we came into Q2. On Mankind 101, we are moving into a promising area. As we think about our nebulizer version, we are next on deck for this product to be developed and be a key part of NTM treatment worldwide. When we look at the NTM prevalence, this is continuing to grow and the unmet need exists around the world. And we believe this will be over a billion dollar opportunity with two players over the coming years. Patients are suffering greatly, and we're gearing up to hopefully bring them a new solution. As you can see in this chart, the unmet need really focuses on the U.S. and Japan, which is where 80% of our clinical trial sites roughly will be. As I share with you here, our ICON1 phase three study design, we'll be having our investigator launch meeting here next month to really talk about the study design and the expectations for this trial And the interest is growing as we already have about 80% of the sites identified who are currently gearing up through the contracting process with our hopes to enroll our first patient by the end of Q2. We've aligned with the FDA on our co-primary endpoints. Our phase three is progressing. And I want to remind everybody that we have 12 years of exclusivity between orphan and QIDP designations. As we look forward to the next up in our pipeline is IPF, or call it fibrotic diseases, because we could also be looking at PPF and other pulmonary-related conditions for 201. When you look at this, it's continued to become an unmet need with only two products approved and littered with failure. This is a very, very difficult disease to treat and harmonize the types of patients you're studying. But when you do look, OFEV has done over $3 billion in 2022 and $3.8 billion, I believe, in 2023. So this is an exciting opportunity. And the reason we're excited is when you look at this slide, we believe strongly this product can compete in an evolving landscape. And we're excited that by moving this into an inhaled version, we could potentially reduce the side effects that we see with oral Ofev and maybe dose higher into the lungs than we can currently get with the products available. We believe our raphalomycin study is the first indicator that the doses we're identifying can meet the needs of these patients. We have not published this data yet, but we do have internal data, and we'll continue to look at other ways to triangulate the best chances for success with an inhaled version. 28-day tox has now been completed, and chronic tox will be done at the same time we're roughly getting the phase one data. We're looking forward to moving this forward into humans here in the next month. Now I'm going to focus on the endocrine business unit. Our endocrine business grew 7% year-on-year on the strength of Afrezza. As we look down, you can see the growth of Afrezza was offset by the decline in Vigo. When you look at Vigo, we reduced our Salesforce support dedicated to Vigo in July of last year, and in January this year, we transformed our Salesforce footprint and added more resources towards Afrezza. This has directly impacted Vigo as we doubled down our efforts to get ready to grow Afrezza faster. Some of the key things that we did this year that we should start to see the fruits of that labor here in Q2 on the field restructuring is we added field reimbursement teams, additional training support, and key account managers, and now we'll be gearing up to support medical as we get ready for the release of Inhale 3 followed by Inhale 1. We believe Q2 is already starting to show the benefits of this focus as we're up 7% in the month of April year over year, and we'll continue to watch this trend closely as we close out Q2. We're really excited about the new data on the FREZA and how this could impact our growth trajectory. In healthy to remind you is our type one study where we went head to head against the standards of care, whether that be MDI or AID pumps. We are utilizing a new conversion dose up front, which we just presented this data at ATTD. And we'll also have another test at baseline, followed by baseline, followed by week 17, which has not been presented yet. But our goal here is equal efficacy to the standard of care, which includes the AID. And the reason that's important is doctors perceive this to be the best thing for their patients. And we think it's going to be critical to really understand that data as we get ready for the kids' launch. We do want to update conversion figure one, and we'll make a decision whether we do this separately or together with the pH data based on the FDA feedback we get later this year. I'll also remind you that there'll be a second data readout later this year for 30-week data which will provide some interesting insights as we look at patients who got to week 17 and continued for an additional 13 weeks, as well as the remaining cohort of patients who didn't switch, who switched for the first time. Because now doctors will have more data and more experience around titration and dosing, and hopefully we continue to see that progress as people switch the second round versus the first round. INHALE-1 is a pediatric study focused here in the US, and that one is almost 40 centers And we expect to secure pediatric approval in 2025 and beyond. And that will depend if we file on six months or 12 months of data. Let me remind you of the growth opportunity for Afrezza that we look at over the coming decade. First, we know type 2 will continue to be dominated by GLPs. So we are now double down our efforts on type 1 diabetes with inhale 3, which we started last year. With that data coming out, we believe that will set us up for continued success in type 1 diabetes to go head to head against the competition. As we look into the future, children with inhale 1, that will be a critical milestone and pivot point. As I've always said, most diabetes innovations have started with children, whether that be CGM or the original insulin pumps that Al Mann developed. And finally, gestational diabetes is getting a lot of attention these days for lots of good reasons. And we believe that the support around AFRESA will continue to grow as interest and guidelines get updated and as more data gets generated. These will be long-term strategic initiatives for AFRESA, some of which we will control and some of which outside of our control. With that said, I'm now going to turn it over to Steve Binder to walk us through the financials.

Thanks, Mike, and good afternoon. I am pleased to review select first quarter 2024 financial results. Please supplement this call by reading the condensed consolidated financial statements and MV&A contained in our 10-Q, which is filed with the SEC this afternoon. The first quarter extended our streak of exceptional quarterly revenue growth, with total revenues growing 63% versus the first quarter of 2023. This was our eighth consecutive period of quarter-on-quarter revenue growth. Let's start at the top of the table with Tyveso DPI Royalties, which generated $23 million in first quarter revenue, a growth of 94% over 1Q 2023. If you listened to UT's earnings call last week, strong patient demand for this innovative product is driving growth in our royalty, which is based on UT's Tyveso DPI net revenues. Collaboration services revenue of $25 million increased 118% versus first quarter 2023, which mainly resulted from a higher level of production activity, a higher volume of semi-finished Tyveso DPI units sold to UT with a higher average selling price per unit, and a new source of revenue, kitting certain SKUs of Tyveso DPI instead of using a third party or sending to UT for kitting. A present net revenue of $14 million includes 16% versus first quarter 2023, which was primarily driven by a lower growth-to-net percentage of 31% versus 38% in the prior year and a price increase. The lower growth-to-net percentage was mainly the result of a change in estimate for AFESA product returns. Including our first quarter AFESA results is an unfavorable impact to net revenues due to the interruption of our copay card services when Change Healthcare had a cyber intrusion in February, which completely interrupted copay support as well as severely impacted the ability of pharmacies to fulfill prescriptions. Our copay program was down for approximately two weeks. Vigo dropped 16% to $4 million in the first quarter of 2024, which is mainly driven by lower demand, resulting from transitioning our focus on volume growth to a focus on profitability for Vigo. The next slide shows our revenue growth by source and basic earnings per share on a quarter-by-quarter basis over a rolling eight-quarter period in the second quarter of 2022 to the first quarter of 2024. For the first quarter of 2024, the far right-hand bar, total revenues of $66 million increased 13% sequentially versus the fourth quarter of 2023 and are up 251% versus the second quarter of 2022. which is the first quarter of TIDASO DPI commercial sales by UT. Our exceptional revenue growth is dropping to the bottom line, as you can see below the graph, where we show our quarterly basic earnings and loss per share. The first quarter of 2024 was the third straight quarter with net income and positive earnings per share. $11 million of net income and 4 cents a share, which was a significant increase over the third and fourth quarters of 2023. Moving on to our GAAP to non-GAAP reconciliation, we had GAAP net income of $11 million, which when adjusted for select non-cash items for the sole portion of royalty revenue, interest expense on liability for sale of future royalties, stock compensation, and gain or loss on foreign currency transactions, which is related to our insulin purchase commitment, produced a non-GAAP net income of $15 million versus a 2023 first quarter non-GAAP net loss of $5 million. This is a $20 million quarterly year-on-year improvement. On the fourth quarter earnings call, I laid out our plans for deploying the $300 million in cash and investments on our balance sheet at the end of 2023 against our highest priorities. This slide is an update of what we discussed at year end. The priorities have not changed since that call. but we have begun to execute the plan, as you can see from the comments highlighted in green. Now that we have fast-track designation and FDA clearance to move forward with the Phase III clinical trial for MNKD101, and FDA clearance to move forward with the Phase I clinical trial for MNKD201, we will invest behind these trials to see them executed as quickly and efficiently as possible. As we look for opportunities to grow Afrezza faster from our new commercial model and upcoming data readouts. We intend to wait to see the results from Inhale 3 and Inhale 1 before making a decision on whether to increase investment behind the present. Moving on to changes in our debt structure that were executed in early April. First, we paid off the mid-cap senior secured debt, which freed us of the encumbrances on our assets and discharged the associated debt covenants, while eliminating our higher cost debt, which had an interest rate of 8.25%. We then extinguished the convertible debt without man's trust by converting part of the debt into 1.5 million shares at the contractual conversion rate and paid cash for the remaining outstanding debt. By paying cash, we reduced expected dilution by over 2 million shares that were backing the convertible debt. We also believe that the per share price paid in cash of $4.31 was a bargain for the company, as we see a price on our stock in this range is severely undervalued. We continue to evaluate the senior convertible debt as we get closer to the March 2026 maturity and intend to do what is in the best interest of shareholders. To summarize, we grew total revenues 63% year over year, another exceptional quarter for revenue growth, and we achieved our eighth consecutive quarter of revenue growth, which has us on a run rate of over $250 million in annual revenues. We recorded $11 million in net income, our third consecutive quarter of net income. Our growing revenue is being used to fund our capital allocation priorities and has favorably impacted our ability to grow net income and earnings per share. We ended the quarter with $2 million more in cash and investments on our balance sheet than when we started the quarter, without needing to sell stock, raise debt, or enter into a BD deal, a first in my seven-year tenure at Mankind. As this is my last earnings call, I would like to thank Mike, the extended Mankind team, the Mankind board, and those shareholders who supported us through the dark days when our continued existence was in question. As this support allowed the executive team to execute our strategy and build Mankind into a company that has a bright future and one that we can all be proud of. Thank you, and now I'll turn it back over to Mike.

Thank you, Steve. And as you can see, we are on the upswing as our revenue trajectory continues to be strong with continued shots on goal increasing to leverage our infrastructure over the coming years. Let me officially welcome Chris and say a big thank you to Steve, as he couldn't have gotten done without him. So, Steve, thank you for everything you've done. Chris, I'll give you a few seconds here.

Welcome to Mankind. Thanks, Mike. As you and Steve just highlighted in reviewing our quarterly performance, This is an incredibly exciting time to join Mankind. Some may notice from my background that I'm actually returning to Mankind, where I began my biotech career nearly two decades ago. The company I knew 12 years ago has undergone a remarkable transformation, with growing revenue streams and a robust pipeline focused on improving the lives of people living with diabetes and orphan lung diseases. My focus is working with the team to expand upon the positive momentum as we propel the company forward. I look forward to engaging with all of you at an upcoming conference. Thank you, Chris, and welcome back to Mankind.

As you look at 2024, we pretty much hit all the milestones we laid out so far in Q1 and are on track to hit the milestones we've laid out for Q2. We're really excited about this year and the second half. And one thing I didn't talk about is the potential approval for India. There was a clinical review there in India. We are submitting some feedback that they requested. We do expect market authorization to happen with potential approval by the end of the year for a launch potentially in 2025. We'll continue to give you updates as we progress on that, but I do want to let you know because that is public knowledge at this point. As we look at our anticipated key value drivers, Mankind 101 is now underway. Mankind 201 has proceeded to clear. We look at OFEB revenue of $3.9 billion. That's a tremendous opportunity to help a lot of people around the world. Tyvanso DPI, we've updated for every 10,000 patients covered, now looks to be roughly 300 to 350 million in revenue as we continue to look at upside projections on our production. UT T-cell studies reading out could provide meaningful upside from where we are today as well. On the endocrine business, we believe pediatrics is key, and we'll know that answer later this year. as well as a combination with Inhale Free and continued growth of Afrezza internationally. As I look at the diabetes market, I continue to see roughly two-thirds of sales are outside of the U.S. for insulin, and that's a tremendous opportunity to help more people around the world, and not one we pursued rapidly over time, because we believe that we need to get these data sets that we have coming out this year, which will set us up for 2025 and beyond. As we look at opportunities to communicate with shareholders, we have three things coming. We have the annual shareholders meeting next week. It will be via the Internet. Please submit your questions there. Please vote your shares as well. I just did mine last night. Scientific conferences will be at the endocrine. There's two endocrine meetings coming up, the ADA meeting here at the end of June and the CD meeting at the end of mid-August. And then lung disease, which will be one of our first times attending, there's an NTM patient conference followed by the American Thoracic Society, both in San Diego in the next two weeks. So we'll have a scientific presence where we can and continue to engage with key thought leaders at these places. And we'll be at the RBC conference next week, followed by Lee Rink in Boston in July. And I believe we just got another invite for August for another conference. We'll update that shortly. Thanks again for everything. Look forward to talking with you all next week. And please bring on your questions, and we'll try to answer them as best we can. Thank you.

Thank you. At this time, we will conduct the question and answer session. As a reminder, to ask a question, you'll need to press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Gregory Renza of RBC Capital Markets. Your line is now open.

Yeah, hi, Mike and team. It's Anishan for Greg. Congrats on the quarter and thanks for taking my questions. I just wanted to ask on inhale three, maybe if you could just remind us and help us set expectations for the inhale three readout at ADA in June, bars of success and potentially any key takeaways or read throughs from the previously disclosed initial meal challenge results. And then also just a real quick thematic question. You know, what's next in the collaboration with with Uther, the Teton studies, and opportunities in IPF and PPF. Thanks so much.

Thank you, Nush. So on the NL3, to make clear the expectations, you know, most people believe AID is the best standard of care out there. And so we wanted to be able to show that if we went on type 1 diabetes against what people perceive as the best, that AFREZA was as good in whatever measure you want to look, A1C, time and range, etc., And so 50% of the patients were on AID and 50% were on MDI. And what we did is we switched everybody to Degladec. And what that will allow us to do is have, you know, roughly 130 people in that study, half going to standard of care and half going to AFREZA. And then at 30 weeks, anyone that was on standard of care will switch over. So everybody will try AFREZA. So that second change will also be an interesting analysis to see what happens, you know, for 30 weeks of continuous AFREZA versus, you know, the 12 weeks that we'll get in the second switch or the first 17 weeks. So we'll have lots of good data. The meal challenge test, which I think shows you when you use the dosing algorithm that we recommend, that it's safe, number one, and it's effective, number two, versus the standard of care. And we show then, you know, when you think about when you eat, the first two hours is when your food is generally peaking and clearing, and that's what the meal challenge test was meant to show, is that in the first two hours you can really get better mealtime control if you want to, right? And I think that's the key is, you know, we know how to dose to products. We can't control what a patient does in the world, what a doctor does in the real world. And so that's what's going to be interesting as we see the trial results come out, what really looks like when we see all the data in totality. But I think to make it clear, a win is as good as standard of care in terms of really looking at we put on AID as well as MDI, so it'll be a total analysis, not individual components. Anything else on inhale three? And on the collaboration with UT, I think there's an agreement that we signed years ago that was if there's additional collaboration opportunities, there's work to be done and licenses, et cetera, that could happen. We have been so focused on Tyveso over the years and that we've had different ideas. For example, we brought Public, Cialis, Imatinib. Both of those would have had to have been in-licensed by UT at the stage we got them to because they have exclusivity for our platform for PH, and so we couldn't move forward with them without their bringing them in. They chose not to, and I defer to them, but I think the biggest thing at the time we had that discussion was really around Tyveso was going to be so big that, you know, these other things are going to move the needle. And that's turned out to be true when you look back in time. So I think it's really trying to find what's next that's going to be meaningful clinically. But at the end of the day, we are moving forward in other orphan diseases outside of PH by ourselves. And I think that's now we have the ability to fund and grow and get the revenue for our own shareholders and patients to help.

Great. Thanks so much and look forward to seeing you next week. Okay.

Thank you. Thank you.

One moment for our next question. Our next question comes from the line of Olivia Breyer of Cantor Fitzgerald.

Your line is now open.

Hey, this is for Olivia. Congrats on a great earnings. I just wanted to ask about your ITF program. As that moves into the clinic, how are you guys thinking about the path forward for Mankind 101? And have you considered potentially working with a partner there, just considering how much interest there is in that market?

Yeah, I think I'd say the same thing, Guggen, is that, you know, IPF obviously is a challenging disease for lots of reasons and lots of failures. We've been working on the inhaled sedative program for many years. And it's at that stage now where it's just about execution, meaning we feel pretty good about the dose. We'll confirm that in our phase one around tolerability. But now it's just moving these patients in and getting the results. And we feel that means if all works out, we should have a clear winner that can help a lot of people and deal with the number one Achilles heel of the market leader out there. And so if you think about a $3.9 billion drug, that's almost $100 million a week out the door in revenue. you know, would I much rather have that for our shareholders versus a partner? I don't think in these diseases you need a ton of infrastructure that we haven't already built, meaning specialty support services, pharmacy distribution, wholesalers, patient trainings, things like that. We have all that. And so it's really about scaling that up and providing the best quality services possible for patients and providers. And so that's That's directionally where we're planning ahead. We think financially we can afford to make these trials go forward, and I think the data is going to drive those decisions as we get there. If you come to the ex-U.S. market, I think we'll continue to reassess those in terms of you go through distributors or is there a partner. But I think from our perspective in the U.S., we continue to progress independently.

Awesome. Sounds great. Thank you.

Thank you.

One moment for our next question. Our next question comes from the line of Steve Lichman of Oppenheimer & Co.

Your line is now open.

Thank you. Evening, guys. Chris, congratulations, and Steve, it's been great working with you. I guess I wanted to ask on PEDE trial for AFRESA, what are the next milestones there? And Mike, you mentioned potential filing at six versus 12 months. When will we know through which direction that goes.

Yeah. You know, when I look at the competitive benchmarks, meaning other insulins, they've been approved on six months of data. In our discussions with the FDA, they would like 12 months of data in terms of safety. And then so I think it's a real question, is there anything that we see at the six-month mark that's inconsistent with all the other thousands of patients we've studied in AFRESA? And if there's really not, then we plan to go ahead and ask to file on a submission that says we'll have pretty much majority of the patients, if not all the patients, done by the time the FDA has to approve the product, and that we don't see a reason to wait, you know, another six months to file. They may disagree, but again, I think the data, assuming it's safe and tolerable, and we get, you know, if there's a positive surprise, that may help our argument. If we get a negative surprise, obviously that won't help us. So we didn't want to get into a debate with the FDA on the timing versus let's get the clinical trial results, and then we can have that discussion with them. We've found them to be collaborative on everything so far. So that's really the key there is we'd like to go for six. The data will help us get there, but there's a chance we'd have to wait for the full 12. And the reality is there's only a handful of patients that are going to be trickling along in 2025 beyond that six-month time point. Okay, that's helpful.

And then, and Steve, the collaboration line was well ahead. You mentioned a number of variables there or pieces. Can you maybe size those different pieces that you pointed to that contributed to the quarter? And I guess just as importantly, which of those sort of is a sustainable item as we look to model it out in the next few quarters?

Thanks, Steve. If you think back to last year, we talked about increasing our Tyveso DPI bulk production by about 2.5x mid-last year. So as you can see, look at our quarterly CNS revenues, third quarter, fourth quarter, first quarter this year, they've been growing. So we expect higher activity in sales to United Therapeutics, which allows us to recognize the revenue. We also had a couple of things in Q1 that may not repeat. One is that we had a higher level of inventory for Tyvesa DPI at year end and a lower level at the end of Q1. So that inventory sold through in Q1. So we got to recognize that revenue. We also had some PPQ testing on our fill finish line that we could recognize revenue on. And then we also have deferred revenue. If you recall back, we had deferred up over $70 million worth of deferred revenue in the first couple of years of this contract. We're starting to actually see that come through and get recognized because that needs to get recognized by 2031, which is the end of the manufacturing contract. So it was about a million and a half dollars of deferred revenue that got recognized in Q1, and you'll start to see that every quarter going out to 2031. Steve, just to add to that.

The PPQ, we will see additional PPQ billing this year, Steve. That will be important because we're validating the spray dryers and we're validating additional strength. So that will be recurring to answer that question. And then there's kitting that we're doing that should also be recurring that was new for us this year. So those are two things that should be recurring as we go forward for the next couple quarters.

Okay. Got it. Thank you, guys.

Thank you.

One moment for our next question. Our next question comes from the line of Thomas Smith of LeRinc Partners. Your line is now open.

Hey, guys. Good afternoon. Thanks for taking the questions, and congrats on the strong quarter. A couple questions. I guess first on 201, the inhaled and impediment program, You mentioned plans to fund a phase two, three study in 2025 pending the phase one results. Can you just comment on how you think about the potential regulatory path here in IPF and whether there's potential for registration on the basis of a single pivotal study or whether your base case is that you would need a second study to enable registration there?

I would say it's too early to comment publicly on those things. You can see an example where a single trial could be required with a sensitive endpoint like IPF specifically, and then the question is can we get extrapolation to PPF, for example, or would the FDA say do one indication and that could be enough for approval, and if you want the other ones, you've got to do another small study. I think the precedent personally is there when you look at biosimilars as well as Tybaso DPI, where we've got ILD and PAH. The biosimilars, you're getting the full label. not just a specific indication, even though you study it in one. So I think a lot of that's TBD. We're going to have an end-of-phase one meeting with Destia. It's ultimately going to drive that next phase of discussions, and I think that's going to be important.

Got it. That's helpful. And then on the Afrezza development plans, you have the ongoing inhale one and three studies, but then you also highlighted the potential in gestational diabetes. I was wondering if you could elaborate on that opportunity and whether you think you'd need a specific study to better access that population.

Yeah, what's happened is the people doing the INHALE-3 study, some of them, and I don't recall specifically if they were in the study or if they are part of the centers that are in the study, so I apologize for that, but they saw the post-meal challenge results at ATTD, and that's really what sparked this discussion, which is, wow, we are trying to really control postprandial sugars in the first 120 minutes and keep sugars under 120. And because injectable insulin is so slow and it just takes about 90 minutes to start working, there's no way a gestational person can really bring sugars down in two hours when it takes 90 minutes to start working. And so they felt when they saw the male challenge results that this could really help change that goal and the guidelines that they're trying to implement as we go forward. So then it got into the discussion, which is, you know, there's another, there's two things we've been requested. One is to contribute drug for a PK study to show that obviously a gestational woman could inhale at the same rate as an adult. We don't have any concerns, but obviously we'd want to get that data to help support that population. And then the next thing is there's a large trial going on out there that they would like us to be part of, and that's not something we would fund. That's something a third party would be funding. We would just be providing drug and support. So part of this is what can we help support, and part of this is what is the market going to do. But if you ask me, like, are we going to consider doing a large pregnancy trial, the answer is not at this time, but I won't rule it out forever. I think we've got to get the PK data, see what's good enough and what happened out there, because there's really only two drugs to treat these patients. It's metformin and rapid-acting insulin. And so they would love to have something that's, you know, for 12 weeks of treatment, roughly, short time period that works with cgm so so that's been the feedback and discussion um and if all goes well we'll hopefully get there but we're doing some internal work as well to make sure we feel comfortable with the overall situation in the request got it that makes sense all right guys thanks for taking the questions appreciate it

Thank you. I'm showing no further questions at this time. I would now like to turn it back to Michael Castaño, CEO, for closing remarks.

I just want to clarify one thing that some of you have commented on via email, which was our share count outstanding. Our shares have not gone up when we are for profit and a quarter. You have to show the fully diluted share count. So the average share count is really 270 versus 263 last year, 270 million. So it's not really going up as much as some of you may have thought on the retail side. Overall, I want to say thank you to Steve again. It was a great quarter. We're firing on all cylinders. The teams are working really hard on your behalf. We're really out there to help patients. We have a lot of meetings coming up with ATS. We're going to be doing some patient advisory boards, physician advisory boards, investigator meetings. So I think mankind's reputation moving into inhaled orphan lung space, you're going to see dramatically improve this year. And pretty much every quarter from here on out, we'll start to hopefully have updates on clofazamine's progress now that we've gotten through all the hard work. I'll say the hard work and now the trial, but getting to this point is a miracle. It's hard to get drugs through development and the fact that we're now able to proceed to phase three and see a light that we can get this to patients in the near future as fast as drug development can possibly go. We will work as hard as we can to get there. We're in the best financial position we've been in and you saw us deleverage the company and we'll continue to do what's best for shareholders and making sure we're allocating capital and being prudent with our expenses. So thank you again. I look forward to seeing some of you at the upcoming investor conferences. And please go ahead and make sure you ask your questions next week. We always want to make sure we have an open dialogue with our shareholders as we have a lot to share and an exciting future. And I'm looking forward to continuing to hopefully have great performance over the coming years. Thank you.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.