MannKind Corporation

Good morning and welcome to the Mankind Corporation first quarter 2025 financial results earnings call. As a reminder this call is being recorded on May 8th 2025 and will be available for playback on the Mankind Corporation website shortly after the conclusion of this call and available for approximately 90 days. This call will contain forward looking statements. Such forward looking statements are subject to risks and uncertainty which can cause actual risks to differ materially from the stated expectations. For further information on the company's risk factors please see the form 10Q for the quarterly period ended March 31st 2025 on file with the SEC, the earnings release and the slides prepared for this presentation. Joining us today for Mankind, Chief Executive Officer Michael Castagna and the Chief Financial Officer Chris Prentiss. I'd now like to turn the conference over to Mr. Castagna. Please go ahead sir.

Thank you everyone for joining us this morning. Today joining me is Chris Prentiss our Chief Financial Officer. We'll be going through operational pipeline highlights, our financial review and some of my remarks at the end. As we've engaged with the investment community over the last several months our discussions highlight that investors especially in these uncertain times are seeking commercial stage companies that have a profile growing revenue, promising pipeline and a strong financial position combined with very little debt that we have going forward. I'm proud to share that this depicts where mankind is today and are excited by our five key pillars of growth above. Now I'm going to highlight our Q1 2025 key points. Our endocrine business grew 20% on NRXs and 14% on TRXs. We have filed for a label change for adult which is a 2x round down conversion. We expect that to be hopefully approved in Q4 of this year. We plan to file the pediatric expansion mid 2025. Our Tiveso collaboration remains strong. I'm sure many of you have listened to the UT call and we are excited about our great partnership together which resulted in Q1 royalty revenue of $30 million and manufacturing revenue of $29 million. In terms of cofasamine attended I will highlight those later in this call and our financial results were very strong for the quarter and we had non-GAAP income of $22 million or 43% growth over last year. Now let me bridge to our diabetes business. Since we last spoke we had a very successful ATTA showing with multiple K-well interactions that have earned a very positive reception for Afrezah. Unlike anything before due to the positive inhale 3 data and the excitement that is building in the pediatric opportunity. All of this gives us reason to believe the steps we have taken and continue to take set the stage for Afrezah to realize its true potential. After leaving ATTD and interacting with hundreds of U.S. and international customers from around the world the global expansion and demand opportunity is real as evidenced by our booth at ATTD which was non-stop with traffic over the three days we were there. Additionally I have met many U.S. customers on my travels around the U.S. and I no longer hear the objections I used to and now what I hear is why don't we increase patient requests? Why is it not top of mind with our sales force? How do you dose and write a prescription versus previously we heard about safety payer roadblocks and dosing and fixed doses. We're very excited we believe pediatrics is a rare opportunity to cause an inflection in Afrezah and additionally we recently had a payer ad board that also described how they would probably allow pediatrics to go through relative to the history where they would block Afrezah to injectable insulin. Now as I look at the performance driven by a strong NRX growth we've really seen this improvement but what's more important is the 26% -over-year growth in our top 50 prescribers, top 50% of our prescribers. Very pleased with the early indicators here and continue to go deeper on our call list to increase the number of prescribers that we can target. Our TRX activity is consistent with our gross revenues and while net sales appear to be relatively in line with the prior year this is due to one-time adjustments of our gross to net and Q1 and ordering patterns at the end of 2024. Data since the last end of the last quarter continues to give us confidence that our messages are resonating and our team is on the right path to continue making impact. Now I'll bridge over to the orphan lung opportunity. First on Taveso DPI this revenue coming in from United Therapeutics will provide the non-dilutive pipeline funding that we need to move to move sorry clofazamine mankind 101 forward as well as the tetanib or mankind 201. What's really encouraging is we had about 1.1 billion of Taveso DPI related revenue from United Therapeutics in the previous four quarters and we receive obviously 10% royalty on those sales. We recorded 29 million dollars in manufacturing revenue in Q1 and we await the readouts of the TITOM 1 and 2 trials that United Therapeutics is conducting. As I look to the NTM market we get very excited that this market will likely exceed 1 billion dollars by the end of the decade. Our focus is on the US and Japan which have the highest addressable populations and this disease continues to grow 7% year over year. We see a large market opportunity with one brand of treatment in the US and Japan. We believe mankind will be the next potential launch with clofazamine as we look out. Current NTM therapies have their limitations in efficacy safety and tolerability. As we look at the drug combinations they have low efficacy and high systemic toxicity. These AEs are very severe and cause long-term consequences for patients and the frequent dosing these are almost TB like regimens and or nebulizers that contribute to patient fatigue and low adherence to therapy. Now let me bridge over to the inhaled development rationale for inhaled clofazamine. The first thing we were trying to do is make sure we maximize the anti-mycobacterium activity at the site of infection by bypassing the GI tract and minimizing systemic exposure to hopefully improve the patient's tolerability profile. Oral clofazamine is recommended by the clinical guidelines and we've done some pre-work to really have comfort in the animal studies as we move forward in the progress of human development. Additionally because clofazamine has a long half-life we've been able to create a very convenient dosing cycle with a drug holiday meaning they take the product for 20 days and load the lung and then 56 days off. We hope this will alleviate the patient treatment burden as well as non-compliance. Now let me update you on our mankind 101 study. First 85 percent of our sites have been activated across four countries. Two we've had 55 patients randomized with minimal dropouts and patients are now starting to move past the six-month time point rolling over to extension and as of today there's been no down dosing to a lower dose so we believe people are tolerating the product and this is an indication of the direction the product hopefully will go. We remain confident in achieving 100 patients in an interim analysis and roll by the end of the year and even once we hit that number we will continue to enroll so that when we get that readout in 2026 if it says we needed more patients hopefully we'll hit that mark by the time we get to that data point. Now I'll bridge over to IPF. For those of you don't know IPF it's a progressive and fatal disease. 80 percent of people will die within the first five years of diagnosis. There are only two drugs approved the majority of the patients cannot tolerate either one of those products hence why we continue to move this forward and believe there's a real opportunity to help patients. We believe the tentative will be the background of therapy as new combinations continue to come out and get approved over the coming years. We previously talked about our phase one study which was complete and it meant its safety and tolerability objectives and healthy volunteers. We had no serious AEs and AEs typically seen with the tentative such as diarrhea have not shown up and we expect to continue to develop this in the next phase of development in a global trial and I look forward to sharing those details at a future meeting. I'll now turn it over to Chris. Thanks

Mike and good morning everyone. I will now discuss our first quarter 2025 financial results. For a summary of our financials please review our press release issued before this call and our form 10q which is now on file with the SEC. Before we get into the details of the quarterly results I want to highlight our revenue growth over the last five years as we compare the trailing four quarters on an annual basis. It demonstrates impressive growth across our three revenue categories over this time frame a testament to the extraordinary work of our team. Looking forward we expect our royalty revenue to continue to grow based on the impressive performance of Tiveso DPI. We expect our collaboration and services revenue to remain relatively flat on an annual basis in the near term due to production scale up and efficiencies and will fluctuate over time based on UT's production orders. The commercial metrics that are unfolding give us confidence and excitement for future of a FRESA and we anticipate change in its growth trajectory especially if we are able to gain approval for a pediatric indication. Our overall revenues in the first quarter grew 18% led by revenues related to Tiveso DPI. Tiveso DPI royalties contributed 30 million in the first quarter an increase of 32% over the same quarter last year. Collaboration and services revenue consists primarily of manufacturing revenue based on production volume sold through to UT and the recognition of deferred revenue. We recorded revenue of 29 million in the current quarter an 18% increase from the prior year quarter. A FRESA net revenues for the first quarter were 15 million a 3% increase over the prior year. It's important to note that the first quarter of 2024 benefited from a one-time favorable adjustment to gross to nets. Additionally the current quarter was negatively impacted based on the timing of shipments at the end of the year. As we look at the performance of a FRESA we are encouraged by the growth and new and recurring prescriptions over the prior year and expect this trend to continue. Vigo net revenue was approximately 4 million for the first quarter a 6% decrease driven by lower product demand. As discussed on previous calls the sales force is no longer actively promoting Vigo as of the fourth quarter of 2024. For the first quarter of 2025 we reported net income of 13 million or 4 cents in earnings per share a 24% increase compared to 11 million or 4 cents per share for the first quarter of 2024. On a non-GAAP basis we reported 22 million of net income or 7 cents of earnings per share for the first quarter compared to 15 million of non-GAAP net income or 6 cents per share for the same period in 2024 a 43% increase. We started the year strong. Our operational results combined with our quarter end cash and investments of 198 million will allow us to continue investing in our differentiated pipeline and execute on our objectives including driving commercial growth. Mike and I will be at the RBC and Jefferies conferences over the next month and we look forward to engaging with all of you there. With that I will turn the call back over to Mike.

Thank you Chris. Quickly I'll talk about some anticipated catalysts over the first and second half of this year. As we look ahead there are a series of catalysts in our pillars here to highlight a few. Inhale one we just had our last patient enroll last week and last visit and now we can lock the database and get top line results here shortly and submit the SPLA in the next few months. For mankind 101 the key metric we're tracking is interim enrollment target which we expect to meet by year end and in 201 it's continued to finalize details behind our global trial and work with your CROs to get a proposal to kick this off in the second half of 2025. As we look to continue to build shareholder value in 2025 and beyond obviously there's a pillar of Tavaso DPI and that for every 10,000 patients covered on insurance we'll see 300 to 50 million in revenue between manufacturing and royalties. We know there's a big opportunity here in T-TOM 1 and 2 and we'll actually see a weight dose results from United Therapeutics as well as the bridging work that has to be done in order to get that into IPF patients. With the endocrine business we previously talked about what the opportunity of pediatrics means. It's a long-term strategy we've been pursuing as we ran the endocrine business for profitability versus significant growth. We now believe that every 10% share in kids will represent about 150 million dollars in net revenue to mankind. As we look out the in-health redata continues to be educated out there in the marketplace and presented and the international opportunity continues to grow. And as we close out here on 101 and 201, 101 is a significant unmet need here in NTM and every 1,000 patients we believe would be 100 million dollars in net revenue and on 201 the market is so large we just need to make sure we have a product that works to help these patients who really have very little options to extend or enhance their life. We are looking forward to continue to build upon these catalysts to make mankind a great opportunity. We have several upcoming scientific conferences starting with ISPOR in Montreal here in May where we'll present one of our first pharmacoeconomic analysis of a FREZA followed by ACE which is a clinical endocrine conference by an ADA here in Chicago in June. We look forward to these opportunities to discuss and present our new data and with that said operator we'll now turn our call over for Q&A.

Thank you. At this time if you would like to ask a question please click on the raise hand button which can be found on the black bar at the bottom of your screen. When it is your turn you will receive a message on your screen from the host allowing you to talk and then you will hear your name called. Please accept, unmute your audio and ask your question. We will wait a moment to allow the queue to form. Our first question comes from Faisal Kherzid from Liebrink. Faisal please unmute your line and ask your question.

Hi this is Heidi on professor thanks for taking our question. Regarding mankind 201 can you provide some initial thoughts on what a phase two three trial design for mankind 201 could look like and any feedback you received from the FDA and did they align on a seamless study design?

Thanks. Hi thank you for the question. We aren't given too much guidance yet on the feedback from the FDA. What I can say on the in the phase two three design was more for a global trial so I think that'll be more of a question as we get to XUS authorities. I think on the trial design we are thinking of several dose arm trial compared to a placebo and I think there's a few last minute discussion points we're having around is it on top of profanedone or naive patients or patients that are previously treated but not tolerating existing products so that that's probably the extent we can share at this point.

Got it thanks so much.

Thank you. Our next question comes from Olivia Brea from Cantor. Olivia please unmute your line and ask your question.

Hi good morning guys thank you for the question. Mike wanted to follow up on your IPF study especially as it relates to endpoints. Maybe it's a little premature to ask but are you guys looking to measure FVC in that study and maybe just any comments around whether you're hoping to actually show improvement from baseline versus just a delta from the placebo arm and then also if there's anything you can tell us with respect to dose levels and then I've got a follow-up question with Hadeso.

Sure so I think the we'll be looking at a couple different doses we're still finalizing the protocols you could imagine but conceptually we're looking at a couple doses and I think the question is do you combine those doses for analysis versus placebo or do we look for a dose response by the highest dose versus mid or low. That's generally where we're going at this point. We are looking for a delta from placebo we're not scaling it for a statistical endpoint or powering it to have a distinct difference in terms of you know should it be 100 delta versus 50 but we are looking to get enough patients enrolled so that we can see a delta to have comfort as we go on the phase three with that efficacy could look like as we scale the next generation the next part of the trial.

Okay understood and then obviously type A so IPF data coming up in a few months for the nebulizer. I know they've talked about a potential bridging study for DPI. Do you know at this point if that would be an inferiority study between the two DPI and the nebulized formulation and anything you can tell us at this point in terms of timing around when that could kick off and how long that could realistically take?

I think it's too premature to comment yet. I think UT and us will be meeting very surely to discuss these things and we'll have some insights from the IPF meeting we had for 201 that I think will feed into the type A so discussion as well so I think give us another quarter or two. I know waiting for the TITAN two results is one of the first focuses to obviously get that readout but then the second focus they have some preliminary ideas and I think we'll have a solid plan. I think we believe it'll be a breeze-like study as opposed to a large scale trial so I think that's the direction I've heard from UT but again I would defer to them to comment for their initial thoughts but that's generally the comments I've heard.

Okay understood helpful thank you guys congrats. Thank

you.

Thank you our next question comes from Gregory Renz at RBC. Gregory please unmute your line and ask your question.

Good morning Mike and team it's Anishan for Greg. Congrats on the progress this quarter and thanks for taking our questions. Just a couple from us first on the label update for adults that you spoke about maybe if you could just give some colour on the rationale behind the update and how you're thinking about the delta in uptake in adults and second just given the macro backdrop how are you thinking about the potential impact of supply chain for a Fresa the manufacturing of Taveiso DPI and even longer term that on 101 and 201 just as we think about API's parts related to technosphere dry powder etc. Thanks so much.

Sure a lot of questions wrapped up there I'll try to hit them all. I think on the dosing we are published and presented that a better conversion dose leads to better time and range better control in the first two hours so we're hoping that that label change will be approved here in Q4. There's another part of label change we're asking for that we'll see if that happens as well that should help us commercially. I think on the adult uptake we are looking to scale faster where we are even with the current footprint but maybe expanding that footprint as we go into the second half so we do believe there's upside growth in the execution on the adult side but the real focus of the team right now is preparing for peds and getting the core functional parts of the launch in place now that we're meeting with the board very shortly. On the supply chain given that we're predominantly US manufactured we don't anticipate much impact from Tarris maybe I'll let Chris comment on a couple of those.

Yeah I think it's just important to remember that you know a FRESA as well as the Tiveso DPI as well as our two pipeline programs in 101 and 201 are all manufactured out of our Connecticut facility so there's certainly certain materials that are purchased from other places throughout the world you know the tariff situation is still evolving I think is fair to say but what we are aware of right now we feel good that you know our key products are either exempt at this point in time or we are in a good position to manage through it.

And another thing is we had several quarters of Vigo supplies here in the US we were able to slow down shipments there just to kind of see where this goes to minimize any impact but we do believe Vigo will be exempt from Tarris if it does go forward as is so we feel pretty good while minimal impact overall but again time will tell it's a -to-day situation for all of us.

Great thanks appreciate it.

Thank you our next question comes from Andreas. Andreas please could you unmute your line and ask your question.

All right good morning and thanks for taking our questions lots of focus on IPF understandably so could you just give us a sense of I mean with the rapidly evolving clinical development treatment landscape can you give us a sense of where you see 201 and even some color on DPI and fitting in the treatment landscape? I'm gonna have a quick one follow up after that thanks.

Yeah I'm surprised none of you asked about 101 but I'll hold back. On the 201 I think as we look out the landscape obviously is challenging meaning an compliant had an abysmal failure there in Q4 it's unfortunate for patients we know this is a very tough disease to treat but as we look out for a notetanib remember 80 percent of patients generally aren't on treatment or can't tolerate existing treatments so our real focus is on how do we expand the opportunity to help more patients and hopefully bring a tolerable you know OFeV like regimen to market we believe inhaled notetanib could be a background of therapy for the other new drugs coming so we think about Tivesa DPI or the new BI launch or the Pristamires one you know if these products make it to market we'll be very excited because we do believe that we use in combination and that combo treatments will hopefully provide better efficacy for patients assuming they can get the tolerability which I think has been the rate limiting issue to date is the two drugs out there are not very tolerable and when you combine them you're getting overlapping toxicity so to have something that we think could provide some efficacy at potentially the equivalent dose or higher doses then how do we then think about that in combination with the new treatments coming and I think that's really evolving quickly over the next year or two as our trials move to phase two three and that's also creating one of the one of the why I don't want to comment too much on the study design because we're trying to think through you know what what do you do as these new agents come online over the next one in two years and how would you add those into your trial or adult and a tetanib inhale on top of them so you know there's a lot of differences of opinion on can you run a placebo trial can you run a naive trial can it be on top of background and in the case of the tetanib it doesn't make sense always to have it on top of background therapy because one of the drugs we're trying to replace would be oral ophf so hopefully it helps give you some color

yeah and then obviously you know if when comes to inhale therapies delivery is is paramount and you know we contend that device plays a key role in that how are you guys thinking just broadly maybe it's too soon or you know you do have a lot on your plate but how are you thinking about opportunities to collaborate with other companies on the delivery side of things yeah thanks so

I think on 201 you know obviously our device platform has been very successful in the in the ph and ph ild market I would say in the diabetes market the device platform is not a reason it's not successful so we're planning to use the same device platform for 201 and you know that device has been used quite widely now amongst pulmonologists treaters in that space so we think that's an advantage of having the clinical experience with the device and the training that it'll just blend into those centers on the case of clofazamine we'll start with a nebulizer jet nebulizer that is pretty widely utilized in this patient population already because they have other products they're nebulizing but we have a dry powder version that we are looking to hopefully fit into the dream build platform and so as we look out you know that that's one of our core focuses I'm not sure we need other device platforms are usually off the shelf and not many of them have been scaled successfully but we'll keep we're always open to ideas for innovation and patient support so

appreciate and congrats on the quarter I'll jump back in the queue

thank you

thank you so much our next question comes from Yun Zong from Wedbush Yun please unmute your line and ask your question

hi uh good morning thank you very much for taking your question and uh so my question is um it's very encouraging to see a higher increase in nrx versus trx would you attribute that to maybe higher promotional activity or new data or the combination of the both

um I think it's a combination we just said the new data combined with the execution at the sales force so we started a strong education campaign around you know October time frame on the inhale three data set and I would say we had several speaker events and national events that led to a strong q4 and in q1 we didn't make any major changes to our sales force we did increase our sales force a little bit in terms of having more feet on the ground we did increase our share of voice at the att conference which I think were good investments and hopefully those will continue to propel us as we come into q2 and q3 so we're hearing good feedback we're hearing less resistance we're hearing good managed care coverage this year so I'd say overall for freza I mean I'm very optimistic that we'll continue to see nice progress especially as the new team comes on board and starts to make the changes they're making and those flow out through the field through customers

would you say the the strategy will be the same for pediatric patient

say that again I'm sorry I heard pediatric patient

right so uh going into pediatric potential launch and what would be your strategy just like the same as you took for the doubt patient

um I think the strategy for pete is actually very different uh 80 percent of the patients are treated in a in a children's hospital or academic medical center and that will take a very different launch strategy as we go forward and I think you'll be hearing some of that roll out as we get to the next quarter we have a pretty comprehensive plan we're working on and I think that will be shared once approved by the board but at this point it is not going to be the same as the adult side we expect that to be a very different launch and launch trajectory from from where we are in adults

thank you very much

thank you thank you our next question comes from Anthony Patrone from Mizuho Anthony please unmute your line and ask your question

uh hi thanks and congrats on a strong start to the year here I'll start with one on pediatric frazza and then move over um to the pipeline on pediatric of frazza maybe mike can you give us an idea when you think about how that patient population behaves and your thoughts on adherence you know obviously with peds you have a caregiver uh tends to be a slightly more diligent sort of patient population relative to adult so maybe just your your thoughts here on what adherence looks like in pediatric diabetes and really what the uptake could be I would imagine maybe there's a potential for more rapid uptake in peds versus adults and all of the follow-up

yeah thank you I think um nice to hear you and thank you for your initiation there uh the the peds side to your point has different dynamics than the adult side number one I think pedendos are much more progressive doctors and they're more used to trying new technologies and an example is that you just have a group of patients who have parents that are very active in their kids life anyone that has kids knows you're going to fight for your children more than anything in the world and when it comes to newly diagnosed children you're dealt with a life sentence unfortunately uh and you're going to you know I think that's where we have a strong opportunity with the frazzas who who really wants to learn how to count carbs inject insulin you know multiple times a day worry about hypo nocturnal dead in bed these are not fun things as a parent you know hearing the stories of parents sleeping next to their child because they're afraid they're going to go into a seizure at night these are all the things that go through pediatric diabetes and so we do think having something like a fresa which we've seen over time has you know less hypos in our pivotal trials it the one set and offset of action allows you to predict a little bit more of your control and use the cgm these days I think will give parents some comfort when they start to get used to the afresa profile so I think net net what that means is a consumer approach will be important in peds and whether that's the parents and educating them and or the kids that are teenagers in camps that's a whole different game than what we've had to deal with in a fresa adults the doctors themselves I mean I've met uh I don't know at least 10 15 of them in the last two months here um they are very open to a fresa once they saw the lung safety data that was the number one question coming into peds and that lung safety data looks looks very strong over the 26 52 weeks so I think that question is off the table in terms of any concerns of lung safety or any impact of a fresa there so that that's also the the important point for launch and then the last one is your your comment on compliance and that's one of our surprises in the afresa trial was how well especially the teenagers did they're hormonal they're taking high doses they are rebellious in some cases they're worried about weight gain of insulin we saw very high success rates in that population um and and so I think your average diagnosis around 12 years old and and those kids are are going through major hormonal changes between 12 and 15 so we we think that you know so far people will probably more likely adhere to a fresa where the younger kids may have some challenges and the schools and the nurses administration will continue to work on programs to to support that where the teenagers you know can take it on take the product themselves and much easier for them to control their sugar so that's that's generally what we see and feel on the afresa peeds and some of the high level thoughts on the launch

very helpful and pipeline this is more of a totality question really when you look at the t-ton programs with with united and then you take 101 clofazamine 201 in ipf both you and your partner go for same indication and just looking at a blue sky scenario it's a heck of a lot of technosphere devices if if it all comes to fruition so just a recap on a damberry capacity if the blue sky scenario plays out over the next five years would you would you need a a growth capex and injection thanks

you know i think we can all thank al man for dreaming big he built a huge scale facility for diabetes and as you know that that disease is 30 million people just in the u.s let alone you know three to five hundred million worldwide so when you think about capacity of device manufacturing we have a very high capacity to scale up there if needed and i don't expect any major capex on the filling equipment lines we believe 201 can be fit into the current facility we already built and whether that's excess capacity on the and we have another line that's idle so we have plenty of equipment to fill cartridges for 201 if that continues to grow as well as a fresa so we're not too worried about the capacity there and then on 101 you may or may not have noticed over the last couple quarters but we actually have been building out the manufacturing capacity there in damberry the equipment's been coming in we're actually doing a field application test this week and that is already being built and in our capex run rate so so i think most of the pipeline and capex is already behind us i'm sure there'll be small things here and there chris but i don't i don't see any major come in the next five years unless we were to buy something that needed something that would be different but where we are today i think we we don't need to build another plant in the next five years and we have plenty of capacity to support the growth of the company

thank you

thank you that concludes the question and support of today's call i will now hand the call back to the mankind team for closing remarks well

thank you everyone for all your interest in mankind the questions here we're really proud of the work we've done 201 you know we had a great great discussion we got great direction we need to go on 101 the pipeline with with clifazumy which we were nervous to how fast or slow that trial would go as you can see the trial is going to be trial has done very well in terms of enrollment and we remain on track there and then the peds for frezze is on track to be followed here mid-year so so everything's going in the right direction the tariffs obviously are impacting the overall economy but for mankind we believe we can navigate through those headwinds and we got a great company for investors and a great company for employers employees and patients so thank you again for everything and look forward to talking to you soon at the upcoming conferences or on the next quarterly call talk soon