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 are Chief Executive Officer Michael Castagna and the Chief Financial Officer Chris Prentice. 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 Prentice, 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 of 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 our 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 in mid 2025. Our Tyveso collaboration remains strong. I'm sure many of you have listened to the UT call. 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 colfazamine and attendib, I will highlight those later in this call. And our financial results were very strong for the quarter, and we had non-gap 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 ATT showing with multiple KOA interactions that have earned a very positive reception for AFREZA. Unlike anything before, due to the positive INHALE3 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 AFREZA to realize its true potential. After leaving ATTD and interacting with hundreds of US and international customers from around the world, the global expansion and demand opportunity is real, as evidenced by our booth at ATTD, which was nonstop 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 in fixed doses. We're very excited, and we believe pediatrics is a real opportunity to cause an inflection. and Afrezza. And additionally, we recently had a PayRab board that also described how they would probably allow pediatrics to go through relative to the history where they would block Afrezza to injectable insulin. Now, as I look at the performance driven by our strong NRX growth, we've really seen this improvement. But what's more important is the 26% year-over-year growth in our 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 in Q1 and ordering patterns at the end of 2024. Data since the 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 Tyveso DPI, this revenue coming in from United Therapeutics will provide the non-dilutive pipeline funding that we need to move clofazamine Mankind 101 forward, as well as notetinib or Mankind 201. What's really encouraging is we had about $1.1 billion of Tyveso DPI-related revenue from United Therapeutics in the previous four quarters, and we receive, obviously, 10% royalty on those sales. We recorded $29 million in manufacturing revenue in Q1, and we await the readouts of the TTOM 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 by the end of the decade. Our focus is on the U.S. 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 branded 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 in frequent dosing, these are almost like 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 antimicrobacterium activity at the site of infection by bypassing the GI tract and minimizing systemic exposure to hopefully improve the 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 clofazumab 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 28 days and load the lung, and then 56 days off. We hope this will alleviate the patient treatment burden as well as noncompliance. Now let me update you on our Mankind 101 study. First, 85% 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 and 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 enrolled 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 who don't know IPF, it's a progressive and fatal disease. 80% of people will die within the first five years of diagnosis. There are only two drugs approved, and 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 Natendib 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 met its safety and tolerability objectives and healthy volunteers. We had no serious AEs and AEs typically seen with a tetanib 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 timeframe, 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 Tyveso 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 the future of AFREZA, 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 Tyveso DPI. Tyveso 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 volumes 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. of 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 Afrezza, we are encouraged by the growth in 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 $0.04 in earnings per share, a 24% increase compared to $11 million, or $0.04 per share for the first quarter of 2024. On a non-GAAP basis, we reported $22 million of net income or $0.07 of earnings per share for the first quarter compared to $15 million of non-GAAP net income or $0.06 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.