MannKind Corporation

good morning and welcome to the mankind corporation fourth quarter and full year 2025 financial results earnings call as a reminder this call is being recorded on february 26 2026 and will be available for replay on the mankind corporation website shortly after this call and for approximately 90 days This call will contain forward-looking statements. Such forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from these expectations. For further information on the company's risk factors, please see the Form 10-K for the annual period ended December 31, 2025, the earnings release, and the slides prepared for this presentation. Joining us today from Mankind are Chief Executive Officer Michael Castagna and Chief Financial Officer Chris Prentice. I'd now like to turn the conference over to Mr. Castagna. Please go ahead, sir.

Thanks, operator. Good morning, everyone. Thank you for joining us for our Q4 and year-end 2025 earnings call. Here's today's agenda, and I'll start with some opening remarks. I want to start by taking a step back and putting our relationship with United Therapeutics into context. Tyveso DPI has transformed both United Therapeutics and Mankind's future to fund our respective innovation and growth. Tyveso was a $450 million brand when we entered the collaboration in 2018. And Tyveso DPI quickly grew within 36 months of launch to a billion dollar franchise by delivering a highly impactful therapy that has helped thousands of patients. This success has funded our diversification, setting us up for three important milestones. First, the opportunity to acquire and scale Furosix and invest in inhaled bubetonide dry powder inhalation. Second, it funded our growth of Afrez over the past six years, as well as the investment in our pediatric indication. While simultaneously third, investing in our pipeline programs such as Mankind 201, which has blockbuster potential. When we signed the UT agreement in Q3 of 2018, Mankind was generating approximately $3.8 million in quarterly revenue and had a market cap of roughly $300 million. Today, we are a very different company. Excluding Teveso DPI, we have a $200 million plus annual run rate and a market cap of approximately $1 billion. Our long-range plan is not dependent on future growth from UT-related revenues, and yesterday's announcement from United Therapeutics does not change our strategic direction, a long-term plan, as the next 36 months should deliver over $350 million in royalties that have no cost against them. And our long-term supply agreement has six years left with minimum orders that should deliver over $400 million in revenue. Just as UT did not convert the entire market to Tybasu DPI, alternative delivery formats will continue to coexist. We've seen this dynamic play out before. Despite being the most widely adopted soft mist inhaler, Sporiva Respimat never achieved more than 50% market share versus the DPI eight years post-launch. Clinical experience with Tyveso DPI supports the storability. The brief study enrolled over 50 pH patients and less than 4% of patients dropped out as the cough generally subsides with time. And we've seen that in our Fresa studies as well. This has enabled Tyveso DPI to become a billion dollar brand. Competition in the pH will continue to evolve and it's reasonable to expect a company facing loss of IP on the nebulized product to pursue replacement options with soft mist inhalers being a likely path. Now I want to step back even further and highlight our revenue trajectory over the past five years. We exited 2025 with nearly $350 million in total revenue, representing a compound annual growth rate of approximately 46%. That growth reflects exactly what we set out to accomplish, moving from a company largely dependent on a single revenue stream to a diversified commercial stage organization with four FDA-approved products. We remain grateful to United Therapeutics and fully expect Tyveso DPI to continue benefiting patients for years to come. At the same time, we believe there will always be a meaningful market for dry powder inhalers, even as delivery formats evolve. We see a clear path to over $450 million revenue run rate in 2026 alone and look forward to discussing our growth drivers the rest of today. As we turn our attention back to Q4, which was a transformative quarter for mankind, we completed the acquisition of SC Pharmaceuticals, which strengthens our cardiometabolic franchise with the incredible team from SC Pharma and Furo6. We delivered record quarterly revenue of $112 million in Q4. And on the regulatory front, we have two important PUDUFA dates coming up with the acceptances of our files. First, the Afrezza pediatric indication with a PDUFA date of May 29th, and second, the Furo6 ReadyFlow auto-injector with a PDUFA date of July 26th. These milestones represent years of work and position us to potentially deliver meaningful growth in the years ahead. Now I'm going to turn to Furo6 performance. Furo6 had an outstanding Q4 with net sales of $23.3 million, up 91% year-over-year. And for the full year, 2025, Furosix generated 70.4 million in net sales. What's impressive to me is that the team shipped nearly as many units in Q4 as they did in all of 2024. As you can see, Furosix has grown consistently since launch. With clear acceleration in 2025, Q1 is typically soft as deductibles reset and patients face higher out-of-pocket costs, particularly for Medicare. but momentum continues to build throughout the year. If you focus on the last two quarters, I'm very impressed that the team remained focused during the acquisition and integration and continued to deliver record growth with nephrology accounting for approximately 15% of our sales. We've experienced minimal turnover within the sales force, and as we get past Q1, we expect significant year-over-year growth in the quarters ahead. Since we acquired SC Pharma, we've taken a hard look where the opportunities are to accelerate growth. Let me walk you through three key areas. Number one is hospital pull-through. We've deployed a key account manager team to deepen our IDM relationships and get Furosix integrated in the hospital discharge protocols. This is critical because the post-discharge period is when readmission risk is the highest. Number two is our Salesforce focus. We refocused the legacy SC team on cardiology and activate our endocrine team to cover nephrology. That gives us a sharper specialty focus and increased our sales rep footprint from approximately 80 to 160 reps, doubling our share of voice. Number three is our marketing investment. We've increased our marketing spend to prepare for the potential ReadyFlow auto-injector launch and to build broader awareness of FURO6 to treat fluid overload from the convenience at home. We believe our investments in these strategic initiatives will support FURO6 growth to achieve a CVR range of $110 to $120 million in 2026. Now let me talk about the FURO6 ReadyFlow auto-injector. We have consistently heard from HCPs that an auto-injector could expand the furosix market given the ease of use and convenience of a once-daily injection. If approved, it would deliver an IV-equivalent diuretic in under 10 seconds. Beyond the convenience to the patient, the Ready-Fill Auto-Injector has the potential to significantly reduce our COGS and free up cash to invest in the brand. Now turning to our Fresno Performance for 2025. In Q4, Afrezza generated 22.3 million in net U.S. sales, up 22% year-over-year. For the full year, we hit 74.6 million in global net sales, which included our first commercial shipment to CIPLA, our commercialization partner for India. This shipment marks an important milestone as we look to expand Afrezza growth internationally. Over the past couple of years, we've been very deliberate about managing Afrezza for profitability, but we're now in a growth mindset as we prepare for the potential pediatric launch and increase our commercial investments in 2026. I want to highlight an important development for Afrezza. The new ADA guidelines that came out in December position inhaled insulin as an equivalent option to injectable insulins or automated delivery systems, which are considered the standard of care. For years, AFREZA has not been on an even playing field, but now guidelines recommend HCP should evaluate the need for a modification of administration at every visit for patients who are not at goal. That's a meaningful improvement based on the scientific data we've generated recently. We believe our shift to a growth mindset supported by investments, guidelines, and a potential new indication will set up AFREZA growth in the years ahead. We are excited about the recent FDA approval of our label change, which clarifies the starting bolus dose when switching from MDI or insulin pumps. This graph from our dose trial shows that there was a 58% reduction in postprandial glucose excursions at two hours with the higher Afrezza dose compared to the original label. That's a meaningful improvement in post-mealtime glucose control, which is when the patients struggle most. We expect that this label update will help support healthcare providers by providing clearer starting dose guidance when transitioning patients to Afrezza and will support the pediatric launch if approved. Now I'm going to spend some time on the pediatric opportunity because I think it is one of the most underappreciated catalysts in our pipeline. If approved, Afrezza will be the first needle-free mealtime insulin option for pediatric patients in more than a century. We recently completed new market research, and I'd like to share what we're hearing from healthcare providers. The daily burden of diabetes management remains high for children and their families. Carb counting, rigid school schedules, and social dynamics create real friction with current mealtime options, especially for adolescents who are constantly snacking and are highly active and don't always want to be attached to things. In fact, our research shows that 93% of families request a change in their child's diabetes management. This tells us there's a significant dissatisfaction with current options and a real desire for innovation. Afrezza has the potential to address these challenges by removing the need for mealtime injections, reducing reliance on carb counting, and offering greater flexibility around meals. For children and their families, that flexibility can reduce daily stress and improve the quality of life while giving providers a tool that better aligns with how kids and their families actually live. Four important data points stood out to us that signal meaningful opportunity in pediatric diabetes. And please remember, this is an entire new segment that has never been marketed to or prescribed at Fresa historically. First, approximately 50% of HCPs say eliminating mealtime injections as their primary driver of adoption. Second, two out of three pediatric endocrinologists indicate they'd be likely to prescribe Afrezza. That's a strong signal of potential underlying demand. We're also encouraged by how early Afrezza could be used in the treatment journey. Nearly one in four HCPs indicate they would consider using Afreza in newly diagnosed type 1 patients. This has helped support our decision to launch the Inhale First pediatric study, which is now currently enrolled. Finally, based on this research, we see share potential in the range of 23% to 37%, and importantly, every 10% share historically represented approximately $150 million in net revenue opportunities. When you put all four of these signals together, the opportunity pediatric is both substantial and well-supported. I will now turn it over to Chris to review our fourth quarter and full year financial results.

Thanks, Mike, and good morning, everyone. For a summary of our financials, please review our press release issued before this call and our Form 10-K, which is now on file with the SEC. Now let me walk through our Q4 2025 revenues by category based on total revenues of 112 million, up 46% from the prior year quarter. As our acquisition of SC Pharmaceuticals closed on October 7th, Ferosix is now included in our cardiometabolic revenues and contributed 23 million of product sales. We recorded sales of 23 million for Afreza, an increase of 25% over the prior year quarter, which includes 600,000 of products sold to CIPLA to support their initial launch of Afreza in India. We are excited that the CIPLA team is now able to bring a differentiated treatment option to people with diabetes in India and look forward to supporting their execution on the launch. Lastly, Vigo was $4 million for the quarter, a slight decline from the prior year period and in line with expectations as we are not actively promoting the product. Collaboration and services revenue increased 5% over the prior year quarter to $28 million. Within collaboration and services revenue, $26 million of revenue was UT-related. This was primarily for the production of Tyveso DPI and the recognition of deferred revenue, as well as recognition of a portion of the upfront milestone we received related to the second investigational molecule as part of our collaboration with UT. Recently, we amended our supply agreement with UT to add minimum annual quantities and volume-based pricing. This provides us better predictability as we prepare our Danbury facility to scale our development programs over the next few years. To give this context, our 2025 Tyveso DPI manufacturing revenues were approximately $100 million. Based on our revised supply agreement, we expect the next two years to be generally in line with 2025 and for the balance of the committed contract term through 2031 to provide a revenue floor of approximately $50 million per year. Lastly, Q4 royalty revenue was $34 million, up 24% from the prior year period, which reflects continued strong performance of Tyveso DPI in the market. I wanted to provide some color about the sensitivity of our financials to potential changes in Tyveso DPI sales by UT. It's important to remember that our economics are driven by a royalty structure where we earn a net 9% following the royalty sale transaction we completed two years ago. What that means in practical terms is that even if United Therapeutics were to see variability or a decline in Tyveso DPI sales, the impact to mankind is significantly dampened relative to the products we commercialize ourselves. we're exposed to a fraction of the Tyveso DPI top line change. We expect Tyveso DPI to continue to provide meaningful cash flows, even in the event of evolving competitive dynamics in future years. So while we obviously care about the success of Tyveso DPI, our overall business today is far less dependent on United Therapeutics than it has been historically. For the full year 2025, total revenue was up 22% to $349 million, fueled by our two commercial growth drivers of Afreza and Ferosix. Afreza grew 16% over the prior year to $75 million. And now with the addition of Ferosix and Q4, we have added a high growth revenue stream. As a brand, Ferosix grew 93% year over year based on total annual revenues. When we look out at our commercial product portfolio, it is now more diversified and represents a significant portion of our expected growth going forward. Lastly, royalty revenue was up 25% year over year to $128 million driven by the performance of Tyveso DPI. On the expense side, R&D increased year over year as we progressed enrollment in our clinical programs and prepared to initiate clinical trials for our Mankind 201 program and IPF. SG&A increased primarily due to acquisition-related expenses and commercial investments ahead of the potential pediatric launch and the ReadyFlow auto-injector launch. For Q4 2025, we reported a gap net loss of $15.9 million and non-gap adjusted net income of $1.5 million. For the full year 2025, we reported gap net income of $5.9 million and a non-gap adjusted net income of $59.5 million. The adjustments for the fourth quarter and the year were primarily related to professional services costs incurred as part of our acquisition of SC Pharma, as well as amortization of intangible assets acquired, which is non-cash and will continue to be amortized over the life of the Ferosix IP. Lastly, I'd like to make a couple of comments about our outlook for 2026. United Therapeutics noted on their earnings call yesterday that they expect durable double-digit growth of Tyveso DPI in 2026. This will directly correspond to growth of our royalty revenue. As we compare the pre-acquisition expense run rate for Afreza and Ferosix to our commercial spend expectations for 2026, we anticipate investing up to an additional $40 million to support these brands' potential launches. This is based on making the significant investments in resources we highlighted earlier on the call today, including key account managers, patient navigators, and expanded field force, as well as increasing marketing spend. We expect both of these brands to be important contributors to our future growth over the next several years. We will have the ability to modulate these investments and adjust timing during the year as we evaluate how our tactics are impacting performance. Regarding research and development, our efforts will be focused on advancing our Mankind 201 program, as well as progressing our other development and lifecycle management programs. Additionally, manufacturing-related costs to get ReadyFlow auto-injector available for distribution upon its potential approval will be recorded to R&D this year. Before I turn it back to Mike, I want to mention that we'll be presenting virtually at the Oppenheimer Emerging Growth Conference later today. Next month, we will be attending the Learing Partners and the Barclays Global Healthcare Conferences. We look forward to engaging with many of you at those meetings. With that, I will turn the call back over to Mike.