MannKind Corporation

Good afternoon and welcome to the Mankind Corporation Second Quarter 2026 Financial Results Earnings Call. As a reminder, this call is being recorded on August 5th, 2026 and will be available for replay on the Mankind Corporation website shortly after this call 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 10Q for the period ended June 30th, 2026, the earnings release and the slides prepared for this presentation. Joining us today from Mankind, our Chief Executive Officer, Michael Castagna, and Chief Financial Officer, Chris Prentiss. I'd now like to turn the conference over to Mr. Castagna. Please go ahead, sir.

Thank you, operator. Good afternoon, everyone. Thank you for joining us for our second quarter 2026 call. I'll start with some opening remarks, walk you through some business updates. Chris will talk about our financial results and I'll close by giving a few closing statements here, followed by Q&A. Let me start by saying how we transformed our company and our potential growth trajectory with the strategy we outlined back in Q1. We laid out three major catalysts this year, a Fresno Pediatrics approval, opening an indication opportunity we have not had access to, Furosix ReadyFlow, which we have a CVR around because of the meaningful contribution this will have to the important growth of this franchise, and finally, the Phase 1b readout and attentive DPI in patients with IPF and underlying lung disease. These three things contribute to a solid foundation as we close out 2026 and move into 2027. Beyond the catalysts, AFREZ is off to a very strong start. Our top 20 key institutions have already written a prescription. Breakthrough T1D acknowledged the importance of this opportunity by funding a grant to go after insulin newly diagnosed patients. 306 showed strong revenue growth with 43% growth just over Q1 and our phase two inflow study has kicked off and underway with multiple shots on goal in front of us between Tyveso DPI, our Lenapeg DPI and now on the Tendon DPI, all focused on IPF disease. As we look at Q2 revenues, we grew 21% from Q1 26 to Q2 26. What's most important about this picture is when you double click down, marketed products were 27% quarter over quarter, where royalties declined 1% from Q1 to Q2. When you take out our collaboration service revenue, you can really see an underlying picture of what's driving our growth quarter to quarter. Now let me talk about our first tier revenue mix evolution as we look at the success of our diversification strategy that we laid out. When you take out that collaboration and service revenue, we grew 111% on marketed products year over year. This is obviously driven by the shift of 406, and you can see that the royalties remain a durable revenue stream for years to come. But the predominant revenue growth of mankind is being driven by marketed products, and this crossed the threshold in Q2 from Q1, where our two marketed products now demonstrate faster growth and a higher percentage of our revenue over the royalties by themselves. The royalties provide a great, strong base business as we go forward into our launch trajectories. Let me talk about the launch of Afrezan Pediatrics, which many of you have been asking us about. Now that we're approved, this is the first alternative mealtime injection in over 100 years. This product is solving an unmet need and a challenge that parents and patients face when it comes to timing of administration and seeing the impact that insulin has on their sugars and their CGM. Seeing the ultra-rapid effect of Afrezza, the earlier peak, and the tail coming off allows patients to dose differently and treat their sugars in a way that they just cannot achieve with insulin pumps or injectable insulin. This is now backed by more than a decade of safety data on the market, clear commercial opportunity, and access at $35 opens up the door for many patients to start this therapy. One of the main questions we get is why do we believe Afrezza will be different in pediatrics than the adult segment? Thank you so much for joining us. Second, there's a connected patient-centric community. We see this online. We see it on Instagram. We see it in education and nurse educators. The adults, we only targeted prescribers. There was limited surround sound on the patients. But the pediatric segment and the success we've had, we've seen noise come from caregivers, from CDEs, school nurses, influencers, and advocacy organizations across the board, driving a lot of demand and questions into the pediatric community. Third, in the bottom left, a stronger clinical foundation and KOL support. When we launched with the adults, we had two studies published and not a lot of top KOL support. As you look at pediatrics, we have some of the top world-renowned thought leaders talking about our data, talking about the unmet need and the solutions that a president can bring to pediatrics. This is followed by 10 years of safety on the market, new ADA guidelines, the INHALE-1 trial, as well as the INHALE-1 trial being done in the top 50, 60 centers across the US between all of our pediatric development. And then finally is removing friction. We know access is a hurdle for any new launch, and we've basically taken the opportunity to take away all objections around access FEV1 and providing point of care opportunities to make sure patients can have a frictionless, seamless experience when they go to start a Fresa. The first eight weeks support these four pillars are driving a different uptake curve than adults. When I look at the names of the institutions on this slide, these are some of the top centers in the country that treat the biggest volume of patients. In fact, one in three of the top 100 pediatric rapid acting writers have already prescribed to Fresa. We had 20 priority accounts and all 20 have written at least one prescription since launch. We're really excited by these early metrics and will continue to keep you posted as we go forward. And before I close on the pediatric launch, I want to talk about the media coverage has really helped convert early momentum. Over 200 markets in all 50 states got episodes on CBS and ABC, as well as numerous articles highlighting the new innovation in pediatrics. This has signaled more demand from HCPs and patients and awareness than we expected, and this media credibility is fueling more world engagement, social conversations, and pull-through opportunities that we didn't have otherwise. As I think about the roadmap to success, Afrez's future includes additional product development, digital advancement, and external innovations. Today, we had updated FDA-approved dose conversion in 2026. We have new guidelines to support, and now we have the pediatric approval providing a foundation for global expansion and opportunity. As we look to 2027, we expect to be able to introduce a two-unit cartridge, an inhale IQ, which will be a Bluetooth-connected device integrated with CGM. And then as we approach 2028, we expect to be able to have high concentration formulations of Afrezza, which ultimately will enable higher doses and lower powder loads at the current doses, minimizing any cough opportunity and increasing cost effectiveness as we get to higher doses in type 2. Now let me bridge to the FDA approval of the 306 auto-injector ReadyFlow. As we know, fluid overload across the patient journey is often something that happens at moments in time. The majority of patients can be stable on an oral diuretic at home. Oftentimes, OGs patients will start to have fluid overload and edema, and in the gut, it stops the absorption of not only the diuretic, but also the other meds to treat heart failure, causing a compound effect and worsening of this condition for patients. We often hope that furosix in the majority of our use today is in this early intervention stage in the community setting where we can hopefully prevent patients from going to the ER and progressing. The opportunity we see tomorrow, especially with this ready flow, is the post-hospital discharge, i.e. can we get patients out of the hospital sooner that are stable or reduce free admissions to prevent the 30-day penalty that many hospitals get for not completely drying out patients before discharge. We see an opportunity here to increase intervention in the early stage, as well as start to continue to get post-discharge protocols across the top health systems in the U.S. Since Q1, Mankind advanced several key 406 growth opportunities. First, we highlight a limited hospital presence. We increased our IDN engagement in hospital systems to drive stronger hospital pull-through. And as we see, our medical liaisons are engaging at the highest level on institution protocol development and discharge, as well as our key account managers working with institutions in quality, purchasing, and pharmacy to drive continued contracts and growth opportunities across these IDNs. We saw 36% growth in Q2 over Q1. Second, the team was really focused on trying to launch nephrology while continuing to deliver cardiology sales. We were able to separate those Salesforce opportunities this year. We caused some disruption here in Q1, but you can start to see the impact of that effort here in Q2 with 67% growth in nephrology in Q2 over Q1 and a record number of prescribers. The next is underfunded marketing spend. So we've made many changes to our marketing investments and you'll start to see those in the second half of this year as we prepare for the 406 ReadyFlow launch. We believe those investments will continue to accelerate growth as we close out 26 and position ourselves for 2027. So what does ReadyFlow approval now mean? First, it's the only IV equivalent diuretic delivered via an auto injector. Thank you so much for joining us. This is a really exciting opportunity to help patients prevent them from going into the hospital or hopefully getting them out of the hospital early or preventing those one in four patients from going back in. The FreeO6 ReadyFlow launch campaign is built to drive immediate awareness and adoption. And we're looking at field activation immediately along with integrated surround sound at the major health systems and opportunities where patients are showing up in these health systems as well as online with the prescribers and patients. We're excited to be present at these upcoming conferences in the fall, and we expect the awareness of Hero6 ReadyFlow to immediately take off in the coming weeks. Now I'm going to bridge to Netetnib DPI. This is an exciting opportunity where we just had a quick update last week, and we kind of walked you through the totality of the program, and today I'm just going to give you a few key highlights. Number one, our positive phase 1B study demonstrated safety and tolerability in patients with IPF. We saw no serious adverse events, no GI burden, no discontinuations due to safety, and no difference in spirometry parameters between placebo, which is an empty cartridge, and the tetanus DPI. Our phase 2 study is underway. Our first patient has been dosed, and we expect to continue to activate sites around the world and throughout 2026. One of the things I want to highlight before we talk about the PKPD is that C-Max is known to drive efficacy in pulmonary fibrosis. This means AUC is less of a driver in terms of the tetanus efficacy and hitting a peak threshold concentration matters more than total lung exposure. Beyond the peak, more exposure adds very little added benefit. And this is one of the challenges you have with oral delivered product is it's very hard to get high tissue levels in the lungs. We've known from our preclinical work that we can see significantly higher lung concentrations than plasma by targeting the lungs directly. So we believe that brief high peaks are sufficient with short bursts of high concentration to inhibit fibrotic pathways is the data that's been generated out there today on the Tetanib. Now as I move into our own program, let me talk about the data we have. Our Phase 1a validated efficient deep lung delivery of the tentative DPI. We had rapid dose proportional exposure and a favorable safety profile in our healthy volunteer data. When you look at our Phase 1a study, significantly six to eight fold higher concentration on Cmax in our Phase 1 study compared to a study out there that's been published in nebulized treatment. When you look at the data on the right, our seven-day treatment shows you a dose proportional response when you zoom in on the key attribute here as we're looking at C-max and AUC. Now let me walk you through the data we just released last week. For those that didn't see it, this was the first inpatient study to assess safety, tolerability, and PK in patients with underlying IPF. This was a two cohort multiple sending dose study where cohort one got two milligrams three times a day and cohort two got four milligrams twice a day delivered as two milligram cartridge, i.e. a patient took four cartridges a day in cohort two. When you look at the baseline characteristics, the age was 73, the females were 37%, and the pulmonary function of baseline is consistent with you'd expect in this population with an FEV1 of almost two liters. So in our Phase 1b study, in patients with underlying IPF, we saw a clean safety profile with zero safety signals, zero bronchospasms, and zero discontinuations or down doses. This becomes a challenge when you think about discontinuations with oral therapy can be as high as 50%. This overall profile supports chronic use and de-risks our program as it advances into Phase 2. Now let me double click down on the overall treatment adverse events, which was one of the questions we got post our call last week. And as you can see here, as previously stated, cough was about 39% in this trial. But there's no other single adverse event that really showed any concerns as we look at safety and tolerability in the placebo group or the active group. So now let me double click down on the cough. There were no discontinuations and no serious adverse events. Thank you for watching. The cough typically happens with the first dose and does not worsen with time. And this is not a product that you're going to continue to increase the dose over time. So we do not expect the cough to change from this first seven days of treatment. There were over 450 doses administered over seven days in patients with IPF and not one patient had the dose reduced due to the powder load or the cough from the powder itself. We're really proud of these results and we're not surprised given that technosphere powders have been studied in thousands of patients and we've seen very low single digit discontinuations due to cough.

Now I'm going to turn it over to Chris for our financial results. Thanks, Mike, and good afternoon, everyone. Second quarter revenue was $109.4 million of 43% year over year and first half revenue reached $199.5 million of 29% over the first half revenue of 2025. At the product level, Afreza generated $17 million in net sales. Once we are through the initial launch phase for the pediatric opportunity, we intend to provide separate visibility into adult and pediatric performance metrics. As you would expect, because the pediatric indication was approved on May 29th, the quarter included only a limited period of pediatric launch activity. For 06 generated 22.2 million in net sales, an increase of 43% from the first quarter. This was driven by a 49% increase in units sold with the offset due to an increase in gross to net adjustments, which were 29% for the current quarter. As we acquired Ferosix in October 2025, we are not making prior year comparisons. Our United Therapeutics revenue streams also continue to provide a meaningful contribution. Royalty revenue increased 4% over the second quarter of 2025 to $32.4 million, while collaboration and services revenue increased 53% to $35 million. Thank you. As we've noted previously, this revenue stream may fluctuate between periods depending on production scheduling at our Danbury facility across Afreza, our development programs, and Taveso DPI. Based on our production plans, we expect Q2 to be the highest quarter of manufacturing-related revenues, with the annual revenues in line with the prior year. Overall, the quarter reflects increasing revenue diversification from our promoted commercial products relative to our stable base of UT-related revenues. Turning to the bottom line, for the second quarter of 2026, we reported a gap net loss of $19 million compared with gap net income of $700,000 in the prior year quarter. Our non-GAAP net loss was $2.7 million compared with non-GAAP net income of $13.9 million in the second quarter of 2025. The year-over-year change primarily reflects the planned investments to support Ferosix, including the ReadyFlow formulation, the Pediatrica of Fresno launch, investment in our Mankind 201 development program, and the incremental increase in our cost structure following the SC Pharma acquisition. As you review our non-GAAP adjusted net income, I'd like to call out two lines that are new this year. The first is the amortization of acquired intangible assets. This relates to our acquisition of the Ferosix OnBody Infuser, which is being amortized over its current expected useful life. Now that the auto-injector has been approved, we will begin to amortize this intangible asset in the third quarter and on a full quarter basis will be approximately $2.2 million. It is important to note that the amortization of these intangible assets are non-cash, but we will see these expenses flow through our P&L for many years to come. The other new item relates to the accounting for our contingent value right associated primarily with the recent auto injector approval. We will pay out the $45 million CVR in Q3 and the balance of expense, approximately $16 million, will be recorded in the quarter. In conjunction with the auto injector approval, we announced a $50 million pipe financing, providing us pro forma cash position at quarter end of $161 million and giving us sufficient cash to pay the CVR and continuing to fully support our two launches and accelerate the development of our 201 program. On the expense side, R&D expense was $18 million compared with $13.7 million in the prior year quarter. The increase was primarily attributable to development of the Ferosix ReadyFlow formulation, higher personnel costs following the SC Pharma acquisition, and increased development costs driven by our Mankind 201 program. SG&A expense was $58.3 million compared with $31.6 million in the prior year quarter. The increase primarily reflected the promotion and support of Ferrosix, as well as the expansion of our field-based teams and activities to support the pediatric Afreza and Ferrosix ReadyFlow launches. As we discussed last quarter, 2026 is a deliberate investment year. With both approvals now achieved, our focus has shifted from launch preparation to disciplined execution. We will continue to monitor performance, prioritize investments behind the opportunities showing the strongest returns, and appropriately managing our cost structure. Before I hand it back to Mike, I want to mention that we'll be participating in the Wells Fargo Annual Healthcare Conference in Boston, as well as the Cantor Global Healthcare Conference and the HC Wainwright Global Investment Conference in New York. We look forward to engaging with many of you there. With that, I'll turn the call back over to Mike.