Great. Good morning, everyone, and welcome to Oppenheimer's 35th Annual Healthcare Life Sciences Conference. My name is Andreas Argyrides. I'm one of the senior biotech analysts at Oppenheimer, and today I have the pleasure to be joined by the managing team from MannKind, Michael Castagna, CEO, and Chris Prentiss, CFO. MannKind is focused on the development and commercialization of innovative therapeutic products and devices to address unmet needs in endocrine and orphan lung diseases. The company's signature technologies include Technosphere, dry powder formulations, and Dreamboat inhalation devices. Commercial products from the endocrine unit include Afrezza and V-Go. MannKind is a collaboration with United Therapeutics for Tyvaso DPI inhalation powder, the first and only approved DPI for PAH and PH-ILD. Orphan lung pipeline assets include MNKD-101 for nontuberculous mycobacterial lung disease and MNKD-201, a dry powder formulation of the nintedanib for IPF. Thanks all for being with us today.
Maybe we'll start with an overview of the company and the most recent progress, and then we can dive into questions.
Good morning, everyone, and thank you for having us today. We really appreciate the opportunity here. For those of you who don't know MannKind, we've been around 34 years. It's an inhalation platform company, and it originally started on inhaled insulin, as many of us may have known the history of the company, and we pivoted to orphan lung disease back in 2017, 2018, with treprostinil, which we ultimately licensed to United Therapeutics, we'll talk about later today, and then we went ahead and built up something for clofazimine and nontuberculous mycobacteria, then we formulated a couple of IPF drugs, and we picked the nintedanib to move forward. We continue to work on Pulmozyme for cystic fibrosis.
That one's been a little bit harder because the endpoints, as those kids have grown into adults and live very well without exacerbations, it's just very hard to come up with a trial that you could run that would show a benefit or show equivalency given the reduction in exacerbations in that population, and then the company has continued to bolster up its endocrine focus here the last couple of years with pediatric readout, we'll talk about a bit as well, and we continue to look for BD opportunities, but as you can see, we're really focused on our own pipeline and developing our own products and funding our own growth organically right now, so that's been our focus.
Great. So you're in a, as you just said, you're in a unique position to be able to fund your own programs like your rare lung pipeline. And you're doing so with the profitable endocrine unit with Afrezza and V-Go and growing royalties from United Therapeutics for DPI and also manufacturing revenues of the DPI. Can you walk us through the upcoming pipeline catalysts?
Sure. As you think about the company and the growth we've had, you know we're very proud of our partner, United Therapeutics. They've done an incredible job with Tyvaso. We've had to do an incredible job keeping up on manufacturing and staying ahead of the curve, and that's really given us a lot more freedom and flexibility over the last five quarters as we became profitable. We were able to fund our trials and really not worry too much about, you know, how do we stay alive and how do we move these products forward? In fact, we did that in conjunction with paying down our debt, and it's really removed any barriers to the future of the company. So when you think about MannKind, in my mind, we are a diversified play. We're not dependent on any one singular asset.
I think about some of the failures we've had over the last few weeks in pharmaceuticals and biotech. These are single-purpose companies, and it's a bet the farm strategy. We don't have that here, thank God. We're really well diversified in terms of whether diabetes hits, Tyvaso hits, the pipeline assets hit. We don't need everything to make us successful, but we have a lot of good shots on goal as we think about that. In particular, I think we laid out the strategy back in 2018 where we said, you know, let's sell off Tyvaso DPI and that growth that would come in in the 2021, 2022 timeframe is about when we thought the first pipeline assets would be starting to go into phase I, phase II, and we'd be ready. It's nice to see that full strategy come full circle.
And so now that we look out over the next five years, we're really just trying to prepare for additional launch indications, new product indications, and BD opportunities to continue to bolt on to our platform. And on top of all this, we actually are still working on new formulations and new ideas. So we're not done yet in terms of molecules that we can put on the platform or ideas we have to make the platform more successful in the future. And so what I'd say is we're just getting started despite all the noise in the company. You know, we finally have commercial assets moving forward. We got Afrezza, we think we can relaunch, and we got new ideas that we're putting into the platform as well.
This should continue to give, I think, our shareholders a nice growth pattern over the next 10-15 years when we look out with no major generic competition, nothing but upside from where we sit.
Oh, absolutely. I mean, and if MannKind stands for anything, you know, today, it's, you know, the resilience that you guys have had in turning the company around and getting to where you are today. So, testament to you guys.
So I think as you think about the pipeline here, you know, we'll talk about clofazimine and 101. That's probably the near-term one that we're kicking off in the trial around the world. And then 201, which will be in the nintedanib. And that to me is an FDA meeting here coming up in the next three months. And then with diabetes, you got pediatrics and INHALE-1 and INHALE -3 with presentations coming out this year and Afrezza, hopefully label changes. And then you got Tyvaso, which just finished up enrolling TETON 1 here. And then that'll be a catalyst for TETON 2 reading out in the third quarter, roughly. So I think about the pipeline as multiple shots on goal here, multiple catalysts. We can talk about individually each one, but they're all exciting, right?
Then they all kind of build over the next, you know, six to 18 months, really.
Yeah. And there's a lot of value creation potential here. All right, so let's do that. Let's start with clofazimine, MNKD-101 for NTM lung disease. There have been some failures in the space, and the unmet need is high. Can you discuss the limitations of current therapies and how 101 can fit into the treatment landscape?
Sure. I mean, it's very unfortunate. You're right. When we started the trial, one of the reasons we were, I get asked, why do we not go to a dry powder? And part of it was the fastest way to market was a nebulizer. And there were a couple of competitors coming quickly, and we wanted to stay ahead of them. And unfortunately, they didn't quite make it through last year. And now we find ourselves it's just us, right? There's nothing in front of us besides Arikayce and early lines and nothing behind us in the next three to five years. So now it's just us and Arikayce to really build up this market. And, you know, Insmed is investing a lot of money, and they're doing very well, thank God.
And we continue to watch that closely because we believe our product will improve upon the opportunities that exist out there today in terms of dosing frequency, number one. We look at clofazimine as a dosing every 28 days you load along with the nebulizer, and then you come off treatment for two months and reload again. And so really think about that as a two-shot over six months regimen. And what that does is it takes the nebulized burden away from the patient. It takes the cost and copay away from the patient. And it takes the daily cleaning away just to, you know, nebulizers are not easy. And it gives them back a lot of free time.
Assuming the early pharmacokinetic data holds up in animals and what we saw in our 28-day study there, we can really show that clofazimine gets into the lung and the macrophages grab it and pull it down deep into the tissue. It's very lipophilic. So when the macrophages die, it releases the clofazimine. The next set of macrophages eat it up again and bring it and keep it deep in the lung. So it's got this very long half-life. And one of the things that clofazimine improves upon the oral formulation is really around QT prolongation. We really lowered the dose to minimize any QT issues. Skin discoloration is a big problem for those who don't know. Clofazimine is used off-label, predominantly, you know, in the U.S. through Novartis' expanded access program, as well as ex-US that's available as a generic.
You know, people in Asia don't like the skin discoloration features of clofazimine. Unfortunately, it builds up crystals in your skin. So we also believe we lowered to those there. And then the last thing that does is cause organ accumulation, which becomes a safety issue. And so we really tried to take all that excess drug floating around the systemic circulation and put it directly into the lung. And we've calculated those doses. And we actually went a little bit higher than we had to, mainly because we knew it was safe and tolerable. But more importantly, we didn't want to have a dosing mistake, right?
I think that's where some of the companies that failed in the inhalation space last year, NTM. It's either they didn't have enough drug getting to where it needed to go or the safety features of the product caught up with them. There's a balance there. There's always a balance between safety and efficacy. We think we really matched that to get well above the MICs in this area to kill this mycobacterium. I have to say, I was traveling last week. I went to visit one of the largest NTM centers in the country. It's a really tough disease to treat. These patients need alternatives. You know, I can talk about the trial in a second if you want, but we're very excited. Let me stop there. Let you ask anything else.
Yeah, I mean, maybe continue along the lines of the immediate market or how you're thinking about 101 and the addressable population, quantify that a little bit, and then, you know, compare that maybe to Arikayce from there, and then we can get into the design. Yeah, it'd be helpful for everyone.
Yeah, I think there's two things on the population. One, you know, our market research would indicate just based on the profile and the dynamics there that we would steal a large share from Arikayce. I also think, as I talked to thought leaders, there's an opportunity for combination treatment, right, that these two drugs could be synergistic together, at least in the models that would show accurate, you know, how it works out in the real world. We still have to test it. And then the other part of this is the dry powder version. So we are working on dry powder. We'll be able to select that very shortly. And some of the thoughts we're having is do you load the lung with a nebulizer, really try to get the disease under a little bit of control, and then follow up with the dry powder and maintain them.
And so we think we have an opportunity there with clofazimine versus Arikayce to really show these two products could be differentiated and used in different ways in different populations. And so we do expect to move into the earlier lines of treatment. We're kind of just waiting to see how the trial's enrolling at the speed of enrollment, get the dry powder stable, and you'll start to see hopefully a bigger life cycle management play here on clofazimine for us. But we really look to Japan, US, size of the market and pharmacies. You know, it's about 100,000 patients in both markets. And we could see Arikayce will do almost $100 million in Japan, a little bit in Europe and a lot in the US. And so we feel these are the main markets of focus for us for a clinical trial.
And then the last thing I'd say on clofazimine is just it's an exciting product. There's nothing else out there. There's a lot of KOL support around it. And there's a lot of worldwide data that the oral clofazimine exists that works well. So just how do we make sure that this continues to move forward in a good way and as fast as possible? So sitting here today, we probably have about 65% of the sites activated. And I'll get some guidance in a few weeks on the earnings call on just enrollment and how that's heading.
To your point about going to a DPI version, I mean, nebulizers are there, I say, coming back in vogue to some extent. So it's not, I think patients are, you know, there are benefits to nebulizers as well. So I think that's still an advantage in many ways too, especially from a payer standpoint too. Maybe just, so as far as the design of the study, can you tell us what we're looking for from an endpoint standpoint perspective and kind of how the study's powered?
Yeah. So the trial we designed to be against placebo. So it's a 2-to-1 randomization. And what we've done is basically we'll have an interim analysis when the first 100 evaluable patients enroll. And so we expect to hit the enrollment number by the end of this year and then call it 6-7 months later, once maybe 8 months, depending on when you get the sputum. We'll call it roughly mid-next year. We will get that readout. And what that readout will tell us is are we on track to hit our primary endpoint? And predominantly, we bias towards sputum conversion in terms of negative sputum. There's a co-primary of quality of life. And I think that one's going to be a harder metric. And so we've not necessarily powered the trial. If we're close on that, then yeah, we're going to make sure we hit it.
But if we're far off, we think this patient population needs this sooner or less than one in development. And that's probably the biggest challenge to me with the FDA. It is really this co-primary desire they have on a quality of life metric plus a sputum. Everywhere else in the world, they accept sputum only. And so this is one that we, you know, went back and forth with the FDA many rounds. We'll continue to talk with them, but, you know, we think getting a sputum conversion, if we can hit the co-primary of quality of life, that'll be great. But as you may, your investors may not realize, Arikayce did not have the quality of life endpoint, right? And they got approved on a single trial.
So what we're really focused on is meeting the safety database requirements and making sure we get this filed as quickly as possible to get the humans. And so that's really our desire is to move this there fast. The trial itself, you know, if the size has to go up, which we suspect it may, the good news is by the time we hit the peak enrollment by the end of this year, we should be seeing, you know, 10 to 20 patients a month from enroll. So if it takes us six more months to get the numbers, we should hit a pretty decent number in the trial. So we think we'll be okay. Even if the interim analysis says we need another 50 or 100 patients, we should be pretty close to that by the time we find that out.
In other words, we're not going to stop enrollment. We're going to let it keep going in anticipation of building up the safety database plus any statistical anomalies that could happen.
Okay, great. Let's move on to nintedanib, DPI, MNKD-201 and IPF. Before I get to my question, we had a competitor update last week. So yeah, it seems as if the IPF competitive landscape is getting smaller.
Oh, for sure.
Unfortunately, yes. Very, very tough as we know here. And yeah, those are unfortunate updates for patients, for the companies involved, et cetera. You know, if you want to add some comments, by all means, we'd love to get those. But maybe, you know, as it pertains to 201, what is the latest? You completed the phase I. What's the latest here with the regulatory agency interactions for an end of phase I meeting?
Yeah. I think at first I like to, you know, the competitor out there, you know, we always believe nintedanib will be used in conjunction with products like a BI or Bristol Myers or Pliant. So we never view them as direct competitors. We view it as part of the building blocks to make combination treatments. And so if anyone out there is looking for a job from those companies, let us know. We're always hiring for good talent. But this is a difficult disease. It's got huge high unmet needs. It's only got two products ever approved. And, you know, that's one of the things we like about nintedanib is we know the drug works. We know roughly the dose you got to get into the lung. And that's really our focus here. Excuse me. It's like Colorado dry weather.
Yeah, we had a good time last week. That's for sure.
I think this is a very difficult population. Because of that, you know, we have a low-risk, I'll say high-value target here, meaning with nintedanib, our platform, the dose, you know, if we can get this through phase II, three, I think people will be very excited, right? It's not a novel mechanism. We know the drug. We know the target. We know our platform. I think from all that perspective, we got through phase I. At this point, everything looks to be good to go to phase II. We just need the FDA to confirm they would align with our findings. We have designed a phase II trial that'll be 100 patients. This will be descriptive statistics.
I mean, we're not powering it for different doses, but we are testing different doses to show that, you know, any of them could be comparable to nintedanib. And I think what we're really looking for is differentiation on the diarrhea and the safety profile and tolerability profile. And that's, to me, you know, what your audience may or may not realize is 50% of the people cannot tolerate the standard of care. I mean, they'd rather die than actually keep taking the drug. And that's pretty bad. But that is how severe the side effects are of these drugs. And we need better treatments. We need more options and better delivery. So despite what could happen to the payer environment, you know, these people have an 80% probability of death within five years. And it's unfortunate. And they need options.
And we believe that this nintedanib could be a really nice option for patients. And we just want to get as quickly as we can through the next phase. And, you know, and hopefully with some of these sites now freeing up patients, we'll be able to just enroll that much faster where we want to be. So we'll see where we go.
Okay, so we'll expect an update on the quarterly call on kind of plans for the program.
Yeah. I'll showcase a little more. But more importantly, we got an FDA meeting already scheduled here in early April. And so we'll see how that goes. And if they approve our phase II, then there's always some changes they'll make, but nothing major, hopefully.
Okay. And maybe before we move on, maybe I'll just ask. I'll get Chris involved here. Maybe give us a brief financial overview of the company and where it stands and all of that. Thanks for joining us, Chris.
Yeah, of course. Thanks for having us. I think the biggest update is in Q4, we were able to take out 84% of our senior convertible notes. So that is the remaining debt instrument that we had in place. There were two others that the team took out at the beginning of the year in April. So our financial position as we close out the year, we feel like we're in really great shape. We have $36 million of debt outstanding. We'll update everyone on our cash position. But from a pro forma perspective, as of Q3, that would have been $180 million. And that would continue to grow as we are generating a cash flow business. So when we look at what the revenues are able to generate, we're able to fund our pipeline. That puts us in a really unique position for the other biotechs I've been at.
It's been exciting to join the team here. We're looking forward to executing on the milestones that Mike highlighted for 2025.
Yeah, fantastic. Great job, guys, on that front. All right. So let's move on to United, your partner, United. And they're going to have a big readout in IPF. They also have a PPF study ongoing. How are you guys thinking about the opportunity here for MannKind from the royalties and the manufacturing perspective?
Yeah. I mean, everything we see, you know, we continue to manufacture to UT's forecasts that continue to be a good direction. You know, so we feel very good about the volumes we're generating out of the factory and the continued expansion opportunities that UT has in front of them, whether that's international or U.S. with new indications. We see Tyvaso as a bedrock in the company in terms of just producing a nice steady downstream. When I think about, you know, the example when you're a single product company and something doesn't read out, you're kind of stuck. Right here, we have, you know, a good underlying pretty stable revenue stream growing under Tyvaso DPI. The diabetes business continues to grow. V-Go continues to remain, you know, relatively stable or in a realm of profitability for us.
And so we just don't have these one-off drops that could happen. And so what I really like about DPI is it's got a number of shots on goal for upside, right? And so if IPF hits, you know, this will be incredible to MannKind shareholders, incredible for patients. And it just opens up a whole new door of opportunities. And so that's one of the things we look at is I don't view Tyvaso DPI as a competitor. It continues to show hopefully our platform works, helps more for lung populations and that we can just continue to expand as we look at our own platform for our own molecules, right? That'll just be more awareness of the technology.
Because one of the things we were talking to some of the pulmonologists over the last couple of weeks, and you know, these patients, you know, they do struggle with inspiratory capacity for some of these other devices. And we think that's an advantage of our device is it only requires two kilopascals for two seconds. So it's just not reliant, I'll say, on patients who just don't have the inhalation effort or capacity, whether that's, you know, patients who have COPD or comorbid conditions. That's an important aspect that we think is underappreciated about the platform versus a traditional device like a Spiriva or something like that. You need a lot of effort. And that effort really drives where the powder goes. And it mostly gets stuck in your upper airways.
And so we think that Technosphere particles and the way they fly and they deposit deep into the lung and across the lung everywhere is really important aspects of what we do, so.
Maybe you want to expand a little bit on the device itself. I mean, I've been to Danbury. I've had the awesome presentation, and I've seen it working live. I actually probably have one of those on my desk here somewhere.
We have plenty. We'll send you a model. But no, I mean, for those who don't know the device, it really is a unique device platform. And that's really what makes the powders fly the way they do. Even if we took like Advair and put it in our device, we would deliver more drug to the lung even if it wasn't our powders. But when you make it into our powders, they fly even better. So it's really the device plus the powder technology and formulation work that our team does that makes these two things go well together. So it's not just one or the other, as many people think. Well, why not just use any powder? Well, part of the mystery of what we do is taking Technosphere particles and making them fly deep into the lungs and formulating them so they're stable.
And the way they clump together and disintegrate when they get out of the device is all important aspects of what we do. And so that's what we look at, you know, whether it's pH with a consistent dose delivery or hopefully IPF or ILD. We see a nice dispersion of the drug throughout the lung. And the device has a kind of resistance mechanism, meaning if you inhale harder, you can't get more air out of the device. So it's really about a consistent low velocity powder that almost comes out like a plume of smoke when you slow it down 40x. But in a half a second, that whole cartridge is emptied and the powder is already deep in your lungs. And that's something that people don't realize. You can't really mess it up. And people say, what if they can't inhale properly?
We've done all types of tests on rotating the device, holding the device at different angles, and, you know, it really is almost foolproof. We just finished up a 100 and some patient diabetes study where we actually measured all the inhalation effort across all those patients, and again, we couldn't see any real difference that would drive an efficacy outcome, positive or negative, if they held the device one way or another and didn't quite inhale as much as they thought. It's really difficult to screw it up, I'll say, so anybody can screw up anything, but we've shown down to four-year-olds up to eight-year-olds that.
I think I tested it pretty intensely at one point, and, you know, it definitely, to your point, you know, I didn't mess it up or anything like that. I mean, on that front, how are you guys thinking about potential partnerships? How are you thinking about even additional pipeline, you know, bringing in additional programs, and what's kind of like the mindset there?
Yeah. I mean, with last year, we picked up the Pulmatrix Research Facility up in Boston. And that really enabled us to get, you know, a team that's been working well together and also increase our capacity. One of the things we found is between the scale-up of Tyvaso, the scale-up of MNKD-101, nintedanib, plus enhancing the formulation work and other work we're doing on Afrezza, honestly, our team has just been busy. And there was no capacity for additional BD opportunities. And so we felt bringing on the platform with what they had up there, plus the team, we really could increase our capacity to do more. And that's, you know, we're now moving some other molecules in development. We're moving 101 into 102 powder, we call it here on this side. And so we feel there's more.
And then from a partnership perspective, you know, we spent a lot of time with small companies doing a lot of formulation work over my first couple of years here. And we always found we got to the end, they didn't have any money to keep going. And as you know, biotech's been in a five-year rut. So, you know, if people bring us ideas, we're happy to work on formulations or co-risk it. But I just think that's somewhat of a distraction to our core of what we're trying to do and bring molecules to market to patients. But if somebody's got good ideas, you know, we'll continue to evaluate those and try to move them forward. So we think that's something there. But really, we're quite busy. And I think that's what's amazing. We're building out an MNKD-101 manufacturing area.
We're going to be scaling up GMP for 201. You got enhancements we're going to make for Afrezza over the coming years. So we just feel a lot of good things happening, and that team is working full throttle right now, so.
Great. Yeah. I know if I were developing an inhaled product, I'd come to you guys. That's for sure. But that's just my endorsement. Unsolicited.
Thank you.
We're almost at time, but I'll just turn quickly to the endocrine business. How do you think about the label changes for Afrezza based on INHALE-1 and INHALE-3 data last year?
Yeah. I mean, this has been a long turnaround, longer than I would have expected. You know, we made a lot of changes coming into this year with the business. And so one of the first is we brought in Dominic Marasco as the President now of Diabetes. And one of the reasons we made that shift was really to get ready for kids, right? We got to basically relaunch the entire brand. We have the capital to do that. We have the data sets now. We got the publications and conference support. So I think it's really having a team out there who's motivated to change the standard of care.
The guidelines got updated at the end of the year for the standards of care to actually make Afrezza more prominent throughout the guidelines and more consistent to injectable insulin, which was a big multi-year effort on our team. We got Medicare coverage now at $35, and a couple of things we're doing this year. We are remodeling our hub. And so what I mean by that is, you know, reimbursement and access to Afrezza becomes one of the major perceptions of the product. And so we have a $99 cash program called $3 a day. We have $35 Medicare. And we bring anyone that's approved commercially down to pretty much $35 now as well. So making sure that that is front and center with doctors so that that is not the objection is number one goal for this year, right? And then it's increasing awareness.
And one of the things we just had a speaker talk at the end of the year. And he said, you know, what is the role of insulin? And the role of insulin is to stop hyperglycemia. But that's not how most people think about diabetes and insulin. They think about insulin as bringing down your sugars. But I do think that's a big opportunity to educate the marketplace, which is, injectable insulin just doesn't kick in for 90 minutes. And it's why patients struggle. It's why they have CGM, because they're constantly on this roller coaster up and down of their sugars. And no matter what pump you have or AID system, it just does not work fast enough relative to inhaled insulin or relative to your food intake. And that's the biggest mismatch. And so even sitting here today, the new T1D Exchange data just got published.
The average A1C is 8.6 in type 1. And the average percent of people not at goal is 76%. So despite the billions of dollars we've spent on technology in the last decade, we are not making huge strides on outcomes for patients. And that's really our focus with the type 1 population, pediatrics coming, and updated dosing in the label will just all make Afrezza's profile that much better. Now it's an awareness issue. It's a marketing issue. We have the data. We show more people get the goal on Afrezza. And we think that's an important message for payers and improving patient access. And hopefully, you'll see us not as much in the first half, but really as we get into the second half and getting ready for 2026, that'll be a big push for Afrezza.
But really retooling everything in the first half to get ready for the second half.
Great. Exciting stuff. You guys have a really exciting year coming up. We're looking forward to all the updates. Thanks for joining. I think we're at time right now. It's been great catching up. And, you know, we'll catch up soon again. Congrats to your Eagles. Hard to say.
Appreciate it. I was waiting for it. So thank you.
Great victory. Great victory. And just keep up, you know, we're looking forward to all the progress, you know, continued progress this year, guys. Great stuff.
Thank you. If the Eagles go into the Super Bowl, MannKind's going to strive for greatness in the future now, so.
You got to get like an Eagles logo for MannKind or something like that, like a version of it.
We'll turn the logos green for a day.
Exactly. Thanks, guys.
Thank you, Andreas. Take care.
Thanks.