Good afternoon, everyone, and thanks very much for joining us here at the HC Wainwright Annual Global Investment Conference. My name is Brandon Foulks. I'm one of the biopharma analysts here, and joining me for a fireside discussion up next is MannKind. From MannKind, I have Waseem Farez, who is the Therapeutic Area Head for Orphan Lung Disease. Thank you very much, Waseem.
Thank you.
As well as Chris Prentiss, Chief Financial Officer. Thank you to you both for joining us.
Thank you.
Yeah, I think, Waseem, it's a testament to MannKind that I have you up here, and this is all we're discussing today. I'm going to focus in on the development pipeline, on MannKind. Yeah, I think, Chris, congrats on all the news recently. It's been a busy month.
It has been a busy month, and thank you and HC Wainwright for having us here today. Appreciate it.
You know, I don't think the company needs any introductions, so I'm going to just dive in, right? Feel free to, if you do want to sort of emphasize anything on the company in general as we go through the questions, just feel free to add it. Waseem, let's go straight in. ICON-1, the phase 3 trial, the enrollment looks to be progressing really well. You know, can you just walk us through the current enrollment trajectory and just any updated expectations for the interim readout?
Sure, and thank you again for having us. We appreciate the opportunity. ICON-1 enrollment is going very well. With the last update we gave, the earnings call was, we've randomized a total of 90 patients. It continues to go well, and we're on track to hit our enrollment for the interim analysis by the end of this year.
Fantastic. When we think about the primary endpoint endpoints, the co-primary endpoints, can we just talk about the difference between the U.S. and ex-U.S. markets there? How do you plan to manage the regulatory environment and sort of manage the clinical trials in different regions?
Yeah, so it's the same clinical trial, same study design, same inclusion criteria. At the end of that trial, we're going to have the same data set for both. We do have regulatory alignment and agreement with each of the target health authorities, be it the FDA, PMDA in Japan, and other health authorities. The difference is that how the primary endpoints are being analyzed. The difference is more on the analysis side rather than on the study design or execution side. Outside of the U.S., there's a single primary endpoint, which is sputum culture conversion. This has been historically what the basis of approval for the other assets in this indication. For the U.S., in addition to sputum culture conversion, the FDA wanted a patient-reported outcome. We do have a co-primary endpoint of quality of life questionnaire as a co-primary endpoint in the U.S.
It's also collected outside the U.S., but outside the U.S., it's treated as a secondary endpoint. We do have alignment and agreement with all involved health authorities on these analyses and study designs.
Fantastic. You know, one thing that you did make public recently was the low dropout rates today. Right. I guess at least from where we sit, it obviously suggests really good tolerability. What early safety insights can you share, especially regarding potential pulmonary AEs versus oral perphenazine?
Right. Obviously we're still blinded, but we know the sample size, how many patients have been randomized so far. We know that two-thirds of them are on active study drug, one-third are on placebo. In a blinded fashion, looking at the whole data set up to today, we're very encouraged. From looking at the results from a safety tolerability perspective, the discontinuation rates continue to be low. We're very happy with what we're seeing so far.
Maybe just sort of staying on the safety side of things, on 101, I guess it aims to reduce the systemic exposure and side effects that we've seen with oral formulations.
Right.
Can you just talk about the data you generated to support this potential differentiation and moving into the phase 3?
Right. It's twofold. The low systemic concentrations, that's a big part of it. The other part of it is completely bypassing the GI tract. With oral clofazimine, the few side effects that are known, and as you know, clofazimine is not a new molecule, so we understand it while it has been around for decades. Completely bypassing the GI tract will take away the GI-related adverse events that are known to be with oral clofazimine. The significantly lower systemic concentration addresses the other side effects that oral clofazimine has, specifically the skin discoloration and the prolongation of the QTC on EKG, potential serious arrhythmias. We believe we'll have high enough concentrations in the lung to be efficacious. Regarding your question, data that went into that, again, clofazimine is not a new molecule, so we understand pharmacokinetics, distribution, pharmacodynamics. That has been established over many decades.
We did our own preclinical studies as well to better understand with the inhaled route how the distribution is in the lungs versus elsewhere. We took this data, what we know about clofazimine, and then we incorporated into that the systemic PK that we generated from our phase 1 study in humans. We put it all together into a simulation part about the expected concentrations in the lungs versus systemically, and that's the basis of our program.
Great. If we think about the refractory NTM space today, it's obviously dominated by Arikayce. MannKind has sort of talked about the dosing schedule, right? The sort of 28 days on, 56 off, and how this could improve adherence.
Right.
Granted you're on the development side and not the commercial side, but just the commercial profile, how do you envision positioning ICON-1 against Arikayce commercially, just given you will be displacing an incumbent?
Right. The only approved drug, as you mentioned, is Arikayce in this indication in refractory NTM. Assuming our hypotheses are true on both the efficacy side, but also safety and tolerability, and as we said, this is strongly supported by what we are seeing in a blinded fashion today on the safety and tolerability side, we see the place for inhaled clofazimine. It will capture different subpopulations within that. We see it as a first-line treatment in refractory NTM. Those who are refractory, they haven't been exposed to Arikayce or other alternative therapies, there will be a big place for inhaled clofazimine there. This is one subgroup, a big subgroup. The other one are those who are prescribed Arikayce, but they do not tolerate it or have safety issues, they have to discontinue it. We will capture those. These will be transitioned or switched to inhaled clofazimine.
A third subgroup are those who are prescribed Arikayce, but do not respond to it. Inhaled clofazimine will be used there. The other subgroup is those who respond to Arikayce, but then they recur. As you know, the recurrence rate is high. That is where inhaled clofazimine will come in. The primary thing is really efficacy. If we have at least what Arikayce has shown, 20% compared to placebo, but significantly improved safety and tolerability profile, which is our expectation, our hypothesis, then we find a huge place for inhaled clofazimine in this patient population.
Fantastic. You know, when we think about the NTM market and geographically, a lot of focus is on the US and Japan.
Can you just talk about treatment paradigms? Do they differ between the two markets?
In many ways, they are similar. The guideline-based therapy, the background is also very similar in that Arikayce is approved and available in both markets. In our clinical trial, we're seeing that the majority of the patients have not been on Arikayce, but we do have a significant number of patients in both the U.S. and Japan who had previously been on Arikayce and they had to discontinue it, primarily from a tolerability safety issue, but also for other reasons. Your question is about the difference there. We're seeing probably more historical use of Arikayce in the U.S. than in Japan. Other than that, really, there haven't been major differences from a practice perspective.
What about a filing and commercialization strategy in Japan? Can you just give us your thoughts on that?
We're waiting for the phase 3 trial to end, right? Your question earlier about the interim analysis—once we have that data set, we'll see if we need to reestimate the sample size or if the current sample size is adequate, and we'll be filing in both geographies and potentially others as well.
Fantastic. I'm going to move on to tier one.
Sure.
I do want to address it. In the interest of time, it's great to be talking about the pipeline and having to limit the questions to get onto the rest of the pipeline. When we think about tier one, you know, you've talked about launching the phase 2 trial by year end.
Yes.
Can you just talk about key design elements there, patient inclusion criteria, and endpoints?
Right. We're starting with IPF, idiopathic pulmonary fibrosis for that indication. As you know, with the oral nintedanib, it has other indications, but we're doing them one by one at least for now. It's going to be a double-blind, placebo-controlled, dose-ranging study. We're testing two different doses. Being a phase 2 study, the primary objective is more on the safety side, but we also have efficacy baked into the study design as well, and standard one forced vital capacity. It's going to be two-thirds on active drug on one of the two doses and one-third on placebo. Twelve weeks long for the double-blind period, and then we're offering an additional six months of active open-label extension.
How do you think about patient enrollment, the speed of patient enrollment? I think over the last few years, there's been varying discussions on IPF trials and competitiveness for patients. Unfortunately, a lot of those haven't worked out, right? What is your sort of base case for enrollment speed here?
Right. Your comment on other programs that haven't worked out from our perspective, just like clofazimine, the mechanism of action, the target is the risk there. Both clofazimine and nintedanib are well-known molecules. We know they work as molecules in that specific indication. It's really the formulation question. That's what the trial is answering. There have been, I mean, yes, there were failures with other programs, but there were successes in enrollment as well, like TITON, for example, and other, I mean, BMS have enrolled while Boehringer Ingelheim. The enrollment in idiopathic pulmonary fibrosis, it's definitely doable. We're excited about starting the trial and then finishing the phase 2 enrollment.
Great. Can you just talk about the regulatory strategy, sort of running the trial outside the U.S. and bridging those kind of ex-U.S. trials into the U.S. and into the U.S. regulatory program? The ultimate filing.
Yeah, so the ultimate filing will be global, including the U.S. We made a decision to start with the phase 2 outside the U.S., get that data set from there. The phase 3 trial will be U.S. and outside the U.S.
Great. The companies previously talked about achieving comparable or superior lung exposures with the oral formulations.
Can you just give us your thoughts and confidence on the selected doses and that you will meet those thresholds?
Right. Similar to what we discussed about the clofazimine, again, the molecule is well known. We understand distribution, PK, PD for nintedanib. We've done our own preclinical studies, including lung tissue biopsies, concentrations, and we also had the phase 1 systemic blood concentrations, PK. We put all of these in a model for simulation. We are very comfortable that on the efficacy side, the lung exposure will be at least comparable to oral nintedanib. The systemic concentrations will be extremely low, but we do have when nintedanib shows up immediately in the blood after inhalation in adequate concentration. In the sense that gives us a lot of comfort that the drug is reaching the deep lung tissue based on that. We're completely bypassing the GI tract.
As you know, with oral nintedanib, that's really the main issue with it, primarily the diarrhea, but a lot of nausea and vomiting as well. By passing the GI tract, no first pass through the liver. As you know, liver toxicity is a well-known potential safety issue with oral nintedanib. By default, we don't expect any of that with the nintedanib DPI.
Great. Given that profile, how are you thinking about the commercial positioning of this product? Are you thinking about it as a sort of replacement therapy, add-on therapy? How should we think about the ultimate commercial use?
It's really all of the above. The one major thing that we see is that currently today, as you well know, we have only two approved products, pirfenidone and nintedanib, basically. They cannot be combined. Even with niraparib, when it gets approved, some of the adverse event profile overlaps with them, primarily like the diarrhea with niraparib, for example, among others. The future of therapy, in our opinion, in idiopathic pulmonary fibrosis (IPF) is combination therapy. This will open the door for nintedanib dry powder inhalation to be combined. Obviously, we haven't done the studies yet, but to be combined with any of the others, whether it's niraparib, whether it's pirfenidone, potentially Tyvaso DPI if it gets approved, and whatever else comes in the market. This will be the future of IPF treatment in our opinion.
Okay. Fantastic. Just given the profile of tier one, and sort of not to jump ahead, you'll get too greedy, but how do you think about the potential expansion into sort of PPF and other combination therapies?
Yes. Combination, the study design of the phase 2, obviously, we didn't get into too much detail there, but we are allowing background treatment, not background of oral nintedanib, but background of pirfenidone, background of niraparib. When it is in the market, we're going to allow, so we'll be generating the combination data there. Whatever else gets approved later on, we're very comfortable in combination in future studies. We're starting with idiopathic pulmonary fibrosis (IPF), but as you know, oral nintedanib has three total indications: IPF, progressive pulmonary fibrosis (PPF), and scleroderma interstitial lung disease (ILD). We're starting with IPF first, but then we'll have regular discussions to see whether we need a bridging study or some other data to get these other two indications.
What I would add too is that based on the mechanism of action of nintedanib, there are other indications that oral nintedanib could not get to, mostly because of its safety and tolerability profile. They couldn't expand that. From our perspective, we do have other opportunities to expand even beyond these three indications.
Fantastic. Definitely a lot going on in the pipeline.
Very exciting, yeah.
Chris, I want to bring you in here. I'd probably be remiss if I didn't ask the question, right? We talked about the busy last month. We saw the acquisition announcement. I'm going to get to capital deployment just to give you a heads up. Very quickly after that, we saw the TITON data, which again changed the potential sort of cash flow profile of the company, potentially very materially. How do you think about capital deployment going forward? We've talked a lot about the pipeline, right? There are obviously sort of good opportunities there. As a company strategically, how do we think about capital deployment today and capital deployment of what may come post-TITON?
Yeah, we're in a great position right now that we have these two development programs that are now in late stage. Our relationship with United Therapeutics and the royalties and manufacturing revenue that we earn there have been growing steadily over the last few years. That's really provided non-dilutive financing for our pipeline. Obviously, the news from last week gives us a view that those revenue streams may be in a position to increase over the next couple of years, which I think just helps to give us confidence about our investment on the development side. We're in a position to invest in two product launches. Excited for the SCP Pharmaceuticals deal to close here in fourth quarter. That's still very early in its launch. We do believe that we'll be making some further investments in that launch in 2026.
We have our pediatric approval in Afrezza that we hope to get next summer and certainly are investing in advance of that launch. We have a lot of key priorities. Luckily, we're in a position where we have been cash flow positive for the last couple of years. We'll have to make some investments now, but starting from a really good cash position to be able to do that.
Fantastic. I appreciate both of your time. I appreciate all the success to date building the company. I think you touched on Afrezza, and that was the first time I think we mentioned it here. There's a potential pretty significant revenue runway there as well, right? I think we can have a whole discussion on that at some stage. For now, I'm going to have to cap it off. Thank you very much for joining us at the conference.
Thank you very much.
Appreciate it.