Good afternoon, welcome to the MannKind Corporation 2022 4th quarter and full year financial results earnings call. As a reminder, this call is being recorded on February 23, 2023, and will be available for playback on the MannKind Corporation website shortly after the conclusion of this call until March 9, 2023. This call will contain forward-looking statements. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from those stated expectations. For further information on the company's risk factors, please see their 10-K report filed with the Securities and Exchange Commission this afternoon, the earnings release, and the slides prepared for this presentation. Joining us today from MannKind, our Chief Executive Officer, Michael Castagna, and Chief Financial Officer, Steven Binder.
I would now like to turn the call over to Mr. Castagna. Please go ahead, sir.
Thank you, Lisa. Thank you, everyone, for joining us today. As we kick off, it was 7 years ago this weekend that I decided to join MannKind, and unfortunately seven years away. 2023 is special because it's the beginning of our new future growth plan. We've overcome any and every obstacle that has thrown our way despite the odds against us. We are capitalized and prepared to enter into our next phase of growth, and I want to personally thank all of our employees, our stock and debt holders, the Mann Foundation trustees and other stakeholders who support us through this journey. Our best years are in front of us. I'm very excited to kick off our Q4 earnings call today.
To remind people that our mission is to give people control of their health and the freedom to live life, and we refer to this as Life More Human. This is never more true as we get ready to enter NTM, where the patient stories we hear from Tyvaso DPI launch or the incredible feedback we get from V-Go as well as Afrezza. Every day, we are making people's lives more human and easier to live. 2022 was a revolutionary year for MannKind. You look back at this time last year, we had one marketed product. We were facing a delay in FDA approval for Tyvaso DPI, one compound in clinical trials, which was Afrezza for INHALE-1 that just started, and a commercial revenue stream with just Afrezza.
As we end the year, we technically have three marketed products, two that we market and one that's marketed by United Therapeutics. Two compounds in clinical trials with Afrezza INHALE-1 being halfway enrolled now and MNKD-101 kicking off to completing phase I and four commercial revenue streams. As we look, this is a revolutionary milestone in the history of the company as we are approaching $100 million exiting 2022. As people talk about how that translates to the run rate as we go into 2023 and beyond. When we take a step back, our collaboration royalties are up 20% versus last year. Our endocrine business is up 44% versus last year.
These three new revenue sources are going to generate the capital required to continue to fund our growth and drive a difference for patients across the disease states that we're servicing. It's really exciting to look at Tyvaso DPI. We're literally in the very early stages of launching with United Therapeutics. When you look back over each quarter of last year, this has continued to be revolutionary as we go through those phases of launch. From the first quarter, really in 3Q, we're just getting some of the SKUs off the market, just getting this off the ground with United Therapeutics. In Q4, you can see collaboration and services revenue is relatively flat, but the royalty revenue continues to grow.
The reason that's important is that the collaboration services revenue is relatively fixed as we continue to increase volume and productivity out of the factory, but the royalty should continue to grow. That's something to keep in mind as we look. It'll fluctuate minor from quarter to quarter, but not dramatically different as we go forward. The EBU business and gross profit accelerated in 2022. When you look at our net revenue, it grew 44%, and that dropped to the bottom line with almost 80% growth year from $22 million to $30 million in gross profit on the endocrine business unit. The reason this is important, we did this without any increase in COGS, despite adding V-Go into our company and the cost associated with V-Go.
We've been able to keep COGS relatively flat, and every incremental dollar starts to drop to the bottom line. We'll continue to look for efficiency as we look at combining this business and driving future revenue growth. Additionally, we had a small primary care pilot last year, which didn't go as planned, and we exited that business. That money we spent last year is being repurposed this year to drive future growth of Afrezza and beyond. Let me focus a little bit more on Q4 highlights. When you look at DPI, we have strong patient demand, which is to bring our manufacturing revenue now into the future. Our royalty revenue grew 50% versus Q3, and our manufacturing capacity expansion is in progress. I was just in Danbury last week taking a tour.
The pipeline's moving forward as we have one more FDA meeting here on 101. We expect to move this asset into a phase II, III trial design in the second half of 2023, and we'll share more details sometime during Q2 and Q3. We filed a pre-IND meeting request for MNKD-201. We expect to get feedback here shortly as we progress this into a phase I study. As I look at our diabetes business, Afrezza grew here at 9% versus 21 and 4% sequential quarter-to-quarter. As I said, INHALE-1's on track. You just saw yesterday we announced the Afrezza with V-Go combination study showed favorable results in the first dose in office on a meal challenge test. The full results of this will be presented later this year.
The results we've seen and analysis we've seen so far have given us the confidence to want to kick off a larger phase IV study as we really think about how do we capitalize and win on the investments we've already made historically in Afrezza, but really position us to be a leader in type 1 diabetes. V-Go had Q4 net revenue of $5.4 million. As I'll show you shortly, we stabilized that business, looking forward to it. We had $173 million in cash and cash equivalents at the end of last year. With the purchase of V-Go, and as the competition continues to step away, MannKind is really the mealtime solutions company. Several other insulins have tried to launch over the last 7 years, and they've failed to capitalize on their innovation and drive meaningful patient differences.
Insulin pump companies have continued to try to drive innovation and what really happens is patients go from one pump to another pump to a pod, but they're all still struggling with mealtime control. At some point, we believe this product has been on the market long enough to put this test to time on safety, and the new data we have coming out over the next 12 months, we've really set this asset up in terms of Afrezza as really helping solve the mealtime solution challenge that we have. V-Go will really allow us to help those Type 2 patients that much better, as that has also demonstrated improvements in A1C and quality of life. Some of the highlights we have for last year is, number 1, we bolstered up our scientific understanding of Afrezza.
The results of these really came out last year or put into last year's work, which they've really been built over the last five years. The dosing that we're using in INHALE-1 around the 2x round- down was put into our pediatric trial, and we believe that's paying off dividends as we look at the first- dose ADC results that were just released yesterday. What it really showed you in the first two hours, when you really care about mealtime control, Afrezza does something amazing versus injectable insulin. We think that hopefully will translate now to dosing over and over for each meal as you look at three to six to 12 months. The ABC trial will come out. Hopefully, we've submitted additional analysis at future conferences, and we've already published the Dose Optimization Study, which was doubling our bar package insert dose.
Our pediatric study remains on progress, and we'll continue to show you, hopefully, data showing how people can safely switch from an insulin pump to Afrezza. We've also shown that adding Afrezza to a pump is great, but there's no additional benefit despite people looked at adding it will help improve mealtime control. On Afrezza, we've enhanced our patient support services. We continue to find ways to improve efficiency for patient reimbursement support and closing that gap around prior authorization for what happens in the marketplace. We worked several years with PS and key stakeholders to ensure that inhaled insulin is included in the Inflation Reduction Act, and I'm probably one of the few drug company executives who were supportive of this act because it really did help patients around insulin and Medicare coverage.
We also improved our product dating, which people may not realize, to 36 months from 24 months. The reason that's important is a good percentage of our gross-to-net are related to product returns, and we believe over time, as demand picks up and dating extends, that allows our returns to come down. That will happen over time. On V-Go, we purchased this asset in the second quarter. We really just focused the team and kept separate for 2022 as we integrated it into MannKind. Finally, within Q1 of this year, we prepared for that integration, and this is now being launched through our entire Afrezza sales force. One of our key focuses last year was driving market share of new prescriptions.
As you can see, our NRX growth quarter-over-quarter continued to grow from Q1 through Q4, where we exited with 17% growth year-over-year on NRXs. As I look at just Q1 to date, we certainly are for 24% growth over the six weeks, Q4 versus Q1 of this year. We continue to see positive momentum on NRXs, which translates to TRXs over time, but this is our leading indicator of how we expect our business to perform. As we look at V-Go, again, back to NRXs, you can look, V-Go's been on a real long decline. We purchased this asset in Q2, got it ready in Q3, and stabilized it in Q4 on an NRX, and we looked to expect NRXs to grow here in Q1.
Most importantly, that will now translate to TRX stabilizing and ultimately growing as we look forward to the rest of this year. How we segment these two products is critical to our success. We've really positioned Afrezza for Type 1, younger populations, commercial insurance. Even though we now have Medicare, that's great because 20% of our sales are Medicare, and 40% of the insulin in market is Medicare. At the end of the day, we want to make sure we continue to win and lead in Type 1 diabetes. Additionally, we continue to find ways to improve our gross-to-net by shifting our sales to specialty pharmacies through direct purchase agreements and making sure that patients have a better service when they receive our product.
On the V-Go side, it's definitely a Type 2 product, older population, which is about 60% Medicare in the case of V-Go. In 2023, we've now put this in a P2 position for Afrezza and is an additional 14 V-Go territories selling this asset. As we look over the next 12–15 months, there's several key milestones coming out. Number one, we have the kickoff of INHALE-3, which really just occurred this week, ATTD. We have a BluHale launch, which is really integrating CGM into a technology platform that attaches to the Afrezza device, and that will start to read CGM along with dosing and be our first kind of platform as we start to think about how do you incorporate AI into our future predictive dosing.
This is 1.0 version, which will continue to grow as we invest in technology behind that diabetes care. We expect simply to read out Phase 2 trial, which we're calling INHALE-2 Type 2 diabetes. Assuming BluHale delivery launch goes well, we should start with a full launch here in the second half of the year. We expect the INHALE-1 pediatric study to be fully enrolled by the end of this year and INHALE-3 to be fully enrolled sometime in the end of this year or early next year, with the readouts that should follow about 3 months later. I'm going to turn it over to Steve, who's been a phenomenal partner with me over the last six years. Thank you, Steve.
Thanks, Mike. Good afternoon. Please review select fourth quarter and full year 2022 financial results. Please supplement this call by reading the consolidated financial statements and MD&A contained in our 10-K, which was filed with the SEC this afternoon. We're very proud of hitting the $100 million mark in total revenues for 2022. I just showed our transition from a company with one source of commercial revenue to a company with multiple sources of commercial revenue. Let's start with the fourth quarter table, and then we'll come back to the full year results. Afrezza net revenue was $12 million versus $11.3 million in 2021, a growth rate of 6%. The growth is mainly driven by higher patient demand with underlying peak TRX growth of 9% year-over-year.
In previous quarters, I have been discussing the adverse impact of the lowering of wholesaler inventory levels, which impacted our revenues for the first three quarters of 2022. We can now confirm that we saw the bottom out of this in the third quarter as expected. Year-to-date Afrezza growth came in at 11%, which is mainly due to favorable price, higher product demand, and a more favorable cartridge mix. Our growth to net held steady at 39% year-over-year. Next is our net revenue for V-Go, where we had $5.4 million in net revenue for the fourth quarter and $12.9 million for year-to-date, which represents the 7 months of June through December. We continue to see V-Go net revenue tracking the high end of our forecast range of $18 million-$22 million for this 12 months post-acquisition.
Moving to collaboration services, revenue in the fourth quarter was $9.5 million versus $1.2 million for 2021. The main driver of the fourth quarter 2022 collaboration revenue is associated with the manufacturing of Tyvaso DPI by United Therapeutics, while the 2021 revenue was impacted by the end of the amortization of Tyvaso DPI R&D milestones and delaying the FDA approval for the drug, which meant that we had no revenue until we could manufacture commercial products and sell to UT. The full year revenue of $27.9 million largely reflects manufacturing revenue recognition that began the second quarter and is lower in 2022 versus 2021 because of the prior year UT milestone amortization and the first half of 2022 deferral of revenue associated with the delay in the start of commercial manufacturing.
In addition to UT-related revenue recognized in 2022, we had $37.9 million of deferred revenue on the year-end balance sheet associated with UT activities, which will be recognized as income through 2031, which is the remaining term of the commercial supply agreement with UT. I will review this in further detail in a few minutes. Lastly, we recorded royalties on net sales of Tyvaso DPI by United Therapeutics to their customers. The $9.1 million in royalties recognized for the quarter is almost 50% higher than the third quarter and demonstrates strong demand for the product. We have recognized $15.6 million in royalty revenues for product launched by UT in June. The next slide shows 2022 growth on a quarter-to-quarter basis.
This graphic really shows the change in our company this past year, growing total revenue 200% from 1st quarter to 4th quarter. The 2nd quarter of 2022 marked the change to multiple sources of commercial revenue when we began to benefit from commercial production of Tyvaso DPI, the launch of Tyvaso DPI by UT, for which we are in low double-digit royalties, and the purchase of V-Go. As we've exited 2022 and lean forward to 2023, our 1st quarter run rate of $36 million puts us almost halfway to $200 million in total revenues. Let's look at the profitability of our endocrine products, Afrezza and V-Go.
Afrezza gross margin increased from 62% in the fourth quarter of 2021 to 92% in the fourth quarter of 2022, and the gross profit associated with Afrezza increased to $11.1 million in the quarter. The increase in the fourth quarter gross margin versus 2021 was due to a decrease in Cost of Goods Sold, mainly from lower inventory write-offs, lower cost per unit, lower excess manufacturing capacity costs, and a high level of manufacturing activity in the fourth quarter of 2022, which capitalized a higher amount of cost inventory, plus an increase in Afrezza net revenue. When looking at the profitability for the full year of 2022, Afrezza had a gross margin of 80% and gross profit of $34.6 million, which were both markedly improved in 2021.
The main drivers of the improvement were a lower cost of goods sold, mainly from a decrease in excess manufacturing capacity costs, which is a benefit from Tyvaso DPI production absorption, lower cost per unit, a $2 million fee incurred for an amendment of our insulin supply agreement in the second quarter of 2021, and lower inventory write-offs, plus increased net revenue. Please note that there will always be some variability in Afrezza gross margin between quarters due to the timing of manufacturing spend and activities, as we are not yet at maximum production capacity. The far-right table shows V-Go year-to-date gross margin of 43%, which has remained consistent quarter to quarter since we acquired the product. 2022 was a year focused on the commercial manufacture of Tyvaso DPI at our facility in Danbury, Connecticut.
We were also focused on increasing the efficiency of our current manufacturing lines, as well as building out increased manufacturing capacity. These activities led to both Tyvaso DPI revenue being recognized as well as being deferred in 2022. The left-hand side of the table shows our revenue recognized for the year. Revenues mainly associated with the manufacturing of Tyvaso DPI and activities for the next gen R&D services totaled $27 million, while royalties accumulated $16 million in revenue, for a total of $43 million in Tyvaso DPI-related revenues for 2022. Moving to the right side of the table, we started the year with a deferred revenue balance of $19 million and added another $19 million in revenue deferrals, mainly associated with the Tyvaso DPI facility expansion, manufacturing process improvements, and pre-commercial activities.
We expect additional revenue deferrals in 2023 while conducting activities paid for by UT related to the facility expansion and further manufacturing process improvements. Please note that UT is paying MannKind promptly for all activities, whether revenue is recognized or deferred, so cash flow is not adversely impacted by any of these activities. Let me conclude with some final comments around our liquidity. We ended the fourth quarter with $173 million in cash equivalents, and investments, a decrease of $5 million from September 30th. We achieved this low level of cash burn because of the fourth quarter collection of monies owed to us from UT and Zealand that were outstanding at September 30th.
Looking ahead to 2023, we expect to reduce our cash burn as we benefit from the impact of increased cash flows from our collaboration with UT and reduce cash burn associated with our endocrine commercial business unit as we move that unit towards profitability. Also note that we'll be increasing investment behind the development of our product pipeline, which is quickly becoming our next lever of shareholder value. Thank you, and I'll turn it back over to Mike.
Thank you, Steve. Next slide. As we look at MannKind's products and pipeline, you continue to see this get bolstered up year-after-year. Afrezza is now on track to hopefully get forward to IND this filing this year, pediatrics will wrap up, and V-Go is launched. On the pipeline, what people don't appreciate is how much time it takes in the early stages of the pre-IND formulation and getting the dosing right and the tox data right in order to progress these into phase I, II, and III . Rest assured, 201, 301, and 501 have had a lot of work behind them that we will start to see the fruits of that labor over the coming couple of years. Right now, 101 is moving full speed ahead, 201 is right behind it.
I hope to share continued updates with you on MNKD-301 and MNKD-501 as we go forward. This pipeline momentum over the next 24 months, whether it's the endocrine business or the orphan lung, you can see we have two major pillars of continued momentum that will drive shareholder value over the coming quarters. I won't go through each one of these, but you can really start to see how MNKD-101 and MNKD-201 in the pipeline really start to march ahead and MannKind builds out the scientific agenda.
I won't spend a lot of time on V-Go, but a lot of people ask me, "When you bought it, what else are you planning to do?" We continue to drive innovation and ideas around how do we create other opportunities for this device in biosimilars, buy and build or just clinical improvement with slow infusion. As one of our thought leaders behind V-Go said, "If you water the lawn and put a big bolus of insulin on one spot, you get mud. When you spread that out over a lawn, you get green grass." I think that's one of the reasons you continue to see V-Go improve people's A1C, is you're spreading that bolus and that basal over a long period of time and continuing to spread that water over a larger space.
We think that's important, and we think there's other ideas that we can generate as we continue to allocate time, energy, and money to this product. A lot of people ask me, "Have I missed the run-up? What else is coming? Where is MannKind going?" I think if we step away and look out, we see 3 key value drivers. Afrezza growth and V-Go growth, number 1. Number 2, Tyvaso continues to grow in new patients, conversion, and improved coverage through Medicare as that donut hole closes in 2024 and 2025. Additionally, there's a large upside if key concept study reads out positive by United Therapeutics. You have the pipeline progress, which is 101 and 201, and any other additional BD opportunities that come our way, or we anticipate any other partnerships that we could put on the platform.
That's probably a fourth pillar of growth. At the end of the day, we really look and see there's lots of upside from where we go. If you look out over the last five years of history, every year we've continued to end on a higher note than where we started. I think that's critical to our future success and believing in our shareholders and what we're doing to continue to allocate capital and do a great job for everyone who's a key stakeholder at MannKind. I want to say thank you again for all the work everyone's doing, Steve, for your partnership. It really feels great to be through that transition of capital balance sheet challenges, product innovation, business development. We are now a self-sustaining, fully integrated mid-sized pharmaceutical company.
It feels really good to kinda close out 2022 and kick off 2023 being in that position. Thank you, and we'll open up for questions, Lisa.
Thank you. If you would like to ask a question, please press star one one on your telephone. One moment while we compile the Q&A roster.
First question I have is coming from Bryan Folkes of Cantor. Your line is open.
Hi. Thanks for taking my questions, congratulations on all the progress this year and the last 7 years. maybe just two from me. Just any update on the Tyvaso manufacturing inventory scale up? you know, just given comments from UT about sort of how they view that product longer term, how should we think about manufacturing scale up there? secondly, on the ABC trial, can you just talk us through how we should think about the revenue pull through from the readouts, obviously recently and then later this year? I know it's very early, but any very early feedback you got from the last two days since that press release? Thank you.
The last question, was any feedback?
Since you put out the press release on the.
Okay. Sure.
Yeah.
I'll take each one of those. I think on the manufacturing inventory, listened to United Therapeutics yesterday. I think one of the things I heard was the order patterns, you know, had some impact, but also the pharmacy days on hand inventory. You know, the demand has been very strong on Tyvaso, which is great, but it also puts a lot of stress and strain on our manufacturing. We've been able to stay well ahead of the demand, but that has not allowed people to build as much inventory as they want as we continue to, you know, production goes right in. We can modify it each week on which cartridge strength do we feel, which pack size do we send to the packager.
We haven't reached full capacity manufacturing yet as we continue to look over the last six months. There was definitely lots of things to work through in the equipment and scale up that have been worked through. We consistently expect Q1 to show a much more consistent, I'll say, productivity impact in Q1 versus Q3 and Q4. We don't anticipate any inventory issues. We continue to selling, stay well ahead of demand, and I think you'll continue to see that productivity out of our plant and the efficiencies this year. We're doing things to add additional production capacity just in case demand continues to go faster than we would anticipate.
Remember when we built the factory and that we make Tyvaso DPI, we made it for PAH and ILD at a time when UT was doing $400 million–$450 million revenue with ILD expected. Obviously that product's now well away from a $1 billion plus this year. We want to make sure we continue to stay well ahead of that ability to convert as much of that as UT can do. We don't anticipate any issues. Then the factory build out itself, again, we expect that to be completed later this year. Part of it will require an FDA inspection, and that, and we'll just deal with that when that time comes. We don't need that factory expansion to complete in order to keep ahead of supply. We're pretty good with that there.
The factory expansion is really to handle IPF demand that could come in in 2024 and beyond. We're well ahead of that readout for that clinical trial. On the ABC trial in terms of revenue pull through, the way to think about this is, this is a pilot study that I've been wanting to do for many years, showing that you don't need insulin pumps, that they're not adding as much control as people think. Every doctor you talk to believes pump therapy is the best you can do, and that there's nothing better, even though there's very little head-to-head data showing pumps are much better than multiple daily injections.
In fact, I believe there's a data set, I don't know if it's public yet, but it should be this week at ATTD, that all the benefit of AID pumps is happening in the first day. So really you get this bolus of improvement, and then it kind of stops. We think that the diabetes burden of wearing a pump, wearing a CGM, is really starting to wear on people as they live with this disease and pumps for 20, 30, 40 years. They're running out of real estate on their skin. They're having scarring. There's a lot of issues. So we do believe there's an opportunity that's going to be created over the next 1 or 2 years when the data in Peace reads out, that's our pivotal phase III, that the next question we're going to get is: What about insulin pumps?
We're trying to get ahead of that question by running this larger pump switch trial, which will switch patients off of MDI and pumps and run head-to-head at the end of the day. We'll have more design on that phase IV. There's an advisory meeting this week at ATTD, and I'll get that feedback next week. I would say the feedback so far, the data's not been presented until Saturday, but the feedback at the conference and the word about MannKind has actually been really nice. We're hearing really good things when people are asking about us. That's the only feedback I have so far. The data set itself has not been presented yet.
Great. Thanks very much. Yeah, congratulations again.
Thanks, Brandon.
Thank you. One moment while we prepare for the next question. Our next question will be coming from Steven Lichtman of Oppenheimer. Your line is open.
Hi, guys. This is Ron on for Steve. I was hoping you guys can. I saw you're going to launch BluHale next month. Last time you talked a little bit about the chip shortage, and I wonder if you could give us an update on how that was resolved and how you're looking forward, how are you looking at that looking forward, and how are you preparing for the launch, considering that? Also, I can have a short follow-up. That would be great.
Sure. On BluHale, the chip shortage I don't believe is an issue. I think there's other parts that became obsolete that we're updating and reworking the device a little bit. All that's working through, but I think we have devices right now to kick off the pilot. That pilot's really going to drive the human factors and the insight feedback will drive the launch investment into our plan in the second half. I think what's really nice is it's the first time where we're going to have dosing and Dexcom CGM integrated.
As we talk about going into type 1, we do think providing those insights to a patient and to a provider are really important, and that's something as we pivot this year from Type 2 to Type 1 on Afrezza, that this is going to be a critical device in the second half, assuming we get positive patient feedback. That's. We don't anticipate any type of shortage in picking the next 1,000 devices to launch. We think that'll be fine at this point from what we can see.
Okay. Thank you so much. You said your pla--. This is going to be integrated with the Dexcom. Are there any plans to integrate with any other glucose monitors, or are you going to stick with-
Yeah.
Dexcom the whole way through?
No, I think Dexcom is the easiest 'cause they have open APIs, and we are able to work with them and get that agreement done. I think Libre is obviously the next big one, especially with Libre 3. I also think Senseonics now as they're getting to the one-year sensor and starting to launch that, you know, that'll be a nice opportunity to look at Senseonics as well. We want to be platform-agnostic at the end of the day from CGM, but we do believe, you know, CGM is something that's really important.
Okay. Thank you. Congrats.
Thanks, Steve.
Thank you. One moment while we prepare for the next question. Next question is coming from Anthony Petrone of Mizuho. Please go ahead.
Thanks. Congratulations to the team on the execution. Maybe one on BluHale, just when you think of sensor opportunity, you certainly have some synergies with Afrezza. Just want to confirm, is that going to be also used with Tyvaso? When you think of, you know, the ability to monitor inhalation and usage, you know, how do you think that plays out over time? You know, if you're capturing that data, do you get better drug adherence? Ultimately, does that drive, you know, better consumption down the road? Then I'll have a few follow-ups. Thanks.
Sure. I think, you know, BluHale's been a long time coming and has had lots of headaches. As you're driving innovation, these types of things take time. I do think your one question/comment is critical, which is when, especially on Tyvaso and Afrezza, when you're using something for the first time, as we continue to improve the number of new doctors prescribing, new educators utilizing and training, people sometimes, especially on like the lower dose cartridge, you don't feel any powder, going to the lung, and you're like, "Did I get my dose?" Showing proper inhalation technique and registering that dose that was taken, I think improves people's confidence.
That's one of the things we saw early on in our user trial with healthcare providers, was it improved their confidence in training and ultimately their success with the patient dramatically. I do think that it's not just for the patient, it's also for the provider, for them to start to see that data, the compliance of that, looking at that overlaying with CGM in the case of diabetes, we think will be important. Long term, I just think, you know, I look at what One Drop has done with data, collecting data sets and predicting outcomes over time. I think this is where we want to go. We think data in healthcare is going to be critical, and starting to collect this data and build out the skill set and capability. We're in version 1.0.
We have a long ways to go, but this is the beginning this year to really start to think about, you know, no better modeling than sugars and data collecting on sugars and predicting what's going to happen with the dose you took. We think there's a lot there that will continue to evolve. I'll start thinking about data scientists and other types of people that we don't have here yet. On the UT side, I don't want to comment for them other than they are using the pro version, which is the healthcare provider edition, to show proper inhalation technique, and that is launched. I believe they will also continue to want viz for their what they're doing there in PH. I don't want to speak for them, but I'll let them communicate that.
That's helpful. Follow-ups would be on endocrine studies. You think of pediatric, but also the INHALE-2 . At JP Morgan, you put some math around this. For every 10% market share in peds, it's a $150 million revenue opportunity or TAM opportunity, let's call it. You know, when you think about that in Type 2s, obviously much larger patient pool. You know, is there an equivalent number, 10% in Type 2s, which could be facilitated by India? How should we think about that number? Is the right way to look at it is share gains from GLPs? I have one last one. Thanks.
Sure. On the peds, yes, I would say that's roughly a good estimate number, but every 10% share rapid acting in kids alone in the U.S. will be about $150 million net revenue to MannKind. That's why when people say, "Why are you investing in a trial now?" Because we want to set peds up for success. This year transformation for Afrezza in terms of tightening things up, really putting some profitability and moving the branding, a very strong positioning between the two assets. Next year, when all the stuff starts to read out, and we start to prepare for launch, we think these are the right questions and the right answers to have data around to ensure we can achieve 10%, 20%, 30% market share in kids.
There's going to be a huge spillover effect as you're successful in kids into adults. That number is just for kids. You can also think about these kids turning 18, 20, 25, they're going to start to roll over in the adult market, and that's going to have a compound effect back into the second half of this decade. We have a long-term view on this asset. We've taken a long time to get to where we are, but we do believe we're finally at that point. We're assuming all the data reads out as we expect. I think it'd be very, very exciting on inhaled insulin going forward.
On India, the way I think about India is it's going to be a very low margin business, but there's 81 million people living with diabetes, and there are a lot-Controlled way in the beginning and then advance over time to bring up the cost in India. The real benefit for us is going to be utilizing FDKP, which we've already purchased, utilizing our factory capacity that's not being utilized right now for the U.S., any diversion of insulin that we've already purchased. These are things that, you know, ultimately, when you look at year-over-year, Afrezza more profitable because of the factory become more efficient with type A. You get that happening, benefiting United as much as MannKind as we launch India production in the factory in 2024.
That's how I think about India's efficiency play, utilizing some costs and getting some of that recouping some of those investments we've already made. Then on the Type 2 market, I think one thing that'll play out over the next year is here in the U.S., is the GLPs have had tremendous success. The weight loss category is growing, and that's really pushing insulin, either declining the market or pushing it later. I think what people are going to see is that despite all the great success of GLPs, patients are still going to need mealtime control. They're still going to need to get some extra help there. I do believe inhaled insulin can play a role in that. We'll have to decide as we look at our progress for the year.
Do we want to do a study using Afrezza on top of GLP where we have no data? Is that something either investigator does or something we want to do? That's kind of the next way we think about diabetes is the other thing is, as we get Type 1 and become this brand of choice, we know those doctors will automatically use Afrezza in type two by default. There's somewhat of a really not vice versa. If I was successful in type two, they don't think about us Type 1. It does work in the reverse way.
That's a last quick one. You know, Apple made some news this week, you know, about potentially hopping in here. You're collaborating with CGM providers. I don't know if you have any two cents you could add on some of the news that came out of Apple. Thanks again. Congratulations.
Thank you. Look, I think Apple and Amazon are going to continue to get involved in healthcare technology and healthcare data at the end of the day. I think, you know, where we're going with BluHale, back to your question, you know, having that data, being able to have that data to predict where people are going to have to go and start to think about outcome contracts. I mean, everyone's looking for ways to drive better outcomes at a lower cost and use data to help that. I think it's premature for us to think about, you know, where would Apple be in 5 years? I go back to my days at Novartis where we were going to have a contact lens that was measuring glucose with Google, if I recall, and that never came out, right?
There's a lot of excitement, but, you know, it takes time for this innovation to happen, and healthcare is not an easy feat to kind of enter into. We'll keep watching it.
Thank you.
Next question. Thank you.
Thank you.
Thank you.
One moment while we prepare for the next question. The next question will be coming from Gregory Renza of RBC. Your line is open.
Great. Hey, Mike and Steve. Congrats on the year and the progress, and thanks for taking my question. Mike, just maybe a quick one. As you build on the success of Tyvaso DPI, of course, we all know about the potential option to license the platform for a second PAH product with UTHR. I know the first bumpers of you and Steve are describing really lie in the pipeline launches, over the next several years. I'm just curious how you think about some of the parameters or potential with a second option or second license with UTHR and how that potentially factors into some of your goals about one indication or product per year over the next several years from your pipeline. Thanks so much.
Yeah, no, great question. You know, I think over time, we Tyvaso is going to be so large as we talk about ideas with UTHR, that we wanted to make sure that that gets off on the right foot because, you know, whether that's $1 billion-$2 billion plus, I mean, that's really UT's purview. We want to make sure we can make supply and be ready for it, not distract our collective teams on that one. I do believe that, you know, over time, we will find other ways to help more patients. I know Martine is dedicated to that focus, and we'll continue to assess opportunities that come in to us or through them in PAH and any other area that they're focused on.
I would say in general, MannKind, we've gone through a pretty deep assessment with our board in the second half of last year around how much energy do we want to continue to put in a platform in terms of going out and seeking partnerships through large pharma, mid-size pharma, versus continue to innovate our own assets. We decided that our real focus is bringing our assets forward as fast as possible and dedicate and double down on new ideas within our platform or other platforms that we see out there, and less so on trying to drive more partnerships. Of course, everyone wants the next Unither deal , but I think we've picked a lot of the key opportunities already to develop in health therapeutics that we think can make a difference.
Now our focus is really on even earlier stage innovation, as we get out there and think about 2030 and beyond. It's probably not a repurposed asset. It's probably an NCE in some orphan lung condition. That's kinda, you know, people look and say, "Where are you in 2023?" These decisions we made 3 years ago. In 2024, I made 3 years ago. We're working on focus for 2030, 2028. We feel like the pipeline's enough to drive a lot of innovation forward in the next couple of years. But that does not mean. It's like every day, the last couple weeks I've had an inbound on business development, whether it's, you know, can we work with you? Do you want to sell something? There's a lot of activity out there happening.
There's a lot of companies are running out of money or refocusing their strategy and divesting non-core assets. We'll keep looking, but we feel pretty good about where we stand and driving that future for value.
That's great. As always, appreciate the color.
Thanks, Greg.
Thank you. One more while we prepare for the next question. The next question will be coming from Mike Kratky of SVB. Your line is open.
Hi, everyone. This is Mike on for Tom. Thanks for taking our questions. Are there any gating factors remaining for the adaptive phase two three study of clofazimine expected in the second half this year? Can you just briefly describe kind of the planned study design, and how quickly do you imagine we could start to see data from that study?
How quickly? I'm sorry.
Could we see data from that study?
Okay. Yeah, I don't want to comment too early on some of the study details yet be either for competitive reasons or we're still finalizing them. What I would say is the gating factors are really twofold. One, opening up the IND, 2, just working with the international regulatory bodies to make sure we can import drug and get clinical trial sites activated. Those are the 2 biggest gating factors. We are pretty close with the FDA in terms of some of the last-minute trial details we focus on. In particular, you know, there's a quality life metric that people want to know about NTM. There's the assumption on sputum conversion. You can expect, you know, the trial design will incorporate some of those features. It'll.
I can tell you it will not be established patients. We're looking at earlier treatment patients who are on general background therapy. We're not going after naive. We felt that would be too hard to enroll, and too expensive relatively to the time it would take. We're looking for earlier stage people not responding on GBT in a global way. It will be US, some place in Europe, Japan, South Korea, Australia, are the key areas. We're focused on, quality of the patient, consistency of the patient type, and ones that aren't necessarily the higher case treatment that are the sickest, that may not respond to anything, but really trying to get a little bit earlier in treatment.
The other gating factor is just getting the IND filed, which requires us to get the manufacturing GMP batches up on stability and write that document up and get that submitted, which the team's full speed ahead on. It should happen in late Q2, early Q3, hopefully. Once that's filed, that'll be the last thing before we can get and have an investigator meeting, kick this off.
Understood. Thanks very much for the color. Just one kind of follow-up. From a modeling standpoint, how should we be thinking about the trajectory of SG&A moving forward, you know, both throughout 2023 and over the next couple years, just based on the commitment to V-Go relative to the Afrezza sales force restructuring?
I'll let Steve take that one.
Sure. I think SG&A, we don't talk too much about forward-looking financial information. We don't currently have large scale plans or plans to scale up. However, if we see opportunities such as the trial readout that come around, we may put money behind our endocrine business. What I would say is TBD, but we'll see how it goes.
Got it.
The thing I'll just add to that, Mike, is with pediatrics, when that gets closer, we don't need to add a bunch of expenses. There's about 500 ped endos in the country that make up the majority of the pediatric market. When you think about, you know, the investment for the future indications, there's not a huge infrastructure. We already have the people. Maybe we add another 5 or 10. I think if Afrezza keeps going the direction it's going, there's nothing but upsides. We've got slow market share there we could hire another 200 reps. We don't do that because we're trying to make it profitable. If we see a real growth opportunity to expand our growth faster, we can do that.
We've added, three or four new territories this year alone in markets where we've never had a sales rep. These are the opportunities we're looking for. We're looking to keep things relatively stable and start to drop revenues to the bottom line as we go forward.
Understood. Thanks very much.
You're welcome.
Okay. Thank you.
Thank you. We'll now turn the call back over to Mike Castagna for closing remarks. Please go ahead, sir.
Thank you again, everyone. Thank you for the questions. Thank you, Anthony, for joining us for the first time. It's good to hear some new analysts come in. I think that's important as we think about the next phase of the company. A lot of the questions we're getting is from new investors is really around the pipeline, the future, and what's next. We're excited as we anticipated that. Clofazimine, we think, is there, nintedanib is right behind it. Afrezza start off the year strong. V-Go, we'll watch over the next six weeks as we just launched that into the sales force. Otherwise, super exciting. Look forward to, hopefully wrapping up Q1 in about six weeks and sharing that with you in the next quarter here.
Otherwise, just thank you everyone for everything, and we're always here to answer your questions and hopefully keep creating value and helping patients.
This concludes today's conference call. Thank you all for joining. Everyone may disconnect and have a great evening.