All right, good morning, everyone. Welcome to Oppenheimer's 36th 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 MannKind CEO, Michael Castagna, and CFO, Chris Prentiss, if he's on. I don't know if he's on the other side.
He's on.
Yeah, MannKind reported Q4 and full year 2025 earnings earlier this morning. Total revenues reached nearly $350 million, representing a 46% annual growth rate. You guys commented that the revenue in 2026 can climb above $450 million based on several drivers, including Afrezza's pediatric expansion for six auto-injector approval, along with royalties from Tyvaso DPI. Great to have you on the call today, Michael. With that, let's dive into some questions. Top of mind, I think is, you know, your Nintedanib DPI program, MNKD-201, we'll call it 201 for IPF. It's available, or the few approved options that have tolerability issues.
Can you talk about the phase 1, phase 2 inflow study, which is initiating this year, and what you're hoping to show with the tolerability method?
Yeah. Thank you for having us today, Andreas, and thank you for the opportunity here. You know, as we pivot the company to where we've been moving towards, but I think it's really gonna crystallize this year between Afrezza, FUROSCIX, and MNKD-201, will be in the focus. The reason is exactly, yes, the phase 1 study is off and running. You know, around activating sites right now. MNKD-201, we've been working on this probably for 6 or 7 years now, this isn't something overnight we just decided: "Oh, let's just go do this." Like, this has been a conscious effort.
The phase 1, we just kicked off in December, and what I can tell you is we already have 4 patients enrolled, I believe, and 10 in screening. Which means the first. It's a 2 cohort study, so the first one is 1 dose, and then you check on that dose, make sure it's tolerable, and then you go to the second dose. We need 12 people for the first part and 12 people for the second. So it's a 24 person study, and the fact that we have 10 in screening and 4 enrolled, means we're gonna hit the 12 number pretty much in the next 30 to 45 days max. That'll answer the part 1 question, which is: Hey, is a dry powder safe in IPF patients? That's people's questions.
We wanna make sure we answer that question, whether it's the FDA, patients, or providers. That's going to set us up for the phase 2. The second part of this trial will be just a higher dose. We'll be looking at, you know, 2 cartridges twice a day, looking at a higher dose. That's going to be really what we're going into the phase 2 with. Those 2 things will be important. I think taking back-to-back doses to get to a higher dose load is going to be much more tolerable probably than the single dose in terms of, like, you get that initial reaction for a dry powder. You know, like when I take Afrezza, you take a 4, if you need another 4, it's not a big deal.
So we think whether they need 1 cartridge or 2 cartridges, that's irrelevant, because these people, they have chronic cough already in their disease. They are severe diarrhea. They, in many cases, will rather die than take the drug. These are very, very tough drugs on the body and the human. So we're very optimistic that 201 has a real blockbuster opportunity to take what is the standard of care today in every backbone of treatment and every trial is Nintedanib, and really show that delivering a dry powder directly to the lungs can, A, have a tolerability opportunity beyond what, you know, the 50% people drop out on Nintedanib, but more importantly, it can show an effect size that's equal or better than what oral Nintedanib can deliver. That's, that's the big question. That's the unknown.
I think the phase 1 is really going to show the tolerability of a dry powder in IPF patients. We believe it will be safe and effective and tolerable. We will have that data here in the second half, hopefully earlier than later. I think the phase 2 study, we expect to be enrolling patients early in quarter 2 here. That is already kicking off ex-U.S. You got phase 1 U.S. focus to answer the FDA's questions, and you got phase 2 ex-U.S. to get the trial moving. We have submitted this to the U.S. FDA, and if they agree to the protocol design that we have laid out, we have no problem considering adding U.S. to the trial. In fact, we are looking for sites as we speak.
There's a lot of interest in this trial, and the fact that we got 14 patients enrolled in the first 6 weeks, I think is pretty compelling, you know, in terms of the desire and the unmet need that people are struggling with. We're really excited. phase 1 will answer tolerability. phase 2 is gonna show us some early efficacy. It's a 12-week trial with a 6-month rollover. We expect majority of people to be there at week 12. We're not powering it for efficacy, in the phase 2, we expect to start to see a delta.
If you look at whether it's the TETON data or the Boehringer Ingelheim data that's come out in the newest drug or even the older dirt, Nintedanib, by 6-12 weeks, you're starting to see a separation from placebo. So we believe we need to start to see a separation from placebo by 12 weeks. If we see that, we'll feel really good about progressing that asset to phase 3. In the meantime, we are fully funded to get this through phase 2, and we feel very good about that opportunity to show that efficacy.
For sure. I mean, and you mentioned the tolerability issues with Nintedanib to date. You know, thinking about that blockbuster potential, it wouldn't be hard to imagine how quick patients would transition over to this product if successful. I mean, we'll hopefully, we'll look forward to all those updates, and I think as we're getting closer to real data, that should reflect in the stock price, too. All right, switching gears quickly, maybe to Afrezza. Let's discuss INHALE-1, INHALE-1ST, the INHALE-1 trial, naive treatment, Type 1 diabetes or pediatrics. Can you comment on how this trial is progressing and what you plan and hope to achieve here with additional data?
You are aiming to introduce a second cartridge for titration and use the Blu Hale tracking device. Can you talk about that as well?
Yeah, I think INHALE-1ST is a build upon the INHALE-1 trial we did. Meaning, INHALE-1 was about children getting the injectable inhaled insulin from injectable insulin as a switch study. INHALE-1ST is specifically about getting the very first insulin you get post-discharge from the hospital, that kids will never have to experience long-term mealtime injections 3-5 times a day or wearing a pump. We're really hopeful that, you know, we can really show that the very first insulin you get post-discharge in the honeymoon period, 'cause we've never done that work, right? We think there's a learning curve with the health systems themselves, let alone the patients and the providers, and what we need to do for a naive patient versus an experienced patient.
We think the drug's gonna work fine. That's not our worry. Actually, how do you titrate in those early stages? How do you change the protocols? Right now, every children's hospital, it's easy to switch, I'll say, you know, from MDI to inhaled or in MDI to a pump. Actually, all the protocols are built for MDI to continue. They're not built to actually change route of administration, which requires a different thought process on carb counts, and requires a different thought process to train the nurses at the school, requires different titration and follow-ups, right? All of that has to be done differently in the naive setting.
It's not about the efficacy or worried about the efficacy, it's actually all the logistics in the health system that we wanna understand better, and show that by working on that, we can actually improve patients' lives and outcomes. In INHALE-1ST, the trial the way it's set up is, the first two sites have to enroll about 10 patients before we open it up to the other 999 sites. Were we too conservative? Should we give them a little bit more? We just got the dose label change on Afrezza in the middle of this protocol, so, you know, we haven't adjusted it for that.
We made it, so we thought that that dose protocol would happen, and we wanna make sure it's right. So far, I can tell you that the 2 sites are doing amazing. Last time I checked, I think we had 3 or 4 patients already enrolled out of the 10, and that's just in the last 3, 4 weeks. So, we expect that to get there. The 2-unit cartridge was your other question. We have not studied the 2-unit cartridge yet in a meaningful way, and this is something we did get feedback from the sites is, "Hey, I'm a little nervous going from 4 to 8.
Could I get the 2-unit to introduce a 6? This is really in that early phase, and everyone's learning how to titrate insulin, how to dose it. It's not that we think people need to start on a 2-unit, because I think that's gonna do nothing. But it's really, can I go from 4 to 6 to 8, to 8 to 10 to 12? People are nervous about kids and doubling that dose from 4 to 8 to 12, and so that's a natural concern if you're a parent. It's a natural concern from a clinician when you got insulin, that people are afraid it's gonna kill themselves, and you don't wanna overdose on insulin.
The good news is, we just got data this morning that we're gonna be submitting, really showing the glucose-lowering effect of Afrezza in the first hour, in the first two hours. It's something, you know, we get 75% of our glucose-lowering effect in the first 90 minutes to 120 minutes. Injectable insulin is, like, 20%. We're three to four times higher in glucose-lowering effect in the first 90 to 120 minutes, and that's really what the label change was about. It's really about the mealtime control with CGM these days. If you wanna see your sugars get under control, inhaled insulin is really the only option that gives you that fast 30, 60, 90-minute window. Injectable insulin is in there for four to six hours, and you've just gotta wait.
Living with diabetes is a constant daily struggle, and you're reminded with your CGM every 10 minutes what's happening. We think the 2-unit cartridge will help on the titration, it'll help build people's confidence that you can go from 4 to 8. There's a 6 and a 10-unit step that they can do in this trial that'll be helpful to see. If that does work, we'll go to the FDA and talk about a 2-unit cartridge, or we can make a 6-unit and a 10-unit. We'll think through that as well. You asked about Blue Halo, and, you know, we go back and forth on this one. We actually have an ad board this weekend with some peds endos.
You know, it's a multi-million dollar investment in Blue Halo if we wanna move it forward. We have that in our budget plans this year. We wanna make sure that it's gonna be used, and that's one of the things we're looking at in the trial. Are you using it? How is it being used? Is it valuable? Once we launch this platform, it's just one more thing you've got to maintain and keep up to date and work through. We'll have it. We've designed it. The software looks amazing, and it really has a physician portal as much as a patient portal, looking at titration, CGM, and overlaying your dosing and timing range.
It takes Dexcom today, and it's ingesting that Dexcom data in INHALE-1ST, and we'll be able to see dosing and CGM and time in range all in one spot. That's what we're trying to do.
Okay, great. Sticking along the lines of Afrezza here, you have the PDUFA on May 29th for pediatric approval. How should we be thinking about uptake in peds?
I mean, the good news is that there is no. I've met some of these ped endos. You would think after 10 or 12 years on the market, people are aware of the product. They think it's a nasal inhalation sometimes. They don't. "When's it getting approved? Has it ever been used?" There is zero awareness of Afrezza in ped endos, which is good. It means we haven't promoted to that audience. We can't get in trouble. But you would think, being ped endos, that they would know what's out there in the adult, the reality is, they don't. The good news, it's a complete new introduction, to them, it's brand new, even though we have 12 years of safety history, 12 years of real-world data.
We just got two lung safety studies published, if you didn't see those, showing the safety of this product after 10 years on the market and thousands of patients. We feel very good about the lung safety in adults. We feel very good about the lung safety in kids. Once doctors see that data, that concern goes away. If you ask me, like, why has Afrezza never hit mainstream adoption? It's three things: It's share of voice, it's lung safety, and it's managed care. We can address lung safety after a decade on the market, we can address managed care through our $99 cash program, or just getting better PA criteria created. Share a voice is a strategic question, right?
Do we have the conviction and desire to scale up the investment direct to consumer and direct to patient? We turned on some digital work this past few months. We've seen really good early results, but we wanna kinda continue to watch that and monitor that. We're getting back patient research right now from families to see how much of a component in our launch as we go into January of next year, should be around patient activation. I think that's all the work we're doing. From a PDUFA, the May 29th is our target. The FDA has been sending us inquiries just like they were on the label change we just got. Some of the inquiries are very similar to that. The questions are very similar. They should be.
It's around dosing, hypo, efficacy analysis. You know, it causes more hypo, it causes less hypo. We never expect to get a better hypo claim, just to be clear, but we do think knowing the trial did miss its primary endpoint because one patient fell short, that the fundamental data set of all 219 other ones holds up, and I think that's important. So far, it looks like every analysis we've sent back to the FDA demonstrates the efficacy, safety benefit is there. We're not worried at this point. Natural IRs that are coming in, so we're hoping to hit that date. It's the week before ADA, so it'd be great to go to ADA and have a new launch. That's what we're aiming for.
Okay, great. Now, switching gears to FUROSCIX, big picture opportunity in heart failure and chronic kidney disease. What are the top drivers for FUROSCIX that you expect will contribute to sustained sales trajectory in 2026?
Yeah, I mean, I think when you look at this opportunity, I mean, heart failure is one of the top costs to CMS. It's one of the top reasons for hospital admissions. You actually peel back that onion and say: Why did the patient go to the hospital? I think the number is like two-thirds of the time they're admitted is literally just to get IV Lasix, because the orals aren't working, doubling the dose didn't work, and now the fluid level is so bad, they had to lose 20 pounds of fluid, and the only way to really do that is through the hospital, through IV Lasix. That, to me, is something that when we've done some research, even the diligence of the product, we felt the hospital segment was not aware of this product even existing.
Yet, you know, there is a hospital segment, and then there's a community segment. scPharmaceuticals was naturally focused on the community. It's where you can see scripts every week, activity every week, and it's not a long-term sell. For the hospital segment, in my mind, you're getting protocols changed, you're dealing with quality people, you're dealing with finance people, you're dealing with pharmacy. It's a longer-term sell, and over time, it's gonna be very successful. When you're starving to succeed, you're gonna take the short-term benefits, not the long-term investments. That's where the company was when we bought it. We've made that investment. We've hired 10 key account managers and a leader of that team, and I think they're having really good success.
They're paired up with each district to focus on the highest opportunities, and as we're seeing that success, I'm sure we'll hire more of them. But I wanted to kind of walk before we run, before we, you know, make sure to make the right investments calculated. We're really excited about what that can mean in the heart failure setting in hospitals. On the chronic kidney disease side, we think nephrologists are very aggressive treaters of fluid overload. They're not worried about the wrong dose higher, so we think that's an important segment, but they're very hard to track. I mean, you think about nephrology, unfortunately, what causes most of the nephrology cases is people living with diabetes. Those clinics are generally co-located in the same building or same blocks.
But nephrologists are bouncing around between, you know, kidney dialysis centers and their offices and follow-up care. We found the scPharmaceuticals team were just spending a lot of time tracking them down, and I think with the diabetes reps, they have plenty of endos to go see while they're trying to track down these nephs. I think over time, as they build those relationships, connections, they're getting early feedback that's very positive, and I think over the next three, four months, we'll start to see that impact, Q2 and Q3. What we think nephrology has got a huge upside from where we are, and we think the heart failure segment with hospitals is gonna be a large upside in the second half.
It's already been a quick turnaround for you guys and what you've been doing in a short amount of time here with and the guidance that you provided too, from when it was under scPharmaceuticals's hand. Kudos to the team there. Looking at the ready flow, looks like a meaningful product lifecycle catalyst with faster administration, potential lower COGS. How do you think its potential approval is gonna expand the market for FUROSCIX?
Yeah, I mean, look, you know, scPharmaceuticals did what they had to do to get to market quick, which is this on-body infuser. Lasix is a very difficult drug to make stable. It's, like, sensitive. It's that's why it's only been in the IV form for 60 years, in the hospital setting, right? This is the first time you have a true innovation, even in the on-body infuser. The real innovation to us was the auto-injector, right? That's why we put a CVR on this. We think it's really important to be able to give a quick injection, because even though the auto-infuser is very simple, it's the IFU is not that complicated. You don't have to charge it, you don't need 2 co-pays.
There's a lot of simplicity in what scPharmaceuticals did, but if you're a caregiver or you're a nurse or you're a doctor, everyone is familiar with giving GLP-1s these days in a quick auto-injector or rheumatoid arthritis drugs. Like, giving a quick injection is easy and less training, less stress, less everything. We think there's a big inflection opportunity that a lot of people have not written the first script or even adopted it, will take a look at it in a serious way with the auto-injector. Now we're just exploring how many different segments there are, meaning, are there nursing homes? Are there hospitals? Like, how much of a burden is the IV Lasix values, and how much delay is there in treatment?
There's a whole host of questions we still have around what are the segments for this opportunity. If we just do auto-injector, it makes it a lot easier to stock, store, and ship. We're excited.
All right, great. Yeah, no, you guys have a lot of, a lot of levers to pull on this year that can continue to get, you know, that can get you to that, you know, projection that you guys provided on revenue. You know, maybe we can also spend some time towards the end of our call here just to discuss, you know, the recent stock reaction to the UT update. I think there's been a lot of misconstrued or misinterpretation of yesterday's announcement with the potential for a soft mist inhaler for Tyvaso. You know, it even caught us, you know, it caught us quickly by surprise on how to interpret it.
It seems to us, and we've talked actually, believe it or not, even today, to a couple of docs, and it's more of a, and correct me where I'm wrong, but it's more of an alternative to the nebulizer, as opposed to the DPI. I mean, UT has invested a significant amount of money in manufacturing the DPI product. It doesn't make a whole lot of sense for them to kind of go ahead and cannibalize it that quickly, so to speak. Just maybe, you know, your thoughts. You did speak on it on the call. I thought you guys did an excellent job on that.
you know, and also just give those who are listening in a way of, you know, the kind of clear-cut way of thinking about the situation. I would just add one thing is, you know, you very rarely get opportunities, you know, with companies like in your position to buy them at, you know, 40%, 50% discount. An attractive entry point here or opportunity to double down, so to speak. Yeah, go ahead, Nick. Thanks.
Yeah, I think a couple of things. When you look at our market cap impact, which was significant and unfortunate, look, UT has been a phenomenal partner. They helped MannKind in the darkest days, we've gotten through that. You know, we're going our separate ways, and there's nothing wrong with that. We have a pipeline, we have assets we've got to invest in, and UT helped fund us to get to that point. As you look forward, they're self-sustaining growth drivers, right? The question is: What else are we doing to grow the company faster? You know, we kinda tried to articulate, even in some downside scenarios, there's still $700 million to $1 billion in cash flow coming in over the next several years on Tyvaso. That's more than our market cap, roughly.
It's about how do you deploy that free cash flow? How do you make the best choices for those investments to drive faster growth on the things we can control? We can't control UT. Obviously, they're a separate company, they're doing a great job. Just like 30% of Tyvaso nebulizer is still there's gonna be a portion of Tyvaso DPI always there for the next 15, 20 years. You know, what is that number gonna be? I don't know. I think time will tell, but we tried to show an example, which I think is the best example out there, is Breo RespiMat. Like, even that platform in COPD only got roughly a little less than 50% share after 8 years.
you know, this is gonna be a $1.5 billion-$2 billion asset, you know, if you just look at the trends. I'll take 50% of that for the next 15, 20 years nicely. you know, what I say to shareholders and employees: "You know, if we fail to deliver on our promises to the Wall Street around the launches and the uptake, then that would be a problem." The reality is, we have shots on goal that should deliver meaningful revenue growth, and if we're really worried about $30 million-$50 million in 2031, then we probably didn't do something else right. I just got to put that in context for everybody, is that the IPF in Tyvaso is upside to our forecast.
We never depended on it, that the upside in Tyvaso is upside, but again, we don't control it, so we always discount internally what we think could happen because we don't know what pricing is gonna do, we don't know what discounts are gonna do, we don't know what upticks look like continuing in different markets around the world. We don't build in our own internal models, you know, too much dependency beyond this year on this product. I think when you look at this year, next year, and even 2028, the near-term things that Wall Street cares about are pretty damn strong.
To see a stock reaction like we've had, when Wall Street really cares about the next quarter and the next year and the year after, I'm a little surprised because, you know, there's a lot of stuff that can happen in the next 36 months that aren't yet public, that are gonna be meaningful opportunities. I think that's what people are missing, right? Is the company has survived death many times. This is nowhere near a survival moment. This is an opportunity to rally around what we're doing and do it even better, and focus on doing it excellent, and get these launches off the ground to make world-class launches. We've never had, in our history, an opportunity to launch things from scratch, right? We inherited Afrezza as a mess with a screwed-up data package.
We have an opportunity to relaunch with kids from scratch. We have an opportunity to relaunch FUROSCIX from scratch. These are two big opportunities in front of us that we think is really important, and the acquisition of SC has integrated so smoothly. The team has been amazing, the patients have been amazing. The... It's just a great opportunity, and I feel very privileged and opportunistic around what's gonna happen, and there's a huge blockbuster sitting in front of us with the nintedanib DPI. I mean, if this thing can get through the phase 1 successfully, and phase 2 goes as quick as we think it can, I mean, this is a blockbuster asset. It does $4 billion of today, and the majority of people can't tolerate it. We feel like that's just a huge upside.
What you saw in our stock last day, honestly, is people who were buying our stock as a hedge to UT, and they've rotated out of it because that hedge and that thesis of investment went away with UT's announcement yesterday. It doesn't mean we're gonna not survive, right? It just means they're selling their position, they're gonna double down on UT, and they're gonna take that bet. That was their thesis in a large, a couple of large investors that I talked with. They weren't buying us for FUROSCIX, they weren't buying us for 201, they were buying us as a hedge for Tyvaso. Honestly, my conversations with investors, hopefully, we'll continue to focus on the things MannKind is doing great and what we're doing in the future.
We got fundamental investors in the coming into the stock in Q4, and we'll see in Q1, that I think will start to build good positions. I mean, if you can buy the stock in the $3 range, congrats! I mean, you know, I didn't think we'd see this again. Here it is. It's an opportunity, and you've seen our stock kind of bounce back out of this range very quickly, and it will bounce back. I'm not too worried. We just have to deliver on what we said.
I mean, well, you know, to provide some real-time trading color here, or whatever it is, it seems like UT also gave back a bunch of what it was up yesterday, too. I guess a lot of investors are just trying to digest those two dynamics. That's probably definitely at play here. I think just to make it clear for everyone else, yeah, it's, the strategy from a UT perspective, as far as we understand it, is not necessarily to compete directly with DPI. It's just to offer an alternative, should cough be a tolerability to your patients to not go to a competitor, but go to a soft nebulizer.
Yeah.
That hopefully will start resonating with investors, and they'll just realize that whatever, you know, punishment they gave to MannKind or discount to the DPI product is just not there.
Yeah.
You know, time will tell. I don't wanna take more also from what you said, Mike, 'cause you said it so well about the company. Let's just, we'll end it there. Thanks for all the color. Thanks for, you know, the insights here, jumping on, also post-earnings, and we'll look forward to updates on the pipeline shortly.
Thank you.
I think it should be a good year for you guys to continue to execute. You got a lot of, like, value drivers here, and look forward to those updates.
Great. Thank you, Andreas, for everything. Look forward to keeping in touch.
You got it. All right. With that, we'll conclude. Thank you.