MannKind Corporation Aktie

Good afternoon, and welcome to the MannKind Corporation Second Quarter 2026 Financial Results Earnings Call. As a reminder, this call is being recorded on August 5, 2026, and will be available for replay on the MannKind Corporation website shortly after this call for approximately 90 days.

This call will contain forward-looking statements. Such forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from these expectations. For further information on the company's risk factors, please see the Form 10-Q for the period ended June 30, 2026, the earnings release and the slides prepared for this presentation.

Joining us today from MannKind are Chief Executive Officer, Michael Castagna; and Chief Financial Officer, Chris Prentiss.

I'd now like to turn the conference over to Mr. Castagna. Please go ahead, sir.

Thank you, operator, and good afternoon, everyone. Thank you for joining us for our second quarter 2026 call. I'll start with some opening remarks, walk you through some business updates. Chris will talk about our financial results, and I'll close by giving a few closing statements here, followed by Q&A.

Let me start by saying how we transformed our company and our potential growth trajectory with the strategy we outlined back in Q1. We laid out three major catalysts this year: Afrezza pediatrics approval, opening an indication opportunity we have not had access to; Furoscix ReadyFlow, which we have a CVR around because of the meaningful contribution this will have to the important growth of this franchise; and finally, the Phase Ib readout in nintedanib DPI in patients with IPF and underlying lung disease. These three things contribute to a solid foundation as we close out 2026 and move into 2027.

Beyond the catalysts, Afrezza is off to a very strong start. Our top 20 key institutions have already written a prescription. Breakthrough T1D acknowledged the importance of this opportunity by funding a grant to go after insulin newly diagnosed patients. Furoscix showed strong revenue growth with 43% growth just over Q1, and our Phase II INFLO study has kicked off and underway with multiple shots on goal in front of us between Tyvaso DPI, ralinepag DPI, and nintedanib DPI, all focused on IPF disease.

As we look at Q2 revenues, we grew 21% from Q1 '26 to Q2 '26. What's most important about this picture is when you double-click down, marketed products grew 27% quarter-over-quarter, where royalties declined 1% from Q1 to Q2. When you take out our collaboration service revenue, you can really see an underlying picture what's driving our growth quarter-to-quarter.

Now let me talk about our first tier revenue mix evolution as we look to the success of our diversification strategy that we laid out. When you take out the collaboration service revenue, we grew 111% on marketed products year-over-year. This is obviously driven by the shift to Furoscix, and you can see that the royalties remain a durable revenue stream for years to come, but the predominant revenue growth of MannKind is being driven by marketed products, and this crossed the threshold in Q2 from Q1, where our two marketed products now demonstrate faster growth and a higher percentage of our revenue over the royalties by themselves. The royalties provide a great strong base business as we go forward into our launch trajectories.

Let me talk about the launch of Afrezza in pediatrics, which many of you have been asking us about. Now that we're approved, this is the first alternative mealtime injection in over 100 years. This product is solving an unmet need and a challenge that parents and patients face when it comes to timing of administration and seeing the impact that insulin has on their sugars and their CGM, seeing the ultra-rapid effect of Afrezza, the earlier peak and the tail coming off allows patients to dose differently and treat their sugars in a way that they just cannot achieve with insulin pumps or injectable insulin. This is now backed by more than a decade of safety data on the market, clear commercial opportunity and access at $35 opens up the door for many patients to start this therapy.

One of the main questions we get is why do we believe Afrezza will be different in pediatrics than the adult segment? First, the top left, a concentrated targetable addressable market. When you think about the adult prescriber base, there are 60,000 adult prescribers that make up 80% of rapid-acting scripts, which include a lot of type 2 patients. We pivoted about over a year ago to type 1. The pediatric prescribers are about 1,000 prescribers, make up 80% and they're predominantly institutional based.

Second, there's a connected patient-centric community. We see this online. We see it on Instagram. We see it in education and nurse educators. The adults, we've only targeted prescribers. There is limited surround sound to patients. But the pediatric segment and the success we've had, we've seen noise come from caregivers, from CDEs, school nurses, influencers and advocacy organizations across the board, driving a lot of demand and questions into the pediatric community.

Third, in the bottom left, a stronger clinical foundation and KOL support. When we launched with the adults, we had two studies published and not a lot of top KOL support. As you look at pediatrics, we have some of the top world-renowned thought leaders talking about our data, talking about the unmet need and the solutions that Afrezza can bring to pediatrics. This was followed by 10 years of safety on the market, new ADA guidelines, the INHALE-1 trial as well as the INHALE-1st trial being done in the top 50, 60 centers across the U.S. between all of our pediatric development.

And then finally is removing friction. We know access is a hurdle for any new launch, and we've basically taken the opportunity to take away all objections around access, FTD-1 and providing point-of-care opportunities to make sure patients can have a frictionless, seamless experience when they go to start Afrezza. The first 8 weeks support these four pillars, are driving a different uptake curve than adults.

When I look at the names of the institutions on this slide, these are some of the top centers in the country that treat the biggest volume of patients. In fact, one in three of the top 100 pediatric rapid-acting writers have already prescribed Afrezza. We have 20 priority accounts and all 20 have written at least one prescription since launch. We're really excited by these early metrics, and we'll continue to keep you posted as we go forward.

And before I close on the pediatric launch, I want to talk about the media coverage, has really helped convert early momentum. Over 200 markets in all 50 states got episodes on CBS and ABC as well as numerous articles highlighting the new innovation in pediatrics. This has signaled more demand from HCPs and patients and awareness than we expected, and this media credibility is fueling real-world engagement, social conversations and pull-through opportunities that we didn't have otherwise. As I think about the road map to success, Afrezza's future includes additional product development, digital advancement and external innovation.

Today, we had updated FDA-approved dose conversion in 2026. We have new guidelines support, and now we have the pediatric approval, providing a foundation for global expansion as an opportunity. As we look to 2027, we expect to be able to introduce a 2-unit cartridge, and INHALE IQ, which will be a Bluetooth connected device integrated with CGM. And then as we approach 2028, we expect to be able to have high concentration formulations of Afrezza, which ultimately will enable higher doses and lower powder loads at the current doses, minimizing any cough opportunity and increasing cost effectiveness as we get to higher doses in type 2.

Now let me bridge to the FDA approval of the Furoscix autoinjector ReadyFlow. As we know, fluid overload across the patient journey is often something that happens at moments in time. The majority of patients can be stable on an oral diuretic at home. Oftentimes, though, these patients will start to have fluid overload in edema, in the gut, it stops the absorption of not only the diuretic, but also the other meds to treat heart failure, causing a compound effect and worsening of this condition for patients.

We also hope that Furoscix in the majority of our use today is in this early intervention stage in the community setting, where we can hopefully prevent patients from going to the ER and progressing. The opportunity we see tomorrow, especially with this ReadyFlow, is the post-hospital discharge, i.e., can we get patients out of the hospital sooner that are stable or reduce readmissions to prevent the 30-day penalty that many hospitals get for not completely drying up patients before discharge. We see an opportunity here to increase intervention in the early stage as well as start to continue to get post-discharge protocols across the top health systems in the U.S.

Since Q1, MannKind advanced several key Furoscix growth opportunities. First, we highlight a limited hospital presence. We increased our IDN engagement in hospital systems to drive stronger hospital pull-through. And as we see, our medical liaisons are engaging at the highest level on institution protocol development and discharge as well as our key account managers working with institutions in quality, purchasing and pharmacy, to drive continued contracts and growth opportunities across these IDNs. We saw 36% growth in Q2 over Q1.

Second, the team is really focused on trying to launch nephrology while continuing to deliver cardiology sales. We're able to separate those sales force opportunities this year, and we caused some disruption here in Q1, but you can start to see the impact of that effort here in Q2 with 67% growth in nephrology in Q2 over Q1 and a record number of prescribers.

The next is under-funded marketing spend. So we've made many changes to our marketing investments, and you'll start to see those in the second half of this year as we prepare for the Furoscix ReadyFlow launch. We believe those investments will continue to accelerate growth as we close out '26 and position ourselves for 2027.

So what does ReadyFlow approval now mean? First, it's the only IV-equivalent diuretic delivered via an autoinjector. This will be available in the next 3 weeks to key institutions and community prescribers. This will allow us to deliver treatment from a matter of hours to seconds. It's demonstrated equivalent urine output, sodium excretion and potassium excretion to IV furosemide in healthy volunteers. The safety profile is consistent with oral and IV furosemide and the symptom relief may begin in an hour or less. This is a really exciting opportunity to help patients prevent them from going into the hospital or hopefully getting them out of the hospital early or preventing those 1 in 4 patients from going back in.

The Furoscix ReadyFlow launch campaign is built to drive immediate awareness and adoption, and we're looking at field activation immediately along with integrated surround sound at the major health systems and opportunities where patients are showing up in these health systems as well as online with the prescribers and patients. We're excited to be present at these upcoming conferences in the fall, and we expect the awareness of Furoscix ReadyFlow to immediately take off in the coming weeks.

Now I'm going to bridge to nintedanib DPI. This is an exciting opportunity where we just had a quick update last week, and we kind of walked you through the totality of the program. And today, I'm just going to give you a few key highlights. Number one, our positive Phase Ib study demonstrates safety and tolerability in patients with IPF. We saw no serious adverse events, no GI burden, no discontinuations due to safety and no difference in spirometry parameters between placebo, which is an empty cartridge and nintedanib DPI. Our Phase II study is underway. Our first patient has been dosed, and we expect to continue to activate sites around the world and throughout 2026.

One of the things I want to highlight before we talk about the PK/PD is that Cmax is known to drive efficacy in pulmonary fibrosis. This means AUC is less of a driver in terms of nintedanib efficacy and hitting a peak threshold concentration matters more than total lung exposure. Beyond the peak, lower exposure adds very little added benefit, and this is one of the challenge you have with oral delivered product is it's very hard to get high tissue levels in the lungs. We've known from our preclinical work that we can see significantly higher lung concentrations than plasma by targeting the lungs directly. So we believe that brief high peaks are sufficient with short burst of high concentration to inhibit fibrotic pathways is the data that's been generated out there today on nintedanib.

Now as I move into our own program, let me talk about the data we have. Our Phase Ia validated efficient deep-lung delivery of nintedanib DPI. We had rapid dose proportional exposure and a favorable safety profile in our healthy volunteer data. When you look at our Phase Ia study, significantly 6- to 8-fold higher concentration on Cmax in our Phase I study compared to a study out there that's been published in nebulized treatment. When you look at the data on the right, our 7-day treatment shows you a dose proportional response when you zoom in on the key attribute here looking at Cmax and AUC.

Now let me walk you through the data we just released last week. For those that didn't see it, this was the first inpatient study to assess safety, tolerability and PK in patients with underlying IPF. This was a two-cohort multiple-ascending dose study where cohort 1 got 2 milligrams 3 times a day and cohort 2 got 4 milligrams twice a day delivered at 2-milligram cartridge, i.e., a patient took four cartridges a day in cohort 2.

When you look at the baseline characteristics, the age was 73, the females were 37% and the pulmonary function at baseline is consistent with what you'd expect in this population with an FEV1 of almost 2 liters. So in our Phase Ib study in patients with underlying IPF, we saw a clean safety profile with 0 safety signals, 0 bronchospasms and 0 discontinuations or down doses. This becomes a challenge when you think about discontinuations of oral therapy can be as high as 50%. This overall profile supports chronic use and derisks our program as it advances into Phase II.

Now let me double-click down on the overall treatment adverse events, which was one of the questions we got post our call last week. And as you can see here, as previously stated, cough was about 39% in this trial. But there was no other single adverse event that really showed any concerns as we look at safety and tolerability in the placebo group or the active group.

So now let me double-click down on the cough. There were no discontinuations and no serious adverse events. As I stated, 60% of patients had no cough post inhalation and about 30% of patients had a mild cough. This mild cough is considered transient, does not progress over time and basically is something that gets better with time as people use the product. So when we think about 90% of patients had very mild cough and none of these were severe. The cough typically happens with the first dose and does not worsen with time. And this is not a product that you're going to continue to increase the dose over time, so we do not expect the cough to change from this first 7 days of treatment.

There were over 450 doses administered over 7 days in patients with IPF and not one patient had the dose reduced due to the powder load or the cough from the powder itself. We're really proud of these results, and we're not surprised given that Technosphere powders have been studied in thousands of patients, and we've seen very low single-digit discontinuations due to cough.

Now I'm going to turn it over to Chris for our financial results.

Thanks, Mike, and good afternoon, everyone. Second quarter revenue was $109.4 million, up 43% year-over-year and first half revenue reached $199.5 million, up 29% over the first half revenue of 2025. At the product level, Afrezza generated $17 million in net sales. Once we are through the initial launch phase for the pediatric opportunity, we intend to provide separate visibility into adult and pediatric performance metrics. As you would expect, because the pediatric indication was approved on May 29, the quarter included only a limited period of pediatric launch activity.

Furoscix generated $22.2 million in net sales, an increase of 43% from the first quarter. This was driven by a 49% increase in units sold, with the offset due to an increase in gross to net adjustments, which were 29% for the current quarter. As we acquired Furoscix in October 2025, we are not making prior year comparisons.

Our United Therapeutics revenue streams also continued to provide a meaningful contribution. Royalty revenue increased 4% over the second quarter of 2025 to $32.4 million, while collaboration and services revenue increased 53% to $35 million. The increase in collaboration revenue was primarily attributable to a higher volume of products sold through to United Therapeutics and to a lesser extent, price. In addition, we recognized $4.9 million of revenue associated with ralinepag DPI development milestones during the quarter.

As we've noted previously, this revenue stream may fluctuate between periods depending on production scheduling at our Danbury facility across Afrezza, our development programs and Tyvaso DPI. Based on our production plans, we expect Q2 to be the highest quarter of manufacturing-related revenues with the annual revenues in line with the prior year. Overall, the quarter reflects increasing revenue diversification from our promoted commercial products relative to our stable base of UT-related revenues.

Turning to the bottom line. For the second quarter of 2026, we reported a GAAP net loss of $19 million compared with GAAP net income of $700,000 in the prior year quarter. Our non-GAAP net loss was $2.7 million compared with non-GAAP net income of $13.9 million in the second quarter of 2025.

The year-over-year change primarily reflects the planned investments to support Furoscix, including the ReadyFlow formulation, the pediatric Afrezza launch, investment in our MannKind-201 development program and the incremental increase in our cost structure following the scPharma acquisition.

As you review our non-GAAP adjusted net income, I'd like to call out two lines that are new this year. The first is the amortization of acquired intangible assets. This relates to our acquisition of the Furoscix on-body infusor, which is being amortized over its current expected useful life. Now that the autoinjector has been approved, we will begin to amortize this intangible asset in the third quarter and on a full quarter basis will be approximately $2.2 million. It is important to note that the amortization of these intangible assets are noncash, but we will see these expenses flow through our P&L for many years to come.

The other new item relates to the accounting for our contingent value right associated primarily with the recent autoinjector approval. We will pay out the $45 million CVR in Q3 and the balance of expense, approximately $16 million, will be recorded in the quarter. In conjunction with the autoinjector approval, we announced a $50 million pipe financing, providing us pro forma cash position at quarter end of $161 million and giving us sufficient cash to pay the CVR and continuing to fully support our two launches and accelerate the development of our 201 program.

On the expense side, R&D expense was $18 million compared with $13.7 million in the prior year quarter. The increase was primarily attributable to development of the Furoscix ReadyFlow formulation, higher personnel costs following the scPharma acquisition, and increased development costs driven by our MannKind-201 program.

SG&A expense was $58.3 million compared with $31.6 million in the prior year quarter. The increase primarily reflected the promotion and support of Furoscix as well as the expansion of our field-based teams and activities to support the pediatric Afrezza and Furoscix ReadyFlow launches.

As we discussed last quarter, 2026 is a deliberate investment year. With both approvals now achieved, our focus has shifted from launch preparation to disciplined execution. We will continue to monitor performance, prioritize investments behind the opportunities showing the strongest returns and appropriately managing our cost structure.

Before I hand it back to Mike, I want to mention that we'll be participating in the Wells Fargo Annual Healthcare Conference in Boston as well as the Cantor Global Healthcare Conference and the H.C. Wainwright Global Investment Conference in New York. We look forward to engaging with many of you there.

With that, I'll turn the call back over to Mike.

Thanks, Chris. Let me close with where this leaves us. I told you at the start of this year that three catalysts would define 2026 for MannKind, and we delivered on all three. Afrezza is approved in pediatrics and is launching well. Furoscix ReadyFlow is now approved and will be available by end of this month. And nintedanib DPI showed positive results in Phase I with IPF patients, which validate our continued Phase II advancement and investment. Our job for the rest of this year is execution, and we have the team, the products and the evidence to make it all happen.

Before we take questions, a quick note on where our teams will be this week. First, starting out, ADCES, which is the CD conference. And this fall, we'll have a presence at major heart failure and nephrology meetings, HFSA and ASN. And the last one I'd like to flag with you is ISPAD in November, where our INHALE-1st pilot phase findings were selected for two oral presentations. At the pediatric diabetes communities annual meeting and having our newly diagnosed data presented there, [indiscernible] launch here is meaningful for how this therapy gets understood by the clinicians who will drive its use potentially around the world.

With that, operator, we'll now turn the call over for questions.

[Operator Instructions] Our first question will come from Ben Burnett from Wells Fargo.

Congrats on the progress. I wanted to ask about Afrezza. You conveyed some good early momentum. I guess what proportion of scripts that you're seeing are coming through your cash program? And do you expect these patients will convert to more standard channels? And if so, kind of when would you expect that?

Thank you, Ben. When we look at all the scripts dispensed, we're still -- because we got the hub and then we have some IQVIA data we're reconciling. But we are seeing a good portion go through as fully paid, and we're seeing the other half at least go through as cash.

It's too early to tell how quickly that will convert. But obviously, we're pursuing the prior authorizations and the appeals to make sure patients get it. And in parallel, we're also meeting with payers as we're trying to continue to increase cost and coverage for patients, especially as we go into '27. This program is going to go through the end of '26, and we would hope by then we work through most of the payers to move forward there. So far, I can tell you, our pediatric approval rates are consistent with the adult approval rates. And so that's one indicator what we're looking at. But otherwise, there is -- more than half grown through is cash, but that we expect many of those to convert to paid.

Our next question comes from Olivia Saunders from Cantor.

I know it's obviously very early in development still, but can you maybe help walk us through how you're thinking about the regulatory path forward for your IPF program? Obviously, the ongoing Phase II will be a big part of that. But what feedback have you gotten maybe more recently from the FDA around what you'll need to get this to patients and whether there are things that you can do to help accelerate that path forward? And then as a follow-up, is PPF something that you guys are looking into at this point as you think about your long-term portfolio, just given how big of a market it is and how much R&D interest there seems to be around it right now?

Thank you, Olivia, and great questions. Obviously, we're very excited about just the nintedanib IPF opportunity. But to your point, we will continue to look at IPF, PPF, ILD and all the indications related to nintedanib. We did meet the FDA last year as we finished up our Phase I to go to Phase II. And we originally proposed a Phase II/III study because most of the time in starting these trials is site activations, and we're trying to minimize that. And at that point, that's why we decided to do the Phase Ib to minimize any distraction related to FDA feedback. They really want to know what the powders look like in patients with IPF. We've now demonstrated that. We have submitted the Phase II protocol to the FDA to open up potential U.S. sites. and we'll have feedback on that in the fall.

I think you've seen the FDA kind of indicate probably one trial is probably all will be required in addition to the Phase II, and that's our underlying assumption. But again, the FDA will have to confirm some of those. And I think depending on the significant effect size that we may or may not see, that's probably going to drive some of those other indication extrapolation discussions versus do you need additional studies? The pulmonary division is very different than the other divisions. And so I think it's still TBD. But we're going to learn -- like you see on Tyvaso DPI as UT talks to the FDA, we'll learn things there. And there was indication extrapolation in DPI for ILD. And I think UT still needs to work through that on Tyvaso DPI.

So a lot of precedent setting around this set of patients and unmet need. And I think a lot of it with the FDA will determine the effect size and how much they understand this. But too early to tell, is it two trials, one trial, each indication extrapolation. But our working assumption is at least one trial for IPF and likely additional data generated in other target populations, but that's our working assumption. Will we do that in parallel to IPF? I think that's still TBD of how many bets we want to place simultaneously, but we want to make sure we establish the dosing here in Phase II.

Our next question will come from Roanna Ruiz from Leerink.

You have Ryan on for Roanna. Congrats on the quarter. Maybe going back to Afrezza, can you guys just help us understand the pace of script trends that you're seeing in the pediatric setting over the last month or 2? As your reps spend more time in the field, are you seeing an acceleration in script or steady growth? And then just as we look out in a couple of quarters and years, how do you expect this mix of adult and pediatric scripts to trend?

Thank you, Ryan. What I'd say in the first week or 2, there was obviously a bolus of patients waiting for approval, and we saw really fast submissions and getting those sites on board and our team getting out there to get them to use our reimbursement hub. I've been out there in the field. The excitement is palpable with the customers, the patients, the social media. And you saw kind of even though we had July 4 holidays and people on vacation, we've seen a nice consistent, steady referral pattern into our reimbursement hub. The last 2 weeks, you're starting to see that build up with potential refills as well as momentum. So I expect continued momentum as the quarter and the months progress ahead.

And we're also adding another, call it, 1,000 targets roughly in the pediatric community to our 70 reps who are selling Afrezza for adults. So they will now be kicking in here in August, and we'll actually be training them next week. So I expect continued momentum building, but it is a nice, steady group every week, and it has been growing in the last few weeks as well. I think we had our highest week 1.5 weeks ago of the last 8 weeks. So it is growing, and we are hitting new peaks every week, and that's exciting. And we think we're just getting started here.

How that builds will be part of what we're looking for in terms of -- obviously, you want to know how to build your models, but us, too, right? We're making lots of investments here, and we want to see how the refill patterns look, how the adult coming in and where are these patients coming from? We just got research this morning.

The good news is we're seeing a significant number of patients are coming from MDI. They're using Afrezza full time, probably 60%, 70% and about 1/3 are using it intermittently. And that means they may take a pump break. They may use it on top of their pump. But we are seeing a large percentage of people say they will use it full time and a lot of good patient demand for it. So that's the overall picture, I'd say, for peds. Happy to dig in, in terms of -- but some of our biggest prescribers are asking every patient on every visit, "Do you want to try inhaled insulin?" And we've seen something right over 20, 30 patients already.

On the adult side, I want to remind people, we pulled back resources this year on the adults. So obviously, we see a little softness in Afrezza year-over-year. And that's related to really the top 10 prescribers had a disproportionate amount of decrease relative to the next 1,000. And so when you take away that top 10, you look at the underlying adult business, it does look like it hit a nadir here in Q2, Q3, and that momentum in July did start to build back up with new patients growing almost 30% over the month of June. So I do think we'll start to see the compound in the second half of Afrezza adult and peds.

And if you ask me personally, I think the peds response, the uptake, the number of patients coming in, the number of prescribers, the feedback, everything points that peds will continue to build momentum and adults, we want to hold steady, and we believe the adult segment will grow with peds.

And just to give you some color, we had -- sorry, we had roughly -- lost my page, sorry. We had roughly about 450 docs come in since launch that are new prescribers. And I'd say -- and this is just one part of the data, not all the data but on the conservative side. And of those, about 200 were peds and about 250 were adults. So you're seeing more adults coming in with the peds approval and the confidence. And we had about 1,800 writers of Afrezza since the June 1 launch. So we're seeing overall writing increase. We're seeing repeat writing increase. We're seeing new writers increase. So that broad base of prescribing, I'll say, is what we're watching and seeing how much we can get depth and breadth of that audience.

Our next question will come from Gregory Renza from Truist Securities.

This is Anish on for Greg. Congrats on the quarter. Just first on the Afrezza peak share source. With the previously quoted 23 to 37 peak share range, how much assumes conversion of pumps and pods versus capture of multiple daily injection patients? And second, on the 201 registrational path or nintedanib DPI, what is the shortest credible route to approval? Does the study need to show FVC benefit on top of background antifibrotic therapy or non-inferiority to oral nintedanib?

Okay. I'll just keep building on the Afrezza theme, and then I'll jump into 201. On the overall data, we would expect roughly half our patients to come from MDI, and maybe 20%, 30% to come off pumps or added to pumps and then the remaining 15%, 20% be insulin-naive patients. And so that's the segment that we're seeing some early data. We got almost, maybe 20% of the naive trial enrolled already. And the 2-unit cartridge is really going to be helpful for the naive setting.

But I think in terms of MDI and pumps, that's the majority of our patients coming in today are patients coming from MDI or people wanting a pump break. And that's been some of the anecdotal feedback from doctors as they offer to everybody. They didn't realize that people have burnout and that they're tired and they love to be detached from something for a little while. And it doesn't mean they're always going to use Afrezza full time or a pump full time. They're going to go back and forth realistically depending on their needs. So that gives you a breakdown of Afrezza.

And I would say the research we just got in this morning reiterated that kind of breakdown of what we're seeing in our initial launch assumptions and how it's being used in the first 6 weeks and how we expect to see that continue on. And also the research that came in reiterated the 20%, 30% share that we talked about previously that the doctors now, that, that's approval there, they're continuing to indicate that's a real possibility. So we continue to remain bullish and excited here for what we see in the early days, but it will take time to show these trends.

And the last thing I'll say on Afrezza is just, some of the pharmacies are reporting and some of them are not reporting. And so that noise will sort out, and we'll continue to keep you updated, but we are working through that consistently as Wall Street may try to look at one data source but not have the full data.

On 201, that's an interesting question in terms of the fastest pathway. Having done a lot of biosimilars, my initial goal was to convince the FDA that a biosimilar like-pathway could be appropriate here, meaning a non-inferiority trial with indication extrapolation. I think we need to get the Phase II data to show the effect size to alleviate any concerns that we would be putting this in a large population and not knowing are you switching off stable nintedanib to inhaled versus an add-on. And so I don't think the FDA has any clear guidance on what they prefer.

But I think what they would like is an add-on design trial with placebo. And the good news with the Jascayd launch, there's clearly going to be more patients to add on, on top of background therapy, especially as we look at Tyvaso nebulizer. So I'm hopeful as we get to Phase III, the ability to look at naive patients as well as add-on and enroll that trial quickly, will happen, and that's our assumption. And the size of the trial and the primary endpoints will be TBD. But that's really what I look at the IPF market is saying, it was only nintedanib and it had to be an add-on, it would be a hard study to enroll. But given the success of Jascayd and pirfenidone and Tyvaso [indiscernible] nebulizer coming in, I'm excited about the Phase III design here.

Our next question comes from Brandon Folkes from H.C. Wainwright.

Congrats on all the progress recently. I would continue on the Afrezza theme. Understanding it's very early on, any color on refills for prescribers writing repeat prescriptions? And then in terms of titration and equivalent dosing, you've generated good data there, but is that resonating or well known with the prescribers right now? Or is there a similar learning curve to the adult launch, but this time you're doing it with the data in hand?

I think it's too early to get -- we are seeing refills already in month 2, so that's a good sign, but it's too early to tell how that builds. I think we're in another month or 2 of data to really look at those trends in the cash pay and compare it to the IQVIA data. But the example, we did see almost a 50% jump in new-to-brand therapy just in June alone, we'll have July very shortly. So that's all positive.

In terms of -- if I think about how many docs wrote three or more scripts, over 30% of our customers have written three or more scripts from what we can see. And that number is probably being conservative because there's some duplication we're trying to eliminate. So we do see people already writing the second and third patient coming into our referral hub as well as in that IQVIA data. So that's another exciting sign that we are seeing the repeat writing happen, let alone the refills.

In terms of the learning curve, we tried to apply, as you saw, why do we think this is different from adults is we don't want to make the same perceived objections in adults. And one of the things that came back today, for example, was cost. And we're charging $35, yet the perceived cost by the customers is in line with an insulin pump or injectable insulin. So the good news is they're not perceiving cost to be a barrier, which is one of the ones we hear in adults. And the other thing that's coming up is lung safety and lung testing. And so that's another one we want to continue to work through the system and make sure that those are not barriers. If you look at the top 20 institutions, two of them just wrote last week because it took them 7 weeks to figure out how to get the lung function test embedded in their clinical practice. But that's done now, and that continues to be less of a burden as we go forward.

And the dosing, I think that the change in the label brings people confidence on the conversion because when you're talking about kids or adults and insulin, everyone's told if you dose too much, you go low and you don't do well. And so that dosing change is bringing people confidence to start with the appropriate dose and titrate up, but most importantly, start. And I think that's what that label change has gotten us. And that should result in less dropouts. And again, too early to tell that, but that's one of the things we'll be looking for.

Our next question comes from Yun Zhong from Wedbush.

Congratulations on the progress. So on the Afrezza pediatric launch, I wanted to ask about -- you said 1 in 3 of the top 100 pediatric insulin writers, but what about the other two? And have they not been reached? Or are they still trying to figure out maybe whether it's suitable for the patient or have they not received sufficient interest level from their patients? So if there is any additional information that you're able to provide, that would be very helpful. And on the ReadyFlow launch, I know that may not sound like a big deal, but what needs to happen during that 3 weeks and now that you are not able to launch immediately after the FDA approval?

Yes. I think on the 1/3, these are the top 100 insulin writers. You can imagine it's very hard to get into these places. Many of them are in academic institutions. You have a lot of people taking summer vacations. And in some cases, we have in-services scheduled in the month of August and September. So they're not always going to be there in the first 30 days. In many cases, we've been asked to come in ahead of our original in-service date and in-service the staff even earlier because of how many patients are coming in and asking.

So I'd say the other 2/3, there's probably always going to be 10%, 20% of docs who are never going to write. But the fact is we're just getting started here in the first 8 weeks. I think we're pretty happy with 1/3. I think that will continue to close the gap. There's nothing specific that I would sit here and say today other than time of why the other 2/3 have not written. There's no major objections happening, and I think that's what's most important.

I've been doing this for 10 years on Afrezza. I go after our peds and people want to -- they're not arguing why they shouldn't use it. They're trying to learn how to use it. And that's a very big difference in my experience from adults. They're asking the right questions. I can tell you, I did a dinner in a key part of the country, 15 providers showed up and they held me for 3.5 hours of just discussion. And that was just their open time. They wanted to stay and continue to understand every nuance of this product over the last 10 years.

So that's the level of detail people are getting into in a good way because they want to learn how to write it, how to prescribe it, how to titrate it and how to really think about using it because it is so different than all the other insulins. And so that's the good part about the peds that we're excited about. It's an audience that is more engaged, more open to change, and they are more progressive than the adults. And so far, we are seeing that.

On the ReadyFlow, unfortunately or fortunately, depending on what you want to look at, the supply chain is outsourced. Now the good news is ReadyFlow's in the U.S. versus the on-body infusors outside the U.S. And so that supply chain across the U.S. just takes time to -- we had to get the labels. We had to get the packaging. We had to get things printed. We got to fit in the queue of the outsourced providers. And all that's been lined up and the team is working tirelessly day and night to make sure we get there every day we can.

But at this point, we've kind of set the target. We're training all the reps next week, the week of August 10. And the following week, they'll be out there promoting it and inventory should be there by the end of that week or the following Monday. So we'll be shipping drug in the month of August for all intents and purposes. And the product is made, so there's no worry so far that we have around is there manufacturing or anything like that. It's just really the supply chain.

Our next question comes from Anthony Petrone from Mizuho Financial Group.

Congrats on all the progress this year. One on Afrezza and one on ReadyFlow. I think, Mike, we talked about the additional doses at the upper end of the range for Afrezza, pediatric Afrezza. And maybe when will those be available? And once all of the cartridges are available, what do you think the mix will be in terms of dosing? And then how does that translate into gross margin contribution because you have some pricing at the upper end of the range there with the larger dose cartridges?

And then on ReadyFlow, the transition to subcu from on-body has a gross margin uplift. I'm just thinking as you go into '27 and we look at product gross margin specifically, when you have that higher mix to ReadyFlow, how should we think about product gross margin year-over-year from '26 to '27?

I'll take the first one, I'll punt the second one to Chris. On the Afrezza doses, I would say that work on the high doses will take another 12 to 18 months realistically, and then we got to get that approved. We have submitted or in the process of submitting that request to the FDA to understand and make sure we follow the bracketing approach we're looking for. On the smaller doses, the two units, that work has already been done. It's already on stability, and we've already asked FDA about it. So we feel pretty good about getting the smaller dose into the market, hopefully in 2027. And I think that's more important in the short term as we continue to get the pediatric market going.

And even the adult market, I'd say more of the type 1 market, they're so used to thinking about 0.5 unit, 1 unit increments that a 2-unit cartridge really allows them to either start earlier in that honeymoon period when a newly diagnosed -- or to titrate between a 4 and 8 to get to 6 or an 8 to 12 to get to 10. There are patients who just want to get that accurate. I don't think it's personally required, but you're changing 100 years of habit, insulin sensitivity ratios and carb counting. And so they've been trained in a certain way, and we can either try to retrain all of society, we can try to fit into the model that they're used to. And I think the barrier to just fit into the model they're used to is going to make these incremental doses easier.

I wouldn't expect a lot of change in gross margin between the different doses. It will help on the fringes, but I think it's really going to help international. When I look at international markets, cost is a huge barrier. People are paying cash and being able to continue to reduce the cost outside the U.S. will only increase adoption there. But otherwise, you're going to be limited to a very small population until we can get these higher doses into a single cartridge instead of two cartridges because that literally cost them 2, 3x as much. And so that will be a hindrance to global expansion. But in the U.S., the high doses in type 2s will be an opportunity to continue to grow as the type 2 market wants to use Afrezza as well. So the high doses are important. They're not as important in the next 18 months, but they'll be there.

Chris, I'll turn it over to you for ReadyFlow and contribution.

Yes. As we think about the Furoscix margin, our commentary has been that the margin increases by about 70% when we think about the transition from OBI to the ReadyFlow. And so as you start thinking about your model for 2027, you can start thinking about a large majority of that being the ReadyFlow. And so that will have a significant help for us. And the on-body in reality will be impacted by tariffs that are soon coming into play. And so that difference between margin would be even exacerbated as we think about future periods.

Our final question is coming from Douglas Miehm from RBC Capital Markets.

My question just has to do with Furoscix. And with -- when you look at the first half of the year, the $38 million or so that you reported and achieving the guidance of $110 million to $120 million, it implies around $75 million, plus or minus a bit in the second half of the year. So roughly doubling or so the first half of the year. And with the launch occurring later in August, can you just walk us through the cadence and key assumptions that would give you confidence that the guidance range is achievable?

Thank you, Doug. I'd say a couple of things on this topic. First, if you look at 2025, 1/3 of the units came in the first half and 2/3 of the units came into the second half of last year. I think that trend is probably what we expect until you start to see either smoothing in Medicare come in more aggressively or there's some way to provide assistance or we move more formularies to preferred status. That patient out-of-pocket cost in the first quarter or 2 as people close the donut hole is a major barrier to that earlier unit adoption. So you see the back half of the year as co-pays come down, there's a huge unmet need. Patients just can't afford it. And that's not something that MannKind can change. It's not just our product, it's all brands.

And the co-pay assistance foundations this year went away pretty much with the generics that came in on Entresto. A lot of that assistance that was out there has gone away for these patients. And so the fact that we did hit roughly 35% of what we expect for the year in the first half, I think, is great given some of the headwinds that are out there and the patient affordability. So if you just do that, your numbers are roughly directionally accurate of what we expect in the first half and second half.

The only thing I'll add to it in terms of can we or can we not achieve that guidance range is the inventory is going to be shifting quite a bit over Q3 and Q4 between the autoinjector and the on-body infusor. And so depending on how that conversion and how fast it happens and those inventory buying patterns, that's going to drive a lot of that noise, I'll say, in that range. And so things look pretty good. But obviously, the second half has got a large demand number in front of it. And based on history, we expect that we can achieve that demand. But the inventory part will also be another factor here what we're driving towards.

There are no further questions. Back to Michael Castagna for closing remarks.

Thank you, everyone, and great questions. It's somewhat of a refreshing or concern that we're all talking about Afrezza, but we're really excited about the pediatric launch opportunity we see in front of us. We're happy to hit all three milestones this year. These were amazing hard work on a lot of people and a real big part of the future of the company. And I think Furoscix ReadyFlow, we're jazzed what that's going to do for patients and providers and hopefully, launch trajectory there in the second half really is going to bring a lot of energy and momentum to the company.

And I want to thank really the patients, the families, our investigators who do all of our trials. We couldn't be here without them and our employees who honestly have worked night and day and weekends to make sure we got through the FDA and got these approval, now they're preparing for the launches. So a lot of people working, a lot of long hours on your behalf. And everything we discussed today starts and ends with everyone involved. So thank you to our employees and stakeholders.

I look forward to updating you on our progress next quarter. We'll have some -- we have 3 or 4 investor meetings between now and then. We'll continue to share updates on the launches and how things are progressing at those opportunities. So please dial in and listen. And we're always available for questions if you want to reach out. Thank you, operator. This ends today's call.

That concludes today's call. You may now disconnect.

Good afternoon, and welcome to the MannKind Corporation conference call to discuss the Phase 1b results for its nintedanib DPI. As a reminder, this call is being recorded on July 29, 2026, and will be available for replay on the MannKind Corporation website shortly after this call for approximately 90 days.

This call will contain forward-looking statements. Such forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from these expectations. For further information on the company's risk factors, please see the Form 10-Q for the period ended March 31, 2026, this morning's press release and the slides prepared for this presentation.

Joining us this morning are Michael Castagna, Chief Executive Officer; and Dr. Wassim Fares, Senior Vice President and Therapeutic Area Head, Respiratory.

I'd now like to turn the conference over to Mr. Castagna.

Thanks, operator, and good afternoon, everyone. Thank you for joining us for this focused update on nintedanib DPI. I'll begin with the IPF opportunity and why we believe this program can create meaningful shareholder value over the coming years. Then Dr. Fares will review the clinical data, including our Phase 1b results as well as the history of the program leading into our global Phase 2 now underway. I'll return with a few closing thoughts before we open up the call for questions.

Let me start with the broader context. At the beginning of the year, we laid out three major catalysts. We have now delivered on all three through July.

The Afrezza pediatric indication is now approved, expanding the population we can serve and creating a growth opportunity. We're excited about the early days of launch, and we'll provide more details on our next week's earnings call.

Furoscix ReadyFlow is approved, reducing administration from hours to seconds while supporting broader adoption and operation in health systems as well as a lower cost of goods. Two approvals in a single year is allowed for a company of any size, let alone ours, which brings me to nintedanib DPI.

When we call this update, we've completed the third catalyst on this page, and it's the one we spent the last seven years to get to this point. There's an urgent need for new effective therapies in IPF, and we believe lung targeted delivery is the best approach that addresses the tolerability barriers that are holding today's therapies back.

For us, our Phase 1b data is the key clinical derisking step for the entire program, and it's the reason we want to walk you through the history and the full picture where we are today.

Let's begin with the opportunity. The first is that our Phase 1b study demonstrated safety and tolerability in patients with IPF. That's a data set we haven't had. And I'm proud to say there were no serious adverse events, no GI issues and no patient discontinued.

Dr. Fares will take you through the details shortly, but I'd summarize it this way. The tolerability questions we and our investors have cared about, including inhaled antifibrotic therapy in the lungs are precisely the questions the study was built to address, and the results give us the confidence to advance this program forward.

Our global Phase 2 is underway, and we are actively progressing site activations, and we expect enrollment to continue to increase as we progress through 2026. I want to spend a minute why we're investing here.

It's because IPF is a category that has already been commercially validated. We don't have to establish a disease state. These are approved therapies in the market today, and OPEB has generated more than $4 billion in global revenue just in 2025. And I hear Jascayd is off to a fast start, approaching $2 billion in their first year of launch.

You have a blockbuster precedent in a disease with roughly 100,000 IPF patients in the U.S., a population that unfortunately continues to rise, year after year. Beyond IPF itself, there's a larger adjacent segment of patients with pulmonary fibrosis, more broadly interstitial lung diseases that can lead and progress to fibrosis.

So, the market does not need to be created. The disease burden is clear. The treatment category is established. The unmet need remains substantial and unchanged, and that combination creates an opportunity for a targeted inhaled delivery.

Let me be a little more specific about the challenge we face because it's not a problem of efficacy. Nintedanib works. We don't question that. It's the first drug to really show what it can do to help patients.

The problem is, patients can never start therapy because they know the side effect profile or they don't stay on therapy. Three out of four IPF patients are not on an approved antifibrotic therapy despite the fact that 80% face the risk of death within five years of diagnosis. Among those who do start, published discontinuation rates run as high as 50% and current therapies carry major tolerability challenges.

Our aspiration was to take a proven molecule, change in route administration to solve this unmet need created by the standard of care. Nintedanib DPI is designed to deliver drug directly to the deep lung where fibrosis occurs while bypassing the GI tract and reducing systemic exposure. The GI adverse effects associated with oral nintedanib are the reason so many patients stop or never want to start.

So reducing systemic exposure is the mechanism by which we hope to change the treatment experience. We believe this approach has the potential to improve efficacy and tolerability, which may support long-term adherence.

This thesis has recently been proven out by the data release on inhaled pirfenidone as well as Tyvaso's TETON-1 and 2 trial, all of which show that targeted lung delivery therapy does drive efficacy in IPF.

With these Phase 1b results, we have more confidence in our program and why this target approach will have an impact on patient outcomes. The reason we believe we can execute on this thesis is the platform underneath it. Technosphere technology provides highly efficient delivery of a dry powder through a small portable device that we call Dreamboat. The SDK microparticles at the core of our technology drive rapid uniform distribution deep into the lung with extensive throughout the lung tissue.

Often, I get asked, can they inhale a dry powder? Will they receive the product? And the answer is yes. If air is flowing, our powders are going into that area of the lung. It's already been validated on two FDA-approved products, Afrezza and Tyvaso DPI. For us, that changes the CMC and drug device risk profile of a program like this considerably. We're not simultaneously trying to prove a new delivery technology and a new molecule and a therapeutic hypothesis. We know how to formulate this on our platform. We know how to manufacture at scale. We have real-world data experience in how patients use our inhalers day in and day out.

For a chronic disease where patients may be on therapy for years, the practical characteristics of the device, the portability, the fast inhalation are not a footnote. They are part of whether a therapy gets used at all.

One technical point worth understanding is the versatility of the platform. A Technosphere particle and the products that we make are mostly FDKP-based carrier with a small percentage of active drug, as you can see here. Technosphere powder has now been used in more than 50,000 patients, a substantial base of experience with the carrier itself before we ever put nintedanib on it. This gives us ability to really understand where our particles go, how they are formed and how patients can tolerate them across multiple diseases.

I also want to address a question we get regularly, which is whether patients and prescribers will adopt a dry powder inhaler. We have a case study from our own experience in the inhaled treprostinil market, where DPI today has grown to 80% of the market since launch. Patients have demanded this, patients have enjoyed it.

In this pulmonary population, many of them elderly, many of them compromised lung function, the DPI format has become the dominant way the therapy is delivered. I'm not going to claim that history will repeat itself automatically in IPF, but it does tell us something important about behavior. When a dry powder option offers a genuine better experience than the alternative, clinicians prescribe it and patients demand it. Those dynamics give us confidence in the commercial logic behind nintedanib DPI, assuming we deliver the clinical profile we're working towards.

With that said, let me turn it over to our clinical data. I'm pleased to introduce you to Dr. Wassim Fares, who joined us a little over three years ago to lead our respiratory therapeutic area. Dr. Fares is a Board-certified pulmonologist with more than 18 years of running respiratory clinical development programs in PAH, IPF from early-stage studies all the way through Phase 3 and post approval. He has spent a career on serious rare lung diseases across both academic medicine and biopharma. So he understands the challenges patients face, how to develop drugs and how to get these to patients in the quickest way possible.

Thank you, Dr. Wassim, for joining us today, and I will turn it over to you.

Thank you, Mike. Good afternoon, everyone. Before starting the clinical program in humans, we conducted multiple animal studies to characterize the pharmacokinetics, pharmacodynamics and safety of an interactive dry powder inhalation. In these preclinical studies, which included five non-GLP, GLP stands for Good Laboratory Practice and three GLP studies, lung concentrations were at least 100-fold higher than plasma with minimal systemic exposure. We did 28-day tox studies in two different species and a six-month repeat dose study. These studies showed no clinical toxicity, and they established a wide safety margin, which was a pharmacokinetic and safety foundation we needed to move into humans.

Since then, our clinical program has advanced from first-in-human healthy adult volunteers to patients living with IPF. We published the results of the healthy volunteer study, along with the preclinical studies earlier this year, and we are reporting today the results of INFLO-1, the Phase 1b study that showed safety and tolerability of nintedanib DPI in patients living with IPF.

We are now enrolling in INFLO-2, our global Phase 2 study for patients with IPF. In less than two years, the program has moved from first-in-human dosing to a global Phase 2 study, which we are very proud of. The team has done an exceptional job with this progress. In the next few slides, I will go into more detail into each of these studies in humans.

Starting with the first-in-human study. It used a standard stepwise design. Part A evaluated single ascending doses from two to eight milligrams. After formal safety reviews, Part B evaluated twice daily repeat dosing over seven days. The objectives were safety, tolerability and pharmacokinetics, not efficacy.

We wanted to know whether we can deliver enough exposure in the deep lungs where IPF pathology is, whether exposure increased predictively with dose and whether repeated delivery into the airways produced any signal of concern.

Nintedanib DPI was safe and well tolerated over seven days in healthy adults with no safety signals, no serious adverse events and no study drug discontinuations. We observed mild reversible cough typically after the first dose without worsening on repeat dosing. We did not observe the systemic adverse events commonly associated with oral nintedanib, including diarrhea, nausea, vomiting or headache.

This was a short study in healthy volunteers, so it cannot establish chronic tolerability. But it provided the first human evidence that the formulation behaved as intended and supported advancement into patients with IPF.

Before I remind you of our PK data that we published earlier this year, I want to highlight the importance of nintedanib Cmax, which supports a lung targeted approach. Published preclinical work shows that peak lung concentration, that is Cmax is more important to nintedanib antifibrotic activity than total exposure over time, that is AUC.

In those models, brief high concentrations were sufficient to inhibit fibrotic pathways, while additional ongoing exposure beyond the peak did not add much. That creates a rational fit for inhaled delivery, achieve a high brief concentration in the lungs while limiting prolonged systemic exposure.

Our human pharmacokinetic data are consistent with efficient drug lung delivery. For inhaled nintedanib to reach the blood, it must go through the deep lungs first, including LDLI, pass through the lung interstitium where IPF pathology is, and then cross to the blood. So plasma levels are an excellent surrogate of how much the drug is delivered to the deep lungs.

To orient you to this figure, our PK data are on the left. The ones on the right are published data from a nebulized nintedanib formulation. At comparable doses, nintedanib DPI produced plasma Cmax values approximately 6x to 8x higher than published values for nebulized nintedanib. This is a cross-study comparison, not a head-to-head trial, and it should be interpreted accordingly.

What it shows is that the Technosphere formulation is delivering drug efficiently to the deep lungs with an immediate plasma peak. Now let's turn to the study most relevant to today's update.

INFLO-1 was a randomized, double-blind, placebo-controlled Phase 1b study in 27 patients living with IPF across 10 sites in the United States. Patients received 1 of 2 active regimens or placebo over seven days with formal safety review by the sponsor, us, and an external data safety monitoring board before dose escalation. The study was designed to assess short-term safety, tolerability and pharmacokinetics. The gating question was simple. Can a fibrotic lung tolerate repeated administration of nintedanib DPI?

The answer from this study was a clear yes. The safety profile was clean. There was no drug-related diarrhea, nausea or vomiting. As you know, these are the major adverse events that limit the use of oral nintedanib. There were no bronchospasms, no changes in oxygen levels or respiratory rate and no study drug discontinuations or dose reductions. This is a meaningful derisking step as we move into Phase 2.

Let me address cough directly because it is the most common question about delivering a powder into fibrotic lungs. Approximately 60% of patients living with IPF who received active drug in this study had no cough. Roughly 90% had either no cough or only a mild that is Grade 1 cough adverse event and none had a severe cough. When cough occurred, whether in this study or in our other studies using Technosphere technology, it generally followed the first dose and did not worsen with continued dosing.

There were no discontinuations, no dose reductions, and there was no correlation between cough and powder mass. The observed pattern is consistent with prior experience across our Technosphere platform, where clinical data from approved products show less than 3% discontinuation due to cough.

The extent of patient exposure also matters. Let me orient you to this figure. Magenta color reflects exposure in our trials with nintedanib DPI. Gray color reflects reported exposure by a nebulized nintedanib formulation. On the left, it shows exposure in healthy volunteers. On the right, it shows exposure in patients living with IPF.

Across INFLO-1, we administered around 448 inhalations of nintedanib DPI to patients with IPF. I'm not talking about exposure in healthy volunteers. I'm talking about patients with the target disease idiopathic pulmonary fibrosis. Contrast this with what has been reported with the nebulized nintedanib formulation, we could find that only six doses were given to patients living with IPF, one dose per patient for six patients with IPF.

As you know, exposure and clinical experience in patients with the target disease are very important. With that exposure to nintedanib DPI, we saw no difference in spirometry between active drug and placebo, which use an empty cartridge. For clinicians evaluating an inhaled therapy in a compromised lung, that is an important pulmonary safety observation. This provides an impressive early safety database in the target population using a carrier already experienced by thousands of patients living with ILD through Tyvaso DPI in PH-ILD.

With that strong foundation, let me turn to Phase 2. INFLO-2 is a randomized, double-blind, placebo-controlled global study that will enroll 210 patients with IPF. The 12-week controlled period evaluates two active regimens against matched placebo, followed by a 24-week open-label extension. So at the end of the trial, we will have safety and efficacy data in patients with IPF over a nine-month period.

The primary objective is safety and tolerability with Forced Vital Capacity or FVC as the key efficacy endpoint. Importantly, the study includes patients who are untreated, that is they are not on background IPF therapies as well as patients who are on stable background therapy of pirfenidone and/or Jascayd.

That design reflects the evolving IPF treatment landscape and preserves our ability to understand nintedanib DPI, both as an alternative first-line antifibrotic and as a potential backbone for combination therapy.

With that, I'll turn the call back to Mike.

Thanks, Wassim. Let me close how we think about the value here.

First, on patent protection, we built a layered patent estate specific to nintedanib DPI in combination use with the longest dated protection extending to 2046. Underneath the product estate sits the platform itself with more than 1,400 patents enforce worldwide. And I'd like to add one point beyond patents. Manufacturing this powder at scale is genuinely complex, and that complexity has a practical barrier to entry. We spent 35 years building the capability to make it at scale, and it isn't something a competitor can quickly stand up. Nintedanib DPI is designed to be delivered in seconds and give patients lung targeted delivery without the nebulizer burden or the systemic adverse events associated with oral therapy.

Our Technosphere particles are already validated in two FDA-approved products used in the adult population, including elderly individuals with compromised lung function, and this overlap is within our target population is really relevant to where we're going. We also have experience in this clinical setting and our platform has demonstrated safety and tolerability in patients with underlying lung diseases.

Tyvaso DPI is approved in PH and PH-ILD, which includes patients who also live with IPF in some cases. Nintedanib is a gold standard in this disease, but the GI burden of the oral caps how much it can be used. I've never believed the ceiling of this molecule was scientific. It's always been tolerability, and that's been going on for over a decade. At the same time, IPF is moving towards combination treatment as more options become available. We've seen the same progression across other chronic conditions, including respiratory disease, where monotherapy comes out and established as a category, new mechanisms enter and combination therapies follow.

This is further evidenced as we look at the data just recently presented in TETON 1 and 2 that showed using combination use in IPF got additional effect size for patients. Our thesis is that a well-tolerated second-lung inhalation nintedanib can become the backbone of future regimens. If patients are going to receive multiple therapies, the foundation needs to be effective, practical and something they can remain on.

That is our strategic thesis, not a demonstrated outcome, but it explains why we've designed our Phase 2 the way Dr. Fares described it, preserving the ability for combination approaches as well as monotherapy.

Finally, I want to zoom out because nintedanib DPI isn't our only exposure to this market. We have three shots on goal when we look at the IPF landscape, all of them running on our proven platform in that large underserved market.

Nintedanib DPI is the asset we fully own. Tyvaso DPI through our partner, United Therapeutics is approved today with potential future expansion in IPF. And we recently announced in partnership with United Therapeutics, the nintedanib DPI that is progressing towards IND. Each of these programs draws on the same formulation science, the same manufacturing base and the same clinical experience delivering dry powder into compromised lungs.

The scientific and operational learnings from any one of these carries into the others. We're applying a large single capability across the same market, multiple angles from our lead asset as well as our partner programs. None of this guarantees clinical or commercial success, but it means we have a shot to make this very successful to help patients.

And with that said, operator, I'm going to turn it over and open it up for Q&A.

[Operator Instructions] Our first question comes from Ben Burnett with Wells Fargo.

This is Xinyi calling in for Ben. Congrats on the data team. So I really appreciate the color that you provided on PK comparison versus the nebulized nintedanib. So just curious, have you guys conducted an analysis or comparison versus the oral one? How does it look like?

I think back to our animal tox, our animal program is probably where we would compare to oral. But in humans, we've not done that because we're not trying to match plasma PK per se. And the data on plasma is out there publicly on oral. So there was no need to redo that work.

Got it. Got it. Another follow-up is, so now that you have this new data set, how does that change your thinking around, like expectation for the Phase 2 data, whether it's safety or efficacy? Any updated thoughts over there?

I don't think it changes how we started the Phase 2 in parallel at risk, knowing that this result will come out somewhere in the middle or before we started the trial. It doesn't fundamentally change anything. If anything, it gets us more excited to go faster. And that's really what we're evaluating is now that we have 100% confidence on lung. The #1 question we get is cough tolerability, can patients of IPF do this? I think we can clearly say this after over about 50 patients and hundreds of doses, we feel very comfortable going forward, and we're trying to see how we can accelerate this as quickly as possible.

Our next question comes from Olivia Brayer with Cantor.

I want to drill down a little bit more on the adverse event data. I don't know how much more granular you can get or if you're planning to provide an event table at some point. But maybe just on the cough, can you characterize whether that 10% cough rate, was it all deemed treatment related? And then for those 60% with no cough, is that just no cough whatsoever or just no worsening cough from baseline? And then I also wanted to ask, it sounds like you saw cough almost immediately after the first inhalation in those patients that did have it. But was any of it transient? Or did it resolve over time? Just trying to understand the comments made around it mostly not worsening. And then I've got a couple of follow-ups, if you don't mind.

Great, Olivia. I'll give some comment, and I'm going to turn it over to Wassim to give further dialogue. The first I want to say is that the cartridges are 10 to 20 milligrams in powder per episode. So we're talking about every time you gave an administration, you might have got one cartridge and two cartridges. And so think about the powder load and the incidence of the number of cartridges. I'll let Wassim talk about the data behind the cough as he's closer to it. So Wassim?

Olivia, good to hear from you. As you mentioned, 60% did not have cough reported as an adverse event. So what that means, if they had cough as a baseline, it did not get worse was cough related to IPF. or if you did not have cough, it did not cause cough. So that's one of the questions. I think the first question was we will report more details about this study in upcoming scientific conference. And then the others, the 40% the remaining 40% who had reported cough were deemed related to the study drug, yes. The 3/4 of those were mild. Most of them were also transient. So it was like an irritation after the first inhalation for most of these patients. Did I miss any of the questions, Olivia?

Olivia, did we get all your questions?

Okay. Perfect. Yes. Just to clarify on that. So that final 10%, that is cough, right, is how you guys are characterizing that, 30% mild, 10% moderate?

Yes. Yes. 30% had grade 1 mild, 10% were moderate.

And, this is very subjective on cough, right, versus the continued cough could make a difference. But they're all mostly transient. I think that's what's most important. These are not adding a huge burden to the patient. They're mostly reaction after inhalation.

Okay. And then I wanted to ask on your PK data. If you're achieving 6x to 8x higher plasma exposure than nebulized nintedanib, how are you thinking about the balance between maximizing lung exposure and then obviously minimizing systemic exposure, just given that I know one of the major goals of the inhalation approach is to avoid some of those dose-limiting toxicities that we've seen with the oral therapy.

Yes. I think a couple of questions came in on the adverse event table today. And I would say there's not much there to get excited about to want to share that. So that's there's really nothing there. So it's not like we're hiding something that we didn't, that we saw that you didn't hear about. I think on PK. On what I say is it's 5% bioavailable from the oral. So when you think about what we were trying to do is take that 5% bioavailable and put it directly into the lung, we have a long way to go to worry about hitting near plasma concentrations of what an oral nintedanib will get through the absorbed GI tract.

So we've done the tox studies. We found we can go pretty high on dosing. There's a pretty high level of safety margin here that we're well below. And we're nowhere near a critical threshold of causing side effects in the systemic system. or even lung issues, I'd say. So we feel pretty good that those levels are, we're happy to see them, number one. It just is reinforcing our technology, which we really believe adds consistency in delivery. That's something we could develop nebulizers, right, if we thought they were better, and we did in the case of clofazimine, if you recall.

But we always know that our technology delivers consistent deep lung penetration where you're getting most of the powder into the lung, you're not losing it in the oral cavity, in the throat and the GI tract. You're getting most of it into the lung tissue. And that's really what our technology is about, and that's really what I thought you could see here when you can see we're getting to the deep [Indiscernible], we're getting picked up in the blood, and we're showing the demonstration of that technology. And as Wassim said, getting through that lung interstitial layers shows up in the plasma, and that's what you should be confident in with our technology.

Our next question comes from Roanna Ruiz with Leerink.

You have Ryan on for Roanna. Congrats on the update. Maybe just two from our end. How do you guys expect this seven-day safety cough data to translate into a longer 26-week and eventually a 52-week trial? Do you think the seven days provides a good benchmark for what we would see on this AE profile moving forward? And then my second one is just curious on the Phase 2. So about your expectations for the two different dose arms. I believe it's 4 mg twice a day and 2 mg four times a day. Are you expecting differences in safety and efficacy between those two given the total dose is relatively similar? Or just curious your expectations there.

Yes. The first thing I'd say, Ryan, is we're very thankful. We have thousands of patients from all of the trials we've done over the 30 years, showing that the cough is usually transient. It's immediate after the inhalation and it usually gets dramatically reduced after the first week. So for us, the first seven days are actually the most important when we think about a long-term program because even if you took Afrezza where we spent $75 million doing a multi-thousand patient trial.

The first seven days, you see one out of four patients have a cough and it drops to less than 3%, 5% at the end of 30 days. So, the cough here doesn't get worse with time. The powder loads aren't going up with time. Patients could have down dosed in this trial if they were having trouble with cough or tolerability, not one person did in either phase trial. I do believe the first seven days are enough for us to project out in the trial. And we didn't see any major concerns or major patient tolerability issues. that give us concern. I do think that's predictive. I don't know for se.

Yes, I agree. It's consistent with our prior data where the cough starts early on and it doesn't really get worse over exposure.

And that was true in the patients who even did have cough, right? We didn't see it get worse, the first dose was the challenge and got better each one. And then the expectations you're asking, which I think is a great question on do we expect a difference in the 4 milligrams twice a day or two milligrams four times a day. The answer is, given the levels we're getting with each of our doses, no. But if Cmax really does have a certain critical threshold, maybe we'll see a slight difference in the four milligrams where you might get a higher Cmax.

But what we're really testing here because theory in animal models and cellular models don't always translate to humans, is we really don't know, right, on the tent, nobody does. But we do want to make sure we're covering the frequency of receptor engagement, the Cmax of receptor engagement as well as matching up what's out there in the standards of care. We fully expect Tyvaso to do an incredible job in IPF. And we want to make sure that, that's going to be out there use four times a day that our product can potentially be used right next to it 4 times a day.

So that's really the key of that second arm there of QID is making it easy for the patient to remember when to take their drugs. My background is in HIV where people are taking 20, 30 pills a day, three different drugs. It's very hard for patients. And so how do we design things early so that when the data reads out, it's meeting the standards of care that are out there at that time. And we think that's critical. So we hope both work. We may find that one works better than the other or they're both comparable. But I don't expect from what we saw any differences in call for tolerability so far. Our seven-day data would indicate we should be confident in tolerability of either dose but we'll be curious about efficacy as much as anything.

Our next question comes from Brandon Folkes with H.C. Wainwright.

Maybe just a follow-up on the cough question. Granted it is a small patient population, but in the patients where you did see mild to moderate cough, was there any potential trend or emerging trend in disease severity or any other patient baseline characteristics?

I'm going to turn that one to Wassim.

Thanks, Brandon. I mean, again, the sample size is small, as you know. But within that sample size, there were no specific characteristics or trend that would differentiate or predict who's going to have a cough or not.

Our next question comes from Yun Zhong with Wedbush.

Congratulations on the data. The first question is, I wanted to confirm, did you see any FEV1 decline in any of the treated patients in the study? And the second question is, it looks like while the study did not enroll patients who have had exposure to oral nintedanib and it looks like the ongoing Phase 2 study is also having the same criteria. So I assume probably don't have any impact on the potential label in the future. But just curious, is that the same approach that the nebulized program is also taking in terms of patient enrollment? And what kind of impact do you think that criteria will potentially have on the pace of patient enrollment?

Yes. I'll try to take these one at a time. So on the FEV1, this data will be shared at a future scientific conference. I think Wassim presented somewhere in one of the slides that the difference between placebo, which was an empty cartridge and our active powder was no difference in pulmonary characteristics. So we'll share more of those details at a conference, but that's all I can say for now.

The next one was around exposure to oral, I can't remember people could have, they couldn't be on nintedanib, but they could have had it in the past. They could have had it previously, but currently, they're not on it or they were never on oral in our trial. But some patients could have tried oral nintedanib in the past. They just couldn't be actively on it because we didn't want to add to the burden of any potential side effects and really look at a clean profile here.

So that is true in our standard trial. It's actually one of the major reasons we went ex U.S. is because we wanted to be able to be used on the background of standard of care and/or naive patients. And we think a placebo-controlled trial really can't go for 52 weeks in the U.S. or even 26. So we got to the lowest we could, which is 12, and that's acceptable so far outside the U.S., and we're working with the FDA to get that acceptable here.

So they could have previous exposure to nintedanib. They just can't be on active nintedanib. But within our trial, they could be potentially on Tyvaso or cascade and some of the newer agents will be moving that in any protocol changes going forward. Those will be options. So we plan to have roughly 75% on some kind of background therapy at some point and probably 25% truly naive.

That is different than the competing program out there. I believe they're going after only naive patients not on background therapy. So those are two different characteristics. I don't think one is right and one is wrong, but we'll see if they impact either company's enrollment. But I think this is a tough population to find for trials, and we're going to do our best to get this done as quickly as possible.

Our last question comes from Gregory Renza with Truist Securities.

It's Anish on for Greg. Congrats on the data today. Mike, at the top of the call, you mentioned you guys have been following 201 and studying this asset and opportunity for a while. So even though this is Phase 1b data, I feel like this question is relevant. Do you see nintedanib DPI primarily as a switch play for OP intolerant patients as a first-line alternative or an add-on that enables combination with other antifibrotics? And where do you see the initial commercial point of entry, just given the clean GI profile and compelling nature of the data to date?

Yes. I think there's a lot that's going to change over the next three to five years while those programs going through development. If you ask me in general, I would say, I believe nintedanib is the major background treatment in most clinical trials. I believe we will continue to be the first choice for patients and doctors. Jascayd may make that a little bit different. We're seeing very fast uptake there. It's too early for me to see the data to say, is that coming 100% naive or switch patients.

But I would say that product is not as efficacious, but it's way more tolerable, and you're seeing that fast uptake on tolerability where people would rather take a more tolerable product and have something than nothing, right? And I think that's good for patients. But I see nintedanib being used as the background. I see DPI is becoming a predominant choice if the data pans out the way we expect because patients really do not tolerate the oral. And if they do tolerate it, it's through a lot of sacrifice, it's through a lot of the Imodium they take and other stringent diet that they're doing. Everything they can to maintain that drug because they want to preserve as much life and lung function as possible.

So I think when they have an alternative to all that lifestyle, they will take it. Now not every patient has that experience and not every patient struggles. And so those patients if they're happy, they'll stay on what they're doing. Dry powders will be the first to say, are not for every patient every time, but the large majority of patients can tolerate them and will tolerate them. And so we believe this will be a foundation opportunity. My guess is we'll get a good share of naive patients. We'll get a good share of intolerable, and we'll get a good share of patients who tried nintedanib been stopped for whatever reason. So we see this as a large opportunity.

It mostly will be used in combination by the time this gets to the market as we see this being a combination market, which is why we are studying it in different dosing regimens. So we're excited, and we're excited by the category, and we're excited that the normal question we get is cough, and that was such an important topic to get out there today as well as all the background data we've generated because people, we've not been always as fluent on this one and sharing with shareholders we wanted to take today to dedicate the background that we've done, the time we've been working on this and the insights we have. And hopefully, that summary today is helpful for shareholders and ultimately, investigators and patients.

That concludes the question-and-answer portion of today's call. I will now hand the call back to Michael Castagna for closing remarks.

First, I'll say thank you to everyone for joining. We've had quite a few calls and data readouts and updates the last six weeks, and we have one more with an earnings call next week. And then we have September investor meetings kicking off. So a lot of great things happening here at MannKind, and we just have never been more excited about the direction we're going, the number of patients we can help and where the shareholders should hopefully start to see the growth they've been waiting for.

I want to thank the patients and investigators in INFLO-1 and as we kick off INFLO-2. This data doesn't exist without them. Our clinical data and manufacturing teams and clinical teams have been working really hard to make this program hit the time lines we set out for. And the first-in-human global Phase 2 is off and running. We're looking forward to updating you as enrollment progresses. And we'll talk to you all on the earnings call next week with additional questions, feel free to e-mail our IR inbox, and we'll talk to you soon. Have a great afternoon, and thank you again for joining today.

Good morning, and welcome to the MannKind Corporation conference call to discuss the U.S. FDA approval of Furoscix ReadyFlow. As a reminder, this call is being recorded on July 24, 2026, and will be made available for replay on the MannKind Corporation website shortly after this call for approximately 90 days.

This call will contain forward-looking statements. Such forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from these expectations. For further information on the company's risk factors, please see the Form 10-Q for the period ending March 31, 2026, this morning's press release and the slides prepared for this presentation.

Joining us today from MannKind are Chief Executive Officer, Michael Castagna; and Chief Medical Officer, Dr. Ajay Ahuja.

I would now like to turn the conference call over to Mr. Castagna, please. Go ahead, sir.

Thanks, operator, and good morning, everyone. Thank you for joining us on what is an exciting day for MannKind. Here's our agenda for this morning. I'll start with the approval and what it means. Then I'll turn it over to Dr. Ajay Ahuja, our Chief Medical Officer, to walk through our clinical overview of Furoscix ReadyFlow. After that, I'll come back and talk about our launch strategy, and we'll open it up for Q&A.

Let me start with the approval. As of yesterday, I'm proud to announce that the FDA has approved Furoscix ReadyFlow. This is a milestone we've been talking about since we announced the scPharma acquisition, is now our third FDA approval in '26, starting with the Afrezza conversion dose update in Q1, the pediatric approval in Q2 and now this exciting opportunity with ReadyFlow auto-injector here in Q3.

For more than 60 years, furosemide has been the gold standard for treating fluid overload, yet administration has been limited to oral therapy or IV delivery in the hospital setting. The ReadyFlow approval opens up the potential to transform fluid overload by setting a new standard in this emerging new class called NODs, also known as non-oral diuretics, delivered at home. We also announced a $50 million PIPE financing led by Frazier Life Sciences, which will support the $45 million contingent value right payment triggered by yesterday's approval.

Furoscix ReadyFlow is the first and only IV equivalent diuretic delivered via an auto-injector. It takes a proven concept behind Furoscix and makes it quicker to administer and easier to use. We are moving from a 5-hour wearable infusion to a full dose delivered in under 10 seconds, while preserving the PK/PD performance that clinicians expect from IV furosemide. Ajay will take you through the data, but the takeaway is simple: IV equivalent performance and a simplified delivery format.

We believe that simplicity can change the role Furoscix plays in practice. It may allow clinicians to consider treatment for more patients in more settings and potentially earlier in the fluid overload episode, whether that be before a hospital-based intervention becomes necessary or getting patients discharged earlier from the hospital. This is why we view Furoscix ReadyFlow as more than a decade enhancement -- device enhancement. We see it as an opportunity to broaden utilization and accelerate growth of the Furoscix franchise. We fully expect to launch this in Q3 and are looking forward to helping a lot more patients who are suffering from fluid overload as we move forward.

The opportunity to use Furoscix exists on both sides of hospitalization. We estimate there are approximately 1 million addressable fluid overload events in the U.S. each year. Many heart failure patients are managed with oral loop diuretics, and this works for the majority of time. But treatment effectiveness can decline during episodes of worsening congestion due to reduced absorption, reducing the effectiveness of not only the diuretic itself, but the other essential oral heart failure therapies, further compounding an already challenging clinical situation. When this happens, oral escalation is no longer enough. That is an important intervention window. Instead of waiting for the patient to progress toward hospital-based care, Furoscix gives clinicians a subcutaneous IV equivalent treatment that patients or caregivers can use at home.

A second opportunity emerging with the new NOD category is earlier hospital discharge. Patients who are clinically stable but require continued diuresis may no longer need to remain in the hospital solely for IV therapy, creating a significant new opportunity for ReadyFlow.

The third opportunity we see is around preventing or reducing readmissions within 30 days post discharge. Roughly 20% to 25% of patients may return home with residual congestion or experience a recurrence shortly thereafter discharge. Furoscix allows clinicians to extend IV equivalent exposure beyond the hospital and continue managing appropriate patients at home during that transition.

Furoscix is not tied to a single care setting or a single moment in the patient journey. It gives clinicians the opportunities intervening earlier, support the transition to home and manage fluid overload across a broader continuum of care. We believe Furoscix ReadyFlow's simplified administration can make these opportunities more practical and ultimately broaden where, when and for whom clinicians consider Furoscix as this new NOD category is established.

Heart failure and CKD are not only high-risk conditions. They are also one of the most expensive conditions for Medicare spending and take up a tremendous amount of resources in the hospital setting. In heart failure and CKD, direct medical costs are projected to exceed $100 billion by 2030. But the most important point is where much of that financial burden is created when worsening congestion leads patients back into the ER and ultimately hospital-based care. Despite that, patients continue to cycle through the system.

Approximately 25% of patients are hospitalized for heart failure and readmitted within 30 days. This current model is not only costly, but there's a gap between chronic oral diuretic therapy and hospital-based intervention. That is the economic context for Furoscix ReadyFlow. If clinicians can manage fluid overload events earlier and outside the hospital, the potential value exceeds -- extends beyond the treatment itself. It may mean a less disruptive care experience for patients while helping providers, payers and health systems address one of the largest and most patient persistent cost drivers in heart failure and CKD.

Now here is a tailwind that I believe is still underappreciated. For years, the hospital readmissions reduction program placed financial accountability for excess readmissions primarily on hospitals. Beginning in '27, CMS is extending that accountability directly to cardiologists through the new ambulatory specialty model known as ASM. This matters for Furoscix because ASM rewards the exact behavior ReadyFlow is designed to support, identifying worsening congestion earlier, intervening in the outpatient setting and helping patients avoid the hospital altogether. The timing is also highly favorable. ASM performance begins in '27, just as we are launching and scaling ReadyFlow. CMS is creating the incentive to intervene earlier and Furoscix ReadyFlow provides the tool to make that intervention practical. We believe that alignment can be a powerful catalyst for accelerated adoption beginning in '27.

Before moving to the clinical overview, I'd like to introduce our Chief Medical Officer, Dr. Ajay Ahuja, who joined us late last year. Ajay is a cardiologist who brings more than 20 years of leadership across clinical development and medical affairs where his work has been in cardiometabolic and respiratory therapeutic areas. Before entering the industry, he completed his fellowship in cardiology and then served on the staff of Boston Children's Hospital for more than a decade.

With that, I'll turn it over to Ajay to explain why ReadyFlow's profile is so meaningful for clinicians and patients.

Thank you, Mike, and good morning, everyone. I'm pleased to walk you through the pivotal data that supported this approval. The pivotal PK/PD study was a prospective randomized crossover study in 21 healthy adult volunteers comparing Furoscix ReadyFlow directly with IV furosemide. Each participant received both treatments separated by a 3-day washout period, allowing each individual to serve as their own control. In one treatment arm, participants first received the 80-milligram dose of Furoscix ReadyFlow subcutaneously in just 5 to 10 seconds. And after the washout period, they then received 80 milligrams of IV furosemide administered as two 40-milligram boluses 2 hours apart, consistent with FDA label.

In the other treatment arm, participants first received IV furosemide and then after the washout period, they then received the Furoscix ReadyFlow auto-injector. It is also worth noting that this was a mature patient study population with a mean age of approximately 58 years and with the group's renal function spanning a wide range. That provides context as we evaluate the consistency of the pharmacokinetic and pharmacodynamic response.

The study met its primary pharmacokinetic endpoint. ReadyFlow achieved 107% bioavailability relative to IV furosemide, which falls within the goal 80% to 125% range for bioequivalence. This demonstrates that the subcutaneous administration delivers total furosemide exposure equivalent to IV therapy. And while the concentration profile was different as expected, the peak was lower and more gradual than IV, the overall exposure measured by area under the curve was still equivalent. The takeaway is straightforward. ReadyFlow provides IV equivalent drug exposure through a rapid subcutaneous administration.

The study also successfully achieved its pharmacodynamic endpoints, demonstrating that this comparable drug exposure leads to the same diuretic effect. ReadyFlow produced urine output equivalent to IV furosemide at 6, 8 and 12 hours with similar urinary sodium and potassium excretion. These are the measures that matter clinically, removing both fluid and sodium. Across each time point, ReadyFlow performed similar to IV furosemide. So the conclusion is clear, the 10-second subcutaneous administration preserved the pharmacodynamic performance of IV therapy.

To summarize the safety findings, ReadyFlow was generally well tolerated. Injection site adverse events were mostly local symptoms, and they were typically mild. And systemic adverse events were consistent with the established safety profile of oral and IV furosemide. Importantly, there were no discontinuations due to an adverse event. Taken together with the achievement of both the pharmacokinetic and pharmacodynamic endpoints, these results support a safety and tolerability profile consistent with what clinicians already know and expect from furosemide.

With that, I'll turn the call back over to Mike to talk about the launch strategy.

Thank you, Ajay. Now let me bridge to our launch strategy. The strategic opportunity here is straightforward. ReadyFlow materially reduces the treatment burden, which we believe can broaden the range of patients clinicians consider appropriate for Furoscix and support intervention earlier in a fluid overload journey of a patient. And that is not just our view. The feedback is very consistent. Patients immediately recognize the value of eliminating a 5-hour treatment experience. Clinicians describe ReadyFlow as a significant advancement. And patients tell us that a simpler option may reduce the hesitation they experience in calling their doctor when symptoms begin to worsen. Taken together, we believe ReadyFlow can expand not only who receives Furoscix, but also when in the patient journey, treatment is considered.

We are prepared to move immediately from approval to activation. Our sales force is being trained and deployed over the next few weeks, supported by an integrated campaign designed to reach both health care professionals and patients across digital, field and point-of-care channels. We are excited about the new creative campaign our marketing team will be launching, and we will have a strong presence at several upcoming conferences.

I want to double-click on the integrated delivery system network opportunity because this is how we believe Furoscix can evolve from a product used by individual prescribers into a capability embedded across an entire health system. Our strategy is straightforward.

First, to establish. We need -- we are engaging more than 60 prioritized IDNs to build awareness and clinical confidence in ReadyFlow. We have another 20 to 40 teed up as the year progresses.

Second, embed. We are working with those systems to incorporate Furoscix in the early discharge, post discharge and outpatient care heart failure pathways.

And third, expand. We will then scale these pathways across more providers, patients and sites of care. That progression from clinician adoption to pathway integration to system-wide use is what creates the growth opportunity ahead. Once Furoscix becomes part of how an IDN manages fluid overload, the opportunity is no longer dependent on one physician making a treatment decision one patient at a time. It could become a more consistent and scalable part of the care model. And this strategy is increasingly aligned with where the health care system is going toward earlier intervention in the most appropriate care setting with greater accountability for avoidable hospitalizations. ReadyFlow gives us a simpler platform around which IDNs can begin to operationalize this new NOD category.

Let me close with this. Today marks an important inflection point for MannKind. We have the first and only product to deliver an IV equivalent diuretic therapy through an auto-injector in under 10 seconds, helping establish us as a leader in this new class that I mentioned earlier. Today is also bigger than one product. We have now delivered the 2 major approvals we set out to accomplish this year, Afrezza pediatrics and Furoscix ReadyFlow while continuing to advance nintedanib DPI towards important clinical milestone. We expect to receive top line results from our Phase Ib study over the next few weeks. These accomplishments are tangible evidence that our strategy is working and that our transformation into a more diversified growth-oriented company is well underway. More importantly, the Furoscix ReadyFlow approval gives patients another way to manage fluid overload outside the hospital with far less disruption to their daily life.

With that said, operator, I will now turn our call over for Q&A.

[Operator Instructions] Our first question today comes from Roanna Ruiz at Leerink Partners.

So I have a couple of questions. I thought it was interesting you're talking about engaging the 60 -- the prioritized IDNs. And I was curious what proportion of eligible patients does that represent, if you have any estimates about that for Furoscix? And curious also if you've already penetrated into some of those with the on-body infuser, how are you thinking about the auto-injector getting more traction there?

Great question. I think if I had the catalog like how many heart failure hospitalizations are in those 60 centers, I think that's a little harder to crystallize right this second. And I would just say they're the highest priority centers like places like Cleveland Clinic, NYU, Emory, just to give you some kind of brands that we're looking at to work with. Kaiser is in that list as well.

When you think about today, our IDN business just launched about January of last year. And so today, it makes up about 10% of our sales. Now some of those doctors had migrated from using our direct patient portal into a more direct purchase within their institution. But ultimately, that business has continued to grow through Q2, and we'll share more details on our next earnings call.

Okay. Super helpful. And a quick follow-up. How are you thinking about the proportion of patients that might switch from the on-body infuser to the auto-injector initially in the launch of the auto-injector? And could you help us understand what's the balance of new patient starts versus switches that you expect more in the longer term for the auto-injector?

Yes. I think the existing base of patients are -- have been using the OBI. They're comfortable with the OBI. There's not a big push. Now remember, it's an acute use product. So there's not always a lot of refills on these prescriptions and those patients can convert over relatively quickly. It's really a systems conversion, I'll say, meaning a doctor's office decides, okay, going forward, this is what we're going to train on. This is how we're going to use it, and this is the one we're going to pick in the system. So that perspective on the new patients, I'll say, we expect 85% plus of new patients, maybe almost 100% to come in on the auto-injector.

I think there is a subset of doctors that do feel like they want continuous infusion over 5 hours, whether that's because they haven't seen our data, they have no clinical experience or they just believe maybe that smoother curve over 5 hours matters. So there are doctors who've indicated they still want the OBI. And now in the short term, we continue to make that available.

Our next question today comes from Ben Burnett at Wells Fargo.

Congrats on the update. I wanted to ask, will there be any different pricing implications with the auto-injector relative to the infuser?

We expect comparable pricing to the OBI. That's the easy answer.

Okay. Okay. And then just on the sales force, do you foresee needing to make any adjustments, either now or in the future to the sales force?

So coming into the year, we made some adjustments to the sales force post close of the sc acquisition, and then we expanded the key account manager team. And so most of that infrastructure, all the disruption happened in Q1, and we really want a stable rest of the year in terms of call targets and relationships with the reps as well as vacancies. So I don't expect any major changes or expansions in the second half here.

I think as we look at how sales continue to grow and we plan for '27, there's always opportunity to cover more physicians and nurse practitioners. Just to give you some color, there's about 60,000 targets between cardiologists, high treatment heart failure as well as allied health care professionals with NP, PAs. We target about 12,000 nephrologists and cardiologists. So there's definitely always room to shrink the sales territories, increase reach and frequency and share of voice. But I really want to continue to see the hospital IDNs expand and adopt, and I think that will just continue to build this compound effect size that we're looking for.

Our next question comes from Olivia Brayer at Cantor.

Congrats on the approval, looking forward to the launch. Can you walk us through how the ReadyFlow changes the unit economics versus the OBI? And then I know the focus is around gross margins. But does the lower cost structure maybe change how you think about product sampling and investing in market access and commercial expansion for Furoscix more broadly? I know you touched on sales force, but even outside of that.

Great question, Olivia, and great to hear from you. Thank you for joining us so early. So ReadyFlow, we previously communicated about a 70% reduction in potential COGS. And that's even becoming more severe as the Trump tariffs take effect here because of the on-body injector has many international components, unfortunately. So this couldn't come at a better time in terms of the threats that come across society for tariffs. And ReadyFlow is completely made here in the U.S. So we're excited about that supply chain shift. So the economics will help free up some capacity.

As we think about payers, majority of the use is Medicare and Medicaid, and they make decisions for 2027 pretty much they can make improvements in formularies, they can't make negative changes per se. So we do expect -- today, probably 40% of our scripts that come in don't have a prior authorization. That is something we're really focused on now with payers, which is they've indicated they'll have comparable coverage to the on-body infuser. So we don't expect any major changes in current coverage rates. But we do want to see how do we continue to remove the burden of a physician, an office, a patient on either the copay issues, which have been really hard this year for patients or the administration is just getting access to the patient quickly. So that is something we are focused on, especially as we go into '27.

You hit the nail on the head on samples. We had pulled back samples this year that definitely impacted us a little bit, but the cost of those samples are incredible with the on-body infuser, where with the auto-injector, the sample costs are dramatically reduced, and we will have sampling available at launch.

Okay. Very helpful. And then, Mike, as you think about the peak sales opportunity here, how would you characterize the hospital discharge opportunity versus actual ER prevention and keeping patients out of the hospital altogether?

Yes. I mean if you just did the TAM of this, call it, 700,000 to 1 million hospitalizations a year, the average prescription is 6 to 9 units. And you do the math on our net price, it's a $6 billion-plus opportunity if everyone got treated effectively. So the market TAM is enormous. And so that to me is the biggest opportunity to transform health care and patient lives. And really, we were talking to Kayla the other day who described how patients come back for infections. And I'm like, yes, that infection started in the hospital when they were sitting there, you may have discharged them. And 2 weeks later, they popped back in for an infection. That's because they got sick in the hospital.

So anything you do to get these patients out of the hospital earlier, it's going to have a tremendous benefit to taxpayers and health systems and health plans, whether bed sores, infections, readmissions for congestion, we just think there's a huge opportunity here. And while the oral diuretics for the majority of patients work fine and they should. And this is meant to be acute in those really challenging situations. And so if you ask me over the next 5 years, the hospital segment will become the largest followed by that physician community practice.

Our next question today comes from Gregory Renza at Truist.

Let me add my congratulations on the approval as well. Mike, when it comes to the near term and the launch, I know you've said Furoscix should do about $110 million to $120 million of revenue in 2026. I just wanted to ask with the ReadyFlow now approved, how does that shape or provide some pieces for you to hit or get to that plan?

I think, Greg, I'm going to hold that question until we get to the earnings call in a few weeks because I think that gives us time now with the approval to kind of run through our own assumptions and make sure we're tight on that guidance here. So we'll come to that in the earnings call in a few weeks.

Yes. Great. That makes sense. Look forward to that. And then maybe just taking a step back on the FDA approval. But maybe just remind us or give us some color on how you're thinking about international expansion now that you have a Furoscix portfolio approved here and thinking about growth externally. Are we thinking an Afrezza playbook? What are your thoughts on Furoscix ex U.S.? Congrats again.

Thank you, Greg, and great to hear from you. The ex U.S. opportunity, as you look at international revenue of all companies, right, continues to grow and help with manufacturing efficiencies as well as price points. And so when you think about the auto-injector, it just does open up the opportunity, whether you think about health systems in the U.K. or Australia, Canada. One of the things we see in those health systems and data just came out from another on-body infuser showing a reduction in hospitalizations from 11 days to 6 days. And you kind of look at that and you say, wow, they're in the hospital for 11 days outside the U.S. In the U.S., it's 6 days.

So yes, just right off the top, we can probably get ex U.S. discharges to be comparable to U.S. Right now, there's not a huge burden, I'll say, or cost driver to get people out of hospital in Europe and other countries. But if they can free up beds by 5, 6 days on these patients, I think there's a big market opportunity outside the U.S. and the auto-injector really does lower the COGS to make that opportunity become real. So it's something we'll continue to assess and look at. And we've had various discussions with different partners over the past 10 months. But we'll do at the appropriate time we needed to get the auto-injector approved to really open up that aperture for that.

Our next question comes from Brandon Folkes at H.C. Wainwright.

Congratulations on the approval. I just want to follow up on a few things here. Of those 60 IDNs, any color in terms of the breakdown between hospitals versus perhaps cardiology practices or outpatient clinics? And then, Mike, I heard your comments about 5 years out in terms of market opportunity. But early on, do you envision the majority of new patients getting the auto-injector at hospital discharge or through a cardiologist? And if it is through the hospital, how should we think about the product launch ramp here or the conversion, either one? Is this going to be more akin to a hospital-based product or an outpatient cardiologist product initially?

Great question, Brandon. I think when you look at the ecosystem today, right, the success of Furoscix has been built on the community practice. That's where the legacy targets have been in our sales force infrastructure and our marketing and sales efforts. And that's really helped the company and the brand to get to where it is. And that will be the fastest adoption of the auto-injector, a, because you can sample those places; b, that's where the unmet need is today that physicians see. And there's a lot of physicians who have written 1 or 2 scripts who now will expand this to more patients. So they know -- they're in our portal, they know our hub, they have some experience, but not a lot of experience. And so that's a big opportunity for faster adoption with an auto-injector because not everybody -- the on-body infuser is very simple. The team did a great job on this device, and I think it will continue to be used.

But the auto-injector is similar to like the Repatha auto-injector, which many of these customers use. And so it's the same platform from SHL. There's going to be a lot more comfort in just adopting an auto-injector, teaching an auto-injector and prescribing an auto-injector in that setting, where the on-body infusers, even Repatha used to have one, those are not -- they were never widely adopted and they really struggled. And so I do think you'll see that adoption happen quite quickly there.

The IDNs, obviously, the team has been working on them for a little over a year. And just to give you some color here, I'd love them to go faster. Every CEO and CFO in a hospital system -- I was with a group last night. I mean they just talk about the cost of heart failure, the busyness in the ERs, the burden that it puts on their staff. It's such a huge infrastructure category burn. And they're all struggling with margins and reimbursement these days. So they want this tomorrow. The reality is you get the procurement, you get the contract and you get to the lawyers and compliance and quality. It takes about 8 to 12 months just to get one contract through a health system, and that's with us pushing.

So it's not that we don't want to go faster. This is just the nature of the ecosystem of IDNs and health systems is it just takes longer than you want, and we just got to be patient. But that's -- the team has had a head start on this, and those will become the biggest growth engines. Most of those contracts, I don't have all 60 in front of me, but I would say the large majority are with health systems like a Kaiser, like a Cleveland Clinic. We expect to bring NYU on shortly and others. So Tower Health in Philly has been a huge adopter of Furoscix. And just to give you some color of -- we are seeing high-quality institutions and a lot of great discussions happening. So I fully expect those IDNs will get on board.

And there's just a lot of coordination from the quality department to the pharmacy, to the training of the staff, to discharge protocols to the prior authorization to get that started so they get discharged with the product. So all that has to be lined up and the team is working really hard, but it just takes time, unfortunately.

Our next question today comes from Yun Zhong at Wedbush Securities.

Congratulations on the approval. So the first question, I just want to confirm if there is any requirement or plan to expand the label to include pediatric patients like you did with infuser?

And the second question is on discharge. Well, that's -- I'm sure that's something that a lot of hospitals would like to see. And in addition to try to incorporate into the discharge protocol, do you have any evidence or do you expect to have any evidence that the use of Furoscix can help expedite discharge -- patient discharge?

Sure. First of all, congrats on having the report out first thing this morning. We -- you beat us by a few minutes, but that was fun to see. So thank you for your proactiveness. On the pediatric, good question there. So what -- it's not a large segment opportunity, unfortunately, but for those patients who need it, obviously, it's a great opportunity, and that's where the OBI is a unique situation with the bolus and continuous infusion.

We are working on a 40-milligram auto-injector. And so that we expect to file and launch in the future, and that will open up that pediatric market opportunity. So it's just the nature of the 80 milligrams all at once in pediatrics that gave the concern there that being able to break that up with a 40 milligram and then another 40 milligram if you need it, is going to open up that pediatric. So that's our plan is to refile that with FDA and get it in that label that way.

Your next question was around discharge and data generation. So obviously, that study coming out of Europe, while not applicable to the U.S., gave you the signal of what's possible. There is some additional data and some small studies that were ongoing that you will hear hopefully be present at future conferences around this topic. But Ajay has been really working with some KOLs, and we are waiting for the auto-injector to kick off some real-world evidence generation here. And so we don't want to start that a month or 2 before the approval. Let's get the approval. It makes it a lot easier to kick off those trials. So Ajay will be working full speed ahead to get those protocols off the ground and now implement it here in the second half.

Our next question today comes from Anthony Petrone at Mizuho Financial Group.

Congrats here on a great milestone for the company. Maybe first on channel on on-body infuser, just again, the recap of who's writing prescriptions today between nephrologists and cardiologists. And what does that sort of push in the cardiology channel look like? How do we sort of track that going forward here? How many net new cardiologists should we be thinking 1 year out, 2 years out?

And then commercial coverage, just kind of milestones we should be looking for? And what will prior authorization look like? I know in the study, you had to step through an oral diuretic for 3 months. Is that something we'll probably see with the subcu formulation?

So on the OBI breakdown today, roughly 10% of our sales go through IDNs. That continues to fluctuate a little bit each quarter, but it's been growing. As we look at our prescribers today, we took the community setting where majority of our sales efforts are, about 15% continues to be neph and growing and 85% is cardio. And so that continues -- remember, neph launched in Q2 of last year. So it's still in its early stages of launch. But we doubled down on the neph expansion this year. And I would tell you that, that did pay off as we looked at May and June after a few months of that increased share of voice. We're seeing record number of prescribers, record doses come out of that segment and we expect that to continue as the year progresses. So we're excited about the early leading indicators there, neph, but another quarter or 2, I think, will solidify that growth trajectory.

Our final question today comes from Sahil Dhingra at RBC.

This is Sahil for Doug Miehm. Congratulations on the approval. So my first question is on the 2027 trajectory, recognizing that ReadyFlow will only have 4 months of contribution in 2026, how should we think about the full year 2027 Furoscix revenue opportunity? Is there a preliminary framework you can share on growth expectations once the auto-injector is fully ramped up?

I think let us get this off the ground. Let's understand the conversion that's happening over the next quarter or 2. We obviously have a plan and some internal estimates, but we'd like to see how that flows out in the real world. And then we don't give general guidance yet for '27, but I think that is something we will weigh as we progress into '27 and in terms of as the company grows, we get these products. It's very hard to give guidance this year. We just completed the acquisition. We had 2 FDA approvals, and we were making those investments. So I think we will share some sentiment on the pediatric launch here on the Q2 call as well as the second half year. But I think in '27, that will be later this year, early next year at JPMorgan.

Okay. That is helpful, Mike. And then my second question is on the -- one of your competitors, the SQ Innovation. So they had recently presented RCT data showing 4 fewer hospital days with their subcutaneous furosemide, that's Lasix ONYU versus standard IV care. And you mentioned in the Q1 call that you have trial results that should come out later this year, looking at early discharge. Can you update us on the timing of that data and whether you believe you will need an RCT to compete effectively in the hospital discharge segment?

I think on the Q2 earnings call, we'll have a little bit of an update there on the clinical section with a little bit double-click down. Ajay has been working on a lot of great opportunities, and we'll share a little more detail there in terms of what's coming. And some of these are internal institutional-driven, not even company-sponsored events. And it's up to those institutions to ultimately publish and present the results. Some of them may not for competitive reasons. Some of them may want to for bragging rights. And so -- but we do -- we are aware of the data at least, and so we are excited by what we're seeing.

I think in that European study you mentioned, the challenge when you talk to the U.S. customers, the average stay is about 5.5 days. And if you told them they can get a patient on 1.5 days, i.e., a 4-day reduction, they basically say that's not possible. These patients are not yet stable. And there -- so I think the data in Europe, while important and an early indicator of what's possible for ex U.S. markets, it's not yet transferable to the U.S. I think what people in the U.S. want to understand is can we shave a day or 2 off. I think that would be very meaningful. And we do have some clinicians really pushing that type of analysis and insight.

And the other flip side is when we talk to payers, I think Anthony had a question on PAs and insurance. And that's one of our comments to payers is we're not looking to block competition or anything. We want all patients to have all options available. We think that's really important for patient choice. What's more important is that there's really not PAs for patients because if there's a prior auth and it comes in on a Friday, within 2 days, that patient is generally going to wind up in the ER, and they're going to be stuck with a $20,000 bill.

So our real thing with insurance companies is just educating that this is an acute use product in a very difficult situation, and we want to minimize the friction for that patient in that journey in the hospital system. And when you talk to PBMs, they obviously care about cost. That's their job. When you talk to regional health plans, they have so much effort put into heart failure and readmissions and Medicare quality scores and HEDIS scores that there's a disconnect sometimes. And it's our job to help bridge that gap and expand that team to call on the payers and make sure those health quality metrics are achieved because we think Furoscix will open up the window to help Medicare populations.

And this year, I'd say on insurance is copays are definitely staying higher longer because not as many people are hitting their copay caps because some of the key drugs like Entresto went generic. And so that's -- a, the foundation is dried up in terms of funding sources and they're not in the cap as early. But that's another reason we want insurance companies to minimize the out-of-pocket cost because they're getting the opposite effect they want, which is hospitalizations. So a lot of good things happening, a lot of great discussions with insurance companies. We've met with all the PBMs and we'll expect continued progress as the year progresses, getting ready for '27.

We look forward to the Q2 earnings call for more update.

This concludes the question-and-answer portion of today's call. I will now hand the call back to Michael Castagna for closing remarks.

Thank you, and thank you for everyone dialing in on such short notice. I want to thank the entire MannKind team who made today possible. Lots of hard work this year that no one ever really gets to see, but the team here at MannKind has delivered 2 major FDA opportunities that are transformative for the company. This milestone reflects your persistence, your expertise and your commitment, and I just want to say thank you. We've delivered and now our focus will turn to fully launch execution mode to realize the opportunity ahead to help patients living with diabetes as well as heart failure and CKD. And hopefully, soon, we'll be able to talk about IPF. So really exciting time, and thank you, operator, for everything, and we may now close the call.

This concludes today's call. We thank you for your participation. You may now disconnect at this time.

Good afternoon, and welcome to the MannKind Corporation conference call to discuss the U.S. FDA approval of Afrezza in pediatrics. As a reminder, this call is being recorded on May 29, 2026, and will be available for replay on the MannKind Corporation website shortly after this call for approximately 90 days.

This call will contain forward-looking statements. Such forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from these expectations. For further information on the company's risk factors, please see the Form 10-Q for the period ended March 31, 2026, this morning's press release and the slides prepared for this presentation.

Joining us today from MannKind are Chief Executive Officer, Michael Castagna; and Senior Vice President, Therapeutic Area Head for Diabetes, Dr. Kevin Kaiserman.

I'd now like to turn the conference over to Mr. Castagna. Please go ahead, sir.

Thanks, operator, and good afternoon, everyone. Thank you for joining us on today, which is a truly historic moment for MannKind, for the diabetes community and most importantly, for children and adolescents living with diabetes. Our founder, Al Mann, always dreamed this innovation will be available for kids, and we are honored to be able to fulfill that dream today.

Our agenda today is with Kevin and I will lead the discussion, and our President, Nick Marasco, will be available during Q&A. Our goal is to walk you through why this milestone is so critical to driving an inflection in Afrezza's future growth over the coming years. In fact, we've already received our first 2 patients in the last hour.

As of this morning, Afrezza is now approved for pediatric patients living with diabetes ages 6 and older. This is more than a label expansion. It is bringing a fundamentally different experience to children and families who manage diabetes every day. This is the first alternative to mealtime injections in 100-plus years of pediatric treatments.

First, I want to thank the FDA for their collaboration and support to help get us across this finish line. I also want to thank the investigators, our patients and the parents who are part of the study. We are really excited about the label we received. Ages 6 and older covers approximately 95% of all children diagnosed with type 1 diabetes. This is a broad and meaningful indication.

What makes Afrezza so unique is its differentiated clinical profile that simplifies mealtime management, reduces the need to carb count and manage the timing of your insulin administration. And most importantly, we're going to make Afrezza available for $35 for anyone less than 23 years old, regardless of insurance coverage, as we want to remove any barriers to patient access. This is a new chapter for Afrezza and for MannKind.

Before we get into the pediatric data, I want to ground everyone on what makes Afrezza a fundamentally unique insulin. On the left side, you see the natural insulin profile of a healthy pancreas, peak concentration at 45 minutes. And on the right side, you see how closely Afrezza mirrors that profile, with peak effect also at 45 minutes and insulin action that clears around 2 hours, right around when food is generally clearing.

Compare that to injectable rapid-acting insulin, which doesn't start to kick in about 45 minutes here on the gray line and doesn't reach its peak effect until about 90 minutes. That delta between the magenta and the gray is the mismatch that patients often struggle with years. It's a big reason why insulin pumps and pods were developed to try to modulate that gray line and close the gap.

But whether you deliver the insulin in a pump, a pod or a pen, it's the same insulin. The delivery device changes do not alter a pharmacokinetic profile materially. The only things that could get closer to Afrezza's profile would be an implantable pump or a cure for diabetes, which we all hope for one day. Short of that, Afrezza was designed to help patients close the delayed effect we see in every dose of injectable mealtime insulin. This is more important today than ever, as the majority of pediatric patients are using CGM to help manage their diabetes.

Why does this matter? At the 1-hour mark, 90% of injectable insulins' glucose-lowering effect is still remaining. Only about 10% of the work has been done. With Afrezza, nearly half the insulin effect has already occurred. That's a twofold difference at just 60 minutes. By 90 minutes, the gap widens to 3x. And by 2 hours, nearly 90% of Afrezza's effect is complete, minimizing the risk of insulin stacking and is approximately when your food is being -- finished being absorbed, while injectable insulin still has roughly half of its effect left to go over the next several hours. This mismatch, insulin still working long after the meal is cleared, has been the single biggest challenge of mealtime control in both adults and pediatrics. Afrezza brings insulin action closer to real-time eating, and this slide shows you exactly why.

So how does this translate to clinical practice? On the left side, you see the head-to-head meal challenge results from our pivotal trial in INHALE-3 in adults. Afrezza reduced postprandial glucose excursions by more than 35% versus multiple daily injections over the first 2 hours. And keep in mind, the injectable insulin was dosed 15 minutes before the meal, while Afrezza was given at the start of a meal.

On the right side, you see the meal challenge data from our INHALE-1 pediatric trial. The peak glucose excursion with Afrezza in pediatric patients is very consistent with what we saw in adults. This consistency in the absorption profile between adults and children was the foundation for establishing Afrezza in the pediatric population. Why is this important? Because better postprandial control should translate to more patients getting to goal.

In INHALE-3, we looked at a subset of patients who switched from MDI or AID systems, pumps and pods such as Tandem and Omnipod to Afrezza. At baseline, 21% of these patients were meeting their A1c target of less than 7, consistent with the national averages. By 30 weeks, that number doubled to 42%. Twice as many people getting to goal by switching off the standards of care is a meaningful number. And this makes sense. As patients approach an A1c of 7, the impact of postprandial glucose control becomes increasingly important. That's exactly where Afrezza's profile makes the biggest difference.

Over the past decade, we've made a deliberate investment in data generation, and this slide shows you the breadth of that commitment. Rather than scaling up commercially with the label we had, we focused on getting the label right. That meant building the clinical evidence base for pediatrics, establishing a clear understanding of our clinical safety and efficacy and addressing questions that matter most to physicians and regulators.

This data generation has given us the ability to correct one of the earliest setbacks. The original label conversion ratio underdosed patients on their very first dose and caused many to drop off before they ever experience the full benefit of the product. The updated label that we got in January of this year now reflects a simplified 2:1 dosing ratio that sets patients up for success from the start. This new dose conversion has been used in our recent clinical trials, including the pediatric.

All this data has now gotten Afrezza recognized in the ADA Standards of Care. Last year, the 2026 Standards of Care were updated to recommend that clinicians evaluate inhaled insulin as an option at every patient visit. This has helped set the stage for launch.

These updated guidelines are a fundamental shift. For years, Afrezza wasn't on a level playing field, and now it is. The ADA Standards of Care are what HCPs, payers and health systems use to guide therapeutic and formulary decisions, and inhaled insulin is now recognized right alongside the other standards of care, multiple daily injections and AID.

In fact, recent market research showed 3 out of 4 patients were not offered choice consistent with the ADA guidelines. This new approval brings Afrezza to routine standard of care conversations, which is exactly where it needs to be. The pediatric approval sets us up to relaunch Afrezza in a truly meaningful way.

Now I'd like to introduce Dr. Kevin Kaiserman. Kevin is a board-certified pediatric endocrinologist with more than 30 years of clinical and academic experience. He joined MannKind in 2020 right in the middle of COVID. Kevin's insights into the lives of children and families living with diabetes were critical to our development of this innovation. You couldn't ask for a more qualified person who have led the clinical program to help us prepare for this launch and gain FDA approval.

With that, I'll turn it over to Kevin to talk about the unmet needs in pediatrics and why we're here today.

Thank you, Mike. So what are some of the challenges that children and adolescents face in diabetes management? One of the major issues is missed insulin doses. Up to 1 in 5 doses are missed, regardless of whether you're using multiple daily injections or pumps. The result: less than 20% of adolescents with type 1 diabetes are achieving the glycemic goal of having an A1c less than 7%.

And when you look at why, functionally, you have changing insulin sensitivity and irregular eating patterns. Socially, there's discomfort with injections or pump site activity in public and fear of having hypoglycemia in front of your peers. And emotionally, you're dealing with injection anxiety, fear of needles and disease exhaustion from managing ever-changing food timing and activity levels. These are the realities of managing diabetes as an adolescent, and they're exactly the types of barriers that Afrezza is designed to address.

INHALE-1 was our Phase III open-label randomized controlled trial in youth aged 4 to 17 with type 1 or type 2 diabetes conducted across 38 U.S. sites. 230 subjects were randomized 1:1, 117 to the Afrezza plus basal group, 113 to the rapid-acting injectable plus basal group. Both groups used Dexcom G6 continuous glucose monitoring. There was a 26-week randomized treatment period, followed by a 26-week extension period where all subjects use inhaled insulin plus basal. As previously disclosed, the primary endpoint was nominally missed, driven by the impact of a single subject with a very high A1c level, who was documented as being not adherent to therapy. Once this single subject was removed, the sensitivity analysis demonstrated the non-inferiority margin was met.

One of the notable benefits we saw in the trial was the lack of weight gain with Afrezza. Body mass index percentile, which accounts for age, gender and weight, showed no change in the Afrezza group over 26 weeks. In the rapid-acting insulin analog group, BMI showed a 3.6% increase, and the difference between groups was statistically significant.

Another important finding was treatment satisfaction. Both teens and parents reported significantly improved treatment satisfaction with Afrezza compared to subcutaneous insulin. When you pool the results, the difference between treatment groups was statistically significant.

Very importantly, pulmonary function was monitored over the full 56-week study period. There was no difference in change in percent predicted FEV1 between the Afrezza and RIA groups. Also, after week 26, all subjects used inhaled insulin. So the dash line here represents the group that started on subcutaneous insulin for the first 6 months and then switched to Afrezza. You can see that when they switched over, there was no change in their percent predicted FEV1 over the following 6 months.

With that, I'll turn the call back over to Mike to talk about the launch strategy.

Thanks, Kevin. Let me start with how we're thinking about the entry point. Type 1 diabetes and pediatric is the focus of this launch. There are about 360,000 children and adults aged between 6 to 22 living with type 1 diabetes, and approximately 30,000 are newly diagnosed each year.

The reason we highlight age 22 is that many of these patients stay with their pediatric endocrinologists through college, so the addressable population is larger than many people think. This is also a strategic entry point that compounds over time as they progress into adulthood. We believe as children transition from pediatric endocrinologists to adult-treating endocrinologists, those physicians will see the positive outcomes these patients have had on Afrezza firsthand and begin to use it more widely as their go-to mealtime insulin, just as they've used this playbook for insulin pumps, pods and CGMs. And beyond type 1, with once-weekly basal insulin getting approved this year for type 2, we now have a road map to enter the much larger type 2 market with higher dose cartridges, which we'll discuss shortly.

Pediatric type 1 is the entry point. It's where the unmet need is the highest. It's where being the first insulin a child uses creates a long runway for the brand, and it gives us a focused high-impact launch with the ability to expand over time. Critical to launch success is the foundation of how we're approaching this launch differently than the adult market. There are real reasons the adult opportunity never reached its full potential. Physicians were trained on the product -- weren't trained on the product or its pharmacology during their training. Awareness of our data is low despite a robust clinical data publication and presentation strategy.

We've pressure tested our strategy against these real-world barriers and built specific solutions into our launch model, and let me walk you through each one. The first is awareness. The reality is that Afrezza hasn't historically been top of mind due to our limited commercial footprint. Pediatrics is a concentrated market made up of roughly 60 key institutions consisting of approximately 1,000 prescribers that treat the majority of pediatric patients. 38 out of these top 60 centers participated in our clinical trial, so they already have hands-on experience with the product, unlike our adult clinical program, which is primarily international.

Our talented field infrastructure of key account managers, MSLs and patient navigators are hitting the ground running today. Additionally, we have a concerted effort on direct-to-patient effort running alongside our prescriber engagement. When a parent asks for Afrezza by name, that's a powerful catalyst for continued adoption.

Second is long-term safety. Lung safety has been one of the top objections since approval. We now have 2 independent studies published this year confirming long-term lung safety. A third MannKind study will be coming out shortly, and 1-year pediatric data that Kevin just shared with INHALE-1 showing no impact on FEV1, as well as over 10 years of post-approval safety and surveillance. No one can credibly argue the safety of inhaled insulin at this point.

Third is FEV1 testing. Spirometry can feel like an operational hurdle, especially in a pediatric practice that may not routinely perform lung function testing. We've created starter kits with FEV1 devices that can be used at the point of care, removing a perceived barrier.

Fourth is dosing complexity. We've got our label changed. We built a one-stop shop hub for an online dosing calculator, a prescriber portal, EMR integration, as well as preprinted forms, all designed to simplify dose selection and prescribing from the very first prescription, clear tools that will give physicians confidence from day 1.

And then finally, prior auth and affordability. The pediatric population is primarily commercial and Medicaid. We are in active discussions with payers to minimize friction for pediatric patients. We have a white glove service that will ensure every patient can get Afrezza for $35 or less regardless of insurance coverage and Afrezza delivered to their doorstep within 24 to 48 hours.

As a pharmacist by trade, I can tell you that cost at the pharmacy counter is one of the biggest barriers for families trying a new therapy. We're removing this potential barrier upfront and hope to improve the prescriber experience and fulfillment process. Every known barrier has a specific funded and operational solution behind it. This is a system built to convert awareness into prescriptions, prescriptions into starts and starts into long-term patients.

We touched on the market research on previous calls, but I want to come back to a few of these numbers because they really inform how we're executing and how excited we are about this opportunity. 2 out of 3 pediatric endocrinologists tell us they're likely to prescribe Afrezza. About half cite eliminating mealtime injections as a primary driver. 1 out of 4 indicate they would consider Afrezza in a newly diagnosed patient, consistent with our INHALE-1ST population, and a strong signal of why we launched the study. Our patient share potential range is 23% to 37%, indicating an opportunity of $300 million to $500 million in revenue coming from pediatrics, which will compound over time to adults. That indicates a compelling opportunity ahead.

I also want to mention that we have a significant presence at the American Diabetes Scientific Sessions later this month. We have 9 poster presentations, and we're going to have an immersive virtual reality experience where people can actually follow the powder through the lungs into the bloodstream. There will also be educational dinner programs and many executive encounters and one-on-ones.

We're excited about leveraging our new creative campaign, Insulin in the Moment, which captures exactly what Afrezza delivers: insulin that works in the moment, right when kids eat and live. It's the centerpiece of our prescriber and consumer messaging, and this is the most significant presence MannKind has ever had at ADA. And the timing is right after our approval could not be better.

Now I want to close by talking about our road map for growth. Starting with INHALE-1ST, this is our pediatric study evaluating newly diagnosed patients. The strategic question we're trying to answer is can Afrezza be the first mealtime insulin a child ever uses? When you think about it, a newly diagnosed kid will have to live with diabetes for the next 70 years. The first 10 patients enrolled in INHALE-1ST gives us optimism that Afrezza can be the first insulin when you're newly diagnosed.

As we look to future innovation in Afrezza, the pediatric launch is a catalyst, but it's not the end of the Afrezza story. Starting with the 2-unit cartridge, which we expect to file with the FDA by year-end, will give us the flexibility for smaller dose adjustments and is exactly the kind of dose granularity that some health care providers and patients have been asking for.

Next is our [ INHALE Q ] digital ecosystem that detects and tracks Afrezza dosing alongside CGM. We also expect to build dosing calculators into the platform. These digital tools are what physicians and patients increasingly expect. We're also advancing Afrezza high concentration formulation that could enable up to 20 units in a single-dose cartridge, opening up the type 2 market further.

And finally, the pediatric approval and the release of our long-term safety PMR open up the opportunity for global expansion. Together, these represent a multiyear road map of Afrezza innovation that will support growth well beyond its initial pediatric approval, both domestically and internationally.

We had 3 major catalysts for '26, and we celebrate our treatment of the first one, pediatric approval, today. On Monday, we'll be back focused on achieving these next 2 catalysts, which are equally transformative to driving shareholder value. Before I close, I want to mention that we'll be at the Jefferies Healthcare Conference next week in New York, and we look forward to engaging with many of you there.

With that said, operator, I'll now turn it over for Q&A.

[Operator Instructions] Our first question comes from Ben Burnett.

Congrats on the progress. I wanted to just ask, how quickly do you expect the pediatric sales to influence kind of the overall sales of Afrezza?

Thank you, Ben, and thanks for dialing in late on a Friday here. I think June, we'll kind of start to get the early foundation laid out here. But I would say we want to see probably a quarter behind us, see how many prescribers come into the fold, how many repeat patients we get. So I think you'll start to see a build in Q3 and ultimately Q4 to set us up for a really nice '27.

Okay. That's great. And then I appreciate all the comments around some of the price dynamics. Where do you see the average kind of price going from here? Would this change materially long term?

The pediatric population from a percent of insulin units in a payer is very little. And most of the payers we've talked to wanted to see the approval, number one. They want to see the demand, number two. But they've indicated their desire to remove any friction for children. They don't want to be on the news for that. They've been very collaborative. We do have contracts that have been outstanding. So they could move it up to preferred. They could move it up to single steps.

But we're just trying to remove the friction from the process. And so far, most of our discussions with the top PBMs have been very positive, and we'll be hitting the ground Monday, trying to push them even harder. But we expect like in October 1 to January 1, formularies to kind of get easier and easier.

And the reason we put it at $35 is our commercial patients generally pay that or less, and Medicaid patients will pay less. And so we don't expect, even as you get formulary changes, that the cost to the patient will change much. We're trying to make that as seamless as possible.

Our next question comes from Roanna Ruiz from Leerink Partners.

So a couple for me. One question I was thinking about is you talked about removing barriers, like making sure patients can access Afrezza for $35 or less. Are there any other barriers that you're planning to proactively mitigate? And could you just give us an update of how smooth or what's the ultimate goal here in terms of streamlining the process for prescribers?

I'm going to punt this one to Nick. And Nick, maybe talk about our launch strategy and the institutions and how -- your focus on the centers of excellence.

Yes. So thank you for the question. The pediatric market is quite different from the adult market, which we've talked about prior. As Michael had mentioned a few moments ago, a majority of the pediatric business tends to be concentrated in roughly 60 key academic institutions and across a much smaller population of prescribers, roughly 1,000 pediatric endocrinologists.

And so we've been able to adapt our field forces to account for a more streamlined focus on that target market. We've deployed key account managers. We have medical science liaisons as well as patient navigators that will support one of the key friction points, which was the ease of prescribing as well as ensuring that the prescription makes its way to the hub and ultimately, to the patient with proper training.

And so some of the friction points, I would say, beyond just the access and payer is a more enhanced and proper prescriber education and awareness, parent and child education and awareness, certified diabetes educators, school nurses. And so a surround sound of education, which ensures most parties that are involved in the diagnosis and treatment selection are trained and educated and aware of inhaled insulin as an option.

And then ultimately, ensuring that the patient journey is smooth. So when the physician decides that she or he wants to write a prescription, understanding how it's dosed, writing the prescription properly, ensuring that all of the necessary clinical and medical information is attached to the prescription, submitted to the hub and ultimately ensuring a more rapid prior authorization process and ultimate -- ensuring a coverage of the prescription to the patient.

And then the other thing Nick is going to be doing is we've got centers of excellence, 5 every week or 2, we're going to be launching, and that's going to work out any kinks that we identify in the first 30 days. So that's another key part of the launch is figuring out where we may have missed something or how we self-correct as we continue to evolve each week.

Okay. That's super helpful. And I also noticed you mentioned that the addressable pediatric population could be larger than people think. Could you frame a little bit more, what's supporting that perspective? And it also sounded like some of that might come from targeting teenage or college-age individuals. Could you talk a bit more about that?

Yes. If you think about -- especially as kids get to adolescence -- and Kevin can comment if he wants. The barriers in there of people wearing insulin pumps and the activity in sports and some of the college habits of kids, they don't all want to be treated the same.

And so a lot of times, if you think about it, from 18 to 23, let's just call that 5 years. And if there's 30,000 new kids a year, that's about 150,000 kids that live in that 18 to 23 range that are still covered by ped endos for the most part. So that's where we talk about this. The market is not just -- yes, it's 16 and below, but we have not been calling on ped endos for the last 10 years.

And so only this year are they getting to know MannKind. And therefore, that population was typically treated by ped endos, not adult endos, and that's opening up an opportunity. And that's been one of our focuses. If you saw, we launched a scholarship fund to try to build awareness of MannKind out there in the college community.

Our next question comes from Olivia Brayer from Cantor Fitzgerald.

Congrats on today's approval. Really looking forward to this launch. Can you talk about some of the launch prep that you've been doing just in terms of identifying patients to put on therapy now that you are approved?

And Mike, you mentioned that you already have 2 patients ready for treatment. What other indicators of early success are you may be seeing from your field teams that may be shaping how you're thinking about the initial launch curve in these patients?

Sure. I'm going to kick it off to Nick, and I can close with any further comments.

Yes. I would just say we've done -- the key account managers have been deployed into the institutions over the past 7 to 9 months. We've been working with the institutions to understand through our medical affairs, proper patient identification of middle school, high school, early college years.

And so I would say we've had a nice head start in working with some of these key institutions. Not to mention, as Michael mentioned, at least 2/3 of these institutions have been involved in our INHALE-1 or other clinical trials. So I think there's been quite a bit of prep work in patient identification and laying the groundwork appropriately.

The only thing I'll say is we have a series of travel events that -- I'm pretty sure my family won't see me for the next 6 months. We're going to be on the road. We've got a lot of speaker programs. We got a lot of KOL interactions with Kevin, grand rounds, CME events. There's going to be a lot to kick off going forward.

And I think the last part I would say is it's the first time -- we've been here a long time. But hearing doctors say, Monday morning, I got my patients lined up. I'm going to be making phone calls, I'm going to be sending in people. We were expecting to launch Monday morning, not end of day Friday. And so it was happy to see when we're already seeing referrals come in today.

So we'll see how quickly it goes, but we want to be cautiously optimistic given the history here. But we've done everything we can to get the best people on the ground to be on the front lines of this company to make the biggest difference for patients.

And then a quick follow-up on the payer angle. What's your actual plan to communicate just progress on the reimbursement side, both on Medicare and commercial? Is that sort of a quarterly cadence update that we should expect on earnings calls?

I think if we were to get like a big formulary win or a national formulary, we would announce that publicly at that time. We're not aiming for preferred status, just to be clear. We want to get preferred status. But I think at the end of the day, that preferred status has to happen if someone maybe -- like remember, most people are already on insulin that we're targeting.

And that's mostly what insurance companies want. They want people to know they tried and failed the preferred insulin. We get it, we understand it. And that's been some of our discussion with the payers is when you fail the first insulin, what happens? You go down the insulin pump routes. And that is the journey that we put most families on forever. And many times, you get to adults, they've been attached to the pump longer than their spouse.

And so this is really part of the discussion with payers is don't look at it against injectable insulin, look at about the alternative that people are going down and what is that lifelong cost and journey. And so far, those discussions with payers have been resonating to say we're not trying to displace all insulin that's out there, really try to help these kids get access as quickly as possible. And so far, it seems like that's the right tone.

Our next question comes from Gregory Renza from Truist Securities Inc.

It's Anish on for Greg. Congrats on the updates this afternoon. Just firstly, maybe if you could help us assess the range of your peak market share projections of 23% to 37% for Afrezza? What gets you from one bookend to the other? I know we're at the launch phase here, but that would be helpful for us. And secondly, just revisiting the label. With the requirement of basal insulin in type 1 and like before Afrezza use being perhaps contraindicated in patients with asthma, how might that gate the eligible pediatric pool?

Yes. About -- you can say 1 out of 5 people on the high end would have COPD or asthma, and that seems to be consistent as we look across the population. So we kind of take that out of our own forecast projections, number one.

I'd say number two, what drives some of the range of the forecast is -- we are actively focused on kids who are on multiple daily injections. And to our surprise, there's a lot of clinicians who said, "I want to use this as my first insulin now." There's nothing preventing them from doing that. Our label allows it. And the dosing, as long as they need 4 units or more, they're good.

So we were also surprised at how early that initial insulin uptake could happen in the naive setting. So we started INHALE-1ST to get ahead of it, but it just turns out that's going to be a nice bonus to support it as much as anything. And I think what drives the range is we don't know there is a large insulin pump and pod segment. We're not actively saying they are not good devices. Most clinicians have used them for decades, and they're comfortable with them. And we really want to focus on the adolescents who are on MDI, most of them who are like 8 above A1c, to try to help get experience there with the providers so they can see the benefits of the product.

Over time, in our market research, we saw a range of patients who could come from the pumps and pod market. And that's probably what gives you the greatest variability in the forecast is how much do you want to assume could switch from that or try this or go back and forth or even use it on top of those devices. And so that's why you have a range here. There's a certain assumption on MDI, and then there's another assumption here that gets you to the higher end if people start really trying this instead. So I think the market will bear that out over the next 18 months, but I think we'll hopefully see that trajectory as we exit the year in which direction we're headed.

Our next question comes from Brandon Folkes from H.C. Wainwright.

Congrats on the approval. Maybe just two from me. You talked about compliance. Can you just give us your view on compliance and potential for missed doses with Afrezza in pediatrics? How do you look to address this or assist in the compliance early in the pediatric patients' journey? Especially as they sort of go to school in some of these places where they may not be under adult -- parent supervision, I guess, early on in their launch to drive it as habit.

Yes. I would say a couple of things, and that's where Nick talked about the educators, the nurse educators in the schools, the camps. We're putting a lot of energy on that over the summer and back-to-school.

I think in terms of compliance, even in our trial, we saw similar dropout rates to the adults. So it's not that kids had a worse dropout rate. It was consistent, if not slightly below what we expected. Kids are no different than anyone else. A lot of times, I've been to the camp with Kevin here. And you talk to some of these kids, they have much bigger issues than worry about their insulin control.

But you want to find the best tool that meets their life. And if it's fitting their lifestyle, they're going to be compliant. And yes, they're going to miss doses, they're kids. But many times, like when you go to the camp and you see it firsthand, they're dosing blindly, their insulin. They're not sure if they're going to eat 1 chicken nugget or 5, 1 ball of mac and cheese or none. And that's really the challenge I think parents face is how do you properly dose your child, how do you keep up with them? What are they doing in school? And now you can clearly see what's happening.

With Afrezza, it does start to see that CGM move in the first hour, 1.5 hours. So you'll know what your child is doing pretty quickly. But just like anyone, there's always going to be compliance issues. And I say if someone is a 9.5 or 10 and they're struggling, then maybe insulin pumps are the right product to get some insulins better than none. But I think anyone that really wants to bring their sugars down and improve mealtime control, that's where I think we have a big opportunity.

And if you really think about children, their alternative is going to be wearing an insulin pump or pod or getting an injection. I think most kids would rather say, okay, I'll take my medicine and let me take it. So this is much easier. And I never forget, a few months ago, we had an ad board. And one of the doctors said, thank you for bringing this forward. The hardest part of my job is telling a family that their child is going to require injections to live the rest of their life. And I hate doing that every single day. And this is going to, say, give them hope that maybe they don't need to give injections the rest of their life. They're going to need a basal, but maybe we can eliminate the 3 to 5 injections a day mealtime or boluses they got to take with their pump.

Great. And maybe one more. During those ad boards or discussions with KOLs, has there been any discussion about use of Afrezza in patients with eczema that may actually not be diagnosed with asthma just yet? Sort of any hesitation there or any discussion or view on that?

About hesitation about undiagnosed asthma, is that the context?

Yes. Just sort of...

In the trial, we allowed some patients in the trial, I think, in INHALE-3 that may have had a history. And we could see people that may thought they resolved childhood asthma had slightly more cough or challenges. But I think in the kids, Kevin, we had the same, right? And there wasn't a big difference in FEV1s or anything there.

So we have some of that clinical data. We can go back and see -- I can't remember, it was like 10 or 20 patients that had asthma historically or somehow diagnosed during the trial, and there was no major issue. So we'll have that data as a medical response if doctors have that question.

Our next question comes from Yun Zhong from Wedbush Securities.

Congratulations on the approval. On the label, first question on the label, did the FDA tell you why the label is for children 6 years and older instead of 4? That's the age enrolled in INHALE-1. And in INHALE-1ST, I believe the study is enrolling patients above the age of 10. So how are you going to get to those patients below the age of 10 that are treatment-naive?

And the second question, I believe in the 8-K that you put out yesterday, the filing mentioned that there is still post-marketing requirement for you to confirm safety and maybe efficacy in pediatric patients. So are you able to provide any additional details related to what needs to be done here, please?

Sure. I'll start with that question first. So there were 4 PMRs when Afrezza got approved in 2014. We completed 3 of them, including, I would say -- the last one wasn't a completion. It was an agreement with the FDA that we were released from our long-term safety study, which is great to have right before pediatrics.

The last one is the pediatric study which we did. And so now that we have the approval, we now have to file that with the FDA and ask to be released from that last PMR. So there's no additional work to be done. This study should satisfy that post-approval commitment that we did as a result of the study. They've indicated that it will be the case, but it's a formality now with the FDA that we have to go through. So we don't expect any challenges, but that will be the next step.

Your next question is a good insight there you caught is we expected 4 to 17. And I think as part of the FDA in the discussion, we realized there wasn't enough patients or really any patients below 6 in the trial. So it's kind of hard to argue for 4- and 5-year-olds when you just -- they just didn't enroll. There was a couple in the control arm, but they weren't in the active arm.

And so we didn't really have much of a debate with the FDA on that one. It was -- we'll be happy with 6. It's really about how many units the patient needs as opposed to age, but we really didn't have any 4- and 5-year-olds in the trial to have any real debate with the FDA on that topic.

And it's important, but it's not critical. What I'd say is there are patients there. Doctors can make their own clinical judgment. We can always run a post-marketing study in that population if we need to. But I don't think it's going to be a significant barrier to success. And I think as we get to 2-unit cartridge, that's probably going to be more important for that population than the 4 units we have today.

And your last comment or question was around INHALE-1ST being 10 to 17. At the time we started this trial with the FDA, we were pretty confident that the 10 and above would be approved. We weren't sure where the FDA would land below 10 as there wasn't as many patients, it wasn't sized for each age range. And so now that we have the approval down to 6, we are going to ask the investigators, should we go down to 6 years old or stay with 10. There's no clinical reason we can't go down to 6 at this point.

The last question comes from Anthony Petrone with Mizuho...

Congratulations to the team here on the approval, big milestone for the company and patients. Maybe just in terms of the market opportunity, Mike. When you think of 360,000 target patients, you're mentioning the 2-unit dose, you have the 4-unit dose. I don't know if 8 and 12 is at play here, and then you have a 20-unit dose in the prepared materials here. So when we think about just dose distribution in pediatrics, how do you think it plays out from 2-unit cartridges all the way up to 20-unit cartridges? And I'll have a couple of quick follow-ups.

Okay. Anthony, thanks for calling in late on a Friday there in New York. And I'd say the average dose in pediatrics was 12 to 20 units a meal. So we weren't seeing as much on the -- in terms of the low doses being -- people wanted 2-unit cartridges because they want to give the fine-tuned doses between 4 and 8 and 8 and 12. But we didn't have that available in the trial. But we saw most people going to the higher doses, especially those adolescents who are growing, going through hormonal changes and need much higher insulin needs. So that's generally what we see.

The 2 high concentrations we're working on are really to get to like a 16- or 20-unit cartridge, and that's really to get people to 1 dose instead of 2 that ultimately reduce the COGS, reduce the utilization of the cartridges. And it will help for like places like India and international where we do see people needing much higher doses in type 2s or international markets.

No, that's helpful. And then the follow-up is just you have the $35 out of pocket, but when you look at just retail pricing or even wholesale acquisition costs and price Rx, you're kind of ranging at $450 to $1,500 a month A.nd that's the 4- to 12-unit range. You're adding 2 and going up to 20.

So I don't know, when we think about it, are we ranging kind of the net price to MannKind at like $250 up to $2,000 a month? Is that kind of the way to model it out? And then the last one real quick is just ADA next week. Do you expect like a bump in new prescribers coming out of ADA? Congratulations again.

I think on pricing, we have time to figure that out, meaning 2-unit, maybe a flat price to 4, maybe slightly cheaper. But as you get to the higher doses, they're actually more efficient to make. So I don't know if we'll still continue linear pricing out that way.

And so it might be -- from a modeling perspective, I would just assume whatever to average price per prescription is today and that continuing is how I would look at it. And you can manage a similar gross to net until we give different guidance of where we are. But I wouldn't expect that the prices will keep going up exponentially with higher doses. And then...

That's helpful. And then just ADA?

And then ADA, it's a big conference. I'd say more than half the attendees are international. And then the other half, I'd say half practice medicine, half are just awareness thought leaders. And so it's really making sure our engagements with the half that matters that are coming to our dinner events, the one-on-one meetings and that they do go back and they are aware of the data.

We're getting really good feedback on the new standards of care. We keep reminding people that this is a choice and needs to be a choice that's offered to patients. And we think as clinicians go back and do that more and more, the patients will choose this as an option. And we think that's an important aspect.

But more importantly, the ped endos, I don't know, Kevin, it's not the biggest conference they attend, but there's quite a few there. So I think we want to make sure we're in the field right after ADA. We're training our team next week live, and they'll be out there right after ADA hitting the ground.

Thank you.

Well, thank you, everyone. And thank you for dialing in so late on a Friday, especially for those on the East Coast. I know it's -- you're waiting for happy hour. I am, too. I have a big reason to celebrate. I've spent 10 years of my life here at MannKind making sure we get this available option to children. It's a really proud moment for me and the team and all the hard work despite many obstacles.

To the patients and the families who participate in our trial and other pediatric studies who believe in this program, our regulatory team, our medical team, commercial team, Nick, Kevin, our pediatric leadership group, this approval is the result of your years of dedication and hard work. We didn't get here overnight. We got here because people refused to accept the status quo and give up on the idea that kids one day deserve this option versus mealtime injections.

With that, operator, I'm going to close the call. We look forward to launching this successfully and meeting you at the future conferences. Thank you.

This concludes today's call. We thank you for your participation. You may now disconnect at this time.

Good afternoon, and welcome to the MannKind Corporation First Quarter 2026 Financial Results Earnings Call. As a reminder, this call is being recorded on May 6, 2026, and will be available for replay on the MannKind Corporation website shortly after this call for approximately 90 days.

This call will contain forward-looking statements. Such forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from these expectations. For further information on the company's risk factors, please see the Form 10-Q for the period ended March 31, 2026, the earnings release and the slides prepared for this presentation. Joining us today from MannKind are Chief Executive Officer, Michael Castagna; and Chief Financial Officer, Chris Prentiss. I'd now like to turn the conference over to Mr. Castagna. Please go ahead, sir.

Thanks, operator, and good afternoon, everyone. Thank you for joining us for our Q1 2026 earnings call. Here is today's agenda, and I'll start with some opening remarks. In the first quarter, we continued to execute our strategy to evolve MannKind to a diversified company positioned to deliver sustained long-term growth. The company is fundamentally different than it was even a few years ago, and we are excited about the near-term milestones that will further advance the company's evolution. Today, we will discuss the recent positive developments with United Therapeutics and articulate our growth plans that we expect will drive significant shareholder value over the coming years.

Let's begin with our announcement earlier today that MannKind 1501 has been unveiled as ralinepag DPI, which United Therapeutics optioned into back in August last year. Our formulation team has been moving ralinepag DPI forward expeditiously, and we recently received a $5 million payment to prioritize the continued rapid advancement of this program. We have the potential to receive up to $35 million in development milestones plus a 10% royalty on net sales. Of those milestones, we expect about $15 million to be earned over the next 12 months.

This expanded collaboration is significant for a few reasons. First, it deepens an already productive partnership with United Therapeutics. Second, ralinepag DPI has the potential to be used across pulmonary arterial hypertension, pulmonary hypertension associated with interstitial lung disease idiopathic pulmonary fibrosis and progressive pulmonary fibrosis, collectively impacting more than 250,000 patients and representing a substantial opportunity to improve the outcomes across these conditions. Third, it continues to validate our unique Technosphere platform.

In addition to ralinepag DPI, we've also confirmed MannKind is the sole manufacturer of Tyvaso DPI under a supply agreement that includes contractual minimums. This provides us with a solid foundation as we continue to scale our Danbury, Connecticut facility for our own pipeline, including a manufacturing build-out to support the growth of FUROSCIX ReadyFlow.

Now let's move on to Q1 performance. We delivered quarterly revenues of $90 million, a 15% increase over the prior year as this now includes the addition of FUROSCIX. Q1 was a challenging quarter for several reasons. Number one is structural. We see each year as Q1 typically declines relative to Q4 due to annual deductible resets. As patients face higher out-of-pocket costs at the start of the year, we see both fewer fills and lower doses per prescription. For FUROSCIX, doses per prescription were down roughly 20% in Q1 compared to Q4. Number two is transitional. As we prepare for our upcoming launches of Afrezza pediatrics and the FUROSCIX ReadyFlow auto-injector, we reorganized the field teams, leading to customer disruptions in Q1 as we didn't want to disrupt the field in Q4 or the upcoming next 2 quarters given the potential launches.

Additionally, we reallocated marketing resources away from Afrezza adult, which slowed the growth year-over-year as we thought it would be more prudent to shift these investments towards the pediatric Afrezza launch and FUROSCIX nephrology opportunity. We have made the adjustments, and the field teams in place today are talented, highly experienced in their therapeutic areas and have the right resources to deliver quarterly growth the balance of the year. Number three, as we prepare for the launch in Q3 of the auto-injector, we want to ensure an efficient conversion. We transitioned our inventory levels to minimize volatility and inventory stocking of the current on-body infuser at the specialty pharmacies. As this adjustment is now behind us, we expect future product outflows to better reflect underlying prescriber demand, which will help us accelerate the transition upon FDA approval.

So when you put these 3 things together, Q1 came in lighter on the revenue side, but even so, the underlying indicators were more encouraging than the top line quarter may suggest. We saw growth in both overall writers and repeat writers of FUROSCIX, hitting a record number of prescribers in Q1 and demand momentum improved as the quarter progressed. Doses dispensed are up nearly 60% through April compared to the same period last year. Chris will walk through the quarter in more detail, but we are confident the underlying business is moving in the right direction, and we remain on track to meet our full year 2026 FUROSCIX revenue target of $110 million to $120 million.

Now let's walk through the Q1 highlights. The FDA approved the updated Afrezza label, which now provides clear starting dose guidance. That's an important enabler for the pediatric launch as this was the dosing used for the pivotal trial. We've also completed our launch build-out for Afrezza pediatrics ahead of the May 29 PDUFA date. We completed the pilot phase enrollment in our inhaled first pediatric trial, evaluating Afrezza in youth with newly diagnosed type 1 diabetes. That's the long-term goal I've talked about for years.

Additionally, we settled the convertible notes, which strengthens the balance sheet. And finally, on the SC Pharma integration, we are now approximately 7 months post close, and I'm very pleased with how the integration has progressed. For most functions, integration is substantially complete, and we've identified synergies that exceeded our $20 million annual target we previously set. I want to thank both teams for the way they came together. These integrations are always challenging, and ours has gone exceptionally well.

I'll now take a step back to talk about our strategic evolution because this slide tells a really important story. Until 2022, we were essentially a single product company with Afrezza. Since then, United Therapeutics and Tyvaso DPI specifically has played a critical role in funding our transformation, including enabling SC [Audio Gap] [Technical difficulty] Pharma acquisition last year. With the acquisition of SC Pharmaceuticals, we added FUROSCIX, which brought an incredible team with deep cardiology experience. That has expanded our portfolio and our commercial infrastructure in a meaningful way.

As we look at 2026 and beyond, we are now a diversified cardiometabolic and orphan lung company with multiple FDA-approved products, 2 near-term regulatory catalysts and a potentially transformative pipeline opportunity with inhaled nintedanib DPI advancing into Phase II. The UT partnership will remain a reliable pillar of the business, providing stability and significant growth potential. It also gives us flexibility to advance the pipeline, reduce debt and pursue business development opportunities. But the MannKind story is increasingly about the products and development candidates we own and the brands we are building for the long term.

Turning to the major catalysts for 2026 and beyond. We have two regulatory catalysts and one clinical catalyst stacked up in a narrow window over the next 3 to 4 months. First is the Afrezza pediatric indication. If approved, Afrezza will be the first and only needle-free mealtime option for children and adolescents in more than a century and will address a long-standing unmet need with a highly differentiated value proposition. Importantly, this opportunity compounds over time as adolescents initiate therapy early and continue to adult, supporting durable long-term growth for the brand.

Second is the FUROSCIX ReadyFlow auto-injector. If approved, this changes the administration profile of FUROSCIX from several hours to just seconds, which has real implications for patient convenience, training and widespread adoption. It supports broader use and would significantly reduce our cost of goods. Third is the MannKind 201 nintedanib DPI program. There remains an urgent need for more new effective therapies in IPF, where current options are limited by tolerability. Our lung targeted delivery approach is designed to address those barriers, and we are on track to report Phase IB top line data in the third quarter, a key clinical derisking step.

In parallel, we are advancing MannKind 201 into a global Phase II trial this quarter. Each of these catalysts will be significant on its own. Having all 3 in a single calendar year is a powerful testament to our progress and execution over the last 10 years. Together, these milestones strengthen our foundation and position us to potentially deliver meaningful growth in the years ahead. We have 2 near-term regulatory events, a growing commercial business, a strong revenue base from UT and a pipeline approaching important data milestones.

Now let's go deeper on the upcoming commercial expansion opportunities for our products, starting with Afrezza. The pediatric opportunity is a well-defined new population entry point with the ability to expand across an even broader populations over time. There are roughly 360,000 people between 8 and 22 years old living with type 1 diabetes in the U.S. with about 30,000 newly diagnosed each year. And while our launch focus is type 1 in children and adolescents, when you look at the broader picture where Afrezza has already indicated, the long-term opportunity for inhaled insulin is significant at over 38 million patients that were indicated for today.

The pediatric opportunity is one of the most important milestones for Afrezza since its initial approval, and our extensive research highlights why. Despite decades of technology and drug innovation in diabetes, A1c control is still not meeting goals. largely because of mealtime challenges that exist in the everyday life of patients. Afrezza is the solution. After more than a decade on the market, Afrezza is poised to finally live up to its potential. Managing mealtime insulin children and adolescents often means multiple daily injections, rigid meal timing and significant burden on both parents and caregivers. Afrezza directly addresses those challenges by eliminating mealtime injections through a novel route of administration, providing greater flexibility around meals and easier timing for kids.

When you think about what it means for a child with type 1 diabetes to not have to take a shot at lunch or wear a pump while playing sports or count cars at a birthday party or even forgo the cake, that's a really big deal to the average life of a child. This is a therapy backed by more than a decade of real-world data and now a completed Phase III pediatric trial. The American Diabetes Association now positions inhaled insulin as an equivalent option to multiple daily injections and insulin pumps, including AID in their guidelines.

This guideline support puts Afrezza on equal footing with the standards of care, a significant milestone that recently happened. The evidence base has never been stronger. Families and physicians continue to highlight the significant daily burden of diabetes management and are telling us that Afrezza has the potential to fundamentally change that experience. With peak share potential in the range of 23% to 37% and each 10% share representing approximately $150 million in net revenue, the opportunity is significant and will continue to compound over the coming years. Pediatric represents a fundamentally different dynamic -- as we look at our key areas at launch, we're continuing to be very disciplined. We're directly addressing the mealtime challenge where about 35% of patients have real friction with insulin at mealtime today, compounded by the fact that 25% to 35% intentionally miss their mealtime injections or pump boluses.

We're engaging consumers through highly targeted outreach. About 93% of families are motivated to speak to their HCP to request a change in the child's diabetes management, so patient requests matter. We're targeting roughly 60-plus prioritized academic medical centers with about 20 key account managers. That's where the highest volume pediatric prescribers are. In parallel, the broader Afrezza sales team will extend coverage by engaging community-based health care providers as well as these academic centers to ensure comprehensive reach and frequency at launch. We're enhancing the customer experience through ease of access with commercial or Medicaid patients able to get on Afrezza for $35 or less.

In parallel, we've engaged in a number of payer discussions to ensure formularies are positioned to support the pediatric launch, and we're seeing receptivity to expanding access for children and adolescents as we approach approval. The pediatric approval for Afrezza offers the brand a new beginning, new patients, eager physicians and a clear unmet need. If approved, we are ready to launch.

Now let's turn our attention to FUROSCIX. As we look at the addressable opportunity, there are roughly 700,000 fluid overload events we can address outside the hospital setting. There are multiple intervention points along the patient journey. Since launch, we were historically targeting when fluid first presented at home and oral diuretics weren't enough. We are moving to address the post-discharge setting where it can impact length of stay and 30-day readmissions. With the FUROSCIX ReadyFlow, we believe we can unlock several additional intervention points, both earlier and later in the treatment paradigm where FUROSCIX can break this cycle of admissions and readmissions.

Next, let's talk about ReadyFlow auto-injector and why we are so excited about it. We consistently hear from HCP that the current FUROSCIX on-body infuser, while effective, can be a barrier to adoption in certain patient segments. With the PDUFA date of July 26, if the ReadyFlow auto-injector is approved, it will reduce the administration time of FUROSCIX from 5 hours to just seconds. That could broaden use among prescribers who have been more selective with the current presentation. Our research also supports this. 65% of HCPs anticipate they would expand their FUROSCIX use with the ReadyFlow auto-injector. Patients are already familiar with the auto-injector type of delivery formats through other therapies.

It's a simple, reliable delivery system with minimal training required. It has comparable efficacy and safety to IV and the current on-body infuser. And the auto-injector allows earlier intervention and enhance patient independence because there's less hesitancy to use it. And importantly, the ReadyFlow auto-injector would significantly reduce our cost of goods, which improves our margins and frees up capital to reinvest.

On FUROSCIX ReadyFlow launch readiness, we are building from a position of strength. To support the launch, we've identified 4 key tactics. Number one, approximately 60% of FUROSCIX patients require prior authorizations today. So simplifying access and reducing friction in the onboarding process is critical to ensuring patients can start therapy without delay. Based on recent payer conversations, they are receptive to removing access hurdles given the overall cost benefits of FUROSCIX and trying to reduce the number of patients going into the ER related to fluid overload.

Number two, from an adoption standpoint, our market research is encouraging. Roughly 85% of existing FUROSCIX patients are expected to convert to the ReadyFlow auto-injector, reflecting strong confidence in the Ready-Flo profile. In addition, 65% of health care providers anticipate expanding their use and enables earlier and more productive intervention. Number three, we have a clear focus on accelerating time to patient start. We are exploring alternative distribution partners that will improve our ability to get FUROSCIX in the hands of the patient the same day.

Lastly, we've deployed our key account manager team to deepen integrated delivery networks or IDN relationships and continue to integrate FUROSCIX into hospital discharge protocols. That's where the post-discharge intervention opportunity lives, and it's where we believe we can make the most meaningful difference in reducing hospital readmissions. We've prioritized more than 60 key accounts supported by our entire sales force in addition to our newly established key account managers who completed training in March. This approach should drive consistent uptake and appropriate utilization, which we expect will accelerate in the second half. Taken together, these tactics position ReadyFlow for rapid adoption by accelerating patient starts, establishing earlier use in the treatment pathway and ensuring focused disciplined execution across the accounts that matter most.

Moving on now to nintedanib DPI, our MannKind 201 program. IPF is a devastating disease. These patients cough up to 1,000 times per day. And with the poor tolerability of current treatments, their quality of life is significantly compromised. 8 out of 10 patients die from this disease within 5 years, and many would rather forego treatment than endure the side effects of today's standards of care. Our approach is to bypass the GI tract through targeted pulmonary delivery. The Technosphere platform is a proven platform. We have 2 FDA-approved products with less than a 3% discontinuation rate due to instances of cough. -- and demonstrate safety and tolerability in patients with underlying lung disease.

So when you combine a proven molecule like nintedanib with direct lung targeting and consider our Phase I healthy volunteer observation showing no GI tolerability issues and our Phase IB in actual IPF patients showing no discontinuations due to cough or serious adverse events in the first 12 patients, we have strong confidence in the potential to improve tolerability while maintaining or potentially enhancing efficacy.

On to our 201 program updates. We've completed enrollment of Cohort 1 in our Phase IB INFLOW study, which is in active IPF patients. Our top line data are expected to be shared during Q3. That's a key derisking point as we generate safety and tolerability data in these patients. Simultaneously, we're initiating enrollment in our global Phase II study now that we have received our first country approval. We are advancing both programs in parallel to accelerate data generation and development time lines.

Here are the key things that differentiate MannKind 201, a 2-second inhalation, a proven delivery platform with no cleaning required and the potential to dramatically reduce side effects while meeting or beating the efficacy of oral nintedanib. Each step further derisks a program that we believe has tremendous potential to target a disease with limited treatment options. Taken together, our inhaled nintedanib DPI program, along with the United Therapeutics Tyvaso DPI and ralinepag DPI gives us 3 differentiated shots on goal in IPF.

Importantly, Nintedanib DPI is not only well positioned to serve as the backbone of therapy, but also opens the door to combination use alongside other current and emerging IPF therapies, which is increasingly how we expect this market to evolve is with combination use. Together, these programs reinforce the potential for inhaled delivery to improve tolerability and play a central role in redefining how IPF is treated.

Before I turn it over to Chris, I want to highlight some of the key upcoming scientific conferences we'll be at, including the Respiratory Innovation Summit, where we have a small presentation at ATS, the American Diabetes Association, we have almost 10 presentations at the scientific sessions and the American Association of Heart Failure Nurses in San Diego in late June. These are exciting times with lots of data dissemination and hopefully upcoming FDA approvals. I will now turn it over to Chris to review our first quarter 2026 financial results.

Thanks, Mike, and good afternoon, everyone. For a summary of our financials, please review our press release issued before this call and our Form 10-Q, which is now on file with the SEC.

Let's start with FUROSCIX. For Q1 2026, FUROSCIX net sales were $15.5 million. As a reminder, the acquisition closed on October 7 of last year and only post-acquisition results are included in MannKind financials. Underneath the revenue number, the demand metrics for the brand remain strong. We had a record number of writers in the first quarter and 75% of those writers are repeat writers, which is a really good signal. Doses dispensed grew 64% year-over-year, and our IDN business grew 97% year-over-year, reflecting the early traction of our key account manager team. If you look at 2025, approximately 14% of annual dispenses was generated in Q1. If you apply this to our Q1 units dispensed, we remain on track to achieve our annual target and are reaffirming our 2026 FUROSCIX revenue range of $110 million to $120 million.

Turning to Afrezza global sales. Q1 2026 net sales were $15.3 million, up 3% year-over-year. As we discussed earlier, we have shifted our marketing efforts toward our 2 anticipated launches this year and transition nephrology sales responsibility to the legacy Afrezza sales team. As expected with the new call point, this created some near-term disruption, which we expect to improve steadily over the remainder of 2026. Tyvaso DPI-related revenues provide a durable revenue base. Our collaboration and services revenue is driven primarily by manufacturing revenue based on volumes sold through to UT plus the recognition of deferred revenue.

For the quarter, CNS revenue was $23.5 million compared to $29.4 million for the prior year quarter. As we've noted previously, this revenue stream may fluctuate between periods depending on production scheduling at our Danbury facility across Afrezza, development programs and Tyvaso DPI. However, it is important to note that the amendment to our Tyvaso DPI supply agreement we signed earlier this quarter established annual minimum quantities, effectively fixing our annual manufacturing revenue for Tyvaso DPI. As a result, period-to-period fluctuations are driven primarily by manufacturing planning and scheduling requirements and to a lesser extent, by the timing of revenue recognition from other collaboration activities.

One such collaboration is our development of ralinepag DPI with UT. We recently received $5 million to accelerate its development. We will begin to recognize this in Q2. An additional $35 million of development milestones remain, of which we expect to earn $15 million over the next 12 months. Q1 2026 royalties reflect year-over-year growth of 9% to $32.7 million. In 2026, royalty revenue will support key capital priorities, including funding the March retirement of our senior convertible notes, our CVR obligations and our pipeline programs.

Turning to the bottom line. For the first quarter of 2026, we reported a GAAP net loss of $16.6 million or $0.05 per share. On a non-GAAP basis, we reported a net loss of $6.9 million or $0.02 per share. For comparison, in Q1 2025, we reported GAAP net income of $13.2 million or $0.04 per share and non-GAAP net income of $21.6 million or $0.07 per share. The year-over-year change reflects the planned increase in commercial investment associated with the potential FUROSCIX ReadyFlow auto-injector and Afrezza pediatric launches as well as the incremental cost structure associated with the SC Pharma acquisition, including amortization of acquired intangible assets, which is noncash. For the full details on non-GAAP adjustments, please refer to our press release and 10-Q filing.

On the expense side, R&D expenses increased over the prior year period, driven by ongoing enrollment in the Phase Ib study and preparations to begin enrollment for the Phase II study of MannKind 201. We expect R&D spending to remain at this level as we advance the MannKind 201 program and as well as our pipeline programs such as our inhaled bumetanide program, MNKD-701. Selling, general and administrative expenses increased compared to the prior year quarter, primarily driven by the expanded commercial infrastructure supporting the anticipated pediatric Afrezza and ReadyFlow auto-injector launches as well as the full quarter impact of the SC Pharma commercial team and operating structure.

Having 2 PDUFA within months of each other is unusual for a company of our size and makes 2026 a deliberate investment year. We're investing to ensure both potential launches are properly supported across the field and in promotion, which is reflected in SG&A this quarter. Going forward, we'll continue to evaluate commercial performance and adjust investment levels with discipline as we execute on these launches.

Turning to our balance sheet. We ended Q1 with a solid liquidity position after settling the remaining balance of our senior convertible notes. We believe we have sufficient capital to support our planned commercial launches and continue advancing our pipeline. In addition, our credit facility provides financial flexibility if needed, and we remain focused on deploying capital in a manner that maximizes long-term value for our shareholders. Before I turn it back over to Mike, I want to mention that we'll be at the Jefferies Global Healthcare Conference in New York in June. We look forward to engaging with many of you there. With that, I will turn the call back over to Mike.

Thank you, Chris. Let me close by summarizing why we believe MannKind is well positioned for the next phase of growth. Number one, as we look at the remainder of 2026, we are in the middle of a meaningful corporate transformation. Since 2022, we've evolved from a single product company into one with multiple FDA-approved products and a more diversified growth profile. United Therapeutics revenue continues to provide a strong foundation while our revenue mix is shifting steadily toward MannKind owned brands, with owned revenue moving from roughly 40% just prior to the SC acquisition to over 65% with the anticipated FDA approvals as we exit 2026. That represents a fundamentally different company than one we just experienced a few quarters ago.

Number two is FUROSCIX. We have a clear line of sight to achieving our $110 million to $120 million revenue range for 2026. The ReadyFlow auto-injector pending its July 26 PDUFA date represents a meaningful opportunity to extend and accelerate the brand's growth trajectory. The fact that 65% of health care providers indicate they would expand the use with FUROSCIX ReadyFlow auto-injector reinforces our confidence in its potential.

Number three is Afrezza. A pediatric approval would unlock a significant growth opportunity and represent the most important milestone since the approval of Afrezza in 2014. Pediatric demand indicators are strong, the value proposition is clear, and we are launch-ready with disciplined targeted investment. If approved, our team is ready to execute.

Number four is our partnership with United Therapeutics. The Tyvaso DPI franchise continues to deliver durable economics with the potential for expansion in IPF and addition of ralinepag DPI extends the partnership into multiple indications, reinforcing both the strategic depth and long-term value of this relationship. And number five is nintedanib DPI, completion of the Phase Ib in IPF patients, where we expect top line data in Q3 and the planned first patient enrollment in the global Phase II program this quarter represent important derisking milestones and position this asset for the next meaningful pipeline value driver.

When you put all these together, a durable revenue base from UT near-term regulatory catalysts and a pipeline with meaningful upside, our priorities are clear, our team is focused and MannKind is poised to capitalize on some of the most fundamental and transformational moments in the history of the company. We look forward to seeing many of you at the upcoming events and share more updates as we approach the Afrezza pediatrics and Ready-Flo auto-injector PDUFA date. With that, operator, we'll open the call for questions. [Audio Gap]

[Audio Gap] -- you see a bigger gap there. But I think in general, I would see an evolution of a combination market evolving. And that's one of the reasons we're running a QID arm in our Phase II so that if you were on QID Tyvaso DPI or Tyvaso nebulizer, you could look at a QID nintedanib DPI as well. And so we're hoping to show in that trial whether you're using 4 milligrams twice a day or 2 milligrams 4 times a day that your outcomes are comparable. And if one is better, that's great. We'll lead with that. But that's one of the things we're exploring in that Phase II.

Great. And then last one for me. On FUROSCIX, any extra color on some of the trends you saw in the quarter? I noticed you reiterated your guide, which is encouraging. And -- but I was curious also anything interesting that you're watching for in the next couple of quarters in terms of underlying demand?

No, I think the first is we know two competitors launched last October. So obviously, we're keeping an eye on that, but not much activity out there. I think maybe 40, 50 scripts since launch. So nothing of significance. We did hear anecdotal reports of people switching back. Some of them had tried the nasal and may not have gotten the efficacy they wanted and went back to FUROSCIX. So that's an early indicator of patient satisfaction or physician satisfaction for us that we felt more confident as we go forward. We're moving our inhaled bumetanide program as well, just so we make sure we have simple inhalation in that space if people want to go that route.

But on the FUROSCIX side, great prescribers. Neff picked up a lot in March as we closed out the quarter. So we see that -- we think the transition of the sales force caused a pretty big disruption in January, February. So as they get those relationships reestablished, launches on calendars, et cetera, dinner events are now taking place. So we think NEF will continue to accelerate throughout the year. We think FUROSCIX overall, especially with the auto-injector, will grow a lot faster in Q3 and Q4. But otherwise, when you look at the volume, the percent of units that shipped in Q1 of last year and the percent of units that shipped in Q1 of this year, you kind of get to a pretty close number to our reported number. So I think that's what we see in Q1 because of co-pay resets, and there's nothing more to read into that.

We listened to a few other companies' calls, and we heard the same thing in Medicare and these co-pays and insurance designs are really slowing down the January, February performance of a lot of products. And you start to see the March and April pick back up, which gives you the confidence for the rest of the year. So we feel pretty good and all the feedback and anecdotal evidence we hear from FUROSCIX is very positive.

Our next question comes from Ben Burnett with Wells Fargo.

I also wanted to ask about the ralinepag DPI that was disclosed this morning. Just curious kind of going back to sort of what you're saying just a minute ago, how far along in this process are you? And I guess, really, what is -- what gives you the confidence that you can actually formulate this as a DPI? And I believe there's also some discussion in the disclosure that QD is on the table, once daily is on the table. What's sort of the confidence around that as well?

So I can't comment on the pharmacokinetics because I'm going to have to defer to UT in their modeling and all the work that they've done and what they know about ralinepag. So I'll stand by their statements. And I think we don't know the real answer until we get into a human and we see some of the pharmacology there. But hypothetically, what they believe is probably as best we have today.

In terms of my confidence, I feel pretty confident we have a lead powder that can go forward into human trials and animal trials now to move us forward. And the good news is the amount of power we have to make for those things is not very significant. So that's going ahead of schedule. UT has done an excellent job on moving this as quickly as humanly possible, and we're doing the best job we can to keep up and keep ahead of them. So I think overall, there's a lot of energy to make sure we accelerate this as quickly as possible. And I think there'll be some interesting good dialogues and updates throughout the year next year.

Okay. Excellent. And also excited to see that there are 2 PDUFA coming up with Afrezza DTI. I guess the question for you is when -- assuming these are both successful and both approved, how soon after those approvals would you anticipate sort of the adoption curve for those drugs being impacted?

Yes. I think on peds, the approval should come the week before American Diabetes Association. So if that time line works, that will be ideal because we have 10 -- 9 or 10 presentations and poster clinical updates as well as an evening event that will be there. So I think that will be a good blast off for there, not just for the U.S., but also India. There was a lot of Indian doctors attending ADA. So just a lot of positive news at ADA will ultimately help just spread the word of Afrezza across the conference. And so that's exciting for us.

And then we have a plan to go into really the first 30, 60, 90 days to get into the top 10, 15 and set up the best practices and then take those best practices and go to the next 15 and next 15. So we're kind of doing a staged rollout and making sure we have advocates and processes and -- we're actually updating the reimbursement hub, which will be a big part of the launch. We're using the FUROSCIX hub actually. And so that's had really good feedback from their customers. And we think that is more of a white glove service to really make sure these patients get through the system nicely.

So I think on the Afrezza side, we should see it a little bit in Q2 because it's only about a month, but I'd say we'll be watching that very closely in Q3 and over the summer, we will be -- the question I have for the summer is, is it all vacations and excuses? Or is it people are coming in and we're seeing adoption and people want to maybe have opportunities as they get ready for sports or summer vacations to have something different and take the time to try something different. So that's important.

And the last thing I'll add is our inhale first trial. We got the first, I think, 9 or 10 patients done. And the anecdotal feedback coming out of that is really positive. And so being able to have the first insulin in children are newly diagnosed is really exciting, and that could really be a game changer if that continues to pick momentum in the trial in real world.

Would you expect to see FUROSCIX impact in Q3?

Yes, sorry. FUROSCIX, yes, I think assuming the approval comes July, we'll be launching in August is our expectation here. And so we'd see a little bit of impact in Q3, but a full impact in Q4. That one should go -- because that one is in Q use, so I think we'll see that much faster in terms of adoption and direction.

Our next question will come from Samuel Rodriguez Santiago with Cantor Fitzgerald.

This is Sam on for Olivia. Piggybacking on some FURO6 questions. I think it's encouraging. You guys said that you're still confident hitting $110 million to $120 million in sales for this year in FURO6. Is that including both the on-body and the auto-injector? And you mentioned that this is weighted more towards 3Q and 4Q. Is this due to the potential approval of the auto-injector? And do you expect the auto-injector to like cannibalize the on-body infuser quite quickly?

So the forecast for the year is basically looking at how the units came out in 2025 and kind of proportionately -- as we look at our demand and our curves, they look like they're consistent with 2025. So I'd say the auto-injector is a small portion of that range, but not the reason we expect to hit 110. It will -- we believe the on-body infusion should be able to get in that direction and that the auto-injector will just bring it there faster. So depending on when that launches, when that gets out there and how fast we get everything moving, that will be a great opportunity.

One of the challenges in the first half so far is we actually don't have samples this year, and that's just due to the nature of how we're preparing for auto-injector and managing our inventory supply. So that is another key thing that we're really gearing up to sample the auto-injector and get that out there to get the adoption faster.

Our next question will come from Gregory Renza with Truist Securities.

It's Anish on for Greg. Congrats on the progress this quarter. Just one from us on the ralinepag DPI update. Maybe if you could just remind us on the relative positioning of prostacyclin's to Treprostinil-based drugs in the treatment paradigm for PAH, namely on patient applicability and doc choice and how that's framing your views on commercial and royalty opportunities to MannKind Bio Uther.

Yes. I think it's a little too early to speculate on that. I mean, to me, we got Tyvaso DPI and United has Tyvaso nebulizer. -- really over the next 2, 3 years will be the major focus of continuing to penetrate IPF and hopefully PPF for the DPI scenario. And I think overall, Tyvaso is going to be a growth driver over the next couple of years. as a DPI. I think as ralinepag launches, that's probably going to go earlier just due to the convenience is my guess, if I had to forecast out where that's going to be going. And then typically, the nebulizer, the DPIs are being used second and third line is my rough estimate here, but that's really UT's positioning and UT's expertise for that. And then I think the question will be, I think you heard in UT's call today that in IPF, RAL DPI will be the predominant formulation that gets used in that development program. So we expect that from an IPF perspective to become the dominant driver overall.

Our next question will come from Brandon Folkes with H.C. Wainwright.

Maybe just on Afrezza Pediatrics. Do you have to do anything on the contracting side post the Afrezza peds label expansion? Or does that fall into the current coverage contracts that you have? And then secondly, can you just talk about some of the -- how do you assess the success of the peds ramp early on? What are some of your objectives that would drive you to invest further behind the peds launch versus sort of maybe keep investment where it is or pull back?

Sure. So I think on the contracting, because it will be the same SKUs, there's not like we have to add another SKU to the contract. So I think from that perspective, there's not updates. We are -- we've had a couple of presentations to the large PBMs and some regionals. And we are exploring how do you free up prior authorizations and simplicity for parents and patients around pediatrics. And it does feel like there's an appetite to free up that friction that happens in the adult side for kids at least.

And then depending on the conversations could go into adults. But we're really focused on making sure Medicaid access exists for kids and the big 3 PBM commercial lives have access for kids. I don't think it all happen July 1. But I think as we get throughout the year going into January next year, I would expect updated clinical guidelines that most of the payers to support the use of Afrezza, even adult because the clinical guidelines, what we're finding is people weren't aware and are not aware of the ADA guidelines putting Afrezza equal to an AID system and multiple daily injections. And so for them to cause 2, 3 step edits is against the standards of care now. So from that perspective, I actually expect with Ped's approval, guidelines to get updated and payer criteria to get updated in a positive way going into 2027. And so far, all indicators are positive.

In terms of Ped success, I think the key things we'll be looking for is not as much on the revenue side. Obviously, we want revenue to grow, but how many prescribers do we have? How many institutions have tried? How many times have they repeated that trial? -- and how many patients do we see coming into our referral hub. Those are going to be the key metrics we're looking at every week, and we will share those as they come out in the quarters. But we think that's really important is look at breadth and depth of prescribing and how many patients get uptake. And we will have access programs for those patients to make sure nobody goes without the option of Afrezza.

So that's our commitment as we look through 2026 is to make sure that payer friction is not one of the reasons to not prescribe. And so we'll do everything we can to minimize that, but really maximizing the opportunity to help parents, children and doctors experience Afrezza because we believe what we see in the adult side, when somebody has a great experience and they use it more than 10 patients, they really become adopters. The ones that never really adopted are ones who tried it one person and never really figured out how to dose it due to PA, et cetera.

So we think it's really important to go wide and deep in these accounts. And then we just made a decision that our sales force will be covering the 20 key account managers we have, we'll be having local coverage to help with the reach and frequency and share of voice in the beginning of launch here. So that's going to be important as well.

Our next question will come from Yun Zhong with Wedbush.

So my questions are about the 201 program. And so it's very encouraging to hear that good safety tolerability, no patient discontinuation. But given that we're going to enroll the first patient in the second quarter without waiting for the top line data in the third quarter, so I just want to confirm, do you plan to confirm anything else besides safety and tolerability from the Phase I study? And also, well, I believe United Therapeutics this morning confirmed that -- well, talked about the plan for the bridging study for Tyvaso DPI for IPF.

Well, it looks like it's going to start from a healthy volunteer, but there will be a patient study. So do you expect any potential impact on, for example, the pace of patient enrollment and overall the program? And the last question, well, including ralinepag, so eventually, there will likely be 3 different products in DPI formulation for IPF. So do you think just a patient taking different inhalations with the same DPI? Or is it reasonable to think about potential co-formulation to increase the -- or improve the convenience?

Yes. Several questions in here. I'll try to take them one at a time here. So on the 201, we did a Phase Ia last year with healthy volunteers. And in that study, we were particularly looking at cough-related incidents as well as FEV1, FVC followed by diarrhea and GI side effects. We can confirm in that trial, cough was not a major concern and that GI side effects did not come up even in the highest doses. So that gave us there. And then on the FEV1 FVC, there was no significant issues. We obviously see variability in the test. We see variability patient to patient, but nothing that was a showstopper.

In the Ib study, we're looking in IPF patients and taking that stepwise approach and showing that you can dose a dry powder inhalation in IPF safely and effectively. And so I'm happy to see after the first 12 that we did get -- this was using 2 milligrams 3 times a day. So they're getting about 30 milligrams of powder to get 6 milligrams of nintedanib. And so we can see in that -- in those patients that the tolerability, cough, discontinuation in IPF patients, there was no concerns in the first 12 of Cohort 1. That cohort is now closed. The DSMB will meet next week. And hopefully, post that meeting, we'll open up Cohort 2. And we're already screening for Cohort 2, so we fully expect to enroll that much faster than Cohort 1 and hopefully have top line data here in Q3.

The top line data in Q3 is just going to probably show you whether you give it twice a day at 8 milligrams or 3 times a day at 2 milligrams TID, you're not going to see a difference in tolerability or cough for acceptance of the product. So what that will do is we'll wrap it up to answer any questions the FDA may have had as we expand the Phase II.

I don't -- to your next question on Tyvaso bridging, remember, UT is focused on Tyvaso DPI for the U.S. market. And so any work they do will predominantly be based in the U.S. in IPF. In our case, with our Phase II trial, we are, as of today, 100% ex U.S. focused on that trial. We are considering adding a few sites in the U.S., but that will be pending some additional FDA negotiations. We have submitted the protocol to the FDA and received back comments. So we kind of know what it would take to get the FDA sites added if we wanted to. But we're much more focused on accelerating the European enrollment and other markets outside of Europe. including Canada and Australia.

So we think getting this trial done ex U.S. will be a similar patient population to the U.S. and that, that will minimize any potential impact of Tyvaso accelerating the IPF side. And your last comment is co-formulation. And I would say our technology, given the doses of the product and the common excipient here, there obviously is potential for co-formulation of these assets. I've worked on fixed-dose combos in my previous lives. And so I think, first, we got to see that these dosing regimens are tolerable. And I think that's the first step to any fixed-dose combo and then you have to have 2 parties willing to come together to figure those things out. So stay tuned, but I think we're all moving in the same direction to help patients hopefully with a longer, healthier life relative to what they have today.

Our next question will come from Anthony Petrone with Mizuho Financial Group. Our final question will come from Douglas Miehm with RBC Capital Markets.

Question I have, Michael, just has to do with those discharge protocols and the ability to integrate the product into those 60 key accounts. Could you walk us through the process involved in opening those accounts or having those changes made to the discharge protocols and how long they may take?

Yes, they take time, unfortunately. I mean, obviously, if this was a fast process, we would be blowing out the numbers right now. These are long-term process, meaning and long term being 6 to 15 months, I'll say, not 3 months. And the reason is every health system is different. And I've met probably 5 or 6 by now at the C-suite level and cardiac surgery departments and discharge quality teams. And what we consistently hear is that there are patient navigators in many of these institutions who are responsible to make sure these 30-day readmissions do not come back. Then you got to get the quality team, you got to get the pharmacist, you got to get the local contract set up and you got to get the adoption in the protocols. And that all takes time.

So there are places like Cleveland Clinic already doing it. Kaiser is running a big experiment right now in Northern California that looks pretty good. We have trial results that should come out later this year, looking at early discharge. That's some of the data people want to see is, can I get people out a day or 2 early. And then you have other clinics who really are focused on the -- they want to make sure the patient gets discharged when they get discharged, but they leave with FUROSCIX so that they are not coming back within that 30-day window, right?

And so it's a hodgepodge of systems, and it's -- like I was talking to Kaiser, and I didn't realize, for example, that they don't -- they accept non-Kaiser patients. And so in that system, they have to have a protocol for Kaiser patients and then a separate one for non-Kaiser because they don't have maybe access to patient navigators or that population. So each system is a little bit different, but I think as we start to find the commonalities, we'll get those across the finish line. Cleveland Clinic shares the protocol with our other customers, which is great. And so we feel good about it. All right, Doug.

Okay. Excellent. The second question -- and my last question is just when you [Technical Difficulty] Okay. My other question Yes. Just had to do with the 60 priority accounts on the Afrezza side. What would they represent in terms of that targeted market share that you're hoping for that 23% to 37% -- they'd represent perhaps over 50%, I imagine. But can you fine-tune that for me?

I'm going to bet roughly, they represent about 75% to 80% of the target opportunity we believe is out there. There's about 20 -- depending on which way you cut the data, but about 20% of the patients fall in the community setting and 80% roughly fall in the key account setting. It's very concentrated.

Our final question comes from Anthony Petrone with Mizuho Financial Group.

[Technical difficulty] All right. Maybe just FUROSCIX, the PDUFA date, July 26, I think we're in the window, but are you expecting a panel meeting on the auto-injector? So that will be the first question. And a quick follow-up on FUROSCIX. This is moving from a hospital almost patient setting infusion clinic, you're going from a 5-hour infusion cycle to under 10 seconds. patient has to use this in the home setting. So just what does that transition look like? How long do you think it takes to get adopted in the home? And what level of like patient training is there going to be? It just strikes us that this can be pretty seamless and it's pretty much kind of a game changer for these patients. So just trying to frame up that transition from infusion to auto-injector in the home setting.

Yes. The first answer is no, we don't expect a panel. We have had various information requests from FDA, nothing that looks like a showstopper at this point. So we believe we're on track for that PDUFA date. And hopefully, that continues to go in the right direction. We're working on labeling, manufacturing all that as we speak. So we'll be ready when the FDA gives us the green light. On the transition, because it's an acute use drug, meaning every cycle is a new cycle, every patient, every day is a new patient, that conversion can happen very quickly. And today, probably 90% of the use is preventing people from going into the hospital, the ER and about 10%, I'll say, is on the discharge and the readmission of 30 days. And that's just rough estimates. I could be off by 50% of those, but I don't think I am.

And so the auto-injector, I think, really helps get those patients on the hospital discharge faster. because it's just much easier. We're going to get probably more local distribution there same day to the patient. And we think that's one of the key barriers of when someone is suffering from fluid overload, they want that product as soon as possible. And we believe that's an important dynamic with the auto-injector that can happen versus the COGS you deal with the auto-infuser are quite high. And so that's something you don't want laying around in many different places. But otherwise, I think you will see a pretty quick transition. There'll be a group of people who still want to use the on-body infuser, and we'll be prepared to hopefully make it available for them. But we believe the preponderance of growth will come from the auto-injector.

That concludes the question-and-answer portion of today's call. I will now hand the call back to Michael Castagna for closing remarks.

Thank you for joining our call today. I apologize for the technical difficulties. We appreciate your continued support and look forward to keeping you updated as we execute on the multiple regulatory and clinical catalysts expected in the months ahead. A lot of exciting times. We've never been busier here at MannKind, and stay tuned. Every week, we'll have hopefully updates coming as we go. So thank you.

That concludes today's call. You may now disconnect.

All right. Good afternoon, everyone. Thank you for taking the time to join us for our next presentation. We're excited to have MannKind Corporation here with us. For those of you who don't know me, I'm Glen Santangelo. I'm the analyst at Barclays. I cover the specialty pharma sector, among some other things. We don't cover MannKind, but we've been doing some work on the company, and we're very excited to have Michael Castagna, who's the CEO; and Chris Prentiss, who's Chief Financial Officer, to his right here with us today. So we just want to say welcome, and thank you all for taking the time.

For those that may be in the room or on the webcast that are sort of newer to the company, maybe I think a good place, Michael, to start might be a thumbnail sketch on the business because 2025 was a very interesting year for the company. You closed out with some strong momentum and you sort of transformed the company from being a single revenue stream to more of a diversified commercial stage organization with multiple FDA-approved products. So maybe why don't you just spend a minute or 2 and just sort of give people a thumbnail sketch, and then we can sort of dig in from there.

Yes. No, thank you, and thank you for having us today. MannKind has come a long way. Most of us have known us as an inhaled insulin company, but I think the one thing I've tried to do over the last 10 years is really move to a new direction. And so when you think about where we're going, especially with the purchase of sc, almost 1 out of 5 emergency room visits are related to diabetes or heart failure. We're tackling the #1 issue around heart failure, which is admissions due to fluid overload. When you think about that, it's a $20 billion-plus expense to health systems. We can get patients out of the hospital early. And if you can give them those discharge protocols and become the standard of care, we're going to help a lot of people.

When you think about where we're going, we're going to have an autoinjector as we'll talk about an on-body infuser and an inhaled version. So [indiscernible] fluid overload is a major problem in this country. And in 60 years, we've not been able to solve it. MannKind is now working in that space. In diabetes, we've had a tremendous amount of innovation in the last 20 years. But despite all that technology, we still have more people to goal. And why is that? Because meal-time control is really hard. And there's not been any innovative breakthrough mealtime insulin in the last 20 years.

And Afrezza is the first time as we go into kids, we'll be able to start demonstrating how do you make this happen and bring it to life. So we're excited about that. And then you got the nintedanib DPI in the pipeline and our partnership with United Therapeutics. We have nothing but great opportunities as we look forward in every single domain of the company. If you just look at our exit run rate from last year, it puts us on track to $450 million plus this year in revenue. And we're really excited about the 2 launches coming up and all the stuff that's going to be happening. So I know a bunch of questions where we're going.

But since you touched on the $450 million exit run rate, I mean, that was the benefit with the scPharmaceuticals acquisition included in that December quarter. And I know you don't really give any formal or official guidance, but maybe you can set the stage for 2026, and then we'll sort of dive right into the products?

Yes. So I think as you look, we come into this year, we hopefully expect 2 FDA approvals, and we will be ready to launch those products and launch with excellence this year. We expect our Tyvaso -- I'm sorry, our nintedanib DPI, right, to get through Phase I and get into Phase II. And we expect to have significant revenue growth with our partner, United Therapeutics. So lots of opportunities, all growing, hopefully, large double digits as we continue to go out there.

Okay. Can we start with the United Therapeutics partnership? Is that a fair place? Let's talk about that because there's many moving pieces here with the minimum supply agreement with Tyvaso DPI and the royalty. And I know there's been a number of questions around that, but maybe you could frame that the discussion for us around that relationship.

Yes. I think we all had a little bit of a surprise a little over a week ago. And it was unfortunate, but we did have the opportunity to sit down with United Therapeutics this week and have a discussion around what is the future and how does it look like? And I think we're really happy to hear Tyvaso DPI is a critically important component to our future growth plans.

When you think about where we started with them 8 years ago, Tyvaso was a $450 million brand nebulizer. Today, it's over $500 million. So despite us moving and growing with United Therapeutics, 70% market share with Tyvaso DPI, that old brand still has $500 million. And so if you think about the future, Martine, she's doing, she's going to be expanding the treatment population. So the market is going to continue to grow. Tyvaso DPI will have a significant share and a much bigger pie. And so even though the softness may launch, when you think about what has happened, you treat more patients by default, 40% or 50% of $4 billion is still a big number. And so we're pretty excited with where UT is going and the opportunities there.

On the supply agreement, that's a good question. We signed the supply agreement believing we were the backup supplier to UT's primary. What we since have learned is that we will be the primary supplier, which means our minimum revenue and our minimum things we previously talked about will actually be probably quite higher in the next couple of years than we expected. So that's good work for us to do and keep us busy. But more importantly, it shows you the demand and the double-digit growth of Tyvaso DPI that they expect over the coming years. And so that's going to be.

And given the concerns and the volatility here, I think it's probably worth just spending a minute on the competitive landscape for this product. I guess, I mean, it sounds like you're somewhat more optimistic than maybe what the market might have been suggesting. So if you could just sort of talk about that. And then just sort of remind us the royalty structure around the agreement.

Yes. The competitive landscape, there's always going to be competition in any market, and I think there's always room for 2 players. I think UT has a good vision for how it looks short term and long term, and I think they're placing bets as evidenced by another partnership program that's not really too much clarity around the public, but they reinforce to us that, that partnership on this other compound we're working on is important. And that's a key component to their future growth and evolving in the competitive landscape that exists. So I think UT is always moving ahead. They're always thinking about different ways to bring more value to patients. And I think when you look out there, we're going to have a lot of innovation and a lot of indications and a lot of growth and MannKind will continue to be part of that journey with them, whether it's the existing Tyvaso or the other compound that we're working on.

And you touched on that minimum supply agreement just a minute ago, and that maybe there's a little bit more responsibility there for you in that role than you had originally thought and that is a good thing, right, because it's going to provide you with some incremental cash flow in the next couple of years that might fund other areas of your business. Maybe could you just elaborate on the runoff of that cash flow stream and how meaningful it can be for you and what you can do with that cash on the other side?

Yes. I think any upside to the current trend is all upside. So we've kind of built our 5-year plan. We had our own expectations way before UT had any announcements. And we don't control that partnership, right, in terms of revenue and discounts and what they do. And we get a 10% royalty. We booked 9%. We sold 1% of that. But I think in terms of the direction and the cash flows, how do we take that money, reinvest for faster growth, right? And that's one of the things we've been doing over the last 4 years since this product launched, and it's one of the things you'll continue to see. Any upside beyond our forecast will be great upside. But we are pretty much self-sustainable as you look beyond this year with the 2 launches and the cash flows coming in.

Okay. Can we talk about FUROSCIX and the acquisition of scPharmaceuticals and what sort of drew you to that asset? I mean, a while ago, we used to cover scPharmaceuticals. So I'm reasonably familiar with the company. And it seems like for those that are unfamiliar, it's -- you described the product to people, and you highlighted in your sort of initial comments that 1 in 5 hospitalizations is somewhat related to congestive heart failure, right? And so you can talk about the market opportunity and what sort of attracted you to the scPharmaceuticals acquisition?

Yes. If you go back to Q3 of 2025, Tyvaso royalties versus our diabetes portfolio was about 70% Tyvaso, 30% diabetes and take out the manufacturing because that line is going to be steady and it really doesn't -- whether it goes up or down, doesn't change our profitability that much. So when you just look at pure royalties versus pure revenue we control, we even look for an acquisition that would make a meaningful change in that trajectory because if every earnings call is 70%, there's not much excitement besides what UT says. So when you exit this year in Q4, we should be roughly 70-30, 70% MannKind revenue driven, 30% royalties.

And that was really one of the things we were looking for is how do we continue to diversify the company and make it less reliant on an opportunity like FUROSCIX that came along. So when we looked at sc, it wasn't just is it a product? Is it doing well? Is it revenue? It's what can we do to generate faster revenue growth. And that's really an opportunity we saw with scPharma was an undercapitalized company with a great product with great innovation and a great life cycle management. And this has been a smooth integration with a great team. And this opportunity is probably going to be bigger than any of us think. When you look back, peak revenue from the analyst was $500 million. And we believe that's a really good starting point, not a peak. And so we're really excited as we look at this year.

And I'm sorry, did you say an undercapitalized company? I mean, so when you look at sc, do you think that was one of the issues, right? I mean the fourth quarter was great. I think there was 90% growth on the product, but maybe was the exit or for the full year 2025, this product generated $70 million, and you're talking about peak sales in this product of $500 million. I just want to be clear.

That's what analysts had it at, but we think it's higher than that.

That's what -- who has it?

Analysts had it.

Analysts have it at. Okay. Excellent. All right. I know the company, I think, expanded the sales force, maybe double the size of the commercial reps that they had up to 160. They were seeking new indications on the product. Could you just sort of bring us up to speed maybe on their commercial efforts to sort of grow that product and what you think MannKind can sort of bring to the equation to maybe accelerate that process?

Yes. We've already started that journey. I think number one is just pure share of voice, right? They were trying to launch neph and launch cardio with the same sales force. We split that out. We have 150 reps dedicated to -- we have 80 to cardiology, 70 to nephrology. That's also the diabetes sales force. So those offices are often co-located near each other. And then we have a hospital team that also launched. And when you think about we have over 160 people dedicated to the field force share of voice of FUROSCIX 6. That's a significant jump over the last 2 years. And we believe there could be even more opportunity to increase that share of voice. So it's just -- there's such an untapped potential here. It's how fast can we go.

Back from my scPharmaceutical days, I sort of remember that one of the issues might have been the on-body infuser, they had to do education to all the people in the physician's office to get them to use -- to learn how to use the product and they have to teach their patients. And I know one of the catalysts for the company was the autoinjector that they were testing. And so could you bring us up to speed in terms of the product innovation there? Because it feels like that by dramatically increasing the terms of use of the product, that could really be a triggering event, right, to increase adoption at a much faster rate.

Yes. I think you're spot on, Glen. The On-body Infusor has been great. It's the first innovation in 60 years to do what it does, right? That's the starting point. The autoinjector, whether we like it or not, it's so easy to use. And people are going to perceive that -- if they perceive an On-body Infusor or nasals 4 to 8 times a day, they're going to perceive an autoinjector, so much easier to give, and they're used to giving autoinjectors in these diseases. So this is a real opportunity to simplify and grow faster.

So there's a way for patients to sort of buy the injector, have it at home. They have an event, right, they can just inject themselves with furosemide and hopefully avoid the hospital stay. Is that basically the thesis?

Yes. I mean prevention is one of the critical parts of CHF readmissions, right? And then to your point, some doctors have said, this is like an epinephrine pen. You need to have it if you have CHF.

And so it sounds like the product in your mind is sort of on its way. Things are trending in the right direction. Can you remind us any sort of milestone structures or anything related to the agreement that you had for the acquisition?

Yes. As every deal, there's a deal gap in value, and one of them was around the autoinjector and the value that could bring and the second one was around revenue expectations. I think we're happy to say on the revenue expectations, we communicated that we believe $110 million to $120 million, which was the CVR is achievable. And so that's really good to see a deal actually hit its expectations, and we'll do everything we can to meet those. But that CVR is $15 million that could be payable in 2027. Then the other CVR is around the autoinjector. And there's a lot of history of drug device combos not getting approved by the FDA on time. I would say sc has done everything in their power to make sure it does get approved on time. This is really good work. And so if that does get approved in July, they'll get a $45 million CVR and we'll be really happy to pay that because the cost savings on the COGS alone will pay for the CVR in one year. So we're pretty excited about that.

Okay. Exciting. All right. Can we shift gears and maybe talk about Afrezza? You exited the year at a very sort of strong rate, big growth in that fourth quarter. Can you sort of talk about your commercial efforts there and maybe what drove that elevated growth in the fourth quarter to help us assess the durability of that recent trend?

Yes. I mean Q4 is always a strong quarter. I think in general, Q3 probably missed a week and Q4 got a week. But I think Afrezza, we really made a lot of transitions in Q4 and Q1. And I think what you're going to see as we come into this year, we are making investments for growth. And so while Q4 was decent, I think really what we're trying to do is set up what does this year look like for Afrezza and FUROSCIX to deliver faster growth, and that required some sales force changes and honestly, a little bit of a deprioritization on adult and an increased focus on peds because we took some of that sales force capacity and put it on the nephrology side for FUROSCIX. And so that Afrezza team, we want to see that they can sell 2 different products and drive fast growth on both products. And I think we'll see as we come out of Q1, how those 2 things are coming together.

I think you also had your first shipment to Cipla in the quarter, right, which opens up your commercialization partner for India. Is that a fair assessment? And is that meaningful? Can that be a meaningful driver in 2026?

So I don't think Cipla in the short term is going to be a meaningful driver, meaning we did this deal a long time ago. At the time, our factory had no other things manufacturing. And so today, for us, we're trying to fill up manufacturing capacity. India has 80 million people living with diabetes. I will say the launch in India is off to a fast start. I'm heading over to Barcelona tomorrow for the ATTD conference and I actually have a bunch of local doctors from -- many who want to come meet with me and share their perspective. So there's a lot of excitement over there.

They've already placed their second order, so that's good. We'll get that out the door, hopefully, off to them soon. And there's a lot of excitement. Is it going to be a huge revenue driver? I hope it becomes one because there's a lot of people that need our help, and I think it can get there.

I mean in the past, it seemed like the company may have been more heavily focused on profitability, but now it seems like you're shifting more to a growth-oriented mindset. And could you maybe talk about some of that transition that's going on at the company? And I don't know if there's anything to sort of expand upon that or the way you think about things strategically today versus maybe 6 or 12 months ago?

Chris, I'll turn that to you.

I think our focus is we want to grow revenues, right? And so profitability is the end goal, of course, but growing revenues in the near term is what our main focus is. So the fact that we have 2 potential launches this year and the ability to invest in those fully is really where we need to focus. So that does have an impact on profitability in the short run. But we think as we get into next year, '27 and beyond, that will be reflected and rewarded to the bottom line.

And there are some recent changes with respect to the FDA guidelines around inhaled insulin. And I know you guys are seeking pediatric approval in late May. Do you want to talk about the timing of that? And do you feel confident in that approval?

I do feel confident in that approval. I mean it's FDA, so you never know. But I would say we had a pre-filing meeting with them. we've done everything they've asked. The data came out as expected. There's no surprises. We just got a label change with them in January. So everything we've done, their questions coming in are what we expected. There's not been any showstoppers and subanalysis that they're asking for. So we feel pretty good about that.

And to your point, a lot of the scientific data we generated on Afrezza now resulted in the guidelines putting us a standard of care equal to an AID system, which everyone perceives to be the best thing out there, which we think is really exciting, right? So between the data guidelines getting updated, our label update and hopefully, a peds update, that will be a trifecta that really sets us up for the second half. And the noise is building. We just had 8 posters accepted for ADA. So the data dissemination and the KOL support continues to be exciting around this product.

Okay. Maybe can we shift gears again and maybe talk about the pipeline with respect to 201 nintedanib. Can we dig into sort of your efforts there? Maybe give us an update on the process, talk to us about the path towards commercialization and frame the opportunity for people?

So I think when you look at IPF, right, these people are given a death sentence. They've got 2 options for a decade. They just got a third one and Tyvaso just released data that hopefully will be a fourth one. And so there's not a lot of options for these patients and the side effects are sometimes worse than the alternative, which is dying. And so it's a really sad disease. I watch my uncle suffer from this disease.

And really, what people are asking for is a more tolerable nintedanib. The product is well known. It's the gold standard. It does close to $4 billion a year in revenue. And we believe that the inhaled version will drive hopefully equal or better efficacy. And it turns out the customers I just talked to said, we take even less efficacy if the tolerability is better. So what we do know so far is the bleomycin data looks strong. Our animal dosing data hit our target dose. Our healthy volunteers took tolerated the product with no diarrhea. And now we're here in IPF patients right now this quarter and next quarter, Phase I U.S. that's enrolling nicely. We'll have that data here on tolerability, FVC, cough, all the things people want to ask about. We'll have that answer here in the second half. And next quarter, we're kicking off, we'll be dosing the first patient international.

So this program is really running really fast and most people don't pay attention right now. And so it's going to be an exciting journey. And we hopefully expect that the enrollment hits our expectations, we will be releasing data sometime second half next year, at least top line results.

The second half of next year?

2027.

2027. And that's a Phase Ib program?

Phase II.

Phase II in 2027. Got you. And the inhalation potentially compared to the oral, is there a difference in the delivery mechanism of those 2?

So the oral tablet, only 5% is bioavailable, 95% sits in your gut and causes severe diarrhea. So what we're trying to do is take that 5% and deliver directly to the lung because we believe targeting the lung will actually give you a better effect size if we can dose higher. Nintedanib has always been limited by dosing and toxicity. And so the question is, can we get higher lung concentrations or equal lung concentrations and what does that do? Does it help tolerability? Does it help patients stay on the drug?

And that's an answer that will be answered in the Phase II. But the first one is going to be can patients tolerate it? Is it safe? Can the coughs -- cough tolerable? In general, an IPF patient is going to cough several times a minute. When you're talking to them, that's what you hear. And so one more call from a DPI is not going to be a big deal, and we'll be able to hopefully show that in our Phase I data, which is going to be important, especially given all the noise we've heard about cough lately.

Okay. Chris, maybe a couple of financial questions as we only have a few minutes left. Can you walk us through some of those revenue streams in the next 3 to 5 years when you think about the commercial assets available today, some of the things in the pipeline, the approvals you're sort of waiting for. Could you paint us a little bit more of a longer-term road map and how we should think about the revenue streams of the company?

Yes. We don't give revenue guidance, but certainly to characterize it a bit, you think about assuming we get both of these approvals. So with Afrezza, the pediatric approval, with FUROSCIX, the autoinjector, I mean, we would expect solid double-digit growth for as far out as we can see. Both of these assets are very durable from an IP protection standpoint. Afrezza goes in the mid-2030s, but this would be a very challenging device and delivery system to replicate. If we think about FUROSCIX, the autoinjector has IP protection in the 2040. So that really is the basis of the revenue that we'll be focused on.

As we talked about earlier, our collaboration and services, which is really our manufacturing revenue, primarily to UT, that appears like it's going to be far more durable than was articulated a few days ago. And so right now, that's generating about $100 million a year, and I would expect that to be the case for the next few years as well. And then we'll have royalties that continue to flow through. So 10% on Tyvaso DPI and on the second program that we're doing with UT, if and when that was approved, we will earn 10% royalties on that as well.

Okay. Maybe could we just discuss the balance sheet for a little bit because there's $175 million on cash. And the company -- I mean, you talked about ultimately, the goal is to drive a profitable business. So you're sort of not profitable today. And how do you think about that transition and sort of with the cash available that you have, noting that you have manageable debt of converts on your balance sheet and stuff like that. Can you just put that all in perspective for us?

Yes. We paid off the convert last week. So that was a stub that was remaining of $35 million. So that was paid off at maturity last week. So what we have on our balance sheet is simply the term loan debt that goes out to the end of 2030. That was related to the sc acquisition. And as we've talked about, we really expect the sc, the FUROSCIX business to be able to provide for that debt service on its own beginning in 2026. So we're very excited about how we will exit the year. We did incur a net loss, as you said, in Q4. That's really directly attributable to closing the sc acquisition, certain costs related to that as well as starting to make the investments related to both of these launches in Q4. So a little bit of an investment year, but we think we're going to close out fourth quarter in really good shape and put us on a good path for '27 and beyond.

Michael, maybe in the interest of time, one last question for you. When you sort of package all this together, I mean, the company has expanded its sort of commercial footprint and in particularly, you have 2 potential approvals on 2 of your key products that could also be also very interesting. But there's also some of the elevated concerns around the durability of the royalty stream that we just sort of talked about. And so when you sort of mix all those things together, anything to talk to the investors about or what may not be fully appreciated in the valuation or maybe how people should think about those positives and negatives when bringing it back to the stock valuation?

Yes. I think when you look out over the next 5 years or so, MannKind will probably hit over $1 billion in revenue, right? We're sitting at $800 million market cap. There's a lot of opportunity to harmonize how you continue to grow, invest in that growth, pursue organic and inorganic growth. But if these FDA approvals come, we have really huge confidence that there's meaningful opportunity upside from where we are. So when you look at doing $450 million, $500 million this year, you start growing $100 million every year, that's meaningful growth. So we're excited. We don't think the Tyvaso royalty is going away tomorrow. Maybe it drifts off in 3 to 5 years a little bit, but it's not going to ever go away, and we'll be making that for a long time. So we're excited to help patients. We will get our share price back to where it belongs and demonstrate success with these launches.

Certainly seems like opportunity. So let me -- with that, maybe you kind of already did it, but I was going to flip it back to you to sort of give you the last word. And I don't know if there's anything we didn't discuss that you think was sort of worth touching on or any other message you want to deliver to the investors here today, and I'll give you the last word.

Just first, I want to make sure we spell MannKind right next time, but that's Mann -- and -- but no, all is great. Thank you for having us. MannKind is in a really good spot. We were profitable for a couple of years. This year, we're investing for growth. And when I look at the small biotech caps, how many of them are profitable, not a lot. And so we really want to make sure we're driving growth. That's what shareholders want. That's what patients want to see as more patients take on our products. Last year, we made over 30 million doses for patients. That's really important. It's really a high-quality product we make. And we have a lot of innovation ahead of us and a lot of success in front of us. So we are really excited to be here, and we'll keep executing like hell and making you guys proud.

Okay. Michael and Chris from MannKind, thank you very much. We really appreciate having you guys here today. Thanks so much.

Thank you.

Good morning, and welcome to the MannKind Corporation Fourth Quarter and Full Year 2025 Financial Results Earnings Call. As a reminder, this call is being recorded on February 26, 2026, and will be available for replay on the MannKind Corporation website shortly after this call and for approximately 90 days. This call will contain forward-looking statements. Such forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from these expectations. For further information on the company's risk factors, please see the Form 10-K for the annual period ended December 31, 2025, the earnings release, and the slides prepared for this presentation.

Joining us today from MannKind are Chief Executive Officer, Michael Castagna; and Chief Financial Officer, Chris Prentiss. I'd now like to turn the conference over to Mr. Castagna. Please go ahead, sir.

Thanks, operator, and good morning, everyone. Thank you for joining us for our Q4 and year-end 2025 earnings call. Here is today's agenda, and I'll start with some opening remarks. I want to start by taking a step back and putting our relationship with United Therapeutics into context. Tyvaso DPI has transformed both United Therapeutics and MannKind's future to fund our respective innovation and growth. Tyvaso was a $450 million brand when we entered the collaboration in 2018, and Tyvaso DPI quickly grew within 36 months of launch to a $1 billion franchise by delivering a highly impactful therapy that has helped thousands of patients. This success has funded our diversification, setting us up for 3 important milestones.

First, the opportunity to acquire and scale FUROSCIX and invest in inhaled bmetinide dry powder inhalation. Second, it funded our growth of Afrezza over the past 6 years as well as the investment in our pediatric indication. While simultaneously third, investing in our pipeline programs, such as MannKind 201, which has blockbuster potential. When we signed the UT agreement in Q3 of 2018, MannKind was generating approximately $3.8 million in quarterly revenue and had a market cap of roughly $300 million. Today, we are a very different company. Excluding Tyvaso DPI, we have a $200 million-plus annual run rate and a market cap of approximately $1 billion. Our long-range plan is not dependent on future growth from UT-related revenues. And yesterday's announcement from United Therapeutics does not change our strategic direction and long-term plan, as the next 36 months should deliver over $350 million in royalties that have no cost against them. And our long-term supply agreement has 6 years left with minimum orders that should deliver over $400 million in revenue.

Just as UT did not convert the entire market to Tyvaso DPI, alternative delivery formats will continue to coexist. We've seen this dynamic play out before. Despite being the most widely adopted soft mist inhaler, Spiriva Respimat never achieved more than 50% market share versus the DPI 8 years post launch. Clinical experience with Tyvaso DPI supports the durability. The [ BRE ] study enrolled over 50 PAH patients, and less than 4% of patients dropped out as the cough generally subsides with time, and we've seen that in our Afrezza studies as well. This has enabled Tyvaso DPI to become a $1 billion brand.

Competition in the PAH will continue to evolve, and it's reasonable to expect a company facing loss of IP on the nebulized product to pursue replacement options, with softness inhalers being a likely path. Now I want to step back even further and highlight our revenue trajectory over the past 5 years. We exited 2025 with nearly $350 million in total revenue, representing a compound annual growth rate of approximately 46%. That growth reflects exactly what we set out to accomplish, moving from a company largely dependent on a single revenue stream to a diversified commercial stage organization with 4 FDA-approved products. We remain grateful to United Therapeutics and fully expect Tyvaso DPI to continue benefiting patients for years to come. At the same time, we believe there will always be a meaningful market for dry powder inhalers even as delivery formats evolve.

We see a clear path to over $450 million revenue run rate in 2026 alone, and look forward to discussing our growth drivers the rest of today. As we turn our attention back to Q4, which was a transformative quarter for MannKind, we completed the acquisition of sCPharmaceuticals, which strengthens our cardiometabolic franchise with the incredible team from sC Pharma and FUROSCIX. We delivered record quarterly revenue of $112 million in Q4. And on the regulatory front, we have 2 important PDUFA dates coming up with the acceptances of our files. First, the Afrezza pediatric indication with a PDUFA date of May 29; and second, the Furoscix ReadyFlow Autoinjector with a PDUFA date of July 26. These milestones represent years of work and position us to potentially deliver meaningful growth in the years ahead.

Now I'm going to turn to FUROSCIX performance. FUROSCIX had an outstanding Q4 with net sales of $23.3 million, up 91% year-over-year. And for the full year 2025, FUROSCIX generated $70.4 million in net sales. What's impressive to me is that the team shipped nearly as many units in Q4 as they did in all of 2024. As you can see, FUROSCIX has grown consistently since launch with clear acceleration in 2025. Q1 is typically soft as deductibles reset and patients face higher out-of-pocket costs, particularly for Medicare. But momentum continues to build throughout the year. If you focus on the last 2 quarters, I'm very impressed that the team remained focused during the acquisition and integration and continue to deliver record growth with nephrology accounting for approximately 15% of our sales. We've experienced minimal turnover within the sales force. And as we get past Q1, we expect significant year-over-year growth in the quarters ahead.

Since we acquired sCPharma, we've taken a hard look where the opportunities are to accelerate growth. Let me walk you through 3 key areas.

Number one is hospital pull-through. We've deployed a key account manager team to deepen our IDN relationships and get FUROSCIX integrated into the hospital discharge protocols. This is critical because the post-discharge period is when readmission risk is the highest. Number two is our salesforce focus. We refocused the legacy sC team on cardiology and activate our endocrine team to cover nephrology. That gives us a sharper specialty focus and increased our sales rep footprint from approximately 80 to 160 reps, doubling our share of voice. Number three is our marketing investment. We've increased our marketing spend to prepare for the potential ReadyFlow Autoinjector launch and to build broader awareness of FUROSCIX to treat fluid overload from the convenience at home. We believe our investments in these strategic initiatives will support FUROSCIX's growth to achieve a CVR range of $110 million to $120 million in 2026.

Now let me talk about the Furoscix ReadyFlow Autoinjector. We have consistently heard from HCPs that an autoinjector could expand the FUROSCIX market given the ease of use and convenience of a once-daily injection. If approved, it would deliver an IV equivalent diuretic in under 10 seconds. Beyond the convenience of the patient, the ReadyFlow autoinjector has a potential to significantly reduce our COGS and free up cash to invest in the brand.

Now turning to our Afrezza performance for 2025. In Q4, Afrezza generated $22.3 million in net U.S. sales, up 22% year-over-year. For the full year, we had $74.6 million in global net sales, which included our first commercial shipment to Cipla, our commercialization partner for India. This shipment marks an important milestone as we look to expand Afrezza's growth internationally. Over the past couple of years, we've been very deliberate about managing Afrezza for profitability, but we're now in a growth mindset as we prepare for the potential pediatric launch and increase our commercial investments in 2026.

I want to highlight an important development for Afrezza. The new ADA guidelines that came out in December position inhaled insulin as an equivalent option to injectable insulins or automated delivery systems, which are considered the standard of care. For years, Afrezza has not been on an even playing field, but now guidelines recommend HCP should evaluate the need for a modification of administration at every visit for patients who are not at goal. That's a meaningful improvement based on the scientific data we've generated recently. We believe our shift to a growth mindset supported by investments in guidelines and a potential new indication will set up Afrezza's growth in the years ahead.

We are excited about the recent FDA approval of our label change, which clarifies the starting bolus dose when switching from MDI or insulin pumps. This graph from our dose trial shows that there was a 58% reduction in postprandial glucose excursions at 2 hours with the higher Afrezza dose compared to the original label. That's a meaningful improvement in post-mealtime glucose control, which is when the patients struggle most. We expect that this label update will help support health care providers by providing clearer starting dose guidance when transitioning patients to Afrezza and will support the pediatric launch, if approved.

Now I'm going to spend some time on the pediatric opportunity because I think it is one of the most underappreciated catalysts in our pipeline. If approved, Afrezza will be the first needle-free meal-time insulin option for pediatric patients in more than a century. We recently completed new market research, and I'd like to share what we're hearing from healthcare providers. The daily burden of diabetes management remains high for children and their families. Carb counting, rigid school schedules, and social dynamics create real friction with current mealtime options, especially for adolescents who are constantly snacking and are highly active and don't always want to be attached to things. In fact, our research shows that 93% of families request a change in the child's diabetes management. This tells us there's a significant dissatisfaction with current options and a real desire for innovation.

Afrezza has the potential to address these challenges by removing the need for mealtime injections, reducing reliance on carb counting, and offering greater flexibility around meals. For children and their families, that flexibility can reduce daily stress and improve the quality of life while giving providers a tool that better aligns with how kids and their families actually live. Four important data points stood out to us that signal a meaningful opportunity in pediatric diabetes. And please remember, this is an entire new segment that has never been marketed to or prescribed Afrezza historically. First, approximately 50% of HCPs cite eliminating mealtime injections as their primary driver of adoption. Second, 2 out of 3 pediatric endocrinologists indicate they'd be likely to prescribe Afrezza -- that's a strong signal of potential underlying demand. We're also encouraged by how early Afrezza could be used in the treatment journey. Nearly 1 in 4 HCPs indicate they would consider using Afrezza in newly diagnosed type 1 patients. This has helped support our decision to launch the inhale first pediatric study, which is now currently enrolling.

Finally, based on this research, we see share potential in the range of 23% to 37%. And importantly, every 10% share historically represented approximately $150 million in net revenue opportunity. When you put all 4 of these signals together, the opportunity in pediatric is both substantial and well supported.

I will now turn it over to Chris to review our fourth quarter and full-year financial results.

Thanks, Mike, and good morning, everyone. For a summary of our financials, please review our press release issued before this call and our Form 10-K, which is now on file with the SEC. Now let me walk through our Q4 2025 revenues by category based on total revenues of $112 million, up 46% from the prior year quarter. As our acquisition of sCPharmaceuticals closed on October 7, FUROSCIX is now included in our cardiometabolic revenues and contributed $23 million of product sales. We recorded sales of $23 million for Afrezza, an increase of 25% over the prior year quarter, which includes $600,000 of products sold to Cipla to support their initial launch of Afrezza in India. We are excited that the Cipla team is now able to bring a differentiated treatment option to people with diabetes in India and look forward to supporting their execution on the launch.

Lastly, V-Go was $4 million for the quarter, a slight decline from the prior year period and in line with expectations, as we are not actively promoting the product. Collaboration and services revenue increased 5% over the prior year quarter to $28 million. Within collaboration and services revenue, $26 million of revenue was UT-related. This was primarily for the production of Tyvaso DPI and the recognition of deferred revenue, as well as recognition of a portion of the upfront milestone we received related to the second investigational molecule as part of our collaboration with UT. Recently, we amended our supply agreement with UT to add minimum annual quantities and volume-based pricing. This provides us better predictability as we prepare our Danbury facility to scale our development programs over the next few years.

To give this context, our 2025 Tyvaso DPI manufacturing revenues were approximately $100 million. Based on our revised supply agreement, we expect the next 2 years to be generally in line with 2025 and for the balance of the committed contract terms through 2031 to provide a revenue floor of approximately $50 million per year.

Lastly, Q4 royalty revenue was $34 million, up 24% from the prior year period, which reflects continued strong performance of Tyvaso DPI in the market. I wanted to provide some color about the sensitivity of our financials to potential changes in Tyvaso DPI sales by UT. It's important to remember that our economics are driven by a royalty structure where we earn a net 9% following the royalty sale transaction we completed 2 years ago. What that means in practical terms is that even if United Therapeutics were to see variability or a decline in Tyvaso DPI sales, the impact to MannKind is significantly dampened relative to the products we commercialize ourselves. We're exposed to a fraction of the Tyvaso DPI top-line change. We expect Tyvaso DPI to continue to provide meaningful cash flows even in the event of evolving competitive dynamics in future years. So while we obviously care about the success of Tyvaso DPI, our overall business today is far less dependent on United Therapeutics than it has been historically.

For the full year 2025, total revenue was up 22% to $349 million, fueled by our 2 commercial growth drivers of Afrezza and FUROSCIX. Afrezza grew 16% over the prior year to $75 million. And now with the addition of FUROSCIX in Q4, we have added a high-growth revenue stream. As a brand, FUROSCIX grew 93% year-over-year based on total annual revenues. When we look out at our commercial product portfolio, it is now more diversified and represents a significant portion of our expected growth going forward.

Lastly, royalty revenue was up 25% year-over-year to $128 million, driven by the performance of Tyvaso DPI. On the expense side, R&D increased year-over-year as we progressed enrollment in our clinical programs and prepared to initiate clinical trials for our MannKind 201 program in IPF. SG&A increased primarily due to acquisition-related expenses and commercial investments ahead of the potential pediatric launch and the ReadyFlow Autoinjector launch.

For Q4 2025, we reported a GAAP net loss of $15.9 million and a non-GAAP adjusted net income of $1.5 million. For the full year 2025, we reported GAAP net income of $5.9 million and a non-GAAP adjusted net income of $59.5 million. The adjustments for the fourth quarter and the year were primarily related to professional services costs incurred as part of our acquisition of sCPharma, as well as amortization of intangible assets acquired, which is noncash and will continue to be amortized over the life of the FUROSCIX IP.

Lastly, I'd like to make a couple of comments about our outlook for 2026. United Therapeutics noted on their earnings call yesterday that they expect durable double-digit growth of Tyvaso DPI in 2026. This will directly correspond to the growth of our royalty revenue. As we compare the pre-acquisition expense run rate for Afrezza and FUROSCIX to our commercial spend expectations for 2026, we anticipate investing up to an additional $40 million to support these brands' potential launches. This is based on making the significant investments in resources we highlighted earlier on the call today, including key account managers, patient navigators, and expanded field force, as well as increasing marketing spend. We expect both of these brands to be important contributors to our future growth over the next several years. We will have the ability to modulate these investments and adjust timing during the year as we evaluate how our tactics are impacting performance.

Regarding research and development, our efforts will be focused on advancing our MannKind 201 program as well as progressing our other development and life cycle management programs. Additionally, manufacturing-related costs to get ReadyFlow Autoinjector available for distribution upon its potential approval will be recorded to R&D this year.

Before I turn it back to Mike, I want to mention that we'll be presenting virtually at the Oppenheimer Emerging Growth Conference later today. Next month, we will be attending the Leerink Partners and the Barclays Global Healthcare Conferences. We look forward to engaging with many of you at those meetings. With that, I will turn the call back over to Mike.

Thank you, Chris. Now let me bridge to the major catalysts driving this year. As we've discussed earlier, there are several exciting commercial catalysts between now and July for Afrezza FUROSCIX. We continue working on early programs like inhaledmetinide and other undisclosed programs. But today, I want to focus on our clinical stage program, MNKD-201, which has blockbuster potential. On the clinical side, we anticipate enrolling the first patient in our Nintedanib DPI global Phase II study next quarter. And the U.S. Phase Ib study in IPF is enrolling nicely with top-line data expected in the second half of 2026. IPF is a progressive and fatal disease with problematic therapies available today. Only a minority of patients with IPF are on approved therapy. And why is that? Because patients can't tolerate these drugs. So they stop taking them, or they never even start. This is a disease where we believe patients are desperate for better options, and we believe Nintedanib DPI can fill this unmet medical need by delivering Nintedanib deep into the lungs.

As we look at the competitive landscape, lung target delivery is emerging as a winning strategy in IPF. Systemic oral delivery has not translated into meaningful antifibrotic impact because it's difficult to achieve high lung exposure without compromising tolerability. Inhaled delivery changes this equation, and our Technosphere-based DPIs have demonstrated safety and tolerability in numerous patients with underlying lung disease. Nintedanib DPI pairs a proven molecule with direct lung targeting and gives us high confidence in its potential to reduce the GI-related adverse events seen with oral Nintedanib while maintaining or even enhancing efficacy. It also opens the door to combination use alongside current and future IPF therapies, which is increasingly how we see the market evolving. We believe Nintedanib will be the backbone of IPF therapy for years to come, and we look forward to hopefully bringing this opportunity to patients in the future.

Before we close, I want to highlight some upcoming scientific conferences next month. We'll be at the THT conference in Boston, and we're also excited about our participation in the ATTD conference in Barcelona. These are important forums for us to share our clinical data and engage with the medical community as we prepare for upcoming potential launches later this year. As we look ahead, our key pillars are clear. Afrezza is at an inflection point and positioned for growth with the potential for the 2026 pediatric approval. FUROSCIX is a high-growth revenue stream addressing a significant unmet need in heart failure and chronic kidney disease. And if the ready auto-injector is approved, it would expand the market opportunity and improve the cost structure. Tyvaso DPI remains the backbone of PH and PH-ILD; we expect a solid 2026 performance. And Nintedanib DPI is progressing into Phase II in IPF, and we believe this program has blockbuster potential to improve treatment options for a disease with [Technical Difficulty]. We completed the revenue, advanced our pipeline, and built the commercial infrastructure needed to support multiple product launches in 2026.

I want to thank you for everyone's attention today, and I'll now open up for Q&A.

[Operator Instructions] [Technical Difficulty]

-- Risk here is, how are you thinking about that $350 million number over the next 36 months? And Chris, I know you mentioned a minimum floor of $50 million through 2031. So is that the annual minimum supply agreement that UT is contractually obligated to?

Sorry about that. But maybe just to kick it off about the minimum supply agreement. So this is a schedule that was just attached to our 10-K that was issued this morning. It is redacted, so you can't see the quantities or dollar amounts, but it is a volume-based agreement. And so we were just trying to put that in dollar terms. So if you think about 2025, it was approximately $100 million. That will be in line for the next 2 years. And then after that, when we get to minimum quantities, you're looking at about half that amount, so approximately $50 million for the out years.

And those are minimum, Olivia. And I think on the royalty, I think you heard yesterday, UT talk about the robustness and double-digit growth of Tyvaso DPI. So if you were to just take a conservative approach and look at that number for this year, and bridge next year, which we don't expect any major competition. I think you get 2 years there, and you at least get to the third year and get a decent number as well. So we wanted to get some context around what this means and how much cash flow it still is going to bring in, not just in the near term, but the longer term, and that it's our job to deploy that capital in an appropriate way.

And then on MNKD-201, how big of a strategic priority is that program at this point? And when will we actually see those Phase Ib data? I know it's later this year, but maybe beyond the timelines, like what will we actually see from that data set that could help drive confidence in the profile of a DPI and IPF patients?

Yes. I think a couple of things. Number one, from a priority 201 is critical in terms of we are spending a lot of energy and money and people on this one. And so it is a big priority focus from that perspective. The team is actively kicking off and enrolling a Phase I trial here in the U.S. and activating a Phase II trial globally as we speak. And so that's a tremendous amount of resources being put against it to go as quickly as humanly possible. In terms of enrollment in the Phase I, it's a 2-part study, and it's 12 patients in each part. And we already have, I think, 4 enrolled in the first part and 10 in screening. So we hope to wrap up Part 1, hopefully in the next month. And then there'll be a second part, which is the next dosing after you complete the first part, and that will hopefully be in Q2. So how fast that goes is why I put it in the second half. to give the team time to analyze the data.

What we're really going to get out of that study is hopefully tolerability, followed by looking at the FEV1, any changes there. It's a 7-day study. We don't expect much. But the tolerability, the cough, and all that is what we are most focused on here for IPF patients. The same dose in office will be given in the Phase II study. So we'll collect that same data in the Phase II. But this is really to satisfy the FDA request from our meeting last year, so that we can hopefully, maybe even think about moving the Phase II to the U.S. Right now, the Phase II is completely ex U.S. But once this is done, we submitted this protocol to the FDA. We're waiting feedback for the Phase II that maybe we can do this if they agree to some of the parameters. They may not, but we don't control that, but we tried to make it so that everything the FDA was looking for, we at least have in the Phase II as much as we are having that Phase I.

And so that data should come out earlier in the first half of -- earlier in the second half, I'll say, of this year. Then the second part of your question was really around conviction. And the Phase II is really meant to show some initial impact on FEV1. And when you look at whether it's Nintedanib or Tyvaso TETON 2, you start to see those curves separate after 6 to 12 weeks. And so we think in TETON 2, when we get those results -- sorry, INHALE-2, when we get those results, you'll start to see that separation. It's not being powered for statistical significance because we'll do that in the Phase III, but at least shows us that there's some conviction that this has blockbuster potential in IPF, as Nintedanib today is the backbone, and we see that continue to be the backbone of treatment.

Our next question comes from Roanna Ruiz with Leerink Partners.

So another question about the UT supply contracts for DPI. I just wanted to check, could they be updated again in future years depending on DPI's ramp? And then as a positive counterbalance to that, I also wanted to ask what tailwinds could be driving future revenue growth, both from Afrezza and FUROSCIX this year and into later years, especially how you're thinking about the new guideline updates and the auto-injector launch for FUROSCIX.

Yes. I think on the supply agreement, for us, it was important -- we never had minimums because we -- if you recall, maybe if I don't recall, Louis, you weren't there in the beginning of the launch, but the launch took off a lot faster, which put a lot of capacity constraints on us in the beginning. And so we had to build that up pretty quickly, and we weren't in a position on either side to predict the outer years. And I think as this became mature and we saw the uptake and we saw the additional work that was happening, we needed to put some minimums in there so that we could operate Danbury for the long run, not just the short run, as we were in pretty much manufacturing hell for a couple of years when I look back. And so that agreement is there. I wouldn't say anything can be modified if you have mutual parties agree to that. But we do think there's a minimum production, and any brand you look at in the long term is always going to have some supply coming, and we believe that we'll be the sole supplier there for Tyvaso for a while.

On Afrezza and FUROSCIX, I think what you've seen really over the last 2, 3 years for Afrezza, we were reducing expenses and running it for profitability. So it wasn't being run for growth. And I think that's an important context for everybody is people say, why didn't Afrezza grow faster. And the reality is until we had peds safety and efficacy, it wasn't going to be something we can invest in because we always believed peds was the inflection point for the brand. We tried various things over the years in the adult segment. And then with the advent of GLPs taking off, we felt our [indiscernible] type 2s and our [indiscernible] insulin needs wasn't the best productive use. But we did want to maintain and grow it a little, but we didn't feel the productivity would be there from an increased investment relative to other shots on goal we had. And so from that perspective, that's where Afrezza was being managed.

We last year brought in a whole new team, we got the data readout. We met with the FDA. Our conviction around peds grew tremendously. And that's to us the focus of the future. And our President, Nick, has done a good job building up the team, getting the infrastructure ready. We got a series of ad boards to confirm some of the research and really get this ready for launch, including the kickoff of the INHALE first. So I'd say you're going to see that investment go up as we progress through the second half. But I would expect that approval in May, if all goes well with FDA, that you'll start to see some additional growth on Afrezza as we get to Q3 and Q4 and exit the year.

On FUROSCIX, the auto-injector is something, obviously, we put a lot of value on the deal. And so we felt the underlying growth trends on the on-body fusion were great. But when we talk to physicians, and you think about the patient experience and the caregiver experience, having an auto-injector just makes it so much easier, just from a mental burden, let alone a training for the patient or the caregiver. And so we feel that that will be a meaningful transformation that, again, is coming up in the next 5 months here in July, so 4 months from now. We should be hopefully getting ready for launch and hearing from FDA with label discussions. So both of those are on track. We've heard or seen nothing from the FDA other than we've got some IRs, obviously, but nothing has showstop at this point. So we feel pretty good about these assets, hopefully hitting their PDUFA dates.

Our next question comes from Gregory Renza with Truist Securities.

It's Anish on for Greg. First, just for Chris. How should we be thinking about the evolution of gross margins and operating margins over 2026 as you take the reins with FUROSCIX and have Afrezza potentially going to this year? And second, for Mike, maybe if you could just give us more color and remind us on how MannKind leverages FDKP to enhance the delivery, efficacy, and tolerability of dry powders and how doc and patient fees have evolved over the years in PAH and PH-ILD, and how this might translate to IPF?

Thanks, Anish. To talk about gross margin dynamics. So the on-body infuser has a slightly lower gross margin than Afrezza historically has. So you could say before the auto-injector is approved and launched, there'll be a slight decline in gross margin. That will then improve significantly as the auto-injector is launched later this year. So I think you'll see a little bit of a hit in '26 and then a significant improvement in '27 and beyond. And maybe the other thing to note is just as a ramification of the purchase accounting, we now have this intangible asset, which is the on-body infuser, and when approved, the autoinjector that those are intangible assets that are amortized. You see that's $4 million in Q4. That will obviously play out over the year. That is technically part of COGS. And so if you look at our COGS and our margin disclosures in the 10-K, you'll see a more significant impact to margin. Those are -- that's a noncash item, but that will be included in margin going forward.

And then your question on FTKP, if I heard it correctly, is just how is that critical? Why is that important? And FTKP is really what founded the formulation behind Afrezza and the scalability in the company and the moat that we have around our technology. It really is used to deliver drug deep into the lungs by either protecting the molecule, make sure it gets there, and making sure the molecule can fly there. As you may or may not know, many dry powders and nebulizers have wide variability in their delivery. And so it's not just the FTKP and the powder, it's also the device platform we have. And those 2 things go hand-in-hand to deliver deep lung penetration and consistent lung penetration. And we see that in Afrezza and the 3D imaging studies we did that's important. And so we believe, as you look at the various molecules we've already worked on and got approved as well as what's in the pipeline, 80% to 99% of that powder is FTP. So it's a critical ingredient in everything that we do and the formulations that we make. And you continue to see that help, whether it's in the fmetinide work that we're doing, the IPF-201 and Nintedanib as well as Afrezza and that FOI treprostinil.

So we think it's important. We think it helps shape the particle size, and there is a barrier to access this molecule. And we think there's more innovation as we look out that we can start to think about with FTKP and continuing to take that to the next level as well.

Our last question comes from Brandon Folkes with H.C. Wainwright.

Maybe just 2 from me. Firstly, on the Afrezza pediatric opportunity, can you just talk about the market research you did? What did this sort of return and where the opportunity lies initially, versus new patient starts versus switch patients? And then should we think about any bolus of switch patients upfront, looking to go needle-free or pump-free? And then maybe secondly, for me, just a quick one. Coming back to UT, which is taking a different approach. In your press release, you continue to include the second molecule, 1505, that collaboration. So is there anything molecule-specific on 1501 that give you confidence that they would move forward on a dry powder on that molecule?

Yes. I think on the Afrezza peds market research, this is a new research that just came in over the last few weeks. And I think we were looking to update the research we did previously that gave us some conviction. So we feel that that was important to share. This is recent data. And it was really done amongst a group of physicians in a quantitative way that wasn't in an interactive or, I'll say, trying to sell them was just displaying what the data says and the product profile. So we were encouraged to see those results because that's before medical education or rep detail, et cetera. And so I think it just shows you that there's a large opportunity.

The one that did surprise us is the percent of naive patients that may potentially come in into the product as it wasn't in our original framework. And I think as we were looking to do inhale first, it just reconvinced us that, that was the right study to do and scale. And that study is enrolling nicely, and we're just kicking off the first 10 patients, and then we'll evaluate that and then open up for the other 90 -- so that study is well on its way, and I think it will be an important study to just understand the dynamics in endo practice and children's hospitals around how do they create teaching protocols, how do they -- they have to change for onboarding patients, how do they train patients on basal versus meal-time control, when do they give doses, school nurses program. So there's a lot in that trial that actually we're learning from daily that I think will apply to the launch. And so that's really good there.

And then -- but is there going to be a bolus of switch patients? I think the answer is the majority of the patients in the initial launch will come from switching. And over time, as people get experience, I think will come from naive. But I don't expect -- we're not turning on a large DTC campaign day 1 of launch. So we shouldn't expect this really fast patient influx because all the consumer advertising we're doing. I think we're taking a methodical approach getting the key account team across the 50 to 70 centers out there we're targeting. which will treat the majority of the kids, and then we have the community sales force targeting the rest. So we feel pretty good about the strategy that we want to walk before we run and spend a ton of money. But then we have this opportunity and upside. And when we get the consumer research that's just coming back, we'll look and see how fast that activation should start and when should that start because we do believe there's a consumer component here, obviously, with families and kids there.

On the UT second molecule, look, we -- the teams are working very well together day-to-day on that program. And so it's progressing nicely. What UT decides with the way the agreement is structured is we're just getting the first part done, and that should be wrapping up shortly. So we hope that then moves forward. We think it will help a lot of patients, and it could be a blockbuster potential, but that's going to be in UT's direction.

I see no other questions here in the queue. So I want to thank our employees for their dedication and hard work. I want to thank the patients and families who are participating and continue to participate in our trials and use our products every day. Everything we focus on is about helping people live life more human. We remain committed to our mission, and we look forward to moving our company forward in 2026. Thank you.

Good morning, and welcome to MannKind Corporation's investor call to discuss a clinical trial update. As a reminder, this call is being recorded on November 10, 2025, and will be available for playback on the MannKind Corporation website shortly after the conclusion of this call and will be available for approximately 90 days.

During the course of this call, management may make certain forward-looking statements, including regarding MannKind's product candidates that are not historical facts. These forward-looking statements reflect MannKind's current perspective on existing trends and information. Any such forward-looking statements do not guarantee future performance and involve risks and uncertainties, including those noted in the Risk Factors section of MannKind's latest SEC filings.

Actual results may differ materially from those projected in these forward-looking statements. For factors which would cause actual results to differ from expectations, please refer to MannKind's most recent press release and current filings with the SEC. This conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, November 10, 2025. MannKind undertakes no obligation to revise or update any statements to reflect events or circumstances after the date of this call.

Joining us today from MannKind is Chief Executive Officer, Michael Castagna. I'd now like to turn the call over to Mr. Castagna. Please go ahead, sir.

Good morning, everyone, and thank you for joining us on short notice. Today, I want to address our recent decision to discontinue the ICoN-1 Phase III clinical trial evaluating nebulized clofazimine inhalation suspension, also known as MannKind 101 for the treatment of refractory nontuberculosis mycobacterium, also known as NTM lung disease.

Let me begin by providing some history and background on the MannKind 101 program. Back in 2020, we acquired QrumPharma, the company that originally developed the nebulized formulation of clofazimine with a long-term plan to get to a dry powder formulation. This program had approximately 5 years of preclinical work prior to our acquisition that demonstrated the in vitro activity of this molecule in NTM and tuberculosis. Over the past 10 years, our collective teams have dedicated extraordinary human capital. Scientists, clinicians, regulatory experts and manufacturing operational staff have been working tirelessly to advance both the nebulized and DPI formulations. Their commitment reflects MannKind's broader mission to transform chronic disease through innovative patient-centric solutions.

As part of our routine study monitoring, we assess sputum culture conversions in the first 46 participants who completed the double-blinded treatment phase. Unfortunately, none of these participants showed evidence of sputum culture conversion, which I'll remind you was 3 consecutive sputum cultures in 3 consecutive months. Following an ad hoc meeting held on November 8, 2025, the Independent Data Safety Monitoring Board reviewed the data and agreed with the decision to discontinue the trial due to futility. Importantly, the DSMB did not identify any safety concerns at any point during the study. I want to be clear, we remain confident in the underlying science. Clofazimine is a molecule with well-established activity against NTM. The lack of efficacy observed in this trial is likely related to the nebulized formulation, not the molecule itself. This distinction is critical.

Our development work and the broader scientific literature supports clofazimine's potential as an NTM lung treatment. Looking ahead, we are actively investigating the reasons for this unexpected outcome. Our next steps include a thorough analysis of the data to understand what potentially may have contributed to this outcome. One key area of focus will be the suspension formulation, which requires handling instructions and product preparation prior to nebulization and which potentially played a significant role in these results.

Our internal team and external advisers will evaluate all available data, including our understanding of how the plasma PK compares to our Phase I results as well as the patient reported outcomes, which are still blinded.

We will need to apply these learnings to the ongoing development of our MannKind 102 dry powder formulation of clofazimine. MannKind 102 is currently advancing from preclinical development towards Phase I, and we remain hopeful about its potential to help patients with NTM lung disease. We still have many unanswered questions, and this is definitely a setback for anyone in the NTM community. However, the safety profile of 101 as well as our greater confidence that delivered dose will be accurate with 102 are encouraging factors as we seek to help patients who are suffering from NTM.

I want to extend my deepest gratitude to all the stakeholders, the key study participants, clinical investigators, study site staff and everyone at MannKind who's contributed to this journey. Your dedication and resilience are the foundation of our progress. We also thank our investors and partners for their continued support and belief in our mission. We will keep you updated as we analyze the data and potentially move forward with MannKind 102. Our commitment to developing new therapies for people suffering from NTM and other serious lung disease remains unwavering. We are fortunately a diversified company with multiple revenue streams as well as pipeline opportunities. We look forward to working with all of you in the future.

And at this point, thank you, operator. We'll now take questions.

[Operator Instructions] our first question comes from Olivia Brayer from Cantor.

You're flagging your DPI candidate. Is there anything that you've seen so far in that candidate's preclinical characterization that would maybe lead you to believe that it would have a higher chance of achieving bactericidal effect in vivo than the nebulized formulation? And then can you tell us anything about how symptom scores or imaging endpoints were trending? Curious if there were any partial conversions or bacterial load reductions or even symptom trends that were observed here?

Yes. Thanks, Olivia. I think the thing -- the first thing we're really looking at is the delivered dose. And I think that's where our focus is going to be in terms of why we have a little more confidence in DPI over the nebulizer. We know we have pretty good consistency in predicting dry powder formulation delivered doses that don't require as much patient intervention, I'll say. The other part, we did see partial conversions. No one got 3 consecutive in a row. That's what was unfortunate. We are still looking at the PRO data, so that will give us some other indicators, maybe cavity size or duration of disease or experience in disease may have contributed in PROs. We did not see anything obvious in the sputum conversions around those things. It didn't seem to matter when no one converts any of those factors.

And the other part is the target dose. We have a lot more ability to load the powder on the platform that we've established so far. So we feel pretty good about should we dose it every day, I'll say, for duration of treatment as opposed to 28 days on and 2 months off. We did not see any correlation when someone had a sputum conversion for those that had 1 or 2 in terms of what is the first month, second month, third month, it didn't appear related to duration of treatment. So we think more consistent delivery will establish better MICs, hopefully, with a better delivered dose.

Our next question comes from Ben Burnett from Wells Fargo.

I just wanted to drill into your hypothesis as to why this might be solvable with formulation in delivery versus kind of the mechanism itself.

I think we'll be trying to figure out what we can do again in vitro because all of our animal studies would correlate to what we were looking for and all the in vitro work. So the only thing you really look at is the liver dose and did you get what you expected. And we had some recent data come in as we looked at how you prepared the vial, how you shook it, how long you shook it for. And it would appear that, that could dramatically change the dose dumped into the nebulizer that's then administered to the patient. And so our biggest fear is that people just didn't follow the proper instructions, maybe they didn't shake it for 15 seconds, maybe they nebulize for 18 minutes. Those were 2 critical steps in the process. We reinforced that through training videos, site administrations, site trainings. But when you have this much of a catastrophic failure, I think you have to really say what's the fundamental commonality amongst all participants, and that is the nebulizer.

And so what is the difference there versus DPI. It's that we can predict much better a DPI delivered dose that requires less human intervention, meaning less depending on how much they inhale or how long they inhale. So that's the key factor here. And we could see a 90% delta between a person who didn't shake the vial at all versus those that did it properly. So I mean it does play a significant role. So hence, why that's our focus.

Okay. That's really helpful. That kind of gets the follow-up question that I had to, which is, as you digest the data, do you plan on making any changes to the DPI clinical program?

It's too early to tell. Obviously, this is coming at us quick. I think from just a formulation development, I talked with our team over the weekend, we feel pretty good that we have multiple formulations with multiple doses delivered. So I think it's a question of how high -- we have pretty good safety margins on this product. And so how high would we go in the average daily dose over the 6 months of treatment, I think is probably our biggest question and how do we correlate that to any data that we can see before we go too far. So I think that will be critical.

Our next question comes from Faisal Khurshid from Leerink.

Michael, can you just go into a little bit more detail on what the next steps are for the DPI formulation of Clofazimine?

Sorry, your question is what are the next steps for the DPI formulation?

Yes. Like what should we expect to hear next on that, like preclinical data or like kind of timing to IND, things like that?

Yes. The team is meeting this week. They'll be here in California. So we'll pretty much be focused on how quickly can we get a GMP batch ready for Phase I. And then in parallel, we'll meet with the FDA to talk about these findings as well as our expectations for next steps. But all the, I'll say, preclinical work, all the animal studies, all the target dose studies, product powder load, all that's done. So it's really just now making the GMP batch in Danbury and getting ready for the Phase I trial. And we'll hopefully be able to provide some updates realistically Q2 by the time who knows with the FDA opening back up and get a meeting schedule, but that will probably take us in the first quarter to get the protocol submitted and get their feedback.

Our next question comes from Brandon Folkes from H.C.W.

Caring what you said about sort of the nebulizer and the dose preparation, do you expect to take a more holistic view and maybe a step back and look at some of your PK modeling assumptions around 201, just given what you've seen here? Just any color in terms of how you are sort of addressing this sort of some of the assumptions maybe around PK modeling that you use across the board and just sort of how you view 201 and any learnings here?

Yes. I think that's a great question, Brandon. And we'll definitely be looking at the PK modeling and any differences we may have seen in the human from animals and how those correlate with the various things we're looking at. I think in particular, is there any PRO direction because that's an important endpoint for the trial. So is there anything we can do to understand PROs, maybe patients are feeling better and some of the sputums or maybe the fibro cavity disease severity maybe playing a factor here. I mean, I can tell you talking to some of the investigators that their belief that some of these refractory patients today versus 10 years ago are just not going to respond to anything. And I think that's something we have to assess as we go forward into our next phase and will we just go earlier treatment versus later treatment. So for that part.

In terms of impact on 201, we are going to disclose that we're conducting a Ib trial, and that will be in IPF patients here in Q1 and should be wrapped up early in 2026. And the reason we're doing that trial is to have a stepping stone here to a larger trial for the U.S. FDA. That will give us some confidence on tolerability of the dry powder because that's probably the only thing that's really of concern. I think when you look at the dose calculations and dose delivered in IPF, we feel very confident, I'll say, in that part. But the question is that dose delivered have an effect size. And I think there's very little you can do to predict that in terms of dose concentration. We'll continue to measure plasma levels there and see what that looks like. But I think the key thing on 102 is getting the interim Ib study done as well in parallel to the Phase II trial, which will be ex U.S.

So these 2 things combined will give us some more confidence on the tolerability of 201. But I'm not sure you're going to get any more than we got in the preclinical data, which included a bleomycin study in our inhaled version versus oral. And that data will be published some of the -- how we got to the dose calculations on 201 will be published this year as well. Maybe next year, sorry, I forgot we are at the end of the year already. Does that help, Brandon?

That concludes the question-and-answer portion of today's call. I'll now hand the call back over to the MannKind team for closing remarks.

I just want to say thank you to everyone. This is obviously an unexpected result. The team, the DSMB have been nothing but collaborative. We're looking forward to wrapping up any insights we gather from the 101 program and applying them to the 102 program. Unfortunately, we have the same development. So there obviously is a setback to the time lines, but there's nothing imminent from a competitive viewpoint that's going to compete in trials, but we'll continue to watch the competitive landscape as well as do our best to predict what 102 could do if we move forward.

So thank you for all your time this morning. Sorry for the late notice on the call, but we look forward to answering any other questions people have.

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" Cantor Fitzgerald & Co., Research Division

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" Oppenheimer & Co. Inc., Research Division

" Wedbush Securities Inc., Research Division

" H.C. Wainwright & Co, LLC, Research Division

" Mizuho Securities USA LLC, Research Division

Good morning, and welcome to the MannKind Corporation Third Quarter 2025 Financial Results Earnings Call. As a reminder, this call is being recorded on November 5, 2025, and will be available for playback on the MannKind Corporation website shortly after the conclusion of this call and available for approximately 90 days.

This call will contain forward-looking statements. Such forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from these expectations. For further information on the company's risk factors, please see the Form 10-Q for the quarterly period ended September 30, 2025, the earnings release and the slides prepared for this presentation.

Joining us today from MannKind are Chief Executive Officer, Michael Castagna; and Chief Financial Officer, Chris Prentiss.

I'd now like to turn the conference over to Mr. Castagna. Please go ahead, sir.

Good morning, and thank you for joining our Q3 2025 earnings call. Let me start with the Q3 highlights. We delivered a record revenue quarter of $82 million. We also strengthened our portfolio with the acquisition of scPharmaceuticals. On the pipeline side, Afrezza supplemental BLA was accepted for review with a PDUFA date of Q2 2026. We also saw strong performance from Tyvaso DPI, which contributed $59 million in royalty and manufacturing-led revenue, reinforcing the durability of our revenue streams. Chris will review the details of our third-quarter results shortly.

We're excited to have completed the acquisition of scPharmaceuticals and are pleased to welcome their talented team to MannKind. Together, we're focused on unlocking the full potential of FUROSCIX as well as the advancement of inhaled bumetanid, Aka MNKD-701 for fluid overload in CKD and heart failure as our target indications. We are encouraged by the momentum across our clinical development programs that we've been working on the past 5-plus years in terms of MNKD-101 and 201, which I'll discuss at the end of our call.

Now let me bridge to our near-term growth catalysts. Building on the hard work and dedication of the entire MannKind team, we have a unique near-term opportunity to accelerate growth and deliver meaningful value through catalysts across our commercial products and pipeline programs. I'll point to a few of these milestones. The sNDA for FUROSCIX auto-injector was submitted to the FDA in Q3 as planned, with an expected PDUFA date of Q3 '26. The Afrezza sBLA was accepted for review, and if approved, will be the first new insulin for pediatric patients in 100-plus years of diabetes therapy. We've also completed enrollment into our midterm target for ICoN-1- NTM Phase III ahead of schedule, allowing us to confirm the sizing of the trial mid next year.

Now I want to bridge over to our commercial highlights, starting with Tyvaso DPI and our collaboration with United Therapeutics. In Q3, we recorded our highest revenue quarter for Tyvaso DPI, earning $33 million in royalties and $26 million in manufacturing-related revenue. As UT noted on its call, we have developed and produced an 80-microgram cartridge, which allows patients to take 15 nebulizer equivalent breaths in a single dose, improving convenience for patients. Following UT's positive TETON 2 data, we anticipate that the company will pursue a DPI bridging study in IPF, which would have the potential to expand the Tyvaso DPI label to include IPF and/or PPF contingent upon FDA approval.

Additionally, UT recently exercised their option to expand our collaboration, and we've begun formulating a second investigational molecule as a dry powder platform using MannKind's proprietary Technosphere technology. In Q3, Afrezza grew 31% in new prescriptions and 27% in total prescriptions year-over-year. As we shifted our focus to type 1 diabetes in preparation for pediatrics, our units per script have declined by about 15% year-over-year, as the average person with type 1 diabetes requires less insulin than the average type 2. The impact you can start to see it reflected in the difference between our net revenue growth being lower than our TRx growth.

On the revenue side, Afrezza grew 23% in Q3 2025 compared to Q3 2024. We're focused on driving prescribing among top prescribers and continue to see strong engagement from health care providers, especially with the potential to expand into pediatrics if approved. Ahead of that opportunity, we've enhanced our messaging and expanded our field force, which includes medical science liaisons, local field salespeople, as well as key account managers who will be focused on the top 50 pediatric centers.

I'll now turn to FUROSCIX, a product we're very excited about.

FUROSCIX is a high-potential brand that expands our footprint into cardiorenal medicine, and we now have the opportunity to merge scPharma's experienced team with the MannKind team. This addition enhances our commercial scale, accelerates growth, and aligns with our strategy to expand into adjacent therapeutic areas while delivering innovative patient-focused solutions. Fluid overload remains a significant burden, and FUROSCIX addresses a critical gap in care by helping break the cycle of hospital admissions and readmissions.

scPharma invested heavily in building a high-performing sales organization, expanding from about 40 representatives to more than 80 by early 2025. Establishing a sales force is a substantial undertaking that requires a significant financial and operational commitment. That investment laid the foundation for the strong adoption we've seen in 2025. The expanded sales team, combined with more focused territories and stronger engagement with healthcare providers, is driving broader coverage and deeper prescriber interactions. These strong results are reflected in Q3 performance with over 27,000 doses dispensed, up 153% from the same quarter last year, reflecting continued prescribing adoption and growing confidence in FUROSCIX.

With the demand continuing to rise, let's turn to the financial impact.

For the year-to-date period, FUROSCIX revenue reached $47.1 million, a 95% increase over the same period in 2024, indicating the investment in driving share of voice is accelerating product adoption. For the third quarter of 2025, unaudited FUROSCIX revenue was $19.3 million. FUROSCIX revenues will be included in MannKind's financial results commencing with the close of the acquisition, i.e., Q4.

Now I want to focus on a large unmet medical need in heart failure and CKD, which is what we saw as we evaluated the scPharmaceutical acquisition. To put the growth we're seeing in perspective, let's look at the size of opportunity in heart failure and CKD, areas with significant unmet need. Heart failure is a large unmet need, and market research shows 80% of heart failure costs are tied directly to hospitalization. There are 2.1 million addressable heart failure episodes in the U.S., mostly driven by congestion from worsening heart failure. And for patients 65 and older, heart failure is one of the top reasons for hospital admission. This represents a large addressable market and a significant portion of the Medicare Part A and Part B spend.

This is where FUROSCIX makes a difference. Its key feature is to allow patients to treat edema at home and reduce hospital admission time and/or readmissions.

Now I'd like to talk about the FUROSCIX opportunity for intervention. scPharma achieved success in FUROSCIX by focusing on community physicians who treat CKD and heart failure often before a patient shows up to the ER, which is on the left side of the slide. By intervening early, physicians have the potential to reduce hospitalizations and break the cycle of hospital readmissions. As we look post integration, we're now expanding our focus to the post-discharge period, where readmissions risk is the highest, creating a significant opportunity for FUROSCIX to improve outcomes and reduce costs. This approach aligns with CMS's proposed ambulatory specialty model for heart failure care, which begins in January 2027 and introduces mandatory 2-sided risk for cardiologists in select regions with performance tied to quality, cost, and care coordination.

These changes underscore the importance of early intervention and strengthen FUROSCIX's role as a key enabler for providers to meet quality and cost targets under CMS's new risk-based payment model.

Beyond revenue growth, we remain focused on innovation to enhance patient experience and drive long-term value. Building on FUROSCIX's momentum, we will expand our hospital strategy by adding key account managers critical to helping ensure discharge protocols will include FUROSCIX and enable local access with the major health systems through meds to bed programs. This positions FUROSCIX for far greater utilization in hospitals and post-discharge settings. We're also planning to increase our share of voice in cardiology and nephrology to raise awareness amongst clinicians and patients, supporting sustained adoption in the community prescribing level.

A key milestone this quarter was the sNDA submission for the FUROSCIX ReadyFlow auto-injector. If approved, this device will simplify admissions, expand treatment options, and reduce cost of goods significantly freeing up capital to reinvest in growth, strengthen our portfolio, and improve margins. Additionally, we're advancing bumetanid DPI MNKD-701 into preclinical development, another example of our commitment to innovation and long-term growth, as we believe FUROSCIX will be the standard of care, but a subpopulation may prefer to inhale versus inject. Our Technosphere technology should provide comparable bioavailability based on our historical development programs in insulin, treprostinil, and migraine, where we get IV-like onset and sustained efficacy in the short term.

A DPI formulation of bumetanid could offer a rapid noninvasive, and highly portable solution, enabling patients and providers to manage flute overload without hospitalization.

I'll now turn the call over to Chris to review our third quarter results.

Thank you, Mike, and good morning, everyone. In the third quarter, total revenues grew 17% over the prior year to $82 million, driven primarily by royalties earned on Tyvaso DPI. These royalties increased 23% to $33 million, reflecting the continued strong performance of Tyvaso DPI under our collaboration with United Therapeutics. Collaboration and services revenue was $27 million, up 14% from the prior year, and consists primarily of manufacturing revenue based on production volumes sold through to UT, as well as the recognition of deferred revenue.

During the quarter, we announced a new collaboration with United Therapeutics and received a $5 million upfront payment. We will begin to recognize revenue related to this agreement in the fourth quarter as the development activities progress over the next several quarters. Afrezza net revenue rose 23% to $18.5 million, while VGo contributed $3.8 million, down 19% over the prior year period. The performance of VGo is consistent with our expectations as we no longer actively promote the product. On the expense side, quarterly research and development expenses increased $1.1 million or 9% over the prior year period, driven by the enrollment ahead of plan in the ICoN-1 trial of inhaled clofazimine and preparations for the INFLO Phase II IPF study, which is expected to begin enrolling in Q1 2026.

These increases were partially offset by the completion of the INHALE-3 and MNKD-201 Phase I studies in 2024. Selling, general, and administrative expenses increased $5.2 million or 22% in the third quarter versus the prior year period. As we continue to invest in Afrezza to support the potential pediatric launch, we have higher headcount and personnel-related costs, including the deployment of the medical science liaison team, as well as additional sales reps. SG&A for this quarter also included $3.7 million of acquisition-related expenses. Q4 SG&A expenses will include costs related to our October key account manager team build-out to support the Afrezza pediatric call point. Additionally, transaction costs associated with the close of the acquisition of scPharmaceuticals will be reflected in the fourth quarter.

As a reminder, our fourth quarter results for our commercial product sales will include sales of FUROSCIX as of the deal close, as well as expenses incurred in their respective categories. Related to the transaction, I'd like to note that we utilized $133 million of our $286 million of cash and investments as of September 30 to fund the transaction and have borrowed an aggregate of $325 million on our 5-year term loan facility with Blackstone.

For the year-to-date period of 2025, total revenues reached $237 million, representing 14% growth compared to the same period last year. Our commercial product sales, consisting of Afrezza and VGo, account for 27% of our total revenues for the year-to-date period. With the addition of FUROSCIX in Q4, our commercial product sales will be a more meaningful component of our growth. On a pro forma basis, if FUROSCIX was included for the year-to-date period, commercial product sales would have been 39% of our total revenues. Considering the continued growth we anticipate in royalties we earn on Tyvaso DPI as well as meaningful and stable revenues from our collaboration and services, we have never been more excited about our revenue growth potential.

I'd like to finish with GAAP net income for Q3, which was $8 million compared to $11.6 million in the prior year. After adjusting for noncash and one-time items, our non-GAAP net income was $22.4 million, up from $15.4 million last year, and non-GAAP EPS of $0.07, up from $0.06 in Q3 of 2024. This reflects strong operational performance of our business lines even as we are making significant investments in future growth drivers.

I'll now hand it over to Mike to discuss clinical updates, starting with our Afrezza pediatric indication. Mike?

Thank you, Chris. As we broaden our impact across cardiometabolic care, we're also advancing innovation in diabetes, starting with Afrezza's potential to offer the first noninjectable insulin for pediatric patients in 100-plus years of diabetes therapy. We're extremely excited about this opportunity that lies in front of us. Now let me bridge to inhale. First, our naive treatment for pediatrics. We're focused on generating additional clinical evidence to support Afrezza's role in children with type 1 diabetes. This is why we're initiating the inhaled first study, which positions Afrezza as the very first choice bolus insulin for youth aged 10 to 18 who are newly diagnosed with type 1 diabetes, either upon discharge in the hospital or arriving at the doctor's office within 7 days.

This study will evaluate the safety and efficacy of inhaled insulin plus basal and up to 100 patients across 10 leading sites, including the Barbara Data Center in Denver, as well as the Joslin Diabetes Center in Boston, who will be our first 2 sites to dose patients to ensure our dosing protocol and training materials are meeting expectations. This is what we did in our gestational trial, and the first 10 test patients confirmed our expectations, and that trial is expanding to full enrollment.

In the inhaled first trial, we plan to introduce a 2-unit cartridge for titration and utilize MannKind's BlueHale tracking dose in this trial. Some of you haven't heard from BlueHale in a while, and I want to show you the updated version of the product as well as some screenshots that you can start to see how this is going to absorb the dose, integrate with CGM and remind you when you took your last dose and how much Afrezza is on board and start to show you your time and range by day, night and time of week. We're looking forward to testing this device here and having this ready for the pediatric launch.

We're also advancing programs in orphan lung indications that leverage our inhalation technology to address serious unmet medical needs. I'll first discuss our ICoN-1 global Phase III study in NTM, where the market is expected to exceed $1 billion by the end of the decade. We achieved our interim enrollment target ahead of schedule in the study. Our focus will be on the U.S. and Japan, which have the largest populations and the greatest growth potential. It's also the 2 markets that we've seen the highest enrollment rates in our trial. This is a global health concern and a real issue in these 2 countries. I'd like to remind you that this trial is a co-primary endpoint in the U.S. of sputum culture and patient-reported outcomes, but for the ex-U.S. market, it's just sputum culture conversion.

Our next trial, Nintedanib DPI, is our INFLO Phase II study, also known as MNKD-201. We have initiated the INFLO Phase II with the first patient enrollment expected in Q1 '26. This randomized placebo-controlled trial will include 210 patients with IPF and will evaluate 2 dose regimens totaling 8 milligrams of nintedanib a day over 12 weeks, followed by a 6-month open-label extension. The primary objective is safety and tolerability with FVC as the key efficacy endpoint. Doses are designed to achieve exposure levels consistent with or above prior studies, supporting our confidence in this program.

More importantly, based on the positive TETON-2 results, we've modified our trial design to include a QID arm instead of a TID arm, which preserves the option for future combination approaches and simplification for patients who will likely be on multiple products to manage their IPF in the future.

Before we move to Q&A, I want to highlight the upcoming scientific medical, and investor conferences where we'll have a presence. These events are important opportunities to showcase our progress and strengthen our relationship with key stakeholders. As we look at our pipeline, I'll close with the updated pipeline slide that reflects the addition of FUROSCIX into our portfolio, as well as 3 additional programs we discussed today: MNKD-102, a DPI formulation of clofazimine, Bumetinib DPI, also known as MNKD-701, and our new collaboration with United Therapeutics. Consistent with our DPI license agreement, this program, if successful, will generate $40 million in total milestones and earn a 10% royalty on net sales of the product, providing yet another exciting growth opportunity for MannKind.

With that, I'll turn the call over to the operator to answer your questions.

[Operator Instructions] Our first question comes from Olivia Brayer with Cantor.

Can you share any thoughts on the recent approvals from FUROSCIX competitors? And if you could help contextualize the pricing differences and how that actually funnels down in terms of actual out of cost. Or out-of-pocket cost to patients? And then just in terms of FUROSCIX growth, when do you think we'll actually start to see a bigger inflection in growth from all of the different initiatives that you're doing to help drive greater adoption? And then I've got a follow-up question on IPF.

So I think on the competitors, when we were going to due diligence, we knew these 2 competitors were in the wings. And I think we felt the product differentiation stood on its merits, along with the life cycle management of the auto-injector. So that's been the key focus for us. And then I think in terms of the nasal one that got approved, we could see how skinny that package was and how quickly that could get to market, which played into our decision to advance an inhaled butmetinide on our FTKP platform.

And the reason is we know our platform has IV-like responses and good bioavailability. And we felt that's exactly what you're looking for in this fast onset of diureysis, especially as you read the VuMex branded label, you can see the quick onset with IV, and the diuresis starts pretty much within 15 minutes or so. So that really allowed us to create another differentiated product as a part of this acquisition, which we wouldn't have done had we not bought scPharma.

So I think from a competitive viewpoint, we'll be able to compete nicely with the new people come on the market. I think just like we see in the case of Liquidia launching in treprostinil, the market size grows with more share of voice, more noise, and more reminders of this opportunity. The market is severely underpenetrated, and scPharma had to fund all this on their own. So having more noise out there and more options, I think, ultimately is going to the market and the believability of this opportunity.

In terms of pricing, I mean, these companies have stated a price, but they have not yet actually publicly loaded their prices to my knowledge. And I think let's see what happens when they do. But the pricing of the product is not going to change the biggest barrier in Medicare, which is somebody's out-of-pocket cost. So whether it's $500 or $1,000 or -- the out-of-pocket cost and the deductible is the same on Medicare, which is the majority of these patients in treatment. So the real issue is not the WACC price of the product, but it's the net price to the patient.

Unless somebody is doing smoothing, the payers aren't going to just cover any of these products really, nearly because they're going to be up against generics in the marketplace. So you're going to need reimbursement support. You're going to need to figure out the smoothing and the prior refill. So I think I like the SC model. I like that we know where our patients are. We know when they get a refill. We know when the prior auth expires. So I think the system that they have in place is good. You'll hear some complaints that people want to access locally, and that's a lot of the IDN contracting. So I think that we'll continue to watch it. We'll be competitive if we got to make changes. But I think in the end, we feel pretty good about our price point and our net pricing.

On the growth inflection, I mean one of the things you'll start to see next year is increasing the share of voice. And I think you could see in the 6 months plus of their sales force expansion, you started to see that kick in, in Q2, but really kick in, in Q3, and ultimately Q4. So I think from the time we make these investment decisions, you can expect to start to see impact 6 months -- within 6 months there. So hopefully, you'll see the TAM expansion that will take at least 6 to 9 months in terms of really starting to make impact in the health system. They don't change overnight. But in terms of rep share of voice, I think we could see an impact on prescribing sooner. And I think that will be our focus is to kind of minimize disruption with customer relationships, but expand the share of voice on cardiologists and nephrologists as we go into '26.

And then for the Tyvaso bridging study in IPF, what can you guys tell us at this point? It sounds like it maybe is confirmed that a bridging study will be run, but any sense of timing and whether you still expect it to look similar to the BRE study?

I don't want to speak for you, T. So I think they've said it could be a BreezE-eng study. So I think with that communication, go to the FDA now, they have the TETON 2 results, and I expect them to move this as quickly as possible to the FDA for clarification and discussion.

Our next question comes from [indiscernible].

Just wanted -- I had 2 questions. One, just on thinking about the scPharma acquisition and FUROSCIX. Could you comment a little bit on the integration process with respect to the field force, how that's been going? And if you have any updated thoughts on kind of what the field force composition will look like across your kind of multiple commercial brands now? That's the first one and then I have a follow-up as well.

Sure. I'd say, first, as we got to integration, it's only been closed about 3 weeks, and it feels like we've already met most of the employees once or twice. I personally was at 5 of the regional sales meetings. Nick, our President, was at the other 3. We had multiple days of integration calls getting ready for '26. So I think the integration is going very smooth. Culturally, the companies are very similar. So there's not a lot of friction. We already have put some of their people in key positions on our side. and integrating them into our leadership team and our processes. So I think overall integration, we don't see much disruption. Sales continues to look strong in Q4 here. So we're very happy to date with the teams and the integration as it goes. You'll see scPharma continue to be independent through the end of the year in terms of their name and job postings, things like that. You'll start to see that integration fully in '26 starting in January, all the way through any packaging changes, et cetera. So we're trying to make sure we're smart about it. We're not looking to waste money on changing the name on a box for no reason. So we'll try to phase those things in as we think about like the autoinjector launching, things like that. So I think that answers the integration question.

And then just on the balance sheet, how should we think about sort of your guys' kind of like relative priority between like investing in the launch of Afrezza and Peds, FUROSCIX, delevering the balance sheet, and kind of maintaining operational profitability? How do you kind of balance like these 3 different goals?

Yes. I think if we see -- we're already preparing for the Afrezza peds launch, you're seeing some increase in expenses this year with MSLs, key account managers, some commercial prelaunch investments. So I think you'll see that tick up. I think on FUROSCIX, we're also going to place a few bets here to grow the brand faster as we go into '26. So we feel like these are the right decisions, and we think investors want faster growth, and we think we can deliver that in '26 with what we have coming. I'll let Chris comment just on the deleveraging and some of the that we're thinking about.

Yes. The key item to deleverage is really on our convert. We have a $36 million stub that's due March 1, 2026. So we'll certainly be addressing that in the near term. And in terms of what Mike said, I think the priority right now is investing in growth. And so you're seeing us make that a priority, but still doing that in a sustainable way and making sure that we are in a good position to certainly continue to pay our obligations with our new debt facility.

Our next question comes from Andreas Argyrides with Oppenheimer .

Congrats on the progress in the quarter and the closing of the scPharma deal. Just following up from some previous questions, how are you thinking about the peak sales opportunity for FUROSCIX? And then on NTM, what do you attribute to the faster pace of enrollment? And can you remind us of the powering assumptions for that study?

I think on the peak sales for FUROSCIX, we looked at the deal, there was not guidance by the company, but there was analyst reports out there, and put it in the $500 million-plus range. And I think that until we give guidance there, I wouldn't quote anything beyond what we've seen out there in the public domain prior to the acquisition.

Chris, I don't know if you have anything else to add before.

I think Andreas was asking about the pediatric opportunity.

Sorry. On the pediatric side, we are just finishing up some research right now to get us ready for next year. And I think that will -- one of the things we know what the peak upside could be. We said roughly 10% market share is about $150 million in net revenue. And we've gotten research that would indicate up to 25% could be possible. I think the question is how fast is that trajectory going to happen? And we haven't yet given guidance on that. So I think that's really what I'll be focused on to get ready for '26 is we look at some of the competitive pump launches that happened this year, and they're seeing nice, significant uptake in those markets.

And so I think there is an opportunity to grow Afrezza meaningfully faster post peds, but I think we got to make sure our market research triangulates what we're thinking before we go public. A question on NTM and then a follow-up on that one as well. Yes. I think on the NTM, a lot of -- Japan was going nicely. I think in the U.S. starting to pick up a little bit. The team has met at several conferences year, just raising awareness amongst KOLs to continue enrollment. So I think that's there. And then we just got recently the FDA to re Lucen the EKG monitoring requirements on entry in terms of the screening criteria so that we're implementing as we speak. And then in terms of powering, I think we're 90% powered, and that's why we have the interim is to really make sure that we would be on track as we look at the patients. Remember, we're seeing people roll over to the open-label extension. So these will all be important aspects as we go out. What are the -- and just a follow-up there.

What are the different outcomes for the interim readout, like the potential for increasing sample size, for example? Can you give us some color there?

Yes. I mean one is the sample size. So if we're close and you want to increase the sample size, that could be it. The other one is the safety database, making sure we're continue to go in that direction. Then you'll have the futility, meaning it just is not delivering what we expect, and that could also be an outcome as well as just you're on track to meet the 180. And that said, in Japan, we only need 180 in the U.S., we're evaluating the total safety database required still with FDA.

Our next question comes from Yun Zhong with Wedbush.

scPharma acquisition, did I hear correctly that you said there was going to be ongoing sales force expansion? Is that mainly on the scPharma side on the commercialization of FSI? And then once you report sales starting from fourth quarter, how -- can you remind us how do you expect the addition to impact the SG&A line in the income statement, please?

I'll let Chris take the second one. I'll start on the first one. So I think we'll be a little quiet on the sales force expansion and share of voice, but what we expect -- one of things we looked at is last year when SC split some territories, how quickly did you start to see that growth rebound? How disruptive was that to the sales force? And you could see in the first quarter, some of that disruption was true, but I think the bigger part was the co-pay resets from Q4 to Q1. So as we look at this year, we'll expect a similar phenomenon is that patient resets happen and then the co-pays pretty much go to 0 as people hit their deductible. So we want to get that sales force share of voice up as we go into the new year and really prepare for that Medicare transition period. But that will be important. I think we can definitely see share of voice does increase sales per customer per territory. So we feel like that track record is there from when they went from 40 to 80, and we won't comment yet on the expansion because we're still finalizing some of that, but we do have some plans we met with the team prelimarily, you'll see -- the #1 thing is the key account manager expansion. We think that's the nearest term low-hanging fruit. And then there'll be some additional ways that we can incorporate FUROSCIX in the increased share of voice.

Yes. In terms of the expense line for Q4, if you think about the selling side, I would just emphasize that this is a bolt-on acquisition from a commercial perspective. And so I would expect most of those costs to be that they have experienced previously on the commercial side is what we'll be reporting in Q4 as well, plus the investment in CAMS that Mike just talked about. On the G&A side, you're seeing quite a bit of synergies are realized right away as we think about public company costs, as we think about systems and tools that we all use in common.

Okay. Then on Afrezza, you talked about this sales not growing as fast as TRx. Do you expect the same pattern in fourth quarter? And at some point, would you expect sales to catch up with the TRx?

I would -- Q4 should be pretty strong. A pattern may exist because of the NRx trends impacting TRx. But in general, in Q4, we see a lot of refills. So a lot of those baseline patients in our business will refill before the end of the year, co-pays reset. So I think it will be pretty decent in Q4, but I would expect the trend to bottom out sometime over the next 6 months and then start to be stable, more in line as we get through Q1 next year. But I think that as we look at the growth, the growth in outflows, growth in scripts plus any price changes, once that volume per script starts to even out, we'll be there. But it dropped -- I don't see it dropping much more, but I'm sure it will drop another quarter or 2 a little bit. So it's not another 20%, but it's probably single digits.

Our next question comes from Brandon Folkes with HCW.

Congratulations on the results. Maybe just for me on Afrezza, can you just help us think about the potential tailwind you expect from the Afrezza conversion dose label update and how you expect to leverage that label expansion to drive Afrezza growth? You put a lot of good context around the peds side of Afrezza. But just any help in terms of that label expansion?

So the label expansion was kind of 3-month delay from November to January. We expect the draft label in December based on the latest communication. And that's fine. I mean we were going to launch the label change anyway in January. So that timing is not that far off. The key thing about the label expansion is it really allows us to talk about the postprandial control. And our #1 adverse event is lack of effect, and that's because doctors do not titrate up fast enough or they don't convert at the appropriate dose. So our top prescribers, this is generally an issue, and that's what drives most of our business. But as we expand the sales force, those new prescribers who don't have a lot of experience, that's where we see the mistakes happen.

That's where we see the patient dropouts happen faster. So as we continue to expand, we want to get this fixed. We want to get this right so that patients start up on the right dose the first time. And so that's really our goal. The data is published, so we can still disseminate it through our medical liaisons through medical response letters and through reactive responses with the sales force. So we do feel our top prescribers know the information, but it's really the new prescribers that will be important. And that sales force expansion for Afrezza is just getting out there over the next month or so, so call it, December, January, when the label change happens, the timing still mirrors up nicely.

So if people start off better, they'll stay on the drug longer, they'll be happier, and the doctors will write more, right? So it's got a self-going prophecy here in the end.

And then one more for me, if I may. Can you just elaborate a little bit on the development path you're thinking about Nintedanib DPI?

Yes. So when you -- I think at a high level, what got us excited is you can -- it looks like you can choose to -- first, the tox studies won't be chronic because it's an acute drug. So call it 28 days of tox roughly. And then you'll have a PK study, which will not be -- need to be multiple time period. So you probably look at single maybe multiple days, but not a 10-day or like that. So the PK studies are pretty straightforward. And then the only thing about bmetinide that we like is you can give it, I'll call it, it works -- it's got a very short half-life. So you could give it really quickly get a quick diarysis going, and then decide 6, 8 hours later, if they want to give another dose, you'll have more flexibility in the way VuMax' label is written versus today in the nasal, you don't look like you have that flexibility because a max daily dose. But on an inhaled version, which will have -- should have greater bioavailability, we should have more flexible dosing as we look at the labels.

And FUROSCIX, I think, does get you that 24-hour diarysis and looks strong, whether it's in the auto-injector or the infuser. So we feel like we'll have 2 products out there in this space. So depending on how people want to treat, we'll be competitive on both angles here over the near term. But we don't look at this as a very long development program. Probably the long palls in the will be scaled up and stability more than the trials themselves. So the team is just starting to get the formulation work moving. And as soon as we feel pretty good, we'll be able to formulate it relatively quickly. But then we got to meet with FDA in parallel and try to get that alignment, which we think we know what that's going to look like, given the history of 06.

Our final question for today comes from Anthony Petrone with Mizuho.

A few on scPharma, just on the SCP-111 sNDA submission that's already taken place. Just want to know if there's any early questions from FDA. The bioabsorbability profile looks good. Maybe just probability of success on getting that through. And then I'll have a couple of quick follow-ups on the Fur 6 to SCP-111 transition.

Yes. I think on the FDA, I can tell you they're full stream active despite the government shutdown, whether it's factory inspections or inquiries on the various programs we have in front of them. So we feel they're -- they're on top of the submissions. I'm glad we got the submission in September, we didn't do anything. But that is allowing IRs to come in already, and the ones that have come in seem like they're pretty minor, and they're not uncommon questions. We've either gotten them on Afrezza or we're getting them on SC. So it does look like they're checking the boxes going through the file. And so far, there's no red flags. And that's true for the pediatric filing as well when we got the -- the PDUFA letter, they identified the same thing we already knew, which is that one outlier in the trial. And so that we feel is pretty straightforward as we go forward. I'm sure there'll be more inquiries as we review everything. But in general, it seems like the reasonable request so far from everything we can see.

And if we think ahead to a positive outcome here, the ReadyFlow injector dramatically reduces the admission time. What do you think could happen to unique prescribers if you get this on market? And when you think about that auto-injector relative to the current delivery device, what do you think it could actually do to margins for this product again?

It's been a few weeks, so I don't want to comment too much still working with the team to think about the right segmentation. But I think we look at this as market expansion. So when you look at the audience today, some may like the infusion for various reasons, and we'll make sure we understand those targets and the reasons to support that. But the real opportunity is the expansion, right? There's a lot of people, whether their nursing homes or in discharge protocols or elderly patients being taken care by their kids, where people would much rather use an auto-injector. And so that to me is the upside that we're looking for in an inflection that could spark faster growth. That's one reason we want to get the share of voice up, right, is get the awareness up of the product. And we still see -- I want to say there's like 40,000 cardiologists. So the team is targeting 5,000 to 7,000. So we think we can boost up the number of cardiologists aware of the product and the conferences and education.

This is still, I think, the first inning of a baseball game, hopefully not an 18-inning baseball game, but a baseball game that I think is going to be well played and competitive, but I think the patient demand and the unmet need in CMS, all the things are going in the right direction and our ability to compete, whether it's going to be anetinide day or the FUOSC auto-injector or OModDyFuser, I think we'll be able to provide a lot of solutions to the various patient types. So I wouldn't look at one replacing the other as much as we're looking at how we can grow it faster.

That concludes the question-and-answer portion of today's call. I will now hand back the call to the MannKind team for closing remarks.

I just want to say thank you to everyone in the company for working on the integration, preparing for the call. It's obviously a little more complex with the integration. But overall, the company is operating in every facet you can imagine. Thank you for all the investors and your belief in the management team and the direction we're going, and I look forward to seeing many of you at the Jefferies Conference in London, as well as the scientific people at the conferences coming up. So thank you again, and we'll try to close the year strong and talk to you next year.

Great. Thank you all for joining us today, and welcome to the Morgan Stanley Healthcare Conference. Just a quick note on disclosures. For important disclosures, please see the Morgan Stanley research disclosure website. Or if you have any questions, please reach out to your Morgan Stanley sales representative.

So welcome to the group here, and thank you for attending the fireside for MannKind. My name is Ross Cohen. I'm an Executive Director from the Morgan Stanley Healthcare Investment Banking team, and I'm joined here by Michael Castagna, the company's CEO. Welcome, Mike.

Thank you. Thanks for having us.

Of course. So maybe just for those of us in the crowd who aren't as familiar with the MannKind story, if you could spend a few minutes just kind of walking through the history of the company, and it's been a very busy last couple of months for you all. It would be great to get the update.

If you are paying attention to last week, it's a very different company in the next month as it was a month ago. For those of who don't know MannKind, we've been around 34 years this year this year from the original technology of FDKP and what we created, mostly known for inhalation therapeutics and diabetes in particular. I think what you've seen over the last 7, 8 years is really diversification away from diabetes and thinking about purposely where we best apply our inhalation technology to make the biggest difference and impact we can for shareholders, patients and employees. And I think in that respect, you've seen our late-stage development programs go into Phase III with clofazimine. You've seen nintedanib is now moving into Phase II. And obviously, Tyvaso has done great for us in terms of United Therapeutics partnership.

And then you pair that up with kind of Afrezza is in the background, been moving along the last couple of years and really getting that ready for a relaunch next year with pediatrics and the label change coming in the fall. So all that's been moving. And then you just saw the last week our first major acquisition, I'll call it. We bought smaller things along the way, but nothing as big as this. And that's really been -- it was a transformative decision as a leadership team to kind of go out and think about how do we diversify our company, how do we grow our company faster. And we also announced another partnership with United Therapeutics as well. So a lot of things happening in the last week, but all really exciting things and keeping us up at night.

Yes. These are good problems. And then so you had the recent release of the T72 data. Maybe just walk us through some of the key growth drivers we could expect over the next few months or the rest of the year and then going into 2026?

I think as we get through just wrapping up '25, we have an October label change on Afrezza, which should solve one of the biggest problems we've had with that product around dosing. And I think getting that clear for the scale-up will be important.

The Peds file should be accepted in the next 2, 3 weeks. And so I think that's another one that people wait to derisk that a little bit. Clofazimine should hit its 100th evaluable patient enrolled in the next 60 to 90 days.

So those three things will happen, and then we got SC Pharma closing hopefully in Q4. So those are four major events for this year. They have to file subcu auto-injector, which we think is important as well, and that wraps up this year. And then we get into next year, and there's a whole another cascade of catalyst as we think about pediatric approval in May, auto-injector, if all goes well approval with SC Pharma will be in July.

We'll have the interim readout midyear for clofazimine in terms of that's the right-sized trial, but we have to go up a little bit bigger. Nintedanib will be paying attention to the enrollment in the Phase II. And then obviously, how Tyvaso DPI going towards IPF and how that FDA discussion is going with UT and that filing. So that will be another big thing happening in the background. So a lot of good catalysts over the next 18 months. As we talked about the management team, 18 month from now, the company is going to be very different than it is even yesterday and a very, very exciting time for us.

No, that's super exciting. So -- and that leads to the recent deal with SC Pharma. Can you kind of walk through some of the rationale of why you thought about doing that deal and then ultimately, what the plan is for integrating?

Yes. I think we've been looking for another asset to purchase over the last couple of years. And sometimes we bid, sometimes we didn't overbid to just walk away. And ideally, we found something in the orphan lung space to complement where we're going in the future, but there's just not a lot there that's meaningful or worth the regulatory risk.

Then we pivoted to something that was derisked as we paid off our debt in December. We really freed up our balance sheet to look for a bolt-on acquisition in a more serious way. And so we really engaged a few ideas this year, and this one came up. We look at this and said some things we look at and we say they're great and the company management team is doing great. So the more value we're going to bring. And that's kind of hard to justify those deals because you're just arguing over cash flows. This particular acquisition, we looked at and said the team has done a great job. They're in the early stages of launch, and this has a lot more legs to grow a lot faster.

It wasn't obvious in the beginning that there was a nice mutual fit, but I think there's a great fit culturally between the companies and what we stand for. I think the overlap in terms of diabetes, which we don't think about, but in heart failure, probably 40% to 60% of those heart failure patients were fully over with actually on insulin and probably the same in chronic kidney disease, a large percent of them have diabetes and probably are at the insulin stage.

So you start to think about how do you optimize the footprint, how do you maximize the investments in these two areas. You really do have a lot of endocrine and metabolic overlap between these two. And now when you think about these two sales forces of our diabetes endocrine side and their heart failure and CKD, there's other things that may come on our lap in kidney disease or cardiovascular disease or even endocrine now that you have all these people, how do you best maximize the value and upside from where we are today.

So we have a really nice footprint going into next year. We're excited about SC Pharma. We love the work they're doing. And I think as we close out Q3, Q4 with them under our books, we'll start to see. I think shareholders start to see like this has really good momentum, really good depth of prescribing, repeat prescribing and how does that continue to drive future value for shareholders will be important.

Yes. No, that's great. Makes a ton of sense. And so -- and then how did you kind of view the ReadyFlow in the broader sort of the deal terms for the transaction?

Yes. I think in any of these deals, there's always a gap in value and you're trying to figure out to best close that gap and if management is that confident, you want to share that risk with them. And so we built our deal forecast, and we were comfortable with that number. And the upside to the model are going to be an auto-injector, not just because of the -- has a nice uptake as we talk to doctors, they really think that will be much easier to overcome injections from their staff around the on-body infuser versus an auto-injector.

But more importantly, the COGS. So the COGS on the on-body infuser are quite expensive, and that eats up a lot of the margin. And so if you can really get to an auto-injector, it frees up the margin, whether you redeploy that capital to grow the brand faster or contract [indiscernible]. So we'll discuss with the management team with the best -- next best opportunity to grow faster. So that's what's so important, I think, around the auto-injector to see you go there.

And then the last one is the revenue stream. So when you think about management is always much more about the [indiscernible] may be great. And then you got disruption, you got integration. And so how do you just have a reasonable forecast that's acceptable. And MannKind doesn't give guidance. And so hopefully, they can see roughly what we see next year is $110 million, $120 million run rate plus Afrezza plus Tyvaso plus manufacturing the pipeline. You got a lot of nice things for MannKind happening in '26.

Yes. Yes. That makes a ton of sense. And so -- and you briefly touched on it earlier, but as you think about the commercial rollout for the SC Pharma product, where do you feel like you can add value based on what prior management did? They had some capital constraints, for example, as an organization. And so how do you think you can expedite and potentially create more value with that product?

So as we double-click down, we did some of our own spot calls, obviously, for diligence. And we clearly see the management team has done a really nice job on the perception of the product, where the product fits and the unmet need that they're solving. And that to me is clear black and white. Then you get into some who just don't even know about the product, which is a lot of people because they had 40 FT equivalents on cardiovascular and 40 FTE equivalents on CKD. In CKD or cardiovascular, that is a drip in the bucket of number of share of voice that you need.

So I think the first thing is how do you increase share of voice and marketing support within each of those respective call points. I don't want to get into what they do, but I think there's a lot more reach and frequency, a lot more top of mind that can happen. Then you get into the conferences and how you raise awareness at the conferences and then you get into the health systems. And they have 5 key account managers, which are doing a great job, and you've really seen that growth.

But the reality is you might need more, right? We see the discharge protocol, the heart failure readmission rates. That hospital protocol administration is critical in my mind. Once you're in that protocol and you can help reduce those readmissions, that's huge for the health systems. And then you see next year, what came out in the middle of the deal flow was this Medicare CMS guidance on taking cuts in '27 on personal physician payments, right?

So if you have 20 heart failure patients, you may take a 9% pay decrease or a 9% increase, depending on how your outcomes are now still draft guidance. But I think having an 18% swing on someone's pay really drives good behaviors usually. So I think as we look at this, I think the product next year has an opportunity to fit into the paradigm shift to heart failure and what's kind of happening even faster.

Yes. And then maybe shifting focus to Tyvaso and IPF. With positive TETON-2 top line results with United Therapeutics and they're planning a bridging study, the royalty stream is obviously expected to grow there materially. Can you share what these developments, along with the anticipated TETON-1 data in the first half of '26 could mean for the broader outlook?

Yes. I think TETON 1 and 2 are phenomenal investments that UT is making to place a huge bet in IPF. It's not just that, but it's the manufacturing plant that they're building in North Carolina, the expansion that they put in Danbury, Connecticut with our plant. They placed a $1 billion bet here on IPF. And so when you think about and similar questions I get, are they really going to go after UTI? Of course, why would they spend all this money on manufacturing. So we feel very confident UT will work as quickly as they physically can to get to the FDA to get to the bridging studies to get that to patients as fast as humanly possible.

Personally, I think the TETON 2 results, we, as a company, because of the financial upside to those data points, we don't want to depend on those for our survival or our BD decisions or clinical investments because it didn't pan out, then you got to pull back everything. So we kind of fully run our company without that in the plan. And now that you have that, I mean, this can be meaningful contribution to MannKind and our shareholders and then the patients that they're going to serve is going to be huge.

And I think the results of TETON 2 surprised many on Wall Street in a good way. No one expected a lot of discussion. It's funny we have debate at dinner last night. A lot of discussion is treprostinil antifibrotic or not. And a lot of pulmonologists who works for us who says, of course, it is high level discussion point. But I can tell you how many other doctors don't understand it and it is a discussion point. So UT, I don't think ever wavered. I think my pulmonologist never wavered. And so it's just kind of funny how you get this result and everyone seems surprised, but I think those that really believe in treprostinil and how it works did weren't surprised. So it's nice to see a big win for UT and we're their biggest cheers.

No, it's nice to see a big win for you and UT and also the IPF patient community, to be quite honest, given what's been going on there last...

Failure is horrible.

Yes. Stuff. Great to see. And then maybe shifting focus to your internal IPF program and then inhaled and so maybe can you just walk us through the INFLow Phase II trial design and including some of the key endpoints and the expected time line for enrollment and top line data?

Yes. So we're giving guidance right now. We expect the first half of '27 for top line data. That depends obviously on the enrollment. So the trial kicks off. This year, we've already got the CRO. We're doing sites. We're hoping to have the first patient in, I'll call it, late this year, early next year, just depending on how quickly we get through IRBs. And this will be about a 220-person study, 4 arms. So 2 arms will be active, 2 arms will be placebo because we're testing a BID and a TID regimen, you have twice as much placebo because they're blinded. So that's -- and those patients after 12 weeks of dosing, we will be able to switch to open enrollment.

And so we'll have people going on hopefully 6 to 9 months of data that we can look at longer-term effect. But in the short term, we'll have about 150 on active nintedanib. And we think that is enough number in the shortest amount of time you could do ethically to do a placebo-controlled trial. That was one of the big challenges is the FDA really wants a placebo trial and they went on top of background therapy, which we don't think is feasible. So outside the U.S., you can actually probably get IRBs to approve a 12-week treatment while they're waiting for the standard of care to come in.

Yes. No, that makes sense.

And then we tested -- we're testing 2 doses. So basically a 6 milligram a day exposure and 8-milligram a day exposure. And some people say, why are you doing TID? It's -- we just don't know whether nintedanib, it's a receptor binding issue, it's the frequency of hitting, it's an AUC or Cmax. So we want to kind of -- we feel like the dose is in the right range, the low and the high should work. But those hitting the receptor somehow differently have a different effect size, and that's what we're looking at. But we don't -- we expect a combined analysis to show some early read of data at 12 weeks.

And I guess with those specific doses, I guess, what gives you the confidence that those are the right ones to push for?

Yes. So if you back up a second on OFEV, it's got severe GI side effects, right? 50% of people drop out. And even those who take it, there on tons of doses of Imodium, they just can't get through the diagnose cases. So I'd rather not take anything than take what's approved. And that drug does $4 billion a year despite those setbacks. It has about 5% bioavailability. So if you were to look at, say, what's available that's actually carrying any type of therapeutic effect size and then you calculate what you think you need to get into the lung, I think those are the bets that we're taking that we're treating a lung disease that we're getting to a specific dose within the lung and then we ran animal models to kind of calculate that and triangulate our dose calculation.

And the good news is whether it's us or a competitor, they both got to the same ballpark independently. And I do think there's a minimum dose you need to hit for an attendant to work. And then above that, you might get more efficacy. And I would say we're both probably in the ballpark at the minimum. And the question is, can you get higher exposure or higher impact on these higher doses, and we don't know yet. So that will be part of it.

And the last thing I'll say is whether it's Avalyn or with their pirfenidone inhalation data or even TETON 2 results, you're showing that treating the lung directly is creating a nice effect size. And I would say a lot of people wonder whether you've given OFEV inhalation versus OFEV orally, will you still have that effect size. And I would say now we have a proof of concept of two that have very nice outcomes. And so I feel even more excited today, if you ask me where the risk was 6 months ago, it was did we get the right dose and could the lung target have an effect size. And I would say TETON 2 just demonstrated success in a good way for Tyvaso, but I believe this product well. And then Avalyn, we did not present our data publicly, but the Avalyn data gave us more confidence that we got the right dose.

Yes. And then maybe just pulling a little bit more on that point around OFEV. Naturally, it's had a lot of GI tox issues historically. And so what gives you the confidence in the inhaled approach of OFEV effectively to be better positioned than the adherence challenge had to date?

So we did a Phase I study, and I can't exact number of patients in there, but we went to small, medium high dose, we'll call it. And then we did repeat dosing. We saw no diarrhea in that trial. We saw no dropouts for cough for tolerability. So people do get cough for the dry powder, but that's about the cough you get. So honestly, most IPF patients do that 20 times a minute. And so 21 is not going to hurt them. I think they'd rather have a tolerable drug, no diarrhea, no Imodium 4 times a day than have an extra for cough. And so I don't think we have major cough issues, but the data will show that, hopefully.

Yes. And I guess, would you position it as replacement therapy, add-on therapy, combination?

Our core belief is this will be a combination evolution. So as you think about the future state, we're excited as we come back to '27 to do a larger Phase III. You'll see Tyvaso to be approved. You'll see hopefully the new BI drug approved, you'll have tend on pirfenidone. So you'll have 4 drugs out there and 3 of them we'll be able to use on top of. And so I think a combination treatment study that we'll have to do along with naive patients will be a good study design, and we should be able to roll that pretty quickly by then.

Yes. And then as you think about the broader competitive landscape, when you compare 201 to other inhaled IPF candidates, for example, even Tyvaso DPI and those currently in clinical development, how do you think about that?

We'll be at ERS looking at the Tyvaso nebulizer data, and I think we'll see what does the subanalysis look like? I don't know any more than the public knows. And so trying to see -- the good news about UT is they got 2 large trials, roughly 600 patients each arm in each trial. And you're going to see the combined analysis is going to have a lot of power, right? So what does it look like on nintedanib? What does it look like on pirfenidone? What does it look like in naive patients? That maybe not on treatment. And I think that will give us some good information that will hopefully give us some confidence. But my bet is hopefully Tyvaso and pirfenidone combination looks good.

Yes. And then how are you approaching the regulatory strategy around it, particularly in light of the ex U.S. piece, too?

So I think we met with the FDA in April, which was right after all the changes they were having. They really -- if you think about MannKind as a company, Tyvaso DPI went to the cardio division. Afrezza has been in the metabolic division and our pipeline is square in the orphan lung division. And the lung division has only had to consult on our development programs in terms of Afrezza. They never had to actually evaluate our technology in wholesale. And so I think some of the questions they didn't quite understand was how the technology binds the APIs, what it does and it goes along, where it goes.

We spent a lot of time just explaining that to them. And I did that because whether it's Tyvaso DPI coming, it's nintedanib coming, it's clofazimine oral coming, pirfenidone coming, we're going to have 3 drugs on the platform coming within the next 18 months. And so that feedback that they wanted was -- I may not agree with people with IPF are dying and they die at a higher rate than HIV patients today. And I feel like we have to have a higher sense of urgency around getting innovation to these patients because they don't want to wait for the next innovation. And we got a 12-month trial and it takes 2 years to enroll and do it, that means 40,000 people died, right? And I think we can do a better job as society helping patients have access to treatment earlier.

And so rather than argue with FDA for a year, which we could have done and got to a better spot, we just pivoted the trial design to ex U.S. and know what they want, we're incorporating that. We'll just come back in Phase III. So I feel fully confident, we'll achieve what they want, placebo, first dose tolerability, those things. And then that will be done, that will answer their questions, and we should be wide open to go to Phase III with them.

Yes. No, makes a ton of sense. And then maybe shifting gears to 101 and NTM. So enrollment for the ICON -1 Phase III trial is progressing ahead of schedule. Can you walk us through some of the expectations for the 2026 interim analysis?

Yes. I mean clofazimine is NTM, unfortunately or fortunately, there's nothing in front of us and there's nothing behind us. So we're -- and ARIKAYCE has done a nice job paving the way. It's a great product. It's doing very well. They got a naive or early treatment trial, they're enrolling and finishing up. So for us, we'll have the refractory population with the co-primary endpoint interim analysis next year for the U.S. and then the ex U.S. market only needs sputum. And so we'll have those answers next year. And if all goes well, we should hopefully be wrapping up 101 at the end of next year, early '27 for file.

The data could tell you need 230 or 300 patients. And if that's the case, we'll hopefully keep enrolling, but maybe need another 3 to 5 months, we'll see. But I don't think it's like years. I think we're talking a quarter or 2. And I think that's in the preview of society that say this is real and it's coming. And so far, we're on track for early Q4 to hit the 100 evaluable patient enrolled. And we are just finishing up the animal studies for the dry powder we developed for that product as well. And the tolerability seems to be there.

So I think when you look at ARIKAYCE, there's a lot of dropouts and a lot of tolerability issues. We are not seeing that so far in the first 100 or so people have come into the trial. So that's great. People are staying on. They're rolling over to the extension phase. They're rolling over to second dosing. We're just not seeing major dropouts, which is great.

Yes. Good to hear. And then as you -- on the ARIKAYCE point, right, and how do you -- as you compare the Phase III ICON-1 study design to the CONVERT and ARISE studies on their part, are there differences in the endpoints, patient selection, dosing?

I think when you study drugs at different times, you always have different patient characteristics. We've been very conscious of that, meaning how sick were the ARISE patients -- how sick were their patients in their original trials versus the latest trial. And even in our trial, we started looking like Japan took off on enrollment and you start looking at how many people had exposure to ARIKAYCE, how much of a risk is that creating? Do we cap that? Do we not? We wind up capping the number of cavities in the holes that people have in their lungs because we think someone has 4 centimeters is not going to respond to anything.

So I think it's just not rig in the trial. It's just nothing is going to work for that population probably. And so how do you make sure the effect size is there that you're looking for and how do you make sure you're helping the population that can benefit the most I think that the baseline characteristics are probably better than AM2, but slightly -- these patients are a little bit sicker than you probably saw in the original ARIKAYCE trial.

Yes. And then maybe around the commercial profile, I guess, how do you envision positioning 101 against ARIKAYCE?

So I think the research would indicate that it's the only treatment option doctors have today, so they use it. Patients would rather try ARIKAYCE and go to a placebo-controlled trial. So I think our enrollment would have been -- we argued for years about not having a placebo in this population. The FDA mandated it. So we finally did it. But I would tell you the #1 objection we have is someone doesn't enroll in a placebo trial and not get active drug when they think their life is limited.

So that's slowed down enrollment a little bit. But despite that, we're still ahead. But in terms of us versus ARIKAYCE, I think we got to make sure we hit the sputum and we benchmarked the ARIKAYCE efficacy at 20% delta from placebo. So placebo dose 10, which is roughly our estimate, and we do 30, we feel like that's an approvable product. We will have the PRO that ARIKAYCE used in the early treatment phase trial. That data has never been generated in a late-phase treatment refractory population. So that will be a difference. We'll have that data. We'll see what it looks like, and that will be there.

And then you get into dosing. So today, a patient has to take ARIKAYCE every day for 6 months. And then if it works, congratulations, you have one more year of treatment. In our case, you have 28 days where we load up the lung with clofazimine. It's got a 70-day half-life and then you stop taking it for 56 days. We have two treatment cycles every 6 months. And then if you're successful, then you'll have 4 more. So it's really about minimizing the patient burden, hopefully maximizing the efficacy and tolerability. And I think those things alone are going to differentiate the product pretty well.

Yes. Yes. No, that makes sense. And then how do treatment paradigms differ between, I guess, the U.S. and Japan for NTM specifically? And how does that affect the strategy?

I don't think they differ dramatically. ARIKAYCE had a very strong start in Japan. It was just later than the U.S. But I think when you look at people coming into our trial, there's probably an equal number roughly that got exposed ARIKAYCE in Japan as the U.S. when you look at roughly X percent had ARIKAYCE.

So I think ARIKAYCE had a nice uptake in Japan where ARIKAYCE in the U.S. with COVID launched a little bit slower, but have done better over time. So I don't think we'll see a big difference there. I think the backbone of treatment used in the refractory population is very similar. So we see the patient populations being pretty comparable. Maybe some of the patients in Japan came in a little bit thicker because they didn't have as many options as long. But I think that will even out as the trial progresses.

And then maybe just changing gears back to Afrezza. So Afrezza achieved another quarter of really strong script growth in the second quarter. And with the decision on the upcoming label update, how transformative could this be for adoption in both the adult and pediatric populations?

I wouldn't expect any major inflections in the rest of this year because we're not investing enough to kind of cause that to be realistic here. But I think the label change allows us to -- we have a new marketing campaign ready to go. We'll have new sales materials ready to go, new messages out to the sales force. All that will be implemented in Q4 with the label change. And you only got about 6 weeks of time before the year closes by the time it happens.

So between Thanksgiving, Christmas and holidays, you're just only going to make so much impact the rest of this year. So I think it's really about gearing up for next year and setting us up for a January relaunch of the product in terms of that and then the Peds coming in roughly May, June. So I think as you look at next year, it's really a relaunch of Afrezza. And I think the label change for us is the first step because we know the 500 or 600 prescribers who write this drug consistently know how to dose it properly. But the thousands who have written 1 scripts or 2 scripts have never count it properly because they read the label and they under dose patients.

Having that label change is more important for the academic centers, honestly, who just don't know how to prescribe it and teaching them how to prescribe it. If they only want to read the label, not see us as a company, at least they can get it right for the patient. And that's going to be important. And then peds to us is the -- when you look at diabetes innovation and breakthrough, it all starts with kids that goes to adults and whether that's Dexcom, [indiscernible] insulin pumps, Omnipod, all those innovations started with children and then became successful in adults. It didn't go the other way around.

Unfortunately, we started the other way around, which is much harder. Changing 65-year-old endocrinologists who've been doing the same thing 40 years is probably one of the toughest jobs we have. And there's no incentives for them to spend more than 7 minutes a patient. That's the real problem. They're trying to change have it, that's really difficult.

Yes. And on the Peds point, I guess you've mentioned May, June is the planned launch. Like what can you share today around your intentions around the launch and the strategy?

Yes. So for kids, we studied the trial from 4 to 17. So we feel like we got a pretty broad age range. That will be the first thing, the FDA gives us all the way on the forward. They limit that in some way. The average age of the kids is 10 to 12. So as long as we're in that ballpark, we feel good. There wasn't a ton of patients below 10. We are -- we have 39 sites in the trial. There are roughly 50 sites in the country that treat most of the kids. So when you think about the almost 80% overlap of patients were in the trial or sites in the trial relative to the market, we're going to hire about 20 key account managers. They'll be responsible for [indiscernible] children's hospitals or those places that treat children connected to academic centers.

And then there's about 20% of the community physicians that treat pediatrics, and that's where you'll see our sales force also target that with Afrezza adults, we'll fold those targets into that group as well. So you'll see 500 to 1,000 targets be added to our call plan next year just for pediatric launch, and that's between the account managers and the adult Afrezza reps. And the reason all that's important is when you take a step back, we target 27% of the market, they have all real-time insulin. Post these transformations, January 1, we should be around 45% to 50%.

So it's a big leap up next year. So I'd say like we're not -- we're preparing this year, but the reality is we're going to have a much higher call percentage against the multi insulin market than we have this year.

Yes. That's significant. And so -- and also when you layer in some gestational diabetes, for example, to Afrezza, how does that also play into the long term?

Yes. I think that's a good question. So one of the -- if you talk to doctors today, they'll give you 3 excuses why they haven't tried Afrezza. They'll talk about the dose is not specific enough, we'll fix that with the label change. They'll talk about the lung safety. We have a large lung safety publication coming out. And then they'll talk about managed care. We charge $3 a day for a great experience. And you'll find most doctors when they give you the managed care objection, don't even know you have a $3 a day insulin. But we've decided $99 is a fair price for our product. We don't make any money on it, but we don't want people not to get access because the payers block them. And I'd say that's number one.

And so when you really think about those objections you have and then how do you reframe that with the customers to make an impact, that's going to be important there. I'm sorry, I missed your question. Pregnancy, sorry, payer. So the payers have indicated for the first time ever that the rebates related to insulin are no longer there and that the prices of insulin have come down, and therefore, blocking Afrezza is not always in the best interest anymore and before they used have to block us because they collect $2 billion, $3 billion in rebates from the competition and there's nothing we could do. If they added Afrezza who lost $2 billion rebates, you can't bring them. And so we were restricted to the sickest patients.

So now when you go forward, do you think payers want to be on the front page of New York Times for blocking pregnant women and gestational and kids? No, they don't. And so we feel like there's a real opportunity on the payer side, which will be one of the big objections to say, maybe we can contract it away and make kids approved easier, maybe gestational data still has to come out and see what that looks like. These babies have large complications and fetal maternal disease. And so can we really showcase Afrezza works well in that population.

We just published a case series of 5 patients last month, and we're doing a study right now to double crossover from injectable insulin to us. And so I think we'll see, hopefully, in that study, a really good readout on control and pregnant women. So those are the things coming next year that you start to get away from is Afrezza just a mealtime insulin that's inhaled to does Afrezza, which our data shows gets more people to goal, you don't need an insulin pump, you can get great control without an insulin pump and you switch off it to gestational diabetes to pediatrics.

So these are all 4 things that are happening right now as we speak next year that we can start to talk about guidelines getting updated, payer restrictions getting uplifted and really clearing some of those traditional hurdles for Afrezza out there.

Yes. And so look, there's a ton going on, clearly, the multiple launches coming up. You have data coming out over the next 12 to 18 months. How do you think about capital allocation priorities?

Nick's back there. He's got a lot of capital to press the gas on. But no, I think the good news is next year will be our toughest year financially, meaning we have the cash to do what we need to do. But if you really think about what we're doing, we're funding an insulin-naive trial first time ever, you're going to get newly diagnosed, you're going to get Afrezza first time. You want to change the next 4 years of diabetes, teach kids how to start with inhaled insulin and never get injected again. That's going to be game changing.

Then you got the 201 trial with IPF. If that's positive, the stock is a unicorn stock, right? If 101 reads out, that's going to be another huge bolus for us. So these are big bets. We have the capital to place all of them, and that's our plan. If you fast forward to the end of the year, we closed SC Pharma, we'll have $325 million in debt roughly from Blackstone and you'll have about $150 million cash on the balance sheet. And we're profitable today. So we'll try to maintain that goal. But we're not worried about quarter, if a quarter dips negative or 2, that's not the end of the world because we have enough cash to fund all these growth drivers. And so next year, you got them all hit at the same time. You should start to see that revenue inflection happen and then '27, '28 gets easier. So we're okay. We're ready to make those investments.

Yes. And maybe a follow-on question on the capital piece is just the deal with SC Pharma, how do you see M&A being as part of your toolkit going forward?

That seems to be the big question we got in the last 60 minutes we had 7 days. So I don't want to guess on that one right now. I think, look, when you make a big acquisition like this, nothing is more important than making sure the employees are happy in the integration, you hit the numbers you set out for that your deal terms were solid and foundational and that you deliver on those deal terms. And then the Board has more confidence in management as well as your ability to do more, but you got to first deliver on the first bite, and that's where we're at right now. We think we're a nice midsized company that can look for more. But I think we just have to do an excellent job on this integration and really prove ourselves first before we start coming to the next thing.

Yes. No, it makes a ton of sense. And look, it's a super exciting time internally as it goes already and so the integration will be key. And look, that's really all I had in terms of questions. If there's anything else, maybe we didn't cover.

No, just because shareholders are listening and some people in the audience here. I think the last thing I'll just close is our stock has run up the last 7 to 10 days with all the announcements. And so some of the question I get, did we miss the run-up? And I just want to give some perspective, which is we did a royalty deal January of last year, and that was a value of the company and the royalty of about $1.5 billion. And then there was a milestone for -- really was IPF indirectly if you looked at the revenue stream.

And so when you think about where the company is today, you still have that royalty stream still strong. Now you've got TETON derisked and now you have 101, 201, Peds, like there's so much more that's happened in 18 months that, that valuation to us is still quite undervalued from where we are. And people are looking for good stocks so good revenue growth and cash on the balance sheet to fund innovation. That's -- I think we're very unique in that situation compared to a lot of our peers.

Yes. No, we're looking forward to seeing it. Thank you for joining us, Michael, and I really appreciate all the time.

Appreciate your time. Thank you, Ross.

Thank you.

All right. Good morning, everyone. Welcome to day 2 of our Cancer Healthcare Conference. My name is Olivia Brayer. I'm one of the senior biotech analysts here at Cantor. And we're really excited to have MannKind with us. We've got CEO, Mike Castagna; and CFO, Chris Prentiss. Guys, thanks so much for making the trip. Happy to have you.

Thank you for having us.

So busy times at MannKind. You're off the heels of TETON 2; you're off the heels of announcing a big deal. Maybe just set the stage. I mean, what are kind of the top priorities at this point as we get into the back half of the year and really into 2026?

Yes. I think as we kick off the back half of this year, number one is the acquisition, integration and making sure that's on point. When you do these types of acquisitions, integration is key, and they can make or break things. The second thing is we actually have a label change coming up for Afrezza that is important. We want to see that. And I think the third thing is now all the TETON data is coming in, right?

And so how do you make sure you're scaling up manufacturing, you're preparing for emergency supplies as Q2 gets ready for that. Any support on bridging study. And then our continued work on that, we announced another deal with them on formulation of a new opportunity. So that's another thing we got going on in Q4. So busy back half here, kind of Labor Day just started this spring, and now we'll be running the marathon for the next 18 months.

Good -- busy is good in this market. Well, let me ask you. I mean, what do you make of the TETON 2 data? Obviously, only top line so far, but what's your take? And what's your level of enthusiasm just given that you guys do get a royalty economics on the DPI of Tyvaso?

Yes. I think for us -- and you made a bold call, so congrats to you, first of all, for getting out ahead of this.

Congrats to you guys.

So we didn't bake TETON in anything we were doing as a company, right? So for us, it was all upside. If it didn't work, we want to still make sure we could fund our development programs and our growth. It did work. Our job is to deploy capital and figure how to do that better. Okay. Sorry, I said it might go in and out. So the second one is just deploying capital. So now with TETON results in, I would say we're dramatically derisked in terms of can we fund bigger growth opportunities, bigger ideas? Do we kind of -- how do we deploy that capital to make sure we're making the best impact.

So TETON is all upside from that perspective. When you look back June of '23, we kicked off a royalty's deal. And we announced that in January of last year. That deal was valued about $1.5 billion for 10% of royal -- or 10%. And there was a $50 million milestone payment to get to $1.9 billion, which is basically if you get IPF, you can get these higher numbers. We weren't willing to sell the majority of the royalty or even more of it because we thought there was more upside with the IPF, high discount rate on these types of royalty transactions.

And so when you think about that, we were able to preserve 90% of the upside for our shareholders, and that looks really good today. And so that just puts the company at, call it, the $200 million royalty sale if all went well, that's a $2 billion valuation. Still today, 1.5 years later, we're trading below that value. So I think when you look at the company, even with TETON, it's even more derisked and you still got a lot of upside on anything else.

Yes. So maybe talk about the -- how you guys are thinking about the IPF market opportunity. I know, we'll hear more comments from you there soon, I'm sure. But -- you do have a 9% royalty that you do record. So as you think about the windfall to you all, I mean, what does that look like, right? What does the overall opportunity look like in IPF? And then when you think about the -- what that translates to from a 9% economics, how big are we talking?

Yes. I think the first thing that this is wonderful for patients, right? The results are spectacular. Patients have no option -- the options today, they'd rather die than take them. So it's really a tough market for these people. So for us, we're excited about that, number one.

Number two, people may not know, we have 201 in IPF, and that's an opportunity that just got derisked. So last year -- earlier this year when Avalent presented their PK/PD data, we were excited because 2 companies got to a similar dose independently because that's a lot of the magic you do here. And so that we felt very good and me, people like that, they're going to love what they see when we present our data.

And then on the second big question we get is, do you think it's a systemic or lung disease. And they showed delivering treprostinil via nebulizer to the lung worked and it worked really well. So we got even more conviction, I think, on 201 going into patients next year that our IPF program probably looks as good as it possibly could.

And so as we look at the TETON data coming out at ERS, we'll be personally seeing how did the monotherapy do, how did the combination treatments do, how did the sub-analysis do. And that's what we'll be focused on as we look at the data ourselves with UT. Obviously, UT owns the asset. We're just a bystander here, and we'll be a happy one.

But when you think about this market today, nintedanib does about $4 billion, and that's with a huge dropout rate, a huge patient population can't tolerate it. Treprostinil is a great product, and I think we're going to see things that we should be looking for as investors and as companies like how was the dropout rate? How does it compare to nintedanib? And that's going to give you some perspective. I believe treprostinil becomes the backbone of treatment now. I think this effect size is really good.

Yes. And we'll come back to your own internal IPF candidate in a minute. But as you think about full details coming out of ERS and potential success of TETON 1 next year, that's obviously a big question as we get into the U.S. readout. Any thoughts? I mean, are you expecting any surprises at ERS? Are you expecting any surprises from TETON 1 at this point, is 95.6-millimeter FVC treatment benefit? I mean, can anybody argue with that?

Yes. I mean the populations are similar that they designed in the trials in terms of demographics. We see -- we're looking at this for our own program in terms of Europe versus U.S. And so I don't expect a big difference. Could you see a small shift, possibly, just nature of running these studies. But I think in general, what TETON 1 is going to give you is now 2 data sets with 1,200 people, really a subanalysis will be that much more powerful as you combine them.

So for me, I don't -- I just think it will be a duplicate of what we have. So we always felt like even if this one didn't work out, you got a second chance, there could be some statistical anomalies that happen in these types of studies. But the fact that it was so good, right, just gives you that much more conviction...

Yes.

For the second readout.

And then -- so I think everybody in the audience knows the TETON 2, obviously, studying Tyvaso as a nebulized formulation and you all get royalties on the DPI formulation. So what's next, right? I know you talked about a potential bridging study. I mean what is your conviction in Tyvaso DPI in IPF? It's a question we get a lot, right? Is there a risk that the lung function won't be able to -- in an IPF patient won't be able to handle a DPI. What do you make of that? Or what are your thoughts there?

So I'd say having spent a lot of time with these IPF patients, and I have a family member who has this disease, they -- in the beginning, they're healthy as can be, and they're taking the meds and they feel healthy. And then towards the end, they start to really collapse, I'll say. And that those patients can still inhale 2 kilopast coughs for 2 seconds, which is what you need for an inhaler. So it's not a huge burden.

Could people get a small cough? Sure. But they -- that's what they do like every 5 minutes, right? And so whether they do that one extra time in an hour, every 5 hours, it's not the end of the world. But I think even today, I'm sure if you looked at the ILD and PH data, I'm sure 1/3 of those patients have IPF already. So you can already see in the real world, there's probably people taking treprostinil DPI that are doing fine. And if it's that big of a burden, I mean, I think these patients do anything to take the drug that they take an asthma inhaler. There's just different things you could do if it's really bothering you, just like they take imodium to prevent the diarrhea, the nintedanib, they want to live.

And so I think as long as it's generally pretty tolerable, the cough is not. We've studied this in 3,000 patients. We study in COPD and asthma. People still get their drug levels. They still get the efficacy. They just have a slight cough, but very few people discontinue because of the cough. And so I think that, that will be -- it should be minimal, but again, time will tell.

Do you think there's a world in which before Tyvaso becomes approved in IPF that we could actually start to see some off-label use or an accelerated use, right, in some of those patients that maybe have background PH and an IPF diagnosis?

That's what keeps me up tomorrow because I worry that there's such a large demand out there that when you're dying, you do anything you can to do. When you've got cancer first, you do a search all day long, who's the best doctor, what are the treatments. I think when you only have 2 options that aren't that good and you find this one is great, I think you're going to see people find this one way or another.

And the data once it's published and presented, I think it's going to be hard for insurance companies to say that there's not an effect size here for a drug that's on the market, or I'm not speaking for UT to be clear, but couldn't UT create an expanded access program or something like that.

Right.

So I think there's a duty to make sure patients have access to this as soon as possible. And given how good the results are, then, hopefully, that will happen.

Yes. And then let's shift gears to your own in-house candidate or MNKD-201. Maybe just give us the back story there. Why did you all decide to develop an inhaled nintedanib version or an inhaled version of nintedanib? And then as you see the landscape evolving and you mentioned that Tyvaso may become backbone standard of care, where realistically does this fit in? And is this more complementary, right, than competitive with Tyvaso?

We've always had the belief that nintedanib directly to one will work. And so that's been the foundation for 6 years. I've been working on this with the team. I always believe that this would be a combination opportunity for patients. I don't think one drug in IPF is enough. We just don't have additional drugs. So I think as the data comes out, again, monotherapy versus combination treatment, how those effect sizes different?

Because I think when you look at the only data, we have today on pirfenidone and nintedanib, it just isn't that great because there's so much drop out, there's so much overlapping toxicity. That's probably not the best regimen.

But can you get to a nintedanib Tyvaso and how does that look? And I think those are some of the data sets we want to see as the data reads out. My background, as you may, is an HIV, so I did a lot of combinations in my life. And I -- you look at combination asthma drugs, combination COPD drugs. I do think these combinations will be opportunistic in the future.

And you all have talked about kicking off the Phase II in the not-so-distant future. What have you decided at this point around trial design, dose levels, different arms, what background standard of care do you plan to study against or as a monotherapy?

Yes. So right now, we pivoted ex U.S. 100% for the trial. We'll submit it to the FDA. If they want to open it up, we'll open it up here. But I think by the time we kick it off in Europe and other countries, we'll have enrollment. Enrollment should go pretty quickly on this one. We're looking at 228 patients, I believe. So it will be 75 -- we're looking at a 6-milligram daily dose and an 8-milligram daily dose.

And so those will be in a BID and TID. We're looking at different dosing regimens. And we're looking at about 75 patients in each arm, 2:1 randomization against placebo, and we'll test the first dose in the office. So I think that's one of the things that we'll be looking for early in the new year is, hey, if everyone is tolerating in the first dose, generally, that's where you get the cough. Generally, it gets better after that. And so I think that will derisk the program the longer that trial goes on. And we expect to have some top line readout in '27 on that trial.

And Mike, why go ex U.S. and then the sites that you do plan to activate, is there any potential synergy there with what United is doing? Or do you have active engagement or relationships already with some of those ex U.S. sites?

I mean the good news is there's a lot of CROs have a lot of good history with IPF because of lot of failures, unfortunately. But -- so it was a tough call because, obviously, people around the UT trial did a great job. We looked at them, we looked at a couple of others. So I think we have a great CRO partner that will be key for these markets.

The reason to go ex U.S. is the FDA wants you to have placebo-controlled trials for 30 weeks on top of background therapy. It's just not feasible ethically IRB to get these things through the IRBs. You really can't -- you're switching off the standard of care. And so to add the background therapy, you would never finish that trial adding on the pirfenidone. There's just not enough people. And so we felt that pivoting ex U.S., we actually could go a lot faster and you can get to a placebo trial, which the FDA wants.

So we took some of the feedback they gave us, incorporate that into what we're doing. So we do come back, we do have the placebo while the first dose in the office, we'll have some early reads on efficacy, and we'll have on top of pirfenidone. And we're writing the protocol because the BI drug should be approved soon. And so that will be another drug that we could be on top of. And so we'll look at that as well as an opportunity.

So I think when you look at the future landscape, you'll probably see treprostinil and the BI drug, the new one coming out be maybe some more background and maybe nintedanib becomes the add-on in the future versus where it is today.

Yes. That's a good problem to have. And I guess you'll figure that out when the Phase III comes around. What about -- so for the Phase II, I mean, what kind of FVC treatment delta realistically would you be looking for? Or have you disclosed what you plan to power for?

Yes. We're not trying to power the study to show -- we want to see descriptive statistics here, right? So we see a trend. We'll do some synthetic modeling on the comparator. The 12 weeks will be the primary endpoint of the trial. And we think when you look at the -- when you look at nintedanib data within 12 weeks, you start to see the separation and then it just continues, right?

And so the patients at 12 weeks on the placebo can roll over to active, so we'll get that arm. And then the people going active can continue on for another 6 months. So I think we'll see patients going on for 6 to 9 months, and we'll start to see that delta. We'll look at the combined arms. I don't think we're going to see a true efficacy difference between the 2. But because it's idiopathic, we don't know what it is. We don't really know [ NTMs ] activity. Some of the work we're doing is, is TID better than BID? Do you see some subtrnds? Do you see different combinations? Is it receptor engagement? And kind of those are some of our questions. So that's why we decided to go TID and BID.

We don't expect to see a huge dose response between the 2. So we'll look at the combined and we'll look at some subsets. But we'll have 150 patients between both arms. And so I think we'll be able to see the delta there at 12 weeks.

Yes. And you mentioned Avalent is another company that is doing a similar approach. Are there any ways that you can expedite the clinical path forward for your inhaled nintedanib program or essentially catch up, right, to not that there's a lot of competition out there, but when you think about time lines and when you could come to market and the fact that the IPF landscape will very likely and realistically look different by the time that you come to market than it does today. Just talk us through some of the strategies that maybe you can implement to accelerate, while obviously still maintaining.

No, I think that's the big reason we pivoted was we did not want to wait and argue with the FDA for 6 to 9 months. I did that for clofazimine for a year.

Yes.

We feel coming back to the U.S. for a Phase III design, by the time that happens in '27, you'll have hopefully Tyvaso DPI in the market, you have BI on the market, you have pirfenidone. Now we could actually do an on top of background therapy trial in the U.S. The FDA will be happy with that. We'll have the efficacy. That will go smoothly.

The other thing that's in our control is we're spending a little bit more money on 201 to activate a few more sites to actually go a little bit faster. So that's in our control. We could have saved a couple of million dollars, but instead, we'd rather have data sooner. We'd rather take some of that risk.

We're getting -- we know this spring is a time line of a quarter or 2, and that's anything we can do to drive time lines faster, we will. But there's just a rate limiting of how long it takes to activate sites, how many patients come in per site and then it will wrap up pretty quickly. So I think that's number one.

CMC, we're in control of. We make it ourselves. We have our own plant. We're not dependent on third parties and their time lines. And so that's a positive for us. And otherwise, I think it's on track to -- we should be up and running by the end of the year. And hopefully, first patient will be in this year or early next year, so.

Yes. Well, we're looking forward to the momentum from that program. So scPharma, congratulations on that deal and your financing with Blackstone. So a question that we've been getting asked a lot is why do that deal right before TETON? We were getting questions around; does it change your conviction in your own internal pipeline? I mean, what do you say in response to that?

So we've been looking for a bolt-on acquisition for a couple of years. We bid on some we didn't get and some just didn't make sense in the end once we got to the finish line. This one, we went at something more in the orphan lung space, to be honest with you. We just couldn't find anyone's worth. We don't need to take on clinical risk at this point, right? So we see a lot of BD deals take on a lot of clinical risk and then year out.

A company of our size, we want a derisked asset that had commercial derisking with what can we add value. And I think that's when the CSC. It wasn't a natural observation, but as you dug in and said, do we have -- we're looking for assets that could bring in $100 million to $500 million revenue that we could bring some value to drive a little bit faster. And I think that's what we saw in SC is -- the synergies weren't obvious around diabetes. But as we dug in, we can see a large overlap in people have diabetes and heart failure, a large overlap in CKD. So how do we increase share of voice? How do we increase the funding for them to accelerate sales faster?

Because what we see is a great company with great people, but they were just understaffed, under resourced under -- you're in the middle of a launch and you got 40 reps, that's not enough. And then you go to 80, it's probably still not enough to cover 2 indications. And so that's what we see as a real opportunity that's meaningful around the drug device combo. That's been our background as drug device combos. It's been my personal background in injectables as well. And so how do we help them go faster and do what they're doing and just do it better. And I think that's one that you'll see a bolt-on.

I think in terms of Afrezza, it is a single product. And so having 2 products in the cardiometabolic space makes that a more sustainable business. But there's nothing -- to me, you look at the future, we'll have an orphan lung business in 201 and 101 and Tyvaso royalties and then you have the in-line commercial business with the pipeline, but -- I mean with the online assets. But the big thing for us was diversifying revenue. So when you think about MannKind, almost 65% of our revenue was Tyvaso related. So this hopefully push it to 50-50. But now with TETON, maybe it pushes it faster, I don't know. But these are good problems to have. But I think when you look at MannKind, it's just a good growth story and with optionality.

Yes. And as you think about the commercial rollout for the scPharma product, where do you feel like you all can add value? I mean I recognize that they had some capital constraints and that, that was probably the biggest burden that they were facing. But as an organization, are there ways that you feel like you can expedite the launch? Or are there catalysts coming, whether it's next year, or...

Yes.

Or this year even that you feel like could actually start to accelerate the launch and maybe create a little bit more of an uptick in revenue so to speak.

So I think that -- a lot of people -- we don't give guidance, which is always one of our challenges, right? So I think you can see the CVR here has $110 million to $120 million number for '26. We feel very confident in that range. They felt confident to take on that CVR. And so that puts a mark in the sand that we'll be aiming for. And I think that's important.

And the question is, can you go faster, right? And I think subcu will give a better COGS reduction and better opportunity to scale faster. And so if that happens in July, if they get that filed this month, then we'll be really excited to have 5 months of launch next year, and you can see a nice back half upside to where they are.

Freeing up COGS would actually give you more money to deploy, whether you're removing rebates and restrictions or you're putting more energy into sales and marketing. I think that's TBD. It's too early for us to give you that guidance.

But at a bare minimum, I think they need more key account managers calling the hospital systems. I think they need more reps calling on cardio. They need more reps to share voice on [ NEF ]. And so that's where you start to get to the benefits of the combination, which is we have -- we'll have 70 reps by October selling Afrezza. We can easily give them more support in another product. We have BAQSIMI in the bag this year. So they're already doing 2 products. That's not a big deal to have more share of voice.

And then sc, when you think about what they have, they have, call it, 80 reps roughly, 40 on -- if you did the FT allocation, 40 on cardio, 40 on [ NEF ]. That's not a lot in cardio. These people have 100, 200 reps easily. So I think those are the key opportunities. And there's just no shortage of places that have struggles with fluid overload. And to me, whether that's nursing homes, it's hospice, it's hospitals, it's ERs. Everywhere you look, there's patients unfortunately struggling with edema, and there's a big opportunity here.

And there have been some challenges, right, around the Part D redesign and patients having to hit their max out-of-pocket spend. So are there things that you guys can do to smooth that over, no pun intended, or ways that you feel like you can increase adoption commercially, while still facing the realities of the Part D redesign?

Yes. So I actually like where the price point is. It's got a great pharmacoeconomic analysis. And so when they first launched, IRA wasn't in place, right? It wasn't until they came into this year that all of a sudden, they could start to hit their stride. And unfortunately, in these single product companies, you often struggle in the beginning and then you work out your kinks and then you can take off.

And so by the time they got to where they were in Q4 last year on their sales force expansion, you started to see that impact in Q2. Q3 is not out there, but you can assume we can -- we're excited about the trends that they have, the number of prescribers, the depth of prescribing, the breadth, the indication prescribing. And to your point, at the beginning of the year, you're going to have this huge co-pay and everyone ways to fill a drug. We see that on Afrezza.

But by the -- as the year goes on and now whether it's Tyvaso, DPI, FUROSCIX, Afrezza, patients start to refill their drugs better in the second half than the first half. And so they generally hit the max out of pocket. And so I do think that phenomenon is a problem for all Medicare patients. But the Part D redesign, I think, is a benefit for patients, and we see that even Afrezza got $35 Medicare by law, and we could see our sales jumped up 30% in Medicare just because of that compliance and cost.

So it is a barrier to patients. And I do think that, that smooth out, you'll start to see patients. What we hope to see is one day they just keep FUROSCIX in the cabinet. They're going to need it. It's not a question, right? They need it. And so when they hit their out-of-pocket deductibles, can they wait and have some available so that they're not worried about the out-of-pocket as much.

Yes. And to that point, I mean, what is -- and now maybe I'm thinking a little bit forward to the more convenient dosing, right? And the -- I guess what I'm trying to figure out is, one, what is the shelf life of the more convenient formulation? And two, I mean, could this realistically become like an EpiPen, right, where patients are carrying this around?

Yes. So I think they want to carry around every day, but they're carrying their medicine cabinets. And so I think today, the product has a couple of year shelf life, and that's the point. So carry it around, you run within a year or 2, obviously, 60% of hospitalizations are because of heart failure. So I don't think that's an issue.

When you get the subcu, they have 2 different subcu devices. And so I think depending on how they flow in the marketplace or approvals, they will have some dating that the company will -- I think that message will be there and the convenience factor will be there. And then the other part of that brings is the -- with the cost reduction, you can actually bring this to other markets. Today, you really can't go to Europe with an on-body injector, but you could get there with a subcu, so.

Okay. And then your other commercial franchise, Afrezza, you did mention that you do have a potential label expansion opportunity coming up. So where does that stand? How are you guys thinking about the pediatric opportunity more broadly?

Yes. So 2 steps. We got an October label change, which will give us new dosing in our label. And we'll see if that -- how that looks and that will be exciting because what that does is it allows us to actually talk about the postprandial control of Afrezza. We reduced postprandial's over the standard of care by about 35%. We get twice as many people to goal. And if you ask most doctors, most practitioners, they don't even know our data. So that's our fault for not getting that out there, and we'll try to do a better job with that going into next year.

And then pediatrics, if all goes well, should be accepted in the next month, and then we'll be on track for hopefully a May approval. And our target is to launch that at ADA next year. And I think even when we talk to the adult docs, they agree there'll be a different launch trajectory in kids there is adults. And you talk, there's a 500 pediatric clinicians out there. There's 50 academic centers, hospitals, children's hospitals. We're going to hire a dedicated 20-count person team just for kids to make sure there's no distraction that they can focus on that, and 39 of those 50 were in our trial.

So we have a lot of experience already. Those docs have already come back and said, "Hey, we're doing the gestational trial because of INHALE-3 data that came out. We're now doing an INHALE first trial, which is the very first insulin a kid will get ever. So they'll go to the hospital and they get discharged within 5 to 7 days, they'll be on Afrezza.

These are being done -- it will be 10 centers to 2 academic centers as Jazlyn and Barbara Davis. And so having 2 of the biggest pump centers in the world actually do INHALE first is actually exciting because people say it's 10 years old, is anything really going to change? Well, this is where it's going. And if that works out, we'll be very happy in the end.

Yes. Are you starting to see a shift in the way that physicians are thinking about inhaled insulin more broadly? Because that's obviously been a big pushback, right, is changing prescribing patterns in this market is not easy and not trivial. So what's been the receptivity to some of the latest data you've been putting out?

Yes. I think the new data coming out last year and this year 2 things have happened. One, I don't get questions on lung safety anymore. And we'll have a large lung safety analysis coming out early next year. And so I think that will put that to bed. When you look at the kids' data, especially, these are growing lungs in a couple of hundred kids, we saw no safety signal at all. And so that's exciting.

And that's -- if you ask me like the #1 reason doctors are not prescribed inhaled insulin, it's because of lung safety, even if they'll tell you that, that's why. And so being able to put that to bed after 10 years, I think, takes a major burden away. And the second one is patient access. And that has been a headache. The payers have been really restrictive. They're getting billions of dollars of rebates from our competition. As insulin prices have come down, that barrier is actually getting reduced.

And so we talk to payers, there is an opportunity maybe to contract away for peds to open up access faster. There's an opportunity on Medicare because of 35 hour by law. So I do think the access question for Afrezza will get better. And if we can solve those 2 problems, I do think you'll start to see some more momentum happen.

Okay. Great. Michael, Chris, really appreciate it. Great discussion, and congrats on all the progress.

Thank you. Thanks for having us.

All right. Perfect. Thanks, everyone, for joining us. I'm Tiago Fauth, I'm a biotech analyst here at Wells Fargo. We're hosting a fireside chat with MannKind today. So I have Michael and Chris. Let's kind of walk through a lot of moving parts here and the story just got a little bit more noise from this Monday, right? And we'll get there, but. Perhaps, say, you can start with the business.

Like, it's funny like we still get some investors that we talk about MannKind. So we go, the Afrezza company or just all the Tyvaso DPI royalty play like a lot has changed. So let's give you a couple of minutes to kind of run down to what the business actually is today?

Yes. I think when you look back in time, it was a diabetes company, right? And really, the drug device was a lot of challenges, I think, for the company. But I think when you fast forward, one of the things we've tried to do over the last 6, 7 years is differentiate us on the clinical development side. Applying the technology to rare disease and specifically orphan lung. The UT partnership has continued to blossom nicely. And the last thing you've seen is how do we diversify even faster? How do we get more catalysts. When we look at Wall Street, a lot of momentum investing, a lot of catalysts investing. And so if you look out, we wanted to make sure we had enough positive things happening, and that gives investors things to look forward to and lots of shots on goal. So when we look at -- you got an in-line brand, you've got royalty and you got a pipeline. So you've really got a lot of different things to look at.

Yes. No, fair enough. And I guess we can probably start with my last question, which was going to be the scPharmaceutical acquisition. So you talked about diversification. To be fair, like some investors just didn't understand like all the strategic fit. This feels a little less orphan lung, which is where the core of areas of expertise had been in the past. So again, how -- can you make the business case with the acquisition, how much operational leverage? Could there be synergies? How are you thinking about that as a part of MannKind?

Yes. I think, number one, when you take a step back, what do these companies have in common, right? Drug device combinations, build on an injectable platform experience in terms of these guys had CRLs. They've learned through those on-body injectors and subcu. The second part is, does it have a large enough scale. We've been looking for something for a couple of years, and it just didn't work out the ones we were looking at. And obviously, like to have some of that just fits nicely with orphan lung but there's not a lot out there and not a lot that you want to pay for that you're going to take on clinical risk. We don't need to take on any massive risk at this point. The company is profitable, we're growing, we're diversified.

And so we're really looking for something that had revenue in the $100-plus million range that had an opportunity to scale. And there's not a lot of those types of opportunities out there. And so we looked at -- sc came along. We felt that the team has done a really nice job. They're right in the beginning stages of their launch. And when you take a step back and you look at -- take insulin pumps, it's a $5 billion market. And all we're doing is taking a 100-year-old product trying to manipulate the profile we get in the body. You take Remodulin, we're getting treprostinil in the body, you take Neulasta, we're preventing hospitalizations. These are multibillion-dollar opportunities. And this thing has that opportunity right in front of you.

Heart failure is a huge market. Lasix has been around for 60 years, being able -- this is I would love, right, being able to take a device and challenge with the formulation and put them together, it just fits really nicely. And we think it wasn't obvious on the surface around the synergies or the bolt-ons in terms of when you think about cardiometabolic heart failure, chronic kidney disease, large overlap in diabetes, large overlap in where we're targeting. And a lot of these patients are also on insulin. So when we think about long-term business, we're kind of all in this cardiometabolic space. And so it kind of fits nicely that way.

Just from a revenue perspective, it's not immaterial relative to your current top line, right? So the mix is going to look fairly diversified over even the near term. Is that fair?

Yes. I think when you look out, we're trying to get to like a 50-50 ratio, roughly royalties, manufacturing versus in-line commercialization products.

Got it. No, perfect. That makes sense. Perhaps pivoting to, I guess, I won't call it the legacy business, but prior to sc, again, you were developing your own internal pipeline in rare lung, a nebulized product, the DPI product. To your point, you have expertise in Afrezza, with Tyvaso DPI, display book of inhaled formulations or drug device combos again, some companies have been less successful in developing good formulations, good devices that deliver reliable PK what's kind of the secret sauce? And how are you applying that to 101, 201, how should we think about from a technology perspective for both INHALE and DPI?

Yes. I think when you take a step back, again, you got 34 years of the company existing around inhalation formulation technology and scale. And in that time frame, the team has probably formulated close to 50 products, some have gotten to Phase I, some Phase II, some approved. And so a lot of that magic is around, can this be scaled? Can you get the right dose in and does it work? And even once you get there, will the payers pay for it? And is there a population unmet need. And so many times, things got killed because they were a great drugs, they'd have a fast onset of action, but we don't think the payers would actually reimburse the proper reimbursement. And I can name multiple things that we didn't do in that space.

But when you take a step back, we try to say, how do we best apply our technology to make the biggest impact on human life. And we felt IPF is an unmet need. NTM is an unmet need. We have our dry powder in development as much as a nebulizer. And then what's the core capability around these drug device combos and predicting that dose and calculating that dose. A lot of companies just have not survived dry powder products or nebulizers and they probably miscalculate a lot of their animal models or see through it. And so I think it's a little bit more art and science sometimes and people unfortunately mistakes that we're devastating. So far, our team has been right more than they've been wrong on the shots on goal.

There you go. And again, for 101 before we go into the actual clinical trial design and a more nuanced discussion. So again, NTM, MAC, there was a lot of skepticism back in the day for Insmed even for ARIKAYCE, right? And that turned out to be a sizable market. I think the story has moved on from that on their side, but still like a reasonable market, even on the relapsed/refractory setting, what is the unmet need, I guess, that, that remains, right? Because there's going to be some questions around competition versus ARIKAYCE? Why this specific product that you chose so on and so forth. So what was the unmet need that you guys are searching to close?

I think when we were looking at the time, we were looking for what else can we put on the platform that would be scalable, would be an orphan disease and lung and that's when NTM popped up on our screening. And so we were able to find something. And at the time we were looking for a license in the dry powder. That discussion turned into full acquisition, which is how we got clofazimine back in 2000. And then just had a lot of work to do on CMC and scale and FDA. So all that work got done we're now in Phase III.

When you look at the unmet need in NTM, there's only 1 drug approved in the case of ARIKAYCE. It's only in refractory. Everything in front of us has failed and everything behind us has failed. So there is nothing else really in development. And I think Insmed has done a really nice job. They launched right in the middle of COVID, which is not easy. They bought it globally, which is not easy, and it's going to do $400 million or $500 million this year, right? And so thinking about an orphan disease, making a difference, challenging product, and it does have some safety and tolerability issues. And so when we look at clofazimine, it's a drug that's well known. We know it works in NTM in all the preclinical models and real-world evidence.

But then how do you best position it? How do you best dose it? How do you minimize the toxicities that were known of clofazimine, which is skin discoloration, organ accumulation, QT prolongation. So really narrowing that dose down, hopefully getting to the most effective lung-delivered dose. And to your earlier question, one of the things we did was we tested low, medium, high and all of them looked safe and tolerable. And when we saw AN2 had a problem, and Aerovate, we actually decided to go up a dose higher just to make sure they have a little bit of safety margin because as much as we like the team and all the work they've done, you just don't know until you put in patients what happens. And so we actually went to the middle dose and said, "if people can't tolerate that, they can down dose." So far, in 90 patients, nobody is down dosed yet. So we feel pretty good about the tolerability profile so far, but we'll continue to watch it.

Yes. But just from a conceptual perspective, this looks a lot more like ARIKAYCE and some of the other alternatives. So some of them are novel anti-infective mechanisms, some of them were kind of repurposed the whole liposomal amikacin like you're basically just going again, nebulize clofazimine, which is a drug that you know should work in this indication and just limited by some of the aspects you mentioned, correct?

I think some of the differences is clofazimine is very lipophilic. So when it gets into the lung tissue, it gets absorbed pretty deep. And then the macrophages heated up and they crystallize and they break it down. Clofazimine has about 70-day half-life, so you load up the lung for 28 days and then you stop taking it, and then you're off for 2 months and then you retake it again. So you've got this unique dosing regimen that removes the burden off the patient, solves some of the co-pay issues. And really, they don't depend on the nebulizer every day, and we have a dry powder coming. So we hopefully, we'll make that easier and the dry powder may have a different dosing regimen. We might dose it every day at a smaller dose. You might load up the lung, take 1 week on, 1 week off. We have some flexibility. We'll get the animal model shortly, and then we'll start to look at the dosing regimen for that.

Interesting. And let's talk about the Phase III design. I guess, so we went from a Phase I directly to a Phase III with an interim readout in the middle, right? I guess just from a time line perspective, I don't think you thought it made sense to run a proof-of-concept small Phase II and then see from the -- like what gives you confidence, I guess, to move? And can you talk about Phase III design?

Yes. I think we don't have any questions that clofazimine works, right? And I think if you did, you'd want to do a Phase II to kind of get to a tighter size. I think at the end, we were up against competition, number one. We were up against watching 2 companies take forever to enroll the trials. And we were very fearful that what if Phase II took 3 years, you wind up killing the drug probably. So we kind of felt let's get to the endpoint. If it fails, it fails, if it works, it works but there's not a question it can work. And so all that energy for the Phase II to really not -- we didn't think the dosing was going to show a difference whether you use IV or low dose.

And so then, what are you wasting 2 years of a Phase II study for? So we took a little bit of risk. We actually had originally 2 doses in the Phase III trial. And then we looked at ARIKAYCE, they only had 1 dose, and we kind of asked ourselves do we really need 2 doses? FDA agreed we can go down to 1 dose. And it was definitely a negotiation with the regulatory authorities in Japan and other places, but they all -- once they saw the data and how we got to our dose calculations and lung concentrations, everybody agreed that it was a sufficient level. And so there's no reason to do a Phase II, to be honest with you.

Got it. And you do have an interim readout, right? So what are you powering that for? What are the actual outcomes of that? Are you actually going to see the data? Is it mostly going to be a sample size reestimate? Like what -- how should the Street think about that?

It's mostly a sample size reestimates. So as you -- one of the things to getting back to the companies that were out there were taking forever to enroll 50, 60, 70 patients. So we wanted to get this to be as small as possible, but also statistically possible, right? And so that got to you about 180 is the smallest you could go, so 120 on active 60 on placebo. And then at 6 months, the 60 placebo can roll over to the active. So we'll get 180 patients for a minimum of 6 months and then 120 for 12 months, hopefully. So that will give you a long enough duration of effect. It will show you any relapse breakthrough. We'll also see some people that enrolled in the trial who may have had a negative sputum and we'll confirm that it was negative. And then today, we maintain negativity in how do people kind of progress. So we're going to get a lot of information out here.

But in terms of the size of reestimation, the #1 thing is we'll let the trial keep enrolling until we get to that data point. It's powered a little bit more on the sputum than it is the PRO because we feel like the PRO is not sensitive enough. You could find yourself with a large variability. And honestly, if you need 500 patients, you'll never finish the trial. But the PRO so far looked positive with ARIKAYCE, we're using the same one. We're probably using it a little bit differently, but I think that should predict the sputum. And then we're powering it for a 20% delta from placebo. So as long as we meet that threshold, then we'll be good. And you could see it go from 180 to 210, 230. It's all predefined in the statistical plan. And there's also a futility as well. So we'll know if the drug works or not.

Fair enough. But -- and there was a lot of discussion with Insmed and ARIKAYCE back in the day about sputum being enough. I recall there was a lot of discussion around that. So you have both sputum and the PROs [indiscernible] that seems to be a little stricter, I guess, than the precedent that was set before. Is that -- like how should we -- is that concerning at all? Do you think it's reasonable? Do you think if you actually just see a very strong signal on sputum and a trend on the PRO that might be fileable? How should we think about the scenarios?

I think yes. I think as long as the sputum -- the efficacy on sputum has to be there, right? And so then you get into the PRO and which direction is the PRO, what are you measuring and what do you see? And I think some of the devil will be in the details on how it reads out. We're picking the most bothersome symptoms and then does the patient improve and they're able to measure against their own self. So I think the way it's being calculated derisks it a little bit. But to your point, ARIKAYCE got approved with no PRO. So we think that's the baseline opportunity because as long as you have better dosing, better tolerability, good safety profile. That's going to be hard for the FDA to say this shouldn't be an option for patients because without this, there is nothing else. And so we feel good about that. The rest of the world only needs a sputum and only needs 180 patients. And so we feel as long as we hit that 180 mark, we're good to file rest of the world.

Got it. Okay. And then just thinking about actual commercial positioning here and this -- I don't know exactly why, but this concern that because of ARIKAYCE there might not be room for additional players like I say, in fact, that there's always going to be some degree of resistance in some patients. The sputum conversion rates are not -- they're high, but they're not 100%, right? So what is the commercial opportunity here initially?

I mean there's 100,000 plus patients in the U.S. and 100-plus in Japan. The enrollment in Japan has been off the charts. So when ARIKAYCE has launched there, we can see that there's a large unmet need, a lot of excitement. In the U.S., it's a little bit harder to enroll because people don't want to be in a placebo trial. People want to try ARIKAYCE first and you got to be clean out ARIKAYCE for a little while to get our trial. But there's a scenario where you'll add this to ARIKAYCE because they're probably synergistic together.

There's a world where you probably use it before ARIKAYCE and there's a world you use it after ARIKAYCE, but there's more than enough patients to build a sustainable business around. And to your point, a lot of people stop ARIKAYCE after a month or 2, right? And so that population is looking for something else. But then you got this huge early treatment population that we think a dry powder is going to do nicely. And so that's really one of our goals is to get to dry powder to a point next year where we can move that in the humans and that'll be exciting because that really opens up to us the major market.

Got it. Anything that we didn't cover for 101 before I move on to?

I think we got it all.

Okay. So let's talk about 201, I guess, nintedanib. So again, kind of a similar playbook. You know nintedanib has systemic tolerability issues likely driven by systemic exposure. Theoretically, if you drive -- if you deliver a DPI, you could reduce that. But what does the data suggest that efficacy is driven perhaps by the positioning in lung tissue? I'm curious if you're not going to perhaps miss some of the efficacy if you don't have the systemic exposure that was one concern with Aerovate and some other players back in the day?

I mean I think that is a little bit of a debate out there. I'm actually really excited about the Tyvaso data that came out yesterday because they showed you can deliver prostacyclin directly into the lung and see a lung effect size, right? We didn't have any data on delivering a target to the lung and showing effect size till yesterday. So to me, that just derisks 201 a little bit. That question will always be there until we get the data readout. But I think we feel good. I mean I think when you take a look at the other competing program in nebulizer, 2 companies independently calculated a dose very comparable. And so we feel very good about the dose calculation. I'm sure the other company feels good.

The part we feel better about back to your earlier question is how do we have confidence? We know our FDKP, we know our delivery platform. We know where the drug goes. We know how much gets delivered. That's pretty consistent from API to API because FDKP is the magic ingredient. And so when you think about -- we haven't released our PK/PD data yet, but if you like the other company's data, you're going to like our data better. We really have good deep lung concentration penetration. We haven't -- we'll put a publication out next year. We just released our target dose on the Phase II of the last earnings call.

So I think you're seeing -- we're targeting a 6 to 8-milligram dose. We're looking at a TID and BID because to your point, is it the frequency of the target? Is it Cmax? Is it AUC? So we want to make sure we're covering those things. So that's an example where would I love to skip Phase II? Sure. But I'd be running a large Phase III with a lot of risk. And so in this case Phase II...

Got it. And so let's talk about the Phase II design in terms of inclusion, exclusion criteria, length of treatment. Again, it feels like FDA has been fairly strict around IPF programs overall. So can you just discuss some of those regulatory interactions and why you landed in the current design for a Phase II?

Yes. I mean we honestly went to the FDA with a Phase II/III designs, and we were optimistic because a lot of the time lost in trials is the activation of sites. And so we really wanted to kind of build a bridging study and keep going and save some time and money. The FDA was adamant that has to be on top of background therapy and placebo-controlled. And so we kind of looked at the experience out there. We think IRBs will have a hard time approving a placebo-controlled trial for 30 weeks in the U.S. And on top of background therapy, you never finish enrollment in the U.S. because you're replacing nintedanib, so the only background therapy is pirfenidone. And that's going to be a very small subset of patients.

And so that caused us to go redraw what we thought was a possibility. And so we are addressing some of the FDA concerns. We'll go ex U.S. It will be a 12-week endpoint because we think we can get there from an IRB perspective. If you look at the BI data at 12 weeks, you start to see separation and then it just continues to build. So that we felt that, that was the earliest point you could ethically treat to not stop them short. And then if they want to roll over for another 6 months, they can continue on the treatment. So while some patients go 6 to 9 months, some people will stop at 12 weeks, I'm sure. And so that's number one.

Number 2 is you could be on top if the BI drug gets approved in the time frame we're launching this, you could be on top of the new one. You could be on top of pirfenidone, you could be naive. We think a lot of the patients where we're doing the study, they will be naive while they're waiting for the new innovation to come or pirfenidone or nintedanib oral. It takes about 12 weeks to get access. And so we'll be able to run the trial in a 12-week window, get it enrolled quickly, come back to the U.S. And now we're excited because we weren't sure with Tyvaso. Now when you go to background therapy in 2 years, you got Tyvaso, you got BI's drug, maybe BMS and pirfenidone. Now you have 4 options. And so to do a Phase III globally becomes that much easier. So I think the background therapy will be important.

Yes. So it's not just about enrollment dynamics and competing versus -- because, again, we had a few failures in the IPF more recently. So you're not actually competing for the patients is not the issue, the issue is just optimizing the inclusion, exclusion criteria?

There's not a lot of -- there's obviously, IPF stuff happening, but we feel like there's a nice window here to kind of get this moving quickly.

Got it. Okay. And what would be, at least from your perspective, a win when you actually get those Phase II data, again, it's not a long enough treatment window that you may see. What sort of the signal is reasonable to expect, given the shorter duration?

I think you'll look -- we'll use borrowing and modeling to kind of show the effect size and how that trends out over time. But there'll be 75 patients in the 6-milligram arm and 75 patients in the 8-milligram arm. So we'll have 150 patients to do a combined analysis and compare that to placebo. So if you're not seeing an effect size signal in 150 patients we probably have a problem. And also, we'll be looking at tolerability. So we'll be giving the first dose right in the office to make sure the tolerability is there. So that's the only thing people will be worried about. And so as long as we can show the IPF and the DPIs are tolerable, that will happen pretty early in the trial. So I think that becomes derisked as you see more and more patients go in. So otherwise, we feel like we've derisked the program. We're moving as quickly as we can. Clinical supplies are getting made as we speak. And so we'll be off and running hopefully at the end of this year, early next year.

Got it. And we did mention TETON a couple of times, let's dive deeper there. Again, we were skeptical about the read out turning out to be wrong. So now, I guess you have a different problem to optimize for in terms of manufacturing capacity, you're going to have more royalties. There's going to be a bridging study. So what does the positive TETON0-2 and presumably TETON-1 should recapitulate that? And what does that mean for MannKind overall?

Yes. I mean I think it's great for employees, shareholders, patients. We're optimistic we're going to DPI IPF product for them. From a manufacturing perspective, Martine has been -- in UT has been thinking about this for years. They've invested close to $100 million in Danbury to scale up the facility. They're building a duplicate plant down in North Carolina. So it will be the only other plant in the world that does what we do. So from that perspective, there'll be enough manufacturing capacity to supply the market. We're doing things to make sure we can supply if demand picked up sooner than later we'll be ready.

So I think from that perspective, it's good. From a royalty perspective, it's great. But when you go back in, time we sold 1% of our 10% royalty back in January of '24. And part of the reason was we believe the IPF was going to be upside to our current stock price and we want to preserve that return for our shareholders. And then the interest rate was very high. And so when you look -- now when you look back, you're like, okay, this was a good move, right, because that was a $1.5 billion valuation of the company back then, plus the milestone if we hit revenue that would be correlated with the IPF. If we look now, if we had $1.9 billion -- if Tyvaso is $1.9 billion, we would get roughly a $50 million milestone next year on the royalty. So I think that deal today would be worth even more if we went out. Interest rates are a little lower. IPF is now derisked and the data looks really compelling. So we're really excited for everybody.

Got it. And in terms of allocation, I guess, of that money so you seem to have your hands full with some proprietary that you have the acquisition. How are you thinking about capital allocation? I'm going to touch on Afrezza as well, but just right now, it feels like there's a lot of moving parts? Yes, capital allocation, internal, external, you just did some BD, how much is going to be integrating that business before thinking about the next leg?

Yes. I kind of have a lot of going on. As we finish off '25 and going into '26. So if you think about key priorities in '26, it's certainly the integration of sc and making sure that FUROSCIX is supported to the best place possible. So I think that's how you think about the early part of next year. You also have the pediatric launch that we hope we'll get approval for mid next year. So making sure that the sales force on the Afrezza side is supported and ready to go there are kind of the key big priorities. Obviously, we've talked about the development programs as well.

And specifically I should have addressed that before, but thinking about [indiscernible] conducted with nebulized you did kind of a bridging study for Tyvaso in the past. Like what is the strategy there? And how quickly can you guys get a piece of DPI on the market with IPF on the label as well?

I don't want to speak for you on that one there. They have to negotiate with -- I know they have a plan but I don't want to...

Fair enough. And again, for the Afrezza pediatric launch, again, it's not a product that gets as much attention at least in our investor interactions, although again, our bias is more towards the orphan rare disease side of the business. What are some pushes and pulls there? Like why could this actually be an inflection point for Afrezza revenue going forward? And how much investment will there have to be before you start to see what's playing out in the marketplace?

So I think the first derisking event will be when the file gets accepted here October-ish, and that will be number one. Number two, we're going to be hiring a dedicated key account management team just to launch peds. So when you think about pediatric diabetes, there's about 500 prescribers in the country that treat the majority of patients. There's about 50 centers, and we had 39 of them in our trial. So we had a very high concentration of top-tier centers enrolled in our trial, getting that experience with the patients seeing the data firsthand.

When you go back in time with diabetes, even though pediatrics, when you think about type 1 diabetes, they're 5% of all real-time insulin prescriptions for pediatric segment. But the type 1 market is 50% of all insulin prescriptions. And so when you think about the insulin at a macro level, half is type 2, half is type 1. But the peds is what influences the other 95% because we're using insulin for type 1, why would you not use it for type 2? And everyone says,"Oh, GLP is going to replace." The insulin market is still flat. It's not going down. Diabetes is a pandemic in this country and GLPs are not going to cure it, unfortunately. We're just seeing good demand. We're seeing patients yet. Patients may use less insulin because they're on GLP. But the first thing that's going to go is a real-time response.

So we still feel like there's a good opportunity. And that's some of the work we're thinking about is to use Afrezza on top of the GLP. We're looking at gestational diabetes. We're looking at, obviously, the pediatric and now we're going to be looking at the very first insulin you get newly diagnosed kids. And so when you think about the kids and the long-term 20-year trajectory of a brand, if you can become the first insulin de facto when you start, why would you go to injectable insulin? Why would you go to insulin pump, you're going to save those options for later. And that's how we look at the kids market is [indiscernible] built the insulin pumps in the pediatric community.

Dexcom got their start in the pediatric community, Omnipod got their start in the pediatric community and then went to adult, maybe something that started in adults and then went to kids and became successful. It doesn't happen that way. So Afrezza kind of did it backwards, I'll say, unfortunately, and it took us 7 years to get this data set in. And when data came in back in December, and we could see the lung safety was strong, that was the signal we needed, right? And so we were just waiting to make sure we're growing lungs in kids weren't going to have an issue. We got the 52-week data in June, everything looks great. And so we're excited to get that there.

If anyone is kids. They know trying to get your kids a vaccine, trying to get your kids needle for a dentist, like you can't do 1 fun shot every now and then, let alone 3 shots a day, 5 shots a day and worry about going low. So we think there's a good use case. I launched -- we launched 2 growth hormones that was just 1 shot a day and that was hard enough, and that's why you see once weekly growth hormone. So if you can get to really solve some of this issue with the kids, the timing of the meal, the sports, the active kids I think there's a large unmet need in pediatrics still. You talk to the parents, the kids, the pumps are great. They do amazing work, but they're not peaceful either. So I think you'll find that there's not -- there's an opportunity there that we can play.

Yes, because I think that was going to be the pushback is basically you are still going against a well established. So what is the selling point that kind of resonates the most? Or is it something specific about the data that you think is going to highlight some of these high-volume prescribers to consider Afrezza for starts?

So we anticipated that in the pediatric market, we're going to hear -- I use insulin pumps. And so we started the INHALE-3 study last year. We got that data. And we showed that within 12 weeks, switching off an insulin pump or MDI you've got more people to go by coming off the standard of care as opposed to staying on the standard of care. And so for me, it's frustrating to see that even when you show data, right, how do you get these people moving. But you've got now data showing more people get the goal switching off a pump and these Omnipod Tandem. They weren't like old pumps these were the latest AID systems.

And so showing people that you can use a basal like Tresiba plus Afrezza is great. And so that becomes part of an economic argument for the payers to make sure you're covering the product for kids. And then the other part of the pumps is we saw in our studies if you had a higher A1c, pumps are great because they give you some influent if you're not doing your job and keeping track of everything, at least they're helping some patients. But we've never seen data that showed an insulin pump was significantly better than the old pump or an insulin pump was better than MDI. We can't find that data set. And so now we actually have a data set showing you inhaled insulin is as good or better in populations. The guidelines got updated last year to put Afrezza equal to injectable insulin everywhere. I think they'll get updated again this year with some more support.

So I think Afrezza from a clinical viewpoint is gaining traction. You're seeing KOLs get behind it. They're coming us with ideas for studies. We've got a lot of positive things but it's good people don't expect much on Afrezza. Keep expectations low. We'll be prudent.

And it's probably very early to talk about potential guidance or anything like that. But just in terms of the size of the opportunity relative to your current revenue base, is there a good way of trying to common size it at peak? Or how to think about the trajectory and how long it might take to get to an inflection point?

I think as we get closer to launch, we'll give more guidance. I think the guidance we gave for now is every 10% share in kids is roughly $150 million net revenue. And so you take that, plus you're adult. you're getting into the $200 million, $300 million range. And then the obvious next question is, well, can you get 10% a year, 6 months, 2 years? How long is that going to take? And that will be all part of our guidance as we go out to next year is make sure we get the label we want, make sure we get the timing we want and then we'll feel good about the trajectory.

But in terms of build-out of commercial infrastructure and I'll say that's already going to be just plug-in.

We're hiring [ CAMS ] in Q4. We have BAQSIMI. People forget we're promoting that this year for Amphastar. So that allows us to get into the pediatric market, allows us to get into certain offices. So we're building up the infrastructure to continue to support that product, let alone our needs. And BAQSIMI has some nice growth this year. So I think you can attribute because a lot of people say, well, can really commercialize things, right? And I think that's an obvious question when you look at Afrezza, but we've chosen not to invest in Afrezza to fund the pipeline. So these are strategic trade-offs that we made. And I think those trade-offs are paying off today. And so they're hard to live through the years because you know you can grow faster, but you got to spend a lot more money and where is the balance you're going to constantly.

Fair enough. Any left topics or aspects of the business that we haven't discussed? I think you've covered a lot of ground, but just anything else that you think is misunderstood by The Street?

No. I think if I had to summarize MannKind, think about us as a diversified company, many shots on goal, royalty providing some downside protection with the optionality of a pipeline and launches next year. And I think most investors would like a stable company that's profitable, that's growing. We don't understand why we don't see more good high-quality investors jumping in, but we'll keep moving forward and people will catch up to the story as we execute.

Fair enough. Awesome. We can probably leave it at that. So again, I appreciate the time.

Thanks for having us.