MannKind Corporation Aktie

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.

Good morning, and welcome to the MannKind Corporation's call to discuss its acquisition of scPharmaceuticals. The call 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 regarding future events and the company's future performance, including statements about the proposed acquisition of scPharmaceuticals, the expected timing thereof, and the expected benefits therefrom, MannKind's and scPharmaceuticals products and product candidates, including the ongoing and planned clinical trials, potential benefits and market opportunity thereof, and other statements 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 and scPharmaceuticals' latest SEC filings. Actual results may differ materially from those projected in these forward-looking statements.

For the benefit of those listening to the replay, this call is being held and recorded on August 25, 2025. Since then, MannKind and scPharmaceuticals may have made additional announcements related to the topics discussed. Please reference MannKind's and scPharmaceuticals' most recent press releases and current filings with the SEC. MannKind and scPharmaceuticals decline any obligation to update these forward-looking statements except as required by applicable securities laws.

Please also refer to Slide 2 of our investor presentation, which contains important information about the proposed tender offer and where you can find more information.

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. Good morning, everyone, and thank you for joining us today. We're excited to share a transformative milestone in MannKind's journey, our agreement to acquire scPharmaceuticals. At MannKind, our mission is simple, yet powerful to give people control their health and the freedom to live life. This acquisition is a direct extension of that mission.

Strategically, this will expand our footprint in the cardiorenal medicine, a natural complement to our existing presence in diabetes. It will accelerate our growth, strengthen our commercial portfolio and reinforce our long-term strategy to seek opportunities that build on our core strengths, extend our reach into adjacent therapeutic areas, and reinforce our commitment to delivering innovative patient-centric solutions for those living with significant unmet medical needs.

Our strategy is anchored in 5 key pillars. The first two, Afrezza and Tyvaso DPI, our revenue-generating products today, and now FUROSCIX will be part of our key pillars. FUROSCIX will add a high-growth asset to MannKind as we look to build upon scPharmaceuticals' late 2024 sales force expansion, and its Q2 launch in CKD. It will also strengthen our infrastructure by integrating the proven commercial model, cardiovascular expertise and experienced team.

Looking ahead, our clinical stage pipeline forms the final two pillars, Inhaled Clofazimine now in Phase III for NTM lung disease, and nintedanib DPI entering Phase II for IPF later this year. Together, these 5 pillars will offer a balanced mix of near, mid- and long-term growth, positioning MannKind to deliver sustained value for our employees and stockholders.

I would like to provide a brief overview of the proposed transaction. Under the terms of the agreement, MannKind will commence a tender offer to acquire all outstanding shares of scPharmaceuticals' common stock at a price of $5.35 per share in cash, plus one non-tradable contingent value rate worth up to $1 per CVR, payable upon achieving certain regulatory and net sales milestones. Additionally, at closing, MannKind will repay the perceptive debt and revenue share obligations currently estimated to be $81 million assuming a 9/30 closing.

To support the acquisition and our broader strategic objectives, we've amended our recently announced financing agreement with Blackstone, securing $175 million in additional funding. The deal is expected to close in Q4 2025, subject to regulatory approvals and the satisfaction of customary conditions.

Now we would like to turn your attention to why we believe this acquisition unlocks meaningful synergies and positions us for sustained growth across cardiometabolic and chronic care markets. The acquisition of scPharmaceuticals will diversify our revenue base and growth. With Afrezza, V-Go and FUROSCIX, we will have 3 marketed products generating revenue. Combined with Tyvaso DPI related revenues, our annualized run rate exceeds $370 million based on Q2 '25 results. This positions us to accelerate double-digit annual revenue growth and expand our market reach.

Next, FUROSCIX is gaining significant traction. The sales force expansion in late '24, the ongoing launch in the nephrology, and the accelerating growth in integrated delivery networks have laid the groundwork for continued growth. In addition, the anticipated ReadyFlow Autoinjector approval will not only enhance FUROSCIX market potential but also reduce COGS.

Finally, MannKind and scPharmaceuticals share a strong cultural and strategic alignment, both committed to delivering patient-centric therapies for those living with significant unmet medical needs. There's strong synergy across our commercial products with a significant percentage of CHF and CKD patients, with fluid overload also living with diabetes. We feel that this provides a meaningful opportunity to unlock significant growth for the combined portfolio. By integrating scPharmaceuticals' drug device combination expertise, and its Boston-based team, we will strengthen our therapeutic presence in cardiometabolic care.

Now I'd like to discuss the significant unmet need that exists for patients living with CHF and CKD. Fluid overload is a hallmark of CHF and CKD. While oral diabetics are commonly used in stable patients, their effectiveness becomes highly variable when fluid retention worsens. Nearly 60% of heart failure missions are directly linked to this issue, yet the current treatment paradigm often fall short with 25% to 30% of patients readmitted to the hospitals in 30 days. FUROSCIX offers a way to interrupt this cycle, helping patients keep their symptoms in check, and potentially avoid unnecessary hospital emissions.

Now let's talk about FUROSCIX and why we're so excited about this product. The burden of fluid overload is an immense and FUROSCIX addresses a critical gap in care by helping to break the cycle of hospital missions and readmissions. FUROSCIX is a wearable at-home treatment that delivers furosemide, the gold standard hospital diuretic delivered subcutaneously via an on-body infuser, offering IV-like effectiveness without the need for hospitalization. It's pH-neutral, well tolerated, and has near complete bioavailability, meaning patients receive consistent and reliable absorption, a key problem with oral diuretics and patients with worsening fluid overload. It's a great example of how MannKind is delivering on our mission to give people control their health and the freedom to live life.

One of the most exciting aspects of this acquisition is scPharmaceuticals' strategic approach to life cycle management. The development of the ReadyFlow Autoinjector reflects a clear focus on patient expansion through formulation and device innovation. By reducing treatment time to less than 10 seconds, the ReadyFlow Autoinjector is designed to dramatically improve patient convenience potentially enabling broader adoption across CHF and CKD populations, if approved.

From our perspective, this kind of forward-thinking product strategy is exactly what we've been looking for. The FUROSCIX ReadyFlow Autoinjector aligns with our commitment to optimize drug delivery and patient-centric innovation.

The strategic importance of this launch is reflected in our deal structure. We've offered up to $0.75 of the CVR to the Autoinjector's FDA approval, a substantial portion of the total CVR value. With an sNDA submission target of Q3, '25, will be focused on supporting a successful launch as early as Q3 '26, if approved.

FUROSCIX continues to deliver strong performance with $28 million in revenue in the first half of 2025 representing 96% growth year-over-year. Sales to integrated delivery networks continue to increase, reflecting growing provider confidence and increasing integration into various care pathways. This level of momentum gives us confidence in FUROSCIX long-term growth trajectory, that's why we've tied the remaining CVR of up to $0.25 to achieving $120 million in sales by the end of 2026.

We believe MannKind is uniquely positioned to scale FUROSCIX and unlock its full market potential in the future. First, we bring strong financial foundation and commercial infrastructure to support continued growth in CHF and accelerate the CKD launch. Second, our deep expertise in drug device combination products, from development, through regulatory approval and commercialization positions us successfully to launch ReadyFlow Autoinjector, if approved. Third, there's natural synergy with our endocrinology footprint. The significant percentage of patients with CHF and CKD also live with diabetes, allows us to leverage existing relationships, sales channels and care models to deliver adoption.

Fourth, integrating FUROSCIX into our broader portfolio will enhance scale and efficiency, shared infrastructure across sales and marketing, distribution and payer engagement will reduce fixed cost and improve agility. Finally, this acquisition is expected to strengthen our long-term sustainability, diversify our revenue base and increased strategic optionality, making MannKind more attractive to employees, partners, investors and a broader health care ecosystem.

Lastly, I want to highlight our stairway to building value. Tyvaso DPI continues to be the foundation in the near term providing non-dilutive funding and anchor in our inhaled therapeutics platform. Looking ahead, our newly re-branded cardiometabol business, formerly the endocrinology franchise represent a major growth engine. With Afrezza, V-Go and FUROSCIX we will expand our reach across diabetes, heart failure and chronic kidney disease.

FUROSCIX is expected to add immediate momentum with multiple near-term catalysts. First, rapid revenue growth and growing hospital system adoption. Second, the recent CKD approval and expanded share of voice. And third, the upcoming ReadyFlow Autoinjector sNDA submission.

Beyond cardiometabolic, we're advancing our orphan lung franchise with Inhaled Clofazimine and nintedanib DPI. Together, these programs are expected to form a scalable, synergistic portfolio that will position MannKind for sustained growth and long-term value creation.

As we close today, I want to reiterate that we're thrilled to soon welcome the scPharmaceuticals team to MannKind. This acquisition will strengthen our portfolio, expand our reach, and enhance our ability to deliver value to patients, employees and shareholders. Thank you for listening.

I'll now turn the call back over to the operator to open the line for questions.

[Operator Instructions] So your first question comes from Brandon Folkes from H.C. Wainwright.

Congratulations on the acquisition. Maybe just 2 from me. First up, if I look at scPharma's SG&A line, any color in terms of sort of on that spend, what's marketing versus -- sales and marketing versus overhead? Just any color on potential cost synergies and when you expect the deal could be accretive.

And then secondly, maybe can you just talk about scPharma's manufacturing footprint, what you intend to do with that and how that fits into Danbury and your overall capacity? That's it for me.

Can you hear me, okay?

I can.

Great. So on SG&A, I think it's too soon to comment on that breakout and how we're thinking about it. We expect the deal obviously to close in Q4. So that will be an update as we get closer to the end of the year.

In terms of accretiveness, we do expect this to be accretive as we look at the -- late next year when we think about a year out from the close of the transaction. On the manufacturing footprint, obviously, as we've gotten to know the Seacoast team. A lot of work is outsourced justifiably so where they are. We will look to see what we can do in Danbury in terms of -- is there different types of testing, different things we could do there, especially as it gets ready for the subcu launch. Obviously, we have a large footprint as you have seen. So it's not built as a biologics manufacturing, or fill finish for sterile injectables, but that's stuff that can be modified if appropriate and make sense.

But otherwise, so far, we looked at, as we look at the growth opportunity, they have enough manufacturing capacity to continue to sustain the growth that we look at in the future.

Our next question comes from Olivia Brayer from Cantor Fitzgerald.

Can you just maybe talk a little bit more about why you decided to move into cardiorenal and where some of the biggest synergies are between sc and your existing franchise? Obviously, both from a therapeutic perspective, but also just considering that this is an Autoinjector device versus your typical inhaler approach?

Olivia, I think as you look at us, we've always been, I'll say, platform agnostic, meaning like we bought Clofazimine, that's one nebulizer, a lot of our history is in respiratory. But we were looking for something that would diversify our revenue stream that kind of culturally fit with the company and had some adjacency or overlap with -- in the areas we're looking to be, whether it's lung or endocrine. And this fit a lot of those check boxes that we're looking at.

In terms of the overlap, I think when you look at the patients living with heart failure and CKD, that are having fluid overload challenges, a lot of them do live with diabetes, and there is a large overlap. These are probably the sickest patients. They're probably on insulin. And especially if we look at like the nephrology launch, there's a large synergy in terms of where those centers are located, where our diabetes centers are located. So we believe scPharmaceuticals has done an amazing job to get to where they are today. But we're bringing more sales efforts, and more marketing will help grow this product faster, especially as the subcu can potentially come to market next year. So that was a lot of the work there.

And I also think the platform, when you think about that part, we actually own V-Gos, as you know. And so having, I'll say, an on-body injector platform, we have some experience with that. And I think just there's not a lot of people that -- there's only really 3 meaningful platforms out there and the on-body injector experience. As a company, we have a lot of deeper experience in drug device combinations as well as injectables.

So we feel pretty confident in terms of being able to integrate and work together and make sure we fulfill manufacturing challenges and opportunities that come up as well as drug device challenges. These are things that the company has dealt with over 20 years.

Our next question comes from Yun Zhong from Wedbush. [Operator Instructions]

My question is on the modification of the loan agreement with BlackRock (sic) [ Blackstone ] [Technical Difficulty] Is that additional $175 million just for this acquisition immediately accessible? And is that on top of the original $500 million that you announced back in early this month? And how does that -- or would there be any impact on the original agreement in terms of the structured timeline, please?

Thank you. It sounds like a great question for Chris.

So we amended the Blackstone deal that we did just a few weeks ago. So in summary, we have now borrowed $325 million that will be effective with the close of the transaction. And then we have $50 million remaining, which is committed but unfunded from Blackstone. So that's the summary of where we ended up after the amendment.

And maybe a follow-up question on the sales force. I think how do you expect to coordinate between the existing sales force from sc and your existing sales force? And would there be any modifications in terms of the targeting the calling, for example, et cetera, please?

I think that's a great question, and it's probably one we'll hold until the deal closes to speculate what the future footprint looks like, and we'll give more updates as we get closer to that date.

[Operator Instructions] Our next question comes from Brandon Folkes from H.C. Wainwright.

Mike, I just want to talk -- sort of jump ahead a little bit. And can you just talk about sort of how you see MannKind longer term, just strategically, right? So your pipeline obviously very often drug focused. How does this acquisition change your thinking on perhaps sort of building an orphan lung commercial organization, versus sort of continuing to be acquisitive between now and the time those products come to market?

And then maybe layer into that. Can you just talk about sort of the focus over the next few years. It looks like the cadence of launches between Afrezza peds, Autoinjector is sort of well laid out. But can you just talk about sort of the company focus, the reason to do it now ahead of the Afrezza peds potential launch as well?

Great question, Brandon. I think when you look out, so much -- thanks to United Therapeutics, Tyvaso DPI has been phenomenally successful. And so I think when you get to our quarterly earnings revenue and guidance here, it's really hard for us to really think about how do you drive faster growth? What can you control with just Afrezza versus the pipeline coming? And also the investment communities' days -- or momentum investors and are looking for milestones that are happening in certain periods of time. So I think when we look out over the next 2, 3 years, first, there when you think about the -- I'll say, orphan business and this business, what they have in common, I think, is important.

Number one, drug device combinations is kind of the heartbeat of the company when you look at that. Number two, the advocacy that has to occur in these various disease states is critical. Number three, the distribution model we liked at scPharmaceuticals, it's a closed model. As you think about Clofazimine coming soon, that will be a closed model as well. As we look at global expansion opportunities in Japan and Europe with Afrezza and Clofazimine, these also become another product in our feather, in our [ armamentarium ] here to bring those markets as well.

And so there's a lot of commonalities around what we are trying to build from a capability as a company and how these all fit together. If this was a low price point product that's going to require 500 reps, that's not what we're interested in. It's a very specialized product to help patients at a very important urgent need around hospitalizations, producing reemissions, and we're running hospitalization.

And when you look back in time, there are several great examples of innovations around the space. One of which we deal with every day is insulin pumps, right? It's about a $5 billion market, delivering a 100-year-old product to really help patients manage their insulin better. We see the same thing in Neulasta when I was at Amgen in terms of preventing hospitalizations there with the drug-device combo.

And so we do look at this as a large opportunity that really solves an unmet need. And it's really a difficult product to get to market. There's very few products that get to market that allow you to have this opportunity and the stage of launch that they're in. We looked at this as a great bolt-on that kind of fit our long-term strategic view within the endocrine space, and the metabolic space, as well as the orphan lung as we look at the company together.

Our next question comes from Tiago Fauth from Wells Fargo.

I'm just trying to understand here the revenue opportunity, right? Like the TAM is theoretically very large. FUROSCIX exited Q2 at an annualized rate of about 60 -- mid-60s and peak sales consensus is much greater than that. So what are the key drivers going forward? Is it further penetration and expansion in CHF. Is it mostly about CKD? Anything you can kind of give us at this point in terms of what can we expect from a revenue trajectory perspective?

Tiago, thank you for the question. I think it's too soon to give guidance or speculate. I think we have to close the deal. But I think in general, what I would say is we believe continued efforts of what scPharmaceuticals has been building around sales force expansion, bigger marketing opportunities, raising awareness. We think they're at that value inflection when you look for adoption of our product, the number of writers you're getting, the depth of prescribing you're getting, it takes a little bit of time.

And I think they're right on the cusp of that opportunity to scale the business faster and keep going. And that's kind of what we looked at and saw in this opportunity. Yes, it's a large market, but it doesn't take a lot. As you know, there's not a lot of competition to do what this product does. And so we feel that unique area is going to be well served by scPharmaceuticals.

That was your last question team. I'd now like to turn the call over to Mr. Castagna for closing remarks.

Thank you, everyone. This is a great milestone in the history of mankind. Hopefully, our shareholders, our employees will start to see the opportunities that come together over the coming quarters and months. Look forward to working with you all and seeing you at the upcoming conferences. Thank you.

Good morning, and welcome to the MannKind Corporation Second Quarter 2025 Financial Results Conference Call. As a reminder, this call is being recorded on August 6, 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 uncertainty, which can cause actual results to differ materially from these stated expectations. For further information on the company's risk factors, please see the Form 10-Q for the quarterly period ended June 30, 2025, now on file with the SEC, the earnings release and the slides prepared for this presentation. Joining us today from MannKind are Chief Executive Officer, Michael Castagnaa; and Chief Financial Officer, Chris Prentisss.

I would now like to turn the conference over to Mr. Castagna. Please go ahead.

Thank you, operator, and good morning, everybody, and thank you for joining us for our second quarter earnings call. As we look out, we're focused on creating more shareholder value, minimizing dilution and enhancing our flexibility as we enter the next phase of our growth. The next 6 to 8 quarters are going to showcase our cumulative work over the past 7 years. Let me talk about the 5 pillars of our success. First, we're on the heels of TETON 2 readout here in September, and we'll actually await those results as that provides upside to our current business plans in the future.

Second, Afrezza is positioned for continued growth. [indiscernible] is now filed. I just want to put this in context, we target about 25% of all rapid-acting scripts. 1% of the rapid-acting market is roughly $300 million run rate in Afrezza. We have a strong balance sheet. With the announcement today of Blackstone, we now have access to additional capital to provide us flexibility over the coming years. Fourth, in our opinion, inhaled clofazimine is not getting enough credit in terms of meaningful opportunity that this has in our future.

Fifth, our Nintedanib DPI, I'm proud to announce, will now move forward into Phase II, and I want to thank our team for all the hard work they've done. Chris will talk about further details on the Blackstone deal later in our discussion today. Our Q2 highlights are highlighted by record revenue of Tyvaso DPI sales, also record referrals for patients in Q2, which should set us up for Q3. Our inhaled Clofazimine for NTM, we expect to meet our interim target ahead of schedule, which is 100 valuable patients. Additionally, we've now advanced the dry powder formulation into preclinical studies and we anxiously await those results to move into earlier lines of treatment in the future. Nintedanib DPI for IPF, we plan to launch our trial called INFLO by year-end 2025.

On the endocrine side, we're excited about the pediatric indications being submitted, and this now sets us up for launch prep as we look out over the next 4 quarters. Our endocrine business unit had strong performance in Q2 with $18.3 million in revenue or 13% growth over 2024. And for the Afrezza opportunity, the application to submit our label update is expected here in Q4 for a decision.

On the financial side, we had Q2 revenues of $77 million or 6% over 2024 and year-to-date revenues of $155 million or 12% over 2024. Chris will dig into the details shortly on this one. We had a strong balance sheet with $201 million in cash, and we now have expansion capital of $500 million from Blackstone of for nondilutive capital to accelerate our growth and innovation as we look out. Let me start out on our orphan lung opportunity with MannKind 101. The NTM market is expected to exceed $1 billion by the end of the decade. Our focus will be in the U.S. and Japan, which have the highest populations and highest opportunity for growth. It's also the 2 markets that we've seen the highest enrollment rates in our trial.

This is a global health concern, but a real issue in these 2 countries. As we think about the inhaled clofazimine development program, these are the 3 pillars we look at. Number one, direct lung delivery could enhance the tolerability profile minimizing side effects. We can confidently say after 90 patients enrolled, we have not seen significant patient dropout early on in the trial. We do not know what arm patients are on, but there's just not been a lot of dropout. So the tolerability does look like it is holding up early on in the trial.

Our active ingredient is a guideline endorsed antibiotic with decades-long clinical track record. This drug is already used in clinical practice around the world. But due to the limitations highlighted above, we believe this is a real opportunity to transform patients' lives. And finally, the convenient dosing cycle with 1 month on and 2 months off will provide a dose-free phase that minimizes treatment burden and potentially enhances adherence. We presented the ICoN-1 global Phase III trial. I want to remind people that this is a co-primary endpoint in the U.S. of sputum culture conversion and patient-reported outcomes. For the ex-U.S. market, it is just sputum culture conversion.

We have Fast Track QIDP & Orphan designation given us 12 years of exclusivity. And to date, we are now at 90 patients enrolled. We need 100 evaluable patients to hit our interim analysis in 2026. Let me remind you that some of the baseline patients will not have a positive sputum culture when they enrolled, and they will not be included in the interim analysis. Next, I'm excited to talk about MannKind 201. As we highlighted last quarter, we've completed our Phase I study looking at 3 doses in single ascending and 2 doses in multiple ascending.

We had to redesign of the trial post our FDA meeting feedback as we went into Phase II, and I'm going to share with you today that trial design. This trial will be named INFLO as we look forward to launching this ex U.S. here in 2025. This study will be looking at approximately 228 patients in a randomized placebo-controlled trial with 12 weeks of active drug, followed by 6 months of open-label extension where everyone can get exposure to our product. We'll be exploring 2 doses, which is 2 milligrams TID or 6 milligrams a day of exposure or 4 milligrams BID 8 milligrams a day of exposure.

The primary objective of the study will be looking at safety and tolerability, really specifically to make sure inhaled powders will be tolerable in this patient population. The second one will be around the FVC and efficacy signals at the early stage of 12 weeks as the primary endpoint. When we look at these doses, these are consistent and may provide equal or greater exposure than what we saw presented at [indiscernible] at ATS here in May. Regardless of the doses, this range that we both achieved independently gives us confidence that we're in a really good spot to move this forward in the patients and hopefully see a signal here in the not-too-distant future.

Now I'll close the orphan lung discussion here on Tyvaso DPI. Our Tyvaso DPI revenue continues to grow as we achieved $31 million in royalty here in Q2, which put us at about $1.2 billion DPI over the last 4 quarters. As you see, our manufacturing revenue shifted downwards from Q1 to Q2 of $22 million. And this is just due to timing of manufacturing that Chris will talk about. But as I talked about 101, 201, dry powders, these are all the things that are going on in manufacturing that we have to shift around our teams as we look forward in the future. We'll anxiously be awaiting the TETON 2 results as well as TETON 1 in 2026.

Now I'm going to talk about our endocrine business unit. Afrezza first half year-over-year grew 22% on new prescriptions and 17% on TRxs. We really look at this performance as we start to see how can we grow writers and how can we grow the depth of prescribing. And devil is in the details here as we think about enhancing prescribing amongst our top prescribers, but how do we more broadly adopt our prescribing base. Some of the things we're doing is really enhancing our coverage at clinical conferences. If you look at the building momentum we've had this year, starting at ATTD in March, all the way through ENDO, ADA, ATDC as well as children's for diabetes as well as ad boards and focus groups.

We've engaged with over 3,000 health care providers and our booths have been packed with guests wanting to learn more information about Afrezza, not just in the U.S. but around the world. We remain excited about the future opportunity of this product and the potential to help children as we go forward. As we look at our vision for this product, we want to enhance our messaging and field force expansion ahead of the [indiscernible] launch. We need to produce a halo effect, not just for kids, but what this is going to mean for the adult Afrezza community.

The new campaign you'll start to see roll out later this year will be called Insulin The Moment. And this really establishes the foundation of the product around speed and control at every moment of a patient's day. This is one of the challenges you hear when you talk to patients and providers is the stacking effect of insulin, the slow effect size of insulin and the challenges patients face whether they're using insulin through a pump or a pet. We believe launching this new campaign targeting not just health care professionals, but consumers will resonate in the challenges they face in everyday control of people using insulin.

We also will increase our share of voice. As we've talked about the expansion, we expect the full sales force to be up and running by the end of this year and the first full quarter of their impact will start in Q1 and Q2 of next year. We are deploying medical science liaisons, key account managers, field reimbursement specialists as well as an additional 20 to 30 sales reps throughout our Afrezza footprint in adults. This new targeting will enhance our coverage of the market to approximately 50% in 2026. Additionally, there is future data coming that will unlock our potential in areas like gestational diabetes, inhale first being a completely naive patient newly diagnosed, getting Afrezza in the first 10 days of diagnosis as well as INHALE AIDEx, which is around an exercise study looking at Afrezza in a highly active patient population. These are the next set of generation data that we expect in 2026 and beyond.

Now I'll turn it over to Chris.

Thanks, Mike, and good morning, everyone. Before we get into the details of the quarterly results, I want to highlight our revenue growth over the last 3 years as we compare the trailing 4 quarters on an annual basis. This annual double-digit growth has resulted in total revenues over $300 million for the trailing 4 quarters, and we expect this growth to continue through both our commercial products as well as our revenues earned through our collaboration with United Therapeutics. Our overall revenues in the second quarter grew 6%, led by royalties earned on Tyvaso DPI.

Tyvaso DPI royalties contributed $31 million in the second quarter, an increase of 22% over the same quarter last year. Collaboration and services revenue consists primarily of manufacturing revenue based on production volumes sold through to UT and the recognition of deferred revenue. We recorded revenue of $23 million in the second quarter, a 12% decrease from the prior year as a result of the net impact of onetime items in both periods. Afrezza net revenues for the second quarter were $18 million, a 13% increase over the prior year. As Mike discussed earlier, we are encouraged by the recent performance of Afrezza in new and recurring prescriptions over the prior year and expect this trend to continue. V-Go net revenue was approximately $4 million for the second quarter, an 8% decrease from the prior year, driven by lower product demand.

As V-Go is not actively promoted, we are pleased with the results of the product thus far this year. As we look ahead to the second half of the year, we anticipate continued growth in our royalty revenue driven by net sales of Tyvaso DPI. We expect collaboration and services revenue for the second half of 2025 to be in line with the $51 million recorded in the first half of this year. The quarterly results of CNS revenue have fluctuated this year. This is primarily driven by the timing of manufacturing as we balance the production for the period in terms of Tyvaso DPI, Afrezza and our development programs. Lastly, we anticipate Afrezza will continue its growth trajectory based on the recent underlying performance and our expanded promotional efforts.

On the expense side, R&D has increased over the prior year period as enrollment in the ICoN-1 trial of inhaled clofazimine is progressing well and preparations are underway to initiate the Phase II IPF study for our MannKind 201 program later this year. Additionally, our team is developing a DPI formulation for our clofazimine program as well as additional potential pipeline assets. Selling, general and administrative expense has increased compared to the prior period, primarily driven by investments in expanding our commercial infrastructure.

As you may recall, we had paused investment in Afrezza at the beginning of 2024, while awaiting pediatric trial data and reduced the sales force. With the potential approval of Afrezza in the pediatric indication, we're now enhancing our commercial organization, having deployed a medical science liaison team and will expand the sales force later in the year. Today, we also shared that MannKind has entered into a strategic financing arrangement with Blackstone, providing access up to $500 million in nondilutive funding.

This capital, secured on favorable terms and combined with our quarter end cash and investments balance, of $201 million reinforces our strong liquidity position and is available to be strategically deployed across our key growth initiatives, including supporting our commercial build-out for the potential pediatric launch of Afrezza, advancing our development pipeline and allowing us the ability to move quickly on business development opportunities. Mike and I and other members of the management team will represent the company at the Wells Fargo, Cancer, H.C. Wainwright and Morgan Stanley conferences in September. We look forward to seeing folks there and in other forums this quarter. With that, I will turn the call back over to Mike.

Thank you, Chris, and thank you for the team's hard work on the Blackstone deal, which is really going to provide us the capital we need to produce these anticipated catalysts over the coming quarters. As you've seen, we've executed the first half successfully, and we have several planned opportunities here in the second half for continued execution of our plan. As we look to our stairway of building value, Tyvaso deep dive will continue to be the foundation in the near term.

As you look out into the longer term, the endocrine build with international expansion as well as pediatric expansion will continue to not only make MannKind more efficient, but allow us to help more patients around the world as we go forward. Inhaled clofazimine is a meaningful opportunity, and let me remind you that every 1,000 patients is approximately $100 million in revenue. We've also advanced this dry powder inhalation because we believe in order to penetrate the earlier lines of treatment, you're going to need something that's much easier for patients versus the refractory population we're currently studying.

Nintedanib DPI is well underway. We've now selected the CRO, and we plan to initiate the INFLO trial here in the near future. As you continue to see Ofev as a meaningful contributor to growth in the IPF space, we're hopefully excited to provide another option for patients as we go forward. We'll be sharing some of the new data at upcoming scientific conferences with ADCES in August here in Phoenix as well as ISPAD, which is a pediatric conference here in the fall. I want to thank everyone for all their hard work this quarter as we really can start to see the fruition of all of our work over the last 7 years coming together this year and next year, and we look forward to continue to execute our plan and share those updates in the future quarters.

Thank you for your time today, and we'll now open up for questions.

[Operator Instructions]

Our first question comes from the line of Olivia Brayer of Cantor Fitzgerald.

Congrats on a great deal with Blackstone. Can you maybe walk us through what a best case might look like just in terms of time lines for a potential bridging study in IPF? I think the BREEZE study took 2 to 3 months. And I think with DPI already on the market, maybe there's a much faster time line to approval than what we saw for PAH. And then I have a follow-up on the nintedanib program.

Sorry, the first one was around what the bridge could look like for Tyvaso DPI and IPF.

Yes, exactly. And just how you're thinking about time line for it, Mike, just given -- I know it will be a much faster time line than what we saw with PAH, hopefully, no CRL is involved. But just how that could realistically play out, right, if TETON 2 ends up being positive and then TETON 1, when could this ultimately come to market, I guess, is what I'm thinking for DPI.

Yes. I mean it's hard for me to comment on UT's regulatory strategy and clinical strategy here. I think what you could just -- as you lay out the data readout that UT has communicated, that's to say it comes out in September and TETON 1 is next year, you got now some time to meet with the FDA and kind of work through what that could look like and potentially get as much work done as you can before your TETON 1 readout because TETON 1 is really for the U.S. market per se. So that's our optimism is around -- let's get the TETON 2 results and then hopefully, UT will accelerate and meet with FDA on what that could look like. And I think some of the effect size that you'll see in the trial will drive some of the, I'll say, ideal opportunity here with FDA. But I think it's too soon for us to speculate the clinical strategy there. I don't want to speak for UT.

Okay. Understood. And then on your nintedanib DPI program, can you maybe just talk about how you're thinking about this drug in context of some of the new updates in that space. Is this basically a replacement to current oral background therapies and then hopefully gets used in combination with newer treatments as they come to market? And then also just a question around whether you guys were able to come to an agreement with FDA around which patients to enroll in that Phase II around naive patients versus patients that are already on background therapy?

Yes. I think that was one of the challenges you kind of heard me say we had to recreate the trial. When we were looking at the original design, it was really about taking nintedanib patients or patients that failed nintedanib and then enrolling them in this and showing more of a non-inferiority design. I think the FDA was adamant on a placebo-controlled on top of general background therapy design as they've given the feedback to other parties. It just doesn't work when you think about the treatment paradigm in the U.S., the IRB approvals you need. You really just can't do a placebo-blinded trial for 6 months.

And so that's what made us pivot the work over the last 3 months and really look at an ex U.S. market where it does take, call it, 3 months to get access to the standards of care. You could run a placebo-controlled trial and get them through the safety and clinical IRBs and protect patients at the end of the day. So we've kind of put all the things the FDA requested into the trial. It's just going to be done more ex U.S. than U.S. per se. And I think that will give us the data we need to have the conviction we need to move to Phase III. And we even upsized the trial a little bit from where we were thinking just to make sure the results that we do get are a little bit more robust. The next phase will be the Phase III -- and I think if you look out in the IPF market, we would expect, hopefully, BI's product to get approved. We'd expect Tyvaso DBI to be out there.

And so as we look out over the 2-year window, there could be now 4 drugs for IPF, maybe 5 if Bristol-Myers gets there. And then you can see this really being on top of background therapy and designed the way that the FDA expects. As you see those other agents, about 70% of the time, those trials have background therapy on top of, right? And so that's one big area. The second big area is going to be the fact that majority of people cannot tolerate the 2 options that are out there today. And we think there's a lot of patients who either choose to not take current treatment and die because the side effects are so severe.

And there's a large population there that we believe an inhaled nintedanib could really help and hopefully by them the time they need for life. And so that's really where we look at the 2 populations, those that are intolerable for the current agents, -- and as the market expands with combination treatment, we think there's a huge opportunity there. And as we go to Phase III, that we think those other drugs being on the market will help us execute a better Phase III trial.

Our next question comes from the line of Faisal Khurshid of Leerink Partners.

I wanted to ask also on 201. Can you discuss your sort of level of confidence in using nintedanib DPI on top of background pirfenidone, both from a safety perspective and also the ability to clear a difference versus a placebo arm that includes background therapy on an efficacy basis as well?

I have Wasim here. Wasim why don't you comment on pirfenidone?

So the combination currently between oral nintedanib and oral pirfenidone, as you know, it's not happening, the combination of the side effects there. So from our perspective, we're going, as you well know, with inhaled nintedanib, the systemic exposure would be very low. So from a safety perspective, tolerability perspective, I mean, obviously, we need to do the trial. But the drug-drug interaction there, we expect it to be minimal.

As far as efficacy, I mean, we do have enough reason to believe that the efficacy of both pirfenidone and nintedanib combined, if they are tolerated, that it will be there. This is our hypothesis. And I would argue the same for the upcoming potential approval of [indiscernible]. I mean the combination there, same thing. And the future of IPF treatment in our opinion, is really a combination therapy, which as of now with the 2 currently available therapies, it's not there.

And we will be allowing both of those agents in the background treatment in this upcoming Phase II trial.

Yes. Got it. And then what do you need to show to bring that development program into the U.S.? And would that be something that could occur during the course of the Phase II? Or would that be just for the Phase III downstream?

I think definitely, the Phase III, we feel confident if we get the results here that we need that this is a U.S. global trial at that point. I think it's a matter of timing. So the trial enrollment could go very quickly ex U.S. from currently what we have lined up. And it'll just be a timing issue by the time we get X amount of patients in and go back to the FDA and show them what they want to see, will they allow it. But I think even in the U.S., [indiscernible] is not when you think about, we can't go on top of Nintedanib and you're not switching them, they got to have a washout period. It's just a very difficult trial to execute in the U.S.

But I don't think it's an FDA issue as much as it's an IRB placebo study. will investigators even enroll 12 weeks on placebo. And we just think it's going to be a very hard trial to enroll by the time you get it through IRBs and approval, you're going to talk minimal patients relative to the expense and time. [indiscernible] if you have anything else to add Okay. So that's -- so we won't roll out the U.S., but I think our focus is on getting this done as quickly as possible to move the program into Phase III. And by the time you get there, you actually might be done the enrollment period.

Our next question comes from the line of Andreas Argyrides Oppenheimer.

On the progress in the quarter. Also on 201, can you talk about what you expect or what you're looking for in terms of a treatment effect from the Phase II, given also that it's kind of a small -- on the [indiscernible] side? And then also maybe rationale for -- Mike, you already kind of alluded to some of the rationale for going ex U.S., but anything also about the patient profiles abroad that makes sense as well. Trying to get a little readthrough into the TETON 2 study here. And then, Chris, for you, maybe just again, thinking around the Blackstone deal, the rationale to do a kind of a revolving credit deal versus other traditional financing.

I'll start off and I'll ask question to add. I think on the effect size, the main thing we'll be looking at is tolerability and safety because that's really the Achilles heel of nintedanib. I think when you look at the pivotal trials of that product, you can start to see a response in 12 weeks. And so that's why we made the primary endpoint. We thought what's a long enough period with placebo that you can safely go and not compromise somebody's journey and ethically enroll the trial. And we felt 12 weeks is appropriate.

After 12 weeks, it's an open-label extension. So we will have hopefully a good group of patients going on for 6 to 9 months, but it will be at their option. So I think we'll start to see that effect size, hopefully, over time, not just at the 12-week mark, but over the patients who continue. And then remember, anyone that's on placebo, we'll have the option of active drug at week 12. And so I think that's really going to give us a nice data set to power a Phase III trial appropriately.

And I think when you look at those effect sizes, obviously, they have to be meaningful enough in FVC. So I think when the secondary endpoint will be efficacy, it will not be powered for efficacy per se. The other key aspect of the trial is really the BID and TID. So as the market does not really know and experts don't know how nintedanib actually has the effect that it does, we don't know if it's a signaling issue, a switch issue, a duration of effect of a binding receptor.

And so we're actually experimenting with that in this trial design in terms of TID versus BID Obviously, when you look at the [indiscernible] data, it could even be QD, but we want to wind up with a wonky result and try to stretch PK/PD it may not be that parameter in terms of what you're looking at from a QD versus BID. So these are insights we'll look, and you might see a difference between those 2 dosing regimens, and that will be important for a Phase III design. But otherwise, we think this will give us enough information to properly design and power a Phase III trial globally. [indiscernible] , I don't know if you have anything.

Yes. To add to that. So that study, as Mike mentioned, I mean, 12-week is a double-blind period. However, it's really it's a 9-month study in the sense that when you include the open-label extension. So we will have -- and we have 2 active doses versus placebo. So we'll have data on both safety and tolerability and efficacy for 9 months for most of the patients for those who are randomized to active and even the placebo will have about 6 months data after the transition. As far as treatment effect assumptions, I mean, obviously, we have our thoughts about the treatment effect.

But again, this is first in patient study. So this will be the basis for our assumptions moving forward. You know we did the healthy volunteers first in humans last year. So we have those data. And the molecule is not new, right, nintedanib. So we understand its pharmacokinetics. The Inhaler is not new. It's already into approved products, as you know. And the powder that we're using is also not new. It's already approved products. So we are very comfortable with the delivery, how we're giving it and the pharmacokinetics and pharmacodynamics are already well understood this [indiscernible].

And then Andreas, on the financing front, as we look out the next 18 to 24 months, we just see a number of key catalysts for us. We have our 2 late-stage development programs. We have starting to focus on commercial prep for one of those programs in clofazimine. And obviously, we have the pediatric launch that we hope to have in 2026, if approved. So as we look at all of those, having access to flexible capital at this point in time, just makes a lot of sense to have this instrument in place.

And then, of course, one of the key tenets here is have the ability to be reactive if business development opportunities present themselves. And so speed in those situations, I think, is really important. And so for us to be able to be in a position of strength on that side, again, just made this instrument the right choice for us and really happy to be working with a partner like Blackstone.

Our next question comes from the line of Brandon Folkes of H.C. Wainwright.

Congrats on the update. Maybe just changing gears a little bit to Afrezza. Can you perhaps just talk about the typical Afrezza patient today, sort of where you're gaining the most traction as we continue to see this double-digit growth? And if you've seen any evolution yet maybe over the last 12 months since the sort of inhaled -- the 2 data sets were published. Just unaided awareness of these data sets currently? Are they seeping into the prescribing community? As yet, just given the outreach you've done, obviously, not promoting to it, but just -- and then sort of when we think about depth and breadth of prescribing, where are you seeing the traction today on Afrezza?

Yes. I think the first comment I'll make and Nick is with us is the -- we just got a database breakdown, and I think you can kind of indirectly see it in the earnings is that the breakdown of patients is roughly 45% type 1 and 55% type 2. Over the last year or so, we've been pivoting a little bit more to type 1, and we can see 4- and 8-unit strength is growing a little bit faster than the 12 unit over the last year. So I think that would signal our execution against type 1 is growing and the uptake there is getting a little bit higher.

I'll let Nick talk about -- a little bit more about the depth and breadth and some of the work you're doing.

Yes. Thanks, Mike, and I would agree with that. I think what we're seeing overall is increased awareness -- we've changed our strategy a bit by adding targets across the field sales force where we're going after unique prescribers. We've had much more activity at congresses where we've had less of a presence in the past.

We're engaging more in scientific and clinical education to create awareness around the science and the benefits of Afrezza within its competitive landscape. So overall, I would say focusing on the adult community, looking to increase unique prescribers, increasing awareness around science and clinical data, I think, is where we're starting to see ourselves making good progress, and we'll continue to do so, focus in that area for at least the next 2 to 3 quarters.

Sorry, I was struggling with the mute but I apologize. Yes, maybe -- sorry, as we just think about the sales footprint and the growth, as we get the pediatric label and sort of in light of the additional capital you now have access to, are you going to think about sort of going with a full footprint for pediatrics on day 1 on the launch? Are you thinking about sort of incremental investment, assessing the traction and sort of then perhaps layering in additional expansion, additional reps to target the pediatric indication over time? Just how should we think about sort of Afrezza investment beyond 2025?

Yes. I think we're building up the peds plan. I think our initial thoughts are number one, we decreased our sales force footprint coming into 2024. And we're running Afrezza for profitability in 2025 and really late '24 all the way into early '25. As we came out and got the pediatric data, right, our confidence level in the peds launch went up, right, in terms of lung safety and believability and the opportunity that exists there. And so as you see this year, we are -- with the hiring of Nick and the expansion of the team.

Number one is we -- when we decrease the footprint, we're only targeting about 25% of all rapid-acting scripts, which is mainly our target to maintain our business. In order to grow, we need to target a larger percentage of the market. The #1 thing we hear is doctors do not remember, Afrezza, it's not top of mind, and it's true. Our reps are not there every week, hitting them like they're getting hit with insulin pumps from one company or another every week.

So that's important as we close out this year, and we have a label change coming up in October that we want to get the sales force expansion so that, that label change can be communicated more widely. The second thing with peds is it's a different selling target than our traditional Afrezza use. Most of our Afrezza use comes from private practice doctors who know our data, who have open access and they listen to the scientific exchange. A lot of the future is in academic centers and children's hospitals where our reps have not traditionally been as strong nor our selling model.

And so we think it's really important to build a dedicated key account manager team with experience selling in institutions. It's a different skill set, and that's where the majority of peds being almost 80% are treated. When you look at our [indiscernible] trial, we had 39 of the 50 academic target centers in the U.S. in the trial. So we had a large percentage of them do the trial, and we think there's a really important opportunity to continue that education and expansion in kids. The other thing we're going through to your question on the uptake will be why do we believe and we'll start to communicate this information, why do we believe the uptake in kids will be more accelerated than we've seen in adults.

And anecdotally, our feedback from advisers and conferences and engagements has been very, very positive. Parents have been very excited. People are shocked. They didn't know and [indiscernible] has been on the market this long. And so we just think there's a whole new opportunity to relaunch the brand and pivot the entire franchise. And so we need to keep expanding in adults as we can grow there. But more importantly, going into the pediatric community early and often will be important. And I'll remind you guys, we do co-promote BAQSIMI with Amphastar. So that does allow us to go into the pediatric community and promote that product today, and that is something we're weighing as we go forward.

Our next question comes from Anthony Petrone of Mizuho Americas.

Great and the Blackstone agreement. Maybe a couple on clofazimine and a follow-up on Afrezza. When we think about clofazimine ICoN ahead on the interim getting to 100 patients, if you get the desired sputum conversion outcome at interim, how does that change just the time line? Can it actually be fast tracked for clearance if you get that sputum conversion? And then when you think about building a sales force, a pulmonology-facing sales force, like what is the size of that team if you look ahead to a positive outcome? And then I'll have a follow-up on Afrezza.

I think on the sputum, obviously, that's where we're weighing the trial statistically. And if we get that interim result next year, we're going to let the trial enrollment keep happening even if we were to hit the 180 mark. So I think if it says it's good at 180, some of the debate we'll have at that time will be, do we lock the database at 180 or do you wait for the remaining 20, 30 people to hit the 6-month endpoint. And that will drive the time line there with FDA. It does have QIDP designation as well as fast track.

So there is an opportunity for a faster review and a rolling submission, I believe, with FDA. And I think the FDA has been nothing but collaborative with this NTM asset and clofazimine. There is nothing else in development that's meaningful. We're the last option for patients at this point. And I do think the FDA wants to see this product succeed and get there if we have the data to support it. that's on that. On the pulmonary sales side, I wouldn't speculate yet the size or investment there. That's one of the reasons we put the capital up as we get closer, we'll make the right assessment opportunity. But it's not a huge footprint, right?

This is a very specialized disease. I think the biggest thing is weighing as we continue to watch ARIKAYCE in Japan, what do you do in the Japanese market? And how do you either partner that or build it yourself. And I think those will be the key strategic questions we face over the next 12 months. As we look in those markets, there is opportunity -- significant opportunity in Japan as we look at trial enrollment, KOL support, has been in Asia for the last few weeks. There's a large opportunity there and a lot of support for clofazimine. So we're really excited about it. I think it's going to be a meaningful opportunity for trajectory inflection on MannKind. And it's coming before we blink, I mean, really next year, close to this time, we'll be hopefully seeing what the interim says and going where we are.

No, that's great. And then on Afrezza, maybe just that patient profile in pediatric from a utilization intensity standpoint. Do you imagine this is going to be kind of more meal time? Or will it be even some aspect of basal plus bolus? So just trying to get an understanding of the intensity of a pediatric patient on Afrezza versus an adult patient.

I mean, Nick just came from the conference here in July. I'll give you my thoughts and then Nick, you can add any anecdotal feedback you have from the sessions. But I think parents stress a lot around hypoglycemia and insulin pumps and chasing their child down with injections. And I do believe parents will want to use Afrezza full time versus sometimes we hear sporadic use on top of an insulin pump, [indiscernible] highs, holidays, things like that. So Nick, I don't know where you came back, if you want to add anything from the conference and the parent engagement you had.

Yes. I think there's -- what we hear largely from the caregivers, which tends to be the parents or the patients themselves is post diagnosis, the patients go through a series of steps, which is initiation of therapy, which tends to be MDI, perhaps looking to switch therapies or eventually going on an AID. And so I think that it's an opportunity for Afrezza to be plugged in at many different steps along the diagnosis pathway and the treatment pathway.

I also think, as Michael had mentioned, -- there's the opportunity for meal time and multiple controls throughout the day. These are younger kids that tend to be active playing sports, grabbing meals as they go. And so I think the opportunity for pediatrics and adolescents will be slightly different from what we've seen in the adult community. And I think we're making adjustments as to how we fit into that community now.

Thank you, Anthony. Yes, we just see kids being so much more active, and that's where inhaled insulin plays much better role for patients.

Our next question comes from the line of Yun Zhong of Wedbush.

The first question on 201 study. I just wanted to confirm that I heard it correct that you said the placebo-controlled 12-week treatment period is not powered for efficacy. And is the goal to select one dosing regimen between the TID and BID and move it forward to Phase III? Or is it possible that both dosing regimens can move into Phase III? And also, what's the possibility of including active control arm in the Phase III or any requirement regarding inclusion of an active control arm, please?

I think it's a little too soon to speculate the exact Phase III design. But I think from the interactions we have with the FDA you can see adding -- we have to assume more drugs get approved. And I mean, one of the challenges is nintedanib is the majority of scripts in the U.S. So it's hard to add on top of nintedanib and inhaled nintedanib. So you really look at -- you're limited to pirfenidone. So we really do hope that there's more drugs approved over the next 1.5 years so that when you run this trial, you have background therapy that you can add on top of in a placebo arm as the FDA seems insistent on the placebo control here.

So it's not an active comparator as much as this placebo compared on top of background therapy. That's our running assumption today. In terms of effect size and powering the trial, should it be 1 or 2 dosing regimens, I think we're just -- we have some flexibility here in terms of -- is it 2 milligrams or 4 milligrams twice a day or 3 times a day. I think that's our focus is getting one dose regimen into Phase III. We don't expect to see a significant difference between these 2 arms. But let's say there is a -- as you look at the subpopulations and patient characteristics, maybe we start to see signals in one or the other, and that would drive a potential dose regimen selection.

But we don't expect to go at this point with 2 different doses in Phase III. We expect to pick one, and we'll look for group analysis and sub analysis on patient characteristics is that does the BID versus TID show anything different. But our overall assumption is it's probably a BID exposure, and that's our working assumption, but we didn't want to get there and find out maybe TID had a better effect size or a better receptor binding that we can't see. So part of this is you're going into a nature that no one else has ventured into in terms of inhaled nintedanib and receptor binding and directly impacting the lung. So we feel very good about that exposure, but now we just have to understand the signaling that happens in that tissue.

I see. And then a question on the $500 million loan agreement with Blackstone. Are you able to share under what conditions will you be able -- we need to draw additional capital? And would that be based on commercial or clinical milestones, please?

No. So it's up to $500 million. We draw $75 million now. We have $125 million that is committed. We, for the most part, have the ability to draw that at our discretion. So there are no specific sales milestones or development-related milestones that would be contingent upon. I think Blackstone just wants to make sure that this is growth capital, and we're putting this forward in a way that makes sense.

Thank you. I would now like to turn the conference back to management for closing remarks.

I just want to say thank you to everyone today for listening. We are very excited about where we're going in terms of the late-stage development pipeline is really starting to mature. We've spent a lot of energy and a lot of money over the years to get to this point. We now have the flexible funding that we need to make sure we can grow these assets, invest in these assets as funding a late-stage Phase III and a late-stage Phase II is important to us and being able to kind of get to the data readouts will only create more value inflection for shareholders and patients.

And so we're very excited about those late-stage assets and the opportunity coming at us with peds. That's now on file. That clock is ticking, and we'll continue to update you guys on those opportunities. And thank you again for your time and look forward to follow-up questions and investor meetings in September.

This concludes today's conference call. Thank you for participating. You may now disconnect.