MannKind Corporation Q2 FY2025 earnings call

Management Statement and Operational Highlights

• Pillars of Success:
  • Anticipation of TETON 2 readout in September with potential upside to business plans.
  • Afrezza positioned for continued growth, with label update application expected in Q4.
  • Blackstone deal provides $500 million in nondilutive capital for flexibility.
  • Inhaled clofazimine for NTM has significant opportunity, with interim target of 100 patients to be met ahead of schedule.
  • Nintedanib DPI for IPF to launch Phase II trial (INFLO) by year-end 2025.
• Q2 Highlights:
  • Record revenue from Tyvaso DPI sales and record referrals for patients.
  • Inhaled clofazimine for NTM on track to meet interim target of 100 patients ahead of schedule, with dry powder formulation advanced to preclinical studies.
  • Endocrine business unit had strong Q2 performance with $18.3 million in revenue, 13% growth over 2024.
  • MannKind 201: Nintedanib DPI Phase II trial (INFLO) to include ~228 patients in randomized placebo-controlled trial, focusing on safety/tolerability and FVC/efficacy at 12 weeks.

Segment Performance

• Tyvaso DPI: Q2 royalty revenue was $31 million. Over the last 4 quarters, Tyvaso DPI has generated approximately $1.2 billion in royalty revenue.
• Endocrine Business Unit: Q2 revenue was $18.3 million, representing a 13% growth over 2024.
• Afrezza: Q2 net revenues were $18 million, a 13% increase from the prior year.
• V-Go: Q2 net revenue was approximately $4 million, an 8% decrease from the prior year, driven by lower product demand.

Guidance

• Royalty Revenue: Anticipate continued growth in royalty revenue driven by net sales of Tyvaso DPI.
• Afrezza Growth: Expect Afrezza to continue its growth trajectory based on recent performance and expanded promotional efforts.
• Blackstone Capital: $500 million from Blackstone provides flexibility for commercial build-out, pipeline advancement, and business development opportunities.
• Trial Readouts: Awaiting TETON 2 results in September to impact future business plans.

Risks

• Regulatory Uncertainties: Uncertainties related to trial outcomes and regulatory approvals for products like inhaled clofazimine and Nintedanib DPI.
• Market Competition: Competition in the pharmaceutical market could impact product adoption and revenue.
• Dependence on Trial Results: Success of clinical trials is critical for product approvals and market entry.

Question and Answer

Q: Olivia Brayer asks about the time line for a potential bridging study in IPF and the nintedanib program.

A: Michael Castagna discusses UT's regulatory strategy and notes that TETON 2 results in September and TETON 1 in 2026 will influence future plans, but he refrains from speculating on UT's clinical strategy.

Q: Faisal Khurshid inquires about nintedanib DPI with pirfenidone, safety, and efficacy.

A: Unidentified company representative comments on minimal drug-drug interaction and hypothesis of efficacy when combining inhaled nintedanib with pirfenidone, noting the potential for combination therapy in IPF treatment.

Q: Brandon Folkes asks about the Afrezza patient profile and sales force expansion.

A: Discussion on Afrezza patient breakdown (45% type 1, 55% type 2), growth in type 1 prescriptions, and plans to expand the sales force to target pediatric and academic centers.

Q: Anthony Petrone asks about clofazimine interim target and sales force for pulmonary.

A: Michael Castagna talks about clofazimine trial timeline, potential fast tracking with FDA due to QIDP and fast track designations, and notes that sales force size for pulmonary will be assessed closer to potential approval.

Q: Yun Zhong asks about the 201 study design and Blackstone loan conditions.

A: Michael Castagna discusses trial design considerations, including placebo-controlled periods and dosing regimens, and Chris Prentiss explains that the $500 million loan from Blackstone is available at discretion with no specific sales/milestone conditions.