MannKind Corporation Q4 FY2025 earnings call

• Tyveso DPI's success funded diversification, including acquisition and scaling of Furosix, growth of Afrez, and investment in pipeline programs.
• Completed acquisition of SC Pharmaceuticals, strengthening cardiometabolic franchise.
• Two important PDUFA dates upcoming: Afrezza pediatric indication on May 29th, Furo6 ReadyFlow auto-injector on July 26th.
• Furosix had outstanding Q4 performance with growth momentum, and strategic initiatives to accelerate growth including hospital pull-through, Salesforce focus, and marketing investment.
• Afrezza saw growth in net U.S. sales, new ADA guidelines position inhaled insulin as equivalent option, recent FDA label change clarifies starting bolus dose.
• Pediatric opportunity for Afrezza is significant with high dissatisfaction with current options and potential to address challenges, supported by market research data points.
• Mankind 201 program has blockbuster potential, anticipating enrolling first patient in Nutetanib DPI Global Phase II study next quarter, U.S. Phase Ib study in IPF enrolling nicely with top-line data expected in second half of 2026.

Excluding Tyveso DPI, Mankind has a $200 million plus annual run rate. Furosix had net sales of $23.3 million in Q4 2025, up 91% year-over-year, and $70.4 million for full year 2025. Afrezza had net U.S. sales of $22.3 million in Q4 2025, up 22% year-over-year, and global net sales of $74.6 million for full year 2025. Collaboration and services revenue increased 5% over prior year quarter to $28 million, with $26 million UT-related. Q4 royalty revenue was $34 million, up 24% from prior year period.

• Long-range plan not dependent on UT-related revenues, next 36 months should deliver over $350 million in royalties.
• Expect both Afrezza and Furosix to be important contributors to future growth over next several years, anticipate investing up to an additional $40 million to support these brands' potential launches in 2026.
• Efforts in R&D focused on advancing Mankind 201 program and other development and lifecycle management programs, manufacturing-related costs for ReadyFlow auto-injector recorded to R&D this year.

Q: 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 Uther is contractually obligated to?

A: Yeah, thanks, Lydia. Yeah. Oh, sorry about that. But maybe just to kick it off about the minimum supply agreement. So, you know, this is a schedule that was just attached to our 10K 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 two 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 Taveso DPI. So if you were to just take a conservative approach and look at that number for this year and bridge the next year, which we don't expect any major competition, I think you get two years there and you'll 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 cashflow it still is going to bring in, not just in the near term, but the longer term. And that, you know, it's our job to deploy that capital in an appropriate way.

Q: On MNKD 201, how big of a strategic priority is that program at this point? And when will we actually see those phase 1B data? I know it's later this year, but maybe beyond the only 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?

A: Yeah, 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 one trial here in the U.S. and activating a phase two 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 one, it's a two-part study and it's 12 patients in each part. And we already have, I think, four enrolled in the first part and 10 in screening. So we hope to wrap up part one, 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'll 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 seven-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 2 study, so we'll collect that same data in the Phase 2 study. 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 two to the U.S. Right now, the phase two is completely ex-U.S. But once this is done, we've submitted this protocol to the FDA. We're awaiting feedback for the phase two 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 two, as, as much as we are having that phase one. Um, and so that data should come out and earlier in the first half of, of the, uh, earlier in the second half, I'll say of this year. Um, Then the second part of your question was really around conviction. And the phase two is really meant to show some initial impact on FEV1. And when you look at whether it's metetanib or tibesotetan-2, you can start to see those curves separate after six to 12 weeks. And so we think in tetan-2, when we get those results, sorry, in inflow-2, when we get those results, you'll start to see that separation. And it's not being powered for statistical significance because we'll do that in the phase three. but at least shows us that there's some conviction that this has blockbuster potential in IPF. As notetinib today is the backbone, and we see that continue to be the backbone of treatment.

Q: 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 Afreza and Ferosix this year and into later years, especially how you're thinking about the new guideline updates and the auto injector launch for Ferosix.

A: Yeah, I think on the supply agreement for us, it was important. We never had minimums because we, if you recall, you probably don't recall, 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, 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 a 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 potential. And we believe that we'll be the sole supplier there for Tevesa for a while. On Afreza and Furosix, I think what you've seen really over the last two, three years where Afreza – 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 Afreza grow faster? And the reality is until we had PEDS safety and efficacy, it wasn't going to be something we could 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 arguing over type twos and arguing over insulin needs was 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 Fresno 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've 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 the FDA, that you'll start to see some additional growth on Afrez as we get to Q3 and Q4 and exit the year. On Furosix, the auto-injector is something obviously we put a lot of value on in the deal. And so we felt the underlying growth trends on the on-body fuser 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 five months here in July, so four months from now. We should be hopefully getting ready for launch and hearing from the FDA with label discussions. So both of those are on track. We've heard or seen nothing from the FDA. We've gotten一些IRs, obviously, but nothing that's a showstopper at this point. So we feel pretty good about these assets hopefully hitting their PDUFA dates.

Q: For Chris, how should we be thinking about the evolution of gross margins and operating margins over 2026 as you take the reins with Furo6 and have the Fresno potentially going into pizza this year? And for Mike, maybe if he could just give us more color and remind us on how mankind leverages FDKP to enhance the delivery, efficacy, and tolerability of dry powders, and how doc and patient views have evolved over over the years in PAH and PHILD and how this might translate to IPF.

A: Thanks, Anish. To talk about gross margin dynamics. So the OnBody infuser has a slightly lower gross margin than Afreza 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 significant improvement in 27 and beyond. And maybe the other thing to note is just as a. As a ramification of the purchase accounting, we now have this intangible asset, which is the on-body infuser. And when approved, the auto-injector, 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 $10K range, you'll see a more significant impact to margin. That's a non-cash item, but that will be included in margin going forward. Okay. And then your question on FDKP, if I heard it correctly, is just how is it critical? Why is that important? And FDKP is really what founded the formulation behind Afreza and the scalability and 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 to make sure it gets there or 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 FDKP and the powder. It's also the device platform we have. And those two things go hand in hand to deliver deep lung penetration and consistent lung penetration. And we see that in Afreza and the 3D imaging studies we did that that's important. And so, you know, 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 percent of that powder is FTKP. 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 pometanide work that we're doing, the IPF with 201 and the tetanib, as well as a freza and that 406-tropacetyl. So we think it's important. We think it helps shape the particle size, and it 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.

Q: Firstly, I'm here for the 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, but just 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 gives you confidence that they would move forward on a dry powder on that molecule?

A: Yeah, I think on the Fresno Peds market research, this was 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 a 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 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 rolling 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 patients. So that study is well on its way, and I think it'll be an important study to just understand the dynamics in endopractice and children's hospitals around how do they create teaching protocols? What do they have to change for onboarding patients? How do they train patients on basal versus mealtime control? When do they give doses? The 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 – 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我don't expect you know, we're not turning on a large DTC campaign day one 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 Salesforce team. 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 on upside. And when we get to 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. Yeah. On the UT second molecule, you know, look, the teams are working very well together day to day on that program. And so it's progressing nicely. You know, what UT decides is what UT decides. But the way the agreement is structured is, you know, we're just getting the first part done. And that should be wrapping up shortly. So we hope that that moves forward. We think it'll help a lot of patients and it could be a blockbuster potential. But that's going to be in UT's direction.