MannKind Corporation (NASDAQ:MNKD) Q1 2025 Earnings Call Transcript

MannKind Corporation (NASDAQ: MNKD ) Q1 2025 Earnings Call Transcript May 8, 2025

MannKind Corporation beats earnings expectations. Reported EPS is $0.04, expectations were $0.03.

Operator: Good morning, and welcome to the MannKind Corporation First Quarter 2025 Financial Results Earnings Call. As a reminder, this call is being recorded on May 08, 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 risks 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 March 31, 2025 on filed with the SEC, the earnings release and the slides prepared for this presentation. Joining us today from MannKind are Chief Executive Officer, Michael Castagna; and the Chief Financial Officer, Chris Prentiss. I’d now like to turn the conference over to Mr. Castagna. Please go ahead, sir.

Michael Castagna: Thank you everyone for joining us this morning. Today joining me is Chris Prentiss, our Chief Financial Officer. We’ll be going through operational pipeline highlights, our financial review and some of my remarks at the end. As we’ve engaged with the investment community over the last several months, our discussions highlight that investors, especially in these uncertain times, are seeking commercial stage companies that have a profile of growing revenue, promising pipeline and a strong financial position combined with very little debt that we have going forward. I’m proud to share that this depicts where MannKind is today and are excited by our five key pillars of growth above. Now I’m going to highlight our Q1 2025 key points.

Our endocrine business grew 20% on NRxs and 14% on TRxs. We have filed for a label change for our adult which is a 2x round down conversion. We expect that to be hopefully approved in Q4 of this year. We plan to file the pediatric expansion in mid-2025. Our Tyvaso collaboration remains strong. I’m sure many of you have listened to the UT call. We are excited about our great partnership together, which resulted in Q1 royalty revenue of $30 million and manufacturing revenue of $29 million. In terms of clofazimine and nintedanib, I will highlight those later in this call. And our financial results were very strong for the quarter and we had non-GAAP income of $22 million or 43% growth over last year. Now let me bridge to our diabetes business.

Since we last spoke, we had a very successful ATT showing with multiple KOL interactions that have earned a very positive reception from Afrezza. Unlike anything before due to the positive INHALE-3 data and the excitement that is building in the pediatric opportunity, all of this gives us reason to believe the steps we have taken and continue to take set the stage for Afrezza to realize its true potential. After leaving ATTD and interacting with hundreds of U.S. and international customers from around the world, the global expansion and demand opportunity is real as evidenced by our booth at ATTD which was non-stop with traffic over the three days we were there.

payerat board: Now as I look at the performance driven by our strong NRx growth, we’ve really seen this improvement, but what’s more important is the 26% year-over-year growth in our top 50 prescribers, top 50% of our prescribers. Very pleased with the early indicators here and continue to go deeper on our call list to increase the number of prescribers that we can target. Our TRx activity is consistent with our gross revenues. And while net sales appear to be relatively in line with the prior year, this is due to one-time adjustments of our gross-to-net in Q1 and ordering patterns at the end of 2024. Data since the last – end of the last quarter continues to give us confidence that our messages are resonating and our team is on the right path to continue making impact.

Now I’ll bridge over to the orphan lung opportunity. First on Tyvaso DPI, this revenue coming in from United Therapeutics will provide the non-dilutive pipeline funding that we need to move clofazimine MNKD-101 forward as well as nintedanib, our MNKD-201. What’s really encouraging is we had about 1.1 billion of Tyvaso DPI related revenue from United Therapeutics in the previous four quarters and we receive obviously 10% royalty on those sales. We recorded $29 million in manufacturing revenue in Q1 and we await the readouts of the TETON 1 and 2 trials that United Therapeutics is conducting. As I look to the NTM market, we get very excited that this market will likely exceed $1 billion by the end of the decade. Our focus is on the U.S. and Japan, which have the highest addressable populations, and this disease continues to grow 7% year-over-year.

We see a large market opportunity with one branded treatment in the U.S. and Japan. We believe MannKind will be the next potential launch with clofazimine as we look out. Current NTM therapies have their limitations in efficacy, safety and tolerability. As we look at the drug combinations, they have low efficacy and high systemic toxicity. These AEs are very severe and cause long-term consequences for patients. And the frequent dosing, these are almost like TB like regimens and or nebulizers that contribute to patient fatigue and low adherence to therapy. Now let me bridge over to the inhaled development rationale for inhaled clofazimine. The first thing we were trying to do is make sure we maximize the antimycobacterium activity at the site of infection by bypassing the GI tract and minimizing systemic exposure to hopefully improve the tolerability profile.

Oral clofazimine is recommended by the clinical guidelines and we’ve done some pre-work to really have comfort in the animal studies as we move forward in the progress of human development. Additionally, because clofazimine has a long half-life, we’ve been able to create a very convenient dosing cycle with a drug holiday, meaning they take the product for 28 days and load the lung and then 56 days off. We hope this will alleviate the patient treatment burden as well as non-compliance. Now let me update you on our MannKind 101 study. First, 85% of our sites have been activated across four countries; two, we’ve had 55 patients randomized with minimal dropouts and patients are now starting to move past the six-month time point, rolling over to extension and as of today there has been no down dosing to a lower dose.

So, we believe people are tolerating the product and this is an indication of the direction the product hopefully will go. We remain confident in achieving 100 patients in an interim analysis enrolled by the end of the year and even once we hit that number we will continue to enroll so that when we get that readout in 2026, if it says we needed more patients, hopefully we’ve hit that mark by the time we get to that data point. Now I’ll bridge over to IPF. For those of you who don’t know IPF, it’s a progressive and fatal disease, 80% of people will die within the first five years of diagnosis. There are only two drugs approved and the majority of the patients cannot tolerate either one of those products, hence why we continue to move this forward and believe there’s a real opportunity to help patients.

We believe nintedanib will be the background of therapy as new combinations continue to come out and get approved over the coming years. We previously talked about our Phase 1 study which was complete and met its safety and tolerability objectives in healthy volunteers. We had no serious AEs and AEs typically seen with nintedanib such as diarrhea have not shown up and we expect to continue to develop this in the next phase of development in a global trial and I look forward to sharing those details at a future meeting. I will now turn it over to Chris.

(0: 03:47): Now as I look at the performance driven by our strong NRx growth, we’ve really seen this improvement, but what’s more important is the 26% year-over-year growth in our top 50 prescribers, top 50% of our prescribers. Very pleased with the early indicators here and continue to go deeper on our call list to increase the number of prescribers that we can target. Our TRx activity is consistent with our gross revenues. And while net sales appear to be relatively in line with the prior year, this is due to one-time adjustments of our gross-to-net in Q1 and ordering patterns at the end of 2024. Data since the last – end of the last quarter continues to give us confidence that our messages are resonating and our team is on the right path to continue making impact.

Now I’ll bridge over to the orphan lung opportunity. First on Tyvaso DPI, this revenue coming in from United Therapeutics will provide the non-dilutive pipeline funding that we need to move clofazimine MNKD-101 forward as well as nintedanib, our MNKD-201. What’s really encouraging is we had about 1.1 billion of Tyvaso DPI related revenue from United Therapeutics in the previous four quarters and we receive obviously 10% royalty on those sales. We recorded $29 million in manufacturing revenue in Q1 and we await the readouts of the TETON 1 and 2 trials that United Therapeutics is conducting. As I look to the NTM market, we get very excited that this market will likely exceed $1 billion by the end of the decade. Our focus is on the U.S. and Japan, which have the highest addressable populations, and this disease continues to grow 7% year-over-year.

We see a large market opportunity with one branded treatment in the U.S. and Japan. We believe MannKind will be the next potential launch with clofazimine as we look out. Current NTM therapies have their limitations in efficacy, safety and tolerability. As we look at the drug combinations, they have low efficacy and high systemic toxicity. These AEs are very severe and cause long-term consequences for patients. And the frequent dosing, these are almost like TB like regimens and or nebulizers that contribute to patient fatigue and low adherence to therapy. Now let me bridge over to the inhaled development rationale for inhaled clofazimine. The first thing we were trying to do is make sure we maximize the antimycobacterium activity at the site of infection by bypassing the GI tract and minimizing systemic exposure to hopefully improve the tolerability profile.

Oral clofazimine is recommended by the clinical guidelines and we’ve done some pre-work to really have comfort in the animal studies as we move forward in the progress of human development. Additionally, because clofazimine has a long half-life, we’ve been able to create a very convenient dosing cycle with a drug holiday, meaning they take the product for 28 days and load the lung and then 56 days off. We hope this will alleviate the patient treatment burden as well as non-compliance. Now let me update you on our MannKind 101 study. First, 85% of our sites have been activated across four countries; two, we’ve had 55 patients randomized with minimal dropouts and patients are now starting to move past the six-month time point, rolling over to extension and as of today there has been no down dosing to a lower dose.

So, we believe people are tolerating the product and this is an indication of the direction the product hopefully will go. We remain confident in achieving 100 patients in an interim analysis enrolled by the end of the year and even once we hit that number we will continue to enroll so that when we get that readout in 2026, if it says we needed more patients, hopefully we’ve hit that mark by the time we get to that data point. Now I’ll bridge over to IPF. For those of you who don’t know IPF, it’s a progressive and fatal disease, 80% of people will die within the first five years of diagnosis. There are only two drugs approved and the majority of the patients cannot tolerate either one of those products, hence why we continue to move this forward and believe there’s a real opportunity to help patients.

We believe nintedanib will be the background of therapy as new combinations continue to come out and get approved over the coming years. We previously talked about our Phase 1 study which was complete and met its safety and tolerability objectives in healthy volunteers. We had no serious AEs and AEs typically seen with nintedanib such as diarrhea have not shown up and we expect to continue to develop this in the next phase of development in a global trial and I look forward to sharing those details at a future meeting. I will now turn it over to Chris.

Chris Prentiss: Thanks, Mike. And good morning everyone. I will now discuss our first quarter 2025 financial results. 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. Before we get into the details of the quarterly results, I want to highlight our revenue growth over the last five years, as we compare the trailing four quarters on an annual basis. It demonstrates impressive growth across our three revenue categories over this time frame, a testament to the extraordinary work of our team. Looking forward, we expect our royalty revenue to continue to grow based on the impressive performance of Tyvaso DPI. We expect our collaboration and services revenue to remain relatively flat on an annual basis in the near term due to production scale up and efficiencies, and will fluctuate over time based on UT’s production orders.

The commercial metrics that are unfolding give us confidence and excitement for the future of Afrezza and we anticipate change in its growth trajectory, especially if we are able to gain approval for a pediatric indication. Our overall revenues in the first quarter grew 18%, led by revenues related to Tyvaso DPI. Tyvaso DPI royalties contributed $30 million in the first quarter, an increase of 32% 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 $29 million in the current quarter, an 18% increase from the prior year quarter. Afrezza net revenues for the first quarter were $15 million, a 3% increase over the prior year.

It’s important to note that the first quarter of 2024 benefited from a one-time favorable adjustment to gross-to-nets. Additionally, the current quarter was negatively impacted based on the timing of shipments at the end of the year. As we look at the performance of Afrezza, we are encouraged by the growth 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 first quarter, a 6% decrease driven by lower product demand. As discussed on previous calls, the sales force is no longer actively promoting V-Go as of the fourth quarter of 2024. For the first quarter of 2025 we reported net income of $13 million or $0.04 in earnings per share, a 24% increase compared to $11 million or $0.04 per share for the first quarter of 2024.

On a non-GAAP basis, we reported $22 million of net income or $0.07 of earnings per share for the first quarter compared to $15 million of non-GAAP net income or $0.06 per share for the same period in 2024, a 43% increase. We started the year strong. Our operational results combined with our quarter end cash and investments of $198 million will allow us to continue investing in our differentiated pipeline and execute on our objectives, including driving commercial growth. Mike and I will be at the RBC and Jefferies conferences over the next month and we look forward to engaging with all of you there. With that I will turn the call back over to Mike.

Michael Castagna: Thank you, Chris. Quickly, I’ll talk about some anticipated catalysts over the first and second half of this year as we look ahead. There are a series of catalysts in our pillars here to highlight a few. INHALE-1, we just had our last patient enrolled last week, and last visit, and now we can lock the database, and get top line results here shortly and submit the sBLA in the next few months. For MNKD-101, the key metric we’re tracking is interim enrollment target which we expect to meet by year end. And on MNKD-201, it’s continued to finalize details behind our global trial and work with our CROs to get a proposal to kick this off in the second half of 2025. As we look to continue to build shareholder value in 2025 and beyond, obviously there’s a pillar of Tyvaso DPI and that for every 10,000 patients covered on insurance, we’ll see $300 million to $350 million in revenue between manufacturing and royalties.

We know there’s a big opportunity here in TETON 1 and TETON 2 and we’ll anxiously await those results from United Therapeutics, as well as the bridging work that has to be done in order to get that into IPF patients. With the endocrine business we previously talked about what the opportunity of pediatrics means, it’s a long term strategy we’ve been pursuing as we ran the endocrine business for profitability versus significant growth. We now believe that every 10% share in kids will represent about $150 million in net revenue to MannKind. As we look out, the INHALE-3 data continues to be educated out there in the marketplace and presented, and the international opportunity continues to grow. And as we close out here on MNKD-101 and MNKD-201, MNKD-101 is a significant unmet need here in NTM and every 1,000 patients we believe will be $100 million in net revenue.

And on MNKD-201 the market is so large, we just need to make sure we have a product that works to help these patients who really have very little options to extend or enhance their life.

[indiscernible] : And with that said, operator, we’ll now turn our call over for Q&A.

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