MNKD - Earnings call transcript Q4 2018

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Operator

Welcome to the MannKind Corporation Fourth Quarter and Year-end 2018 Earnings Call.

As a reminder, this call is being recorded on February 26, 2019, and will be available for playback on the MannKind Corporation website shortly after the conclusion of this call, until March 12, 2019. All participants will be in a listen-only mode for the duration of this conference. [Operator Instructions] Joining us today from MannKind are Chief Executive Officer, Michael Castagna; Chief Financial Officer, Steven Binder; and Rose Alinaya, Senior VP, Investor Relations. I would now like to turn the conference over to Rose Alinaya. ma'am. ahead, go Please

Rose Alinaya

Laws. thank that joining call comments within from Federal Forward-Looking and actual that call. could results will on Please Statements differ Security of meaning note made stated the is you morning possible us the expectations. for these today's include It Good during this

Securities of the of and cause broadcast, update our will the Company by the This could call undertake which any Mike. We differ Michael Exchange factors contains that of filed of circumstances under results to time-sensitive the or Act reflect from is now as the no turn reports Castagna. Securities to date and date I or expectations, events this February XX, conference call For CEO, call. to accurate statements actual please XXXX. revise Commission the refer Exchange over after live to information obligation with to only the XXXX. this

Michael Castagna

you Good morning Rose. everyone thank and

Coast, I on earnings there. those done will note Margret appreciate the this get East before For to opens try I -

for Coast, slide. waiting go are still to to sun the West but On the rise, we next the let’s

talk overview on of for XXXX a let some about highlights. myself So the me quick

we believe to platform that we over have out that We call to major will QX, years, circle revenue shareholders the well - over Medical start worry combined debt debt the will back four our with and we two new earnings next when and half then few bridge pillars don't enhance Technosphere Afrezza our we our about information where to are and laid as years. Steve of value. compounds more next heading In have rest any show how you in XXXX. then any grows pillars evolves we Assembly on as as coming will These for the

Street. continue institutional the confidence to Wall regain shareholders our and of We solidify base

I Company. throughout many these covering we morning. three of four see, As you will have points hit under analysts our this now buckets presentation these on our

important, see highlights will The QX with as forward to are research well as our the now to Technosphere on fee you our platform. compound and that press that [indiscernible] start is other collaboration and of These UT platform our in underway Some moving well Technosphere are related in particular the agreements. our release as technology section. well BluHale now and as

additional We Technosphere will with are about this an our also platform forward morning in talking compounds update the be control. to moving that on website MannKind's

just were will XXXX. million On first forward, This recognize time part something but we have versus that not go we the expect collaborations of is received, revenue. the milestones United the that the the And front, $XX other as been the or MannKind, revenues for as and we will story funds that XXX% receive this have QX can Steve is you we that revenue see through. you us of Therapeutics also walk

or come in up And we a The $XX.X the a XX% is XXXX, XX% start point some how versus XXXX see difference once will QX, Afrezza million versus sales were approved. here we in minutes. one-time future revenue QX compare because in want show QX in eight catch our million quarters you net In at GAAP out XXXX. in in XXXX. and of XX% underlying evolved royalties I over to XXXX. addition see will Overall In net we the or you Afrezza few had think the of to further TreT QX were is reasons last XXXX picture sales to $X.X that the and non-GAAP

through has UT the with agreement. collaboration of our positions receipt been financial million Our significantly enhanced $XX

Our offering. $XX public million

and our almost XXXX influence news ended at this $XX.X also And XXXX our with million. has amended cash. million XXXX requirements $XX release commitment in by reduced morning We purchase we which

we sales first our our time, Company as at tremendous our insulin as made reductions. platform, well have forward advancing the in with purchase COGS progress where expected, debt we XXXX for reduction, weren’t profitability While our Technosphere

now revenue, to We us allocation focused in All capital previously of should us and allow to these our grow our mid-XXXX as get invest to our believe revenues XXXX. communicated.

So product go the our already. slide, it here new on is the should at front pipeline up website

U.S. that First, are you Type our here in II see for and Type indicated we Afrezza I in already the

progressing actively year-end. halfway and by we to are almost progress pediatrics first III and are part expect We in we hopefully through that Phase the then to

United Therapeutics. the Treprostinil with partnering On the

hopefully with ahead speed complete full this of is have that and should there by midyear we And entering moving patients undisclosed another TreT, expect work that another we are anticipate compound. for We year. earlier part formulation

moving to is degrees addition with compounds in that products and with MannKind to FDA, as when Cannabidiol In there year will Life work, to formulation as two progresses. Dronabnol related various forward our Sciences me partnering at are hear studies. Receptor continue as about more additional platform five Technosphere we well meetings you talk And

progressing can as Technosphere we So see, you rapidly. are

that the with exists the with fast Treprostinil the but not Company going set Afrezza, know in and replicating the [indiscernible]. like also we that Now now IV around capability only characteristics with

I to Now bridge to want over commercial.

at and as over look continue quarters, the XXXX. to Afrezza past year So grow progressed when in TRx the our accelerated you the growth eight

way to show growth to we had program could what reason we to the wanted look January the refills December people perspective percent and because in to about box But the versus those out base wanted But our as you what you weren’t are you get and year-to-date book That the to of were don't just is I know programs the prescription Vouchers. do will don't big which Voucher change update called see QX presentation. highlight Voucher what types through you see do, And the took talk scripts on try fall ended there prescriber plus you program you difficult Paid significantly right, data. is then out see much. I in the because here that give and to underlying of like our happening of the X.X% is earnings the XXXX, we terminal there quarterly the programs believe we many important we we business you this you the show are Claims, give and data XXXX, I additionally XX% did revenue Voucher like continue our compare we all our was will little that And And on made it how continue can on could XXXX year-over-year. sometimes the for in could progress we that things how in you to I because in how of our XXst One on reduced to our is year, year-to-date. from a Bridge, which here category. Vouchers and we is as new looks, later in available. in

And so business underlying month see we away this prescriptions. take show want that you that growth one really you when to we

to in focused Second that is really prescribers and are XXX and those over of roughly to have at now depth on off XXXX unique unique part in quarter slides have we XX,XXX look increase writers had This forward, we we look we prescribing. prescribers as continues that QX, we writing. the is you the that show start many do what and how we

not this but really prescribers more to used to So also we to forward important it's right Afrezza. getting as only new getting get go them Afrezza,

will and this or been over the ones. number to talk any Cartridges. is Steve So if of And to we see seven we focus narrowing five have it’s to what in quarter have get eight from is and a month. look about shareholders prescribers XXXX that is to. in have unique continue consistent part this magic prescribers our on the every you about And way we doing about get XXXX look depth prescribing. XXXX, this curve before turning we year last thought something and given is our really really And that we each clarity month, out, in of important and the to are This that and really a and grow I we is as

of one the titration was also We II now the grow happy that the strategy up efforts are linear was to all continue working really is had the our representation results not in dosing saying Afrezza where this our getting growth but to past, in consistent of have we appropriate unit have growth you that now a total people challenges on product unit. see. that you be working. you reminded the XXX anticipation can scheduled lot XXXX, that good working, original XX% priced of is of Cartridges Cartridge fixed the and dosing. know are is also and as reason that as of QX, was commercial see XX we The year-over-year. continue from eight Type as the signal see units fundamental people launch and XXs a around we the growth efficacy we and in and important year-over-year in as new four Our and our patient and the this is QX, is strong today And to way XXX% retention of important to eight XXXX unit XX see phone XX And the getting to

Now, I will turn it over to Steve.

Steven Binder

results, to from year financial pleasure which read XX% fourth with you XX% in XX-K, recognition was of quarter I double-digit begin and good MD&A will discussing when the Therapeutics year-over-year and and our profit select growth time morning. fourth first full-year year. SEC morning. the first with the Mike to and our cash of highlights gross discuss less for full-year and urge we which filed showed net and the financial contained we our the quarterly Thanks the United than in ended consolidated agreements, be and statements this XXXX achievement Afrezza debt my quarter more our revenue, the Afrezza It’s revenue

as sources shows $X.X and comes and our $XX full-year of well in other. services first for Total recognition of fourth Let's the XXXX. of The the $XX.X revenues. of fourth time XXXX. million the totaled the slide The increase fourth agreements Afrezza from for versus the the XXXX. revenue our for research Afrezza, from million and XX% of related XXX% million total to revenue fourth XXXX revenue net revenues half net first of United of growth quarter license quarter revenue $X.X as the revenue Therapeutics net review components both the quarter top corresponding from of to of Net revenue for and quarter collaboration million

recall in in increase an net net the may the change related fourth in Afrezza XXXX, that estimate which quarter resulting we fourth revenue recognized million. a revenue, for XXXX in periods Afrezza to by $X.X quarter You of prior of

basis, non-GAAP show revenues. an revenue Afrezza a comparable and on If net net you total XXX% adjustment exclude increase the XX% quarterly for the an increase of of results for

the fourth revenue with of a both follows. keep move the collaboration bottom recognized XXXX agreement as on the and of each and fourth million, of Let's well RLS Therapeutics the value and of quarter agreement slide, United total XXXX. $X.X details quarter which The collaboration XXXX to United as services and license Research down The results Therapeutics broken partner services and agreement by revenues for as $X.X the million. recognition is of million $X.X table

to expect be performance XX, when through agreement our XXXX. revenue Therapeutics the United license of recognize December which completed, substantially date is the estimated We will obligations from

be our Therapeutics research will XXXX. the agreement, performance recognize For based on expect obligations, complete which United to revenue substantially we in

quarter and of collaboration $XX.X increase slide net and Afrezza Therapeutics next the to XXXX. increase vast $XX.X revenue review million I'm coming significant net Therapeutics over XXXX, and down recognized Our revenues. a to collaboration agreements full-year United the full-year the net table impact the quarterly with beginning the The and numbers components, recognized from XXXX. over XXX% now and our services we the top from XX% XXXX. in United $XX.X the fourth full-year the We are gross majority due revenue is XXXX of moving Breaking total revenue million fourth similar to shows XXXX of revenues. the services net of Afrezza revenues to for quarter million back revenue

quarter of six in Looking XXXX. when XXXX. quarter fold the over revenues of and the our revenue first and revenues net fourth the the the top XXXX the net XXXX adjusted revenue quarter million XXXX gross in graph, of Afrezza internal fourth fourth for recorded quarter both of salesforce base the graph depicts increased as better estimate of the at of our in we increases in launched the gross change between business. net bottom our we quarterly finishing The quarter graph fourth of We revenue quarterly $X.X with is shows gross

Our mix of you Cartridge or percentages. favoring favorable earlier sales bottom our as the increased adjustment see of came of faster Afrezza XXXX Mike. and discussed from volume unit the growth gross-to-net will At our price net usage growth XX expanded higher cartridge quarterly by graph,

purchase $XX.X associated XXXX XXXX, while price Our gross goods two profit Afrezza commitment that percentage. extended in increases not quarter XXXX first stated in our we lowered XXXX. also gross net and cost came fee December, the saw amended during The net In XXXX and SKUs adjustments at In sold with with $X second In the million goods of year expected time contract cost fourth million, primarily XXXX purchase earnings million to prior of of is in quarter. of and Afrezza total deduction third of primarily the we fourth call, we fourth was for were the in $X attributable And XX% from revenue fourth we requirement $X.X we to change purchase by which in while $X.X XXXX the being was XXXX in quarter ended our discontinuance the product profit rebates the a approximately sold. for commercial was December to revenue gross from and the returns the quarter increased year agreement we quarter was quarter Amphastar yielding million paid did, Amphastar, the turn one insulin million. net did XXXX. the one-time a up gross exchange, government gross versus recorded to overall increase a Afrezza rising net to and which

Amphastar gross quarter exclude you one-time fourth If non-GAAP profit Afrezza for $X million. million the $X.X the payment the of was to

a net as Afrezza sales we from four a to Afrezza quarters would have all in to of volume and gross continue I inventory expect As offs long report XXXX, grow write our low in XXXX. of profit

final Some comments.

million with cash cash, on expense that and hand Company years two transitioning of lower decreasing and the amount left is Sanofi, the to improving graph. dependent to debt in slide now execute our are shown the highest ended We from upper and the related as an amount in in was the in shown side revenue loss our on shown of left which cash, graphs per streams equivalents restricted of since We graph. year-end share, interest load debt as that the one has A the lowest multiple XX XXXX XXXX right one sets and with nicely plan. $XX.X XXXX, us up in

medical turn I over and it concluding update, to Now, Mike, for will back comments.

Michael Castagna

you, Thank Steve.

with that study to that is there January two highlighted we from were what close excited first for and guidelines additional not important that we with more are small found share inducing to out you highlight community in These receive continue XXXX. as as trial insulin were happy the management year there particular look doses that when December acting ADA type of The in despite Standards and trials, show went publish this to data with you trial compared your go the supplemental Afrezza Standards we STAT time that meetings ADA that and can you refine in multiple based the the that Hypoglycemia will We there is into glucose injectable of to works, in go you in update is waking. stakeholders that This this XXXX. continue Afrezza but is published significance an and very Care. did are Afrezza medical people of on key give improved could in evidence and head-to-head of know the insulin are the forward. Standards are other additional we the without and rapid our in Anticipate and our in areas showing important enough Care we Care stacking inhaled, you when an taken pilot very Hypoglycemia in of you and study

presented published Berlin, and data with published week presented or sets will Additionally be in three Germany. last actually that

if data the want was sets investigator-initiated will to compared was gold of was diminish. heard to overhang in of each set improve a sitting read and Kendall history an of oral here. that trial was these you quick And of OneDrop. improvement called absolute for in that what working this the of XXXX previously is have as can first this an in press you tell the duration an the is is in important this that the is we [indiscernible] to safety RAAs. our mine that that data third we absorption on in years you various the as I profile showing back trial different, no as mimics it were insulin been profile to glucose. The with study to as people longer when leaders through Afrezza. continues release. is there shows was comfort happens to reason thought of term something to you have XXXX. injectable go other on that continue then in David go Afrezza a and here time-action And significant that and The an my one really always human now you data is here of around that is and why clinical three well he was I on a effect this physiological ePoster know as analysis. speak, XX the can two And the is is market, key you the at looking that scientifically completed Ultra-Rapid presentation accepted country, profile box presented, right effects And And of have starts the articulate meetings accepted were trial There sponsored AXC, lungs detail and on the your Afrezza natural and

Care their they So box around inject you the here is is one Lispro is see in postprandial doses we terms sugars versus mean difference consistently to of notice STAT . go your in just carries to by you quickly first in first Afrezza, clinical slide are next you with very trial, world you when start in waiting with as the And hour in again, through that this excursions, and down. on can we the as diabetes, in particular see can consistent is living other you data first in study slightly switching see for were people way dropped minutes average they excursions. postprandial getting two And what the and significant important a came And of just the they this glucose presented two in AXC AXC going a is improvements few of here And worse the set better think switching you baseline in look reinforcement XX.X, our you I AXC you really as to important X.X insulin starts Hypoglycemia. could seven. Afrezza on. next just drop every just the see versus the where just this additional probably meal, demonstrated The you (Ph) hours, is they is postprandial. your various they the this data see as mentioned And you you this hours. itself AXC and Hypoglycemia by one This Afrezza I insulin. well slide side, [TR] this the And baseline thing lines is is excursions. first have and see significant by continue curve. sets you you shows a the the insulin, will what first showed the OneDrop, two see we And not Frankly about in, their reduction two data year. four potentially trial. this are Type if this on purple the And to their and showing was insulin, and Standard in the your see switching This just as the we the see days II. and effects react the first Again, on And saw the first as all Glucose XX time day, every period. AXC experience do to reduction. over less the that is left of reason real on

XX formats. be published that out data that to set ago XX So to XXXX various in presented started we read we to months will sets in in the very and and XXXX are now excited start out

So and started. the scientific just story continues it's to build getting

think as the to XXXX. the wanted I half Now, milestones bridge you over of potential about first

expect completed, of the the Therapeutics. end the will our We to milestone ones be by United hopefully first being of Some anticipate achievement first this QX. of

We publications data efficacy. safety coming have around multiple Hypoglycemia out and

complete X progress expect to and pediatric cohort cohort We X.

certificate We were QX order our approval or expect on and we came through during receive We in GMP Brazil received had the sometime things January. in approval late one of waiting is that which to QX.

was looking have Levin of our fixed We results dose trial titration. This a with at [indiscernible] Type II study. interim a Phil

year. those present at conference this to upcoming excited results are We

and ways a getting a Company with are this that for for on for want follow on Cipla, the potential after that. study they do you and closely, or we our clarity approval marketing have of then [indiscernible] a post study, not is based those approval One India, go a through. one pathway current also marketing We regulatory can to data. may who post file And us potential would then two

very that there meeting We get expect with to on authorities have a shortly. the and clarity

agreements compound in pursue for for Therapeutics, the first and half. world. completing to are work formulation country United the unmade And additional around the continue we around We international the the

continues expansion the the the the the As further footprint from pay you starting is international between doing have been U.S. progress opportunities work the grow, and the side that Technosphere in we now R&D the] as well the as we the and Company, out to [indiscernible] in off, royalties organization, [be to pipeline, in continue the side but and business see platform of of (Ph) and across just milestones to future. base hopefully not as the as

nothing Afrezza, from The years. we of to seven see we five as us second stopping out the part look over growing next

as all see, people going cash quarter-over-quarter the expect increase burn, you showed can are over that beyond. has from starts Steve QX year you when become see of to fold could you way continued we QX do of to to next breakeven, year, six when the as grow of to say, and your to And So evolve reduce and you that and part last XXXX, this or you out. a an [indiscernible] as and story I go year get

forums of insulin we pipeline and Pediatrics And but to people get to out get. shareholder can our where latest forward everybody taking a the meeting to and dates than be Care the finally, Afrezza at you York your that hopefully show every to really, just in and e-mails various enjoy soon. things the for to but thank continue establish our can area. your rooms at Company have is of we to positive and pumps, seen efforts and see May to day to that into you that That opportunities Company This a this what our lead came evolve sales had want any into I we and hired see to but place really have on just development controlling have force be Standard on we expect you complex help meal. sugars bring free the feedback as guys tentatively very Afrezza infrastructure when attached chat subject City look complement transformative important for scheduled important in-licensing proxy we look XXXX. our really that and we life then to as and patient post New lifetime seeing annual its is XX, head look we for a believe year change, attachments really as take we is we we to the children in of we existing what Our business will a

So that stop there I said, will we and any take with questions. will

Operator

[Operator question instructions] Markets. We first from Capital O’Neil Lake our Thank Brooks go Please take Street you. will ahead. from

Brooks O’Neil

have marketing prior know that you on ambitious a I Congratulations program all hoping recognizing the based couple a testing. embarked that some relatively was you I was Could questions. on on just what a progress. lot. marketplace it in Thanks what we to comment in evolve forward. move the on how you saw are might you and seeing that test relates think the you as as you

Michael Castagna

our four ground an new marketing sales topic Thanks, Brooks. QX, It's important The is consumer think between early launch meeting at we into about in lack had new the for and period weeks beginning of as force see three XXXX conversation. I it's we the people of January. weeks a came delays share on a entire running. in time this the year ago spoke And campaign kicked retraining as back in but off because was about our much well hit January, a QX the we of you of the one training or efforts five Christmas when didn't important that and the with as campaign voice really

So about a new and our reps that. three weeks after materials got then week gap few

January, new market in So lot TV started mid kicked February. that of filled out in in, our late and our initiatives campaign to promotional effort a

on. nationally this see you to we to will going Friday. able perspective, and give early happen, just still are week it results see as of would TV The what you had DTC turn to start to just some regional we So off that probably on some the for a

and typically they patients look to the TV have they in downloads. don't run see TV at, then earliest look until so increase far we can we probably that So in measure the Card But because happens always download what able is That doctor, right after problem the something result with doctor. see Copay consist would away. see overtime. you And end we with significant wait the the just is indicator to

that And you keep period. TV throughout got on to so time

what Copay in we every we saw week Card in download probably up, So first entire or an downloads are so far. year quarter see the we had

So exciting. is that

his one part off hits turn so website for to other at And at Afrezza.com looked The we XX%. week dropped five-fold. traffic, are we our a website the they TV

you it indication So what has. that the gives impact some and of TV on should

weeks, yet will from three So the think out don't the as are first of see to expected now. tell I we doctors some Friday have the scripts, hopefully hopefully and a bump, have shock that forward indicators during positive. our play this scripts early little it should can .But in we go I think a but feedback bit seen to what here the starts you I the from salesforce, of four we I

Brooks O’Neil

That innovation diabetes it doctors. a doctor a products has then community have the are second my attitude moving obviously is in to commensurate relatively attitude least opinion, still or is open I feel it from curious let's the you there from trying question prescribing there to just in in the doctors? seeing been seeing openness you FDA among and management. I'm you scene Is are as of call to at what be great. innovation the a And a relates change to

Michael Castagna

and no. Yes

twofold. been I endocrinologist, would good years. it. One, with and months long diseases over conservative HIV speak I diabetes, diseases. of hepatitis, a quarter So HIV, you their groups I in the progress different In to years, that of back I have in disease and rheumatologist those effect there have time the most we this come we for six see I have on transformed goes but worked not challenge just, dying they diabetes not around is over decades, and and dramatically. just two reasons can and the doctors, finally think of here. change been many in were XX again, the states, hepatitis in lag cure and months in I have and and people will seen say

to we comes bit they our long not really and patent some when It's stick a factor some hard little it pumps what but that to Afrezza. single change have and We is they lots That a you seen we CGM doing grow, we our prescription are take once of prescribers inertia. seen a doctors but pick it are to again, day. every would doctors takes [indiscernible] left. that, to takes probably have not trying is and as longer good change time move our life it biggest that have up they And a to a like, these It's than of grow. news the pretty

run I continue, be trend expect there the will [indiscernible] some long that off point. in We to at the think of market

some tell you can of and the practitioner side, technology, the it's is a reality. On patient a for been lot I other a on there of noise a treat absent where average I I CGM lot would [indiscernible] around have more have Lispro with noise lot CGM. been pump in or and think in flip than upfront. - I don't I they office very

around really varies the practice you in. type are So the country and of

we look new have think Dexcom. today and area with now integrating progressive technology right tools very think the Bluetooth in this Afrezza FDA the We around excited that we platform. [indiscernible] I and we as the remain combined and with technology very excited I our are is

You medical years that five even care couldn’t next diabetes. can XX will in start your to your decade we a ago. over and iPhone transformative manage will foresee approach and how you Android the be most I with innovations to your believe see the significant

FDA So I'm lay ahead of and excited is and job out it's where going the our I and we think the curve. to about help with future that think create it’s

Brooks O’Neil

Absolutely, for all that. thanks

one, is going think will taking one the studies the he light, would he you forward. that have, And mentioned he is bringing the Just having and thanks of do you my hoped the kind and having Kendall for impact you continue last impact David in questions.

Michael Castagna

or Kendell Thank respected I have traveled the [indiscernible] be in there meeting Kendall invited all or with questions. you, appreciate well Brooks, those as out good has community. I the there I’m is as country, probably been incredible, to David continue ADA and

big have some because we year, four giving in in rounds history as data coming on meeting and product our he this as grand last well been from has educating the them of of two much out. new profiles, heard diabetes the cities at weeks different least with insulin centers haven’t We

the all driving a at studies support just of and been you studies for have has home new as him. the incredible these publications and when he got saw, with some authors publications on these look the our are thought Kendall So long across great leader really around we at go some the TVs

he has So that he been is a and great thankful addition are here. we

Brooks O’Neil

very you Thank much. Great.

Michael Castagna

you. Thank

Operator

Please SVB take next Leerink. we our Sarraf ahead. question go will Pasha from And from

Unidentified Analyst

This [indiscernible] for Hi. Thank is Pasha. you.

guys. you for questions of couple Just

one off to with much think going are the write and was bookkeeping. if with do these First you Cipla hoping Biomm? inventory, you provide color a then that bit have How more you you agreements could discontinued more SKUs I terms had the and from of actual little guys on on

Steven Binder

take discontinued first of we to expect be will back more I one, there from in don't April is any that XXXX. the write-offs which were Steve, the its material [indiscernible] SKUs

Michael Castagna

clarity Cipla on yes, then Biomm. And some and so

accelerated were payment, So transfer on we of that a is or review to one. opportunity there Cipla you well say, in that royalties, the another that additional agreement, because milestones a off price make as we get result upfront as will could if will

excited, and So it's see long pathway, can the it's we we but achievable. a given think we that, are think hopefully doable if compare shot, to we

trying are get with accelerated we that approval, together them. we that took So risk to

sure to or no this the signed one, in make Biomm be wasn't On that great wanted shape. relief the because not agreement terms may of. financial were aware you we how recall and understood we may not Because that there company at agreement, we on

Brazil. And weren't so on sure going environment was we in pricing about that the

terms agreement market. final what brings that over we that some, are clarity we that from our and shipping profile discussions or revolve drive and to on get we or and to lot and active packaging of like the packaging start into shipping sector approved are Biomm goods look whether - Now private government in [indiscernible] get of we could is in local as will product continue pricing in around who's general are

to the transfer some come drives that royalty start So see of plus out. pricing that you will

will about and as we revenue. go year, to expect this you more hopefully into so translate just So how Biomm you those actual forward hear

Unidentified Analyst

the just these you go about and you of for XXXX? Great, thank you molecules developmental Can about understanding the how then XXXX what your better question choosing like give one path beyond us did early moving and look is pipeline. then last molecules you and a that

Michael Castagna

back So, these they are felt XX all we subject to to changes, market as we over based XX back ago, you we first we opportunities MannKind had the a months years - from because we good were two, done feedback on we did know, on as got some product of last received when them assessments assessment well Company. as from three picked the strategic

and the have there for be prevention migraine at is made that chronic of has [triptan] at we there couple market couple there all that been an that category, If treatment to for triptan the And believe of harder. the best a in there look again, better one bit evaluate partners the one nasal results. that to But continue we will and new deliver we platforms approval (Ph) re-focus available you opportunity in that that a us the look think believe environment a do with this acute we category. we little of

background them of Could a think the These upside we types hopefully DNA. on fibrosis are lungs technology are given and So to healthier market feel lives kind of is DNA. And to at in into still that the this one. in help the they bit chemotherapy thankfully those cystic Treprostinil is saw you and on that cystic two see we efficacy fibrosis getting new unfortunate opportunities Tobramycin growing, delivered platform of need sick and living with that a get When what dramatic have drugs two help a look platform conditions. think is way. nice longer treatments space there. this [indiscernible] to one. are long Tobramycin that and these and in we that we the tolerability. patients and still like you that the Those can terms technology a space get have that we then we And That of in the little and

primary is believe their go a and decided so on opportunity taking trying We are and treatments so go opportunistic having with. had for We adjunct relief I updates. way quickly this in if second be as have bring area. provide going hopefully you that can feel don't we in questions you is to landed kind that that paradigm changed we so was along innovation we a oncology there an back larger hopefully lot then many one that better is if what eating as replacement. go try just feel cancer, been and an are understand when a where a area see are products the to that FDA has we that so bought we we niche breast to that our have and we bet. companies is treatment has there much little to of in tune And we happening product years see had we believe which as and sick the chemo, symptomatic of a go FDA is bag bit, are and two forward excited the the going ago shifts you will reason continue dialogue a moving out the get like have [indiscernible] pick one on. and we so from And there to the And change to epinephrine come And to and discussion to in epinephrine to opposed back to anyone

steps clinical studies. to the make to of for for of So continuing fine tune these talk next the powders many are sure they are kind ready

which that very filing already the a similar getting epinephrine, and products. pathway would hell. are get And clarity be, some Treprostinil, pulmozyme for But the of of CF the case is FDA around in we that drug, these studies to in is talk some of example, the pathway the done believe

So pretty a study that easy. with driving bioequivalence really small study. confirmatory It's is along switch

of I time, look all ahead in think that we if be into So as you have the will can important. and we of and given look looking we partner these, find then a phase we development out also for and for those there fund partners the them equally is and we Phase

Unidentified Analyst

Great. much. very you Thank

Michael Castagna

Okay.

Operator

from Oren We from go will take Livnat ahead. Wainwright. question Please our next HC

Oren Livnat

And the and variable which that look if leads ways where guess both congrats regards I goes margin off. Hey $XX is guess guess to wonder you forward. overhead level? that quarter in million with a next QX, wondering look that can maintain is that how in structure threshold, and COGS, I which nice obviously going breakeven on OpEx, guys, ongoing I the guess taken we just do with you to total. this crossing hurdle, think ramp is approximately I talk magical fixed at in the your COGS while think or that cost higher a much about quarters which today, call breakeven, I just - current I'm could like gross disciplined where this including we should me overall to clearing the of

Steven Binder

so plant which this both it's on have is the Oren, at Hey production shift in absorbed which the lines full we we capacity at underutilized time. point goods and an sold, run take costs part Steve, we cost first our will don't have production of I under

in into those the get increase absorbed cost don't I production significant of actually the sold until manufacturing volumes, anticipate to as capacity we increase a COGS goods plant. in more we our So as inventory, add have

some we In the capacity, of the that will COGS manufacturing as add absorb factory. also in Technosphere for addition,

won't you going forward gross looking go I but we think to So gives predictions, that in any it's a XXXX. margin give where we of picture think

Michael Castagna

sees and Thanks burn much of in Oren, to Company takes you think the it raise that we are as cautious much I the very Company, the from how cash money. how

programs types bit our on risk more launching. focus to and a the take DTC the of initiative tough making fund self terms of our choices And so well the the and other little and our year costs at narrow at end programs that efforts that wanted are of managing kind in is disciplined really we OpEx the we of as salesforce at promotional of why are and as we some to do

it impact example, and as on and a requires things those and rid a Vouchers program doing that pivot term switching will requires from Copay the of retrained, the after short all learning scripts pivot, right. years our be just something you reps transition doctors getting of out For two your have new take that to make

breakeven. that cash more in very or choose to been how burn control our to and conscious cash and faster, don't burn cash have manage that meaning growth, so we of to get a and it's we grow that our to fund to we forward we OpEx - we So do do hold

being are is is you impact. what just make we we dollar shareholders tight budget as continue those expenses. every best that that think show will as the to make to Company. can and everything tell we looking I And interest we across accelerate best very the main can see I will continue Steve on first counts half, if sales the trade-offs. to a efforts an grow faster our employees we think tightly, us are now manage to execution, think you right in making make that we approach this we is that running that and disciplined focus go I, our are really execution, way But than the on is will forward the execution in And to at important in we and point doing at

Oren Livnat

been everybody the has reduced thanks. a Okay, methodology know which board. across adjusting to this I lot IQVIA for of personal shift, scripts

this of so you Copay guess regards help little offer, program indicators you launched a direct which help might I better. programs. us a you guys especially have maybe can And I from purchase we to understand demand, guess, And actual with this more little need new

have other you that us the qualitatively describe can trend? data us show you indicator an that of have demand or do that to So you leading any internally gives you

Michael Castagna

can factory switch, data and the data. trends shipments and always were look have I we but the we you and in pharmacies I basis, you two symphonies, should weekly SYMPHONY. we look IMS see from consistent we factory do you go look higher X% X% our look that wholesalers what not back shipments what impacted the they with know pretty Yes. at that from we to when at every think to use historically, our SYMPHONY IQVIA by things, a with No on Oren, because so compare all a week we see we data at were the at and is is what tell into wholesalers We our the

of our at inventory another. number SKUs so direction shipping or but the overall some be and saw weeks those off we and told wholesaler we a we those two when inventory reduction ultimately by we burn may pretty reduced in demand to of trends And reason correlated or were this all then the But pretty They in in one are one example, we off because and look stay us, strong, returns. general, of year the three for had tightly. that

call tell X% seen, I SYMPHONY pharmacies. to our correlated we we within directionally you can be So our in we you to tightly off and have sales And the I future, continue They dynamics. little it the is and bit, a I shipments today, given some what we if high we think about try some market to as can see some the share knowing of weekly that variance. and things we as you will manage SYMPHONY showed in in there indicators. [indiscernible] transparent will what of with could can a But but are on what of maybe early sales those

or one So in general, may there but nothing vary major, two way and another, sync. or in weeks, it are by one

The cash direct it's we that didn't XX,XXX program which mentioned, the see, in meant program, not to think talk purchase is back program a little January. so I it's things because other margin cash why just insulin. we program. about could the the that I on is took really Unfortunately important are two for you those launched mainly happened help last ADA the that notification injectable in high that, paying it probably bit extended up It out. longer that their week, and get [indiscernible] get to a and patients we websites and had

expect the into cash is month, that. to program low program. the see to basically That It of of more move a media be anymore. can We it for very year. this continued will week progress through on will still and But probably not that sustainable evolve it rest introduction expect marketing still we all are next news that three some a -

to Our to to if And about goal money. program, running that want are get XXXX costs up, we a of of program. consumers lose type because the don't sign is of we maintain going fixed the

get So signed we number to a need up. certain of people

is So up it's not on numbers the track, there. but so when those scripts not do at data show we that and on look weekly

We also stuck reimbursement. either. the have patients show in up drug landscape in may scripts reimbursement to Those help through be reimbursement some do a a not the hub program

So our this what as going are as technically is like with Voucher you away. year And our see I to going get said, to you demand. program close

your start can a but to bring you and to called revenue something try Bridge models. each quarter have so adjust program as We will count and won't either, we we that clarity

Oren Livnat

Okay. if may. I And lastly,

going planning think blood about know patients? at your picture, big Congress think pricing that penetrate being horizon, to anything sticker sort all indicating consultants ability XX% a dynamics prices insulin Just you I such regards middleman in I'm the market thorough with change about And to are if you formulary are less and competitors access have your cases. overall to the you we and themselves seen and that makers of more of front insulin is maybe dragged some going you wondering in shock And explain access of that historical are to your concerned their rebates your market to have in and given practices. I'm or access have to

Michael Castagna

Afrezza's Yes. there four to it. unfortunately the were competition years negative very prescribe doctors news launch. think drug to covenants, that restrictive ago, very that to really rebate I I the mean is, payers ability was get and or impacting the damaged most patient's three, access the were initial good agreements ability There

the trying you ultimately why is But the to as So, them, look them in which to in able so because of the those the stuff hats today, the and all that players of protecting of from protecting for of you continue. are unfavorable actually BBMs we off activity were be they people forward some know removed very true some Remember be seeing protecting those resulted Minnesota to that to [indiscernible] high in Congress. market XX% will terms monopoly, contracts, concentration into we more the PBM getting and think noise start those sue called successful get the I will to that discoverable, market the and guess of and XX% of makeup competition that and up to market, see two and discovery shares. and on state seem get judges I companies like some discovery letting make has

think said, and opportunity, cost types I and access you those it’s we where there two you you about to restricting no payer So just within incentives we we formulary about it Kaiser one our aren't a contracting able and of can are and to be see your are net position gain then as our disciplined then strategy. is very where cases able I it's evidence can know secure see you tell longer they really competition or basically

be insulin, and outcomes based the are provider like are cost on outcomes are Kaiser and really and think trying focused XX% health that care systems about the which of we injectable not the We majority we evolves. places to volume not of and based systems lowest like that outcomes net

what going this dramatically nothing Amgen you or two me path. like lowering you one skew change, that to year, with will ask did you when is see a is moves to make our change going if might on So

system rebates certain for cannot can health you rebates continue come non-contracted much you you that still has contracted - lower of fixed maybe these passed being mean some growing you transparency United showing so I out that out we them Sanofi see growth we it's just are be we sorry it because your continue PBM in rebates you I seeing for types focus, to out I doesn't moves the think recently versus models see of are need depend their of mean and restricted of I'm through opportunities or also overnight. last faster business. cost said access on are ripped where But not will the but rebates, where to system quarters. of to open Healthcare one where the activities can't that - whack tell net are pull way think we I seven When just saw business we I and care I are you the gave business money another got it pay the in billion think $XX you someone year. get

of to dramatically, impacting So don't than it's and the PBMs behavior seem Afrezza habits really growth be anything. doctors more changing

So we much continues this to in stuff. around near-term environment positive see the

Oren Livnat

the Okay. clarity. Thanks for

Michael Castagna

you. Thank

Operator

question from comes Investment next from Mark, Zack Research. Brian Our

Brian Marckx

of regarding Mike updated that terms Good in morning, How ADA guidelines. you may of do making, guys and on congrats the the terms influential, prescribing? that be think quarter. prescribers in decision

Michael Castagna

I doctorate I degree this, trained Yes, us, probably it where us pharmacy, not the much, does itself because when the right. but think doctors my think back I did by they reading help that is guidelines, on in

confidence, from evolve And ADA set And long-term are it. dosing, doing meaning said medicine in experience so data you It's explain doctors But recent very they apprehensive getting well to you still I'm near-term plus they to how as starts this and them to the experience If data is much, I the or future publications, along take been our continue we articulate CGM, know and happening the Care lot have on don’t with they I time in my you I get think once when point, get around confidence. same to the the they feedback are your but happy more say asked clinical is along naive that I experience with of throughout one to we within with is adopt to I for what all things to plus inhaled based the Afrezza. a year, with they evidence the is even them change that the because that our just I the its insulin things highlight focus are doctors go, the that them made when thing. experience, have new understand inhaled as what the they XX years enough, get to think had as more because not is and versus market, here is updates continue starting give evolve they general they don't drug to safety, guidelines injective. that get hopefully, main differentiation train and do drug. But Standards it's other change fixed precise doctors like, but oh, expect guidelines exactly

so out as care we hear is history. their of comments, as take experience success, we that, see that And but those patient doctors there get and rest the they get maybe whenever

And inhales, so not from three itself, to shift confidence have excited around they are years that is big a discussion all the need starts people people now, where bring and learn is I so for want a a of when that ADA no big now is When would where difference doctors that doing in for four out now go said up need over barely think show that actually - [indiscernible]. I very two I it's to I it's for years was in prescribe is to and combination sit the scientific a just team an no speak intimate hours that ago by it. to but how stuff people our about they data dinner, how dinner that ago learn lot to and of we medical around

Brian Marckx

to there In much terms from seasonality in demand, Afrezza QX of Is QX? seasonality. particularly

Michael Castagna

Yes.

the slightly only to book is make little Voucher miss is growth picks clarity seeing. the of dip kind what bring flat why seen down quarter then know March it see generally any back, year removal, this in you look then go two to terms to that now over up or revenue, Company. script that the XXXX quarters if have Because We back the ended Vouchers have what the grow. some you I is years so row continue versus and more people you a are up in QX and on three you February and got a try to saw don't dip on we slightly we takes looking is now back but of January's is the think But QX difference a or kind building paid we been XXXX. But, bit a scripts about hit really that are up of flatness. because we the of when good and decline, and in through And it of back then to and Sanofi backup QX roughly at to saw end varies or of well whether eight flat July year you XXXX to since way and revenue

We expect it really efforts the kicks depends in. the slightly salesforce QX or DTC and but be some flat down, next to or five weeks and how that of other four

we to watch, press are still up. continue are will the now we quarter So of to what we right seeing, to optimistic need but we finish

Brian Marckx

Okay. Thank you.

Operator

Bert from BTIG. question Hazlett Please from go ahead. final One

Robert Hazlett

early on Congrats the the appreciate increased on some you Do you campaign, lowering TV traffic by anecdotal have XX%. Is thoughts do Thanks. that just and would have the on and is as was of influencing helpful. But you of the progress evidence influencing kind scripts a with sense of it's Mike. in - said sense it you be the how meaningful, It comments scripts? and any XXXX. said, I a days

Michael Castagna

And campaign the are kind little more it’s value is where national is I a measure. way we of because adding along to tell a campaign, a running with bit you markets XX there TV can about meaning sub-regional is

XX do you year. impact we white out this the of remember, states that does space If because pulled in TV nationally,

markets certain can versus where we a we where So do TV at can and salesforce and we happening in states have look have we look bit where it more also then see what in little salesforce, don't prescribers. have is at we

a people come and the have up markets, in in that for or certain couple continue reps will when couldn't you analysis and in. doors the for in wrap we be where to we where really get to a drug to focus effort. to tell I it's reps all want invited good of come can sudden, So up a asking opened QX anecdotally, in are

of I part is and TV that So important. why you do think that is

think consumers TV. our also of I are remember customers

their So when gives reason see prescribe. that confidence them it reinforces whatever for and to on they to prescribe continue confidence TV it also

that I get So great community spread. see me. other to significantly a we they chat you comment, self-help of within things a community see they you each that it the And got continued up and it's amazing. patient, grows, room. Facebook posts of it's post helping as the And back chatter. notified copy just expect our I from the our those I noise XX think heard, can kind learning on that and see is whether continue to self-help have patients from anecdotal when it's - to salesforce, traffic click see of just whenever all patients all minutes, that of XX But and are comments we some the interesting is to

So it's starting I all to think work.

I be We look we at when think TV. will five, six just weeks early important days are next the and

Robert Hazlett

Great.

like put point to some to it. And finer on made of goods cost comments earlier. I You maybe a on try

you Brazil write-off, program, How don't we as as you more maybe think things, you move of have sold through cost coming do as potentially XXXX direct about we about and have how board. XXXX into but we do So think we the think purchase well. about the on expecting goods

Steven Binder

its So Steve again. Bert,

a our our up, underutilized the material through minimal we see reach as where year. are volumes going But of you until don't the because Brazil anticipate absorption So I see of goods. terms I goods costs, impact go in I cost cost change we plant, our our the purchase of significant a the absorbing of in in a direct are have in rolling from throughout XXXX. to point under wouldn't our there goods. mean program volumes there will a to being change product cost and cost The

Robert Hazlett

And Therapeutic the final And a milestone, just could just should that. the to the according of as proceeds that unnamed then that or on thank Therapeutics, if interaction one the you terms remind you just it compound with format? how the listed United development of one United terms? Okay, you proceed us development plan, with for general

Michael Castagna

opt-in predefined speak that lines agreements, an important we to to to that license it. which and discussion that that of have to at. would and version is within one, what I so some make work. they so for And would additional the we more option negotiation, formulation shareholders, a want in done, smaller, we our we don't is they sure us that to an in things first a different new that not we once want is look important, bring the UT have agreement. already then if And these our We try are step is part molecule But here expect clarity of it’s milestones they a perspective and opportunity are the share of that royalties is and in. comp think share to inhaled a they Yes. when because to a result making complete we happen can Obviously, you

has remind four you, You pulmonary hypertension products. agreement know exclusivity just the UT

arena, an is they you as there So agreement saw license particular product, and a in that.

are in which best synergies is collaboration the And we of you I companies proud the what and very can and lot strong industry, ones go big just within companies there forward I products this you they happy I looking are are is of we on which looking I I’m all think be good, to very, of with the had. the ever are and lungs doing partners, through so good. ones the tell we as can them. working So one a the have types at. in have been aren't tell

suffering culturally, they support PH, think just they to driven it’s like an company and I and we mission of aligned from a they those patients and are are people are are culture when are, we amazing partnership. phenomenal help just amazing group an

facility, bring and Steve forward the out of in to So the Company as products building a process think high permanent them we will we are to which new potency dialogue the epinephrine. with look mentioned earlier, about continue a capabilities manufacturing to like

forward. high built We build to products et cetera. of now able to will clinical other a capability, supplies, we lot in clinical need development, you continue then Because to be bring potency

lot a underestimate what it people but that capability. company does and a that So of build work take have in takes, to

come met be quality for in have are - to do, excited and we the UT we quality So look our they looked and to systems a produce partner requirements manufacturer good partner. everything a they at in inspection, all order the that they

year. I think, UT to lines continue with So that this is our all see you positive and will clarity throughout

continue to So they the stages of to have a will and transparency those readouts to to various bring at looking think I market. things then as evolve, we continue

Robert Hazlett

Terrific. Thank you.

Michael Castagna

Bert. you Thank

Steven Binder

Thank you.

Operator

may conclude does conference. participation, you disconnect. That today’s your Thank you for now

MannKind (MNKD) 26 Feb 192018 Q4 Earnings call transcript