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On Wednesday, 12 March 2025, MannKind Corp (NASDAQ: MNKD) presented at the Barclays 26th Annual Global Healthcare Conference, outlining a promising future driven by strategic initiatives and robust financial health. CEO Michael Castagna highlighted record revenue growth, while CFO Chris Prentiss emphasized the company’s strong balance sheet. Despite challenges, MannKind is optimistic about its innovative pipeline and market expansion.
Key Takeaways
- MannKind reported a record revenue quarter driven by Afrezza’s growth and strategic market expansions.
- The company is focusing on orphan lung diseases, leveraging its dry powder technology.
- MannKind aims for significant market opportunities with clofazimine and inhaled natinib.
- A strong balance sheet supports MannKind’s growth initiatives and future profitability.
- Expansion into pediatric markets and international markets is a key strategic goal.
Financial Results
- MannKind achieved a record revenue quarter, with Afrezza showing strong year-over-year growth.
- The company ended the year with over $200 million in cash and reduced convertible debt to $36 million.
- Afrezza and the EDU business have been profitable for the last six quarters.
- Current brand ARIKAYCE is on track to generate over $400 million, while Afrezza reached $65 million last year.
Operational Updates
- The clofazimine Phase III trial has 75% of sites activated, with 30% enrollment expected by quarter-end.
- Inhaled natinib is progressing to Phase II, with an FDA meeting planned.
- MannKind filed for an FDA labeling change for pediatric expansion of Afrezza.
- The company expanded its sales force through a collaboration with Amphastar for Baximy and increased R&D capacity.
Future Outlook
- MannKind plans to complete site activations for the clofazimine trial in Q2.
- Interim analysis of the clofazimine trial will determine trial size and endpoints.
- The sNDA submission for Afrezza’s pediatric indication is on track for the first half of the year.
- Strategic goals include expanding Afrezza into pediatric and international markets, launching clofazimine in the US and Japan, and advancing inhaled natinib to Phase III.
Q&A Highlights
- The clofazimine trial aims to enroll 180 patients with a 2:1 randomization, focusing on PRO and sputum endpoints.
- The Phase II trial for inhaled natinib will compare it to oral OFEV, optimizing dosing and improving safety.
- The sNDA submission for Afrezza’s pediatric indication depends on FDA feedback regarding data duration.
For more detailed insights, readers are encouraged to refer to the full conference call transcript.
Full transcript - Barclays 26th Annual Global Healthcare Conference:
Balaji, Analyst, Barclays: Good afternoon, everyone. My name is Balaji, analyst for the spec pharma space. Continuing our spec pharmaceuticals track for the day, delighted to have the management team from MannKind with me, Michael Castagna and Chris Prentiss, CEO and CFO respectively. Mike and Chris, thank you so much for taking your time today and joining us at the Barclays Health Care Conference.
Michael Castagna, CEO, MannKind: Thank you for having us down here. It’s been great.
Balaji, Analyst, Barclays: Maybe to begin with, Mike, could you I mean, you recently reported your Q4 results. Walk us through the key points and the highlights there and then drill it down further into the 2025 outlook that you see and what are the key events milestones we should look for?
Michael Castagna, CEO, MannKind: Yes. I mean, Q4 was a record quarter for revenue. We had a great quarter in terms of Afrezza growth did really well year over year. We got our India approval to the launch of Afrezza hopefully there later this year. We were able to take out most of our convertible debt.
We started kicking off our Phase III trial on clofazimine. We’ll talk more about that. And then we kind of closed out the year just really getting ready for 2025. So we’re really excited about this year and all the momentum happening in the company.
Balaji, Analyst, Barclays: Got it. Maybe as the business stands itself, could
Michael Castagna, CEO, MannKind: you provide an overview of
Balaji, Analyst, Barclays: the company too for those who are new to the story, focus on the strategic goals that you have? Yes.
Michael Castagna, CEO, MannKind: If those who follow the company, I was really known for a diabetes endocrine focus for twenty some years. Back in 2018, ’20 ’20 timeframe, we started pivoting the and lung with the first deal with Tabaso doing the DPI deal with United Therapeutics back in 2018. And then in 2019, we kind of said where do we best use our technology to drive a difference and many people might not realize. When you look at dry powder technologies, most of them are lactose blends. There’s really nothing unique or special about most, I’ll say, third party CMOs that are making powders.
Our technology is the only one really like it. When you look at the landscape of dry powder technologies, a lot of companies have not survived. I think mankind is one of the few that’s still independent, still growing there. And we look at the novel excipimab is called FTKP. No one else in the world really plays with that.
And you got to think about it as a delivery vehicle kind of like the Halozyme technology, right, with biologics. This is just a different technology delivered drugs into the lung and really get deep absorption and consistent absorption. We have a proprietary device platform in addition to how we make the powder. So it’s not just the powder, it’s the device and you really need both hand in hand. That’s really what we did.
So we pivoted that into orphan lung and said where do we best help patients and how do we best create shareholder value. And I think that strategy has really paid off.
Balaji, Analyst, Barclays: Got it. And maybe I think with multiple things happening on the pipeline side, let’s start there. So walk us through the current state of the pipeline and what is it that you find the most exciting within your pipeline? Yes.
Michael Castagna, CEO, MannKind: It’s exciting time, MannKind. We have really Chris and I were talking earlier. The first Phase III asset outside of diabetes the company has ever done in thirty four years is clofazamine. And so that’s in Phase III. And it’s obviously very important to get that trial moving in the right direction, really help patients get to market as soon as we can.
And so that trial in particular has got seventy five percent of the sites activated. And we’ll be about 30% enrolled by the end of the quarter in terms of the number of patients needed for the interim analysis. So that’s the most exciting thing we have right now that’s near term that really is big enough opportunity to be meaningful for patients and shareholders. And then the second thing that we have that’s moving forward is inhaled natinib and that can be so amazing for patients and we’ll talk more about that today, I’m sure. But that one’s going to Phase II hopefully we’ll meet with the FDA very shortly and being able to see hopefully two assets in Phase IIIII.
We started these projects five, six years ago. So it’s nice to finally see them getting into humans and scaling up.
Balaji, Analyst, Barclays: Understood. And I would imagine as you go through the enrollments, you would at certain points, you’d be updating the market and the investors bought it. And so maybe starting with Clafizumine, how should we think about this drug versus the existing drugs in the market? Where are the points of differentiation
Michael Castagna, CEO, MannKind: for the product? So So I think first the market’s really divided between two phases in my mind. You got the early treatment population mostly taken off label generic drugs that are very cheap, not that effective, but it’s all they have. And then you got ARIKAYCE approved in the later lines of treatment of refractory. So the refractory population has been growing.
There’s more and more patients getting diagnosed and treated. And so we think that’s where we’re going to start. We’re following the same model that ARIKAYCE did start with the refractory and go earlier. Mainly because if you had to enroll a trial in the early patients, it’s a mixed population and it’s quite hard to recruit that population. It takes a long time.
So ironically, it’s just faster to enroll to get to market through refractory population, which is what we’re doing. We’ve differentiated the product profile in a couple of different ways. Number one, we’ve added M. Abscessus into our trial. So there’s patients who’d be co infected with MAC and M.
Abscessus NTM. And what that does is a lot of these patients have co infections. And because we know clofazin works on both, we want to enroll as many people as we could as quickly as we can. And that will help us hopefully hit some enrollment timelines. The second part is the dosing.
So today the only other drug approved is nebulized every single day. And if you treat for six months and you do well, congratulations, you have a whole another year of treatment. And so we try to make that dosing burden once a quarter. And so when you think about clofazamine, it’s got about a ninety day, seventy to ninety day half life depending on what study you look at. But it’s got a very long half life.
We saw that in our animal models and the lung concentration in lung tissue. So what that means is you can load the lung up over twenty eight days and then take a break for two months and then load the lung again. And so we kind of have a one month cycle off for two months, one month cycle. What that’s going to do is really help patient co pay burden, administration burden and cleaning the nebulizer, new parts for the nebulizer to really reduce a lot of that friction. So we think that’s important for these patients.
These are patients who will be on treatment probably for at least six months. And then if they do really well, they got a whole another year. So it’s really and unfortunately a lot of these patients relapse. So if they had a response, for example, it’s in the water system, it’s in the soil, they often will get reinfected at another time point. So hopefully we’ll be able to show durability of effect in our trial as well.
And that’ll be something here. But I would just say dosing administration, hopefully tolerability and efficacy we’re benchmarking comparable to ARIKAYCE. We don’t think there’s a wide enough data set to say you can get better than they’re getting. So let’s see what happens.
Balaji, Analyst, Barclays: And as regards to market itself, help us contextualize the total addressable market as you see for the product and maybe the market and then translate that to potential revenue signs? Yes.
Michael Castagna, CEO, MannKind: So I think there’s a huge unmet need in this area. Unfortunately, last year at this time, there were two other companies working on assets that haven’t made it. And so patients just don’t have a choice for trial, they don’t have a choice for treatment and they really do need options. And when you think about ARIKAYCE is a great job, INOMED is doing a great job building the market up, really raising awareness, raising treatment diagnosis rates. And so we think that that’s going to continue whether it’s Japan or U.
S. Those are the two biggest markets. And the current brand is on track to do over $400,000,000 this year. Sorry, dollars 400,000,000 is what ARIKAYCE is on track to do. And so we watch that closely because we think this is a multibillion dollar market opportunity and there’s enough room for two players to do well.
And then so we really look and see do we think clofazamine will be used in addition to our case, could be some patients, will it be used instead of, I’m sure in certain situations or do we expand the market and treat more people, right? And I think that’s the real opportunity for everybody. We see this as a $500,000,000 to $1,000,000,000 opportunity when we look out there.
Balaji, Analyst, Barclays: Got it. So as we look at the progress of the trial, what are the key events or catalysts we should be looking forward to?
Michael Castagna, CEO, MannKind: Yes. I mean, the first catalyst is just fortunately site activations are going pretty well. So we’re almost done with that in Q2. Then it’s going to be the speed of enrollment. And so that started off I’ll be honest this year started off very strong.
So as we look at Japan, South Korea, Australia coming on board, they’re really active, but using clonfazoline in that part of the world. And so we expect to see faster adoption in the trial because there’s already a belief that the drug works. They know the side effect profile and they really do hope that this has a better side effect profile. So we’ve seen about we’ll see about 20 some patients come into trial just in Q1 by the time we close out the quarter. So the interim analysis, which is based on the first one hundred patients, will be very important because that’s going to determine the size of the trial.
And so we’ve said publicly we expect to get the interim analysis by the we expect to finish enrollment by the end of this year and then it’s a six month endpoint. So call it mid next year you’ll hit that endpoint and then the data people will review at that point and tell us is the trial sized appropriately, do you have to go bigger? And one of the things is we’ll probably keep enrollment going just in case they tell us you need to go bigger, at least if you already have the patients in.
Balaji, Analyst, Barclays: Got it. And remind us again, what is the data that you would see that would give you a decision at least, create a confidence in continuing on with the trial? And what would you like to see it as to also help commercially?
Michael Castagna, CEO, MannKind: Yes. So in the interim analysis, we’re just going to know is it powered appropriately for the two endpoints. One is a PRO, one is a sputum. That’s for The U. S.
In Japan, you only need sputum. So we don’t have to necessarily power it for Japan. It’s 180 patients is our goal for the trial, so two:one randomization. And what the interim analysis is going to tell us is do we need more patients to make sure we hit the statistical validity of the trial. We won’t necessarily know is the response rate 4020% until we get the final results.
But at least they’ll tell us if the trial is futile then I think it’ll just tell us to stick at 180 and not go any higher. So that’ll be kind
Balaji, Analyst, Barclays: of just the answer you wait for on that one. Understood. Shifting from clofazmin to nintedanib, so remind us of where this asset stands currently and I know you have had some interactions with the regulatory agencies for an end of Phase I meeting. What’s the update there?
Michael Castagna, CEO, MannKind: Yes. So we submitted all the work for the FDA. So we’ll be meeting to talk about the Phase two trial design. It’s a four arm study, 25 patients in each arm. And so we’ll be comparing ourselves to natinib.
And the way to really think about that is, one of our hypothesis is that we can dose higher doses directly into the lung over the oral OFEV. And so there’s a big debate out there. Do you need the systemic exposure or is the lung exposure enough? And then even within lung exposure, is it a Cmax issue, AUC issue, a frequency issue? And given some of the failures we’ve had in IPF, it’s obviously a very hard target.
And therefore, we’re going to design this trial to have multiple shots of success, right? One is a comparable efficacious dose, one is a higher dose just in case this calculated or can we get better efficacy? And the third one is going to look at higher frequency. So could you dose the patient more often and see what happens? And we think that that’s important.
And the good news in this disease, we’ve seen another company prove that an inhaled IPF treatment can actually work as good as the oral delivered treatment. So we think the proof of concept is there that you really can deliver an appropriate lung dose and get the outcome you need. Hopefully, our big goal here is better safety, right? The population of IPF, they really just cannot tolerate the existing drugs out there. It’s a very tough disease from that respect.
Balaji, Analyst, Barclays: And it’s still in a slightly early stage generally for analysts like me to start modeling out the market and giving putting a number to the drug and the potential opportunity. But help us understand the market opportunity for this drug.
Michael Castagna, CEO, MannKind: Yes. So I mean, look, you look today, oral Ofev is about $4,000,000,000 in sales, and fifty percent of the people drop out pretty quickly. And only about fifteen percent of people who have IPF even take a drug. So when you think about the marketplace, eighty five percent of the people who were given a death sentence would say I’d rather be dead and then take the current drugs. It’s a pretty dismal outlook And that’s because the safety and tolerability of these products are so tough on the patient.
The quality of life is really rough and they’re not feeling a benefit. So we really think that opportunity is can you help the eighty five percent who can’t tolerate what’s out there? Can you get them in the treatment? And I think whether it’s our treprostinil program that we have partnered with United Therapeutics and IPF or Atentive, we think there’s a real opportunity to bring dramatic change to these patients and help them. Then you got the people on the drug and that’s who we’re going to start the study with.
There’s a population here, it’s about 15,000 call it that you can really help bring them the more tolerable option. But the real opportunity in my mind is helping all those that can’t tolerate what’s out there and that’s a five times bigger market than wherever we want that today. Got it.
Balaji, Analyst, Barclays: That’s it. And maybe final question around the pipeline side of things.
Michael Castagna, CEO, MannKind: What do
Balaji, Analyst, Barclays: you see as a scope for possible expansion of the pipeline? Is that a priority for both of you? And how are you thinking about it related to your other goals that you have? Yes.
Michael Castagna, CEO, MannKind: I think on the company, when we take a step back, you’re looking at innovation over the next ten, fifteen years. And so obviously, our platform technology can be applied to more molecules. And we just picked up an extra research facility last year through our pulp matrix collaboration there. And what that brought us was another team, another expansion, more spray drying capacity. Because when you look at what we’re doing from where we were even five years ago, we have colfasmin moving forward, we have Natetinib moving forward, we have Afrezza work happening, you have TAVESO work happening.
There’s a small team working really hard to keep all that moving and we needed more capacity for R and D. And so that is now we’ve basically doubled the size of that team and now we can actually put some more work into the pipeline. We’re not out of ideas yet. There’s still a couple more ideas we have to push forward here and we’ll start formulating those and sharing those later this year, early next year. But we want to make sure we get the right formulation, the right target dose and the right animal studies moving, but we definitely have more ideas coming beyond what we see out there.
Balaji, Analyst, Barclays: Understood. Shifting more a bit towards the commercial side of things, talk to us about Afrezza and the level of adoption you’re seeing currently and how does the drug fit into the broader treatment paradigm? Yes.
Michael Castagna, CEO, MannKind: The good news on Afrezza, I mean, it’s been around ten years now. And so when you look at the pump insulin pump market which is only type 1s worldwide is about $5,000,000,000 And when you think about Afrezza doing $65,000,000 last year, there’s nothing but upside for continued growth. The biggest challenge that I think we are at this point is really awareness and marketing, right? And so I think that’s something that we’ve run the brand for profitability in the last couple of years while we waited for these data readouts to just happen last year. We’ve now filed with the FDA a labeling change that really will change hopefully the dosing configuration in our label as well as pediatric expansion.
So those are two big opportunities in the next twelve months that we’ll wait for. But what that allows us to do is promote inhale one and inhale three into broader populations and hopefully start people off on the right dose the first time instead of waiting for doctors to titrate up and people struggling in that phase, which is what happens in the real world. And so now that the data is out there, you can clearly see Afrezza is a differentiated product. It works faster than injectable insulin. The onset is there.
The head to head data is now out there. We’ll be presenting five new datasets next week at the ATTD conference. And I think you’re starting to see KOL support. I think we’ll be excited for the kids. So I look at Afrezza, it’s had an inflection.
And one of the hang ups has been around safety of inhaled insulin. It’s really hard if for ten years when you see no safety signal to say that there’s a safety issue, right? We’ve treated tens of thousands of patients at this point. We’ve seen nothing in our databases. So it’s really exciting now to finally see the pediatric data because that’s what we’ve been waiting on, right?
If pediatric lungs were safe and effective, that now gives you a whole new population with a whole new data set and looking at lung function data. And we saw no difference in the two arms of that trial. And that was the key goal in the PEAT study was what does the one year safety look like? We have 85% of that data in at this point. So now it’s really nice to be able to see that and confidently go out there and say, we have a drug that’s safe and effective for a broader population.
And that will now set up Afrezza to be a growth engine as we go forward in the company.
Balaji, Analyst, Barclays: Sure. So the sNDA submission is still on track for the first half of the year? So
Michael Castagna, CEO, MannKind: we’re meeting the FDA in a few weeks. And so that’ll just drive, do they want the six month data is already done, we can file that in April if they let us. If they want the twelve month data, that data set will be wrapping up in April. So we’ll have that file ready in June, July. So it’s about one quarter difference between the two data sets, but we think the patients deserve an option.
This is really the first time in 100 that a kid living with diabetes will have an alternative choice. They’ve had no choice but injectable insulin. And so we think it’s important to get this to the population, to get this out there and really bring options to patients that have never had anything else. And so we’re excited about that and hopefully the FDA in a few weeks will agree that we can file this sooner because we’ll have a full data set. So it’s not like there’s any guesses here.
We know eighty five percent of nothing really is going to change in the last 15.
Balaji, Analyst, Barclays: Got it. And help us understand what this means in terms of incremental market opportunity and also the overall market opportunity for Afrezza and where you see the peak sales for the drug? Yes.
Michael Castagna, CEO, MannKind: So I don’t see Afrezza, I mean, between now and 02/1940 pick your year, I don’t see a generic coming. I don’t see a peak sales year. I think the struggle will keep growing for the next ten, fifteen years, because we’re going to go international expansion. You’re going to go population expansion. You’re going to go into hopefully helping bigger and broader population.
So it’s really a function of marketing spend and marketing investment and sales execution. And And we’re at that point now with the new data sets that that really can drive that. So what we kind of said on the last earnings call was think about every 10 share in pediatrics is about $150,000,000 in revenue. And so that gives you a baseline of we have to kind of feel like that’s a reasonable expectation as we go out there. And then last year we did about $65,000,000 of revenue.
So that takes you to call $210,000,000 2 20 million dollars And then all those kids turn to adults and so they’re going to live. I mean how many brands and companies have you talked to today that have a sixty year patient life cycle value? Sixty years is a long time to be living with the disease. And if you’re 12 years old, you’re likely to live sixty years. And so as those kids grow, you’re just going to see Afrezza compound year after year after year over the coming decades.
And that’s really exciting for us. So that’s why I said, I see this just starting to compound faster as we go into kids. And so that puts you at a $200,000,000 3 hundred million dollars run rate in the near term. But the near term is $27,000,000 20 8 million dollars I think we can debate that. But that kind of gives you that plus Tyvaso plus the pipeline.
Balaji, Analyst, Barclays: All of a sudden, mankind is a real reputable differentiated company. Got it. Great. Changing tax slightly on the commercial side still, early this morning, we had Amphastar. We did speak about their collaboration with you on Baximi.
So take us through that and what does it mean, this promotional collaboration that you have and also the implication of this for your overall strategy? Yes.
Michael Castagna, CEO, MannKind: I mean, AmphheStar has been nothing but a great partner since I got here nine years ago. They have been so flexible and the company was in deep financial constraints. And I would just say that that company and the leadership there has been amazing to work with. We came to them last year with an opportunity with Salesforce capacity because we stopped marketing V Go. And we said, hey, would you be open to a collaboration next year?
And they quickly stepped up and we came up with a quick easy deal structure was key to us was, let’s not make this complex. We have a 60 person sales force. How do we just drop an opportunity to help back CME faster, while continuing to have a different reason to show up to our offices, right? 95% of customers do not write Afrezza on every single visit. So how do we increase our shots on goal and how do we increase the productivity of our sales force?
We think this is a great opportunity with Baximy. In addition, what that does is allows us to go into pediatrics and start to educate that market faster in terms of BaXcemia and expand deeper into that population and build that reputation with mankind. So that’s one of the opportunities we have in the second half of this year is really expanding the footprint of our sales force with BaXcemia in the bag, really going out there during the back to school season for those guys, while hopefully getting us ready for pediatric launch.
Balaji, Analyst, Barclays: Got it. With a few minutes remaining, I do want to discuss some points around the balance sheet. So, Chris, so walk us through the current state of the balance sheet. And as the company has evolved and come to this point, what are the capital allocation priorities for 2025? How has that changed?
Chris Prentiss, CFO, MannKind: Yes. So, we really transformed the balance sheet in 2024. We had the opportunity to pay down the vast majority of our debt. And so, we ended the year with over $200,000,000 of cash and a small stub on our convert of $36,000,000 So we have a very clean balance sheet that we think really sets us up for 2025. As we think about our priorities, this is the first opportunity we’ve had really in quite a while to invest in Afrezza with the pediatric opportunity.
So Mike highlighted that well, but that’s something that we certainly will focus on this year. And then the pipeline, as we commented on having a Phase III asset in NTM is such an exciting opportunity for us. We will fully fund that to go as fast as we can. And the same is true for our IPF program. I’m excited to move that into Phase II at the end of the year and move that through as quickly as possible as we can.
Such an unmet need in both of these populations.
Balaji, Analyst, Barclays: Got it. So with these programs ongoing, how should the market be thinking about operating margin directions? And at what point could we also start seeing the return on some of these investments you’re planning to make?
Chris Prentiss, CFO, MannKind: Yes. So as we’ve commented on, Afrezza and the EDU business has been profitable for the last six quarters or so. And so that gives us an opportunity to really invest in that business without truly impacting the bottom line. And the revenues that are generated through both manufacturing Tyvaso DPI as well as the royalty stream allows us to fund our pipeline. So we’ve been cash flow positive and profitable the last couple of years, and we intend to be so on an annual basis.
It may vary from quarter to quarter as priorities change and just how accounting flows through, but we expect to be able to protect that in the near term.
Balaji, Analyst, Barclays: Got it. Maybe final question for the session. With multiple things happening and you’re hitting some key event milestones over the next six to twelve months, a good spot to think about the longer term vision for the company, what would the company be looking like in three years or five years from now? Yes.
Michael Castagna, CEO, MannKind: It’s fine. If you fast forward, you’re just talking to somebody three years from today, it’ll be 2028. It’s hard to believe number one. But number two, when you think about the company, we should be in the middle of launching clofazmin by then. Afrezza should be off and running in the pedes segment.
Afrezza should be expanding globally. We should be launching clofazmin in Japan. Atatinib will have the Phase II readout by then. So now you can that will probably be in Phase III realistically. TAVESO IPF could be launching in the DPI form in that timeframe.
So all these are just going to be tremendous revenue growth drivers and they’re only two, three years away. And I looked over nine years it’s taken me to get us to this point. It’s amazing how much more transformative we’re going to be if we’re sitting here three years from today when you add up all the revenue streams, how much profitable mankind can be and the additional pipeline opportunities that we’ll be getting ready for. It’s going to be an exciting place to be. So we’re recruiting great talent in the company right now.
We got a great pipeline. We got great opportunities to bring in some awesome talent to bring us to the next level. But in three years from today, it’s amazing. When I look back three years ago, it it was 2022, we were just getting out of COVID, things were shut down, Temase wasn’t approved, pipeline wasn’t in belief. And now you got two assets in Phase IIIII, readouts on Afrezza, everything, no major debt to deal with.
I think the company is in a really bright spot despite what is a dark side of the market right now. It’s really tough politically and it’s a tough financial markets. We don’t have these headwinds to deal with unfortunately, which is the first time I kind of can say that.
Balaji, Analyst, Barclays: So I think that’ll be a good spot to leave this conversation at. And I look forward to updates around these the progress. And thank you again for joining us at the Healthcare Conference. And I wish you a very productive day of meetings. Great.
Thanks so much.
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