MannKind at Wells Fargo Conference: Strategic Diversification Unveiled

On Wednesday, 03 September 2025, MannKind Corporation (NASDAQ:MNKD) presented at the Wells Fargo 20th Annual Healthcare Conference 2025, outlining its strategic diversification efforts. The company emphasized its acquisition of SC Pharmaceuticals, pipeline development in rare lung diseases, and the potential of Afrezza in the pediatric market. While the focus on diversification and innovation is promising, the company must balance these efforts with effective capital allocation.

Key Takeaways

• MannKind aims to balance royalty income with commercialized products, targeting a 50/50 revenue mix.
• The acquisition of SC Pharmaceuticals is expected to add over $100 million in revenue and diversify offerings.
• Afrezza’s pediatric market entry could generate $150 million in revenue for every 10% market share.
• Clinical trials for MNKD-201 and MNKD-202 are progressing, with a focus on addressing unmet needs in rare lung diseases.
• MannKind plans to launch Afrezza in the pediatric market by mid-year, with a dedicated management team.

Financial Results

• Revenue Mix: MannKind is targeting a 50/50 ratio between royalties/manufacturing and in-line commercialized products.
• SC Pharmaceuticals Revenue: The acquisition is expected to bring in over $100 million, enhancing revenue diversification.
• Afrezza Pediatric Market: Each 10% market share in the pediatric market could result in approximately $150 million in net revenue.
• TETON Milestone: A potential $50 million milestone payment is anticipated if Taipei reaches $1.9 billion in revenue.

Operational Updates

• SC Pharmaceuticals Integration: Focused on integrating SC Pharmaceuticals and supporting the launch of Feroses for heart failure.
• Clofazamine (MNKD-201): Phase III clinical trials are underway, with a design that includes an interim readout for sample size reestimation.
• Treprostinil (MNKD-202): Conducting Phase II trials to determine optimal dosing and demonstrate efficacy.
• Afrezza Pediatric Launch: Preparing for a mid-year launch with a dedicated key account management team.
• Baqsimi Promotion: Promoting Baqsimi to build infrastructure for Afrezza sales.

Future Outlook

• Key Priorities: Focus on integrating SC Pharmaceuticals, supporting Feroses, and advancing development programs.
• Afrezza Growth: Targeting newly diagnosed pediatric patients to become the first insulin option.
• Dry Powder Development: Aiming to advance clofazamine to human trials next year.

Q&A Highlights

• MNKD-201 Positioning: Exploring synergistic use with ARIKAYCE, targeting patients who discontinue ARIKAYCE.
• MNKD-202 Phase II Design: A twelve-week, placebo-controlled trial is being conducted outside the U.S., analyzing two doses (6 mg and 8 mg).
• Afrezza Pediatric Adoption: Highlighting INHALE 3 study results to present Afrezza as an equal or better alternative to pumps.

Readers are encouraged to refer to the full transcript for a detailed understanding of MannKind’s strategic directions and operational plans.

Full transcript - Wells Fargo 20th Annual Healthcare Conference 2025:

Thiago Fauci, Biotech Analyst, Wells Fargo: Alright. Perfect. Thanks, for joining us. I’m Thiago Fauci. I’m a biotech analyst here at Wells Fargo.

We’re hosting a fireside chat with with mankind today. So I have Michael and Chris. Let’s kinda walk through a lot of moving parts here. I mean, story just got a little bit more noise from this Monday. Right?

We’ll we’ll we’ll get there, but perhaps, yeah, you can start with the the business. I guess, it’s funny. Like, we still get some investors that talk about mankind and say, oh, the Afrezza company or or just all the Tyvaso DPI royalty play. It’s like a lot has changed. So let’s give you a couple of minutes to kind of run down to what the business actually is today.

Michael: Yes. I think when you look back in time, it was a diabetes company, right? And really, the drug device was a lot of challenges, I think, for the company. But I think when you fast forward, one of things we’ve tried to do over the last six, seven years is differentiate us on the clinical development side, applying the technology to rare disease and specifically orphan lung. The UT partnership has continued to blossom nicely, and the last thing you’ve seen is how do we diversify even faster?

How do we get more catalysts? When we look at Wall Street, a lot of momentum investing, lot of catalyst investing. And so when you look out, we wanted to make sure we had enough positive things happening, and that gives investors things to look forward to and lots of shots on goals. So when we look at, you got an in line brand, you got royalty and you got a pipeline. So you really got a lot of different things to look at.

Yes.

Thiago Fauci, Biotech Analyst, Wells Fargo: No, fair enough. And I guess we can probably start with my last question, which is going to be the SC Pharmaceutical acquisition. So you talked about diversification. To be fair, like some investors just didn’t understand like all the strategic fit. This feels a little less orphan lung, which is where the core of areas of expertise had been in the past.

So again, how can you make the business case of the acquisition? How much operational leverage could there be synergies? How are you thinking about that as a part

Michael: of mankind? Yes. I think, number one, when you take a step back, what do these companies have in common, right? Drug device combinations, building on an injectable platform experience in terms of these guys had CRLs. They’ve learned through those own body injectors and subcu.

The second part is, does it have a large enough scale? We’ve been looking for something for a couple of years, and it just didn’t work out, ones we were looking at. And obviously, we’d like to have something that fits nicely with orphan lung, but there’s not a lot out there and not a lot that you want to pay for that you’re going to take on clinical risk. We don’t need to take on any massive risk at this point. The company is profitable.

We’re growing. We’re diversified. And so we were really looking for something that had revenue the $100 plus million range that had an opportunity to scale. And there’s not a lot of those types of opportunities out there. And so we looked at as Seed came along, we felt that the team has done a really nice job.

They’re right in the beginning stages of their launch. And when you take a step back and you look at take insulin pumps, it’s a $5,000,000,000 market. And all we’re doing is taking a 100 year old product, trying to manipulate the profile to get it in the body. You take Remodulin, we get Intrepostol in the body. You take Neulasta, we’re preventing hospitalizations.

These are multibillion dollar opportunities. And this thing has that opportunity, right, in front of you. Heart failure is a huge market. Lasix has been around for sixty years. Being able this is something I’m able to love, right?

Being able to take a device and challenge with the formulation and put them together, it just fits really nicely. And we think it wasn’t obvious on the surface around the synergies or the bolt ons in terms of when you think about cardiometabolic, heart failure, chronic kidney disease, large overlap in diabetes, large overlap in where we’re targeting. And a lot of these patients are also on insulin. So when we think about long term business, we’re kind of all in this cardiometabolic space. So it kind of fits nicely that way.

And just

Thiago Fauci, Biotech Analyst, Wells Fargo: from a revenue perspective, it’s not immaterial relative to your current top line. Right? So the mix is gonna look fairly diversified over even the near term. Is that fair?

Michael: Yeah. I think when you look out, we’re trying to get to, a fifty-fifty ratio roughly royalties manufacturing versus in line commercialization products.

Thiago Fauci, Biotech Analyst, Wells Fargo: Got it. No, perfect. That makes sense. Perhaps pivoting to, I guess, I won’t call it the legacy business, but prior to SC, again, you were developing your own internal pipeline in rare lung, a nebulized product, the DPI product. To your point, you have expertise with Afrezza, with IVASO DPI, this playbook of inhaled formulations or drug device combos.

Again, some companies have been less successful in developing good formulations, good devices that deliver reliable PK. What’s kind of the secret sauce and how are you applying that to 01/2001, 02/2001? How should we think about it from a technology perspective for both inhaled DPI?

Michael: Yeah. I think when you take a step back again, you got thirty four years of the company existing around inhalation formulation technology scale. And in that in that time frame, the team has probably formulated close to 50 products. Some have gotten to phase one, some phase two, some approved. And so a lot of that magic is around can this be scaled, can you get the right dose in, and does it work.

And then even once you get there, will the payers pay for it, and is there a population unmet need? And so many times things got killed because they were great drugs, they’d have a fast onset of action, but we didn’t think the payers would actually reimburse a proper reimbursement. And I can name multiple things that we didn’t do in that space. But when you take a step back, we try to say how do we best apply our technology to make the biggest impact on human life. And we felt IPF is an unmet need, NTM is an unmet need.

We have our dry powder in development as much as a nebulizer. And then what’s the core capability around these drug device combos and predicting that dose and calculating that dose? A lot of companies just have not survived dry powder products or nebulizers, and they probably miscalculate a lot of their animal models or see through. And so I think it’s a little bit more art than science sometimes, and people have unfortunately made mistakes that were devastating. So far, our team has been right more than they’ve been wrong on their shots on goal.

Thiago Fauci, Biotech Analyst, Wells Fargo: There you go. And again, for one on one, before we go into the actual clinical trial design and a more nuanced discussion, so again, NTMAC, there was a lot of skepticism back in the day for AimsMed, even for ARIKAYCE, right? And that turned out to be a sizable market. The story has moved on from that on their side, but still, like, a reasonable market even on the relapse or factory setting. What what is the unmet need, I guess, that that remains?

Right? Because there’s gonna be some questions around competition versus ARIKAYCE, why this specific product that you chose, so on and so forth. So what was the unmet need that you guys are searching to close?

Michael: Yes. I think when we were looking at the time, we were looking for what else can we put on the platform that would be scalable, be it in orphan disease and lung. And that’s when NTM popped up on our screening, and so we were able to find something. And at the time, we were looking for a license in the dry powder. That discussion turned into a full acquisition, which is how we got clofazamine back in February.

And then just had a lot of work to do on CMC and scale and FDA. So all that work got done. We’re now in phase three. When you look at the unmet need in NTM, you know, there’s only one drug approved in the case of our case. It’s only in refractory.

Everything in front of us has failed, and everything behind us has failed. So there’s nothing else really in development. And I think Insmed has done a really nice job. They launched right in the middle of COVID, which is not easy. They bought it globally, which is not easy.

And it’s going to do 400 or $500,000,000 this year, right? And so thinking about an orphan disease making a difference, challenging product, and it does have some safety and tolerability issues. And so when we look at clofazamine, it’s a drug that’s well known. We know it works in NTM and all the preclinical models and world evidence. But then how do you best position it?

How do you best dose it? How do you minimize the toxicities that were known of clofazamine, which is skin discoloration, organ accumulation, QT prolongation. So really narrowing that dose down, hopefully getting to the most effective lung delivered dose. And to your earlier question, one of the things we did was we tested low, medium, high, and all of them looked safe and tolerable. And when we saw AN2 had a problem in AeroVate, we actually decided to go up a dose higher just to make sure to have a little bit of safety margin.

Because as much as we like the team and all the work they’ve done, you just don’t know until you put in patients what happens. And so we actually went to the middle dose and said if people can’t tolerate that, they can down dose. And so far, in ninety patients, nobody’s down dosed yet. So feel pretty good about the tolerability profile so far, but we’ll continue to watch it.

Thiago Fauci, Biotech Analyst, Wells Fargo: Yeah. But just from a conceptual perspective, this looks a lot more like ARIKAYCE than some of the other alternatives. Saw some of them were novel anti infective mechanisms, some of them were kind of repurposed. The whole liposomal amikacin, like, you’re basically just doing, again, nebulized clofazamine, which is a drug that you know should work in this indication and just limited by some of the aspects you mentioned, correct?

Michael: I think some of the differences is clofazamine is very lipophilic, so when it gets into the lung tissue, gets absorbed pretty deep, and then the macrophages heat it up and they crystallize and they break it down. Cholophazamine has about a seventy day half life, so you load up the lung for twenty eight days and then you stop taking it, and then you’re off for two months and then you retake it again. So you’ve got this unique dosing regimen that removes the burden off the patient, solves some of the copay issues, and really they don’t have to clean the nebulizer every day. We have a dry powder coming. So we hopefully will make that easier.

And the dry powder may have a different dosing regimen. We might dose it every day at a smaller dose. You might load up the lung, take one week on when we cough. We have some flexibility. We’ll get the animal model shortly, and then we’ll start to look at the dosing regimen for that.

Thiago Fauci, Biotech Analyst, Wells Fargo: Got it. Interesting. And let’s talk about the Phase III design. Guess, so you went from a phase one directly to a phase three with an interim readout in the middle. Right?

I guess just from a timeline perspective, I don’t think you thought it made sense to run a proof of concept small phase two and then see it from the like, what gave you confidence, I guess, to move? And can you talk about Phase III design?

Michael: Yes. I think we don’t have any questions that clofazamine works, right? And I think if you did, you’d want to do a Phase II to kind of get to a tighter size. I think in the end, we were up against competition, number one. We were up against watching two companies take forever to enroll the trials.

And we were very fearful that, you know, what if phase two took three years? You’d wind up killing the drug probably. So we kind of felt let’s get to the endpoint. If it fails, it fails. If it works, it works.

But there’s not a question it can work. And so all the energy put into a phase two, they’re really not we didn’t think the dosing was going to show a difference whether you used high, medium, low dose. And so then what are you wasting two years of a phase two study for? So we took a little bit of risk. We actually had originally two doses in the Phase III trial.

And then we looked at our case, they only had one dose, and we kind of asked ourselves, do we really need two doses? FDA agreed we can go down to one dose. And it was definitely a negotiation with the regulatory authorities in Japan and other places, but they all, once they saw the data and how we got to our dose calculations and lung concentrations, everybody agreed that it was a sufficient level. And so there’s no reason to do a phase two, be honest with you.

Thiago Fauci, Biotech Analyst, Wells Fargo: Got it. And you do have an interim readout. Right? So what are you powering that for, and what what are the actual outcomes of that? Are you actually gonna see the data?

Is it mostly gonna be a sample size reestimate? Like, what how should the street think about that?

Michael: Yeah. It’s mostly a sample size reestimate. So so as you one of the things, again, back to the companies that were out there, we’re taking forever to enroll fifty, sixty, 70 patients. So we wanted to get this to be as small as possible, but also statistically possible. Right?

And and so that got you about 180 is the smallest you could go, so 120 on active, 60 on placebo. And then at six months to 60, placebo can roll over into the active. So we’ll get 180 patients for a minimum of six months and then 120 for twelve months, hopefully. So that’ll give you a long enough duration of effect. It’ll show you any relapse breakthrough.

We’ll also see some people then enrolled in the trial who may have had a negative sputum, and we’ll confirm that it was negative, and then do they even maintain negativity and how do people kind of progress. So we’re going get a lot information out here. But in terms of the size of the estimation, the number one thing is we’ll let the trial keep enrolling until we get to that data point. It’s powered a little bit more on the sputum than it is the PRO because we feel like the PRO is not sensitive enough. You know, you could find yourself with a lot of large variability.

And Yeah. Honestly, if you need 500 patients, you’ll never finish the trial. So but the PRO so far looked positive with ARIKAYCE. We’re using the same one. We’re probably using it a little bit differently, but I think that that should predict the sputum.

And then, you know, we’re powering it for 20 delta from placebo. So as long as we meet that threshold, then we’ll be good. And and, you know, you could see it go from 180 to two ten, two thirty. It’s all predefined in the statistical plan. And there’s also futility as well.

So so we’ll we’ll know if the drug works or not.

Thiago Fauci, Biotech Analyst, Wells Fargo: Fair enough. But and there was a lot of discussion with with things, but in our case, back in the day about sputum being enough. There was, like, an ad colony. There was a lot of discussion around that. So you have both sputum and the PROs called primaries.

That that seems to be a little stricter, I guess, than the the precedent that that was set before you. Is that like, how true is that concerning at all? Do you think it’s it’s reasonable? Do you think if you actually just see a very strong signal in sputum and a trend on the payroll that might be file able? How how should we think about the the scenarios?

Michael: I I think, yes. I I think as long as the sputum the efficacy on sputum has to be there, table six. Right? And so then you get into the PRO and which direction is the PRO, what are you measuring and what do you see, and I think some of that will be in the details and how it reads out. We’re picking the most bothersome symptom, and then does the patient improve, and they’re able to measure against their own self.

So I think the way it’s being calculated de risks it a little bit. But to your point, ARIKAYCE got approved with no PRO. So we think that’s the baseline opportunity because as long as you have better dosing, better tolerability, good safety profile, it’s going be hard for the FDA to say this shouldn’t be an option for patients because without this, is nothing else. And, so we feel good about that. The rest of the world only needs a sputum and only needs 180 patients.

And so we feel as long as we hit that 180 mark, we’re good to file rest of the world.

Thiago Fauci, Biotech Analyst, Wells Fargo: Got it. Okay. And then just thinking about actual commercial positioning here, again, there’s this I I don’t know exactly why, but this concern that because of ARIKAYCE, there might not be room for additional players. Like, I sometimes I infect that. There’s always gonna be some degree of resistance in some patients.

The sputum conversion rates are not. They’re high, but they’re not 100%, right? So what is the commercial opportunity here initially?

Michael: I mean, there’s one hundred thousand patients in The U. S. And one hundred plus thousand in Japan. The enrollment in Japan has been off the charts. So even though ARIKAYCE is launched there, we can see that there’s a large unmet need, a lot of excitement.

In The U. S, it’s a little bit harder to enroll because people don’t want to be in a placebo trial. People want to try ARIKAYCE first, and you’ve got to be clean out of ARIKAYCE for a little while to get our trial. But there’s a scenario where you’ll add this to ARIKAYCE because they’re probably synergistic together. There’s a world where you probably use it before ARIKAYCE, and there’s a world where use it after ARIKAYCE.

But there’s more than enough patience to build a sustainable business around. And to to your point, you know, a lot of people stop our case after a month or two. Right? And so that that population is looking for something else. But then you got this huge early early treatment population that we think a dry powder is gonna do nicely.

And and so that’s really one of our goals is to get the dry powder to a point next year where we can move that into humans. That will be exciting because that really opens up to us the major market.

Thiago Fauci, Biotech Analyst, Wells Fargo: Got it. Anything that we didn’t cover for 01/2001 before I move on to I think you got it all. No. Okay. So let’s talk about 02/2001, yes, entendonib.

So, again, kind of a similar playbook. You know, entendonib has systemic tolerability issues likely driven by systemic exposure. Theoretically, if you drive if you deliver a DPI, you could reduce that. But what is the data that suggests the efficacy is driven perhaps by the positioning in lung tissue? Like, I’m curious if you’re not going to perhaps miss some of the efficacy if you don’t have the systemic exposure.

That was one concern with AeroVade and some other players back in the day, so

Michael: I mean, I think that is a little bit of a debate out there. I’m actually really excited about the Tyvaso data that came out yesterday, because they showed you can deliver prostacyclin directly into the lung and see a lung effect size. Yeah. Right? We didn’t have any data on delivering a target to the lung and showing effect size to yesterday.

So to me that just de risks two zero one a little bit. That question will always be there till we get the data readout. But I think we feel good. I mean, I think when you take a look at the other competing program in the nebulizer, two companies independently calculated a dose very comparable. And so we feel very good about the dose calculation.

I’m sure the other company feels good. The part we feel better about, back to your earlier question, is how do we have confidence? We know our FTKP, We know our delivery platform. We know where the drug goes. We know the how much gets delivered.

That’s pretty consistent from API to API because FTKP is the magic ingredient. And so when you think about we haven’t released our PKPD data yet, but if you like the other companies’ data, you’re going like our data better. We really have good deep lung concentration penetration. We haven’t we’ll put a publication out next year. We just released our target dose on the phase two at the last earnings call.

So I think you’re seeing we’re targeting a six to eight milligram dose. We’re looking at a TID and BID because, to your point, is it the frequency of the target? Is it the Cmax? Is it AUC? Like so we want to make sure we’re covering those bases.

So that’s an example where would I love to skip phase two? Sure. But I’d be running a large phase three with a lot of risk. And so in this case, phase

Thiago Fauci, Biotech Analyst, Wells Fargo: Got is it. And so let’s talk about the phase two design in terms of inclusionexclusion criteria, length of treatment. Again, it feels like FDA has been fairly strict around IPF programs overall. So can you just discuss some of those regulatory interactions and why you landed in the current design for a Phase II?

Michael: Yeah, I mean, we honestly went to the FDA with a phase twothree designs, and we optimistic, because a lot of the time lost in trials is the activation of sites. So we really wanted to kind of build a bridging study, can keep going and save some time and money. The FDA was adamant that it has to be on top of background therapy and placebo controlled. And so we kind of looked at the experience out there. We think IRBs will have a hard time approving a placebo controlled trial for thirty weeks in The U.

S. And on top of background therapy, you would never finish enrollment in The U. S. Because you’re only you’re replacing the tetanib, so the only background therapy is prevented them. And that’s going be a very small subset of patients.

And so that caused us to go redraw what we thought was a possibility, and so we are addressing some of the FDA concerns. We’ll go ex U. S. It’ll be a twelve week endpoint because we think we can get there from an IRB perspective. If you look at the BI data, at twelve weeks you start to see separation, and then it just continues to build.

So that we felt that that was the earliest point you could ethically treat, to not stop them short. And then if they want to roll over for another six months, they can continue on the treatment. While some patients go six to nine months, some people stop until they become short. And so that’s number one. Number two is you could be on top if the BI drug gets approved and the time frame we’re launching this, could be on top of the new one.

You could be on top of profenadone. You could be naive. We think a lot of the patients and when we’re doing the study, they will be naive while they’re waiting for the new innovation to come or propranolone or the tenniv oral. It takes about twelve weeks to get access. And so we’ll be able to run the trial in a twelve week window, get it enrolled quickly, come back to The U.

S. And now we’re excited because we weren’t sure way Tyvaso Now is going when you go to background therapy in two years, you’ve got Tyvaso, you’ve got BI’s drug, maybe BMS, and profenadone. Now you only have four options. And so do a phase three globally becomes that much easier. I think the background therapy will be important then.

Thiago Fauci, Biotech Analyst, Wells Fargo: Got it. So it’s not just about enrollment dynamics and competing versus because, again, we had a few failures in IPF So more you’re not actually competing for the patients. It’s not the issue. The issue is just optimizing inclusion criteria.

Michael: There’s not a lot of there’s obviously IPF stuff happening, but we feel like there’s a nice window here to kind of get this moving quickly.

Thiago Fauci, Biotech Analyst, Wells Fargo: Got it. Okay. And what would be, at least from your perspective, a win when you actually get those Phase II data? Again, it’s not a long enough treatment. We know they may see it.

What sort of the signal is reasonable to expect given the shorter duration?

Michael: I think you’ll look we’ll use borrowing and modeling to kind of show the effect size and how that trends out over time. But there’ll be seventy five patients in the six milligram and seventy five patients in the eight milligram arm, so we’ll have 150 patients to do a combined analysis and compare that to placebo. So if you’re not seeing an effect size signal in 150 patients, we probably have a problem. And also, we’ll be looking at tolerability. So we’ll be giving the first dose right in the office to make sure the tolerability is there.

So that’s the only thing people will be worried about. And so as long as we can show the IPF is and the DPIs are tolerable, that’ll happen pretty early in the trial. So I think that becomes derisked as you see more and more patients go in. So otherwise, we feel like we’ve derisked the program. We’re moving as quickly as we can.

Clinical supplies are getting made as we speak. And so we’ll be off and running hopefully at the end of this year, early next year.

Thiago Fauci, Biotech Analyst, Wells Fargo: Got it. And, again, we did mention teaching a couple of times. Let’s let’s dive deeper there. Again, we were skeptical about the readouts turned out to be wrong. So now I guess you have a different problem to optimize for in terms of manufacturing capacity.

You’re going to have more royalties. There’s going to be a bridging study. So what does the positive TETON2 and presumably TETON1 should recapitulate that? And what does that mean for Mann Kind overall?

Michael: Yes. I mean, I think it’s great for employees, shareholders, patients. We’re optimistic we’ll get a DPI IPF product for them. From a manufacturing perspective, Martin has been and UT has been thinking about this for years. They’ve invested close to $100,000,000 in Danbury to scale up the facility.

They’re building a duplicate plant down in North Carolina, so it will be the only other plant in the world that does what we do. So that from that perspective, there’ll be enough manufacturing capacity to supply the market. We’re doing things to make sure we can supply. If demand picked up sooner than later, we’d be ready. So I think from that perspective, it’s good.

From a royalty perspective, it’s great. But when you go back in time, we sold 1% of our 10% royalty back in January ’4. And part of the reason was we believed the IPF was going to be upside to our current stock price, and we wanted to preserve that return for our shareholders. And then the interest rate was very high. And so when you look now when you look back, you’re like, okay, this was a good move, right, because that was a 1,500,000,000.0 valuation of the company back then, plus the milestone if we had revenue that would be correlated with the IPF.

So if you look now, if we had $1,900,000,000 if Taipei said it’s $1,900,000,000 we would get roughly a $50,000,000 milestone So next year on the I think that deal today would be worth even more if we went out. Interest rates are a little lower. The IPF is now derisked, and the data looks really compelling. So we’re really excited for everybody.

Thiago Fauci, Biotech Analyst, Wells Fargo: Got it. And in terms of allocation, I guess, of that money, so you seem to have your hands full with some proprietary that you have the acquisition. How are you thinking about capital allocation? I’m going to touch on Afrezza as well. But just right now, it feels like there’s a lot of moving parts.

Yeah. Capital allocation, internal, external, just did some BD. How much is gonna be integrating that business before thinking about the next leg?

Michael: Yeah. Kinda have a lot of going on

Chris: as we finish off ’25 and going into ’26. So if you think about key priorities in ’26, it’s certainly the integration of SC and making sure that FEROSIX is supported to the the best place possible. So I think that’s how you think about the early part of next year. You also have the pediatric launch that we hope we’ll get approval for mid next year. So making sure that the sales force and the Afrezza side is supported and ready to go there are kind of the key big priorities.

Obviously, we’ve talked about the development programs as well.

Thiago Fauci, Biotech Analyst, Wells Fargo: And the specifically, I should have addressed that before, but thinking about getting conducted with nebulized, you did kind of a bridging study for Tyvaso in the past. Like what is the strategy there? And how quickly can you guys get Tyvaso DPI on the market with IPF on the label as well?

Michael: Yeah. I I don’t wanna speak for your team on that one. They they they have to negotiate with

Thiago Fauci, Biotech Analyst, Wells Fargo: They do. Okay. I know they have a plan, but I don’t wanna I don’t wanna. Fair enough. And, again, for the Afrenza pediatric launch, again, it’s not a product that gets as much attention, at least in our investor interactions.

Although, again, our bias is more towards the orphan rare disease side of the business. What are some pushes and pulls there? Like, why could this actually be an inflection point for Afrezza revenue going forward? And how much investment will there have to be before you start to see what’s playing out in the marketplace?

Michael: So I think the first de risking event will be when the file gets accepted here, October, and that will be number one. Number two, we’re going to be hiring a dedicated key account management team just to launch peds. So when you think about pediatric diabetes, there’s about 500 prescribers in the country that treat majority of patients. There’s about 50 centers. We had 39 of them in our trial.

So we had a very high concentration of top tier centers enrolled in our trial, getting that experience with the patients, seeing the data firsthand. When you go back in time with diabetes, even though pediatrics, when you think about type one diabetes, they’re five percent of all mealtime insulin prescriptions, the pediatric segment. But the type one market is fifty percent of all insulin prescriptions. And so when you think about the insulin at a macro level, half is type two, half is type one. But the peds is what influences the other ninety five percent.

Because if you’re using insulin for type one, why would you not use it for type two? And everyone says, oh, GLPs is gonna replace.

Thiago Fauci, Biotech Analyst, Wells Fargo: Yeah.

Michael: The insulin market is still flat. It’s not going down. Diabetes is a pandemic in this country, and GLPs are not going to cure it, unfortunately. We’re just seeing good demand. We’re seeing patients yeah, patients may use less insulin because they’re on GLP, but the first thing that’s going to go is their real time response.

And so we still feel like there’s a good opportunity. And that’s some of the work we’re thinking about, to use Afrezza on top of a GLP. We’re looking at gestational diabetes. We’re looking at, obviously, pediatric, and now we’re going be looking at the very first insulin you get in newly diagnosed kids. And so when you think about the kids in the long term twenty year trajectory of a brand, if you can become the first insulin de facto when you start, why would you go to injectable insulin?

Why would you go to insulin pump? You’re going to save those options for later. And that’s how we look at the kids’ market is, you know, Al Mann built the insulin pumps in the pediatric community. Dexcom got their start in the pediatric community. Omnipod got their start in the pediatric community and then went to adult.

Maybe something that started in adults and then went to kids and became successful. It doesn’t happen that way. So Fresa kind of did it backwards, I’ll say, unfortunately, and it took us seven years to get this data set in. And once the data came in back in December and we could see the lung safety was strong, that was the signal we needed, right? And so we were just waiting to make sure growing lungs and kids weren’t going to have an issue.

We got the fifty two week data in June. Everything looks great. And so we’re excited to get that there. If anyone has kids, they know trying to get your kid a vaccine, trying to get your kid a needle for the dentist, like, you can’t do one one shot every now and then, let alone three shots a day, five shots a day, and worry about going low. So we think there’s a good use case.

I launched two growth we launched two growth hormones. That was just one shot a day, that was hard enough. And that’s why you see once weekly growth hormone. So if you can get to really solve some of this issue with the kids, the timing of the meal, the sports, the active kids, I think there’s a large unmet need in pediatrics still. You talk to the parents, the kids, the pumps are great.

They do amazing work, but they’re not peaceful either. So I think you’ll find that there’s not there’s an opportunity there that we can play.

Thiago Fauci, Biotech Analyst, Wells Fargo: Yes. Because I think that was going be the pushback, is basically you are still going against a well established pump. So what is the selling point that kind of resonates the most? Or is it something specific about the data that you think is going to highlight some of these high volume prescribers to consider Afrezza for starts?

Michael: So we anticipated that in the pediatric market we’re going to hear, I use insulin pumps. And so we started the INHALE three study last year. We got that data, and we showed that within twelve weeks switching off an insulin pump or MDI, you got more people to go by coming off the standard of care as opposed to staying on the standard of care. And so for me it’s frustrating to see that even when you show data, right, how do you get these people moving? But you’ve got now data showing more people get the goal of switching off a pump, and these were Omnipod, Tandem.

They weren’t like old pumps. These were the latest AID systems. And so showing people that you can use a basal like Tresiba plus Afrezza is great. So that becomes part of an economic argument for the payers to make sure you’re covering the product for kids. And then the other part of the pumps is, you know, we saw in our studies, if you had a higher A1C, pumps are great because they give you some insulin if you’re not doing your job and keeping track of everything.

At least they’re helping some patients. But, you know, we’ve never seen data that showed an insulin pump was better than the old pump or an insulin pump was significantly better than MDI. We can’t find that data set. And so now we actually have a data set showing you inhaled insulin is as good or better in populations. The guidelines got updated last year to put Afrezza equal to injectable insulin everywhere.

So I think they’ll get updated again this year with some more support. So I think Afrezza from a clinical viewpoint is gaining traction. You’re seeing KOLs get behind it. They’re coming to us with ideas for studies. We’ve got a lot of positive things happening.

But it’s good people don’t expect much on Afrezza. Keep expectations low. We’ll be prudent with it.

Thiago Fauci, Biotech Analyst, Wells Fargo: And it’s probably very early to talk about potential guidance or anything like that. But just in terms of the size of the the opportunity relative to your current revenue base, is there a good way of trying to common size it Or how to think about the trajectory and how long it might take to get to an inflection point?

Michael: I think as we get closer to launch, we’ll give more guidance. I think the guidance we gave for now is every 10% share in kids is roughly $150,000,000 net revenue. And so we take that plus your adult, you’re getting into the $2.300000000 dollars range. And then the obvious next question is, well, can you get 10% in a year, six months, two years, how long is that going to take? And that will be all part of our guidance as we go out to next is, you know, make sure we get the labor we want, make sure we get the timing we want, and then we’ll feel good about the trajectory.

Thiago Fauci, Biotech Analyst, Wells Fargo: But in terms of build out of commercial infrastructure and also, like, that’s already gonna be just Yeah. Plug

Michael: No. We’re hiring CAMs in Q4. We have Baqsimi. People forget we’re promoting that this year for Amphastar. So that allows us to get into the pediatric market, allows us to get into certain offices.

So we’re building up the infrastructure to continue to support that product, let alone our needs. And Baqsimi has had some nice growth this year. So I think you can contribute because a lot of people say, well, can mankind really commercialize things, right? And I think that’s an obvious question when you look at Afrezza. But we’ve chosen not to invest in Afrezza to fund the pipeline.

So these are strategic trade offs that we made, and I think those trade offs are paying off today. So they’re hard to live through the years because you know you can grow faster, but you got to spend a lot more money. Where’s the balance you’re going to constantly Okay.

Thiago Fauci, Biotech Analyst, Wells Fargo: Fair enough. Any last topics or aspects of the business that we haven’t discussed? I think you’ve covered a lot of ground, but just anything else that you think is misunderstood by The Street?

Michael: No. I think if I had to summarize mankind, think about us as a diversified company, many shots on goal, royalty providing some downside protection with the optionality of a pipeline and launches next year. And I think most investors would like a stable company that’s profitable, that’s growing. We don’t understand why we don’t see more good high quality investors jumping in, but we’ll keep moving forward, and people will catch up to the story as we keep track

Thiago Fauci, Biotech Analyst, Wells Fargo: Fair enough. Also, we can probably leave it at that. So again, I appreciate the time. Yeah. Alright.

Thanks for

Michael: having us.

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