Mannkind Corporation 2026 Q2 Earnings Call

Good afternoon, everyone. Thank you for joining us for our second quarter 2026 call. I'll start with some opening remarks, walk you through some business updates. Chris will talk about our financial results. I'll close by giving a few closing statements here, followed by Q&A. Let me start by saying how we've transformed our company and our potential growth trajectory with the strategy we outlined back in Q1. We laid out three major catalysts this year. Afrezza pediatrics approval, opening an indication opportunity we have not had access to. FUROSCIX ReadyFlow, which we have a CVR around because of the meaningful contribution this will have to the important growth of this franchise. Finally, the Phase I-B readout in the nintedanib DPI in patients with IPF and underlying lung disease.

These three things contribute to a solid foundation as we close out 2026, move into 2027. Beyond the catalysts, Afrezza's off to a very strong start. Our top 20 key institutions have already written a prescription. Breakthrough T1D acknowledged the importance of this opportunity by funding a grant to go after insulin newly diagnosed patients. FUROSCIX showed strong revenue growth with 43% growth just over Q1. Our Phase II inflow study is kicked off and underway with multiple shots on goal in front of us between Tyvaso DPI, ralinepag DPI, and now on the nintedanib DPI, all focused on IPF disease. As we look at Q2 revenues, we grew 21% from Q1 2026 to Q2 2026. What's most important about this picture is when you double-click down, marketed products were 27% quarter-over-quarter, where royalties declined 1% from Q1 to Q2.

When you take out our collaboration service revenue, you can really see an underlying picture of what's driving our growth quarter-to-quarter. Let me talk about our first-tier revenue mix evolution as we look at the success of our diversification strategy that we laid out. When you take out the collaboration and service revenue, we grew 111% on marketed products year-over-year. You can see that the royalties will remain a durable revenue stream for years to come. The predominant revenue growth of MannKind is being driven by marketed products and this crossed a threshold in Q2 from Q1, where our two marketed products now demonstrate faster growth and a higher percentage of our revenue over the royalties by themselves.

The royalties provide a great strong base business as we go forward into our launch trajectories. Let me talk about the launch of Afrezza in pediatrics, which many of you have been asking us about. Now that we're approved, this is the first alternative mealtime injection in over 100 years. This product is solving an unmet need and a challenge that parents and patients face when it comes to timing of administration and seeing the impact that insulin has on their sugars and their CGM. Seeing the ultra-rapid effect of Afrezza, the earlier peak, and the tail coming off allows patients to dose differently and treat their sugars in a way that they just cannot achieve with insulin pumps or injectable insulin.

This is now backed by more than a decade of safety data on the market, clear commercial opportunity, and access at $35 opens up the door for many patients to start this therapy. One of the main questions we get is why do we believe Afrezza will be different in pediatrics than the adult segment? First, the top left, a concentrated, targetable, addressable market. When you think about the adult prescriber base, there's 60,000 adult prescribers that make up 80% of rapid-acting scripts, which include a lot of Type 2 patients. We pivoted about over a year ago to Type 1. The pediatric prescribers are about 1,000 prescribers, make up 80%, and are predominantly institutional-based. Second, there's a connected patient-centric community. We see this online. We see it on Instagram. We see it in education and nurse educators. The adults, we only targeted prescribers.

There was limited surround sound to patients. With the pediatric segment and the success we've had, we've seen noise come from caregivers, from CDEs, school nurses, influencers, and advocacy organizations across the board, driving a lot of demand and questions into the pediatric community. Third, in the bottom left, a stronger clinical foundation and KOL support. When we launched with the adults, we had two studies published and not a lot of top KOL support. As you look at pediatrics, we have some of the top world-renowned thought leaders talking about our data, talking about the unmet need, and the solutions that Afrezza can bring to pediatrics. This is followed by 10 years of safety on the market, new ADA guidelines, the INHALE-1 trial, as well as the INHALE-1 trial being done in the top 50, 60 centers across the U.S. between all of our pediatric development.

Finally is removing friction. We know access is a hurdle for any new launch, and we've basically taken the opportunity to take away all objections around access FEV1 and providing point-of-care opportunities to make sure patients can have a frictionless, seamless experience when they go to start Afrezza. The first eight weeks support these four pillars are driving a different uptake curve than adults. When I look at the names of the institutions on this slide, these are some of the top centers in the country that treat the biggest volume of patients. In fact, one in three of the top 100 pediatric rapid-acting writers have already prescribed Afrezza. We had 20 priority accounts, and all 20 have written at least one prescription since launch. We're really excited by these early metrics, and we'll continue to keep you posted as we go forward.

Before I close on the pediatric launch, I want to talk about the media coverage has really helped convert early momentum. Over 200 markets in all 50 states got episodes on CBS and ABC, as well as numerous articles highlighting the new innovation in pediatrics. This has signaled more demand from HCPs and patients and awareness than we expected. This media credibility is fueling more world engagement, social conversations, and pull-through opportunities that we didn't have otherwise. As I think about the roadmap to success, Afrezza's future includes additional product development, digital advancement, and external innovation. Today, we had updated FDA-approved dose conversion in 2026. We have new guidelines support. Now we have the pediatric approval providing a foundation for global expansion and opportunity.

As we look to 2027, we expect to be able to introduce a 2-unit cartridge, an InhaleIQ, which will be a Bluetooth-connected device integrated with CGM. As we approach 2028, we expect to be able to have high concentration formulations of Afrezza, which ultimately will enable higher doses and lower powder loads at the current doses, minimizing any cough opportunity and increasing cost-effectiveness as we get to higher doses in type 2. Now let me bridge to the FDA approval of the FUROSCIX autoinjector ReadyFlow. As we know, fluid overload across the patient journey is often something that happens at moments in time. The majority of patients can be stable on an oral diuretic at home.

Oftentimes, though, these patients will start to have fluid overload and edema. In the gut, it stops the absorption of not only the diuretic, but also the other meds to treat heart failure, causing a compound effect and worsening of this condition for patients. We often hope that FUROSCIX, in the majority of our use today, is in this early intervention stage in the community setting, where we can hopefully prevent patients from going to the ER and progressing. The opportunity we see tomorrow, especially with this ReadyFlow, is the post-hospital discharge, i.e., can we get patients out of the hospital sooner that are stable or reduce readmissions to prevent the 30-day penalty that many hospitals get for not completely drying out patients before discharge?

We see an opportunity here to increase intervention in the early stage. Start to continue to get post-discharge protocols across the top health systems in the U.S. Since Q1, MannKind advanced several key FUROSCIX growth opportunities. First, we highlight a limited hospital presence. We increased our IDN engagement in hospital systems to drive stronger hospital pull-through. As we see, our medical liaisons are engaging at the highest level on institution protocol development and discharge, as well as our key account managers working with institutions in quality, purchasing, and pharmacy to drive continued contracts and growth opportunities across these IDNs. We saw 36% growth in Q2 over Q1. Second, the team was really focused on trying to launch nephrology while continuing to deliver cardiology sales. We were able to separate those sales force opportunities this year.

We caused some disruption here in Q1, but you can start to see the impact of that effort here in Q2, with 67% growth in nephrology in Q2 over Q1 and a record number of prescribers. We've made many changes to our marketing investments, and you'll start to see those in the second half of this year as we prepare for the Furoscix ReadyFlow launch. We believe those investments will continue to accelerate growth as we close out 2026 and position ourselves for 2027. What does ReadyFlow approval now mean? First, it's the only IV equivalent diuretic delivered via an auto-injector. This will be available in the next 3 weeks to key institutions and community prescribers. This will allow us to deliver treatment from a matter of hours to seconds.

It's demonstrated equivalent urine output, sodium excretion, and potassium excretion to IV furosemide in healthy volunteers. The safety profile is consistent with oral and IV furosemide, and symptom relief may begin in an hour or less. This is a really exciting opportunity to help patients, prevent them from going into the hospital or hopefully getting them out of the hospital early or preventing those one in four patients from going back in. The Furoscix ReadyFlow launch campaign is built to drive immediate awareness and adoption, and we're looking at field activation immediately along with integrated surround sound at the major health systems and opportunities where patients are showing up in these health systems as well as online with the prescribers and patients.