MannKind Corporation (MNKD) Earnings Call Transcript & Summary

Welcome to MannKind Corporation Annual Meeting of Stockholders. As a reminder, this broadcast is being recorded on May 20, 2021, and will be available for playback on the MannKind Corporation website shortly after the conclusion of this meeting. I would now like to turn the meeting over to Dr. James Shannon, Chairman of the Board of Directors of MannKind Corporation. Dr. Shannon, please.

Good morning, and welcome to MannKind's Annual Meeting of Stockholders. I am James Shannon, Chairman of the Board of Directors of MannKind Corporation. I will preside this as Chairman of this meeting, which I now call to order. I would first like to introduce the other members of the Board of Directors of the company who are present virtually today. Mr. Michael Castagna, also our Chief Executive Officer, who will provide a corporate update after adjournment of the formal part of this meeting; Mr. Ron Consiglio; Dr. Michael Friedman; Ms. Jennifer Grancio; Mr. Anthony Hooper; Ms. Sabrina Kay; Mr. Kent Kresa; and Ms. Christine Mundkur. Continuing with the introductions of our other corporate officers in attendance of this meeting are: Mr. Steven Binder, Chief Financial Officer; Mr. Alejandro Galindo, our Chief Commercial Officer; Mr. Joe Kocinsky, our Chief Technology Officer; Mr. David Thomson, our General Counsel and Corporate Secretary; and Mr. Stuart Tross, our Chief People and Workplace Officer. Also participating virtually today is Mr. Khurram Siddiqui of Deloitte & Touche, our independent public accountants. This meeting is being held pursuant to the notice of annual meeting mailed to all of the company's stockholders on April 9, 2021. Mr. Thomson will serve as Secretary of this meeting. Rose Alinaya was appointed as the inspector of elections for the meeting, and Ms. Alinaya has taken and subscribed the customary oath of office to execute her duties with strict impartiality. We will file this oath with the records of the meeting. The inspector of election decides upon the qualifications of voters, accept their votes and when balloting on all matters is completed, tallies the final votes. Broadridge has provided MannKind with a certificate indicating the number of votes represented by proxy at this meeting. I will now ask Mr. Thomson for his report. David?

Mr. Chairman, I have a list of the holders of common stock of the company as of the close of business on March 22, 2021, a record date for this meeting. Only holders of record of common stock on the record date were entitled to notice of this meeting and to vote at the meeting. I also have a copy of the notice of this meeting together with a declaration as to the mailing of the notice. The holders of approximately 68% of the outstanding shares are represented at this meeting, specifically 169,157,768 shares are represented either in proxy -- or by proxy or in person. Since there were 249,072,677 shares of company common stock outstanding on the record date, a majority of the outstanding common stock is represented here today, and a quorum is therefore present. The meeting is authorized to transact business.

Thank you, David. At this time, we will look forward to address the items of business set forth in the notice of this meeting. There are 3 proposals to be voted on in the meeting today. These proposals were further described in the proxy statement dated April 7, 2021, which was made available to all stockholders. The first proposal is the election of 9 directors. Each director that is elected will hold office until the next annual meeting of stockholders and the 9 nominees are: myself, Chairman, Dr. James Shannon; Mr. Michael Castagna; Mr. Ron Consiglio; Dr. Michael Friedman; Ms. Jennifer Grancio; Mr. Anthony Hooper; Ms. Sabrina Kay; Mr. Kent Kresa; and Ms. Christine Mundkur. These nominations need no second and the nominations are close. The second proposal to be voted on is to ratify the appointment of Deloitte & Touche LLP as MannKind's independent registered public accounting firm for the fiscal year ending December 31, 2021. The last proposal to be voted on is to approve on an advisory basis, the compensation of the named executive officers of MannKind as disclosed in MannKind's proxy statement for the annual meeting. The secretary will now describe the voting procedures. David?

Share on the stock is entitled to 1 vote. Voting is by proxy and written ballot. You do not need to go through this portal if you had already sent in your signed proxy. Those who wish to vote via the portal, please do so now, and we'll leave the poll open for a few minutes to collect any last minute votes. [Voting]

Okay. The time is now 8:06 a.m., and the polls are now closed for voting. Mr. Chairman, report of the inspector of elections indicates that each of the 9 nominees for Director has been elected, Deloitte & Touche has been ratified as MannKind's independent auditor and the proposal to approve on an advisory basis of compensation of the named executive officers of MannKind was approved. We will report the final tally of votes in a current report on Form 8-K, which we filed within 4 business days.

Okay. I would like to thank you for your interest in attendance at this meeting. This concludes the formal portion of the meeting. And now we will proceed with the executive team's corporate update, and they will be available at the end of the meeting for appropriate questions. Before proceeding, as you can see on the presented slide, I want to remind everyone that this call will contain forward-looking statements. Such forward-looking statements are subject to risks and uncertainty, which could cause actual results to differ materially from these stated expectations. For further information on the company's risk factors, please see the most recent 10-Q report filed with the Securities and Exchange Commission. So as I mentioned earlier, I am James Shannon. I am the Board Chairman for MannKind. And I would like first to speak about the Board of Directors who you have just reelected for the coming year. As you know, I took over as Chairman in December of last year from Mr. Kent Kresa. Kent has served the company since joining the Board in 2004 and was the lead independent Director during the latter part of the chairmanship of our founder, Al Mann. Following Al's departure, Kent assumed the Chairmanship role and has led the company with a steady hand through some turbulent times. He has handed over to me a company with a sound foundation for the future, and I would sincerely like to thank Kent for his dedicated service to MannKind. We have a Board that has been an evolution over the last 2-3 years. While we have some colleagues who have been on the Board for a number of years, alongside Al Mann, and have lived the history of this company. We have added a number of new people and skills to the Board. Today, I believe we have a diverse Board with the background of finance, biotech, commercialization, R&D, and including a number of current and ex-CEOs. The Board works extremely closely with the executive management, and I can assure you that we, as a Board are participants in all major decisions of the company. As you'll hear from the update, I believe that we now have a company which is stronger today than years passed from a financial perspective, from our pipeline, our partnerships and for the commercialization of Afrezza. With that, I would like to hand it over to our CEO, Michael Castagna. Mike?

Thank you, James, and thank you, everyone, for joining our shareholder meeting today. And just reinforce 3 things that James just said, a lot has changed, especially over last year. Number one, there's 3 things I want you to walk away from this next section. Our financial strength is better than ever. This attracts new great employees, new and stronger shareholders, high-quality investors as well as new business partners. We -- we've been busier than ever on the pipeline and finding new opportunities to exploit Technosphere molecules in different avenues than we have in the past. Number two, when we look at the company value drivers that we think will drive shareholder demand over the coming years, we have a pipeline to talk about. We have Afrezza, Treprostinil and additional BD activity that should drive more value in years to come. And finally, we do have the conviction Afrezza has more room to grow. Now that we have the capital and talent aligned with COVID starting to get behind us, we feel like now more than ever is the opportunity to push us forward. Some of you may remember last January, we branded the company and our mission to give people control of their health and the freedom to live life. As you see the results, in a minute, from the Treprostinil data, being able to resolve symptoms and give you that acute need of resolution is critical today to driving differences in people's lives. We call that life more human. We look over last year, MannKind has quickly changed our share performance in our investor base. Institutional ownership is up a little over 51% when you count that with insiders. Our -- we have almost 100,000 stockholder accounts, which is up almost 20,000 in 1 year. And our institutional base has grown about 50% over 1 year. We continue to spend a lot of time recruiting and retaining new investors and growing people perspective here of MannKind. When you think about our year-to-date performance, we are at 35% here in 2021 versus a negative 1.68% in the NASDAQ Biotech Index, and that's even more pronounced over the last month, the Index has really struggled a little bit. When you look year-over-year, we're up 238% since our last shareholder meeting and 12% compared to the national NASDAQ Biotech Index. As James talked about, our evolution, we look at things in 5-year periods. Over the last 5 years, we've established our commercial base. Afrezza was approved not only in the U.S., but Brazil, we've done several pipeline deals with UniTher, Receptor Life Sciences, and we sold oncology technology to Fosun. We've had over 125,000 prescriptions written for Afrezza this time we continue to look at how we can really demonstrate the safety and efficacy of this product. And today, we have approximately 8,500 patients taking Afrezza, and that's growing every week and every year. As you look over the next 5 years, we've invested in the pipeline in the previous 5 years. This is going to start to pay off as we go forward. Number one, as you know, we've launched -- we filed Tyvaso DPI and expect to launch that by the end of 2021 with United Therapeutics, pending FDA approval. From this, we'll see royalties and manufacturing revenue. And if all goes well, UT has invested in COPD and IPF trials for their Tyvaso nebulizer, and we would hope that those indications could expand to Tyvaso DPI one day. Number two, we want to really scale Afrezza growth. We believe we can cause an inflection into the growth curve and demonstrate stronger uptake in the U.S., which will lead the opportunities to expand international as well as into pediatrics. And then finally, in business development, we purchased our first company here in December, and you'll hear from Thomas, shortly. And we have lots of new collaborations we're working on. You do not see these listed in the pipeline or announcements as we're really working on these in terms of formulation, stability and dosing. And once we have conviction that our technology can help other companies' molecules, we will work to turn those in development deals. And then finally, as we get into the '25 to the '30 time period, and we look at our pipeline today, our goal is 1 launch per year, especially in the orphan lung space as we look at 2025 and beyond. This is what we're setting ourselves up for, and this is our eyes on the goal ahead. Let me bridge to our first near-term pipeline asset, Tyvaso DPI. United Therapeutics released top line clinical results, we're super excited to see these results shared with the public. Number one, the primary objective was achieved on safety and tolerability. Nothing significant, whether it's Treprostinil-related, or costs, et cetera, from Technosphere was an issue. We see 96% of patients completed the treatment phase and rolled over into the optional extension phase. And by the time we launch we should have almost 1 to 2 years of data on most of the patients in the success phase, demonstrating what dose they titrated to, what their outcomes were and how tolerable they continue to maintain on the product post the 3-week switch. When you look at the secondary objectives of this trial, which were around the efficacy and quality of life, we improved the 6-minute walk test in 3 weeks after switching to our Tyvaso DPI. We saw an improvement in patient satisfaction and patient-reported outcomes. And again, this is in only 3 weeks. So we're very excited as we continue to look at how this is going to pay out over the long term. The optional expensive phase, patients continue to be treated, and I believe that will stay all the way through approval, pending approval here in late 2021. Right now, we expect the FDA to accept our application [indiscernible] as well as our drug master file here in Q2. We are scaling up Danbury to begin manufacturing in Q3. And once the PDUFA date, hopefully, gets approved here in Q4, we'll begin launch preparation and hopefully get this into patient's hands as early as possible. Now before I talk about our next pipeline opportunity, I want to introduce Thomas Hofmann. Dr. Hofmann joined us in December as our Chief Scientific Officer. He was the CEO and founder of QrumPharma. And he identified a great opportunity to help patients suffering from nontuberculous mycobacteria. Thomas has been a great addition to our company, continue to lead our R&D efforts, not just with clofazimine, but everything else now fallen underneath Thomas. I see we have a lot of questions in Q&A on the pipeline, which between Thomas and I will take and look forward to answer some of them. Thomas, please give us a quick overview of what you see with clofazimine and your background so far on MannKind.

Thank you, Michael. I am very excited, and we, as a team, have been joining the MannKind family and have found a lot of wonderful new colleagues and even more so a technology that can be scaled and applied to lots of pulmonary and orphan indications. In particular, we are excited about the possibility to work with the FDKP technology, which is the core underlying Afrezza and Tyvaso DPI. And we're working on several opportunities now. Most of them early to scale this technology and target orphan indications. And in that, we use numerous known drugs, but also a few so-called NCEs, and we have both our own projects as well as partnered projects, as Michael indicated. That gives us the opportunity to leverage the wonderful technology that was developed over 20 years at MannKind, and can -- and as you all know, there's amazing manufacturing and CMC experience and scale. The one project that is closest to the clinic in the pipeline is the one that we brought in through Qrum, which is an inhaled antibiotic, well-known antibiotic that is approved outside of the U.S. for oral applications, and we have targeted that to a severe lung infection that is called nontuberculous mycobacteria. It's an orphan indication that makes people suffer and die prematurely. It affects 120,000 people here in the U.S. and it's considered an orphan indication and a substantial unmet need. We believe in the value of inhaled clofazimine for several reasons. And you see here on the slide some data from our previous publication, it is an antibiotic that we believe it's best targeted to go to be inhaled and go straight to the lung where the infection is. That also means it would reduce systemic side effects that you get when taking a drug orally, and it reduces possible drug-drug interactions because your circulating levels are far reduced if you only in parentheses deposited in the lung. What you see here is the potency from an animal mouse model in which the inhaled version of clofazimine, the MNKD-101 reduced the bacterial count by over 99.9% and also was statistically superior to oral administration of the drug. What we are currently doing is finishing out the necessary inhaled tox studies and are embarking on dosing humans in a Phase I study that is about to start before the end of the year. Thank you, and I'm excited to continue this and other things for years to come.

Thank you, Thomas, and thank you for joining us on this journey. And as Thomas mentioned, shareholders invested in the manufacturing and the R&D and the 20 years of know-how. So our ability to move molecules quickly through early preclinical all the way through Phase I. It's something we'll continue to move, and you'll see more and more coming over the coming years. Next, I want to introduce Dr. Kevin Kaiserman. Dr. Kaiserman just joined us recently in August of this year. He's been leading the charge in our PED study along with our clinical development team. And I want to just thank the whole team in doing a very nice job getting this into FDA, planning the CRO, getting the protocol approved by IRB. And I thought it'd be really nice for Kevin just to introduce himself to shareholders and also just quickly talk about the PED study. So Kevin, welcome.

Well, good morning, and thank you for the opportunity to speak with you today. Prior to joining MannKind last year, I worked for 25 years in the clinical delivery of care and conducting clinical research trials for children, teens and young adults with diabetes. I was excited to join the team last year to help to educate more people regarding this important therapeutic option for those living with diabetes. I have personally witnessed the significant challenges to controlling post-meal sugar levels and the benefits on meal time control provided by the ultra rapid action of inhaled insulin Afrezza. Today, I would like to provide you with a brief update on our upcoming pediatric trial. We have already chosen our clinical research organization partner, The JAEB Center in Florida, they have extensive experience executing pediatric trials in the field of diabetes, and we anticipate the study will be conducted over 30 to 40 sites, and this will be the largest trial undertaken by MannKind in the past several years. This slide shows you an overview of the study, which includes children and adolescents between the ages of 4 and 17 years with either type 1 or type 2 diabetes. After a brief run in period, the subjects will be randomized to continue on their rapid-acting injectable insulin with a basal insulin or to switch to inhaled insulin Afrezza with a basal insulin for a period of 6 months. Our primary study endpoint will be the change in the hemoglobin A1c from baseline to 6 months. All subjects will continue for an extension period of 6 months using inhaled insulin Afrezza with a basal insulin followed by a final evaluation visit 4 weeks after discontinuing the study therapy. We hope to begin enrollment for this study before the end of the year. Thank you.

Thank you, Kevin. And our final speaker before we go to Q&A, and please go ahead and submit your Q&A if you have any questions. We see a couple come in already, and so it gives us a head start on thinking about who is going to answer which question. So please go ahead and type them. Our next introduction here is Steven Binder. Steve joined us 2017 as our CFO. He's done a tremendous job helping balance really tenuous situation over many years. And Steve, I just want to say thank you for all your work on behalf of shareholders, and look forward to hearing your update here.

Thanks, Mike, and good morning, MannKind shareholders. Our company is in a very different place financially than we have been in the last 4 to 5 years. When I think back to 2017, our future wasn't so clear. We had relaunched Afrezza with our own commercial team and midway through the year, the company made significant changes in the leadership team, which enhanced the biopharma depth and experience of our executive officers. As you can see on the slide, we started 2017 with only $23 million in cash and $158 million in debt. The first full year of commercializing of Afrezza after relaunch resulted in $9 million in Afrezza net revenue and a net loss of $117 million. During the period of 2018 to 2020, and we did a lot to change the future of our company, including inking a game-changing collaboration agreement with United Therapeutics and acquiring QrumPharma to bolster our internal pipeline. We also continue to believe in the promise of Afrezza. By the end of 2020, we had a cash balance of $67 million, and our debt balance has been reduced to $126 million. For Afrezza, we increased net revenue by more than 250% between 2017 and 2020 to $32 million. Despite 2020 being the year of COVID. And with the impact from the United Therapeutics agreement, collaboration revenues increased by almost 1,200% in the same time period, while total revenues grew to $65 million, and we cut our net loss in half to $57 million. We didn't stop hustling at the end of 2020. The past few months have been very busy, as you can see by the increase in our cash and investments balance to $278 million by the end of Q1, which has eliminated our growing concern disclosures in our financial statements. The major driver of the increase in cash was the issuance of $230 million of convertible debt, which was raised on very favorable terms to the company. Although this transaction increased our debt balance to $335 million, 75% of the debt is convertible to common stock, which we expect to happen as we execute behind our commercial, manufacturing and pipeline development strategies. We recognize the dilution can be painful to shareholders, but please view the convertible debt issuance as a critical step on our path to profitability. 2021 and 2022 will be pivotal years as we begin manufacturing Tyvaso DPI for United Therapeutics in the second half of this year and assuming Tyvaso DPI is approved by the FDA in December, a second Technosphere product will be approved in the United States, and we'll begin collecting royalties from United Therapeutics in 2022. The company has a bright future, and we now have the financial wherewithal to deliver on the promise of our Technosphere technology. Thank you for your support and believing in MannKind. Back over to you, Mike.

Thank you, Steve. That concludes this morning's presenters. And I just want to thank you, Thomas, James, Kevin and Steve for giving us quick updates. And James as our new Chairman of the Board. I'm now going to move into Q&A.

Thank you. I see the questions rolling in here. I'm going to start first while they come in and we go through them internally here. With some of the ones that came in via e-mail, and I'll try to just start at the top in no specific order, but we'll flow them down. The first one, I'm going to read comes from Sheila Chaplin. Sheila, thank you for sending in a list of questions. And a lot of them pertain to, what can we do to control our future and how do we help continue to move our share price in the right direction? And there are various things we've thought about as a company. And what I'd say Sheila is, we just got these funds in about less than 60 days ago, roughly. The team -- we raised more money than we expected, which caused us to really rethink a lot of our priorities. And the team has been working nonstop to scale up opportunities to move Afrezza faster. How can we move the pipeline faster, and how do we continue to look for opportunities to increase shareholder value. So I would say we with the Board today. That's an ongoing discussion. And we'll talk about the sale-leaseback in a separate question, in a second. The next question you had was around short interest and can I comment on that. And what I would say is the short interest is up this year not because I feel people are betting against MannKind. But when you do a convertible debt, we expected about 15 million to 20 million shares to be shorted because a certain portion of the convertible debt market is hedged by hedge funds. And so they buy, they convert because they believe in the upside of the company, but they hedge their position as they normally do in any type of convert. And that's pretty standard in the convertible market and it's been standard in MannKind's history when they looked at a convert years ago as well. So there's nothing significant that keeps us up at night in terms of short interest going up in the company. We do think it's a much bigger factor around the convert that took place there in that Q1. I'll comment there. I have a question here from Evan Pantos. And Evan, thank you for your question. Really, you're asking around our business model and ultimate goal for the company? And our goal is to create shareholder value. The business model historically was to get Afrezza successful. What you've seen us do is evolve into a pipeline driven company that's really moved into orphan lung space, and we've kind of doubled down that area we have full conviction on Afrezza, which I'll talk about in a second with Alejandro. But the premise today is move the pipeline forward and now with the convertible debt done and the financing ability we have, we have the flexibility to get assets all the way to commercialization. One of the questions I do get, I want to bring clarity to, which is around yours is, are we looking to just license these out like United Therapeutics, are we looking to build a second division of MannKind and our goal is to launch these products ourselves and keep them through development. There could be opportunities to partner them, and we'll definitely pursue those as they look likely to be interesting. And so those are some of the clarities that I want to bring around to the pipeline and our kind of business model here. The second part of that business model is licensing Technosphere to other companies, either new molecule or repurpose molecules that aren't in the orphan lung space. So that is the second part of the company strategy here is not just move our own pipeline, build Afrezza, but also find opportunities to help other patients and other disease areas that are not of strategic interest to us. Another question from many shareholders. This one came from Sheila in particular, but I know it's a common one, it's the sale leaseback. And I'll turn it over to Steve real quick.

Thanks, Mike. We announced earlier this year that we were looking at a sale-leaseback of our Danbury facility. We are still considering that sale leaseback. We want to make sure that if we take in the money from the sale-leaseback that we have a use of funds that will drive the growth in the stock. So right now, we have not executed on it, but we are still considering it. And look for us to make an announcement on that in the near future one way or the other.

Okay. The next set of questions, I'm going to focus on really around Afrezza. Alejandro I'll ask you to step up to the microphone here. So Alejandro, you joined us in August. You have a deep background in diabetes, a GE trained executive. You joined us for a reason. What have you seen so far in your first few months here? And why do you have the conviction of Afrezza and how do you see the value drivers as we go forward?

Yes. Thanks, Mike, and good morning, everyone. Glad to be in front of you speaking. So I came to MannKind for a couple of reasons. One, I believe, in the clinical and quality of life differentiation this product brings to patients with diabetes. And there is no doubt that it meets a number of criteria for it to be successful. And what we need to do is the fundamental work and the building blocks that I know how to build with the help of the team. That was the second reason why I came. It's an opportunity for us to get the fundamentals right, get our messaging simplified, get that message to be compelling in front of our providers, in front of writers as well as prospective customers. And as that happens, enable the prescription process to be as frictionless as possible. We do those things right, then the third step, which I also know how to do and the team is committed to helping me doing is once someone is on our product. We have got to make sure they have a delightful customer experience. We do those 3 things right, those were sort of fundamental blocks right Afrezza is going to be on a path of continuous predictable growth. We know we can achieve it. We know we have a significant amount of heavy lifting to be done but I'm committed, the team is committed, and we're going to be delivering that for us and for the shareholders.

Thank you, Alejandro. And just kind of quick so there's a couple of questions here. One from David Marrick, one from Brett Thompson. And one is Afrezza obviously has struggled over the years for various reasons. I think one of the things I would say historically, before Alejandro got here was, we either had the money and not the right talent or enough talent to push us forward or we had great people but not enough money to invest in them to do their job. So it's never -- 1 plus 1 is always going to be 3, or is always 1.5. And we're able to continue to move Afrezza forward, but not in the way that any of us was keen here to join MannKind. No one shows up for 600 or 700 scripts a week. We're not proud of that. We want to make it better. There's millions of people we can help. And I think Brett Thompson, your question here is around, do we have the data to support putting more money in Afrezza with something tangible to talk about the PED's trial. And what I would say on that one is we do know a lot of docs have never written the first script. And even more docs have written 1 or 2 scripts. So when you look at our top 10% of prescribers, we have 20%, 30% market share in that particular physician's office. We have 2%, 3%, 4% market share in a particular repertory. So we do see in markets regardless of managed care coverage that reps in New York, in Florida and Texas, can drive significant success for patients and providers. And we know that, that gives us the conviction to keep figuring out what works there and how do we replicate that in 80 other territories. That's number one. Number two, on pediatrics. I think Kevin kind of alluded to this in the trial. There's a significant unmet need around managing hypoglycemia. And some of the data you'll see us present this month is around nocturnal hypoglycemia, daytime, time and range. These are still challenges that patients deal with every day, whether that's in a PED or adult segment. 80% of the people on insulin, there's 4.5 million people, are not our goal. So we know we have a long ways to go, not just for MannKind, but to help patients get better control and we believe Afrezza is going to be a very unique tool. And the PED study is actually the first study where we can take all the insights we've generated over the last 3 years in the small pilot trials and now put them into one large Phase III trial to multi-center trial that's not inferior, but has a chance to be superior, right? And that's how we've designed the trial, it's how we've written our statistical plan, is that we will make sure we, hopefully, don't lose. But more importantly, can we beat the standard of care in a well-controlled trial. And that's really our goal here, and that's why we have the conviction and the PED study to go forward. Because when you look back in history, diabetes does change with kids, a lot of type 1s set the standard, and they grow up into adults and they change the adult endocrinology prescribing. And we think that's a critical long-term strategy. And this trial is going to be in the neighborhood of $10 million to $12 million. This is not a large expense relatively speaking over the time frame we're looking at. And we think the value coming out of this is going to be significant. So hopefully, that answers a few of those questions. A couple of questions here on the black box warning and the safety study. What I would say is I don't have a problem. I don't think anyone in the company believes the fact that Afrezza's black box warning is holding us back from growth. The world's #1 leading brand, Humira has a black box warning. No one seems to stop prescribing that. I've had many black box warning products. That is not our challenge or an issue. It's important to disclose proper safety information, and I think there's nothing wrong with that. I think in terms of the long-term safety study, our new regulatory person is working closely to meet with FDA shortly this year and kind of put some clarity around that as we go forward. But we don't have any safety signals. We've been on the market for years. We feel very good about the safety of the product, and we have a plan to address that. The first step here was getting all the FDA commitments done as you saw the PEDs is just getting checked off. And this is the last one, we'll check off with the FDA. And overall conversations have been very positive so far there. I'm going to bridge over to some of the questions that came in here. So how is the Phase III trial going in India from CINV and when will complete? To my surprise, the India trial is still enrolling. I thought maybe stopped with COVID, but I just got an update yesterday, and they're enrolling and continuing to enroll. Now we're shipping additional supplies over. So hopefully, they wrap up sometime this year. The trial, and then they'll have to go for, I think, 12 weeks, if I recall. And then it should be -- the FDA approval there is much quicker than the U.S. So hopefully, once it wraps up, we see the data, and we're excited to see this data because it's using our new protocol for type 2s. And that will be the first large trial we have done there. So we're looking forward to the results and just praying for our colleagues in India, as -- it's a really tough atmosphere right now when you talk to them. So hopefully, soon, we'll have an update for you. Another comment on international expansion. Some questions that came in. I got one here from Robert Nucom and I got a couple from Tom, Dawn and Sheila again. Just 1 is around China from Tom. And is there a serious effort to explore the Chinese market? China is obviously a very large market. I think, Thomas, Tom you recommend you were highlighting Tesla building there strategy in China. What I would say is consumers buy cars, and that's great, and they pay retail prices that you pay in the U.S. for Tesla in China. That's true for jeans, Nike's, et cetera. When it comes to medicine, the government is a major payer there. And yes, they're a large middle class, but they still depend on the government for the majority of revenue in China for various companies as Steve has spent a lot of time in China. And the problem in China right now is they're just cutting your price 50% a year. I mean you don't have a choice. You think you're doing $50 million, $100 million, and they just say price cut next year, we got to free up money. And that's the business in China. That does not mean we're not looking to help patients bring Afrezza there. When we look at our prioritization, it's Australia, Canada, Europe. We think those are real markets with real standards, and we can compete in those markets. When you get to China, it's a little more unpredictable, but when we find the right partner there, we'll be full speed ahead on Afrezza. We have no reason not to try with people in China. So that's that one. On the Australia, just what is our plans for approval? We expect and hope to be able to file that in the second half of this year. Obviously, COVID slowed a lot of things down. And our partner there had a little bit of a setback on an in-line asset they had, which slowed some things down there, but that's now all behind them. And we're -- I just talked to them last week. So we should be pretty good about getting this moving as we go forward. And then in Europe, Alejandro has -- do you want to comment on Europe status?

Yes. So I have extensive product launch experience for Western European countries primarily. I think what we will do for Europe is certainly submit our dossier for EU and CE Mark approval. As we do that, there's a number of workflows that we have to work in parallel to determine prioritization of launch countries, on the one hand, the pricing and reimbursement pathways that need to be well understood on the other. And then last but not least, understand precisely how we will go about distribution as we assess all of those things and the OCA process goes to the regulatory pathway, I think we'll have a pretty good understanding about the prioritization list of countries and how we roll out. And we will be spending time this year actually in the next month or so at ATTD, one of the largest diabetes related conferences, an event that I've attended for many, many years, and we'll start to start priming that market with better understanding about the properties of Afrezza and how Afrezza can benefit, many of those patients out there who are struggling just like we have patients struggling in the U.S. So I'm bullish about it. It's a real opportunity for us, and we'll keep you updated with our next steps.

And just to close that conversation now. One other question, I guess, how come we didn't file in Europe sooner? And the reality is we had to have the pediatric part I study done and get the protocol through the FDA to be comfortable where we're going with the U.S. and you need to have, what they call PIF, done before you can file for Europe, and that is all done now, and now we're absolutely ready. So that's why there is a delay over years, not months, but we couldn't file sooner even if we wanted to. So Canada, we did meet with. We feel good about Canada. And getting that filing here. And now we have the capital. These are easy trade-offs to make to kind of plan for future expansion to help continue to drive our success. Now I'm going to bridge you over towards the pipeline and some clarifying questions that I see coming in here. The first one, I'm going to tee up to Steve here. It's around Tyvaso DPI, Steve, and it came in from David Marek, who's been a shareholder for 12 years. So thank you, David. You're asking about basically for every dollar Tyvaso is manufacturing, how does that go to MannKind of top line? How is it going to be booked in revenue? And how should shareholders start to think about this either in the coming quarters or in the coming years?

So thanks for the question, David. We've got 2 sources of revenue in our contract, our collaboration contract with United Therapeutics. One is, and I'll talk about this first is our royalties. So when the product is approved and sold by United Therapeutics, we will get low double-digit royalties on the net sales of Tyvaso DPI in the marketplace. The second is manufacturing of the product. We haven't completed a manufacturing agreement yet with United Therapeutics it will be completed shortly. But I think what you can expect is that we will sell products at a particular price at a cost-plus type of an arrangement. And we're not going to say the specifics at this point because we're not finalized yet, but you expect to see that coming in through revenue. And it will not just cover our costs, but there will be some profit above our costs.

Thank you, Steve. And I'll bridge over the pipeline. A couple of questions here. One is will Tyvaso DPI be above or outside the U.S.? I can't speak for United Therapeutics plans for international expansion. I would say the predominant focus historically has been in the U.S., but I do know that they're considering other alternatives. One thing that could happen over time is we have the right a few United Therapeutics is not launching it in a particular country. We could also consider MannKind launching in those countries if we were to build infrastructure in Australia or Canada, for example. But I would have to be United therapeutics not having gone into the country or made a revenue stream there. So we'll particularly evaluate that with them. But I think whether we look it out as shareholders, the value in this space really is the U.S. market. And I know my team is passionate about helping patients around the world, and we've got to figure out how to do that together. So that's one. Can I elaborate -- from Michael Liu here. Michael, thank you. Can I elaborate on the collaborations mentioned in today's call and the earnings call? Yes, we have 3 or 4, I'm losing track to be honest, it's so busy. But we have lots of formulation deals coming in and what we've decided to do instead of trying to spend 6 to 12 months hammering out what the development -- business development deal could look like, is to lower the cost of entry because once we stabilize the company on the financial side, people are interested in partnering with us because they see us being here for the long term. And when such people ask, why didn't you do more the sooner? Well, the reality is partners, when you got a 5- to 10-year development plan, don't want to bet on a company who doesn't have a 5- to 10-year view at the time we were in our financial condition. Now that we're stable now we can see that we're going to be here for many, many years. Our interest and other people's interest to work together has really gone up. And in fact, we're pretty much at capacity in the Technosphere pipeline, people they are working really hard. And I want to say thank you to them, if you're listening, but that's the main thing is we're doing development deals. We're showing that the formulations can work on our platform. We're showing that the products are stable. We get the right dosing in the animal models. And then once you have that, we will turn those into development agreements, if all goes well. So we're excited about the partners. I want to thank them for joining us along the journey, but you should start to see more, but there's no reason to put the things on our slide yet or update our pipeline until we really move these into full development programs. A question around some assets have come and gone over the years, in particular. I think David Spielberg [indiscernible]. Sumatriptan, for example, has come in and out. And what I would say is, prior to March, when we finished the convertible note, it's really about prioritization and capital allocation. And we felt the best ROI for shareholders is going to be clofazimine and DNase alfa, other molecules we're working on. And that it wasn't a clear picture of -- we spent $1 million or $2 million on one of these assets would we get the return. Now that we have capital to drive more things forward faster, some of these assets are further along. And we relook at those and see whether or not we should have the conviction to push them into Phase I and II. But if they're not strategic in nature, it's hard for us to want to make that capital allocation just to move a molecule because we believe it's going to be -- migraine, for example, migraine is a very competitive space. And we're not sure where the generics are in the pricing. But I do agree with you. I think sumatriptan provides a very big differentiation clinically, and that's something that I do value to help patients. So we'll relook at some of those older assets we had. We do think they're differentiated. And whether we find a partner, help bring them forward or we can do it. Stay tuned, we are looking at that. So thank you for highlighting that and the question. I answered that one. So I think a lot you asked why is the pipeline not moving forward faster? The reality is drug development takes time. And so I think we are going as fast as we can. I ask Thomas all the time if we could spend more money or hire more people to move things faster, we will. And where we could find opportunities to do that, that is what we are doing. So I don't want you to think for 1 second. We're slow walking the pipeline. We are full steam ahead on many assets driving forward as quickly as we can. A lot of questions on the vaccine. And I would say on this one, we're not -- there's a booster shot and one of the partners out there that make the vaccine one of company who scale up the Texas here. We'd be wide open to those types of discussions. But our main focus is continue to drive orphan lung. But I think, unfortunately, or fortunately, on your side of the table here, COVID is going to cause an abnormal amount of lung abnormality issues over the next 10 to 20 years. And that's where MannKind is focused on. So we feel very good about getting our assets moving to help more patients because we believe IPF, sarcoidosis, ILD. These are going to be growing areas due to COVID as it ravages peoples lung and there are long-term lasting effects. And so this is going to cause markets to grow, specifically in orphan lung. And they're going to be good technology like ours to deliver therapeutics directly into the lung over time. So we'll continue to look for opportunities to help there. Endocrine -- coming in here. Is there anything done to expand the label, from Evan? Evan, we are -- I think the -- you really don't want to open up the label unless you have a meaningful opportunity. And the one thing that we see is meaningful in the future is either as a pediatric expansion indication or can we reduce or eliminate the FEV1 requirement. That's something we think we can make optional. It was how Exubera was phrased. And so those are such the things we'll look at. But in terms of ultra acting, we went for that 4 years ago when we got our label change and the FDA said, that goes back to the ADA creating categories ultra acting. So we have -- we had to get our data published on this ultra acting speed and start to submit that to the ADA and endocrine society and ACE. And so we have been doing that. Medical is doing a great job there. But to date, they've not created an ultra acting category. But if they do, I have all the confidence in the world, Afrezza will be front and center there. Just take a question here from David Eisenberg on -- right here -- future additional molecules, any discussions regarding the equity stake be taken or do they see in the future? So United Therapeutics is a shareholder in the company. They do hold shares. They've been -- I talk to Martine whenever I get a chance to. But usually once a month we're touching base. We have quarterly calls on the development program. Everyone's really busy. So I think when you take a step back and say, "can we put a second or third molecule with UniTher." I think the short answer is yes. Will we -- most likely at some point, yes. But there's nothing more critical to our company or their company in getting Treprostinil right. This has an opportunity to be a $1.5 billion to $3 billion product. And we want to make sure that if UT can get the COPD indication and the IPF indication, these are huge markets and large opportunities that will trump any other molecule coming down the road. So I think it's really important that we execute our scale, our manufacturing facility. We get commercial supply ready, we're ready for FDA inspections and we get Treprostinil right. And I think the same thing is true on UT side. When you look at their growth over the next 5 years, a lot of it's going to come from Treprostinil and hopefully, it's a DPI version from our perspective, and I know they feel that way and so it's really critical that we get these rights. So while there is opportunity, we do talk about it, I would say the #1, 2 and 3 focus is make Treprostinil as successful as possible. And the rest will come together. But we have a very good collaborative dialogue. I think we've delivered on all the commitments they expected. And from that perspective, I don't see why we don't as we identify other unique opportunities to work together, I think we'll see other stuff. Do you have to expand production lines and anticipation of new products this year? Our line -- we have plenty of manufacturing capacity for Afrezza. We built out -- we call the North Field suite for Tyvaso that's got enough capacity to make the near-term demand that we see. And by the time where we're scaling up a new facility within the facility for expansion. That will be able to take on additional demand as we look at these indications launching in future years with Tyvaso DPI. So we're fine from what we can see, we feel very good about our manufacturing production and our plans for that with UT. Just looking at pre-submitted questions. I have 1 here from Brett and Sheila both asking about RLS and what's going on there. We are actively making clinical supplies for their tox studies as well as they're -- also trying to help them make sure they got a manufacturing pathway for Afrezza. I mean for -- there were [ simple life ] sciences. But one of the things is making sure they have a device like the Afrezza device, so they can go forward with an FDA-approved device, and that takes one of the risk assets off the table for them. And so we are actively working closely with them, and we expect to be the manufacturing partner for the future as that goes forward. But they are moving forward they've kind of updated their company a little bit recently and got some FDA feedback on protocols as well as dosing information and clinical data, you'll start to see come out and hopefully get published there. But I think RLS is a sleeper. And we'll continue to see them progress here over the coming months and years. On partnerships, I think I've hit that one enough, and Technosphere, we talked about that. Qrum, we fit that in. Use of proceeds we talked about on the things. And that's it. So I think , we've answered all the questions. So thank you, everyone, for the advanced submissions and using our virtual platform. It's new for all of us. And last year was our first test run and hopefully, I do get to see you guys in-person next year. But for now, thank you for your patience. Thank you for your time. And operator, I'm going to hand the call back to you.

Thank you so much for participating in our meeting today. Have a great rest of your day, and you may now disconnect.