MannKind Corporation (MNKD) Earnings Call Transcript & Summary

Good morning, and welcome to MannKind Corporation's investor call to discuss a clinical trial update. As a reminder, this call is being recorded on November 10, 2025, and will be available for playback on the MannKind Corporation website shortly after the conclusion of this call and will be available for approximately 90 days. During the course of this call, management may make certain forward-looking statements, including regarding MannKind's product candidates that are not historical facts. These forward-looking statements reflect MannKind's current perspective on existing trends and information. Any such forward-looking statements do not guarantee future performance and involve risks and uncertainties, including those noted in the Risk Factors section of MannKind's latest SEC filings. Actual results may differ materially from those projected in these forward-looking statements. For factors which would cause actual results to differ from expectations, please refer to MannKind's most recent press release and current filings with the SEC. This conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, November 10, 2025. MannKind undertakes no obligation to revise or update any statements to reflect events or circumstances after the date of this call. Joining us today from MannKind is Chief Executive Officer, Michael Castagna. I'd now like to turn the call over to Mr. Castagna. Please go ahead, sir.

Good morning, everyone, and thank you for joining us on short notice. Today, I want to address our recent decision to discontinue the ICoN-1 Phase III clinical trial evaluating nebulized clofazimine inhalation suspension, also known as MannKind 101 for the treatment of refractory nontuberculosis mycobacterium, also known as NTM lung disease. Let me begin by providing some history and background on the MannKind 101 program. Back in 2020, we acquired QrumPharma, the company that originally developed the nebulized formulation of clofazimine with a long-term plan to get to a dry powder formulation. This program had approximately 5 years of preclinical work prior to our acquisition that demonstrated the in vitro activity of this molecule in NTM and tuberculosis. Over the past 10 years, our collective teams have dedicated extraordinary human capital. Scientists, clinicians, regulatory experts and manufacturing operational staff have been working tirelessly to advance both the nebulized and DPI formulations. Their commitment reflects MannKind's broader mission to transform chronic disease through innovative patient-centric solutions. As part of our routine study monitoring, we assess sputum culture conversions in the first 46 participants who completed the double-blinded treatment phase. Unfortunately, none of these participants showed evidence of sputum culture conversion, which I'll remind you was 3 consecutive sputum cultures in 3 consecutive months. Following an ad hoc meeting held on November 8, 2025, the Independent Data Safety Monitoring Board reviewed the data and agreed with the decision to discontinue the trial due to futility. Importantly, the DSMB did not identify any safety concerns at any point during the study. I want to be clear, we remain confident in the underlying science. Clofazimine is a molecule with well-established activity against NTM. The lack of efficacy observed in this trial is likely related to the nebulized formulation, not the molecule itself. This distinction is critical. Our development work and the broader scientific literature supports clofazimine's potential as an NTM lung treatment. Looking ahead, we are actively investigating the reasons for this unexpected outcome. Our next steps include a thorough analysis of the data to understand what potentially may have contributed to this outcome. One key area of focus will be the suspension formulation, which requires handling instructions and product preparation prior to nebulization and which potentially played a significant role in these results. Our internal team and external advisers will evaluate all available data, including our understanding of how the plasma PK compares to our Phase I results as well as the patient reported outcomes, which are still blinded. We will need to apply these learnings to the ongoing development of our MannKind 102 dry powder formulation of clofazimine. MannKind 102 is currently advancing from preclinical development towards Phase I, and we remain hopeful about its potential to help patients with NTM lung disease. We still have many unanswered questions, and this is definitely a setback for anyone in the NTM community. However, the safety profile of 101 as well as our greater confidence that delivered dose will be accurate with 102 are encouraging factors as we seek to help patients who are suffering from NTM. I want to extend my deepest gratitude to all the stakeholders, the key study participants, clinical investigators, study site staff and everyone at MannKind who's contributed to this journey. Your dedication and resilience are the foundation of our progress. We also thank our investors and partners for their continued support and belief in our mission. We will keep you updated as we analyze the data and potentially move forward with MannKind 102. Our commitment to developing new therapies for people suffering from NTM and other serious lung disease remains unwavering. We are fortunately a diversified company with multiple revenue streams as well as pipeline opportunities. We look forward to working with all of you in the future. And at this point, thank you, operator. We'll now take questions.

[Operator Instructions] our first question comes from Olivia Brayer from Cantor.

You're flagging your DPI candidate. Is there anything that you've seen so far in that candidate's preclinical characterization that would maybe lead you to believe that it would have a higher chance of achieving bactericidal effect in vivo than the nebulized formulation? And then can you tell us anything about how symptom scores or imaging endpoints were trending? Curious if there were any partial conversions or bacterial load reductions or even symptom trends that were observed here?

Yes. Thanks, Olivia. I think the thing -- the first thing we're really looking at is the delivered dose. And I think that's where our focus is going to be in terms of why we have a little more confidence in DPI over the nebulizer. We know we have pretty good consistency in predicting dry powder formulation delivered doses that don't require as much patient intervention, I'll say. The other part, we did see partial conversions. No one got 3 consecutive in a row. That's what was unfortunate. We are still looking at the PRO data, so that will give us some other indicators, maybe cavity size or duration of disease or experience in disease may have contributed in PROs. We did not see anything obvious in the sputum conversions around those things. It didn't seem to matter when no one converts any of those factors. And the other part is the target dose. We have a lot more ability to load the powder on the platform that we've established so far. So we feel pretty good about should we dose it every day, I'll say, for duration of treatment as opposed to 28 days on and 2 months off. We did not see any correlation when someone had a sputum conversion for those that had 1 or 2 in terms of what is the first month, second month, third month, it didn't appear related to duration of treatment. So we think more consistent delivery will establish better MICs, hopefully, with a better delivered dose.

Our next question comes from Ben Burnett from Wells Fargo.

I just wanted to drill into your hypothesis as to why this might be solvable with formulation in delivery versus kind of the mechanism itself.

I think we'll be trying to figure out what we can do again in vitro because all of our animal studies would correlate to what we were looking for and all the in vitro work. So the only thing you really look at is the liver dose and did you get what you expected. And we had some recent data come in as we looked at how you prepared the vial, how you shook it, how long you shook it for. And it would appear that, that could dramatically change the dose dumped into the nebulizer that's then administered to the patient. And so our biggest fear is that people just didn't follow the proper instructions, maybe they didn't shake it for 15 seconds, maybe they nebulize for 18 minutes. Those were 2 critical steps in the process. We reinforced that through training videos, site administrations, site trainings. But when you have this much of a catastrophic failure, I think you have to really say what's the fundamental commonality amongst all participants, and that is the nebulizer. And so what is the difference there versus DPI. It's that we can predict much better a DPI delivered dose that requires less human intervention, meaning less depending on how much they inhale or how long they inhale. So that's the key factor here. And we could see a 90% delta between a person who didn't shake the vial at all versus those that did it properly. So I mean it does play a significant role. So hence, why that's our focus.

Okay. That's really helpful. That kind of gets the follow-up question that I had to, which is, as you digest the data, do you plan on making any changes to the DPI clinical program?

It's too early to tell. Obviously, this is coming at us quick. I think from just a formulation development, I talked with our team over the weekend, we feel pretty good that we have multiple formulations with multiple doses delivered. So I think it's a question of how high -- we have pretty good safety margins on this product. And so how high would we go in the average daily dose over the 6 months of treatment, I think is probably our biggest question and how do we correlate that to any data that we can see before we go too far. So I think that will be critical.

Our next question comes from Faisal Khurshid from Leerink.

Michael, can you just go into a little bit more detail on what the next steps are for the DPI formulation of Clofazimine?

Sorry, your question is what are the next steps for the DPI formulation?

Yes. Like what should we expect to hear next on that, like preclinical data or like kind of timing to IND, things like that?

Yes. The team is meeting this week. They'll be here in California. So we'll pretty much be focused on how quickly can we get a GMP batch ready for Phase I. And then in parallel, we'll meet with the FDA to talk about these findings as well as our expectations for next steps. But all the, I'll say, preclinical work, all the animal studies, all the target dose studies, product powder load, all that's done. So it's really just now making the GMP batch in Danbury and getting ready for the Phase I trial. And we'll hopefully be able to provide some updates realistically Q2 by the time who knows with the FDA opening back up and get a meeting schedule, but that will probably take us in the first quarter to get the protocol submitted and get their feedback.

Our next question comes from Brandon Folkes from H.C.W.

Caring what you said about sort of the nebulizer and the dose preparation, do you expect to take a more holistic view and maybe a step back and look at some of your PK modeling assumptions around 201, just given what you've seen here? Just any color in terms of how you are sort of addressing this sort of some of the assumptions maybe around PK modeling that you use across the board and just sort of how you view 201 and any learnings here?

Yes. I think that's a great question, Brandon. And we'll definitely be looking at the PK modeling and any differences we may have seen in the human from animals and how those correlate with the various things we're looking at. I think in particular, is there any PRO direction because that's an important endpoint for the trial. So is there anything we can do to understand PROs, maybe patients are feeling better and some of the sputums or maybe the fibro cavity disease severity maybe playing a factor here. I mean, I can tell you talking to some of the investigators that their belief that some of these refractory patients today versus 10 years ago are just not going to respond to anything. And I think that's something we have to assess as we go forward into our next phase and will we just go earlier treatment versus later treatment. So for that part. In terms of impact on 201, we are going to disclose that we're conducting a Ib trial, and that will be in IPF patients here in Q1 and should be wrapped up early in 2026. And the reason we're doing that trial is to have a stepping stone here to a larger trial for the U.S. FDA. That will give us some confidence on tolerability of the dry powder because that's probably the only thing that's really of concern. I think when you look at the dose calculations and dose delivered in IPF, we feel very confident, I'll say, in that part. But the question is that dose delivered have an effect size. And I think there's very little you can do to predict that in terms of dose concentration. We'll continue to measure plasma levels there and see what that looks like. But I think the key thing on 102 is getting the interim Ib study done as well in parallel to the Phase II trial, which will be ex U.S. So these 2 things combined will give us some more confidence on the tolerability of 201. But I'm not sure you're going to get any more than we got in the preclinical data, which included a bleomycin study in our inhaled version versus oral. And that data will be published some of the -- how we got to the dose calculations on 201 will be published this year as well. Maybe next year, sorry, I forgot we are at the end of the year already. Does that help, Brandon?

That concludes the question-and-answer portion of today's call. I'll now hand the call back over to the MannKind team for closing remarks.

I just want to say thank you to everyone. This is obviously an unexpected result. The team, the DSMB have been nothing but collaborative. We're looking forward to wrapping up any insights we gather from the 101 program and applying them to the 102 program. Unfortunately, we have the same development. So there obviously is a setback to the time lines, but there's nothing imminent from a competitive viewpoint that's going to compete in trials, but we'll continue to watch the competitive landscape as well as do our best to predict what 102 could do if we move forward. So thank you for all your time this morning. Sorry for the late notice on the call, but we look forward to answering any other questions people have.