MannKind Corporation (MNKD) Earnings Call Transcript & Summary

Good morning, and welcome to the MannKind Corporation conference call to discuss the U.S. FDA approval of Furoscix ReadyFlow. As a reminder, this call is being recorded on July 24, 2026, and will be made available for replay on the MannKind Corporation website shortly after this call for approximately 90 days. This call will contain forward-looking statements. Such forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from these expectations. For further information on the company's risk factors, please see the Form 10-Q for the period ending March 31, 2026, this morning's press release and the slides prepared for this presentation. Joining us today from MannKind are Chief Executive Officer, Michael Castagna; and Chief Medical Officer, Dr. Ajay Ahuja. I would now like to turn the conference call over to Mr. Castagna, please. Go ahead, sir.

Thanks, operator, and good morning, everyone. Thank you for joining us on what is an exciting day for MannKind. Here's our agenda for this morning. I'll start with the approval and what it means. Then I'll turn it over to Dr. Ajay Ahuja, our Chief Medical Officer, to walk through our clinical overview of Furoscix ReadyFlow. After that, I'll come back and talk about our launch strategy, and we'll open it up for Q&A. Let me start with the approval. As of yesterday, I'm proud to announce that the FDA has approved Furoscix ReadyFlow. This is a milestone we've been talking about since we announced the scPharmaceuticals acquisition is now our third FDA approval in '26, starting with the Afrezza conversion dose update in Q1, the pediatric approval in Q2 and now this exciting opportunity with ReadyFlow auto-injector here in Q3. For more than 60 years, furosemide has been the gold standard for treating fluid overload, yet administration has been limited to oral therapy or IV delivery in the hospital setting. The ReadyFlow approval opens up the potential to transform fluid overload by setting a new standard in this emerging new class called NODs, also known as non-oral diuretics, delivered at home. We also announced a $50 million PIPE financing led by Frazier Life Sciences, which will support the $45 million contingent value right payment triggered by yesterday's approval. Furoscix ReadyFlow is the first and only IV equivalent diuretic delivered via an auto-injector. It takes a proven concept behind the OBI and makes it quicker to administer and easier to use. We are moving from a 5-hour wearable infusion to a full dose delivered in under 10 seconds, while preserving the PK/PD performance that clinicians expect from IV furosemide. Ajay will take you through the data, but the takeaway is simple: IV equivalent performance and a simplified delivery format. We believe that simplicity can change the role Furoscix plays in practice. It may allow clinicians to consider treatment for more patients in more settings and potentially earlier in the fluid overload episode, whether that be before a hospital-based intervention becomes necessary or getting patients discharged earlier from the hospital. This is why we view Furoscix ReadyFlow as more than a device enhancement. We see it as an opportunity to broaden utilization and accelerate growth of the Furoscix franchise. We fully expect to launch this in Q3 and are looking forward to helping a lot more patients who are suffering from fluid overload as we move forward. The opportunity to use Furoscix exists on both sides of hospitalization. We estimate there are approximately 1 million addressable fluid overload events in the U.S. each year. Many heart failure patients are managed with oral loop diuretics, and this works for the majority of time. But treatment effectiveness can decline during episodes of worsening congestion due to reduced absorption, reducing the effectiveness of not only the diuretic itself, but the other essential oral heart failure therapies, further compounding an already challenging clinical situation. When this happens, oral escalation is no longer enough. That is an important intervention window. Instead of waiting for the patient to progress toward hospital-based care, Furoscix gives clinicians a subcutaneous IV equivalent treatment that patients or caregivers can use at home. A second opportunity emerging with the new NOD category is earlier hospital discharge. Patients who are clinically stable but require continued diuresis may no longer need to remain in the hospital solely for IV therapy, creating a significant new opportunity for ReadyFlow. The third opportunity we see is around preventing or reducing readmissions within 30 days post-discharge. Roughly 20% to 25% of patients may return home with residual congestion or experience a recurrence shortly thereafter discharge. Furoscix allows clinicians to extend IV equivalent exposure beyond the hospital and continue managing appropriate patients at home during that transition. Furoscix is not tied to a single care setting or a single moment in the patient journey. It gives clinicians the opportunities intervening earlier, support the transition to home and manage fluid overload across a broader continuum of care. We believe Furoscix ReadyFlow's simplified administration can make these opportunities more practical and ultimately broaden where, when and for whom clinicians consider Furoscix as this new NOD category is established. Heart failure and CKD are not only high-risk conditions, they are also one of the most expensive conditions for Medicare spending and take up a tremendous amount of resources in the hospital setting. In heart failure and CKD, direct medical costs are projected to exceed $100 billion by 2030. But the most important point is where much of that financial burden is created: when worsening congestion leads patients back into the ER and ultimately hospital-based care. Despite that, patients continue to cycle through the system. Approximately 25% of patients are hospitalized for heart failure and readmitted within 30 days. This current model is not only costly, but there's a gap between chronic oral diuretic therapy and hospital-based intervention. That is the economic context for Furoscix ReadyFlow. If clinicians can manage fluid overload events earlier and outside the hospital, the potential value extends beyond the treatment itself. It may mean a less disruptive care experience for patients while helping providers, payers and health systems address one of the largest and most persistent cost drivers in heart failure and CKD. Now here is a tailwind that I believe is still underappreciated. For years, the Hospital Readmissions Reduction Program placed financial accountability for excess readmissions primarily on hospitals. Beginning in '27, CMS is extending that accountability directly to cardiologists through the new ambulatory specialty model known as ASM. This matters for Furoscix because ASM rewards the exact behavior ReadyFlow is designed to support, identifying worsening congestion earlier, intervening in the outpatient setting and helping patients avoid the hospital altogether. The timing is also highly favorable. ASM performance begins in '27, just as we are launching and scaling ReadyFlow. CMS is creating the incentive to intervene earlier and Furoscix ReadyFlow provides the tool to make that intervention practical. We believe that alignment can be a powerful catalyst for accelerated adoption beginning in '27. Before moving to clinical overview, I'd like to introduce our Chief Medical Officer, Dr. Ajay Ahuja, who joined us late last year. Ajay is a cardiologist who brings more than 20 years of leadership across clinical development and medical affairs where his work has been in cardiometabolic and respiratory therapeutic areas. Before entering the industry, he completed his fellowship in cardiology and then served on the staff of Boston Children's Hospital for more than a decade. With that, I'll turn it over to Ajay to explain why ReadyFlow's profile is so meaningful for clinicians and patients.

Thank you, Mike, and good morning, everyone. I'm pleased to walk you through the pivotal data that supported this approval. The pivotal PK/PD study was a prospective randomized crossover study in 21 healthy adult volunteers comparing Furoscix ReadyFlow directly with IV furosemide. Each participant received both treatments separated by a 3-day washout period, allowing each individual to serve as their own control. In one treatment arm, participants first received the 80-milligram dose of Furoscix ReadyFlow subcutaneously in just 5 to 10 seconds. And after the washout period, they then received 80 milligrams of IV furosemide administered as two 40-milligram boluses 2 hours apart consistent with FDA label. In the other treatment arm, participants first received IV furosemide, and then after the washout period, they then received the Furoscix ReadyFlow auto-injector. It is also worth noting that this was a mature patient study population with a mean age of approximately 58 years and with the group's renal function spanning a wide range. That provides context as we evaluate the consistency of the pharmacokinetic and pharmacodynamic response. The study met its primary pharmacokinetic endpoint. ReadyFlow achieved 107% bioavailability relative to IV furosemide, which falls within the goal 80% to 125% range for bioequivalence. This demonstrates that the subcutaneous administration delivers total furosemide exposure equivalent to IV therapy. And while the concentration profile was different as expected, the peak was lower and more gradual than IV, the overall exposure measured by area under the curve was still equivalent. The takeaway is straightforward. ReadyFlow provides IV equivalent drug exposure through a rapid subcutaneous administration. The study also successfully achieved its pharmacodynamic endpoints, demonstrating that this comparable drug exposure leads to the same diuretic effect. ReadyFlow produced urine output equivalent to IV furosemide at 6, 8 and 12 hours with similar urinary sodium and potassium excretion. These are the measures that matter clinically, removing both fluid and sodium. Across each time point, ReadyFlow performed similar to IV furosemide. So the conclusion is clear, the 10-second subcutaneous administration preserved the pharmacodynamic performance of IV therapy. To summarize the safety findings, ReadyFlow was generally well tolerated. Injection site adverse events were mostly local symptoms, and they were typically mild. And systemic adverse events were consistent with the established safety profile of oral and IV furosemide. Importantly, there were no discontinuations due to an adverse event. Taken together with the achievement of both the pharmacokinetic and pharmacodynamic endpoints, these results support a safety and tolerability profile consistent with what clinicians already know and expect from furosemide. With that, I'll turn the call back over to Mike to talk about the launch strategy.

Thank you, Ajay. Now let me bridge to our launch strategy. The strategic opportunity here is straightforward. ReadyFlow materially reduces the treatment burden, which we believe can broaden the range of patients clinicians consider appropriate for Furoscix and support intervention earlier in a fluid overload journey of a patient. And that is not just our view. The feedback is very consistent. Patients immediately recognize the value of eliminating a 5-hour treatment experience. Clinicians described ReadyFlow as a significant advancement. And patients tell us that a simpler option may reduce the hesitation to experience and call in our doctor when symptoms begin to worsen. Taken together, we believe ReadyFlow can expand not only who receives Furoscix, but also when in the patient journey treatment is considered. We are prepared to move immediately from approval to activation. Our sales force is being trained and deployed over the next few weeks, supported by an integrated campaign designed to reach both health care professionals and patients across digital, field and point-of-care channels. We are excited about the new creative campaign our marketing team will be launching, and we will have a strong presence at several upcoming conferences. I want to double-click on the integrated delivery system network opportunity because this is how we believe Furoscix can evolve from a product used by individual prescribers into a capability embedded across an entire health system. Our strategy is straightforward. First, establish. We are engaging more than 60 prioritized IDNs to build awareness and clinical confidence in ReadyFlow. We have another 20 to 40 teed up as the year progresses. Second, embed. We are working with those systems to incorporate Furoscix into early discharge, post-discharge and outpatient care heart failure pathways. Third, expand. We will then scale these pathways across more providers, patients and sites of care. That progression from clinician adoption to pathway integration to system-wide use is what creates the growth opportunity ahead. Once Furoscix becomes part of how an IDN manages fluid overload, the opportunity is no longer dependent on one physician making a treatment decision one patient at a time. It could become a more consistent and scalable part of the care model. And this strategy is increasingly aligned with where the health care system is going toward earlier intervention in the most appropriate care setting with greater accountability for avoidable hospitalizations. ReadyFlow gives us a simpler platform around which IDNs can begin to operationalize this new NOD category. Let me close with this. Today marks an important inflection point for MannKind. We have the first and only product to deliver an IV equivalent diuretic therapy through an auto-injector in under 10 seconds, helping establish us as a leader in this new class that I mentioned earlier. Today is also bigger than one product. We have now delivered the 2 major approvals we set out to accomplish this year, Afrezza in pediatrics and Furoscix ReadyFlow while continuing to advance nintedanib DPI towards important clinical milestones. We expect to receive top-line results from our Phase Ib study over the next few weeks. These accomplishments are tangible evidence that our strategy is working and that our transformation into a more diversified, growth-oriented company is well underway. More importantly, the Furoscix ReadyFlow approval gives patients another way to manage fluid overload outside the hospital with far less disruption to their daily life. With that said, operator, I will now turn our call over for Q&A.

[Operator Instructions] Our first question today comes from Roanna Ruiz at Leerink Partners.

So I have a couple of questions. I thought it was understanding you were talking about engaging the prioritized IDNs. And I was curious what proportion of eligible patients does that represent, if you have any estimates about that for Furoscix? And curious also if you've already penetrated into some of those with the on-body infuser, how are you thinking about the auto-injector getting more traction there?

Great question. I think if I had the catalog like how many heart failure hospitalizations are in those 60 centers, I think that's a little harder to crystallize right this second. I would just say they're the highest priority centers like places like Cleveland Clinic, NYU, Emory, just to give you some kind of brands that we're looking at to work with, Kaiser's in that list as well. When you think about today, our IDN business just launched about January of last year. And so today, it makes up about 10% of our sales. Now some of those doctors had migrated from using our direct patient portal into a more direct purchase within our institution. But ultimately, that business has continued to grow through Q2, and we'll share more details on our next earnings call.

Okay. Super helpful. And a quick follow-up. How are you thinking about the proportion of patients that might switch from the on-body infuser to the auto-injector initially in the launch of the auto-injector. And could you help us understand what's the balance of new patient starts versus switches that you expect more in the longer term for the auto-injector?

Yes. I think the existing base of patients have been using the OBI. They're comfortable with the OBI. There's not a big push now remember, it's an acute-use product. So there's not always a lot of refills on these prescriptions and those patients can convert over relatively quickly. It's really a systems conversion, I'll say, meaning that doctor's office decides, okay, going forward, this is what we're going to train on. This is how we're going to use it, and this is the one we're going to pick in the system. So that perspective on the new patients, I'll say, we expect 85% plus of new patients, maybe almost 100% to come in on the auto-injector. I think there is a subset of doctors that do feel like they want continuous infusion over 5 hours, whether that's because they haven't seen our data, they have no clinical experience or they just believe maybe that smoother curve over 5 hours matters. So there are doctors who have indicated they still want the OBI. And in the short term, we continue to make that available.

Our next question today comes from Ben Burnett at Wells Fargo.

Congrats on the update. I wanted to ask, will there be any different pricing implications with the auto-injector relative to the infuser?

We expect comparable pricing to the OBI.

That's the easy answer. Okay. And then just on the sales force, do you foresee needing to make any adjustments, either now or in the future to the sales force?

So coming into the year, we made some adjustments to the sales force post close of the scPharmaceuticals acquisition and then we expanded the key account manager team. And so most of that infrastructure, all the disruption happened in Q1 and we really want a stable rest of the year in terms of call targets and relationships with the reps as well as vacancies. So I don't expect any major changes or expansions in the second half here. I think as we look at how sales continue to grow and we plan for '27, there's always opportunity to cover more physicians and nurse practitioners. Just to give you some color, there's about 60,000 targets between cardiologists, high treatment heart failure as well as allied health care professionals with NPs and PAs. We target about 12,000 nephrologists and cardiologists. So there's definitely always room to shrink the sales territories, increase reach and frequency and share of voice. But I really want to continue to see the hospital IDNs expand and adopt, and I think that will just continue to build this compound effect size that we were looking for.

Our next question comes from Olivia Brayer at Cantor.

Congrats on the approval, looking forward at launch. Can you walk us through how the ReadyFlow changes the unit economics versus the OBI. And then I know the focus is around gross margins. But does the lower cost structure maybe change when you think about product sampling and investing in market access and commercial expansion for Furoscix more broadly. I know you touched on sales force, but even outside of that.

Great questions, Olivia, and great to hear from you. Thank you for joining us so early. So ReadyFlow, we previously communicated about a 70% reduction in potential COGS, and that's even becoming more severe as the Trump tariffs take effect here because the on-body infuser has many international components, unfortunately. So this couldn't have come at a better time in terms of the threats that come across society for tariffs. And ReadyFlow is completely made here in the U.S. So we're excited about that supply chain shift. So the economics will help free up some capacity. As we think about payers, majority of the use is Medicare and Medicaid and they make decisions for 2027 pretty much they can make improvements in formularies, they can make negative changes per se. So we do expect today, probably 40% of our scripts that come in don't have a prior authorization. That is something we're really focused on now with payers, which is they've indicated they'll have comparable coverage to the on-body infuser. So we don't expect any major changes in current coverage rates. But we do want to see how do we continue to remove the burden of a physician, an office, a patient on either the co-pay issues, which have been really hard this year for patients or the administration is getting access to the patient quickly. So that is something we are focused on, especially as we go into '27. You hit the nail on the head on samples. We have pulled back samples this year that definitely impacted us a little bit, but the cost of those samples are incredible with the on-body infuser, where with the auto-injector, the sample costs are dramatically reduced, and we will have sampling available at launch.

Okay. Very helpful. And then, Mike, as you think about the peak sales opportunity here, how would you characterize the hospital discharge opportunity versus actual ER prevention and keeping patients out of the hospital altogether?

Yes. I mean if you just did the TAM of this, call it, 700,000 to 1 million hospitalizations a year, the average prescription is 6 to 9 units. And you do the math on our net price, it's a $6 billion-plus opportunity if everyone got treated effectively. So the market TAM is enormous. And so that to me is the biggest opportunity to transform health care and patient lives. And really, we're talking to [indiscernible] the other day who described how patients come back for infections. And I'm like, yes, that infection started in the hospital when they were sitting there, you may have discharged them. And 2 weeks later, they popped back in for an infection. That's because they got sick in the hospital. So anything we can do to get these patients out of the hospital earlier, it's going to have a tremendous benefit to taxpayers and health systems and health plans whether our bedsores, infections, readmissions for congestion, we just think there's a huge opportunity here. And while the oral diuretics for the majority of patients work fine, they should. And this is meant to be acute in those really challenging situations. And so if you ask me over the next 5 years, the hospital segment will become the largest, followed by that physician community practice.

Our next question today comes from Gregory Renza at Truist.

Let me add my congratulations on the approval as well. Mike, when it comes to the near term and the launch, I know you've said Furoscix should do about $110 million to $120 million of revenue in 2026. So I just wanted to ask with the ReadyFlow now approved, how does that shape or provide some pieces for you to hit or get to that plan?