MannKind Corporation (MNKD) Q2 2025 Earnings Conference Call Transcript

Access earnings results, analyst expectations, report, slides, earnings call, and transcript.

Overview

The earnings call summary and Q&A session reveal strong financial performance, promising product development, and strategic market expansion. The company's collaboration with United Therapeutics and the potential for Afrezza growth, especially in pediatrics, are positive indicators. Despite some uncertainties in regulatory strategies, management's optimism and strategic planning suggest a favorable outlook. The market cap indicates moderate volatility, aligning with a positive sentiment prediction of 2% to 8% stock price increase.

Key Financial Performance

Endocrine Business Unit Revenue $18.3 million in Q2 2025, representing a 13% growth over 2024. The growth is attributed to strong performance in the endocrine business.

Afrezza Revenue $18 million in Q2 2025, a 13% increase over the prior year. Growth is driven by new and recurring prescriptions.

Tyvaso DPI Royalties $31 million in Q2 2025, a 22% increase over the same quarter last year. Growth is attributed to increased net sales of Tyvaso DPI.

Collaboration and Services Revenue $23 million in Q2 2025, a 12% decrease from the prior year. The decline is due to the net impact of onetime items in both periods.

V-Go Net Revenue Approximately $4 million in Q2 2025, an 8% decrease from the prior year. The decline is driven by lower product demand as V-Go is not actively promoted.

Total Q2 Revenue $77 million in Q2 2025, a 6% increase over 2024. Growth is led by royalties earned on Tyvaso DPI.

Year-to-Date Revenue $155 million in 2025, a 12% increase over 2024. Growth is attributed to strong performance in commercial products and collaboration revenues.

Cash Balance $201 million at the end of Q2 2025. This strong liquidity position is further supported by $500 million in nondilutive funding from Blackstone.

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Operating Highlights

Afrezza: Positioned for growth, targeting 25% of rapid-acting insulin market. Pediatric indications submitted, with launch prep underway for the next 4 quarters. Revenue of $18.3 million in Q2, a 13% growth over 2024.

Inhaled Clofazimine: Advanced dry powder formulation into preclinical studies. Interim target of 100 evaluable patients expected ahead of schedule. Positioned for earlier treatment lines.

Nintedanib DPI: Phase II trial (INFLO) to launch by year-end 2025. Focused on safety, tolerability, and efficacy signals.

Tyvaso DPI: Achieved $31 million in Q2 royalties, contributing to $1.2 billion over the last 4 quarters.

NTM Market: Expected to exceed $1 billion by the end of the decade. Focus on U.S. and Japan for highest growth opportunities.

Endocrine Business Expansion: International and pediatric expansion planned. Enhanced market coverage to 50% by 2026 with expanded sales force and new campaigns.

Revenue Growth: Q2 revenue of $77 million, a 6% increase over 2024. Year-to-date revenue of $155 million, a 12% increase over 2024.

Blackstone Financing: Secured $500 million in non-dilutive funding to support growth initiatives, including pediatric launch of Afrezza and pipeline development.

Pipeline Development: Focus on advancing inhaled clofazimine, Nintedanib DPI, and other pipeline assets.

Commercial Infrastructure: Investments in expanding sales force and medical science liaison team for Afrezza and other products.

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Risk or Challenges

Market Conditions: The company faces challenges in the rapid-acting insulin market, targeting only 25% of all rapid-acting scripts. This indicates competitive pressures and potential market saturation.

Regulatory Hurdles: The company is awaiting regulatory decisions for Afrezza's pediatric indications and label updates, which could delay product launches and revenue growth.

Supply Chain and Manufacturing: Manufacturing revenue has fluctuated due to timing issues, and the company is balancing production for Tyvaso DPI, Afrezza, and development programs, which could strain resources.

Economic Uncertainties: The company relies on a strong balance sheet and external funding (e.g., $500 million from Blackstone) to support growth, indicating potential vulnerability to economic downturns or funding challenges.

Strategic Execution Risks: The company is expanding its sales force and commercial infrastructure, which increases operational complexity and costs. Additionally, the success of new campaigns and product launches is uncertain.

Pipeline Development Risks: The development of inhaled clofazimine and Nintedanib DPI involves clinical trials with uncertain outcomes, which could impact future revenue and market positioning.

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Guidance & Outlook

TETON 2 Readout: Expected in September 2025, with potential upside to current business plans.

Afrezza Growth: Positioned for continued growth, targeting 25% of all rapid-acting scripts. Label update application expected in Q4 2025.

Inhaled Clofazimine: Expected to meet interim target of 100 evaluable patients ahead of schedule. Dry powder formulation advanced into preclinical studies.

Nintedanib DPI: Phase II trial (INFLO) to launch by year-end 2025, targeting safety, tolerability, and efficacy signals.

Pediatric Indications for Afrezza: Launch preparation underway for the next 4 quarters, with expanded promotional efforts and sales force.

NTM Market Opportunity: Market expected to exceed $1 billion by the end of the decade, focusing on U.S. and Japan.

Tyvaso DPI Revenue: Continued growth expected, with $31 million in Q2 royalties and $1.2 billion over the last 4 quarters.

Strategic Financing with Blackstone: Access to $500 million in non-dilutive funding to support growth initiatives, including pediatric launch of Afrezza and pipeline development.

Future Data and Studies for Afrezza: Data on gestational diabetes, newly diagnosed patients, and exercise studies expected in 2026 and beyond.

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Shareholder Return Plan

The selected topic was not discussed during the call.

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Key Q&A

Q:What is the best-case timeline for a potential bridging study in IPF, considering the BREEZE study and DPI already on the market?

A:Management stated that it is hard to comment on UT's regulatory and clinical strategy. They mentioned that data readouts for TETON 2 are expected in September and TETON 1 next year. They hope UT will accelerate discussions with the FDA after TETON 2 results, but it is too early to speculate on the clinical strategy.

Q:How is the nintedanib DPI program positioned in the context of new updates in the space, and what is the agreement with the FDA regarding patient enrollment in Phase II?

A:Management explained that the trial design was adjusted to meet FDA requirements, focusing on a placebo-controlled trial on top of general background therapy. They shifted the trial to ex-U.S. markets due to challenges in conducting placebo-blinded trials in the U.S. They also upsized the trial to ensure robust results and aim to address patients intolerant to current treatments or those who avoid treatment due to severe side effects.

Q:What is the confidence level in using nintedanib DPI on top of background pirfenidone, both from a safety and efficacy perspective?

A:Management believes the systemic exposure of inhaled nintedanib will be low, minimizing drug-drug interactions. They are optimistic about the efficacy of combining pirfenidone and nintedanib, though trials are needed to confirm this. They also highlighted the future of IPF treatment as combination therapy.

Q:What is required to bring the nintedanib DPI development program into the U.S., and could this occur during Phase II?

A:Management stated that Phase III would likely be a U.S. global trial if Phase II results are positive. However, conducting trials in the U.S. is challenging due to IRB and placebo study requirements. They aim to complete Phase II quickly and focus on Phase III.

Q:What treatment effect is expected from the Phase II nintedanib DPI study, and what is the rationale for conducting the trial ex-U.S.?

A:The primary focus is on tolerability and safety, with efficacy as a secondary endpoint. The trial includes a 12-week double-blind period followed by an open-label extension. The ex-U.S. focus is due to challenges in conducting placebo-controlled trials in the U.S. and the need for robust data to design a Phase III trial.

Q:What is the rationale for the Blackstone revolving credit deal versus other financing options?

A:Management highlighted the need for flexible capital to support late-stage development programs, commercial preparation, and potential business development opportunities. The deal allows them to react quickly to opportunities and maintain a position of strength.

Q:What is the typical Afrezza patient profile, and where is the most traction being gained?

A:The patient profile is roughly 45% type 1 and 55% type 2 diabetes. The company is focusing more on type 1 patients, with increased awareness and targeting unique prescribers. They are also engaging more in scientific and clinical education.

Q:What is the plan for Afrezza's pediatric label launch and investment beyond 2025?

A:Management plans to expand the sales force and target pediatric centers, which require a different selling approach. They aim to relaunch the brand with a focus on pediatric patients and continue expanding in the adult market. They are also considering co-promotion opportunities.

Q:What is the potential impact of the interim sputum conversion outcome on the clofazimine ICoN study timeline, and what is the plan for building a pulmonology-facing sales force?

A:If the interim result is positive, the trial enrollment will continue, and the timeline will depend on whether the database is locked at 180 patients or after additional data collection. The sales force size and investment will depend on the trial outcome, with significant opportunities in Japan and other markets.

Q:What is the expected utilization intensity of Afrezza in pediatric patients compared to adults?

A:Management expects pediatric patients to use Afrezza more consistently due to their active lifestyles and the challenges parents face with other insulin delivery methods. They see opportunities for Afrezza to be used at multiple steps along the treatment pathway.

Q:What is the goal of the 201 study regarding dosing regimens and the inclusion of an active control arm in Phase III?

A:The goal is to select one dosing regimen (BID or TID) for Phase III based on the Phase II results. The Phase III design will likely include a placebo arm on top of background therapy, depending on the approval of additional drugs.

Q:What are the conditions for drawing additional capital from the $500 million Blackstone loan agreement?

A:The company has the discretion to draw $125 million of the committed capital without specific sales or development milestones. The focus is on using the capital for growth and strategic opportunities.

Q:Review of Unclear Management Responses

A:Management avoided giving direct answers to questions about the best-case timeline for the IPF bridging study and the specific requirements for bringing the nintedanib DPI program into the U.S. They cited uncertainties in regulatory and clinical strategies and challenges in conducting trials in the U.S. Additionally, they did not provide detailed conditions for drawing additional capital from the Blackstone loan agreement.

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Earnings Word Cloud

The most frequently occurring keywords in this quarter's earning call

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The earnings call highlights strong financial metrics, optimistic guidance, and strategic growth initiatives. The company expects significant growth in Afrezza sales and FUROSCIX, supported by investments in sales force expansion and new product developments. The strategic financing with Blackstone provides a substantial non-dilutive funding boost. Market opportunities, especially in the NTM market, are promising, and the company is confident in its pricing model. Despite some unclear management responses, the overall sentiment is positive, with potential catalysts like the Afrezza label update and ReadyFlow injector expansion.

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