Q4 2023 MannKind Corp Earnings Call

Participants

Andreas Argyrides; Analyst; Wedbush Securities Inc

Olivia Bryer; Analyst; Cantor Fitzgerald

Steve Lichtman; Analyst; Oppenheimer & Co.

Gregory Renza; Analyst; RBC Capital Markets

Oren Livnat; Analyst; H.C. Wainwright & Co, LLC

Thomas Smith; Analyst; Leerink Partners

Anthony Petrone; Analyst; Mizuho Americas LLC

Presentation

Operator

Good afternoon, and welcome to MannKind Corporation 2023 Fourth Quarter and Full Year Financial Results Earnings Call.
As a reminder, this call is being recorded on February 27, 2024, and will be available for playback on the MannKind Corporation website shortly after the conclusion of the call until March 12, 2024 this call will contain forward-looking statements. Such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from those stated expectations. For further information on the Company's risk factors, please see the 10-K report filed with the Securities and Exchange Commission this afternoon. The earnings release and the slide prepared for this presentation. Joining us today from MannKind are Chief Executive Officer, Michael Castagna, and Chief Financial Officer, Steve Binder.
I would now turn the conference over to Mr. Castagna. Please go ahead, sir.

Thank you, Valerie. We have never seen better time for mankind than we do today. As we look at our future is extremely exciting and then never more motivated to ensure we deliver on all key operational opportunities in front of us.
As we think about today, Steve and I will go over the operational pipeline highlights the financial review. I'm also here today with Lawrenceville as our Chief Operating Officer for Q&A, we will drive shareholder value by making a difference in the lives of the patients we serve, we will make over 25 million doses and devices in 2024 and helped roughly 25,000 patients take a MannKind produced product in 2023 most in our history.
In Q4, we had record revenue for TVs on both royalty and collaboration manufacturing, along with record production on tablets or cartridges. We advanced our pipeline in both the orphan business as well as endocrine business. And our endocrine business had its second consecutive profitable quarter. We finished the year in the strongest position we have been in in terms of financial ability as well as by selling the TVs with 1% of our typical royalty for $150 million upfront and $50 million revenue milestone, many of you asked, could we have sold more?
Why did we sell more? And the reality is we didn't need to sell more if we wanted to make sure we were comfortable with carrying that level of debt and cash on the balance sheet to control our future. We're very excited about Tyvaso DPI and what it's going to bring to patients and anticipate hopefully positive milestones per ton based on the future and never wanted to preserve 90% of that value for our shareholders.
At the same time, we wanted to derisk on the debt side of our Company, but also restructure insulin purchase commitment and reduced our near-term cash outlays about $50 million. The EBU will be the foundation for our future launches and currently makes up about 37% of our revenue in 2023. As I presented at JPMorgan in January, our ability to grow double digits for the foreseeable future looks bright. And you see in 2023, our total revenue approached $200 million, almost 100% growth year over year. I'm going to spend a few minutes on Afrezza and the EBU because we are at a pivotal inflection point for our future. Innovation takes time and disruption is even higher.
When you think about the weight loss craze today, GLPs were 20 years in the making to what you see today, pods in type one diabetes, 10 years in the making. And pens took a huge time to convert from vials back in the early two thousands, I believe we can make this business a core pillar of our growth story. We look at the Endocrine business.
It grew 32% year over year or $70 million '23 and greater than $20 million in Q4, the second quarter in a row profit profit contribution as well as on a run rate of $80 million. We've made a lot of changes in 2023 and delivered. Despite those changes, it set us up for a transformation once we see the new data from inhaled one and inhale three this year. As I look at the revenue, Afrezza, net revenue grew $12 million or 27% year over year. This is our largest jump in seven years and is the most we've seen driven by volume alone as opposed to price balanced by historical standards. Several clinical readouts in 2024 may expand our market potential and I'll talk about those in a minute.
One of the questions I get is what is different this year than prior years. Our focus this year is incredibly different. We've been waiting for this moment where we had people money and data. Many times, we had two out of three, but not all three. Number one, we've got to maintain our persistence and Medicare and commercial to grow our base business and leverage the her $35 insulin co-pay that currently exist for Medicare and commercial insurance coverage, we know is the number one objection, number two, we optimize our sales force footprint here in January to build capabilities for the future growth. And what that means is we were able to reallocate some headcount to create key account managers, reimbursement specialists as well as virtual and in-person training across the country. We also have new insights from market research, which I'll share with you shortly that suggests that by executing effectively, we can increase prescriber adoption.
And finally, around data and education, we want to focus on KOL development, education at conferences and publications to elevate the support and awareness, especially among academic centers here, some new market research as we go forward called the emotional engagement mindset model, which is done by a company. We've deleveraged from market research. This shows a significant shift in perception by the various groups we tested with our new data. And you can see at baseline just unaided awareness of Afrezza will people's perceptions were in terms of unattractive, empathetic attracted her passionate and by exposing them to our core visual aid as well as some of some expectations of what in hell three data readout. You can see we shipped almost two thirds of our key key target audiences are attracted are passionate about our future. It's really important because the first time we can see this big of a ship and where we started, where we end up with the new data coming, people don't want slow acting Inphone world that moves as fast as we did. When I look at the future here on our studies and held three, and then how long I'll talk a few minutes about these. We have 60 U.S. sites and KOL sites like the Mayo Clinic to jobs and clinics, some of the foundations of that diabetes treatment in this country from a Hershey's, our top-tier fully to Hero and Health Re as a principal investigator and he has done a great job. Ensuring This trial is dosing properly and enrolling quickly. We have over 300 patients in both of these trials and most of them are on track to read out this year.
On the left side of the slide, type one, diabetes and health three is the largest switch study away from AID. pumps. We'll be about 120 some patients in this trial, and then we'll be on MDI. half of them will be likely on the pumps as we look at the data. The reason this data sets important is it's utilizing a new dosing conversion upfront to ensure proper efficacy is maintained or improved. They are also doing meal tolerance test at baseline and week 17. So we can see how people dosing may have changed over this timeframe.
And another thing to remember about this trial is the first time we're enrolling almost 25% of the patients are level seven A1c when they enter. So we've also shown you hopefully, that tight control and remain by switching to receivable plus Afrezza Degludec is the generic name. A lot of people ask me what is the goal of inhaled three? Our goal is equal. Efficacy was perceived to be the standard of care, including a IV system no mealtime insulin or AID. systems ever be another system head to head. We think this is an important metric that is successful. And if we see a clinical advantage on highs or lows.
That's upside to our expectations.
We also plan to use this data to hopefully update conversion figure one in our Afrezza label. We've been in discussions with the FDA since the start of the PEAKS program around how do we update that initial dose conversion?
We hope to inhale three will be part of that dataset on the right side of this slide, you can see sorry, on the bottom of the slide, the different data readouts. First dose will be ATTV. In March, the 17 week day, we expect to present at ADA in June and the 30 week data will be complete in Q3 and will be presented at a future conference on the right side of this slide, is inhaled once this is a pediatric study, and we think this is a watershed moment in order to transform the inflection of Afrezza will be through pediatrics. And we look at diabetes innovation today, whether CGM insulin pumps started with children and work their way into adults because the patients are worn social media, the parents are more progressive and the doctors are more progressive. This is the largest study done on a present over 10 years. And so far, we don't have the data, but I can tell you the conversion dose has appeared to drop to cause less dropouts relative to our original trials on Afrezza because also meal tolerance test at baseline using CGM. And hopefully the study will be used to secure pediatric approval in 2025 and beyond. This is how we believe we will accelerate rapid growth of Afrezza, and this will ultimately spill over into adults. One hangover is still the lungs, and we think it's time to move forward beyond this. And we look at the data today to build the market 10 years. We've helped tens of thousands of patients. We are building up U.S. KOL support. And we have this new data coming out will not be going to the children if we're worried about the safety of our products. So when I look at the future and the growth opportunity we look at for segments of our future. Number one, we're already approved for type one and type two adults in health, three will be using a new dosing with CGM and an upfront conversion for super excited about this data set as it also includes a head to head data.
I just mentioned GLPs will continue to be the bulk of the units there in type two diabetes are those patients will still need mealtime insulin, and we'll continue to promote Afrezza and video in that segment as our millions of people who require mealtime insulin over the coming years. However, in order to be a leader in type one, we need the data from inhale three to set us up for inhale one, which is the pediatric segment. It is when we do finally get that data. We know insulin pumps will be the indirect competition when it comes to a doctor a patient or the city making an educational decision for a patient. They want to know what Afrezza looks like against insulin pumps. We started that study within health rate.
We're excited to hopefully wrap up and have one and a few months here.
Once we see that data, we will have a one-two punch this year as we wrap up 2024. And now as people are starting to see the first dose data, we're getting questions on gestational diabetes. We think there's an unmet need there that we want to fulfill over time because there's only two drugs that can be used today, net forming, which crosses the placenta and slow acting injectable insulin.
And for anyone that knows and suffer from gestational diabetes, keeping your time-in-range really tight is critically important. I'm going to bridge over to the pipeline very quickly. Ntm nontuberculous mycobacterium with our qualified women suspension. Some of you may it may not be aware, but one of the competing products in Phase three had a pause this week enrollment and people ask. Why am I excited about our program and why am I confident?
Well, the reason we are excited is one when we purchased the product, it was preclinical data showing an improvement in bacterial recovery in the lung model that they use number two, there's wearable data. The product is approved today, indirectly through an medic market access program by the FDA and Novartis. So we see robust data being generated from patient taking capacity here in the US as well as Japan. Third, there's KOL support for this along with guidelines potentially. And finally, there's no near-term competition for trials now for patients as we look forward, we have 100 sites we're going to target across the world, and we see no other option really for these patients to roll besides the current drugs on the market hurricanes. So here's the design of our Phase three study called the ICON one study, which was designed post our FDA feedback along with the quality like group there at the FDA. We've taken their feedback within corporate dendritic design. That's 120 patients on the active arm and 60 on the placebo arm will do an interim analysis at 50%. And we'll continue to watch enrollments as we saw that the competing programmable route relatively quickly over the last six months of the year and last year into this year, and that gave us even more excitement for the speed of enrollment that could happen with this trial.
We're excited to get this trial going and we expect to file the IND here in March and kick off the trial in June as we've had a lot of dialogue with FDA on the trial design, and we expect quite quick approval on a central IRB.
That's exciting to us that this will be over $1 billion market with only two players in the next 5 to 10 years. We have the potential to be the second approved NTM product in the market research indicates we will be a potentially preferred option for patients, whether it's because of our favorable safety profile relative to Orla CORAL cafes and units that's utilized for the toxicities and tolerability challenges that some people face with hurricanes. We also know that how convenient dosing, what does that mean? 28 days of treatment followed by two months, all fall by 28 days of treatment.
So if you're doing well, you'll potentially be treated four cycles a year. It gives patients a large burden back from what they did every single day.
So where they are, we also know the current treatments are not highly efficacious and that patients need more options in order to keep this disease and control. It may be disease that goes away and comes back over time, but it's one that they're popular with chronically for a long time. We have an opportunity to expand a brand within the brand as we think about capacity in the future.
Next quick pipeline highlight I want to talk about is idiopathic pulmonary fibrosis two oh one. This is going to be known as nintedanib GPI. as we go forward.
Reason I'm excited about this program is our 28 day tox data was very clean. We know 80% of these patients die at five years. There's a huge unmet need in this disease state and open the market leader from marketed by bundling on and we have decreased risk relative to the landscape that has failed in IPF development because we already know this molecule works in IPF. What we do also know that there's severe GI toxicities, which limits patient acceptance and uptake and prescriber adoption is roughly 15,000 active patients in treatment in this country. And we believe bringing a more tolerable product that could potentially be dosed higher, be maximized in value for this population relative to what's out there today.
Additionally, our rat glioma study, a one appeared to mitigate inflammation and fibrosis comparable to oral the tentative at substantially lower dose as we go forward in our IND will be filed will be studying this into a one in our in our mix, but we'll be studying this in our Part one a single ascending dose as well as our multiple ascending dose to show can we tolerate higher doses over seven days. This will be an important study that gets done here in Q2 with data expected to read out Q3.
Our goal is to show lower GI side effects in safety and healthy volunteers.
I want to acknowledge as we go forward, the hard work that Steve has done in lending, our royalty financing deal. As we work on this for over six months. We're in a great position because of these vision and leadership over the last seven years.
Before I turn it over, I just want to acknowledge all the hard work Steve has done for us and our shareholders and our employees with that said, I'll turn it over to Steve to go over the financials for the quarter.

Thank you, Mike, and good afternoon. I'm pleased to review select Fourth Quarter and Full Year 2023 financial results. Please supplement this call by reading the consolidated financial statements and MD&A contained in our 10-K 2023 was a year of substantial revenue growth for the Company. In terms of both percentage and dollar growth, total revenues doubled versus 2022 and reached nearly $200 million. Let's break this down by starting with the fourth quarter total revenues. At the bottom of the table, our total revenues grew a robust 62% versus fourth quarter 2022 and 99% for the 2023, four year period, primarily due to the growth in our database ODPI. related revenue. Going back to the top of the table, you'll see that database or DPI royalty revenue for the fourth quarter was $21 million, which is 132% increase versus 2022. The result of continued growth in use of today's IDPI. for patients suffering from PAH and PHILD. Please note that $2.1 million of the fourth quarter royalty revenue was sold to a third party, and I will review the accounting for the royalty sale in a few slides.
Collaboration services, fourth quarter revenue was $17 million, which was an 81% increase over 2022 was primarily representative of strong pervasive DPF production volumes in the fourth quarter. For the full year 2023 Type ADPI. royalty revenue was $72 million, an increase of 361% versus 2022, which was primarily due to the increase in patient demand for the product and the start of commercial sales by United Therapeutics late in the second quarter of 2022. Royalty revenue has now become our largest single source of revenue, which allows us to fund and progress our clinical development and product pipeline, collaboration and services revenue for the 2023 full year period was $53 million, an increase of 90% versus 2022, which is primarily due to the start of commercial manufacturing in the second quarter of 2022. And the increase in production and sales of Type ACEPI. semi-finished product United Therapeutics in 2023.
Moving down the table to our endocrine business, total endocrine revenues were $20 million for the fourth quarter and $74 million for the full year. For the fourth quarter, Afrezza net revenue of $15 million compared to $12 million in 2022, a growth rate of 29%, which was mainly driven by a higher patient demand with underlying paid TRx growth of 29% year over year, a lower gross to net deduction as a percentage of gross revenue and price compared to the third quarter of 2023. It was a $2 million increase, which represents half patient demand and have increased channel inventory due to wholesalers purchasing an extra week of product in late December. This additional wholesaler purchase in late December would likely impact our net revenues for the first quarter of 2024.
For the full year 2023 period, 27% increase in Afrezza net revenue was mainly related to increased volume from higher patient demand with underlying paid TRx growth of 25%. Price and a more favorable gross-to-net adjustment. As a percentage of gross revenues, net revenue for V-Go was $5 million. In the fourth quarter of 2023, revenues were 13% lower versus 2022, primarily due to lower patient demand and higher gross to net as a percentage of gross revenues, partially offset by price V-Go net revenue improved versus the third quarter of 2023 by $0.2 million, mainly due to improved gross to nets for the full year period to 48% increase is primarily related to the purchase of V-Go on May 31 of 2022, reflecting a seven month versus 12 months comparative.
Next slide shows our revenue growth by source and basic earnings per share on a quarter by quarter basis in the first quarter of 2022 through the fourth quarter of 2023. Like to show this graph because it highlights how dramatically our business has changed in two years and how we are executing and expectations for the fourth quarter 2023, total revenues increased 14% sequentially versus the third quarter of '23 and are up 62% versus the fourth quarter of 2022. Fourth quarter 2023 total revenue of $58 million was almost five times the total revenues recorded in the first quarter of 2022 below the graph of our quarterly basic earnings and loss per share.
The fourth quarter was the second straight quarter with net income and positive earnings per share. As I stated on the third quarter earnings call, we are in a period we expect to bounce back and forth between earnings and loss per share as our revenues increase. But we will also be increasing our spending on our pipeline as we move MNKD-101 into a Phase 3 global clinical trials and MNKD-201 into a Phase 1 clinical trial. In addition, we will wait to see the results from the in-house three and then have one clinical trials for Afrezza before deciding whether to increase promotional spend behind that product. For now, we will continue to focus on growing the profitability of the endocrine business unit which has had a positive contribution for two straight quarters.
Moving on to our GAAP to non-GAAP reconciliation, I'll first focus on the fourth quarter, which is on the left hand side of the table, we had GAAP net income of $1 million, which when adjusted for select noncash items for stock compensation gain or loss on foreign currency transactions, which is related to our insulin purchase commitment loss on available for sale securities was sold portion of the royalty revenue and the interest expense on the liability for sale of future revenues, which I'll discuss in more details in a minute, provide for a non-GAAP net income of $7 million versus a 2022 fourth quarter non-GAAP net loss of $11 million for the full year 2023 period, we ended with a net loss of $12 million when adjusted for the select noncash items becomes non-GAAP, net income was $6 million, which is compared to a non-GAAP net loss of $78 million in 2022 and $84 million year on year positive change.
Now I'd like to take some time to explain the accounting that resulted from the sale of our 1% of our TV show DPI. royalty to set the stage, we saw 1% of our 10% royalty for $150 million, plus up to $50 million. More of certain net revenue numbers are retained within a period of time ending of September 2027. This puts a third party valuation on the 10% royalty of approximately $1.5 billion to $2 billion. After we announced the work the sale in early January, I heard back from investors that we could have done a better job explaining how we recognize this transactions in our financial statements and how we got to our accounting conclusions.
So let me try again first, we looked at all of the GAAP guidance reviewed all similar relevant transactions we could find in the last five years and they consulted with our auditors. The conclusion we arrived at amongst other things is that mankind has a continuing involvement in the generation of high base of DPR revenue through activities to protect the intellectual property of pervasive DPI. such as defending the patent estate, protecting the product and the continuing involvement in the manufacturing, the product for United Therapeutics. Thus, the upfront proceeds recorded as a liability for future sales of royalties, not as revenue. The table on the slide reflects how the accounting works. We record the cash consideration received net of issuance costs and the related liabilities for the sale of future royalties on our balance sheet to recognize interest expense related to liabilities with forecasted future royalties to be received through 2042 and calculate the return that would be needed when receiving a $150 million upfront payment for 1% of the royalty over this time period. This rate came to just over 11% in future periods, we'll continue to estimate the future royalty stream based on royalty trends, commercial success of Type ACDPI., competition for the brand and other meaningful inputs. The outcome of these future estimates may adjust the prospective interest rate used in determining interest expense and amortization of liability. Each quarter, we will charge our P&L for non-cash interest expense based on the interest rate and credit the liability. We also recognize 1% royalty as non-cash revenue and reduced the liability by this amount. In addition to the noncash attributes of this transaction, we also earn cash interest income of approximately $7.5 million annually. This slide shows how the accounting should work for 2024. If nothing changes in our forecast of expected royalties. The balance sheet would end 2024 with $153 million in cash and $153 million of a liability for the sale of future royalties. The liability balance will increase as long as the non-cash interest expense is greater than the non-cash royalty revenue, which is likely to occur over the next few years once the noncash royalty revenue becomes greater than the non-cash interest expense, assuming that sales of today's IDPI. continue to grow, then the liability balance will begin to decrease focusing on the 2024 income statement. On the right side of the table, we will record non-cash revenue of $10 million and cash interest income of $7 million, offset by non-cash interest expense of $17 million.
As discussed on a previous slide, we expect to isolate the non-cash aspects of this transaction and our quarterly GAAP to non-GAAP reconciliation of net income and loss with over $300 million of cash and investments on our balance sheet as of December 31, 2023, I want to share our near term priorities for using the cash to increase shareholder value.
First, focusing on our development pipeline, we expect to fund much of MNKD-101 and MNKD-201clinical trial expense over the next few years through operating cash flow. As these assets advance through clinical trials, we will prioritize their funding. In addition to MNKD. one or one and two a one. We have two clinical trials for Afresa nearing data readout. We will wait to see the results of these trials before deciding whether to invest more behind this asset to grow revenues.
In addition, we plan to do the following with our debt. Our MidCap senior secured debt has a balance of approximately $33 million as of December 31, 2023, and currently carries an interest rate of 8.25%. We expect to pay off this debt in the first half of 2024 to take advantage of the interest rate arbitrage between debt, interest expense and cash investment returns. And we lease our assets for mid-caps security interest Mann convertible debt with a balance of approximately $9 million as of December 31, 2023 is expected to be paid off early in cash or at a mix of cash and stock. By doing this, we will be we would be reducing future shareholder dilution. Our senior convertible debt with a balance of $230 million as of December 31, 2023 carries a low fixed interest rate of 2.5%, and we did not expect to buy back bonds prior to maturity in March 2026 maturity arrives. We expect to reduce future dilution by paying off the debt with cash by stock prices below the conversion price of $5.21. Additionally, we did not expect to access the ATM.
To summarize a very successful 2023, we doubled our total revenues to almost $200 million versus the prior year fourth quarter was a second successive quarter for positive contribution from our endocrine business unit. Q4 was the second successive quarter of net income for the Company. We saw the worst and interest in our 10% time-based IDPI. royalty, which values the royalty stream alone at between $1.5 billion and $2 billion. And we ended 2023 with $302 million in cash and investments. 2024 should be another stellar year for MannKind as we are financially trying to drive our commercial and clinical priorities and deliver increased shareholder value.
Thank you, and now I'll turn it back over to Mike.

Thank you, Steve.
I appreciate the explanation of the accounting. I never want to know that I appreciate you So next slide.
So MannKind has been around 33 years. I want to give a special thank you to our founder who passed away eight years ago to on February 25, the reason that's important today, I decided to join MannKind and our forever be grateful for our man. He was a special human being who cared about society, our patients and making a difference. We have the foundation he left us within 2016.
Can we build this into a major self-sustaining growth company against the law? When you look at the history from 16 forward, we announced our United Therapeutics collaboration. We acquired Coram, which in our Phase three asset with qualifies me to MannKind one-on-one. We purchased V-Go, which made our endocrine division more sustainable and brought a couple of thousand new prescribers and Tyvaso DPI has been ahead of all expectations since its approval. As I look forward, we are just getting started expected 2024 milestones alone between Afresa and the study readout. Mannkind one-to-one MannKind to I want not to mention the case of DPI., which has two major trials going on to Tom, wanted to turn to what triggered this.
This week were 70% enrolled.
Once they finish up enrollment will have 12 months there.
We should expect to see data from United Therapeutics.
Additionally, our team just this year, they completed the high-speed fill finish line in terms of a qualification. I will now be going into PP. two, hopefully producing much higher lines of Tyvaso well, that line as we exit Q1 going into Q2.
As I look at our future, we have several key value drivers.
As you can see, our insiders picked up some stock in the last few weeks post our Board meeting because we believe we're undervalued and we're very confident in our future analysts have expenses in for our pipeline, but no revenue in the next five years. We think this is an unfair valuation of our Company, given that we do expect to launch capacity in the next five years and move and TM I'm sorry, I moved to the IPF asset in terms of MannKind to a one in two patients and then hopefully into Phase 3 by then we go back and look at another successful company in time. Intermune for certainly valued at $800 million. One point in 18 months later was $8 billion once they got a positive data readout. Our job is to not react or overreact day-to-day to swings in the stock market, but to lay out a firm foundation for future growth. And as we look out there, whether it's the pipeline with MannKind one-to-one, every thousand patients is approximately $100 million in revenue to a one we're going to start patients those nurse think about IPF every thousand patients was roughly $150 million in annual revenue. And then we get into TVs or DPI., which as you can see this past year was when you add up the collaboration services revenue and additions that have royalties, we do have those roughly 5,000 patients on Tyvaso DPI, and that's about half of the $250 million revenue that we experienced this past year and the endocrine side, we have several major upcoming opportunities within health one and then held three as well as Afrezza international V-Go is being managed for improved profitability as we continue to focus on improving our margins by reducing COGS as well as improving gross-to-net. As we take a step back, we have multiple shots on goal to create significant shareholder value across three commercial products. When you think about Afrezza of SIDPI. V-Go, they're already FDA approved as well as two assets coming up quickly in the pipeline between MannKind one oh one into oh one, we have multiple shots on goal within these assets.
We are completely focused on delivering shareholder value sustainably for years to come.
We have several upcoming presentations and engagements at conferences.
I'll be doing non-deal roadshows with Steve over the coming months to get the word out as we feel like mankind as at the best inflection point with the best team in the industry, cash in the balance sheet and multiple shots on goal in terms of data readouts to drive future growth.
We're super excited about our future, and I will stop there and are ready to take questions.
Thank you again.

Question and Answer Session

Operator

(Operator instructions) Andreas Argyrides, Wedbush.

Andreas Argyrides

Great.
Thanks for taking our question. Congrats on all the progress on just the maybe two for us here quickly, despite an evolving competitive landscape in PAH and ILD. Sagard royalty puts a $15 billion valuation on TIBCO GPI., a key component to DPI.'s advantage, the ease and convenience of a low resistance advice compared with other high resistance devices.
So the question is, could you elaborate on the differences with the DPI. device compare with the competitors and how that plays into DPI. safety and efficacy profile? And also, how do you see the DPI device playing a key role in the delivery of nintedanib in IPF Thanks, Andreas.

I wish I could a second question. Can you repeat that one?

Andreas Argyrides

Yes, sure. So go back to the advantages of the DPI. device. How do you see it playing a key role in the delivery of nintedanib and IPF or mostly from a delivery and a safety perspective?

Yes.
No, I think that's what gets us excited raises. I followed that question. First is when you think about our platform, it's the same device being used in the same audience that we're currently moving forward, an orphan lung disease that United Therapeutics is also using, right?
So the familiarity of the training, all that and the comfort of bringing inhalation into this patient population with our current technology gives us that much more confident because most of the powder is our novel excipient FDKP. So if they can tolerate that in the PH market and we know some of those patients overlap with ILD. as well as IPF. That then being able to show that our powder at 99% FDKP. should be able to on tolerated in the inattentive as we go forward. And so far, the animals, single-visit dissolution and all that looks positive. We're doing a chronic tox, and we'll have that done by the end of this year. At the same time, we get Phase one. So I think this year, but then it should feel like it's even more diverse than it already has given us an own asset and a known technology, and that will be a positive contribution for there.
On the other side of the equation, you're asking me how do we differentiate our platform I think, you know, our powders are built to fly with our devices. They're going hand-in-hand.
We're not taking it a novel powder and thrown into an off-the-shelf device.
I think that it's about that deep lung penetration.
It's about the velocity of those patterns are coming out and how consistent and deep lung penetration you're getting across the lung, the bed.
And so I think that's number one.
Number two, we know that the powder we need is very low because we've prior prior payable records of filling the smallest volume for the 60 microgram always the 64 microgram or higher. So as people want more, they don't need to inhale that much more powder to get additional effect size, which should help on cost. But should help on resorption as well as just safety. When you think about and a lot of FDA questions on hormones and devices and asthma, how to use steroid use these are questions that come up with the FDA. And it's really important, right that there's not excess powder come around, especially when you get to these narrow therapeutic drug and you want the proper dose delivered with minimal powder containment on happening. It will cover exhibit X extraction happening outside of the cartridge itself.
These are all important things that come up.
And I also think patient satisfaction is very high in the trial that UTi ran phone and Pivotal and us. We also know from thousands of patients we've studied Afrezza in the device is relatively easy to use from four years old to profit 80 years old. And so those are just the well-known comfort, the dosing and the consistency of those will be important factors as we go forward.

Andreas Argyrides

I appreciate that.
I'll jump back into queue and congrats also on all the progress.

Operator

Thank you. one moment, please.
Our next question comes from the line of Olivia Breyer of Cantor Fitzgerald. Your line is open.

Olivia Bryer

Hey, good afternoon, guys. Thank you for the question. Can you talk about how NTM fits into your strategic priorities just as you grow into a more mature company and there is some competition in the space, although maybe less of these days, as you pointed out. So how should we be thinking about where MNKD. one oh one could fit into the treatment paradigm. And last question is just can you remind us on what the timelines are for expected enrollment and data readouts there. Thank you.

Sure, but I think there's a couple of things that help fits in the company. The first will be a decision on licensing outside the US, so we'll run the trial in key countries where NTM exists, but we may choose to partner out Japan, for example, where we saw in demand went independent and we have made those decisions. We don't have to make those decisions. We aren't looking for partners talking to partners, but it's up to us, and we're a little bit in control of that process there in terms of how it fits.
In the meantime, I think there's core capabilities that we have today around reimbursement support, patient training and how do you treat Specialty Products and Distribution, things like that that we have that will be applicable to the NTM space.
And then when you think about where it fits into the treatment regimen, there's two points there. Number one, we're going after the refractory patients first. And in that population, right?
The only drug approved is our case. And we think there we have a significant clinical advantage as well as the convenience advantage that we should build displaced or grow that market opportunity very quickly as we enter it on.
The other part is we are actively working on a dry powder version of clofarabine. And we expect that that will be used for naive population, so that can be used earlier lines of treatment.
So we do intend to cover early and late stage and that's one of the benefits of being where we are as a company is when that opportunity presents itself and we choose to want to fund maybe a second trial at that point we can decide and part of that will be how fast is the Phase three enrolling for India, the refractory population we look at and to have the lead example right. They've got about 180 patients in 15 months. And so that's about what we need. So if you really think about where we are today, 15 months from now we could be fully enrolled, but we only need half of that population to do our interim analysis. So we hope to have that interim analysis sometime in the second half of next year. And then we would just be waiting for the full patient population to get there in order to hopefully file on six month data.
And so that's our that's our goal with the primary endpoint at six months.
And when you think about the grand scheme of life, we're not that far away from hopefully kicking this trial here in second quarter and more importantly for senior next year. At this time, we should be and quickly enrolling halfway if everything goes as planned.

Operator

Thank you.
One moment, please.
Our next question comes from the line of Steve Lichtman of Oppenheimer & Co. Your line is open.

Steve Lichtman

Thank you. Good evening, guys, and congrats on the progress of just level setting into a TTD., what is the data exactly that we're going to see there? I know we'll see the 17 week at this on inhaled three excuse me. What I know we'll see the 17 week at ADA, but what what's the anticipation at ETTD.?

Yes. So we have a presentation there by agro Hersh, which will be the first dose on the meal tolerance there.
And Steve and I think that will allow us the opportunity to obviously have a presence on a podium there in front of everybody, but I'm sure he will be presenting some of the data and rationale why Afresa deserves a more fair chance in treatment. And he'll show that first dose data and that will be the primary focus there as you know, it's a technology conference with lots of innovation, and that's really a type one community and that comes from there. I think the other part of this is starting to talk about do you go to Europe, for example, is there another opportunity once we see the full dataset to expand to other markets in a meaningful way? And so zone that were there for that reason as much as anything in terms of showing the data, meaning global thought leaders.

Steve Lichtman

Okay.
And then just on the endocrine business in general, I know you've been balancing growth and profitability. And you noted in your prepared remarks, you're optimizing the sales force footprint. So I guess are you are you been reducing the footprint being more strategic there. You've talked a little bit about what you've been doing and then what are the range of commercial investments you would consider assuming positive outcomes in inhaled three in one and two, would you add more to the sales force would be something else things?

Yes, I think on the sales force footprint, you have to rewind back 18 months when we bought V-Go in May of '22, we dedicated roughly 2025 FTE.s to that brand alone.
And one it was on a two year decline not being promoted and we had to stabilize it.
And two, we didn't want to disrupt the Afresa field team. So we held We held overlapping expenses for quite a while.
And both of those businesses. And really our focus going into July and January this year was a two-step process around integrating V-Go into our commercial footprint on Afrezza. And then the second step was integrating the sales force into one voice one team and that took place in January of this year. There were some headcounts that were freed up as a result of that process. And we reinvested some of those headcounts into the field reimbursement support, the training, Tom and the the key account managers.
We think the key account managers critical as we go into pediatrics and academic centers. That's not where Afrezza has been widely adopted.
So the first step is getting the key account managers to make sure we stabilize those big accounts. And then the second step will be hopefully filtering in from reps underneath them so they can maintain accounts or grow accounts day-to-day, while those key account managers take on the next group of accounts and get us ready for peak. So we have a multistep process here. It's not going to happen overnight, but the first step was getting the one field field footprint, one voice with one team and one new marketing campaign, which we're actually rolling out this week.
So I think the team will see that we've invested a lot in training and we have a couple of field trainers.
Now Tom spent, and that's going to be the number one focus this year is can we grow after that? We have been with the current footprint and the current infrastructure you put around that footprint and that model's working, I think we'll have conviction to go ahead and expand that model further bigger to easily add 50 to 100 more people. I wouldn't really do that until we saw groundbreaking data and that some of our current models working with KOL support from, I think the number one thing that the data will be the KOL support around that data because we have to be able to penetrate the academic centers, which are very pumped based. And I think that the pump data within our three is going to have to hold up in every objective way in terms of producing highs or reducing lows or improving a what's your timing range versus what are the data? It looks like it's going to be very compelling for us to be willing to spend money and that compelling our investment will be commensurate with the data and we're not going to we've been through for a long time. We're very excited about the day. We love the product, but we have to be objective around our investments and our ability to drive success, and I think the data is going to help support that.

Steve Lichtman

Understood.
Thanks, Mike.

Operator

Thank you. One moment, please.
Our next question comes from the line of Gregory Renza of RBC Capital Markets. Your line is open.

Gregory Renza

Hi, Mike and team and finish on for Greg. Congrats on the quarter and thanks for taking my questions. I just wanted to parlay some questions on inhale three there. How should we be thinking about clinical bars for HBA 1C over the 17 week period in June? And then just considering real-world translatability of the trial design. Maybe if you can just remind us on the foreseen pushes and pulls for getting patients to switch between injectable insulin or pumps to Afrezza.

Thanks again, I think the first question I had was kind of the non-inferiority margin maybe in a health rate between the two arms.
And I think that the 0.4%, which was consistent with our pivotal trials with type one. And so that was those trials were done with a different conversion. And so we're hoping one of the as you saw in those trials was we got to the right dose. It just took 12 weeks. We're hoping by starting at a better risk upfront. We have 12 more weeks of benefit, and we saw the other part this year, if you may or may not recall this, we did a small study called ABC., which was there pilot trial on 25 patients to show, could you switch off an insulin pump? How do you adjust the basal and what happens over to 12 weeks for that study? And that study give us a lot of insights on things. We have to correct for this larger trial before we spent the money and, for example, a once-a-day titrated basal very well. The other side, we learned that they could be a little more aggressive with our basal titration. And so those are the types of things we tried to get more guardrails around this trial to ensure proper titration proper conversion. And obviously, doctors now use insulin pumps. And so that we're delivering we saw in the original trial was another manipulated pump very well because the doctors use pumps all day long where Afresa was due to that. They didn't know how to use it to its advantage in terms of dosing and no follow-up dosing, if necessary. So we kind of feel pretty good about the trial design. The controls within the trial to now is to wait for the data so that that gives you some perspective there. So we didn't design it for superiority that will be secondary endpoints that we'll watch out for.
And then your second question around how do you think about this from a more world of the existing with pumps and pumps and physicians, and I think it comes down to patient motivation. At the end of the day, I think we will have KOL support. I think we will continue to see guideline support that we saw some updates this year in the standards of care for Afrezza and people are starting to understand the lower rates of hypoglycemia, the better time in range. And you're saying they want a real-time acting insulin as they've kind of adjusted every IT system and pumped together.
And what's next and what's next is really tightening control even further, and we're the best tool to help that. And so that's a lot of what we're talking about is how do we look at data on Afrezza on top of pumps potentially. We know that's an FDA challenge. We're also thinking about GLPs. And if you still have mealtime popping on GLP's, do you add Afrezza to those populations?
So we're starting to look and say, if we were to get positive data on an L. three as an early readout and we anticipate and want to look good, then what's the next leg up that we should really start exploring for more continued opportunities for Afresa. And we think about it. It's the pump market is the pediatric market, the decisional diabetes market, GLP market there's a lot of niche areas that are quite large that we think this brand can grow pretty rapidly over the coming years relative to it in the last five years.

Gregory Renza

Great.
Thank you so much.

Operator

Thank you. One moment, please.
Our next question comes from the line of Oren Livnat of H.C. Wainwright. Your line is open.

Oren Livnat

Thanks. I got a couple one questions. Can you just help us better understand on how you arrived at the AGM pivotal study, sample size and powering? What's that based on and done with regards to the PRO endpoints. I guess since that's a new subjective endpoints in this space, what is the bar there? What does it need to look like a pretty effective competitor as you can have a follow-up at Barneys.

These are two great questions that I think the biggest challenge to developing products for NTM. And that's why I think you're going to see continued Tom black of investment because you have to be to have enough capital to go through with it. In the case of Wyndham over spent many years building out the space and working with the FDA as well as the patient communities. And we know that the physician K-12 population really wants call Pfizer, you know, the patient population really wants Coface mean so and even FDA will say has been nothing but collaborative along this whole journey for five years and come back with them, Coram. So I think the market forces are aligned to help support us with the wind, the wind in our backs to push us forward and then you get into the risks of running these trials. And I think the reality is there are risks in this population. But given the efficacy on a on Copaxone, we estimated about a problem think a 20%, 30% effect size delta between us and placebo. And that's going to be the interim analysis to see. Are we on track for that or if not, we might increase the sample a little bit. That's number one.
The second part of the PRO.
We went back and forth with the FDA for years, not just months on the PRO endpoint, the PR division and the feedback from the PR division for two reasons one, we weren't comfortable running a placebo-controlled trial, given that you can pretty much know what the active arm is. And we think that makes the PRO a difficult tool. And therefore, we tried to make it a secondary endpoint. The FDA was insistent should be a primary or co-primary endpoint. And so around that around the long story short, we landed where we did, which is a co-primary endpoint with the understanding that this is a little bit of a risky Tom endpoint, but that they agree, we've done the best we can to create the baseline measurements and the improvements in those key measurements that we've aligned to with the FDA and that the efficacy is going to have to matter in terms of sputum conversion as much as the PRO tool by itself. And so I'd just like I know I listened to the call, I mean what they're going through with FDA. We've had a lot of those questions. We work with them, and we've got a lot of their feedback already incorporated into our trial design. So now it's about the data and then what happens with the that data and how you analyze that data once it comes in, I'll be really important. But again, we'll work very closely with the FDA as I think they understand where we are they understand the pros and cons of that resident keep debating it. We thought it was more important to get the data and help get this drug across the finish line.

Oren Livnat

Okay.
And just so I'm clear on your going based on some close hasn't been experienced efficacy wise. And are you assuming an improvement on that with your powering assumptions or even being conservative on that.

Now I think when you when you look if we got into naive patients, we think we'd see a much higher efficacy rate.
But because we're focused on refractory. We think it will be a little less obvious in naive patients. And I think you saw that the MTRK. stated out there. There's only one study to really judge NTM endpoints on and that's therapies. And so I think when you go back in their development program, they had a 23% delta between the control and there is I am not sure they had a placebo to go back and double check the data. And so that's some of the work that we were going back and forth on is incorporating the placebo could have a placebo effect. And how much more do you have to be in highly powered trial with that potential risk. And that's a lot of back-and-forth with FDA.
So we've done the best we can.
We'll have an interim analysis. We think that's the most important aspect that we will get to in this trial. But assuming that's on track and we feel very good about the it up this trial to bring this to patients very quickly.

Oren Livnat

All right.
And then just with regards to the TEMSATPI. situation, we're seeing a lot of headlines with regards to potential competition and lawsuits. I'm sure you couldn't or wouldn't comment directly on anyone else's litigation but if you are willing, I'm curious if you're able to comment on whether your orders coming into this year and your efforts there.
Inventory our manufacturing capacity expansion on reflect I guess, any possible assumptions or risks around competition? Are you like potentially waiting to do anything or is that pedal to metal pedal to the metal, so to speak on that front?

Yes, on the Travatan DP., I mean, we are making as much as we can around the clock.
Nothing slowed down there and we know we wanted to build up inventory as well. So between the demand and the current mill we can manufacture, there's no slowing down where we are with Thomas IDTI. in terms of a competitor coming I mean, we've been hearing about this for years and whether it was the higher dose that was the indication everyone's been telling us about was just going to get approved and when we did get approved, then you're going to have ILD.
We've got IoT.
We've been very honest with the market ever since this drug was under review and everything we've said has come true rate. We said we would expect ILD.
We've got IoT.
We said remanufacturing remanufactured. We said we have nice conversion that's had a better conversion anyone expected. So from my perspective of SIDPI. is delivered on all parameters above and beyond expectations, despite an under forecasted launch, which put a lot of pressure on MannKind, and we did not miss one b. to make sure every patient at every day supply. And we did a lot. Our team worked incredibly hard this year to make that happen. We had record production in Q4 and we'll hopefully have equal record production in Q1 and even more production in Q2. So um, you know, if you looked at their store. They were after ILD. as their differentiator for some reason, and I'll be honest, if a patient can't tolerate the drug hunter file D, I don't see how their accelerators, which has three or four times more powder, if I recall. And so it's really about the patient tolerability. It's about the titration. It's about the powder load. It's about how you approach a patient treated patient, all these are really equal the important things. And anytime you launch a new drug, you find things out as you go along and you're modifying your go forward. And that's pretty much what I think I hear you T2S, as previously discussed, strong. It's to a great and NILD. as much as page what I heard from their call, our conversation with you to continue to be very positive. And I do want to mention another thing or in Japan so far is okay with the sputum conversion. So we'll do one trial on MannKind, one to one for Cliff, as I mean in terms of US and Japan will be one global study, but we'll cut the data two different ways. One for Japan for Steve and two primary for the US are co-primaries. So that will be an important aspect that we did struggle with the FDA saying why are you the only country in the world? It wants this sputum plus PRO where we don't have the same demands yet in the other countries around the world.
So that's why the sputum you still got to kill the bug at the end of the day, and I think that becomes king in this disease.
And can we do that really well, there's two questions how the PROs will work out. But when you look at the labels of PROs are not really strong claims at the end of the deck. So I still think efficacy is going to matter in terms of you have conversion.

Oren Livnat

Okay.
And I look forward to talking to Steve some more about this accounting if they have that conversation.

Yes, thank you for a moment, please.

Operator

Thank you.
Our next question comes from the line of Thomas Smith and Leerink Partners. Your line is open.

Thomas Smith

Hey, guys, good afternoon. Thanks for taking the questions and let me add my congrats on the progress and just a couple on our end.
I guess first on and KMNKD. one, the inhaled nintedanib program.
You just walk us through your expectations for the Phase one data in Q three and how quickly you think you could turn this around it and advance it into a Phase two trial in IPF patients. And then just remind us how you're planning for clinical supply and scale on the Tier one?

So on of the Phase one study, because it's a pretty quick study.
We were actually were doing going to do of IPF patients. It was the FDA who pushed us to consider healthy volunteers. So we actually switched from of the IPF patient to healthies, which saves us a lot of time and money. So that's number one. So that turnaround time should be pretty quick.
In terms of wrapping up Phase one and filing an end-of-Phase one meeting with FDA, hopefully by the end of the year.
And then we're having good discussions internally.
We just hired a new gentleman. I talked to our team who will be pivotal in building our development program beyond Phase one four to a one. And we're having good discussions internally. For example, we do a Ib study to get there sooner in parallel, while we continue to wait to kick off the trial for for the next phase, is it a two study going into a Phase three, so that work is happening as we speak. And I don't want to prematurely guess where we land, but just like capacity where we've pushed to not do a Phase two trial, one could argue that that's a little risky at the same time. We know these drugs work, we know the approximate dose we're trying to go after. And we know that that dose has produced a signaling effect that we expect. So on the case of tool one, we actually wanted those higher, and that's really the chronic tox data in Q4 to help support the higher dosing and assuming a patient can tolerate a higher dose, we think that's going to be one of our clinical differentiators for Tier one. So that will be the things we look for in the trials, can we dose higher is a tolerable and down? Do you have any of the GI. side effects that we see with the oral formulation?

Thomas Smith

Got it.
That's helpful. And then just on the on pipeline strategy and the priorities here. You obviously have a lot on your plate across the in-house studies for Afrezza and the cliff as I mean, the material one programs, but now you have the financial flexibility. I'm just wondering if you could talk about how you're from thinking about balancing external business development opportunities versus advancing sort of the internally derived candidates on your platform?

And that's a great question.
I think the team is bursting at the seams and everything we're doing today and the good news is we have a great team is working extremely hard to make sure we get these INDs and to get them and he'll want to three study wrapped up and so from a financial flexibility, people don't realize we probably spent some in exact numbers, but over $30 million between inhaled one and then held three between people and trial costs but those trials are wrapping up this year going into next year.
As you think about Coface, I mean, there will be a little bit of overlap with the one to one but these other trials wrap up. And so you kind of see that phased in people also missed that. We have been funding tox trials and other data sets in R & D over the last couple of years on one, I wanted to have one as well as them final one. So there's been other investments in our data aren't as transparent. You don't talk about them as much. But again, some of those are ramping up and those those extra funds will be used to fund the Phase three trials. So I think we have the financial flexibility to ensure that if we can't funded out of cash flow generation that we are today that we have the cash on the balance sheet if we needed to. But our goal is to continue to run the Company lean like we have been and not get too far ahead of our skis until we continue to show consistent delivery as we go forward. I'll Steve, unless there's anything you want to add some there.

I know, Mike, I think the other original question was also around BD versus internal. I think you're exactly.
Yes, we're going to focus in on the internal priorities that we have. And if opportunities come along, we'll certainly assess them. But the focus will be internally first.

Yes, and then on the BD side, we get lots of inbounds these days.
We're just busy. And so if we see something compelling, we'll look at it, but we're not actively trying to pursue anything we want to work with what we have and maximize the value what we have on our plate right now.

Thomas Smith

Got it.
That makes sense, guys. Thanks for taking the questions.

Operator

Thank you, Ramon, please.
Our next question comes from the line of Anthony Petrone, Amazon retail group. Your line is open.

Anthony Petrone

My thought Thanks for squeezing me in here and congrats on a strong result. Also condolences on Alfred Mann passing to the team.
Maybe Steve, a couple on TV. So just the royalty agreement, just high level, why why was 1% sort of the right number. So Arne's point that potential competition. So what was the calculus and settling on 1%? And can you is there an option to further monetize high base of royalty, you know, under scenario maybe where you want to fast track one to one to a one or even add to the portfolio for future growth investments would you consider monetizing the royalty further as a source of funds? And then I'll have a couple of follow-ups on on diabetes for Mike.

So Anthony, it's Steve. So what we did is we looked at what the value was for the Type A., so royalty in a very competitive environment. We had originally over 25 different purchasers come to the table and we wanted to keep a vast majority of the royalty to MannKind. So we thought 1% was right to get to about $300 million on our balance sheet, which would fund, not only our pipeline, but put us in a good position to fund the convertible debt when it matures in 2026. So yes, we can further monetize the royalty if there was a need for it, but we don't it could have a need for it at this point.

And Steve, I'll just add two things on your question for the thing that drives royalty valuation is interest rates and the calculation you're using for expected interest rates.
And so over time, if interest rates come back down, the overall value of this royalty may go up even further, even as from the sales came off a little bit of trend for some reason. But we think that when we started this process, the royalty rate was not transparent to the public when you look back in June, July of 2023, and we wanted to bring value to our company around what is 10% of the royalty worry because we thought man and valued. And that 10% fell the right way to demonstrate that clearly to investors in the meantime, and we're midway through that process you to disclose the royalties. We didn't have to kind of work around that issue, number one. And then number two, the interest rates are high and that does create a bigger discount factor into that future cash flow. So those are things going in our favor, hopefully over the coming years.
And the thing about a competitor coming, we know there's about So X percent converted from nebulizer to DPI. However, if there was another competing product out there that may help drive more adoption. And earlier adoption of DPI. which indirectly may help us right as you think about the future. So we're pretty bullish on DPI. and whether there's one or two players out there, it only helps more patients that can hopefully use the product more in earlier lines of treatment as well. So that's kind of how we looked at it. And we're we think MannKind's indirectly benefits as more competition does come to initiate that.
And just on premium and health-oriented hail one, just from a combined outlook there for Afrezza, when you think about using Fraser with automated insulin pumps and then the pediatric indication just kind of level set again from from MannKind standpoint, you know how it's looking at those two opportunities from a market expansion standpoint for the product and actually which of the two indications are you most excited about you think you get faster traction in pediatrics or would it be in the combination use? Thanks again, and congratulations. It's not like you. I think the challenge with adding your presence on top of pumps besides the FDA, I'll just put that out.
There is really the need that a patient sees and are they've always going to carry all this extra supplies with them and we use it on special occasions that use when they get home, it's not a full-time patient when you think about that value.
And that's one of things.
I think I've seen when people used to criticize our refill rates. So we knew roughly 20%, 30% of our Type one use Afresa intermittently, which kind of hurts your refill rates, right? And then we know type twos or compliance we want to be. So that's why it's so important to make sure that we are a front-and-center choice for patients who have mealtime control for one, improve their A1c. As we look out there, can we improve A1C? Can we improve time-in-range, that's we're hoping to see with these new trials versus when we got approval was just to show and the drug is as good as standard of care. And we think that's good enough for peds approval, but to cause an inflection, right, we want to show that hopefully, you're improving something on the product.
Yes, which is going to be more critical, I think in health one will be the study that causes Afresa to become the next standard of care. And what I mean by that is, can we grow faster by putting more people out there, more marketing, more advertising?
Absolutely. I think we can.
Is it going to be an inflection point that looks like a rocket. I think it's going to take another launch into a new market. And the good news about care, there's only about 500 doctors in the country that are meaningful, Pete endos and mostly academic centers and they're mostly about 40 50 centers in the country. And when you think about the study, it's only 40 centers in the US. So we are covering a majority of the key academic centers in this trial. So they will have first hand experience once the results are unbilled or finalize, at least until we kind of really make sure could you go faster by taking on a global trial.
Absolutely. But we thought in order to have a major inflection, you better have the right experience with conditions of the year. And that's really what we're doing unfortunately, we cannot go against pumps in that trial. We wanted to, at the time switch off in foam pumps and include them the FDA would not allow us and that's one of the reasons we kicked off in health careers. We felt that once we did the ABC. trial, it would seek to switch people off insulin pumps, new FDA agreed at that point that we could add that to the trial. But a bit of bolt-on, we change and I want to get all three Arby's wasn't worth the distraction and so we feel very good about where we are in a one-two punch with that and how was announced.

Anthony Petrone

Appreciate that.

Operator

Thank you.
I'm showing no further questions at this time. Like to turn the call back over to Michael Castagna, CEO, for any closing remarks.

Thank you, Valerie, and thank you all for the analyst coming and look forward to seeing hopefully a couple of UATTD. also will be on a non-deal roadshow of in some key cities meeting with our investors. And just want to say thank you to everyone. It's been a great year so far. We're super excited. Everything is off to a great start, and we're looking forward to making 2024 another record-setting year. So thank you again for everything, Steve and Dave and everything else. Thank you for all the work everyone's doing. Have a great day.

Operator

Thank you. Ladies and gentlemen, this does conclude today's conference thank you all for participating. You may now disconnect. Have a great day.