Start Time: 17:00
End Time: 17:43
MannKind Corporation (NASDAQ:MNKD)
Investor Conference Call
February 03, 2016, 17:00 PM ET
Matthew J. Pfeffer - CEO and CFO
Dr. Raymond W. Urbanski - Chief Medical Officer
Rose Alinaya - VP of Finance
Cory Kasimov - JPMorgan
Keith Markey - Griffin Securities
Joshua Schimmer - Piper Jaffray
Jay Olson - Goldman Sachs
Ladies and gentlemen, thank you for standing by. Welcome to the MannKind Corporation Conference Call. At this time, all participants are in a listen-only mode. Later, instructions will be given for the question-and-answer session. As a reminder, this call is being recorded today, February 3, 2016.
Joining us today from MannKind are Chief Executive Officer, Matthew Pfeffer; and Chief Medical Officer, Raymond Urbanski.
I’ll now turn the call over to Rose Alinaya, Vice President of Finance for MannKind Corporation. Please go ahead.
Good afternoon, and thank you for participating in today’s call. Before we proceed further, please note that comments made during this call will include forward-looking statements within the meaning of Federal Securities laws. It is possible that the actual results could differ from these stated expectations. For factors, which could cause actual results to differ from expectations, please refer to the reports filed by the company with the Securities and Exchange Commission under the Securities and Exchange Act of 1934.
This conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, February 3, 2016. We undertake no obligation to revise or update any statements to reflect events or circumstances after the date of this call.
I now turn the call over to Matt Pfeffer, our Chief Executive Officer.
Matthew J. Pfeffer
Thank you, Rose. In addition to Rose, I’m also pleased to be here with MannKind’s Chief Medical Officer, Dr. Ray Urbanski. We plan to use today’s investor call to give a deeper update on several aspects of MannKind’s business than we had the time to go into at our recent JPMorgan Presentation.
For the first time, we’ll also be answering questions submitted from our retail investor community as well as answering live questions from covering analysts. As Ray and I provide updates on various topics today, we will answer many of the questions submitted related to that topic.
In addition, we will post an Investor FAQ on our Web site as soon as we can for the call with information we are able to share to answer as many of the hundreds of questions submitted as possible.
To begin, I want to reiterate my key messages from JPMorgan. First, the company is moving forward with renewed vigor and excitement. Afrezza has our unequivocal support and we are committed to its future. Technosphere remains the foundation upon which MannKind’s future will be built and Ray will be talking in much more detail about that in a few minutes.
In the JPMorgan presentation, I promised three things. First, you will hear about a Technosphere partnership and subsequently we announced our collaboration and licensing agreement with Receptor Life Sciences on January 21st.
Second, that MannKind would promote more open and transparent communication. To that end, we published a frequently asked questions or FAQ document on the Receptor agreement to answer many of your questions and I’ll be answering more here today. We’ve also begun using Twitter and Facebook to communicate the very positive feedback.
Third, I said that I would hold an Investor Call before our earnings call and that is what’s happening here today. In addition, we introduced the concept of MannKind 2.0 at JPMorgan. I’d like to elaborate on that briefly.
The main things I’m working toward under MannKind 2.0 umbrella are a strong sense of urgency, improved communications, creative problem solving and a focus on execution. I can tell you that our employees, investors and business partners have embraced this attitude, and I strongly believe it will reflect in our results as we move through 2016.
Now let me turn to an update on Afrezza and the transfer of rights from Sanofi. The transition teams have been formed and include operations, scientific and legal personnel from both MannKind and Sanofi. The teams have met and begun discussions about the complex process that a transfer like this involves.
MannKind is targeting April 5th as the transition date of the license to develop and commercialize Afrezza but we may request that Sanofi agree to a later date. There are many factors that influence when the transition will occur including a myriad of regulatory, commercial and development activities many of which involve third-party vendors, our regulatory authorities and out of which needed to be transferred in a smooth and coordinated fashion.
As our transition teams work through these various issues, the top priority is to ensure the continuity of supply of Afrezza for patients. Until the transition officially occurs, Sanofi retains all rights associated with the distribution and commercialization of Afrezza including marketing and sales responsibilities, study management, regulatory filings in the U.S. and in foreign jurisdictions.
In order to clear up any misconception until the transition is complete, MannKind will not be promoting Afrezza neither can we affect any change in sales strategy, pricing or negotiate with peers. MannKind is also unable to make any regulatory filings including filing for approval in other jurisdictions until the NDA is transferred back to us.
When the transition agreement is finalized, we will issue a press release and expect to address questions in an Investor Call. Please know that the Afrezza transition is MannKind’s top priority and is getting the full attention it deserves.
We’ve received many questions about Sanofi’s actions during the launch and how they marketed Afrezza, and MannKind’s response were the results we saw as we progressed through 2015. As I’ve stated previously, we learned many things in 2015 and those lessons will benefit us greatly as we look forward to launching our own strategies this year.
Regarding clinical studies, many of you know that two of the studies required by the FDA has post-approval commitment have recently been completed. These studies analyze the kinetics in glucose lowering activity of Afrezza in one study and inter-patient variability in the other study. I can tell you that the result of both studies were positive with full data expected to be presented by MannKind at the American Diabetes Association meeting in June of this year.
Because the American Diabetes Association or ADA meeting is such a prominent platform, which disclose scientific study results, they require no preannouncement of results by presenting companies and so we will not go into more detail regarding those studies here except for my comments that outcomes are quite positive. Required pediatric study is also underway and that too will transition back to us from Sanofi along with everything else.
I’d now like to turn to the future of Afrezza under MannKind. MannKind is looking at other potential partners, which may see Afrezza as a value-added addition to their portfolios. But in addition we’re putting plans together to market and sell Afrezza ourselves and have initiated a search for seasoned, smart executives to run our sales and marketing efforts.
We’re also evaluating contract commercial organizations that can provide the necessary services as we build or in lieu of our own commercial infrastructure. I expect to update you on the status of these efforts in the near future and look forward to publicly disclosing more details on our sales and marketing strategy, as we are able. But I can tell you that regardless of whether we take on another partner, it is our full intention to market the product ourselves retaining full rights of ownership and Afrezza at most will be co-promoted with an additional partner or partners.
We continue to receive frequent messages from Afrezza users and others recounting their very positive experiences with Afrezza, and suggesting we use these accounts to promote the product. Unfortunately, that is not allowed under FDA regulations, which prohibit us from disseminating anecdotal information of any kind. In fact, no promotional information regarding Afrezza can be disseminated by us without including the black box warning in all associated safety information.
So these user accounts obviously do not include such information, we cannot be directly associated with them. This means that MannKind Facebook and Twitter accounts may not even like or Retweet such posts. They are shared with us and our followers in online social media forms. We can, however, continue to post and tweet publicly available and relevant information as we’ve been doing these past several weeks. We look forward to doing more of this sort of thing in the future.
I previously mentioned two initiatives to support our future sales efforts. First was the diabetes care centers and also the Afrezza Advisory Council. The care centers are being started by a separate company for MannKind and are set to launch their pilot center in New Jersey by the end of the first quarter. These centers will operate as adjunct services to urgent care centers focused on the treatment of diabetes.
Their business model will support growth in 2016 in major metropolitan areas and they’ll perform several tasks necessary to the success of Afrezza, including onsite barometry testing and hands-on training on how to use the product for best results. They can also coordinate regional user groups that can support each other if they develop optimal protocols.
The Afrezza Advisory Council is now currently being formed with a cross section of stakeholders including Afrezza users, doctors and other professionals, all of whom will provide a hands-on link to the market that we seek to penetrate with Afrezza. We’ll disclose more on that as we initiate our own marketing efforts in the future.
Now regarding international expansion, prior to signing the agreement with Sanofi, MannKind was in discussions with multiple international groups representing substantial regional markets. Those discussions have now been restarted in recent weeks with our priority being those regions in which we can use our U.S. approval as a basis for regulatory submission without additional trials. As these plans firm up, we’ll be sharing them with you.
Now moving on to Technosphere. Ray is going to discuss the status of our three lead programs but first I’ll comment on our recently announced agreement with Receptor Life Sciences. First, to reiterate information disseminated through the frequently asked questions or FAQ list, Receptor is a wholly independent entity unaffiliated with MannKind or Al Mann [ph] and our agreement is a collaboration and licensing agreement in exchange for milestone and royalty payments.
MannKind retains all rights for Technosphere technology except for the specific proprietary compounds for Receptor that are the subsidy per license. Any future disclosures about Receptor’s management team, their financial backers or some specific proprietary pharmaceutical compounds that they are using will be made by Receptor and no additional comments or disclosures will be made by MannKind.
We negotiated the agreement with Receptor because it is attractive from the standpoint of Receptor’s pedigree, their management team and the business opportunity. Our reverse merger with Receptor is not under consideration at this time.
There have been many related questions regarding Receptor’s new Chief Scientific Officer, Andrea Leone-Bay who is a valued member of our scientific team for many years here at MannKind until his departure last fall. Her move to Receptor was not in any way coordinated by MannKind nor is it connected with our agreement with Receptor, but we believe it speaks very well of Receptor that they were able to attract someone of Andrea’s caliber.
We are happy to be working with her again as part of this collaboration. We typically do not comment on past employees career paths but are making an exception in this case with Andrea’s knowledge and approval because of the many questions we have gotten on this topic.
With that, I’ll now turn the call over to Ray who will present a bit more detail on our plans for our pipeline products than he was able to do during the short time I allowed him during the JPMorgan presentation before coming back to some more questions and answers. Ray?
Dr. Raymond W. Urbanski
Thank you, Matt. As I mentioned during my JPMorgan presentation, our dry powder formulations, devices and development tools represent an innovation in all inhalation technologies. Our competitive advantage resides in MannKind’s innovative all inhalation technology, a combination of formulation, device and development tool expertise. These technologies represent a versatile drug delivery platform that allows the pulmonary administration of therapeutics, many of which requiring administration by other means.
Beginning with formulations, Technosphere technology enables the delivery of a variety of different drugs through the design and preparation of novel microparticles utilizing our proprietary methods and FDKP. This technology when combined with our device capabilities results in simple, easy-to-use, discrete, efficient, breath-powered devices that are readily manufactured, have a low cost of goods and are applicable to a wide range of therapies.
In addition, we manufactured devices of many shapes and sizes both reusable, our DreamBoat family as well as single-use inhalers, our Cricket family. How do we know these devices work? We test them using one of our development tools, one of which is our anatomical airway model commonly known to us as MIDAS.
An example of a successful delivery of a drug using our technology is Technosphere insulin, you know it as Afrezza. Afrezza exhibits excellent aerodynamics and a uniformed distribution deep within the lungs. These attributes of our Technosphere technology offer several advantages over other pulmonary drug delivery systems. Most notably, the pharmacokinetic profile of drugs as seen here with Afrezza characterized by very rapid systemic absorption into the circulation; this while avoiding hepatic first pass metabolism.
In simpler terms, what this means is that Afrezza is more rapidly absorbed into the bloodstream through the lungs when compared to other routes of administration. And importantly, Technosphere-based drugs are not immediately metabolized in the liver.
MannKind has recognized that Technosphere technology has the potential to provide impressive drug delivery solutions across a wide variety of therapeutic areas encompassing a number of diverse products and disease states. The unique pharmacokinetic profile of drugs inhaled as Technosphere formulations have the potential to provide significant competitive advantages over drugs delivered via other delivery systems.
What you see here is the PK profile of parathyroid hormone or PTH. This more physiologic profile could represent a major improvement in safety and efficacy than currently available drugs. To that end, we have identified a portfolio of product candidates in several different therapeutic areas. These candidates address an unmet medical need and/or provide superior efficacy, safety or tolerability over existing therapies according to our scientific research.
Of note, we have discussed in the past prior investigations into migraine and pain management. We still consider these areas attractive and ideally suited to our technology. At this time, we are reevaluating the clinical and commercial aspects of these potential programs.
We currently have three candidates in development; Treprostinil, Palonosetron and Epinephrine. The first is Treprostinil for pulmonary arterial hypertension, PAH. PAH is a sizable market expected to reach $10 billion by 2020. Treprostinil, a prostacyclin vasodilator is currently available in several formulations. However, these often carry a significant treatment burden. This often leads to poor compliance and poor clinical outcomes.
Our Treprostinil program is in the early technical assessment phase. Preclinical work is expected to begin in the second quarter of 2016 followed by clinical trials beginning in first quarter of 2017. We are actively looking for a development partner for this program. Ideally, the partner would be companies that already are active in this space.
The second candidate I will speak about is Palonosetron for chemo-induced nausea and vomiting. The CNIV market is forecasted to grow at 5.7% CAGR from 2013 to 2020 going from 1.2 billion to a market of 1.88 billion. Palonosetron is a 5-HT3 inhibitor indicated for the treatment of acute and delayed chemo-induced nausea and vomiting. Clinical data suggest that Palonosetron is superior from an efficacy and safety standpoint to any other 5-HT3 inhibitor with or without the addition of dexamethasone, when used in a moderately emetogenic regimen.
There are many advantages to the oral inhalation while it avoids the need for IV access or having to access the patient’s port, it can be used when oral agents are not practical, for example, with mucositis. It can be self-administered, for example, to prevent anticipatory nausea and vomiting. It has the potential to decrease the cost of care, nursing time, pharmacy costs, et cetera. And it can be used in multiday regimens.
Palonosetron is in the early technical assessment phase with preclinical work expected to begin in the third quarter of 2016 followed by clinical trials beginning in second quarter of 2017. Again, we are actively looking for a development partner for this program. Ideally, company or companies already active in the oncology supportive care space.
The last candidate I’d like to speak about is Epinephrine for the acute treatment of anaphylaxis. In the U.S. alone, Epinephrine used in anaphylaxis represents a market over $1 billion. Epinephrine is used as a drug of choice with initial treatment of suspected anaphylactic reactions. Patients with known allergies are often asked to carry Epinephrine auto injectors. These drug device auto injectors tend to be large and inconvenient to carry around.
They also involve an invasive procedure that is to say an injection into the lateral thigh. This has led to episodes where patients have postponed this injection leading to an adverse clinical outcome. We believe that the oral inhalation route will provide more than adequate levels of Epinephrine. In addition, this noninvasive step has the potential to prevent untoward outcomes secondary to delaying treatment for fear of an injection.
Epinephrine is in the early technical assessment phase. Preclinical work is expected to begin in the second quarter of this year followed by clinical trials beginning in the first quarter of 2017.
For those that may have questions whether an inhaled medication is suitable for use during the initial phase of an anaphylactic reaction, patients typically know when they are having the reaction. This is well before the full physiologic effects of anaphylaxis become apparent. This is when they typically take an antihistamine, for example, Benadryl because they do not want to inject themselves thinking that the Benadryl will help. Well, it doesn’t. This product will now offer them a noninvasive option.
Clearly, there is a very substantial U.S. and global market already for Epinephrine including millions of pediatric and young adult patients. The market is dominated by one player. We will be pursuing partners in which to penetrate this established market with a product that addresses a significant unmet medical need.
Now let me move on to the broader topic of our patent portfolio. MannKind has a strong background as a scientific company with numerous world-class scientists and a culture of patentable innovation. To highlight a few, we currently have 918 patents encompassing our powders, devices and manufacturing technologies.
We have 510 patents protecting Afrezza and related technologies, 188 patents related to formulations and methods of use, 358 related to the inhaler device technologies and the utility and designs, 82 patents related to process and manufacturing technologies, 114 patents related to powder dispensing/filling technologies, 48 patents protecting inhaler support technologies, for example, MIDAS as I mentioned earlier and BluHale, 90 patents related to miscellaneous technologies and uses, for example, with pain, peptides and other triptans.
We have greater than 600 pending patent applications in multiple patent families directed to various technologies, for example, alternate inhalers, new powders, methods of use, et cetera. This patent portfolio was a key asset of MannKind and provides the foundation upon which MannKind can differentiate itself in new product development.
So in summary, the framework of MannKind’s innovative oral inhalation technologies include our dry powder formulation expertise, our inhalation device capabilities and innovations as well as our advanced development tools and techniques.
We also have a robust and diversified portfolio across many therapeutic areas. We believe our unique delivery method will provide superior efficacy, safety and tolerability compared to existing therapies.
I will now turn it back to Matt.
Matthew J. Pfeffer
Thank you, Ray. So before opening the lines for questions from analysts, I’d like to address a few sorted questions asked by investors for which we haven’t incorporated the answers into the comments we have already made.
First, many questions were asked about MannKind’s financial situation. We expect to cover this in more detail on our normal quarterly call in a couple of weeks, so I’d like to save a response until that time, but I will say we are still hard at work on efforts to extend our cash runway and excess other sources of cash before making any public commitments here.
Steps already taken or are being considered to address cash burn include things like companywide wage fees, no compensation changes for new responsibilities, example my own or for that matter Rose’s and to plan attrition that will not be backfilled. We’re also in discussions to restructure certain debt and purchase commitments, which will be elaborated on only when and if finalized.
Lastly, we believe that by showing the investment community a continuous path of executing on our MannKind 2.0 strategy and commitments from January on that our share price will reflect the future potential of our present sales by MannKind as well as Technosphere-related products, licenses and partnerships allowing additional fundraising to occur, if needed.
Bankruptcy is a path of absolute last resort and not one under consideration at this time. We’ll plan to update all financially-related plans in our quarterly call in the next few weeks.
Second, likewise many questions were asked about why the company does not respond to rumors, particularly those around potential buyouts, executive departures, whether the Danbury facility is still in operation and so on. The problem is that such rumors are so frequent that once we respond to one, people are more likely to believe the next rumor if you don’t respond to that one also and so on.
We have a duty to disclose material information, which we take very seriously. If we are being acquired, we’d obviously have to announce it. Likewise, we’re required to announce departures of named executive officers in a timely manner. So other than material disclosures, MannKind will not comment on questions post about rumors or other speculations.
Many questions were asked about potential delisting from NASDAQ. The way this process works is a company will automatically be sent a warning letter by NASDAQ if their stock closes under $1 for 30 consecutive days. The closing of over $1 for even one day resets that clock, such as what happened yesterday.
Even then, you have to stay under $1 for six months before NASDAQ will take any action and companies in this situation can appeal and ask for more time passed the six-month window, which is commonly granted if a good reason is given or a plan is elaborated on for fixing the situation.
Related to the share price, we are not contemplating a reverse split or similar action at this time. We feel the stock price will take care of itself if we execute the strategic plan that we are on.
We are commonly asked why executives do not buy stock in MannKind to show support. This is more difficult than some may realize. Officers in public companies cannot purchase shares during blackout periods prior the earnings releases such as the one we have been in since the end of the year or before year end or while in possession of material insight information.
As such, the lack of purchases by MannKind officers is a reflection of adherence to SEC rules and in no way a reflection of our strong commitment to MannKind and our strategic direction.
Many asked about the notice of class action lawsuits. I’m afraid such suits are a fact of life in our litigious society and can be expected anytime a company stock price declines significantly regardless of whether there are any grounds for such a suit. It is not uncommon for complaints to be filed without any serious basis in hope of some rationale can later be found to amend the complaint. Fortunately, as most all public companies do, we have insurance to cover such circumstances and the insurers will handle the litigation for us.
Finally, one of the most common questions submitted was in relation to what was described as the “blatant manipulation of our stock” and illegal short selling. It’s unfortunate in our current public market trading system that was so much stacked against companies in this arena, but we’re not completely powerless. We have had discussions with the SEC about some of our more unusual trading patterns and the short selling activity related to MannKind shares.
I know the SEC has an investigation underway but there’s no way to know how long such an investigation might take before we see any action. We’re also using what tools we do have to investigate these allegations on our own. I do not want to tip our hand prematurely but I do want to reassure our investors that we are aware of the allegations, we take them very seriously and we will do what is necessary to protect our company and our investors.
With that, I think it is time to open up the call to any remaining questions from our analysts. So, operator?
Thank you. [Operator Instructions]. Our first question comes from Cory Kasimov from JPMorgan. Cory, please go ahead.
Hi, Matt. Thanks for taking the question. I guess my first one is, I just don’t understand the secrecy around Receptor Life Sciences in this deal and wonder if there’s anything you can say to provide some perspective or some comfort here because right now there’s nothing for anyone to go on other than no one had ever heard of the company before your deal. The company doesn’t have a Web site and the CSO is a 12-year valued employee of MannKind. So, is there anything at all that you can share on this? And then I’ve another question. Thanks.
Matthew J. Pfeffer
Okay. Sure, Cory. We tried to share a lot of information what we could. We’re not at liberty to disclose proprietary information of theirs. I can tell you that the company has been operating for some time. It’s not as new as it might seem although they did recently change their name, which is why it may have seem like it sprung up fairly recently. I think that’s probably safe and I wouldn’t be giving too much away. So they’ve been around for a while. We’ve done a lot of diligence. We know a lot about things we can’t talk about like who the management team is and who’s behind the company and how they’re funded and who those parties are. But they have some reasons of their own, which we think as we understand that were pretty good reasons why they don’t want to make those things public at this point and we have to respect that. So, I tried to – a lot of things we talked about are because people are worried about specific things. So I was trying to say, no, this isn’t some – it’s funny the things you’ll see floating around on the Internet. It’s not some shell we set up, some sort of a shell game or something like that. It’s not Al Mann tier [ph]. We’re trying to dispel as many of the rumors as we can and let people know that this is a legitimate enterprise. They’re serious. We take them very seriously. They’re working closely with us to develop these proprietary compounds of theirs, and we feel pretty excited about it for reasons which ultimately become known, but there’s not much more beyond – I think we’ve kind of pushed the limits of what we’re allowed to say at this point, but I hope that will change in the near term.
Okay. And then my other question is, I can appreciate the fact that you want to wait for your fourth quarter call to update us more on the cash position, cash balance for the company, but obviously we need to maintain model, so a couple of sort of sub questions there. Can you at least broadly speaking kind of inform us how we should be thinking about SG&A this year now that you’re going to be promoting Afrezza? And then what costs are you going to be on the hook for starting in 2016 with regard to ongoing post approval trials, the ones that have not been completed yet for the product?
Matthew J. Pfeffer
Yes, I was hedging our bets a little bit because really these things are so much in motion. Clearly, we’ll be responsible for taking over the costs of those trials. The costs are relatively low at this point. They pediatric study is – it’s a small first phase of a larger study, so at least in 2016 – I don’t know if Ray wants to say anymore about it, the costs are not going to be terribly great. And the safety study wasn’t expected to get started until the end of the year at best anyway. So you shouldn’t see a whole lot of effect from the studies. As far as cash, the only guidance we’ve given at this point realizing we’re still under audit and closing the books, so one of the few numbers you can handle on pretty quickly is cash. So I went not very far out of the limb and said it was going to be between 59 million and 60 million at the end of the year. So I said that previously, I’ll repeat that here, it’s true. Nothing has changed there. And this is an extraordinary active area. We literally are talking to anybody we might owe money to or have a purchased commitment with and talking about how we might restructure some of those things. I can’t promise anything because those things are still ongoing but they’re all kind of taking shape. And likewise, the discussions with Sanofi are important for this. So as we take over functions or which things come over when, all have a big impact on this and will impact – specifically you asked about SG&A, it’s certainly going to impact that. We’ve only just started meeting. It’s premature to be able to model this in an effective way and I rather defer it even just a couple more weeks to give us some time to get a better handle on it than give you bad information at this point.
Okay. But I mean in terms of us maintaining a model today and what we have out there now and if you’re here conveying confidence in the future of Afrezza, that obviously is going to take – it’s going to take money to make money here. If we’re ramping up SG&A over the course of this year, that’s something you’re comfortable with as you stand there today?
Matthew J. Pfeffer
Yes, absolutely. We maintain confidence in the product and I think it’s going to be important to show the results of that confidence that we can ramp up sales and change the inflection of the curve, which is I think something everybody has always been looking for. So we wouldn’t do it if we didn’t think it made sense and it would pay for itself quickly enough that we shouldn’t attempt it and that’s what our plan is.
Okay, all right. I’ll let someone else ask. Thank you.
Matthew J. Pfeffer
Our next question comes from Keith Markey from Griffin Securities. Keith, please go ahead.
Hi. Thanks for taking my question. Just wondering since Sanofi is continuing to have a control over Afrezza at least for the time being, I assume that their costs are going to be split between you and them on the basis of a 65-35 split?
Matthew J. Pfeffer
Yes, that will remain true until such time as we get the rights fully back remembering though of course was not cash cost to us, so it would go against the line of credit that still exists during that period.
You anticipate the monthly or quarterly costs relating to their efforts to remain similar to what they were say in the third quarter of 2015.
Matthew J. Pfeffer
Similar I think is fairly safe. They’re not going to appreciate the increase. I can think of some reasons why they might go down a little bit, but based on the budgets that we have been talking about for some time, they should be similar.
Okay. And just one other question. You mentioned you were interested in getting a marketing executive onboard. Do you have a timeframe for when you’d like you do that?
Matthew J. Pfeffer
Last week would be good. You said when I’d like to do it, but obviously that didn’t happen. It takes time. It’s difficult in this environment to recruit somebody like that and a lot of the work has been to finding exactly what type of individual we’re looking for. But we’ve already talked to a couple of people and we’ll see how it works out.
Great. Good luck. Thank you.
Our next question comes from Joshua Schimmer from Piper Jaffray. Joshua, please go ahead.
Hi. Thanks for taking the questions. Can you define what it means to be in the early technical assessment phase for some of the new applications of Technosphere platform?
Dr. Raymond W. Urbanski
Yes, certainly. That simply implies that we are looking at various dry powdered formulations of the drug candidate and then looking at the device mechanics that would sort of lead to the best distribution of the drug within the lung.
How big is – that’s working on that?
Dr. Raymond W. Urbanski
How big is the team?
Dr. Raymond W. Urbanski
Yes, so I can’t give you an exact number, the number of employees that are working on it but they’re all again in-house FTEs. So there’s real no cost to this except for the time and resources of the people involved.
Got it. And Matt, you noted the company has been – continue to be active on Twitter. Can you explain a little bit how that’s going to create more value for the Afrezza franchise or for MannKind? Thanks.
Matthew J. Pfeffer
It’s not going to, so I hope that I didn’t imply that. It was part of fulfilling the pledge to try to be more open and transparent and it just gives us a way to disseminate the information rapidly with the caveat that it’s really difficult to disseminate any information about our lead product given the FDA rules being what they are. I think that was somewhat misunderstood out in the community, so I thought it was better to clarify that situation. When you have a product with any kind of a blackbox warning, you’re extremely limited on what you can say about it. So we fully intend to abide by all those FDA rules and then it’s a little bit what we can do on social media. But we do find it a handy tool for disseminating information at this time.
Okay. Thank you.
Our last question comes from Jay Olson from Goldman Sachs. Jay, please go ahead.
Hi, Matt. Thanks for taking the questions. You had outlined a number of steps to be taken with Afrezza that were contingent upon completion of transferring the rights back to MannKind, and I think you identified additional regulatory submissions and some other steps. Does that mean that we should expect those steps to be taken once that transfer is complete?
Matthew J. Pfeffer
Yes, I think you can – well, it depends on what you mean by the question. So let me be perfectly frank. If I had to tick the questions that were most – we literally got hundreds and tons of questions because we opened this up to really the universal people that are wondering about things amongst our investor base. And by far and away the most questions were, when can you do some of these things? When can you make filings? When can you reduce the price or when can you do x, y and z? All of which are dependent upon our having the NDA or the tiny [ph] back in our hands. So that all occurs when the transition is complete. And I just want to clarify we can’t do those things until that happens. So people are wondering why we’re not doing it now and when are you going to go talk to peers and when are you going to make some of these changes. So that was the point of that discussion. It doesn’t necessary imply anything a few asked about, but we have talked about that. And we did say an important part of our strategy is to go back into some of those foreign markets specifically where there’s no new clinical trials required and try to capture some volume quickly there, because we know the product is very volume-sensitive from a cost to goods standpoint. And in order to make it more profitable everywhere, especially in the U.S., we need to get the volume up relatively quickly and that’s a good way to get your margins up quickly too. So, it’s kind of a win-win for us. It doesn’t mean we wouldn’t consider some jurisdictions that have clinical trials required, in fact I know for a fact we’re talking to at least one where it probably will be. But our focus is really on trying to get things where we can get a deal done quickly and start selling the product in a foreign jurisdiction. So you would expect to see some stuff from us I hope fairly quickly but I would be reluctant to commit to a specific timeline because I’m sure Ray will kick me under the table if I do.
Okay. Thank you. That’s helpful. And then I know you mentioned that filing for bankruptcy protection was an option of last resort. But is that another one of the steps that would require the – or be contingent upon completion of the transfer of Afrezza rights back to MannKind before you would consider that?
Matthew J. Pfeffer
No, that’s not really related. A lot of people as about that and they say, are you going to declare bankruptcy? And I was trying to reassure them that it’s not something we’re currently considering and it would have to become a lot more dire than they are now before we’d even start considering it. And so that was what that was intended to address. It’s not really related to the transfer of rights from Sanofi.
Okay. And then I guess my last question is that at JPMorgan you had sort of signaled that certain business development opportunities were on the horizon before signing the Receptor Life Sciences deal. Are you in a position to signal any other potential future business development opportunities at this time?
Matthew J. Pfeffer
Signaling future business development opportunities is a very hazardous thing because – for a variety of reasons. The timing is rather uncertain. Often just making that signal will impact the timing, because to be frank it can put a weapon in the hands of whoever you’re negotiating with and it’s probably not a prudent thing to do. So I would have to be really, really, really, really close before I would be willing to signal and that’s why I felt comfortable doing it at JPMorgan, because I knew it was imminent. I’d say there is certainly many things under development. There’s nothing I feel so imminent right now that I feel comfortable doing that.
Okay, great. Thank you.
With that, I’ll turn the call back to Matt.
Matthew J. Pfeffer
Okay. Thank you, operator. All right, well, in closing, I want to thank our retail investor community for the overwhelming response to our announcement that we would retail investor questions for today’s call. We understand that particularly when a company situation is changing, as ours is, and new strategies emerging, there are going to be questions.
What Ray, Rose and I together with the rest of the management MannKind team are working to do is provide communication on our blueprint for 2016, which would be based on a successful transition of Afrezza ramping Afrezza sales, creating new opportunities with Technosphere technology and implementing a strategy based on creative problem solving, better communication and just plain hard work.
We receive and read all of your comments and suggestions by email, phone, Twitter and Facebook, which include many messages of support for the company and for Afrezza. Note that we value those inputs and truly appreciate your support of MannKind. With that, I thank you for your attention. Bye-bye.
Thank you. Ladies and gentlemen, this concludes today’s conference. Thank you for participating. You may now disconnect.
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