MannKind Corp (MNKD) 2017 Q2 法說會逐字稿

Welcome to the Second Quarter 2017 MannKind Earnings Conference Call. My name is Eric, and I'll be your operator for today's call. (Operator Instructions) Please note that this conference is being recorded.

I will now turn the call over to Rose Alinaya. Please go ahead.

Good afternoon, and thank you for joining us on today's call. Joining me today from MannKind are Chief Executive Officer, Michael Castagna; Chief Financial Officer, Steven Binder; Chief Commercial Officer, Patrick McCauley; Chief Medical Officer, Raymond Urbanski.

Please note that comments made during this call will include forward-looking statements within the meaning of federal security 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, August 7, 2017. We undertake no obligation to revise or update any statements to reflect events or circumstances after the date of this call.

I will now turn it over to Michael Castagna, our Chief Executive Officer. Mike?

Thank you, Rose, and thank you, everyone, on the phone for taking time to dial-in to this evening.

I want to share quickly my perspective on MannKind as I transition into the role as CEO. Over the last 8-plus weeks, I've had the opportunity to meet our hundreds of employees around the country. I've had -- done a deep-dive assessment on the pipeline and the history around the pipeline. We've met with potential analysts. We've met with our key stakeholders who own either share in the company and/or hold our debts. And we've also met with several potential investment groups through our Greenhill collaboration.

And I want to take a step back and think about, when I took a tour of our manufacturing facility, which is over 300,000 square feet, it reminds you of why A. Mann invested in this company the way he did and built the capabilities that we have. This product was destined to be a blockbuster. It was studied by 2 independent companies as well as others to show what the potential was.

And just to get a fresh set of eyes, I myself went out and conducted some market research during the month of June to confirm that we were on track to achieve status that I felt was reasonable in the time frame as we look out over the 18 to 24 months.

What I heard in the feedback from customers was very enlightening and exciting, because it reinforced the things that we'd been working on for the last year of fixing and straightening out and executing, are right on track with what we need to be doing.

The #1 thing I heard the most was, continue to show up to my office, continue to be there front and center present. And also, as I looked at endocrinologist versus primary care doctors, there was a much larger opportunity than I expected in terms of receptivity by primary care doctors being willing to prescribe Afrezza because they've felt that they have mastered the basal treatment patterns for patients and are looking at using GLPs and then as a logical next step, if they had an inhaled insulin, that they would continue to learn how to use and prescribe insulin.

Many times they've tried their best to manage these patients. They struggle with where to go and how to get there and how long they stay with elevated A1Cs and they try to get them on injectable insulin. But often times, it's years before they progress to an endocrinologist.

That left me with complete optimism as I transitioned into this role. As we recruited out our leadership team, we looked for people who could have the capabilities and skills to take this company to the next level from a commercialization perspective as well as global growth.

Yes, we've had work to do over the last 12 months. This company was built over 26 years, and you're not going to change everything in 1 year. As hard as you work, as many hours as you have, on the capital constraints we had, I'm really happy with the progress we've made in Q2, as you'll continue to hear from Pat and Steve in the direction we're going.

If Sanofi just had kept the foot on the gas with Afrezza, you'll see when you look at Pat's section, the success trends of Afrezza would've continued to grow throughout 2016 and 2017. This would have been easily a $30 million to $50 million a year drug in the first 12 to 18 months of launch, had we just kept executing.

Instead, we had the pivot, we got the product back, and we transitioned many key factors as we went into the commercialization on MannKind in terms of transitioning, packaging, SKUs, co-pays, sales force execution and training, as well as the articulation of the -- as well as the articulation of the Sanofi -- I'm sorry, sorry -- as well as the articulation of the clinical profile to product. So one of the things we saw last year was a modeling of the simulation data saying, had we dosed Afrezza properly and appropriately in our trials, we felt very confident we'd had a superior insulin. That is obviously not what our label says, but that's some of the investments you'll hear from today that we're starting to make in the announcement of One Drop as well as the STAT Study that Ray will talk about.

It may be obvious to us and to us as shareholders, to us as employees of this company, the value that this product will bring to patients around the world, but sometimes you need to boost the data package around it to help people understand how to do certain things to get to where they need to be. And with that said, I'm going to transition into my first slide here.

And I apologize, for some of you on the phone, there might be a slight delay. We'll try our best to coordinate the slide and the voiceovers.

So we've recruited, in my mind, a world-class executive leadership team in record time. So I want to personally thank Pat and Steve for joining us here today. They've not even really been here for a full month and have already been on the road with me and have been out meeting with customers and sales force as well as potential investors. So I want to thank both of you for accelerating your joining the company.

I also want to thank the rest of my management team as well as our employees, because we've been able to retain our key talent throughout the transition of an executives switchover in the company, which doesn't always happen. So I want to thank Rose, David, as well as the rest of the executive team, including Ray, for sticking by here and continuing to work with us as we continue to rebuild the company.

Some of the things you saw upon the month of June, during Q2, was really improving our near-term financial position. We know we have to recapitalize the company, but doing that without the rest in front of us was one of my first priorities. And I really want to increase our optionality.

So with that, you saw that, this afternoon, we announced our withdrawal from the TASE Stock Exchange. We're doing this for a couple of reasons. We want to simplify our filings, we want to reduce our expenses, and also, this frees up 10 million preferred shares.

Number two, we've reduced our Deerfield obligations by $15 million through conversion of equity as well as $4 million in cash payments. While this does reduce our debt burden, we did increase our debt through the drawdown of the Mann Foundation, $30 million. And what that does is really in effect change the interest rate from a high-yield debt to a low-yield debt, while pushing out any near-term obligations.

As a result of that, we did increase our cash by $19.4 million through The Mann Group.

Afrezza net and gross revenue grew 29% and 60%, respectively, quarter-over-quarter, and Steve will provide further details around this number.

Additionally, we redeployed capital and critical resources across the company, such as reducing our burn rate in facilities that aren't being utilized. Our move to Westlake Village from Valencia will reduce our expenses in the second half of this year.

We continue to find ways to redeploy our capital to where -- areas that are going to be contributing to our growth and our success as a company.

We've continued to reduce our year-over-year burn rate in the first half of this year versus first half of last year.

And then finally, we've reduced our operating cash burn quarter-over-quarter despite having a fully expanded commercial transition. This burn rate was approximately $6.9 million a month, not including the $4 million that was paid in capital to Deerfield.

We've continued with commercial improvements in our insurance coverage. As I previously announced, we had Anthem on April 1. We renewed the VA contract. And we're now working on reducing prior authorization burdens. For example, we know contracts that continue to have Novolog as a preferred exclusive agent. Those contracts and the terms within those prior authorizations typically will say something to the nature of, in order to get Afrezza, you must fail insulin and have physical and visible disabilities. And we don't believe it's fair that healthy patients who desire better health should have to fail every single aspect of their life before they get access to Afrezza.

We continue to work with places like [United] and CVS to reduce the burden of the prior authorizations. We're okay if patients have to fail insulin to get to our product, but we don't think it's fair that patients have to go -- potentially be visibly impaired and physically disabled. So we'll continue to open up those opportunities and we've had some success already in that nature.

You also saw this morning our announcement of One Drop collaboration. Back in Q2, we announced the memorandum of understanding around the intent to partner with One Drop and really help and transform the care of diabetes. We know there are over 22 million people in treatment, and it's virtually impossible for every patient to get the best treatment in the country.

We are looking at innovative ways to scale up how people can obtain success through coaching, through dosing and titration of our product and through self-management tools that exist in the marketplace.

And when I look out over the next 3 to 5 years and where we've come over the last 3 to 5 years, technology and adoption of technology will play a critical role in people's outcome of their health, as they continue to pay a larger and larger percentage of their health care.

And then finally on this topic, we announced our international expansion with Brazil, that is on track to file our meeting request by the end of this year. And what will next happen is an inspection of our manufacturing facilities will occur. And at that point, we will be ready to file the application with an expectation of potential approval in [maybe] 2018.

And then finally, you might have saw our announcement, we were very excited about our pre-IND meeting with the FDA on Treprostinil. We believe our Technosphere-based platform can solve some of the unmet needs that exist in the pulmonary arterial hypertension market, which we'll talk about later in this call.

And then finally, we've engaged Locust Walk partners, to help us partner out the pipeline, because our strategic assets that we think are of value, they just don't make strategic sense for us to continue to invest and move forward, when I think about the types of markets we want to be in and the size of footprint we want to have over the next 3 to 5 years. Ray will speak about this a little later in the conversation.

I'm going to stop there and turn it over to Steven Binder.

Thanks, Mike. Good afternoon. I'm really excited to be part of the MannKind team. I can see and feel the passion and dedication this team has for connecting insulin-dependent diabetes patients with Afrezza. I feel we really are making a difference and this means a lot to me personally, so thanks for having me on board.

Moving to the financials, I will be discussing selected financial highlights and urge you to read the full financial statements contained in our 10-Q, which was filed this afternoon.

Please note that I will be making comparisons to both Q1 2017, which highlights our activities as an integrated commercial organization, post the Sanofi breakup, as well as to Q2 2016 where appropriate.

Our total net revenues for the second quarter of 2017 was $2.2 million, which included $1.5 million of Afrezza product net revenue, which is a 29% increase over the first quarter of 2017.

Also included in the second quarter net revenue was $0.6 million of other revenue from the sale of oncology-related intellectual property to a Chinese company, [Fuson].

Afrezza product gross revenue increased 60% versus quarter 1 2017. The difference in the growth rates for the net revenues of plus 29% and gross revenues of plus 60% was due to an adjustment recorded in Q2 2017 of $0.3 million in net revenues for wholesale distribution fees that will not occur in the future.

The Afrezza gross revenue growth of 60% from quarter 1 2017 was generated from a combination of volume growth, a mix change to more favorably priced NDCs and price. Pat McCauley, our Chief Commercial Officer, will provide additional color for our volume growth later in the presentation.

A reconciliation of growth to net revenue is contained in the MD&A section of our second quarter 10-Q.

At June 30, 2017, we had $2.6 million of deferred revenue for product that had been shipped to the wholesaler and retailer channels, but had not yet -- but was not yet dispensed to patients and recognized as revenue.

Until we can reliably estimate product returns based on historical patterns, we will continue to recognize Afrezza revenue based on Symphony prescription data, which does not include some hospitals and health groups such as Kaiser Permanente, for example.

The cost of goods sold for the quarter ended June 30, 2017, was $5.1 million compared to $4 million for the same period ended 2016. The increase was primarily driven by our write-down of inventory for expiring and obsolete inventory. Cost of goods sold is greater than Afrezza sales for the 3 months ended June 30, 2017, due to under-absorbed labor and overhead and the write-down of inventory for expiring and obsolete inventory.

Research and development costs remained flat at $3.1 million in the second quarter of 2017 versus Q1 of 2017 and decreased from $4.3 million in the second quarter of 2016. Ray Urbanski, our Chief Medical Officer, will expand on our clinical program later in the presentation.

Selling and marketing expenses were $11.6 million in the second quarter of 2017, an increase of 51% over Q1 2017 and were $4 million in the second quarter of 2016, just after we took back commercial responsibility for Afrezza from Sanofi.

The increase versus the first quarter of 2017 is from the build of our sales force, which began partly through quarter 1 and the filling out of our sales territories, plus the building out of our commercial support teams. Pat will speak more directly to the commercial changes later in the call.

General and administrative expenses were $6.9 million in the second quarter of 2017, a 9% decrease from Q1 2017 as compared to $7.1 million in the second quarter of 2016. We've been managing G&A tightly as we build out our integrated commercial structure.

Interest expense was $3.1 million for the quarter ended June 30, 2017, as compared to $3.4 million for the first quarter of 2017 or an 8% reduction; and compared to the second quarter of 2016 of $4.9 million, a 37% reduction. Interest expense decreases correspond to the reduction in our debt balances.

We incurred a net loss of $35.3 million or a loss per share of $0.35 for the second quarter ended June 30, 2017, compared to a net loss of $16.3 million or a loss per share of $0.17 in Q1 2017. The increased loss versus Q1 2017 is primarily from the noncash change and the fair value of warrants of $6.6 million recorded in Q1 and a noncash increase in the foreign exchange loss on our insulin purchase commitment of $5.3 million in Q2 2017.

We incurred a net loss of $30 million or a loss per share of $0.33 for the same period in 2016.

Cash and cash equivalents at June 30, 2017, were $43.4 million compared to $48 million at March 31, 2017, and $22.9 million at December 31, 2016.

During the second quarter, we received cash of $19.4 million from increasing The Mann Group obligation plus $2 million from shipments of Afrezza, while making principal and interest payments of $5.6 million on our debt and had an operating cash reduction of $22.1 million.

Q1 2017 included cash received from Sanofi of $30.6 million and $16.7 million from the sale of real estate in Valencia, California.

As we focus on supporting the upward trajectory of Afrezza sales and tightly manage our cash operating expenses, we expect Afrezza gross revenue for the second half of 2017 to be in the range of $9 million to $14 million; net revenue for the second half 2017 to be in the range of $6 million to $10 million; and an applicable gross-to-net reduction in the range of 30% to 35%.

We also forecast our operating cash burn, which is exclusive of debt principal payments, to be between $18 million to $24 million per quarter in the second half of 2017. Our operating cash burn, exclusive of debt payments, was between $20 million and $22 million per quarter in the first half of 2017.

We continue to work with our advisers, Greenhill & Co., on recapitalization options, as this is our priority for the second half of 2017 along with the driving -- I'm sorry, along with driving Afrezza sales growth.

I'll now turn it over to our Chief Commercial Officer, Pat McCauley.

Thanks, Steve, and I'll tell you I'm also very excited to be here at MannKind and be part of the team as well. Based on my first few weeks in this position, I really wanted to share a few observations that I've had, but also provide an update on our commercial efforts and successes of the second quarter.

So first, while I've only been here a few weeks, I've been really impressed with the overall commitment and dedication of both the MannKind organization as well as the commercial team.

I've had the great opportunity to meet many employees who are fully committed to working together to ensure that we educate our health care providers on the clinical benefits of Afrezza in order to help diabetes patients achieve their treatment goals.

And secondly, over the past few months, there's been a significant amount of investment and focus on building our commercial infrastructure to support Afrezza for both today as well as the future. And I really wanted to take a moment and just recognize all the great efforts of the team and the wonderful job that they've done.

So let's look now at our second quarter highlights from the commercial perspective. And as we shared with you on our first quarter earnings call, we completed a significant milestone event, which was the expansion, hiring and training of our MannKind sales force in February of 2017. The second quarter is very important because it represents the first full quarter that this MannKind team has been promoting Afrezza to health care professionals.

We're going to review the impact and efforts of this team on prescriptions and writers for the second quarter in just a moment. But before we do that, I wanted to highlight a few other areas from the commercial perspective.

First, from the enhanced payer coverage, we know that once a health care provider prescribes Afrezza for patients, it's very important that these patients have access to Afrezza on the payer plans. We currently have approximately 70% of commercialized covered across a number of national health plans and pharmacy benefit managers. And we'll continue to work to improve our coverage for patients.

We're also partnering with our party payers and expect to improve access in the future here as well.

Now there's a couple of other interesting notes. First, we continue to see an increase in the use of our co-pay assistance program with our commercial plans. As a matter of fact, the average patient out-of-pocket cost in June was approximately $39 per month. In addition, we see just about 1/3 of our patients paid less than $15 per month.

Now another thing we hear about is the education and awareness of -- certainly our patients and the community on Afrezza, and one of the things we've done and we've talked about this in the first quarterly call was to enhance our social media platform as well as development on our TV commercials. So we're going to talk about that.

First, we've spent a lot of time enhancing our Facebook. And here's just a couple of things that have occurred between the quarters. We've continued to provide important product information for our patients on our Facebook page. We've also increased community engagement. We've increased the awareness of medical conferences, such as the ADA and the AADE. And most recently, we used our Facebook platform to drive further awareness of our Afrezza TV commercial.

That's something we're really excited about, and when you look at the Afrezza TV ad on July 18, we achieved another great milestone that the Afrezza TV ad launched and was aired twice on the show reversed on the Discovery Life channel. And to-date, we've had over 110,000 online views of this TV commercial.

And it's an industry we know that, with TV ads and commercials, there is sometimes a lag, which can be 3 months or more, to really driving patients and increasing awareness. So we know, in the future, it's going to be important that we continue to have a sustained and repeated views of our commercial in the future.

In addition, in working with our Outcome Health and their reach capabilities, we're running the Afrezza TV ad in approximately 9,000 HCP offices, and this really provides patients, Afrezza education and awareness, while they're waiting to see their providers.

So as I've mentioned, we're going to continue moving forward to look for ways to increase our awareness and education, through not just the TV commercial, but other social media platforms as well.

So I want to shift now and take a look at our second quarter promotional efforts. So first, let's look at prescriptions. And what you see in the chart is the Afrezza prescription counts by month from January of '15, which was the launch with Sanofi all the way through the end of the second quarter, June of 2017. Now, while this is the last time we're going to go over this in detail all the way back to launch, I really think it's important to keep the historical promotional efforts of Afrezza in context as we review exactly where we are today in some of the results that we're having.

As we first shared with you, we're just going to make sure that you're aware of this and let's go all the way back and look at January of 2015.

At that time, Sanofi was promoting Afrezza with a large sales force of just about 400 to 500 representatives for the year of 2015. A decision was made to end the Sanofi agreement, and you can see that the NRx trend line, which is actually the orange line in the chart, started declining around October of '15 and continued through July of 2016.

Now as the commercial capabilities of MannKind expanded, a contract sales force was implemented in July of 2016. This contract sales force helped stabilize the declining NRx and TRx script trend from approximately July of '16 from just about December of '16.

This was very important because we wanted to assess the promotional responsiveness with the contract sales organization before we fully invested in a dedicated MannKind sales team. So in November of 2016, we communicated that the contract -- sales organization contract would be ending.

While we stabilized the decline in prescriptions, we needed to accelerate our NRx growth with the dedicated MannKind sales team to enhance, not only our promotional impact, but improve our reach and frequency. So we made that strategic decision.

And moving forward into the first quarter of '17, we committed a significant effort to execute on this decision, as we recruited, hired and trained our dedicated MannKind sales team of approximately 100 sales professionals, with 2/3 of the Touchpoint CSO team rolling into MannKind.

We completed training to the team in February of 2017. And as you may know, with any new sales team, there are a few things that come to mind: first, for some of the new representatives hired it can take typically 3 to 6 months to make an impact in your territory. But secondly, while we did roll in some individuals from Touchpoint who were already promoting Afrezza, whenever you realign territories there can be a significant amount of disruption with customers. And in this case, we had significant disruption in just about every single territory that we had.

So I hope that, that historical context is helpful for some of you that have not heard it, but it brings us to where we are today, which again is the first full quarter of Afrezza promotion for our MannKind sales team. And one thing we see is the continued promotional responsiveness of our sales team with both prescriptions as well as writers. So let's first look at prescriptions.

NRx prescriptions grew 36% in the second quarter of 2017 compared to the first quarter of 2017. In addition, our TRx perceptions grew 23% in the second quarter compared to the first quarter of 2017.

One of the things to note in June, it also represented our highest Afrezza TRx prescription month for the dedicated MannKind team, which was approximately 70% of Sanofi's highest TRx month, which was December of 2015.

Now this is significant because this has been accomplished with a much smaller sales team than Sanofi, and on approximately 20% of the resources that they had at their disposal. So we do believe that as we recapitalize the company, our ability to continue to scale will accelerate growth.

Let's now take a look at the new writers, and I think you're going to see a very similar story when you look at quarter-over-quarter growth. What you see here is that new writers increased 41% in the second quarter of '17 compared to the first quarter of '17. Total writers increased 14% in the second quarter of 2017 compared to the first quarter of '17.

The other important thing to note is our new writer growth has contributed to the NRx prescriptions surpassing the refill prescriptions. And if you look at the lower right-hand side, you can see that the orange line, which is the NRx, has surpassed refills. And this, again, is very, very significant as we look for continued growth of our Afrezza brand in the future.

So we believe that this further represents the promotional responsiveness of our MannKind sales team and marketing efforts. And we're going to continue to have a high level of focus on expanding our breadth of new writers, as this will be critical for our future growth.

I also wanted to share with you the performance around our Afrezza cartridges and look at the growth. This chart represents a rolling 4-week average of Afrezza cartridge quantities. And we saw a 24% cartridge growth in the second quarter of '17 compared to the first quarter of '17.

And I think what else is very important to note is, when you look at our highest cartridge 4-week average, which occurred on June 30, that was approximately 83% of Sanofi's highest full week cartridge average, which occurred on December 18, 2015.

So we're going to continue moving towards that peak in cartridge quantity growth quarter-over-quarter. And as we've shared with you on previous calls, this is very important because we book our revenue on the number of cartridges and cartridge types per prescription sold.

I also wanted to make you aware of some of the NDC packaging and certainly, things that we've been focused on. And as you may or may not be aware of, we have been transitioning our packaging and now, have 5 primary SKUs and those are all listed on the slide in front of you, with 2 of these just being launched in July.

So in the second half of 2017, we are going to continue to phaseout 3 of our other SKUs. And there's been a lot of change here, when you look at some of the packaging. And one way to put it in perspective is by the end of this calendar year, we will only have 1 SKU that was originally used in the launch of Afrezza. So we know there's going to be some changes going on across some of the prescriptions and packages.

But also, as Steve shared earlier, our gross Afrezza revenue in the second quarter grew 60% compared to the first quarter of '17, which was due to volume growth and the mix change to more favorably priced NDCs as well as price.

So in closing, when we look at the quarter-over-quarter, we know that it was very, very exciting for us to look at some of the different growth in many of the metrics that we have. And we know that, as we continue to grow the writers and grow new prescriptions, this will be compounded impact and have that effect as we move forward. And so we're very encouraged, whether we looked at new and total prescriptions, cartridges or new writers.

While we know data fluctuates week-to-week and we see this in multiple disease states, one thing we also know is that we're trending in the right direction. And we believe, as we've said before, that this represents the promotional responsiveness of our commercialization efforts, and that we've shared with you on this call, and we really look forward to our continued growth in the future.

I'm now going to turn the call over to Ray, our Chief Medical Officer.

Thank you, Patrick. So, as Patrick just described the commercial strategy, utilizing the data we currently have on hand, I'm going to cover the Afrezza clinical strategy, basically generating new data to help move us and Afrezza forward.

I will also give you some detail -- some details on the clinical trials that we are planning and/or conducting.

I'll then give you a brief update on the label submission and on some of our development compounds that Mike alluded to in his introduction.

Although there have been approximately 63 studies conducted in approximately 5,000 patients during the Afrezza development program, there still exists significant knowledge gaps. There are several reasons for this. The field of diabetes has advanced. We're currently looking at different metrics, metrics that include measurements other than A1C, and technology has vastly improved.

The advancement and uptick of CGM technologies now allows for patients to have real time glucose control. This can improve metrics, such as time and range and glucose excursions, both recent topics at FDA meetings and are being viewed as clinically important end points.

Afrezza, when dosed in titrated properly, is uniquely situated to help patients achieve these goals, especially around these metrics. And this is the foundation of our clinical programs.

So let me start with the starting and staying on Afrezza. Mike alluded to some simulation data that we have. This simulation data has provided some keen insights into how to appropriately dose and titrate Afrezza.

This simulation data was not available at the time of the development programs and, hence, we are implementing it in many of our new clinical trials. So when looking at this data, we have designed 2 studies, the STAT Study and the ADD-1. I'll show you a high-level view of all the studies on an upcoming slide. And this will help us address the proper dosing of Afrezza.

We also looked at the speed of titration, which we know historically and based on feedback we see in actual patients. So the STAT, the A-ONE and the ADD-1 studies are looking at addressing the speed of titration.

We also are looking at integrating technology and digital platforms. So Mike had already addressed One Drop. We are doing a study with One Drop, which we call our A-ONE study, which is basically going to be done in Type 2 patients.

We are going to be implementing CGM. Again, keep in mind that there were no Afrezza CGM-based studies in the development program, in the 50 to 63 studies I alluded to previously. This will be in Type 1 patients. And again, it's the STAT and the ADD-1 study.

Then we'll look into expand our clinical knowledge. Everybody often asks about our pediatric program. I'll mention the time lines, et cetera, on the next slide. The long-term safety study. There is a closed-loop study being conducted at Yale. And we're also looking to generate real-world data and this was in the Type 1 patients and it will be in the APEX study.

So this next slide is actually going to give you a high-level detail of the studies I just mentioned within our Afrezza clinical trial program.

What you can see at the top is the pediatric PK study. We have recently hired an endocrinologist to our staff, David Klein. David has helped us tremendously in guiding us and finalizing our first pediatric protocol and planning for all future pediatric studies.

We anticipate enrollment to begin in September. It was interesting to note and investigators informed us that trying to enroll during the summer months would actually pose us more problems than solutions.

Also, as we always do, we have worked diligently on operationally simplifying the trial and help controlling cost.

The next study we looked at is the pediatric Phase III study, which basically is being planned, and we're probably going to conduct at sometime in 2018. This will follow ongoing negotiations with the FDA around what the actual pediatric program looks like.

The long-term safety study we -- I have spoken about on numerous calls previously, that is still on target to start sometime in 2018. And we again are managing our costs -- operational costs, et cetera, with that study. And again, engaging with the FDA on future conversations around what that study might actually look like.

STAT, ADD-1, APEX, A-ONE and the Yale closed-loop study I mentioned in our previous strategy, the STAT Study has already began enrolling. It has approximately 20 of the 60 patients already enrolled in the trial. It's across 4 centers with some key thought leaders.

The ADD-1 study is the Afrezza dynamic dosing study. This is being done by 2 key centers within the State of California, and again, with key thought leaders.

APEX is going to be our 600-patient experience trial. We expect this to begin sometime in November of 2017.

The A-ONE Study, which is the -- utilizing the One Drop patient disease management tool, will help us see how patients -- Type 2 patients actually dose Afrezza, and we can get more accurate results in driving our Type 2 strategy. And the Yale closed-loop study is being done in the artificial pancreas setting.

So I just want to make of note that we are executing this incredibly robust program, while keeping our quarter-to-quarter R&D spend flat and decreasing our year-on-year -- year-over-year, sorry, total R&D spend, while conducting these studies.

So let me move on from our Afrezza clinical program and just touch upon the submitted label revisions. As I've done in the past, I've shown that these are the graphs that we are submitting into the FDA for our label change. And it really demonstrates our Afrezza's unique PK/PD profile.

You clearly see in the upper right-hand graph, the much earlier onset versus Lispro versus Afrezza. You'll also see a much rapid return to baseline with Afrezza versus Lispro.

We are utilizing these fundamental differences between Afrezza and other rapid-acting analogs to be the foundation, I say -- excuse me, the foundation for our clinical trial philosophy within our program.

Last, let me speak a little bit about the pipeline. Mike and I have had several conversations since Mike has joined the company about the importance of having a development program on top of and in addition to our Afrezza franchise. During that time, we have been slowly progressing some of the key programs within our development pipeline.

We recently had a very successful Treprostinil pre-IND meeting with the FDA. I must say in my 20-plus years of doing clinical development, I've never left an FDA meeting having such clarity on what the required studies were for registration. We will be filing the IND in 2017.

We also expect to be dosing our first subject with one of our investigational products for the first time in over a decade and this will occur in 2018. This is a quantum step forward for our development programs as well as for us as a company.

And finally, with the pipeline, we have also, as Mike has alluded to, we will engage Locust Walk and this process has been started to evaluate potential partners for our pipeline candidates, of which we have had several interesting parties to-date.

So with that, let me turn it over to Mike to finalize some discussions about PAH as well as give a summary.

Thank you, Ray, Pat and Steve. I want to quickly just touch on the pulmonary arterial hypertension market. It's not something we've previously discussed on an earnings call, but based on the FDA meeting, we made the decision to accelerate the investment behind this program and pull it forward to make sure that we don't lose time on the time critical path in terms of developing our next pipeline candidate.

For those of you who don't know, PAH is a type of high blood pressure affecting the arteries, or the lungs and right ventricle of the heart. It's estimated to impact about 250,000 individuals worldwide and it's considered in orphan condition.

The market size exceeded about $6 billion in 2016, but there's considerable commercial potential through the premium price paid for PAH therapies.

Currently, just to put some context around this, the current prostacyclins cost anywhere between $170,000 to $300,000 in a patient per year. The lifestyle and the quality of life for these patients is dramatically impacted by the current treatments out there. For those of you who don't know, you currently need to take roughly 12 to 20 inhalations a day through a nebulizer, and a machine to get your effective dose. And because of the complexity in the delivery, as well as the absorption of the product, it's very hard to get to the top end of therapeutic doses.

We believe we have an opportunity here to deliver appropriate dosing in the current ranges of all upper dose ranges that will really help these patients receive tremendous benefit and get their disease under control.

Today, the prostacyclins have about 45% market share, and we currently have labeled our Treprostinil, TREP-T, which will compete in the space. It is not the brand name, that is just our internal abbreviation as we refer to it.

We're excited about this milestone in the company's history. We're excited for our development team to get to work, to start focusing on bringing this molecule forward.

Many of you will probably ask me how we're able to afford to bring this forward. And I want to articulate that the early phase development of these programs do not cost a lot of money. They take more time. And so the capital put in towards this is worth it because it -- I don't want to lose another 3 to 6 to 9 months in time in a critical development pathway, which this, to me, can -- we have ensured time lines, but as we get through the single ascending dose study and build our confidence around the potential of this molecule, we will share updated time lines for potential launch. But obviously, we are moving fast because we believe there's an opportunity.

So you've heard a lot from all of us. I know the #1 question on your mind is capitalization of the company. What people need to understand is we have many options on the table as we think about sources of capital. We can issue debt, we can issue equity. We can do lease sale, lease buyback of our manufacturing plant out in Connecticut. There are development deals that Ray and I have been working on as well as international licensing opportunities.

So we have to figure out the right combination of all those mix in terms of how much capital do you want to raise to get to what time point so you can maximize shareholder impact, the growth of the company and the investment. What I can confidently say at this point is the more capital we put in, the faster we will grow Afrezza. And there's always a balance of shareholder returns as we think about the type of mixes and opportunities we have to bring in capital. But also delaying a little bit of these investments, while we fix the fundamentals of the company, was important.

No matter how hard we pushed over the last 12 months, we had to fix some of the fundamental aspects of the commercial launch around the packaging, the sampling, the training of our sales force and how we roll this out to customers. That just took time and we're [finally] through that.

And I think you can see in Q2 of this year, our first real quarter with our expanded sales team, significant growth quarter-over-quarter. What I know, and many people know in the pharmaceutical industry, to see that kind of growth within the first 3 months of a new sales team doesn't always happen, especially on a relaunch.

So we're very optimistic as we go forward; there's nothing I've heard in the market research that tells me we're not going to make this drug phenomenally successful.

So we've given guidance, for the first time in the history of the company, which I think is important. You can refer back to Steve's section to get that guidance. But we continue to meet with potential investors and we'll come up with the right capital solution for the company, which may or may not meet the short-term versus long-term needs or exceed the short-term to get to the long term needs.

We will continue to work with our potential and future investors and our current equity and debt holders to get there.

We will deliver on these financial commitments and we will capitalize for future growth. We expect our current capital, depending on which way we handle the Deerfield debt, to get us pretty close and into 2018. I will continue to evaluate that as we go forward, [as Steve] given you our expense burn quarter-over-quarter.

On the commercial side, we have continued field execution of our key programs, whether that's the commercial, whether that's our speaker programs, whether that's the continued execution of the medical aspects of the company.

We've enhanced payer coverage and streamlined access to Afrezza. We've started to build out a specialty pharmacy network in the end of Q2 and we expect that to continue to grow in Q3.

International expansion with Brazil is our first one. And we continue to have other opportunities in discussions on the table that I'll answer probably in the Q&A.

And then finally, on the medical side of the product, while it may be obvious, again, to us, the value Afrezza brings to patients, it takes time for people to see and understand the information. Our label change coming with the FDA will allow us to make some potential different claims that we've not been able to make in the past. And when you take that label change, combined with the investments we're making and the clinical development of the program and the trials that we're -- had launched this quarter, they really will help articulate the value and the benefit of this product, as we think about those titration and getting to a time and range whether it's Type 1 or Type 2 patients.

The launch of the pediatric program, to me, is really important to our long-term growth. We know this is where patients will start on the drug and stay on the drug for years to come. That experience in the pediatric population is extremely important, and making sure we get that right. So we've been tiptoeing along the clinical development program to make sure we tighten up the trial and get a successful outcome, as this will be the next Phase III trial that we run with the product.

And then finally, as Ray mentioned, filing the Treprostinil IND is our #1 priority on the medical side, and getting that application in and approved to move that program forward is critically important.

Some of you may be wondering, we mentioned previously our new office. This is another cost-savings measure as we won't have rent expenses for the second half of this year. And so we expect to be moving to our office effective September 1, and we'll be moving over the next few weeks.

With that said, I want to thank the executive team for joining us in this journey. We have a road ahead of us to really get through, but I think you can see that as we grow units, revenue will exponentially increase a little bit faster.

This is a very scalable business, and not one that we see that we have to increase our operating cost structure dramatically from where we are in order to obtain significant growth in the future.

We believe time will prove that this product has the ability to be very successful within the current commercial execution that we've established.

I'm going to stop there and turn it over to operator for Q&A.

(Operator Instructions) And our first question comes from Jason McCarthy from Maxim Group.

Congratulations on completing your first quarter with the new commercial team in place. Michael, can you talk a little bit more about the upcoming labeling change? Maybe give us a sense of the timing of the change, and how you expect that to impact revenues in 2017 and going forward into 2018?

Sure. Thank you, Jason. First, the label change has a couple of aspects to it. And I would think about it in 3 steps. One, there is the ability to articulate that the drug starts working within 5 minutes. The second part is, we can articulate that it is faster than the competition. And the third is, asking for a different category altogether. The importance of these commercially really vary in terms of impact, not only in the second half of '17, but as we go into '18 and beyond. As Ray previously communicated, we expect PDUFA approval by the end of Q3. So this will be a Q4 event in terms of launch and impact. Depending on which combinations of those 3 activities happen, really will depend on the upside, in terms of the forecast and the accelerated growth that we expect, post the label change. So for example, if we were to get a different category, that opens up a lot of the managed care access because it takes us out of the bucket that we're currently restricted in by the competition. So we don't always control the buckets, they're going to be driven by the 2 PBMs that drives 78% of the units in the country. But that really opens that window up a little bit. It also dramatically could change Medicare Part D coverage. When it comes to the speed of onset, saying we work within 5 minutes, the reason that's important is we're running these trials right now with Dexcom. And what you can see is within 3 dots on the Dexcom, you can see whether you've got your appropriate dose or you need to follow up the dose. Being able to have the clinical data that we've kicked off, come out in a time frame and readout for us internally, to know what the label change is going to be, will really allow patients to see within a couple of dots on their CGM which way did they overshoot or undershoot their dosing in order to pull them back into the time and range very quickly. We expect that the 5 minutes claim to be in there. The data supports that and it's something we're excited about. The other thing I can tell you is when we shared that PK/PD curve with the physicians and asked them, what does this mean to you, the 5-minute onset meant more to the physicians than we expected in terms of just understanding the PK/PD of the product, the speed of onset, getting out of the body fast and all the things that come without stacking of insulin and injecting. So that really gave them some confidence around how to administer the drug and what they can communicate to their patients. And then getting out of the body faster and being able to make that claim is [really our] label today, we say we get in the body faster but we can't necessarily say we work any faster. And that's been something that's been bothering us since launch. And so this to me is a very important label update as it really will allow us to finally articulate the true profile -- for this product, at least from the PK/PD. When you take that label change plus the work that Ray's been doing and his team, we're really working on this one-two punch combination when it comes to some of these things. I hope that answers your question, Jason.

Yes, it does. And just one more on international expansion. You mentioned Brazil earlier. Any plans for the Asian markets, in particular, China? And how is MannKind thinking about those additional markets with the new commercial team in place?

Yes, great question. So when we think about international markets, earlier this year when the commercial growth wasn't clear to everybody, it was very hard to think about the right balance of a deal. Now that we've shown our first quarter behind us and it's public, we can start to show the early success of our commercial team so that potential deals outside the U.S. can see that when you put the resources appropriately against this in the limited resources we have and get the kind of growth we're getting and continue that growth quarter-over-quarter, that will really help solidify some of the deals we've been working on. Obviously, different markets around the world have dramatically different price points, but we are and have been able to continue to talk to various partners in key markets. When you think about Japan, you probably need a second study for Japan, that's typical. And there's plenty of Japanese partners to consider for that one. And when you think about India and China, those are 2 great markets which have tremendous unmet needs. For example, in India, there's probably about 80 million patients with diabetes. And their average A1C is about a 10. So these people aren't under control and they need something that could be easier, it really helps drive that. And we have some innovative ideas on how to think about treatment with insulin in some of these markets. So we continue to look at that. And when I think about the international markets, they're business opportunities but they're also opportunities to help us turn our inventory faster as we think about scaling up the manufacturing plant, the insulin purchase commitments we have in the outer years, this really helps turn some of that. And so, we'll continue to see nice offset in terms of our fixed expenses but they will also help turn the inventory in some of those commitments that we have in the outer years.

And our next question comes from Robert LeBoyer from Aegis Capital.

I'd like to get a better feel for the One Drop collaboration. And having read the press release, is there anything that you could add to what has been publicly disclosed about what you're trying to do and how this will impact usage and patient management?

Thank you, Robert. When we announced the Memorandum of Understanding back in Q2, it was really focused on 3 things, right, really around coaching and education of patients and helping think about how Afrezza can benefit from their platform; the second one was around Bluetooth technology; and the third was around trying to build a model that really helps transform patient care. So I break that out into 3 sections. So we just announced the first part of that collaboration which is around launching this clinical trial. What that will help us build out will be some of the platforms around coaching education, it's also running a [real-world] study in Type 2 patients, which we really haven't had. It's a cost-effective way to do that. And it will help, kind of, help people self-monitor when it comes to FEV1. And it will also show how we can dose and titrate and build coaching applications within the app for future growth as we think about the collaboration. The second part of the collaboration that we really did spend a lot of time on during Q2 into Q3 is really around thinking about a membership-based model. So we know the cost of insulin is high for many patients. We also see roughly $300 million in sales and cash-pay market alone. And that is now all the Walmart ReliOn brand. There's a lot of people paying for analog insulin out of pocket. And then we look at the number of prescriptions, which are significant in this market -- sorry, just to get them off the top of my head, but there are significant number of cash prescriptions in addition to the dollars. So we think about One Drop and we look at their membership model for unlimited insulin test strips, we're looking to say, how can you build out an insulin-based subscription service with a product like Afrezza? And there are unfortunately various challenges as we think through that problem but we're continuing to push forward on this one. And the challenges mainly come out of government pricing and how do you deal with best price issues and managed care contracts. These are patients who may not have access to care or they just have high deductible plans. And so we're continuing to work through what that could look like and the combinations of that. And I'm pretty sure we'll have something to be able to move forward with as we progress, but we're closely working through that internally as well as with third-party partners. And then the last part of that collaboration is around Bluetooth technology. We know there are Bluetooth pens. I've worked on some of these things myself in my previous lives. And I think there's nothing better than thinking about the technology platforms that are out there, whether it's One Drop, it's (inaudible) coming or it's Dexcom, where you can take a dose of your product and it shows up on your screen, whether it's your phone or your Dexcom and your -- on your iPhone, showing you that I took a dose and what that response was. I think it's the first time in medicine where we're really going to see dose response curves. When a disease, where you measure your sugar every 5 minutes or you wave a [radio] frequency device or you just prick your finger, either of these options, even new clarity on your sugar is just something that we really have not had well adopted across diabetes. And I think as we continue to go out there, the technologies in diabetes and the growth on these technologies, people are going to see, for the first time, what their sugars do all day long as these continue to get adopted. But the problem they're going to run into is they don't have a tool that gives them real-time feedback on how to manage their sugars. And so with the label change coming from the FDA, we're optimistic that the studies we're investing in will help us have data to show that you have real time control with this disease, when you can measure your sugars, now you have a solution to the problem you've identified. So this is why we are excited. We are excited about the product and what the product can bring and the dynamics it brings. So hopefully that answers a little bit more clarity around the One Drop collaboration. They've been having phenomenal success in their membership model, the growth of their platform, and they're just a great partner to work with, with a great culture. So we're excited about that collaboration.

Okay. Great. That's helpful. That gives a little bit more insight as to what you're doing. And just one other. Are there any other updates on the pipeline, maybe the epinephrine program or Palonosetron?

So -- hi, this is Ray Urbanski. So with the epinephrine program, we are still progressing, albeit slowly, the inhaled epinephrine for anaphylaxis. The conversations with the FDA are ongoing around what the clinical program will look like for registration. As you can imagine, there are several complexities around an auto injector versus inhaled epi. So the FDA and MannKind are trying to get this quite right. Palonosetron was still doing studies with formulations and aerodynamics without devices, et cetera, but that's also progressing as quickly as we would like it at this point in time. We also have 4 or 5 other compounds that we've evaluated that are in various stages of development. Again, as resources and capital become available, we'll progress some of these more than others. I just also want to make a note that of the 45 compounds that we've ever looked at to formulate, we've been successful with 43 of them. So we're pretty confident that whatever compound we look at, we'll be able to put it into our formulation technology as well as our devices and move it forward.

And just to add to that. Some of these are in -- why we've engaged Locust Walk because their -- of interest to us we think they serve real unmet needs. But they may not be like epinephrine and we're really going to build out a large primary care sales force to sell epi. So when we think about potential partners that we line up with these programs is -- one of the things we look forward to offset some of those development costs is to bring in the right partners around some of these programs.

And our next question comes from Bill Tanner from Cantor Fitzgerald.

Mike, I had a couple for you. As it relates to -- and you guys walked through good detail, the efforts that are being undertaken to grow Afrezza. And I'm just curious -- so if you think about the sales force expansion, payer coverage, the One Drop to label -- [provisional] label update, international expansion and additional clinical data, if you had to rank order, which ones, or one or ones, you think are the most important, maybe the most likely to be successful and most likely to move the needle? What would those be, just in terms of investors wanting to pay attention to the impact that they're having? Or do you think it's the constellation of all these things that are going to potentially have an impact? And then I had a follow-up on Treprostinil program, please.

Bill, great question. I mean, I think you can see the company continues to make tremendous progress on a lot of fronts, pushing a lot of things down the unparalleled path. And I think we often ask ourselves, are we trying to do too much at the same time and where can we refocus our energies sometimes. But I think, to answer your first question around privatization, I think, getting Afrezza success and execution here in the U.S. is #1, 2 and 3 priority. I'm glad to have Pat here who's got tremendous amount of leadership and experience in leading sales teams in cross functional alignment. I believe we'll continue to see an accelerated fine-tuning of our sales team in terms of their impact and their execution. And also recruitment of key talent to continue to -- we have probably about 7 field openings around the country right now. And I think those -- we're not in a rush to fill them because we want to make sure we have the right type of people on the bus. And this is really important because we see -- I'd just give you one example. We just hired a rep recently on the East Coast and literally in 1 month, she grew that territory 600%, which was unbelievable. But you just get the right person who has the right passion and the right understanding and you can just see tremendous growth. And that's when we look across the territories, the good and bad news over last year, is we've seen what works and what doesn't work and the types of hiring profiles. And we continue to get pickier and pickier as we go forward in the types of people that we believe will be successful as we go forward. And so that's in terms of #1 priority. The other reason that, that is important is that continues to drive some of the deal terms we think about, whether it's international expansion, pipeline opportunities, et cetera. So the faster revenue of Afrezza starts growing, the more people gain their confidence and be able to invest in future expansion opportunities. International expansion is probably my third priority. My second one is the label change because I believe depending on which combination comes out of that label change, all of them represent upside to the current forecast. And that upside may or may not be realized directly in the month after we get it but they really represent a potential upside in terms of what we can actually say and how doctors understand and communicate about the product. So that's probably my second priority. My third priority is a combination of international plus pipeline. And the reason is, both of those things take a long -- they have long lead times. And so if we don't start some of those international discussions now -- we've started them already, but if we didn't start them previously, we would never get across the finish line in a time frame that I want to make sure we're launching ex U.S. in late '18 and '19 and beyond. Those are important years as we grow out with the company. And then the one thing I didn't mention -- sorry, there's one other thing I didn't mention on the call, I didn't mention in the last call, which is seeking a primary care co-promote partner. This is something that, if the appetites right, I believe there's a large opportunity to accelerate the growth in the primary care segment. We have all the tools and capabilities ready to go, and they're ready for scale. So for example, I get a lot of question on the TV commercial on why it's not out there. Why we're not spending more. The reality is you don't want to spend $20 million, $30 million launching a TV campaign without a couple of hundred reps pulling it through on the local level. So we're really looking and seeing, is the right partner out there to help pull all those together as we go into '18. If we see that the temperature is not right out there for whatever reason, then we might make the assessment that we want to go into a local market ourselves and demonstrate what could happen in one small geography and scale that up from there. So that's probably another priority, is to really look at that opportunity.

Great. And just on the Treprostinil program, I'm wondering if you can just -- whatever you're willing to disclose, kind of provide some idea as to what the profile -- the differentiation profile of the product would be relative to other inhaled prostacyclins. I mean, I'm assuming the aspiration is not to create a me-too product. And I guess, as you think about longer term with the pipeline, the notion would be what, in terms of trying to leverage the technology, converting things that aren't normally delivered, pulmonary or perhaps the PK profile being better as it is with insulin.

I'm going to -- Ray, take that question. And one thing I will add before he goes is, we're going to have investor updates twice in the month of September, and we'll give a little bit more clarity around how we sequenced out the pipeline and the filter that we use, so that will be coming out in the September time frame. But just to focus on Treprostinil for now. Ray, maybe you can comment?

Yes, certainly. So one of the things I want to emphasize and the things we'll articulate in future meetings, is that all of our development programs and even on maybe following 505(b)(2) registration pathways, are not being developed just for the mere convenience, right. We're not developing an inhaled Treprostinil simply because it happens to be more convenient than walking around with a battery-powered nebulizer, where you have to take multiple inhalations for a single dose. We firmly believe, and in having conversations with some very high-level thought leaders, that our drug delivery technology will deliver Treprostinil in a more effective way, increasing tolerability but also improving the safety profile, but also the efficacy profile of the inhaled drug. So when we describe our other pipeline products, you're going to see this recurring theme throughout our presentations, that we're not only meeting an unmet medical need through our improved safety and tolerability, but also we feel there's a real efficacy advantage. And it's not purely -- as I'll say again, it's not purely a convenience play. So that's where we think TREP sits. And as I say, we've had conversations with some very high-level practitioners as well as KOLs and they think the therapeutic advantage of the Technosphere Treprostinil is incredibly high, especially as related to a currently marketed inhale Treprostinil.

And for competitive reasons, I don't want to go into this one too much, but I would say, we have talked to a couple of key physicians that -- when you articulate what we're trying to achieve with this development program, what we think is possible and their articulation of what the journey is for these patients, it's something that we get very excited about. But we want to walk before we run on this one, but we do believe, as we get through the first phase of this, the time lines will move rather fast.

Yes, that was the question, I mean, obviously, Technosphere insulin is ground-breaking as it relates to delivery of insulin. I just wanted to make sure, or curious, as to other things that you would put into the pipeline or use the inhaler for, the formulation technology for, they would also be viewed as being very much innovative. And I understand that 505(b)(2) does not necessarily mean lack of innovation, just kind of wanting some color. But, obviously, we'll get more detail when we get more detail.

And just one other comment on this one, I think the big surprise or excitement, I guess, for our part is, when you're delivering a drug to the lung already, the FDA's barrier, in terms of what they expect and want out of their studies, becomes a lot less of a burden in something like insulin, which was the first time for us going in that direction with all the development costs. When you deliver drugs to the lungs, the FDA has a little bit better understanding and expectation around that. So that's helpful to us as well.

We have no additional questions at this time. And I would like to turn the call over back to Mike for closing remarks.

Okay. We have some other questions that were e-mailed in, but I'll hold off, but just expect some continued future updates as we progress into Q3. I want to thank everyone for their patience. I think you see the first quarter of a fully built MannKind sales team has continued to accelerate our growth. The excitement I have is that you can see, as we grow units, revenue exponentially increases. So even though scripts may only be growing 20%, you see gross and net sales growing probably in the upwards of 50%, 60%. We expect that trend to continue as we migrate through a dose titration schedule for patients. And the packaging changes that we've made has really helped make it easier for patients to titrate up and stay and start on the drug. I get lots of questions on refills and new Rxs and I just want to remind people that, just because you see 100 or 200 NRxs, there not all new patients. Sometimes they're patients switching doctors or switching pharmacies. It's an annual renewal. So the subset of patients is what's new. And when we look at our refill rates, we don't see a tremendous difference between us and rapid-acting analog insulin. So that's a question I know we get a lot. It's not one that concerns us. We think as we grow and we do some of these studies and continue to increase our titration schedule, we think our retention rates will grow even higher than the rapid-acting class. But in general, we're not seeing anything that scares us at this point when it comes to retention.

We had to pass our refills with the NR (inaudible) which we did in June, and July continues to be a strong month as we sit here today going into August. So from this perspective, we have some time on our side to solve the capital structure of the company. We're working diligently on that one. So it doesn't -- we know it's an overhang, as we stand here today, but it's not an overhang that we lose sleep over because we've had several great meetings and expect that to continue.

So I want to thank my team. I want to thank all of you, and most importantly thank patients who depend on us to be here today and tomorrow and in the future. So thank you, everyone. Have a great evening.

Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.