MannKind Corporation (NASDAQ:MNKD) Q1 2021 Earnings Conference Call May 12, 2021 5:00 PM ET

Company Participants

Michael Castagna - CEO
Steven Binder - CFO

Conference Call Participants

Oren Livnat - HC Wainwright
Thomas Smith - SVB Leerink
Steven Lichtman - Oppenheimer

Operator

Good afternoon and welcome to MannKind Corporation First Quarter 2021 Earnings Call. As a reminder, this call is being recorded on May 12, 2021, and will be available for playback on the MannKind Corporation website shortly after the conclusion of this call until May 26, 2021.

This call will contain forward-looking statements. Such forward-looking statements are subject to risk and uncertainty, which could cause actual results to differ materially from these stated expectations. For further information on the company's risk factors, please see their 10-Q report filed with the Securities and Exchange Commission this morning, the earnings release and the slides prepared for this presentation.

Joining us today from MannKind are Chief Executive Officer, Michael Castagna; and Chief Financial Officer, Steven Binder.

I'd now like to turn the conference over to Mr. Castagna. Please go ahead, sir.

Michael Castagna

Thank you and good afternoon everybody and welcome to our Q1 2021 quarterly earnings. First, I want to highlight our total revenues for the quarter were $17.4 million or 7% versus 2020. And as you may or may not recall, we had a tough comparison in 2020, because of the pull forward of COVID demand, but it was the wholesalers our patient stocking, which made a presence as we'll talk about in a second look slightly modest increase as much as we would expect quarter-to-quarter, year-over-year.

On the JVs and partnerships continue to progress our United Therapeutics collaboration with Tyvaso DPI was submitted to the FDA by United Therapeutics, for both the pulmonary arterial hypertension indication as well as ILD.

And we're looking forward to hopefully have an acceptance from the FDA with later this quarter and the approval by year-end.On the pipeline side, we completed our first toxicology studies for clofazimine, which is MNKD-101. We are now just finished dosing the dog study, which is a large animal for talks. That will be wrapped up very shortly and we now currently making API supplies and identifying the site here for the Phase 1 by year-end. We started several new formulations for new collaborations.

We are quite busy there in Danbury. We've increased our staff on R&D as you see and excited to continue to move the pipeline and new collaborations forward as we continue to progress 2021. As you look at the Afrezza, it further grew $18.1 million or 1% versus Q1 2020.Well, it's really important to look at is true demand growth in the marketplace.

And what I mean is when you strip away inventory shifts from wholesalers, pull forward patients, prescriptions here and there, volume mix and price, you really show a true demand growth from $7.3 million to $8.8 million or 21% year-over-year.As many of you may noticed in our earnings, we did expand our investments behind the Afrezza, $3 million increased expense is not 100% related to Afrezza. There's a lot of moving parts to that number.

Number one, we did expand our sales force in Q2 of 2020, you're just seeing them get out the door here in Q1 of 2021 in Q2. We increased our medical liaisons, which are just happening here in Q1 of 2021.So there are several things related to Afrezza, that really took effect either late in 2020 or early '21 that we're just going to start to see the impact of those extra hires and extra expense here as we progress the rest of this year.

Pediatric trial is another area, we've increased our investments and getting ready for that trial. And the FDA recently would be providing us final comments, but gave us the green light to move forward, the IRB just approved the protocol with minor changes.

And we are on track to start this trial in the second half and extremely excited with all the work that the team has done and getting this trials to ground. We've also like clearly co-promote here late in Q1 and we'll continue to see progress in Q2 as the team gets the additional marketing materials and getting out there across targets as COVID opens up the world.

And on the balance sheet, Steve and the team has done a very nice job. As you look at our cash balance, at the end of March, it was $278 million, mainly due to the convertible debt issuance of $230 million.

And we've also completed our debt restructuring, where now the majority of our debt is due in 2026 and we would do some of the historical legacy that we have in the company in April.

On the further, when you look at the moving parts here, there's a bridge program, which was a free goods program that showed up in the Symphony and IQVIA prescription that ended January 1st. And so, it's hard for the market to see the gives and takes in the prescriptions. We're trying to show you. If you look at TRx plus our free goods that we see flash cash pay and you look Q4 to Q1, generally flat. And if you recall, we typically see a Q1 decline versus a Q4, I mean patients generally for one extra strip at the end of the year to max out their benefits.

So I think you see this looks pretty good relative to what you're seeing in the marketplace of strips dropping. But just know a lot of those strips dropped about 15%. Traditionally, we call it the bridge program and that's now going in our history. When you look at some of the work we did here in Q1, we had a sales meeting that was virtual. We got the sales reps new materials with the new message focused on speed.

We've launched a nationwide CME focus on both revenues and funds with TCYOD.

We've done more surround sound amplification that increasing the awareness and reminder around the present an inhaled insulin, you'll see more Journal, digital, EMR advertising and further assist our new reimbursement hub got 25% of our is in Q1 and continues to progress here in Q2. On the patient side, you'll see expanded digital marketing we piloted in a couple of states increased here in late March, early April at all of our covered states. We've seen a 40,000 clicks and increase in traffic and ideal website and we want also increase our support of third-party advocacy groups and here you a little car. We're running a pilot want to key markets here of Cars 2 see if that helps to increase awareness of inhaled insulin.

So currently we are finalizing our plans to invest, to get it for the growing faster. Now the curve, it looks like it's behind us, we believe 85% of our field employees are roughly vaccinated. And so basically back to where we were pre-COVID of last year, as we expect to get all those back up and running here in Q2.On the Tyvaso timeline we completed everything we've stated here in Q1 and Q2 and Q4. I will just waiting upon acceptance.

But as you may look on a job board. We are hiring quite a number of employees to gear up here for Q3 manufacturing of Tyvaso. And the site build out, which is an expansion opportunity to support the future growth for additional indications of Tyvaso. So a lot of work going on in Danbury and just want to thank everyone there listening to the call. It's been a tremendous amount of work under really tough circumstances with given all these extra equipment to get aware during COVID and making a high potency molecule.

And we hope will be on track for -- date at the end of this year. Steve, I'll turn it over to you.

Steven Binder

Thanks, Mike, and good afternoon. Very pleased to review First Quarter 2021 financial results and a number of favorable changes we've made that change with our lenders. Please supplement this call dense consolidated financial statements and MD&A contained in our 10-Q which was filed with the SEC this afternoon. Let's start up by looking at revenues for the first quarter of 2021, total net revenue with $8.1 million versus $8 million in 2020, a growth rate of 1%.

As Mike said, you may recall that in the first quarter of 2020, it was favorably impacted by approximately $0.5 million due to shipments to wholesalers related to patient stockpiling as the COVID-19 pandemic started to heat up. Excluding the impact of the first quarter 2020 stockpiling, non-GAAP as a growth was approximately 8% mainly due to favorable price including gross to net. Also, as Mike spoke about a further demand sales increase of 21% for the first quarter of 2021 versus first quarter of 2020. Demand sales reported by Symphony and adjusted by MannKind net.

The most significant reason, we don't see a similar increase in Afrezza net revenues is because of wholesaler buying patterns. Specifically, the increase in the first quarter 2020 inventory levels for patient stockpiling that I just mentioned plus as we expected wholesalers low the inventory levels in the first quarter of 2021, primarily related to the termination of the free goods program as well as seasonality, which impacted Afrezza net revenues by approximately $1 million. Moving to collaborations and services. Revenue for the first quarter was $9.3 million versus $8.2 million for 2020 representing a 13% increase.

The increase was mainly due to higher revenue related to our United Therapeutics collaboration as we prepare for the commercial manufacturing launch of Tyvaso DPI, as well as revenue from the site liquidity co-promotion agreement. Like liquidity was launched approximately midway through the first quarter. In addition to the new quality collaboration revenue we expect new business development deals will further add to our collaboration revenues this year.

We've been quite busy raising capital on restructuring our balance sheet to make the company financially stronger in early March, we raised $30 million by issuing 2.5% senior convertible taking advantage of strong market conditions and demand for mankind convertible debt reflected in a substantially oversubscribed offering the cash received from the convertible debt offering has resolved the significant risks and uncertainties regarding sources of liquidity, which previously raised substantial doubt about the company's ability to continue as a going concern.

Our 10-Q filed today with the SEC, reflects the absence of a going concern disclosure in April with our improved financial condition we some of the proceeds from the convertible debt issuance to pay down some of the higher cost debt and negotiated more favorable terms with our lenders. Specifically, we paid down $10 million of mid cap debt, with an interest rate of 8.75% which reduced the outstanding balance to $40 million. We also paid off the Mann Group term loan with an interest rate of 7% and the amount of $35.1 million and outstanding accrued interest to the Mann Group in the amount of $4.9 million.

Overall, in April, we decreased higher interest rate debt by almost $50 million. In addition to reducing debt, we also renegotiated terms on the mid-cap and Mann debt. For our senior secured credit facility with MidCap, we increased trance 3 from $25 million to $60 million, which is available to us between December 2021 and June 2022 with Tyvaso DPI approved by the FDA. The interest rate on the loan was lowered by 1.5%.

The LIBOR interest rate flow was lowered by 1% and we added an interest rate cap of 8.25%We also extended the interest only period by one year to August 2023.In addition, financial covenants were relaxed. Specifically, our minimum cash balance was lowered from $30 million to $10 million and upon FDA approval of Tyvaso DPI, the minimum cash balance requirement is eliminated entirely. And as long as, we maintain at least $90 million in unrestricted cash equivalent, the Afrezza 12-month trailing net revenue covenant is suspended.

For the remaining Mann group debt of $18.4 million, the interest rate was lower from 7% to 2.5% to match the way we obtained on the March convertible note issuance and the maturity was changed in November 2024 to December of 2025.The impact of the changes just discussed result in an annual interest expense reduction of $5 million. To conclude the finance section of today's call, we've strengthened our financial position by adding up substantial amount of cash to the balance sheet, reduced our cost of debt as well as lowered the hurdles associated with our debt covenants, which allows us to better fund pipeline opportunities including the pediatric clinical trial.

Afrezza growth opportunities and allows us to focus on the preparation for manufacturing Tyvaso DPI for our collaboration partner, United Therapeutics, which should begin in the third quarter of 2021.Thank you. And now, I'll turn it back over to Mike for additional comments.

Michael Castagna

Thank you, Steve. And let me start as we think about the future of the company in the pipeline of techniques for opportunities. A key player on the collaboration revenue line. I encourage our shareholders and analysts to continue to watch that line because that is where additional revenues are going to start to show up, whether it's that liquidity fees that come in, or just the formulation work we're doing, a formulation work that we're making for the pipeline for partners such as life sciences, these all these extra revenue streams are going to start to fall in the collaboration and I think that's important for people to continue to focus on. As you look down here in our pipeline.

You can see a further and liquidity are the 2 Phase 3 marketed products we have. Pediatrics has done quickly in the Phase 3 will be dosed here in the second half and international expansion is not just focused on disciplined here in India as well as Australia. We are also now looking at Europe and Canada next milestones to file the presence. On Tyvaso the so DPI side, that's on track to be filed year and approved by the end of the year, all goes well and MannKind-101 as I mentioned earlier, we are making additional supplies to run the Phase 1 study and we are just finishing up the large animal tox study, which will be wrapped up here in Q2 especially Q3 and set us up for Q1 opening that opportunity. The next 3 assets.

I won't go into details in any one of them, but I will just say they all continue in terms of formulation optimization PK dosing the hurdles to get us ready to move these at least hopefully to these programs in the tox studies as we believe this year. And then we have the second life sciences the new start to see more activity from them. As we look to be CMC manufacturer for the Cannondale franchise with or less. On the 2021 milestones, we have several items that are new that work here in the last quarter, in particular the Levine Type II study just cut published and that was an important study as it showed you how to dose a fixed-dose way and inform your time patient and when you, if you recall that study had a 1.6 reduction in A1c in 12 weeks with no significant material hypoglycemia rates increasing.

So we find this is a really important study that we're looking to use as a basis in our Indian trial as well as some future trial designs we're looking at. Additionally, there is a trial we did here in Q2. It's almost done here in a couple of weeks where we are looking at a higher conversion dose and what's in our label as we want to step it up for our Pete study and future studies, potentially looking at a label change, where we can get patients started on the right dose at the right time to increase patient retention.

And finally, as Steve mentioned, the $60 million debt tranche will increase from $25 million and otherwise. All these milestones continue to remain on track for this year as we look forward to continue to execute against our plan.

One exciting thing to announce that will take will be not the smart money. But we think we have an earnings call today want to surprise you we are engaging Conor Daly who is a patient living with diabetes at the only full-time type one that rates are in the Hindi in the series here and he'll be, you'll see a mankind car in the rate this weekend. If you can dial-in to watch, but the GMR Grand Prix and Indianapolis May 15 from 2 to 5, we will have a MannKind car hopefully doing very well with counter help.

So looking forward to this, but this is part of our unbranded campaign around raising awareness of inhaled insulin, and you can see the tag on here. And so we are one of the growth has a lot faster and we see no reasons we look at all the noise with CGM what's happening in the marketplace around free moving OpEx a further have to capitalize in this opportunity and drive faster demand as we go out there, so hope you have a chance to the car and hopefully have a good base.

And then just wrapping up here next week. We're also getting ready for the Annual Shareholder Meeting I don't thank everybody who has voted the shares already. I mean over 50% have been voted please intend to 15 minutes for the start and are 3 proposals, nothing major here but making sure we left our 9 directors gratifying our auditors and advisory approval of our compensation for our named executive officers. If you have questions you want us to be prepared remarks. 4, please feel free to send them.

I've already gotten at least 10 or 15 from very shareholders just take them the IR will be collecting those and trying to make.We organize our answered in the way that we can group questions and provide the feedback that you're looking for.So I'm going to stop there and I think we'll take the questions.

Question-and-Answer Session

Operator

[Operator Instructions] Your first question comes from the line of Oren Livnat from HC Wainwright.

Oren Livnat

I have got a couple on Tyvaso DPI, and then one big-picture. On the DPI program, and you mentioned manufacturing moving forward quickly and I'm just curious, since you're expecting December approval, what sort of manufacturing revenue and how material could that be actually this year ahead of approval potentially? And do you booked that? And then, also, I guess as we try to figure out its something that's going be a big product. How do we gauge manufacturing revenue as a percentage of end sales so to speak, and what sort of margin is there on that and then I have a question on BREEZE. Thanks.

Steven Binder

So I think I had a couple of things, one, we're just finalizing our commercial supply agreement here with, I think we have further guidance as we get to Q3 HMH we up is up in Q2 on some of the margins and percent of peers in terms of looking at what we can expect. I'm going to over to Steve. Here I'm going to say we're going to be. Same thing will provide some perspective. Once we get the manufacturing agreement completed know there are a few different ways you see revenue to possibly be recorded and will make sure we get it right.

So once we get that done, we should be in the second quarter will provide that feedback to you.

Michael Castagna

The short answer to your question Oren is, there will be impact this year in a positive way that we'll be booking just finalizing metric.

Oren Livnat

So I guess we'll cross that bridge later. I think I've asked you about this before, and I don't know, if you could talk about or not. So you could shut me down if not. But obviously they filed with the BREEZE results, which I think was just like a dose for dose switching study from Tavy, so the old formulation, and I'm just curious was there or is there ongoing extension to that study perhaps studying at higher tolerable o max tolerable doses using the DPI such that maybe we can learn that in fact you can go a lot higher with your product. And maybe you can give even superior efficacy even if it's not statistically controlled head to head study.

Michael Castagna

Oren, great question. So you're right the first, I think it was with the 3 weeks, which was dose 2 dose conversion, making sure we were no worse than and have any surprise safety signals from those patients, if you call they enrolled 51 patient. I believe 49 rolled into an optional extension phase and in the therapies. We have patients going on over year I think I'll have to get approvals should be almost 2 years. So we are going to have good long-term follow-up on efficacy and safety and in that outflow pension fees people could titrate up to higher doses.

And so we do know what that looks like and we do know the average dose from when it started to where they end up with a one or 2 years. And I think that'll be important data. Right from an overall given that in the label to also demonstrating safety and as you recall, we were able to get to a maximum tolerated dose of 150 micrograms. And so we are down people are the United fairness is allowing people to go up that high. It's in expansion phase and so I can tell you the majority before needs can be more, but there is a subset of people that is do those higher.

Oren Livnat

If I may be greedy I apologize I just missed going forward also are they using your device for additional extension label expansion studies that they're talking about now COPD et cetera or are they using Tyvaso. The old formulation and then plan to maybe wait for approval of the DPI to then try to expand that label after approval or are they using your device going forward even pre-approval for clinical trials.

Michael Castagna

Yes. I think in fairness of everything you're doing outside of the extension study, so all the other indications are on their Tyvaso nebulizer and whether or not they switch over to the DPI formulation. I think will be TBD approval. So I wouldn't be expecting. So we've seen approval.

Operator

Your next question comes from the line of Thomas Smith from SVB Leerink.

Thomas Smith

And congrats on the progress. Just a couple of my end. First I guess now that the NDA has been submitted for Tyvaso DPI. Can you talk about your expectations for pre-approval inspection and I guess how are you preparing for this? And do you have any expectations on timing?

Michael Castagna

Yes. I mean, we'll be prepared for a pre-approved inspection whether or not we need one I think is a question, we don't know the answer to. That's up to the FDA. The fact is just inspected, I want to say in mid '19 if I recall, mid '18, but we have -- everything looks really clean and so the FDA well there recently since we got approval, that was the first time they there 5 years. So we feel pretty good about the readiness of the fact we're not too worry.

We always prepared for those things and a 5th year once, we do expect that and we'll be ready for that when that happens. The good news is they want to go International other than here in the U.S., the packaging here and a pretty well established place and the Boston office of FDA going out and have had the Denbury. So it could be an issue, but I mean I know some other coming other issues on this slide, we don't expect that to be one of our issues with the other

Thomas Smith

And then, some of Steve's comments suggested that you're looking into new business development deals. Maybe you could just speak to some of the types of deals you're evaluating and any sense when we could expect to hear on next steps here?

Steven Binder

Yes. So one of the things we started doing recently with a few partners is lowering the operative cost upfront to do some formulation work. So that we can look at feasibility studies and kind of sharing that risk with our partners to show that we can take our technology and some an office product and really make this an opportunity to scale up other BD opportunities and manufacturing deals and royalties ultimately very slow. So I think that's what we were working on right now. We we've had several come in the last few months, we're working on those.

We're already formulating things enough on stability and other new not linear entities we're looking at that could be NCEs that will thinking about. And so, that's a combination of other people's products, maybe in terms of lifecycle management.

And then there is opportunity to look at earlier stage innovation that we think our technology and someone else's molecule could work really well together and now either done by doesn't make sense, but together, it could be really powerful in treating somebody working on. So that's our main focus for those types of collaborations, that the collaborations with our partners are likely to be non-orphan lung areas. What the partner these that have been directly compete with there was in our pipeline.

And then, some things still something on COVID doubling up that our people are working on that they want us to explore our Pattern Development Foundation force.

That we'll continue to explore. But we're not directly going to focus on COVIID personally as we speak. But they're going to be our molecules are things that we can somebody with them. We did not to continue to look at those. We have a scalable technology that can deliver therapeutic steepen the long but provided a clinical benefit in many diseases and that's what we're looking to see it happen continue to help more patients as we go out there.

So just what you're so the times are getting done, I think the first thing is, given the formulations showing they get the right PK in the rodents. And then we know we have dosing and I think those will turn into development deals and go forward.

Thomas Smith

Thanks, Mike. That's helpful insight. And then, maybe just a last question at with ADA right around the corner, maybe you could just talk to expectations for data, we should be watching out for us at the conference?

Michael Castagna

Sure. There's two covers, it's actually ATTD, which is coming up in I think 2.5 weeks. That will distribute our poster for that. And so, that one is going to be nocturnal hypoglycemia with from tox study with a new analysis that was done and then in CDA.

We have 2 posters there, one is around day time, time range and that's based on the wind data, it just got published showing that a and improve daytime real time control and give you better time and range in the other study that will be presented at PDA will be the PK studies. And I think that will be one of the first half of the delta, if I recall, and I'll be to start as we start to prepare the market for pediatrics and understanding how would it looks like and then feeding into that pre-market preparation within the dividends coming years that's that second study is going to be.

Operator

Your next question comes from the line of Robert Hazlett from BTIG.

Unidentified Analyst

Hi, this is Terry on the line for Bert. Thanks for taking the question. Just have an additional question on potential development opportunities, specifically for Tyvaso DPI. Has there been any ongoing discussion with UT regarding additional indications PH COPD IPS that they're currently investigating? And could we expect any future updates, regarding additional opportunities?

Michael Castagna

Yes. And I think we've been clear from and UT that I think the good news in the FDA and I listened to their earnings call last week is that we have in writing from FDA and they have been writing that, any additional indications that Tyvaso get, our formula will be eligible to fold into the label and those may be protected with UT and orphan patent and things like that. And so COPD was to get approved for them if IPF got approved and those are indications that could expand for the Tyvaso DPI label. Soh we're preparing for success in those markets and those opportunities. And as you saw, we just are planning to file with the IRBs and PHY and I'll just speak.

So I think they expect to readout on COPD next year, if I recall, in the following year at the IPO. So we'll keep watching those. We're going to get, we got to get out of those and the manufacturing, we can't wait for the readout, we got to be ready to go. There is a big markets.

Operator

Your next question comes from the line of Steven Lichtman from Oppenheimer and Company. Your line is open.

Steven Lichtman

On Afrezza you said estimate of how much channel inventory is that there that might still get work down due to the end of the free goods program?

Steven Binder

We don't, we believe that the reduction in the channel inventory was mainly Q1. What we've seen in April, we haven't seen further work down and inventories they expect is all done by us.

Steven Lichtman

And I was wondering if you guys if you could update on some of the initiatives. You highlighted some already. Maybe if you could talk a bit more about how Afrezza effect is, is performing for you guys and then any update on - I didn't, I didn't see anything on that?

Michael Castagna

Yes, two great questions, Steven. Thank you. On the - as you saw 25% of our volume went through there in terms of new prescriptions. We're seeing anywhere between 60 and 90 prescriptions we come into the fibrosis. Obviously, we have incentives with our sales force to improve that.

An example, there is, we're looking at one large PBM. And what we're full percent of claims are getting approved and that helps us to finetune in our contracting strategy. And so, now, we can see 90% of claims get approved on PBM 1 and 80% of PBM 2. So it's really given us really important insights and as we think about how do we invest remove friction from the prescribing process, that's one of the things we continue to work on. Afrezza is just giving us a nice roadmap on to improve.

And certainly, we see Steven that process for example with doctors just don't know how to write a prescription. They do new prescribers and now we can go back and educate them and say, hey, this is how it should be written or we see they don't fill form in many times the payer disclose. Hey, did you feel the competition or not. And as long as they try the competition, they will get approved. Now we see in a further, lot of times of doctors are starting a document, that's the basic premise and that's causing a delay and from the time of prescription to the patient start.

So we're getting a lot of good insights that allow us to keep working out those teams, to keep moving the friction and get those offices to be more efficient in the POD.We have no problem at the prior off but mostly PA to label and some cases a step edit through the preferred agent, which again we're targeting the 3.5 million people on insulin already today and so that's more than enough patients to grow a successful company around. So that's just we got about 200 patients, honestly. In the wings right now just waiting for the PAS, either from the doctor to completed or PBM and so that's, let's say that some kind of perception of the load patients that should come out over the next 3 months.

In a couple of hundred there. And do we've acquired this quarter mainly because waiting for the FDA to grant us a meeting and give us feedback on how they're going to categorize the device. We think it's an exempt device we just want to make sure that before we talk much more got it. But otherwise, we're continuing to invest on an important partnership with UT. It's an important partnership here on the accounting side and then really looking at how we integrate that potentially building up the software to feet of the PGM and dosing.

So all those continue to progress the spending the money as we go forward on this one and you continue to see that get elevated as we progress this year in the next year, so that's still front and important part of our investments in future growth.

Steven Lichtman

And could you maybe just lastly Steve, gross margin ticked down here sequentially you in on a steady rise anything unusual in product revenue COGS that you'd call out or anything else that you'd highlight on the gross margin?

Steven Binder

Yes, Steve, thanks for the question. It's related to the manufacturing activity for the first quarter for Afrezza. We didn't have a lot of a Afrezza manufacturer in the first quarter, the excess manufacturing costs fell through the COGS line without getting capitalized as it would get there is actual manufacturing activity. The second quarter, we have a lot more manufacturing activity so you should expect the gross margin to be higher than the first quarter.

Operator

There are no further questions at this time. I'd like to turn the call back over to Michael Castagna for closing remarks.

Michael Castagna

Right, well, thank you everyone. I think the good news for hopefully not worried that COVID is slowly getting us back to normal. I personally are bidding customer the last week and very excited, being able to meet large practices and understanding where we have, and have not going right with Afrezza and where we can kind of turn the corner. I think -- doing a great job and getting everyone focused on the right thing. We're currently looking at how do we get each of our district managers leading growth quarter-to-quarter.

And I think we're on track, probably this quarter for the first time of 7 out of 9 going double digit positive as we closed out Q2. So we're exciting to see the momentum. We've got a lot of great new salespeople out there and a lot of our current reps had to work through the Free Goods lending here in Q1. And that was a little bit of friction they had to overcome, but I think a lot of that's now behind us and I'm expecting, we'll see it seemed like a stabilization at this point, but the free good behind us and remember you realized there was some former coverage changes here in April, which we mostly worked through.

And so, I think we're seeing the bottom here, and we should start to continue to see growth as we go forward and that's where for investing for, so look forward everyone, I'm talking here in Q2.

Getting on new data sets out there and continue to move to Tyvaso in our pipeline forward. MannKind will in the best position we've been in the last 4 years and looking forward to continue to march along in 2021 and hopefully starting to grow this company a little bit faster. So thank you for everyone's support and I look forward to talking to you soon.

Operator

This concludes today's conference call. Thank you for participating. You may now disconnect.