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Item 1. Business

2023-02-23 compared with 2022-02-24 · 118 added, 130 removed, 272 unchanged (48% of the section changed)

Unless the context requires otherwise, the words “MannKind,” “we,” “Company,” “us” and “our” refer to MannKind Corporation and its subsidiaries.

We are a biopharmaceutical company focused on the development and commercialization of inhaled therapeutic products for patients with endocrine and orphan lung diseases.

Our lead product is Afrezza (insulin human) Inhalation Powder, which was approved by the U.S.

We are a biopharmaceutical company focused on the development and commercialization of innovative therapeutic products and devices to address serious unmet medical needs for those living with endocrine and orphan lung diseases.

Our signature technologies – Technosphere dry-powder formulations and Dreamboat inhalation devices – offer rapid and convenient delivery of medicines to the deep lung where they can exert an effect locally or enter the systemic circulation.

In our endocrine business unit, we currently commercialize two products:

Afrezza (insulin human) Inhalation Powder, an ultra rapid-acting inhaled insulin indicated to improve glycemic control in adults with diabetes, and the V-Go wearable insulin delivery device, which provides continuous subcutaneous infusion of insulin in adults that require insulin.

Afrezza was developed by us and received approval from the U.S.

Food and Drug Administration (“FDA”) in June 2014.

Afrezza is an ultra rapid-acting inhaled insulin indicated to improve glycemic control in adults with diabetes.

According to the Centers for Disease Control and Prevention, 37.3 million people in the United States had diabetes in 2019.

Globally, the International Diabetes Federation has estimated that approximately 537 million adults had diabetes in 2021 and approximately 783 million will have diabetes by 2045.

Afrezza consists of a dry powder formulation of human insulin delivered from a small portable inhaler.

Administered at the beginning of a meal, Afrezza dissolves rapidly upon inhalation to the lung and delivers insulin quickly to the bloodstream.

The first measurable effects of Afrezza occur approximately 12 minutes after administration.

In the U.S., we are solely responsible for the commercialization of Afrezza.

Our sales representatives promote Afrezza to endocrinologists and selected primary care physicians located throughout the United States.

Our sales efforts are aided by support programs, such as our AfrezzaAssist program that helps patients and physicians navigate through access, reimbursement and training questions, and savings programs, such as our co-pay assistance program for patients with commercial insurance and our cash pay program for patients with no insurance.

V-Go received 510(k) clearance by the FDA in 2010 and has been available commercially since 2012.

In May 2022, we acquired V-Go from Zealand Pharma A/S and Zealand Pharma US, Inc.

(together “Zealand”) and began integrating the product into our endocrine business unit.

V-Go is a mechanical basal-bolus insulin delivery system that is worn like a patch and can eliminate the need for taking multiple daily shots.

V-Go administers a continuous preset basal rate of insulin over 24 hours and provides discreet on-demand bolus dosing at mealtimes.

We are solely responsible for the commercialization of Afrezza and V-Go in the United States.

Outside of the U.S., our strategy has been to establish regional partnerships in foreign jurisdictions where there are commercial opportunities, subject to the receipt of necessary foreign regulatory approvals.

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(“Cipla”), is currently conducting a clinical study of Afrezza in order to meet the requirements for a regulatory submission to the Drug Controller General of India.

As part of the approval of Afrezza, the FDA required us to conduct certain additional clinical studies of Afrezza in pediatric patients .

In the third quarter of 2021, we initiated a Phase 3 clinical trial to evaluate the safety and efficacy of Afrezza in combination with basal insulin versus multiple daily injections of insulin in children and adolescents aged 4-17 who are living with type 1 or type 2 diabetes.

This study, known as the INHALE-1 study, is a 26-week open-label, randomized clinical trial with a 26-week extension period.

The primary endpoint is change in HbA1c level after 26 weeks.

Secondary endpoints include change in fasting plasma glucose after 26 weeks, and rate of hypoglycemic events.

We do not expect to complete the INHALE-1 study until 2023 at the earliest.

When Afrezza was approved, the FDA also required us to conduct a five-year, randomized, controlled trial in 8,000-10,000 patients with type 2 diabetes to assess the long-term safety of Afrezza.

In discussions with the FDA during 2021, the agency indicated that this requirement could potentially be satisfied through a retrospective analysis or a prospective registry study rather than a randomized controlled trial.

The details of such a modified requirement will be elaborated in further discussions with the FDA that are planned for later in 2022.

Afrezza utilizes our proprietary Technosphere formulation technology, which we believe represents a versatile drug delivery platform that may allow the oral inhalation of a wide range of active pharmaceutical ingredients.

We have successfully prepared Technosphere formulations of anionic and cationic drugs, hydrophobic and hydrophilic drugs, proteins, peptides and small molecules.

The proprietary formulation and inhaler technologies used in Afrezza have also been deployed in our efforts to develop products to treat orphan lung diseases.

The first product to come out of our orphan lung disease pipeline, Tyvaso DPI (treprostinil) inhalation powder, received FDA approval in May 2022 for the treatment of pulmonary arterial hypertension (PAH) and pulmonary hypertension associated with interstitial lung disease (PH-ILD).

Tyvaso DPI is the first and only approved dry powder inhaled treatment for PAH and PH-ILD.

Our collaboration partner, United Therapeutics Corporation (“United Therapeutics” or “UT”) began commercializing Tyvaso DPI in June 2022.

UT pays us a royalty on net sales of Tyvaso DPI as well as a margin on supplies of Tyvaso DPI that we manufacture for UT.

The next most advanced program in our pipeline of potential treatments for orphan lung diseases is MNKD-101, a nebulized formulation of clofazimine, for the treatment of severe chronic and recurrent pulmonary infections, including nontuberculous mycobacterial (NTM) lung disease.

We believe an orally inhaled formulation of clofazimine could potentially provide several clinical advantages over the current solid oral dosage form of this drug.

The FDA has designated MNKD-101 as both an orphan drug and a qualified infectious disease product for the treatment of pulmonary NTM infections.

We recently completed an initial clinical study of MNKD 101 in Australia and we plan to initiate a Phase 2/3 clinical study in the United States in 2023.

In connection with the development of MNKD-101, we are also evaluating the feasibility of developing a dry-powder formulation of clofazimine using our Technosphere formulation technology.

We have formulated other drugs and biologics for the treatment of orphan lung disease and plan to continue their development as dictated by the results achieved in preclinical studies and by resource requirements.

We have also partnered with several third parties that have proprietary rights to certain compounds in order to evaluate the feasibility of developing dry-powder formulations of such compounds.

We may seek to convert certain of these exploratory programs into full development programs funded by the external parties.

To aid in the development of oral inhalation products, we have created a number of innovative tools, including a novel inhalation profiling apparatus, known as BluHale that uses miniature sensors to assess the drug delivery process at the level of an individual inhaler.

The BluHale apparatus medical device provides real-time data regarding patient usage and delivery system performance that is transmitted to a user interface, such as a smartphone application.

During 2020, we released a BluHale Professional version of the apparatus for use as a training tool in certain physician’s offices.

A consumer version of the apparatus, with additional features, is planned for release in 2023.

Manufacturing and Supply

Technosphere powders are based on our proprietary excipient, fumaryl diketopiperazine (“FDKP”), which is a pH-sensitive organic molecule that self-assembles into small particles under acidic conditions.

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Technosphere powders dissolve quickly when the particles contact the moist lung surface with its neutral pH, releasing the drug molecules to diffuse across a thin layer of cells into the arterial circulation, bypassing the liver to provide excellent systemic exposure.

We have also created an innovative line of breath-powered, dry powder inhalers.

In our Danbury, Connecticut facility, we can develop novel Technosphere formulations of different pharmaceutical ingredients and manufacture clinical and commercial supplies of

these powders.

In this facility, we currently formulate both the Afrezza and T yvaso DPI inhalation powders at commercial scale , fill plastic cartridges with the powders and package the cartridges in to blister packs.

We utilize a contract packager to assemble the blister packs of Afrezza and Tyvaso DPI cartridges along with inhalers and the applicable package inserts , into final kits for sale .

Our Technosphere powders are intended to be administered with our innovative, breath-powered, dry powder inhalers.

Our inhalers are easy to use, cost-effective and can be produced in both a reusable (chronic treatment) and a single-use (acute treatment) format.

Both the reusable and single-use inhaler formats use the same internal air-flow design.

Afrezza and Tyvaso DPI both use the reusable format (also known as Dreamboat).

Being breath-powered, our inhalers require only the patient’s inhalation effort to deliver the powder.

To administer the inhalation powder, a patient loads a cartridge into our inhaler and inhales through the mouthpiece.

To administer a dose of the inhalation powder, a patient loads a cartridge into our inhaler and inhales through the mouthpiece.

Upon inhalation, the dry powder is lifted out of the cartridge and broken up (or de-agglomerated) into small particles.

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Our inhalers show very little change in performance (i.e., efficient cartridge emptying) over a wide range of inhalation efforts.

Using our formulation and inhaler technology, we advanced an inhaled formulation of treprostinil Technosphere into clinical development in June 2018.

In September 2018, we entered into a license and collaboration agreement (the “UT License Agreement”) with United Therapeutics Corporation (“United Therapeutics” or “UT”), pursuant to which UT assumed responsibility for global development, regulatory and commercial activities with respect to a product that UT has branded as Tyvaso DPI, while we retained responsibility for manufacturing clinical and commercial supplies.

In April 2021, United Therapeutics submitted a new drug application (“NDA”) to the FDA seeking approval of Tyvaso DPI for the treatment of pulmonary arterial hypertension (PAH) and pulmonary hypertension associated with

interstitial lung disease (PH-ILD) .

In October 2021, the FDA provided UT with a complete response letter (CRL) in which it declined to approve the Tyvaso DPI NDA , citing an open inspection issue at a third-party analytical testing facility for the treprostinil drug substance as the single deficiency preventing approval of Tyvaso DPI .

The CRL noted, but did not cite as a deficiency, that the FDA had not yet completed its review of a c itizen p etition submitted to the FDA in July 2021 concerning the safety of an excipient in Tyvaso DPI.

In December 2021, UT resubmitted the NDA to the FDA, addressing the single deficiency cited in the CRL.

In January 2022, the FDA accepted the resubmitted NDA for review, and designated it as a class 1 resubmission with an expected two-month review period ending in February 2022.

In mid- February 2022, the FDA requested additional information from UT concerning the pulmonary safety of Tyvaso DPI related to the citizen petition .

UT promptly responded to the FDA’s request .

T he FDA subsequently indicated that the response constitutes a major amendment to the Tyvaso DPI NDA, which extends to May 2022 the FDA’s deadline to complete its review of the pending NDA.

In December 2020, we acquired QrumPharma, Inc., a privately held pharmaceutical company developing inhalation treatments for severe chronic and recurrent pulmonary infections, including nontuberculous mycobacterial (NTM) lung disease.

The lead program from this acquisition (MNKD-101) is an inhaled, nebulized formulation of clofazimine, which could potentially provide several clinical advantages over the current solid oral dosage form of this drug.

MNKD-101 is currently being evaluated in an initial clinical study in Australia.

The FDA has designated MNKD-101 as both an orphan drug and a qualified infectious disease product for the treatment of pulmonary NTM infections.

In addition to continuing the development of MNKD-101, we are evaluating the feasibility of developing a dry-powder formulation of clofazimine using our Technosphere technology.

We have also partnered with several third parties that have proprietary rights to certain compounds in order to evaluate the feasibility of developing dry-powder formulations of such compounds.

We may seek to convert certain of these exploratory programs into full development programs funded by the external parties.

The BluHale apparatus provides real-time data regarding patient usage and delivery system performance that is transmitted to a user interface, such as a smartphone application.

During 2020, we released a BluHale Professional version of the apparatus for use as a training tool in certain physician’s offices.

A consumer version of the apparatus, with additional features, is in development.

Manufacturing and Supply

We use our Danbury, Connecticut facility to formulate both the Afrezza and Tyvaso DPI inhalation powders, fill plastic cartridges with the powders and package the cartridges into blister packs.

We utilize a contract packager to assemble the final kits of Afrezza and Tyvaso DPI cartridges along with inhalers and package inserts.

The quality management systems of our Danbury facility have been certified to be in conformance with the ISO 13485:2016 standard.

We have a supply agreement with the contract manufacturer that produces the plastic-molded parts for our inhaler and the corresponding cartridges.

We expect to be able to qualify an additional vendor of plastic-molding contract manufacturing services, if warranted by demand.

We then assemble the inhalers from the individual components at our Connecticut facility.

The quality management systems of our Connecticut facility have been certified to be in conformance with the ISO 13485:2016 standard.

Our facility is inspected on a regular basis by the FDA, most recently in July 2021 when the FDA conducted a pre-approval inspection related to Tyvaso DPI and a GMP inspection related to Afrezza.

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The FDA and other foreign jurisdictions are expected to conduct additional inspections of our facility from time to time.

We believe that our Danbury facility has enough capacity to satisfy the current demand for Afrezza and, if approved, Tyvaso DPI.

We believe that our Connecticut facility has enough capacity to satisfy the current demand for Afrezza and Tyvaso DPI.

In addition, we are currently expanding production capacity with additional filling lines and other equipment in order to meet the demand for Tyvaso DPI projected by UT over the next several years.

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Currently, we purchase FDKP, the primary component of our Technosphere powders, from a major chemical manufacturer with facilities in Europe and North America.

We have a supply agreement with the contract manufacturer that produces the plastic-molded parts for our inhaler and the corresponding cartridges.

We expect to be able to qualify an additional vendor of plastic-molding contract manufacturing services, if warranted by demand.

We assemble the inhalers at our Connecticut facility.

We also have an agreement with the contractor that performs the final packaging of Afrezza overwraps, inhalers and printed material into patient kits.

We also have an agreement with the contractor that performs the final packaging of Afrezza and Tyvaso DPI overwraps, inhalers and printed material into patient kits.

We expect to be able to qualify an additional vendor of packaging services, if warranted by demand.

The BluHale device is assembled for us by a contract manufacturer using components that are sourced from multiple vendors.

V-Go is manufactured for us by a contract manufacturer (“CMO”) in Southern China using MannKind-owned, custom-designed, semi-automated manufacturing equipment and production lines that can be brought online and/or staffed up as demand increases.

We believe these production lines will have the ability to meet our current and expected near-term demand for V-Go.

Additional CMOs in China perform release testing, sterilization, inspection and packaging functions.

V-Go is assembled from components that are manufactured to our specifications.

Each completed device is tested to ensure compliance with our engineering and quality assurance specifications.

A series of automated inspection checks, including x-ray assessments and lot-released testing, are also conducted throughout the manufacturing process to verify proper assembly and functionality.

When mechanical components are sourced from outside vendors, those vendors must meet our detailed qualification and process control requirements.

We maintain a team of product and process engineers, supply chain and quality personnel who provide product and production line support for V-Go.

We also employ a full-time dedicated contractor based in China.

Some of the parts and components of V-Go are purchased from sole-source vendors, and we manage any single-source components and suppliers through our global supply chain operation.

We believe that, if necessary, alternative sources of supply would, in most cases, be available in a relatively short period of time and on commercially reasonable terms.

The BluHale device is assembled for us by a CMO using components that are sourced from multiple vendors.

Similarly, the clofazimine inhalation solution being evaluated in the MNKD-101 program is manufactured for us by a CMO.

In general, our suppliers and contract manufacturers are sophisticated and mature organizations, often with multinational operations, that have significant experience with pharmaceutical and medical device manufacturing.

Our quality and manufacturing personnel conduct extensive inspections to qualify new vendors and periodic GMP audits of their operations on an ongoing basis.

Our quality and manufacturing personnel conduct

extensive inspections to qualify new vendors and periodic GMP audits of their operations on an ongoing basis.

O ur CMO facilities and the facilities of our critical suppliers are subject to periodic inspection by the FDA and corresponding state and foreign agencies.

With the expansion of our supply chain into the electronic components that are required for BluHale devices, we have begun to require our vendors to confirm that conflict minerals are not knowingly or intentionally added during the manufacturing process for, or are unnecessary to the functionality or production of, the components that we source from such vendors.

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We have obtained, are seeking, and will continue to seek patent protection on the compositions of matter, methods of treatment and manufacturing processes flowing from our research and development efforts.

Our Technosphere drug delivery platform, including Afrezza, enjoys patent protection relating to the powder, its manufacture, its use for pulmonary delivery of drugs as well as protection related to our inhalers and associated cartridges.

Our Technosphere drug delivery platform enjoys patent protection relating to the powder, its manufacture, its use for pulmonary delivery of drugs as well as protection related to our inhalers and associated cartridges.

We have additional patent coverage relating to methods for the treatment of diabetes using Afrezza.

Overall, Afrezza is protected by approximately 640 issued patents in the United States and selected jurisdictions around the world, the longest-lived of which will expire in 2032.

We also have over 65 applications pending that may provide additional protection for Afrezza if and when they are allowed.

Similarly, Tyvaso DPI is protected by approximately 400 issued patents in the United States and elsewhere and an additional 50 pending applications.

Overall, Afrezza is protected by approximately 670 issued patents and 55 pending patent applications in the United States and selected jurisdictions around the world, the longest-lived of which will expire in 2032.

Similarly, Tyvaso DPI is protected by approximately 450 issued patents in the United States and elsewhere and an additional 40 pending patent applications.

The longest-lived patent protection for Tyvaso DPI will expire in 2035.

Our entire portfolio consists of approximately 1,100 issued patents and approximately 170 patent applications that provide protection for MNKD-101, our drug delivery platform, Technosphere-based products, our BluHale inhalation-profiling apparatus and various development tools.

We expect to file further patent applications as our research and development efforts continue.

The field of pulmonary drug delivery is crowded and a substantial number of patents have been issued in these fields.

Various features of the commercial V-Go device are protected by a portfolio of approximately 200 issued patents and another 25 pending patent applications, the longest-lived of which will expire in 2033.

Additional patents and patent applications are expected to provide protection for MNKD-101, our BluHale inhalation-profiling apparatus and various development tools.

Our entire worldwide portfolio consists of approximately 1,350 issued patents and approximately 215 pending patent applications We expect to file further patent applications as our research and development efforts continue.

Drug delivery is a crowded field and a substantial number of patents have been issued to innovators in this space.

In addition, because patent positions can be highly uncertain and frequently involve complex legal and factual questions, the breadth of claims obtained in any application or the enforceability of issued patents cannot be confidently predicted.

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For some of our inventions, particularly manufacturing processes and improvements, we have chosen to rely on trade secrets and know-how, which are not protected by patents, to maintain our competitive position.

We use trademarks and service marks to protect our corporate brand as well as the branding associated with Afrezza, our Technosphere formulation technology, our device platform and the product support programs that we have developed.

Our current portfolio consists of 178 registered trademarks and 60 applications in the U.S.

We use trademarks and service marks to protect our corporate brand as well as the branding associated with Afrezza, V-Go, our Technosphere formulation technology, our device platform and the product support programs that we have developed.

Our current portfolio consists of approximately 240 registered trademarks and 55 applications in the U.S.

and selected foreign jurisdictions.

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We face competition based on, among other things, product efficacy and safety, the timing and scope of regulatory approvals, product ease of use and price.

Diabetes Treatments

We believe that Afrezza has important competitive advantages in the delivery of insulin when compared with currently known alternatives.

However, new drugs or further developments in alternative drug delivery methods may provide greater therapeutic benefits, or comparable benefits at a lower cost, than Afrezza.

There can be no assurance that existing or new competitors will not introduce products or processes competitive with or superior to our product candidates.

Currently, we believe that Afrezza has a unique “ultra rapid-acting” pharmacokinetic profile, i.e., entering the bloodstream in less than one minute, with the first measurable effects occurring approximately 12 minutes after administration, and peak glucose-lowering effects within 35 or 45 minutes after administration of a 4 or 12 unit dose, respectively.

There are several formulations of “rapid-acting” insulin analogs that reach their maximum glucose-lowering effect within one to three hours after injection.

The principal products in this category are insulin lispro, which is marketed by Eli Lilly & Company as Humalog® and by Sanofi S.A.

insulin aspart, which is marketed by Novo Nordisk A/S as Novolog® ;

and insulin glulisine, which is marketed by Sanofi S.A.

New formulations of two of these

products – Fiasp®, a version of insulin aspart from Novo Nordisk, and Lyumjev™, a version of insulin lispro from Eli Lilly & Company – have been positioned by their manufacturers as fast(er) insulins.

According to prescribing information, these products have their first measurable effects within 17-30 minutes after administration and reach peak glucose-lowering effects after 90-120 minutes.

Inhaled Drug Delivery Systems

Our drug delivery platform competes with other inhaled delivery systems, including AER-901 being developed by Aerami Therapeutics.

AER-901 is a formulation of imatinib, administered with a small handheld electronic inhaler that is being developed for the treatment of pulmonary arterial hypertension.

Afrezza is administered at the beginning of a meal, so its principal competitors are rapid-acting” insulin analogs that are used for mealtime insulin injections.

The products in this category are marketed by Eli Lilly and Company, Sanofi S.A.

and Novo Nordisk A/S.

V-Go is typically used by patients as part of a basal-bolus insulin regimen.

Like Afrezza, it competes with injectable mealtime insulin products but also with long-acting, or basal, injectable insulins.

The principal products in this category are marketed by Novo Nordisk and Sanofi.

Both Afrezza and V-Go also face some competition from glucagon-like peptide-1, or GLP-1, analog injection products.

These products are often used in combination with oral medications or basal insulin injection before a patient progresses to a basal-bolus insulin regimen.

As a result, we also compete with the manufacturers of GLP-1 analog injection products, such as AstraZeneca PLC, Novo Nordisk A/S and Eli Lilly and Company.

Government Regulation

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Failure to comply with applicable FDA and other regulatory requirements can result in sanctions being imposed on us, including warning letters, hold letters on clinical research, product recalls or seizures, total or partial suspension of production or injunctions, refusals to permit products to be imported into or exported out of the United States, refusals of the FDA to grant approval of drugs or to allow us to enter into government supply contracts, withdrawals of previously approved marketing applications , civil or criminal fines or other penalties.

With an approved product such as Afrezza, we are subject to continuing regulation by the FDA, including post marketing study commitments or requirements, record-keeping requirements, reporting of adverse experiences with the product, submitting periodic reports, drug sampling and distribution requirements, notifying the FDA and gaining its approval of certain manufacturing or labeling changes, and complying with certain electronic records and signature requirements.

All manufacturing sites are subject to inspection by the FDA and other national regulatory bodies and must comply with current good manufacturing practices (“cGMPs”), quality system regulations for medical devices (“QSR”) and other requirements enforced by these regulatory bodies.

As a result, our drug-manufacturing facility in Connecticut is subject to federal registration and listing requirements and, if applicable, to state licensing requirements and so too are the facilities of our insulin supplier and the supplier(s) of FDKP.

Likewise, the supplier of our inhaler and cartridges is subject to QSR, which requires manufacturers to follow elaborate design, testing, control, documentation and other quality assurance procedures during the manufacturing process of medical devices, among other requirements.

As the holder of marketing approvals for Afrezza and V-Go, we are subject to continuing regulation by the FDA, including post marketing study commitments or requirements, record-keeping requirements, reporting of adverse experiences with our products, submitting periodic reports, drug sampling and distribution requirements, notifying the FDA and gaining its approval of certain manufacturing or labeling changes, and complying with certain electronic records and signature requirements.

For example, as part of the approval of Afrezza, the FDA required us to conduct certain additional clinical studies of Afrezza in pediatric patients .

In 2021, we initiated a Phase 3 clinical trial to evaluate the safety and efficacy of Afrezza in combination with basal insulin versus multiple daily injections of insulin in children and adolescents aged 4-17 who are living with type 1 or type 2 diabetes.

This study, known as the INHALE-1 study, is expected to complete enrollment by the end of 2023.

When Afrezza was approved, the FDA also required us to conduct an additional long-term safety study that was originally intended to compare the incidence of pulmonary malignancy observed with Afrezza to that observed in a standard of care control group.

We have an ongoing dialogue with the FDA regarding the agency’s current interest in the long-term safety of Afrezza and an appropriate study design to address any concerns.

As a manufacturer of multiple therapeutic products, including Tyvaso DPI, our Connecticut facility is subject to federal registration and listing requirements and, if applicable, to state licensing requirements.

It is also subject to inspection by the FDA and other national regulatory bodies and must comply with current good manufacturing practices (“cGMPs”), quality system regulations for medical devices (“QSR”) and other requirements enforced by these regulatory bodies.

So too are the facilities of our insulin supplier and the supplier(s) of FDKP.

Likewise, the supplier of our inhaler and cartridges and the CMOs for V-Go are subject to QSR, which requires manufacturers to follow elaborate design, testing, control, documentation and other quality assurance procedures during the manufacturing process of medical devices, among other requirements.

A failure, including those of our suppliers, to obtain and maintain applicable federal registrations or state licenses, or to meet the inspection criteria of the FDA or the other national regulatory bodies, would disrupt our manufacturing processes and would harm our business.

In complying with standards set forth in these regulations, manufacturers must continue to expend time, money and effort in the area of production and quality control to ensure full compliance.

In addition, the FDA imposes a number of complex regulations on entities that advertise and promote drugs, which include, among other requirements, standards for and regulation of direct-to-consumer advertising, industry sponsored scientific and educational activities, and promotional activities involving the Internet, and restrictions on off-label promotion.

In addition, the FDA imposes complex regulations on entities that advertise and promote drugs, which include, among other requirements, standards for and regulation of direct-to-consumer advertising, industry sponsored scientific and educational activities, promotional activities involving the Internet, and restrictions on off-label promotion.

The FDA has very broad enforcement authority, and failure to comply with these regulations can result in penalties, including the issuance of a warning letter, requirements for corrective advertising to healthcare providers, a requirement that future advertising and promotional materials be pre-cleared by the FDA, and state and federal civil and criminal investigations and prosecutions.

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Moreover, in the United States, there have been several presidential executive orders, congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for products.

For example, July 2021, the Biden administration released an executive order, “Promoting Competition in the American Economy,” with multiple provisions aimed at prescription drugs.

In response to Biden’s executive order, on September 9, 2021, the U.S.

Department of Health and Human Services (“HHS”) released a Comprehensive Plan for Addressing High Drug Prices that outlines principles for drug pricing reform and sets out a variety of potential legislative policies that Congress could pursue as well as potential administrative actions HHS can take to advance these principles.

No legislation or administrative actions have been finalized to implement these principles.

It is unclear whether these or similar policy initiatives will be implemented in the future.

Additionally, on March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 into law, which eliminates the statutory Medicaid drug rebate cap, currently set at 100% of a drug’s average manufacturer price, for single source and innovator multiple source drugs, beginning January 1, 2024.

In addition, Congress is considering additional health reform measures.

For example, on March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 into law, which eliminates the statutory Medicaid drug rebate cap, currently set at 100% of a drug’s average manufacturer price, for single source and innovator multiple source drugs, beginning January 1, 2024.

More recently, the Inflation Reduction Act (the “IRA”), which was signed into law in August 2022, limits insulin copays to $35 per month for Medicare Part D beneficiaries starting in 2023 and extends enhanced subsidies for individuals purchasing health insurance coverage in PPACA marketplaces through plan year 2025.

The IRA also eliminates the “donut hole” under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost and through a newly established manufacturer discount program.

In addition, the IRA, among other things, (1) directs the U.S.

Department of Health and Human Services (“HHS”) to negotiate the price of certain single-source drugs and biologics covered under Medicare and (2) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation.

These provisions will take effect progressively starting in fiscal year 2023, although they may be subject to legal challenges.

At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.

Further, it is possible that additional government action will be taken in response to the COVID-19 pandemic.

Health Care Fraud and Abuse and Transparency Laws

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nurse practitioners), and teaching hospitals, or to entities or individuals at the request of, or designated on behalf of, the physicians and teaching hospitals and (ii) report annually certain ownership and investment interests held by physicians and their immediate family members.

In 2020, we reported approximately $383,700 in payments to physicians under the Physician Payments Sunshine Act, which consisted of $216,140 in speaking fees, $121,740 in meals, $31,600 in consulting fees and $14,220 in other payments.

We also reported approximately $294,190 in research payments to teaching hospitals.

Our report for payments to physicians and teaching hospitals for 2021 is due to be submitted to the Centers for Medicare & Medicaid Services (“CMS”) by March 31, 2022.

Many states have similar healthcare statutes or regulations that apply to items and services reimbursed under Medicaid and other state programs, or, in several states, that apply regardless of the payer.

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Although the CCPA exempts some data processed in the context of clinical trials, the CCPA may increase compliance costs and potential liability with respect to other personal data we maintain about California residents.

In addition, it is anticipated that the California Privacy Rights Act of 2020 (“CPRA”), effective January 1, 2023, will expand the CCPA.

Additionally, the CPRA establishes a new California Privacy Protection Agency to implement and enforce the CPRA, which could increase the risk of enforcement.

In addition, the California Privacy Rights Act of 2020 (“CPRA”), which became effective January 1, 2023, expands the CCPA.

The CPRA establishes a new California Privacy Protection Agency to implement and enforce the CPRA, which could increase the risk of enforcement.

Other states have enacted data privacy laws.

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Off-label promotion of our products is explicitly prohibited, as are sales activities that would interfere with a healthcare provider’s independent medical judgment or the doctor-patient relationship.

All sales staff received compliance training upon hire and on an annual basis.

All sales staff receive compliance training upon hire and on an annual basis.

We also routinely monitor sales calls.

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We manufacture our approved and investigational products in accordance with the applicable cGMPs, QSR and other requirements enforced by the FDA and other regulatory bodies that have oversight over our products.

We acknowledge, however, that there are inherent risks associated with the use of drug products.

We attempt to minimize these through stringent adherence to quality control procedures and proactive recall processes whenever a safety concern is identified.

To date, we have not issued a recall for any product.

In addition, all sales packs of Afrezza that are placed in the distribution chain are serialized in accordance with the requirements of the Drug Quality and Security Act, which requires drug manufacturers to assign a unique identifier to each sales pack (and each aggregate of such sales pack, such as a case or pallet).

In addition, all sales packs of our drugs that are placed in the distribution chain are serialized in accordance with the requirements of the Drug Quality and Security Act, which requires drug manufacturers to assign a unique identifier to each sales pack (and each aggregate of such sales pack, such as a case or pallet).

These identifiers remain on such pack or aggregate through the whole supply chain until its consumption or destruction.

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We apply those standards to trials that we sponsor and conduct directly as well as those conducted on our behalf by clinical research organizations.

We conduct trials in accordance with all applicable laws, the standards of International Conference on Harmonisation of Technical Requirements for Registration of Pharmaceuticals for Human Use Guidelines and following the ethical principles that have their origin in the Declaration of Helsinki.

We require that a three-stage informed consent process be implemented in all trials to ensure that participants understand the risks and benefits of the procedures, how personal medical data is collected and used, and that participation in the trial is voluntary, among other information.

We conduct trials in accordance with all applicable laws, the standards of International Council for Harmonisation of Technical Requirements for Registration of Pharmaceuticals for Human Use Guidelines and following the ethical principles that have their origin in the Declaration of Helsinki.

We require that informed consent be obtained in all trials to ensure that participants understand the risks and benefits of the procedures, how personal medical data is collected and used, and that participation in the trial is voluntary, among other information.

We retain documentation that all participants in our trials have provided informed consent.

6 unchanged sentences

Our policy is to disclose the basic results of all clinical trials that we conduct to test the effectiveness of investigational drugs intended to treat serious or life-threatening diseases or conditions (i.e., phase 2-4 clinical studies).

Additionally, we may voluntarily disclose the results of initial safety studies (i.e., phase 1 clinical studies).

We strive to disclose these results within one year of study completion or within 30 days of marketing authorization approval.

Additionally, we may voluntarily disclose the results of

initial safety studies (i.e., phase 1 clinical studies).

In our disclosure of clinical trial results, our policy is to include all serious adverse events and those non-serious adverse events that have a frequency of at least five percent.

11 unchanged sentences

Long-Lived Assets

Our long-lived assets are located in the United States and totaled $36.6 million and $25.9 million as of December 31, 2021 and 2020, respectively.

Our long-lived assets are located in the United States and China and totaled $53.0 million and $38.9 million as of December 31, 2022 and 2021, respectively.

Employees and Human Capital

6 unchanged sentences

Of our full-time employees, 210 were engaged in manufacturing, 25 in research and development, 55 in general and administrative and 101 in selling and marketing.

Seventeen of these employees had a Ph.D.

Sixteen of these employees had a Ph.D.

degree and/or M.D.

59 unchanged sentences

Chief Financial Officer

Alejandro Galindo

Chief Commercial Officer

Joseph Kocinsky

Chief Technology Officer

Sanjay Singh, M Pharm, MBA

Executive Vice President, Technical Operations

Chief People and Workplace Officer

9 unchanged sentences

He has also held positions with commercial responsibilities at EMD (Merck) Serono, Pharmasset and DuPont Pharmaceuticals.

He received his pharmacy degree from the University of the Sciences-Philadelphia College of Pharmacy, a Pharma D.

He received his pharmacy degree from the University of the Sciences-Philadelphia College of Pharmacy, a PharmD.

from Massachusetts College of Pharmacy & Sciences and an MBA from The Wharton School of Business at the University of Pennsylvania.

15 unchanged sentences

degree in Accounting and Business Administration from Muhlenberg College and is a Certified Public Accountant.

Alejandro Galindo has been our Chief Commercial Officer since August 2020.

Before joining us, he served as Vice President and President of the Advanced Insulin Management Business Unit at Medtronic from 2014 to 2020.

Prior to Medtronic, Mr.

Galindo spent nine years at General Electric (GE) Healthcare in a variety of leadership roles, leading emerging markets, strategic corporate development and global supply chain operations.

Prior to joining GE’s Healthcare division, he spent eleven years in various global leadership positions for the company’s energy and appliance sectors, overseeing advanced manufacturing engineering and product development.

Galindo received a B.Sc.

in Industrial & Systems Engineering from Monterrey Institute of Technology, Mexico and M.B.A.

degrees from Indiana University.

Joseph Kocinsky has been our Chief Technology Officer since October 2015.

Kocinsky has over 30 years of experience in the pharmaceutical industry in technical operations and product development.

Prior to joining us in 2003, he held a variety of technical and management positions with increased responsibility at Schering-Plough Corp.

Kocinsky holds a bachelor’s degree in chemical engineering and a master’s degree in Biomedical Engineering from New Jersey Institute of Technology and a master’s degree in Business Administration from Seton Hall University.

Sanjay Singh has been our Executive Vice President, Technical Operations since October 2022.

Before joining us, since 2011 Mr.

Singh served as Sr.

Vice President and Associate President Technical Operations in India and USA at Aurobindo Pharma , a leading generic pharmaceutical manufacturing company, headquartered in Hyderabad, India.

Prior to Aurobindo, Mr.

Singh worked in various leadership roles at Cipla Ltd (2000 – 2007, 2008-2011), Glenmark Pharma (2007-2008), Nicholas Piramal India Ltd (1992-2000) and Cadila Laboratories (1990-1991).

Singh has been associated with the Parenteral Drug Association (PDA) and was the founding president of the PDA, India chapter before moving to the US in 2015.

Singh received an M.

degree in Pharmaceutical Chemistry from LM College of Pharmacy, Ahmedabad, India and an MBA degree from Institute of Management Studies, Indore, India.

has been our Chief People and Workplace Officer since December 2016, with responsibilities for human resources, information technology, corporate communications and west coast facilities.

9 unchanged sentences

Thomson was a post-doctoral fellow at the Rockefeller University.

Thomson obtained his B.S degree, M Sc.

degree and Ph.D.

from Queens University and obtained his J.D.

from the University of Toronto.

Thomson obtained his B.S., M Sc.

degrees from Queens University and obtained his J.D.

degree from the University of Toronto.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business