Operator: Welcome to the MannKind Corporation Fourth Quarter and Year End 2012 Conference Call. At this time, all participants are in a listen-only mode. Later instructions will be given for the question-and-answer session. As a reminder, this call is being recorded today February 11, 2013.
Joining us today from MannKind are Chairman and CEO, Alfred Mann; President and COO, Hakan Edstrom; and Chief Financial Officer, Matthew Pfeffer.
I would now like to turn the call over to Matthew Pfeffer, Chief Financial Officer of MannKind Corporation. Please go ahead.
Matthew J. Pfeffer - Corporate VP and CFO: Good afternoon, and thank you for participating in today's call. I will be summarizing our financial results for 2012 as reported earlier today, Hakan will then discuss our current operations and Al will conclude with a brief overview before we open up the call to your questions.
Before we proceed further, please note that comments made during this call will include forward-looking statements within the meaning of Federal Securities laws. It is possible that actual results could differ from these stated expectations. For factors which could cause actual results to differ from expectations, please refer to the reports filed by the Company with the Securities and Exchange Commission under the Securities and Exchange Act of 1934. This conference call contains time-sensitive information that is accurate only as of the date of this live broadcast February 11, 2013. We undertake no obligation to revise or update any statements to reflect events or circumstances after the date of this call.
So turning to the financials; for the fourth quarter of 2012, total operating expenses were $33.5 compared to $30.6 million for the fourth quarter of 2011 and $35.5 million for the third quarter of 2012. R&D expenses were $25.3 million for the fourth quarter of 2012 compared to $20.2 million for the fourth quarter of 2011 and $25.5 million for the third quarter of 2012. The increase in R&D expenses for the fourth quarter of 2012 compared to the same quarter in 2011 was primarily due to an increase in clinical trial related activities as trials 171 and 175 were initiated in the fourth quarter of 2011, partially offset by the absence of insulin purchases in the fourth quarter of 2012 related to the termination of our insulin product in 2011. There was a slight decrease in R&D expense this quarter for last quarter due to the clinical trial related activities. General and administrative expenses were $8.2 million for the fourth quarter of 2012 compared to the $10.3 million for the fourth quarter of 2011 and $10.1 million for the third quarter of 2012. General and administrative expenses were higher in previous competitive quarters, primarily due to a litigation settlement accrual related to securities and derivative actions.
Other expense of $13.3 million for the fourth quarter of 2012 was primarily due to a non-cash non-recurring adjustment in the fair value of forward purchase contract with a related party, which was settled in December of 2012. The net loss applicable to common stockholders for the fourth quarter of 2012 was $51.8 million or $0.23 per share based on 229.2 million weighted average shares outstanding compared with the net loss applicable to common stockholders of $36.4 million or $0.30 per share on 122.4 million weighted average shares outstanding for the fourth quarter of 2011.
For the full year ended December 31, 2012 total operating expenses were $147 million compared with $140.6 million for 2011. R&D expenses were $101.5 million in 2012 compared to $100 million in 2011. Our clinical trial related expenses increased $24.9 million in 2012, this increase was offset by the non-recurrence of $16 million in expenses recorded during 2011, in connection with the settlement of the terminated insulin supply agreement and decreased salary-related expense as a result of the reduction in force in February 2011. General and administrative expenses increased $4.9 million to $45.5 million for 2012 as compared to 2011 primarily due to non-cash litigation settlement expenses during 2012 offset by lower salaries and benefits costs from the 2011 reduction in force.
The net loss applicable to common stockholders for 2012 was $169.4 million or $0.94 per share based on 180.9 million weighted average shares outstanding compared with the net loss applicable to common stockholders of $160.8 million, or $1.32 per share based on 121.8 million weighted average shares outstanding for fiscal year 2011. Our cash and cash equivalents at the end of the year totaled $61.8 million which compared to $2.7 million at December 31, 2011. Our cash burn during 2011 fluctuated from $33.3 million spent in Q1, $24.7 million in Q2, $30 million in Q3 and $25.9 million spent in Q4. We expect to accelerate our spending in 2013 as we complete the trials and prepare for resubmission of regulatory approval of AFREZZA.
With that I'd like to now turn the call over to Hakan.
Hakan S. Edstrom - President and COO: Thank you, Matt and good afternoon. Since our last call in November we completed the recruitment phase of both trials in the definitive program and is achieving this major milestone the clinical and medical teams together with our contract research organization shave been intensely focused on the execution of our trials. The monitoring of patients, the clinical part is all in accordance with the product protocol, Mannkind's operating procedures and good clinical practice.
As a reminder, we are running two key Phase III studies; the first of these studies, Study 171, is an open-label study in patients with type 1 diabetes. The study includes a run-in period, during which all patients are optimized on their base of the insulin. A total of 518 patients were randomized through one of the three treatment groups for the mealtime insulin. A control group in which patients utilize injected rapid-acting insulin analogs, the AFREZZA using the MedTone inhaler or AFREZZA using the next generation 2 inhaler.
After initial 12 week mealtime insulin optimization period, there's a subsequent 12 weeks stable insulin dosing period, the primary objectives are to establish non-inferiority between rapid-acting analogs and generation 2 treatment groups, and also compare the safety profile of the AFREZZA treatment groups with the two devices.
The other Phase III study, the 175 assesses the addition of AFREZZA using the generation 2 inhaler to patients with type 2 diabetes who disease is inadequately controlled on metformin with or without a second or a third oral medication. Again, after running period during which the patients stabilize their oral medication, a total of 354 patients were randomized through additional treatment with AFREZZA or to a placebo group using only the Technosphere inhalation powder. This study also includes a titration period followed by a 12-week evaluation period to assess the HbA1c levels, other secondary parameters, and safety.
Randomization was complete for both throughout the November of last year. So the individual patient visit for the remainder of the trial are now visible and can be tracked and managed in real time by both the clinical sides and the MannKind monitors.
Our teams are now managing patients through the trials, patient-by-patient and the last patient left is continues to be on track to May and June respectively of 2013. The operational plan for the rapid database look and the production of final tables, figures and listings is in place and we expect to share the key trail results with you sometime in mid-August. We have also submitted meeting request this month to inform the FDA of our intention to submit a Class 2 resubmission in 2013. The purpose of this resubmission meeting is to seek concurrent with the agency on the content of the format of the resubmission. The FDA has already informed us that it will provide a written responses to our briefing package in March.
We are targeting to resubmit their first NDA between late September and early October, and we expect a six-month review. All other activities that support the resubmission are well underway and progressing according to plan. We remind you that the amount of data on supporting information including tables, graphs, and listings for the resubmission is extensive. A detailed operational plan outlining all of the activities required for the resubmission is an execution and we remain fully committed to meet the 2013 timeline.
With that I will now hand the call over to Al. Al please.
Alfred E. Mann - Chairman and CEO: Thank you Hakan, and good afternoon ladies and gentlemen. During the last conference call, we reported that we would complete the recruitment for the two key clinical trials MKC-171 in type I diabetes now known as Affinity I and MKC-175, an insulin naive type II diabetes now known as Affinity II. Those two recruiting milestones were critical because they have set the timeline for completion of those trials that would be the primary basis of our NDA resubmission to the FDA. Hakan has described some of the details and the progress of those two trials and I'm going to provide little more detail so that we can focus more on some of the details and results we expect. The study protocols we are generating close collaboration with the FDA. After a run in period of four weeks for Affinity 1 and six for Affinity 2 there are 12 weeks of titration, 12 weeks of treatment and a four week follow-up after completion of the therapy. Affinity 1 will thus complete in late May and Affinity 2 in mid-June. Data lock and preparation of the re-submission will take at least about three months so there is as Hakan alluded the filing is anticipated in late September, early October.
We should be able to release the Affinity trial results in August. We have reported that for these trials the FDA wanted to include patients with A1Cs averaging between 8% and 8.5%. Such a high average A1C required of some patients are based on A1Cs of 10% or more. Those high initial A1Cs will enable (pressure) to show truly substantial lowering but as the premier center that is conducting these trials there are not many such poorly controlled patients. To satisfy that baseline and ensure that we have more than 399 and 246 completed respectively for the two studies, we screened 1,400 new patients for Affinity 1 and 1,381 for Affinity 2. That was the major challenge and took more time but was successfully achieved.
One of our concerns, have been potential patient drop-out because of the substantial demands on the patients in those trials. With our trial over enrolled to better insure that we have adequate statistical power, we are pleased to report that both studies are tracking well. At this point we're quite confident that the trials will be completed as scheduled with more than enough patients. As of last week 297 patients already completed the treatment phase for Affinity 1 and that's about almost 75% of the total and the 167 for Affinity 2 are approximately two-thirds, a little over two-thirds of the target.
For almost all the major earlier trials, the primary target was non-inferiority for A1C versus rapid-acting analog prandial insulins. The end points in those trials are successfully met and showed AFREZZA to be comparable to the best of the current prandial insulins in A1C. Additionally, those studies showed clear advantages of raising other measures of efficacy and also a much lower incidence of hypoglycemia. Yet, even though the kinetic dynamic profile of AFREZZA so much more physiology, our early trials were not yet able to clearly validate superiority with AFREZZA for A1C. But that can be explained. Since A1C effectively reflects the average blood sugar over about two to three months, substantial lowering of A1Cs can only be realized by reducing fasting level as well as lowering prandial rises.
However, since the excessive late persistence of current prandial insulin is the primary cause of hypoglycemia, out of concern for such risk and chemical practice today, physicians typically resist increasing basal insulins to lower fasting levels. As the consequence, they are managing their diabetes patients at very high fasting glucose levels that result in higher A1Cs with increased risk of long-term diabetic complications. Since there is no excessive, such extensive persistence with AFREZZA, fasting glucose can be much more safely lowered. At a fasting level of where a 100 milligram per deciliter is really hard to imagine how the kinetic dynamic profile of AFREZZA could lead even to a mild hyperglycemic incident. Much all of it with these so thus will be achievable and that would reduce the risk of long-term complications of diabetes. Since our earlier trial basal insulins were not accurately titrated, the fasting glucose for the AFREZZA patients, were thus excessive.
What is different in this trial is the protocol very clearly defined the proper titration of the basal insulin. As a result the AFREZZA patients end up with much lower fasting levels though far less change would likely be possible with the current prandial insulins because of their excessive persistence. The caveat to this is that non-physiologic inter-pacing variability of glargine, the basal insulin used in Affinity 1, which can also cause glycemic – which is really the primary cause of hyperglycemia, so there will probably be some residual hypos (seen) even in the AFREZZA cohort.
Past experience suggests that there should be many of those exceptions so we are confident of good outcomes in this trial. Expectations for the Affinity 2 trial in insulin naive type 2s are also very positive. Approval for such patients requires only modest comparative advantages for A1C in this study for the patients on AFREZZA versus those on a placebo. Prior trials have shown that AFREZZA itself lowers fasting glucose levels, according to opinion leaders because it reduces insulin resistance. That effect coupled with the adequate dosing to reduce prandial rises should enable much lower A1Cs for the AFREZZA cohort with virtually no risk of hyperglycemia.
Enrollment in this trial also includes some patients, very high fasting glucose levels than the A1Cs. For those type 2 patients with more advanced disease they will surely benefit from the substantial lowering dose measures of AFREZZA, but they should be using basal insulins in addition to AFREZZA. In any case the trial ought to further validate AFREZZA as a very effective and very safe antiglycemic agent in insulin naive type 2 diabetics.
Ultimately we anticipate the use of a present drop in the entire spectrum of diabetes. Not only for type 1, but also for gestation diabetes and almost the entire range of type 2 at least after metformin. That would seem to offer an enormous opportunity for AFREZZA, although our factory even with additional equipment will be able to serve only about 2 million people. I anticipate that we will surely soon need to plan additional manufacturing facilities. As I have communicated before I believe AFREZZA will become a major weapon in the battle against the global diabetes pandemic. AFREZZA is so very significant because it addresses the prandial glycemic problem in the most natural and most effective way.
AFREZZA delivers a very same regular insulin as supplied from a healthy human pancreas. Importantly AFREZZA's kinetic dynamic profile in the blood quite closely mimics the natural insulin fluid physiology of a non-diabetic in response to a typical meal. AFREZZA should this enable much improved glycemic control without those serious problems, risks and limitations of current antiglycemic products. I mean not just today's insulins but also the alternative antiglycemic drugs.
The value of the alternative antiglycemics is really due to the lack of any physiologic insulins today. Indeed in spite of the deficiencies through days of exogenous insulin products, the limit to everything benefits the side effects and the potential safety risks of the alternative antiglycemics of fostering a growing movement towards early use of insulin in type 2, a more physiologic insulin should certainly accelerate that movement.
The American Diabetes Association is one of the organizations urging ever earlier use of insulin. In a January 28, 2013 issue of The Wall Street Journal, there was a frightening article entitled 'Grim New Diabetes Milestone', expressing serious concern about the explosion of type 2 diabetes in children. Metformin, now the only oral antiglycemic approved for use by children is apparently much less effective than pediatric patients, more even than in adults. What appears to be evolving for these young patients is far greater early use of insulin soon after diagnosis. The ultrafast kinetic dynamic profile of AFREZZA should certainly be even more important for children.
Moreover, the simple, discrete and convenient innovation of AFREZZA should be an important contributor to compliance especially in the very young. However AFREZZA will not soon be available for pediatric patients. The clinical trials to-date, were all in adults and the initial label upon approval will be limited to use by people over the age of 18. Last year, the FDA requested we submit a protocol for a Phase IV study in pediatric patients. They directed us to conduct that clinical trial in children down to age 4. The protocol is almost final but as a Phase IV trial, it will not be initiated until after approval of AFREZZA for adults.
Key opinion leaders are becoming increasingly positive and enthusiastic about the potential of AFREZZA. Some are suggesting that, by reducing pancreatic stress, AFREZZA may slow and perhaps stop, and even reverse, progression of type 2 disease, moreover delivering AFREZZA by inhalation with a tiny whistle size inhaler, so simple, so convenient and will be so very cost effective. I truly believe many patients for this therapy modality. As I have consistently said in previous calls, I am absolutely convinced that AFREZZA will become widely recognized by patients and clinicians alike as a better, safer, and more effective therapy throughout almost the entire diabetes spectrum. For a quite a few years into the future, I'm certain that AFREZZA plus the basal insulin patch pump ought to be the optimum basal bolus therapy for type 1 and late type 2 diabetes patients.
Since the first launch of early type 2 is prandial control, not fasting control, at least metformin an ideal therapy from most of these patient should be AFREZZA alone or along with metformin. As you can see I remain absolutely confident of the clinical significance and the enormous opportunity with AFREZZA.
Let's open up the call to your questions. Operator?
Operator: Ian Somaiya, Piper Jaffray.
Matthew Luchini - Piper Jaffray: This is Matthew on for Ian. Thanks for taking the questions. So first I guess the one that always seems to come up, and that's I was hoping you could give us sort of the latest color, the latest take on where you guys are in terms of a partnership status and how diligence is progressing with potential partners? Then I have just a couple of more after that.
Hakan S. Edstrom - President and COO: This is Hakan and which we have indicated before is that we are in discussions and also in diligent discussions with a number of interested parties again seems to be as we indicated earlier with the addition of the type 2 market and significantly increase opportunity that attracted additional potential partnerships. So those say discussions and due diligence sessions are underway as we speak.
Matthew Luchini - Piper Jaffray: Matt one for you. Could you just give us your sense as to expectations for operating expense run rate in 2013 and beyond, particularly once the trials complete?
Matthew J. Pfeffer - Corporate VP and CFO: I will try. So you will remember that I have been saying we are going to burn somewhere in the $10 million to $12 million a month range for a long time. We consistently seem to underspend that so I am getting a little reluctant. But that is what our projections are showing. So I do still think it's going to pick up into that range as we hit the kind of crescendo period of the clinical trials in the first couple of quarters here after which we should start winding down. There will be a slight offset as we gear up a little bit for this commercialization. I think post filing but you should see some of the certainly clinical trial expenses which have been the major driver for the increases in that side will start coming down a little bit through the latter part of the year. Beyond that I can't be to term it much more specific.
Matthew Luchini - Piper Jaffray: Somewhat sort of related, I guess, Al actually mentioned in the manufacturing facilities in his remarks and I was just hoping you guys might be able to comment on that in terms of expectations. Is that something that in terms of timing and also is that something that you think you guys would handle yourselves or is ultimately the expectation that the partner would take care of that?
Hakan S. Edstrom - President and COO: Initially, we certainly will handle it ourselves based on the Danbury facility. As Al mentioned, it has a capacity on a commercial basis to service up to 2 million patients. Beyond that, that certainly will be a discussion. We potentially thought as to whether they would have an infrastructure to help build out that and the structure for doing so is still open ended. But if we certainly, I would say have probably a couple of years of that opportunity once we have a deal in place to determine, which is the most efficient way of doing so.
Matthew J. Pfeffer - Corporate VP and CFO: Yeah. Just to make sure we are all on the same page, when we talk about a 2 million patient capacity at the Danbury facility, that's in a fully built out (stake). We expect to launch with about quarter capacity. We have the footprint in place for that use of the full amount of the 2 million capacity but we haven't put all the equipment in because obviously we didn't want to spend all the money before we had to. So it has a 12 (multiple-finish) line capacity. We expect to launch with three. So it's about a quarter capacity roughly. Then we can just build it out as we need it. Remember, the 2 million capacity while we are talking about it is not very much, equates to somewhere in the $4 billion of sales range. So we are looking forward to starting to worry about outstripping that facility.
Operator: Steve Byrne, Bank of America.
Steve Byrne - Bank of America: I welcome your thoughts on the merits of FDA's decision to require Novo's degludec to have a cardiovascular outcome study and more importantly, what data do you have that either shows the lack of or the strength of your view of a lack of cardiovascular signal with AFREZZA?
Alfred E. Mann - Chairman and CEO: Our cardiovascular signal showed a 1.01 cardiovascular effect, which was negligible and the FDA has not pursued this any further. The degludec numbers were enormously higher, and that's why they got the CRL.
Steve Byrne - Bank of America: With respect to the enrollment in the 175 trial, you had 167 have not completed. I think you said 360 or so were randomized. Can you at this point estimate how many you think will complete at this point?
Alfred E. Mann - Chairman and CEO: We only need 246, but Bob?
Robert Baughman, PhD. - VP, Experimental Pharmacology: Hi Al, this is Bob Baughman in Danbury. We have 124 subjects who have completed the trial in its entirety. We still have about 173 subjects in the study. So that gives it up to 297 subjects to complete 246, and as you know we are well on our way for this study. So we will have more than enough subjects to be able to complete the trial.
Steve Byrne - Bank of America: Bob based on the discontinuation rate, can you estimate how many out of that 173 will complete?
Robert Baughman, PhD. - VP, Experimental Pharmacology: Of that total I would say we will you only lose maybe 15% of them. As you know most of the drops in all of our trials occur early on when patients are still getting used to the inhaler relatively few drop out at the end of the trial. That's essentially where we are. So I do not expect even say the 15% rate in the 175 Study.
Steve Byrne - Bank of America: One last one for me. Matt can you talk about the adequacy of the $62 million of cash right now to take you through at least the results in August?
Matthew J. Pfeffer - Corporate VP and CFO: Remember $62 million by itself will get us right to about the time of results. Remember we do still have a large amount of credit available from Al across the table from me here. Not only the fact that there was available previous to the last financing but also some monies that were reinstated, so that should be enough to bridge the gap if we decide to use it. That said we have been trying to make that line go away. So we might be looking at other alternatives from that in the meantime. But really what we need to bridge through is just the data which is it is in August as we said. So that should take us right to about that point. Remember also we have in late October the expectation of a large inflow of money on a semiautomatic basis from the warrants we issued with the last financial issual otherwise (expire related) in October with any kind of data at all and we obviously expect very positive data from these studies. We would expect those warrants to be in the money and that should bring in almost ($90 million). Additionally, I think we are going to be generally pretty good, safe financially this year.
Operator: Jason Butler, JMP Securities.
Jason Butler - JMP Securities: Just first on the trials, you incorporated some new titration requirements in these trials and FDA gave you the power to enforce them. Can you give us as an idea of whether – of what you're seeing in the clinic in terms of adherence to these protocols and how your new measures are working as well as hoped to or not.
Alfred E. Mann - Chairman and CEO: Bob should answer that. But we are really blinded at the data, Jason.
Robert Baughman, PhD. - VP, Experimental Pharmacology: Yeah, hi, Jason, this is Bob Baughman again. We cannot comment on the data because we remain blinded. We have an independent titration management committee that makes those recommendations to the investigators. But we are blinded to that and the outcome of that we will only see when we evaluate the data.
Jason Butler - JMP Securities: Then a question from…
Robert Baughman, PhD. - VP, Experimental Pharmacology: My initial comment was only going to be is that we get the comment back from the committee that the investigators are being attentive to the recommendations.
Alfred E. Mann - Chairman and CEO: Then we have to win big.
Jason Butler - JMP Securities: Then for Matt, just a question on the warrants following on from Steve's question. Could you talk about the cash and cashless provisions for those warrants? Then I think there were also warrants issued to Mr. Matt at the same time, are those warrants exercisable in the timeframe and are they cash or cashless?
Matthew J. Pfeffer - Corporate VP and CFO: Yes, well, there's just the usual cashless provision that we don't have a valve lifting and so forth. So for all terms and purposes, you should think of them as only being cash exercised warrants in the normal course. The same would be true of Al, although that doesn't preclude him from using his debt or debt cancellation to exercise those warrants. But they do have the same, otherwise the same terms. The warrants have the same terms for everybody.
Hakan S. Edstrom - President and COO: Except that it'd be a lot more for him.
Matthew J. Pfeffer - Corporate VP and CFO: I would pay more for his, but once he has them in his hands, they are the same terms on the warrant.
Hakan S. Edstrom - President and COO: I still think they are cheap though.
Operator: Cory Kasimov, JPMorgan.
Matthew Lowe - JPMorgan: It's actually Matt Lowe in for Cory today. Just to quickly come back to the partnership talks that are ongoing. Just wondering is there a certain type of deal that you are seeking I guess what matters mostly with the deal. Are you looking for a Company that's already in diabetes care or a company with a primary care sales force? Then regarding Europe, are you looking to file yourselves there or to wait for a potential European partner to do this?
Robert Baughman, PhD. - VP, Experimental Pharmacology: If they do have a primary care sales force, that certainly is A is an advantage opportunity because we've seen in our market research that if the primary care physicians can retain their patients, over a longer period of time not have them say go to specialist that is for them certainly a continuing (indiscernible) and revenue opportunity. They do not necessarily have to be say in insulin or in diabetes, even though some of the people we're talking to certainly are in diabetes care. In regards to the European submission, we have conducted the U.S. trials and even the ones that we are underway right now. So they will, say, very easily fit into the requirement we would expect out of the European application. Probably the timing of a potential partnership deal will determine whether we go alone in Europe in terms of submission, say subsequent to acceptance of our filing in the U.S. by the FDA, or whether we will utilize a European partner for doing so. So I would say that's a decision that's pending until the appropriate time.
Operator: Simos Simeonidis, Cowen & Company.
Simos Simeonidis - Cowen & Company: A question for Bob. I know you are blinding on the data but your data monitoring committee have they seen any concerns of hypoglycemias up to this point?
Robert Baughman, PhD. - VP, Experimental Pharmacology: I can say that the data is being reviewed and we have not been alerted to any concern with hypos in the studies.
Simos Simeonidis - Cowen & Company: Final question for Matt. Matt how much is available under the line of credit from Al?
Matthew J. Pfeffer - Corporate VP and CFO: Approximately $120 million.
Simos Simeonidis - Cowen & Company: As of the start of the quarter, right? Or I guess the end of the quarter I should say?
Matthew J. Pfeffer - Corporate VP and CFO: Yes. I mean obviously we haven’t drawn anything from that since the financing. So the full amount remains available. Remember we now bought the stock, reinstated that portion of the debt back into the line should we need it. Obviously we hope we won't.
Operator: Keith Markey, Griffin Securities.
Keith Markey - Griffin Securities: I was just wondering, some people have brought to my attention that there are blogs hosted by different patients ostensibly who participated in one trial or the other. I was wondering, if you have anything to talk about the results with these patients have posted saying that they've never had such great control. I was wondering if these patients are eligible for use of AFREZZA on a compassionate use basis?
Alfred E. Mann - Chairman and CEO: First, let me say that we get lots of those inputs. People send us information. I have gotten letters from patients. I've got emails from patients; all talking about how their experience has gone or how successful it's been, how pleased they are. I had one physician who is involved in 171 who called me and wanted, pleaded with us to get all those patients to remain on AFREZZA on a compassionate care basis simply because he had never seen results that had been so significant. I said, tell that to the FDA, don't tell it to us. A few weeks ago, I ran into a physician involved in the Affinity 2 trial in type 2 and his remark was that he's never seen such incredible results and without any hypos and that he intends to put all of his patients, his type 2 patients on AFREZZA. Now those are just anecdotal stories. So you can't really draw any conclusions from it. We will get the data sometime in July probably and we will be analyzing it. Once we get all of that data, then we will be able to make a definitive statement. But until then, we have to treat these only as anecdotal stories. I think perhaps the most significant fact is that I've personally heard dozens of very positive comments and opinions of our AFREZZA and I am yet to hear one that was negative, so that to me is significant.
Hakan S. Edstrom - President and COO: There are compassionate used applications with the FDA from physicians in trying to address their patients. So we do know that, but again it's on a patient-by-patient basis.
Operator: Michael Tong, Wells Fargo Securities.
David Wong - Wells Fargo Securities: This is David on for Michael. Just a quick question, can you just repeat for us the number of patients who completed the MKC-171 and 175 studies please.
Alfred E. Mann - Chairman and CEO: Well, the 171 was 297 patients, which turns out to be 74.4% of the total completers that are required and one – in Affinity 2 it was 167 or 67.9% of the total, so we're roughly three-quarters and two-thirds done as of last week.
David Wong - Wells Fargo Securities: Then in terms of the Q4 G&A. Should we expect that to be the run rate, as we go into 2013?
Matthew J. Pfeffer - Corporate VP and CFO: Yes, absent other non-recurring items that we talked about. G&A, yes, should be more or less the same.
Alfred E. Mann - Chairman and CEO: If there are no other questions, let me thank you all for joining us today. Our next quarterly call will be in mid-August, and by then we hope also to have been able to release our top line results from our current trials, and as I've said before I'm very confident that we will be announcing very significant results and we look forward to that call. Thank you all for joining us today.
Operator: Thank you, ladies and gentlemen. This concludes today's conference. Thank you all for attending. You may now disconnect.