MNKD 2017 Annual Report

the lung with minimal deposition at the back of the throat. Our inhalers show very little change in performance over a wide range of inhalation efforts and produce high bioavailability. To aid in the development of our oral inhalation products, we have created a number of innovative development tools and techniques such as a novel inhalation profiling tool that uses miniature sensors to assess the drug delivery process at the level of an individual inhaler. This tool provides real-time insight into patient usage, device system performance and pharmacokinetic effects. We can combine this tool with other development tools, such as patient inhalation simulators and anatomically correct airway models, in order to integrate inhaler performance with formulation development right from the beginning of the development program. The result is a powder/inhaler combination product customized to the target patient population from the first clinical study. As one example of an additional application of our formulation and delivery technologies, we entered into a collaboration and license agreement with Receptor Life Sciences (“Receptor”) in January 2016, pursuant to which we performed initial formulation studies on compounds identified by Receptor that treat conditions such as chronic pain, neurologic diseases and inflammatory disorders. Following the successful completion of these formulation studies, Receptor exercised its option to acquire an exclusive license to develop, manufacture and commercialize inhaled formulations of these compounds utilizing our technology. In addition, In January 2018, we submitted an investigational new drug application (“IND”) for an inhaled formulation of treprostinil to possibly treat pulmonary arterial hypertension. Our Strategy The following are the key elements of our strategy: Commercialization and development of Afrezza. Our primary focus is the commercial success of Afrezza. Over the last several years, we have transformed from a manufacturing-based company into an integrated company with capabilities in marketing, sales, managed care and market access. During 2017, we expanded the footprint of our sales force and initiated direct-to-consumer advertising in selected television markets. Our ongoing priority is to enhance the commercial opportunity for Afrezza in the United States; however, we have also begun to pursue and establish regional partnerships for the development and commercialization of Afrezza in foreign jurisdictions where there are appropriate commercial opportunities. Capitalize on our proprietary Technosphere and inhaler technology for the delivery of active pharmaceutical ingredients. We believe that Technosphere formulations of active pharmaceutical ingredients have the potential to demonstrate clinical advantages over existing therapeutic options in a variety of therapeutic areas. In addition to our collaboration with Receptor, we are actively exploring other opportunities to out-license our proprietary Technosphere formulation and device technologies. We are also evaluating several product opportunities that we would consider developing as internally and/or externally funded efforts. Intellectual Property Our success will depend in large measure on our ability to continue enforcing our intellectual property rights, effectively maintain our trade secrets and avoid infringing the proprietary rights of third parties. Our policy is to file patent applications on what we deem to be important technological developments that might relate to our product candidates or methods of using our product candidates and to seek intellectual property protection in the United States, Europe, Japan and selected other jurisdictions for all significant inventions. We have obtained, are seeking, and will continue to seek patent protection on the compositions of matter, methods and devices flowing from our research and development efforts. Our Technosphere drug delivery platform, including Afrezza, enjoys patent protection relating to the particles, their manufacture, and their use for pulmonary delivery of drugs. We have additional patent coverage 4