Insmed Inc (INSM) 2015 Q2 法說會逐字稿

Good day, ladies and gentlemen. Welcome to today's call: the Insmed second-quarter 2015 financial results call. (Operator Instructions) As a reminder, this conference call is being recorded.

I would now like to introduce your host for today's conference call, Susan Mesco, Head of Investor Relations. Ma'am, you may begin.

Thank you, Marcus, and welcome to our second-quarter conference call. Before we start, let me remind you that today's call will include forward-looking statements based on current expectations. Such statements represent our judgment as of today and may involve risks and uncertainties that may cause actual results to differ from the results discussed in the forward-looking statements. Please refer to our filings with the SEC, which are available from the SEC or our website for information concerning the risk factors that could affect the Company.

Joining me on today's call are Will Lewis, President and Chief Executive Officer, and Andy Drechsler, Chief Financial Officer.

At this time, let me pass the call over to Will.

Thank you, Susan. Good morning, everyone, and thank you for joining us today. During the first half of the year, we've made considerable progress advancing an ambitious wide-ranging agenda that is centered on five key goals.

First: fully enrolling our global Phase 3 study of ARIKAYCE in NTM lung disease. Second: advancing our European marketing application. Third: bringing a second source contract manufacturer online. Fourth: filing our IND and starting a Phase 1 study of INS1009. And fifth: acquiring an additional asset.

I'd like to start with ARIKAYCE and our top priority for the year: achieving our enrollment objective in our global Phase 3 study, which we have branded as the CONVERT study. We are pleased with the momentum we are seeing, especially in recent months, as most of the upfront heavy lifting associated with the global study of this scope and magnitude is now behind us.

As of today, we have secured health authority clearance in 10 countries, including the US and parts of Europe and Asia-Pacific. In addition, more than 50 sites are open for enrollment and we expect this number to approach 100 by the end of September.

We have taken a number of steps to improve the performance and productivity of the study. We have significantly expanded the number of CONVERT sites around the globe. Whereas we were initially targeting about 80 sites, we now expect this study to involve more than 100 centers worldwide.

We are sequencing our site initiations geographically, starting with US, followed by Australian, New Zealand, Europe, and finally Japan. Sites are enrolling in all of these territories with the exception of Japan and new sites are coming online on a daily basis.

The global expansion of the CONVERT study will also enable us to raise disease awareness and gain clinical experience in important markets outside of the US. For example, in Taiwan and Thailand, the patient numbers appear greater than our initial expectation. This will also pay dividends over the medium term, as it will accelerate the regulatory process and eventual commercial launch in more countries.

To harmonize the different interests of local health authorities and scientific leaders, including the EMA's Scientific Working Party and Japan's Pharmaceuticals and Medical Devices Agency, we implemented a protocol amendment for the CONVERT study. These changes will allow us to capture a more robust data set, including one-year post ARIKAYCE treatment data to evaluate durability of affect. The changes are particularly relevant, given the encouraging data released today, which show durable culture conversions out to one year from our 112 study.

As part of the protocol amendment, we also added a substudy of Japanese patients. This will be in lieu of a separate local pharmacokinetic study in Japan and should accelerate our path to approval in Japan.

In addition, we have formed partnerships with patient advocacy groups as well as insurance providers to enhance patient recruitment for the CONVERT study. Through these relationships, we have quantified several hundred patients with NTM who potentially meet the CONVERT eligibility criteria. A robust outreach from our partners is underway to channel these patients to the clinical sites.

This is a process, with each country and site having its own questions, comments, and timelines, so progress to date is a substantial accomplishments. I give credit to our clinical and regulatory teams as well as our EU country managers and our CRO partner Synteract for making extraordinary efforts to ensure that we are doing everything in our power to deliver on the study.

Important enrollment metrics are coming in real-time and we should know definitively by our November call where we will ultimately land with regard to number of patients and timing. We look forward to providing another update then.

I want to emphasize, as I have during previous presentations, it is extremely challenging to predict enrollment for any study. This study in particular is the first of its kind and the ratio of the number of sensors to the number of patients needed is quite high by intention. This makes enrollment by site in a given time frame difficult to extrapolate.

Quality above all else must remain our guidepost from selecting sites to screening and tracking patients. This will ensure the ultimate value and utility of this study. As you know, we intend to own this disease globally and the CONVERT study will provide the foundation for us to accomplish that objective.

So the bottom line is it remains our ambition to enroll this study by the end of 2015 and we are putting extensive resources and efforts to this task. I would like now to turn to one of the reasons why we are so passionate about completing CONVERT in a high-quality and timely manner.

At the American Thoracic Society meeting in May, we reported data from a subanalysis, noting that 20 patients had achieved culture conversion by the conclusion of the 168-day treatment phase of the 112 study. This analysis employed a more stringent definition of culture conversion, in which a patient must have at least three consecutive negative monthly sputum samples. As a reminder, this is also the primary endpoint for our CONVERT study.

Today, we reported preliminary off-ARIKAYCE follow-up data, in which three additional patients achieve this definition of culture conversion by their 28-day follow-up evaluation. This brings the total number of patients who achieved culture conversion to 23 out of 89.

Today we are also announcing that one-year follow-up data were available for 14 of the 23 patients who achieved culture conversion. 12 of the 14 patients remained culture negative for NTM at their one-year follow-up visit and the remaining two patients' cultures grew in liquid medium only and not on agar medium.

While preliminary, we are very encouraged by these robust culture conversion results in the 112 study and now the durability of treatment effect. This is significant, especially since nearly half of the patients enrolled in the study were unable to achieve culture conversion, despite being on a multidrug regimen for over two years. So the hurdle was quite high for showing any improvement.

Given the high mortality rates associated with NTM lung disease, we also looked at the number of deaths that occurred in the 12-month follow-up period. Of the 23 patients who achieved culture conversion, one patient died during the one-year follow-up period. For the 66 patients who were unable to achieve culture conversion, 9 died during the one-year follow-up period. This drives home the need for a therapy that enables patients to achieve culture conversion quickly and directly, with the hope that this will yield improved patient outcomes.

Turning to goal number two, advancing our European regulatory filing. As we noted in today's release, we are preparing our responses to the EMA's 120-day questions. The questions cover a number of topics and overall, I would say that we feel we are well prepared to respond, as there were no surprises with respect to the topics that the Agency asked us to address.

We intend to include the above-mentioned data from the 112 study when that clinical study report is completed, as well as other clinical and manufacturing data that we believe will greatly augment the strength of our application. We are on track to accomplish all of this before the end of the calendar year.

Separately, the EMA has asked us to provide additional information on the difference between ARIKAYCE and the TOBI podhaler. This request is based on a strict reading of the regulatory definition of similarity of drugs with orphan designation.

To be clear, this request relates only to the CF indication. As we have said before, our historic interest in pursuing CF was not commercially driven. Our focus has been and will continue to be the NTM indication.

That being said, we have always had a desire to help patients with CF if possible. So we felt it was important to seek approval after our successful Phase 3 study in Europe. We believe a strong argument can be made to overcome this similarity challenge by highlighting the differences between the treatments as well as the obvious public interest in having different kind of antibiotics to address the very serious issue of antibiotic resistance.

However, we are keen to advance our NTM indication and do not want this issue in any way to distract us from achieving that goal. We are currently evaluating our best course of action, which may include postponing our pursuit of CF in Europe and focusing our application exclusively on NTM. This approach, if taken, would avoid any potential delays or distractions caused by pursuing and defending a CF indication.

Also, as you know, choosing to pursue the CF indication has some important implications for the positioning of the compound in Europe, from culling efforts to pricing, which will factor into our decision-making. Importantly, the outcome of this similarity assessment in no way impacts our NTM application in the EU.

As the growing clinical data set continues to demonstrate efficacy and durability, we grow more confident than ever in the potential therapeutic benefit of ARIKAYCE in the NTM population.

To that end, let me highlight an important endorsement we received from the French National Agency for Medicines and Health Product Safety. Today we announce that an ATU, or temporary authorization for use, was granted in France.

As you may be aware, the ATU is a mechanism by which under strict conditions of medical supervision patients may gain access to drugs prior to their approval by EMA. And companies who provide them are fully reimbursed.

I am pleased to report that early last month, product was shipped for the first patient who was authorized under this program. The patient is a CF patient with an NTM infection caused by M. abscessus, which as you know is a very serious condition. We are hopeful liposomal amikacin for inhalation will be of benefit.

The government has agreed to reimburse us at a price of EUR4,500 for one month of therapy. This would calculate to an annualized rate of approximately $60,000. Importantly, this authorization speaks to the recognition of the unmet need while also laying the groundwork for an appropriate financial return that will ensure our investment in Europe is justified if we secure approval for NTM.

Turning now to our precommercial activities in Europe and the US. In anticipation of approval, we continue to implement our market development activities with a focus on education and disease awareness. A particular effort is being placed on programs that entail working with thought leaders to better characterize and communicate the burden of illness associated with NTM. Our nonbranded disease awareness website is up and running in Germany and generating interest and feedback from physicians.

Within the first 4 months of taking the site live, more than 600 physicians have visited the site. Similarly, in the US, we have already begun our outreach to both KOLs and other key constituents supporting patients.

Another key area we are focusing on is building our pharmacoeconomic model. This will help build the framework for future discussions with payors who will want clarity on prevalence, diagnosis, and of course the cost of treating NTM. In partnership with one of the nation's largest Medicare insurance providers, we conducted a series of studies and we expect three of these to be published this year.

At ICAAC in September, claims-based data will highlight increasing incidence rates for diagnosing NTM within the Medicare population. During Infectious Disease Week in October, we'll see data on the comorbidities associated with delays in diagnosing NTM lung infections. And lastly, at the Academy of Managed Care pharmacy meeting in October, we expect to report results from a study that showed significantly higher costs and resource utilization patterns in patients with NTM versus well-matched controls.

Based on our interaction thus far, payors are appreciative of the upfront work we are doing to begin characterizing the NTM disease burden. This is one of a number of factors that we will use to support the ARIKAYCE value proposition that we will present to the providers responsible for payment. All of this and future activities will enable us to define a data-driven pricing strategy that addresses the interest of all stakeholders serving this rare disease population, including patients, physicians, and payors.

One final highlight to share about the NTM disease burden. We are happy to report that FDA recently selected NTM to be part of its patient-focused drug development initiative. This program was rolled out under PDUFA 5 and aims to gather patients' perspectives on their condition and available therapies.

FDA is holding a limited number of meetings over the course of PDUFA 5, with each focused on a specific disease area. The NTM open public forum will take place on October 15 and will include a broad array of stakeholders.

This will be an important opportunity for FDA to learn more about the devastating nature of NTM, the limitations of current treatment options, clinical trial endpoints, as well as patients' challenges with current guideline-based regimens. The meeting will include patient testimonials to help regulators, healthcare providers, and industry enhance their understanding of the personal circumstances associated with their disease.

This is critical across all drug development, but especially in rare diseases with unique complexities like NTM. We applaud the FDA for recognizing the need to better understand the NTM patients' journey and we look forward to supporting this ongoing effort.

With respect to disease awareness, we remain on track to launch a nonbranded campaign in North America in connection with the CHEST Conference that is taking place in October. We are getting out front of clinicians early in the US because we know education is needed and we intend to take a leadership role in providing that to the community.

We are bringing lessons learned in Europe from our early efforts in disease state awareness back to the US to ensure even more successful campaigns. We envision these efforts picking up in earnest in the second half of this year and continuing throughout 2016 and beyond. As I have said previously, it is Insmed's ambition to own this disease on a global basis.

Turning now to goal number three: bringing a second source manufacturer online. Part of fulfilling our ambition to be the leading player in NTM globally is ensuring we fulfill our commitment to patients by providing a safe and reliable supply of drug once we secure approval.

To that end, we are very pleased to announce that we have now successfully produced ARIKAYCE at both of our contract manufacturing operators, marking an important milestone for our internal team's efforts and bringing us one step closer to reliable global supply at attractive margins. I want to thank the entire tech ops team at Insmed and especially Andy Drechsler and Don Nociolo for their leadership in reaching this accomplishment. Andy will provide some additional color on this during his remarks.

I would now like to turn the attention to goal number four: filing our IND and starting a Phase 1 study of INS1009 as well as our research efforts more broadly. INS1009 is our nebulized treprostinil prodrug that we plan to develop for the treatment of pulmonary arterial hypertension, or PAH.

Our IND-enabling activities are advancing according to plan and we are well positioned to complete our submission and begin our Phase 1 study later this year. Encouraging data from an animal model designed to evaluate cough reflex were presented at the ATS conference in May, in which INS1009 showed a superior side-effect profile compared to treprostinil. Investigators also presented rat and dog models demonstrating the potential for once-daily dosing.

In addition, so far the preliminary information from the inhalation toxicology studies of INS1009 have been favorable and supportive of our IND submission. While these are early data, we continue to be encouraged by the promise of INS1009 as a compound with a potential for improved dosing and an improved side-effect profile, which would be a needed and welcome addition for patients with PAH.

In parallel to INS1009, our research team is evaluating other formulations of treprostinil for use in a metered dose inhaler as well as a specific formulation for subcutaneous dosing with the goal of reducing site pain. We will share more information on these and several other research projects once we have a sufficient body of preclinical data.

Finally, with respect to our fifth goal, we continue to actively evaluate assets to add to our pipeline. We are being aggressive, but we are also disciplined. We will continue submitting term sheets where there is a strong strategic fit. But while completing a transaction that is certainly an ambition for 2015, all of the elements need to be present in order for us to follow through on a transaction.

I know this is an environment where the broader markets are incredibly supportive of many deals, but I remain committed to the notion of only doing a deal where the logic is self-evident, the price is right, and the ability to deliver value is within reach. Unless everything aligns to our satisfaction, we are willing to miss on achieving this goal. I know our shareholders support our discipline in this regard.

With that, I will turn the call to Andy for his financial update. Andy?

Thanks, Will. Good morning, everyone. As Will just discussed, we have made notable progress across all areas of the business. On the financial front, the second quarter started with a very successful secondary offering that generated $223 million of new capital to support the advancement of ARIKAYCE and INS1009. These funds will also provide us with resources to execute other strategic growth initiatives.

We were gratified by the overwhelming market response and the high-caliber investors who participated in the offering. We look forward to developing our relationship with our investors and delivering on our objective to ensure they are rewarded for their investment and trust.

We now employ over 115 people in the United States and Europe. In addition to our investment in human resources, we continue to invest in manufacturing as part of our precommercial preparations. To that end, we have been working with Therapure, our manufacturing partner in Toronto where we produce ARIKAYCE at a 200-liter scale. This is a significant advancement over our current production at the 50-liter scale.

In addition, this is a state-of-the-art automated facility, which we believe we will be able to reduce turnaround time and increase the throughput. In fact, a few weeks ago, we successfully produced our first engineering batch of Therapure. We have a series of additional activities to complete in the coming months and we remain on track to have two fully functioning sources of ARIKAYCE supply by the end of this year.

Turning now to our quarterly results. This morning, we reported a net loss of $28.6 million or $0.47 per share compared with a net loss of $23.2 million or $0.59 per share for the second quarter of 2014. For the second quarter, research and development expenses increased to $18.2 million from $14.9 million in the prior year. The increase was primarily due to the advancement of our global Phase 3 CONVERT study of ARIKAYCE in NTM lung disease.

Second-quarter G&A expenses were $9.7 million versus $7.9 million in the prior year. The increase was driven primarily by non-cash stock-based compensation expense. We also saw an increase in costs associated with establishing our global tax structure as well as other precommercial activities, such as our European-based NTM disease awareness campaign.

With a $223 million equity offering completed in April, we ended the second quarter in a strong financial position, with $335 million of cash. This gives us a substantial runway well past 2016.

With regard to cash guidance, in the first half of the year, our cash operating expenses were approximately $46 million, which was at the low end of our previously guided range of $46 million to $56 million. Looking ahead to the second half of 2015, we expect cash operating expenses to increase and to be in the range of $50 million to $60 million. This increase in cash operating expenses reflects spending for the global Phase 3 CONVERT study, additional manufacturing activities, and the continued buildout of our infrastructure.

With that, I will turn the call back to Will.

Thank you, Andy, for that overview. In closing, 2015 is the year of the deliverable for Insmed as we focus on our five corporate objectives. We've made great strides throughout a very busy first half of the year and I hope the accomplishments we shared with you today underscore the breadth of talent we have assembled at Insmed.

We expect the balance of 2015 to be an equally productive time as we continue to advance our strategy. We are well capitalized to do so and we have added significant experienced personnel to ensure we accomplish these objectives. I am pleased with our progress.

We will hold ourselves accountable for each objective on behalf of patients and our shareholders. After all, the patients are waiting.

At this time, we will turn the call over for Q&A. Operator?

(Operator Instructions) Matt Roden, UBS.

Thanks very much for taking the questions and congrats on the progress. First question is on the MAA in Europe. Specifically on the 120-day questions. Should we assume that if it's taking sort of several months to address the question, just trying to understand what's behind that?

Is it that there's a lot of heavy lifting involved with responding to the various issues? Or is this a matter of waiting out the requisite amount of time that you need to include the updated data that you talked about from the long-term follow-up in the manufacturing? Just trying to understand what's in that.

And then a related or follow-on question would be if there is a material increase in the amount of information to review, could that actually increase the review time post the -- after you resubmit the questions to the Agency?

Thanks, Matt. Yes, the reason for the time is pretty straightforward. We want to include the CRSs from the 112 study, including the one-year follow-up data, which is fairly recent, as well as the CSR from the 110 open-label extension study, which has only just completed. So both of those need to be finalized as well as the final data from our P/B batch runs at Althea.

Those are the things that are -- the rate-limiting steps in terms of response. I do not anticipate that they represent a bolus of data that is going to require more time for response.

Okay. And then my understanding of the process, then, is that post 120-day questions, there's about 90 days to follow to get to a CHMP decision. So should we assume that it is going to be sometime around March or April? Is that what we are tracking to for CHMP opinion?

Well, it's always hard to know how this process is going to go, because there's the clock start-and-stop sequence that surrounds back and forth in terms of questions. The way I like to think of it is once we've responded to the 120-day questions, they will provide for themselves a preliminary assessment report at day 150. And then they will communicate to us by day 180, which is obviously 60 days or 2 months after our response to the 120-day question.

At day 180, we feel -- as we've always said -- that that's the time we will really understand what their position is and what their thoughts are. So I would anticipate that the earliest we would know anything further would be with the day 180 response.

Okay. Great. And then you mentioned in the press release increased expenses related to the establishment of an improved tax structure. I'm intrigued by that. Can you elaborate on the current status of the IP domicile and if there's anything further to add on the tax side?

I'll have Andy answer that.

During the second quarter, we've been planning to do this for a while. We actually executed the transfer of the IP and all ex-US rights to Ireland. We also have operating subsidiaries set up in several different countries throughout Europe. And this is really just the first step of what will be many steps to make sure we take advantage and optimize our overall global tax structure.

Great. Thanks very much. If you'll allow me, I'll get back in the queue. Thanks very much.

Joseph Schwartz, Leerink Partners.

Thank you for the detailed update and operational excellence again this quarter. I was wondering if you could talk a little bit more about how you are looking and focusing on balancing quality versus expedience in the CONVERT study? Things like patient selectivity, site training, and conduct. How has the screen failure rate and baseline characteristics been trending in line with your range for the study in order to replicate the strong results in the target study?

Sure. Appreciate the question. I think the right way to respond to that is to say that we are being very selective in terms of where we are going for sites. As an example -- but by no means to draw undue attention to it -- we are not in Russia. I think there were -- as an example of a balance between quality and productivity just a decision taken that that's probably not something we want to be doing.

However, we are in other places around the world. And I think the central theme behind the selection of sites is, is there a sufficient number of patients there? Is there clinician interest in participating? And do they have experience in executing these types of trials?

When we talk about quality, it's really that last point that's the most important. So that's where we've spent our time with our visits, which we have done for these sites to ensure that that quality is there. Does that answer your question?

Yes, that's definitely encouraging and it helps. I think also I'd be interested in hearing a little bit more about the market development work that you are doing in terms of this nonbranded campaign that you are rolling out at the CHEST Conference.

Do you expect at some point soon to start to be able to -- or to be able to start actually identifying potential candidates for therapy similar to what other companies have done before approval in order to build a database of folks that could go under the drug at launch?

It's my view that that's the cornerstone of best practice for launches. And absolutely that is an important element of our work in the course of the next -- really starting in the second half of this year.

So we're getting a jump on it, I think, a little earlier than most. But my hope is the byproduct of that will be we'll have a commanding knowledge of where the NTM patients in many areas of the world at the time of commercial launch.

Okay. Great. Thanks for taking my questions.

Ritu Baral, Cowen.

Thanks for taking the question. Will, first question is on the sites in CONVERT. Where are you on site activation? Are you thinking about increasing the number of sites that you have over the original plan?

And actually, I wanted to follow up on Joe's question about the screen failure rate. Is it tracking with expectations or is it higher?

So what we tried to do today is provide the metrics that we feel we have enough data on to be helpful. And in that regard, we've highlighted the 10 countries where we have approval -- more than 50 sites that are open to enroll patient currently. And we're in a very steep ramp-up phase where we anticipate that the number of sites open will approach 100 by the end of September. And I think that speaks to the amount of hard work that people have been doing to get the program moving forward.

I don't know there's a lot more we can say at this time. We are not commenting specifically on things like screen failure rate. I will say just perhaps for a little bit more information, we are in a place now where probably three-quarters of the sites in the US are open or more. All of the sites that were significant producers in the 112 study are up and running. And I think from that point of view, we've got the cornerstones laid for a successful and high-quality trial.

Are you considering adding even more sites?

We have identified all of the sites that I think we want to open. The one area of exception for that, of course, is always going to be the opportunistic awareness that there are a number of patients in any given geography.

Probably not additional countries would be added, but we might for example take a site that's open in one country and find a way to get patients to that site from another. Or we might look to add an additional site in the US if we feel like the patients are there to justify it.

Where the country approval is already in place, it's much easier to add additional sites. So that's the only variable I would put there. But as far as scoping out the number of sites and where they are, that process is long completed.

Okay. And then in your one-year follow-up data, you mentioned deaths. Are there other clinical events that you have been tracking in these patients? And was the events a specific portion of the 120-day questions from Europe?

It's interesting -- I told you it's inappropriate to comment on specific questions from the 120-day question. Much as I might want to get into that discussion, I think what I would say is the mortality associated with this disease is significant enough that it's the logical place to go in terms of examination.

Certainly we're tracking everything that can. As you know, the 112 study was really not designed to take a robust look one year post-drug, exposure, so we're somewhat limited with the data we are collecting based on the original protocol.

Okay. And last question and then I'll get back in the queue as well. What are your plans for ERS, whether on a day-of-presentation level or a commercial presence level?

So as we now enter this next phase of nonbranded disease state awareness and data presentation, I think you can expect to see more press release notifications about upcoming conferences and the specifics of what will be covered at them. So I guess probably the best way to handle that is to direct you to keep your eyes out and we will make sure we draw attention to what our plans are for these different conferences.

Matt Roden, UBS.

Great. Thanks very much for taking the follow-up. I wanted to ask about the long-term follow-up data -- the one-year follow-up data. If I'm hearing you correctly, in those two patients where there's these sort of partial positive cultures, sounds like those patients aren't presenting clinically as if they have NTM. I'm just trying to understand if there's evidence of reemergence of the path of physiology or if this is just a subclinical lab finding?

So it's a lab finding. I don't know that we can make a lot more commentary about it than that. I think what we try to highlight is the guidelines, when they look to issues like [brought]-positive only, are really doing so with an eye to saying that that's certainly not as severe as a strong growth finding on agar medium. So [my point to you] is probably relevant to take note of that distinction.

Okay. And then I guess related to that, in those two patients, was there any relationship in the time it took to get them to negative in the initial conversion to the reemergence in the lab finding 12 months later?

It's an interesting question. To be honest, it's not one that we've looked at in detail in a way that I could comment on. So I don't really have a good answer for that. We can go back and look at that and see if we can get back to folks with some more understanding of what this represents.

I will say this data is fairly hot off the presses in terms of being checked for quality and all the rest. We would have liked obviously to collect samples on all the patients, but we only had it for the 14. But the data, even if you impute culture change to the patients where we don't have data, it's still quite a compelling finding.

Yes, I would agree. I guess lastly, I would imagine that you've contemplated maybe developing protocols for potential re-treatment of patients in case they initially convert and then sort of reemerge with the lab finding. Is there anything to say there? I realize it's probably pretty preliminary at this point; just curious your thoughts.

Well, we know from the available data, albeit there isn't a lot in NTM, that the reinfection or relapse rate is around 30%. It's hard to know whether it is caused by the original disease -- in other words, a relapse -- or the old infection is treated and then a new one arrives.

To that end, this study is designed to answer that question. We are going to use a molecular probe to examine the underlying pathogens so that if a patient does go negative and then goes positive, we will know whether that new infection is a relapse or a new infection from a different pathogen. And in the case where it's a new infection, certainly it would be logical, given the success of the drug in the first instance, to reapply in that circumstance and treat again.

Okay. Great. And then lastly, I just want to follow back up with Andy on my prior question about the tax. So if I look at my mid- and large-cap comps, where intellectual property is domiciled in Ireland, we know that the Irish tax rate is 12.5%. But it seems to me that on a -- for US sales, maybe there's some transfer pricing and things like that that have to be taken into consideration.

But in most of these cases, you see an integrated global tax rate as reported on the income statement on a non-GAAP basis. Certainly sub-20% tax. So is there anything you can say -- I know it's preliminary at this point, but is there anything you can say related to those comps, things to consider, etc.? Thanks.

We've obviously looked at those comps as well. The key variable still to be determined is pricing, right? And exactly what impact that's going to have. But I think you're looking at it the right way. And as we get closer, we will obviously give a little more input or guidance, if you will, around tax rate once we get to that point.

Great. Thanks so much and congrats on the progress.

(Operator Instructions)

Ritu Baral, Cowen.

Hi, guys. Thanks for taking the follow-up. And I got cut off, so if you addressed it in the question following mine, I apologize. But have you done any additional EU payor consulting work? Has there been any sort of new findings or new strategy as you approach potential reimbursement submissions? And how much of that was done before you set your expanded access price for the ATU?

So we have had payor consultations in Europe. And it is fair to say that, as everyone is aware, the opportunity commercially for NTM is certainly more attractive and more easily supported in the mind of the payor than that of the CF indication.

So certainly that does weigh on our thought process, as it must, as we about evaluate how we think about NTM in Europe and, pricing, and it did into enter into our thinking as we examined where we were with regard to the ATU pricing. So that's probably about as much as I can say at this stage.

Got it. Thanks for taking the follow-up.

Ladies and gentlemen, that's all the time we have today for questions and answers. At this time, I would now like to turn the call over to Mr. Will Lewis for closing remarks.

Thank you for your questions and participation on today's call. We appreciate your continued interest and support and look forward to updating you again when we report our third-quarter financial results. Have a great day.

Ladies and gentlemen, thank you for attending today's program. This does conclude today's conference. You may now disconnect. Everyone, have a great day.