Insmed Inc (INSM) 2024 Q2 法說會逐字稿

Thank you for standing by. My name is John, and I'll be your conference operator for today. At this time, I would like to welcome everyone to the Insmed second quarter 2024 financial results call. (Operator Instructions)

Thank you. I would now like to turn the call over to Bryan Dunn, Head of Investor Relations. Please go ahead.

Thank you, John. Good day, everyone, and welcome to today's conference call to discuss Insmed's second quarter 2024 financial results and provide a business update. I am joined today by Will Lewis, Chair and Chief Executive Officer; and Sara Bonstein, Chief Financial Officer, who will each provide prepared remarks, after which they will be joined by Martina Flammer, Chief Medical Officer for the Q&A session.

Before we start, please note that today's call will include forward-looking statements based on our current expectations. These statements represent our judgment as of today and inherently involve risks and uncertainties that may cause actual results to differ materially from the results discussed.

Please refer to our filings with the Securities and Exchange Commission for more information concerning the risk factors that could affect the company. The information we will discuss on today's call is meant for the benefit of the investment community. It is not intended for promotional purposes and it is not sufficient for prescribing decisions.

I will now turn the call over to Will Lewis for prepared remarks.

Thank you, Bryan, and welcome, everyone. The second quarter of 2024 will go down in Insmed's history as the start of an important new era as a mid-cap biotechnology company. During this quarter, we not only saw the continued growth of ARIKAYCE and refractory MAC lung disease, but also positive Phase 2 data for TPIP and PH-ILD and of course, most significantly, the successful results of the landmark ASPEN study

We are grateful to be able to mark and celebrate this moment with patients, physicians and investors. It is a time that reminds us why it is so rewarding to work in the field of biotechnology. Today, I intend to focus on a number of exciting catalysts across all of our pillars.

However, we are keenly aware that nothing is more important for our near and medium term success than flawlessly executing the launch of Brensocatib in bronchiectasis. If we can get that right, we believe it holds the potential to transform this company once again, which is why executing on that opportunity will continue to be such a focus for us.

So let me start there with an update on Brensocatib. The World Bronchiectasis Conference held in Dundee Scotland in July was nothing short of a celebration of the positive results from the ASPEN study. We've been touched and honored by the enthusiastic and often emotional responses we've heard from patients and the physicians who treat them to ASPEN's overwhelmingly positive results.

Brensocatib demonstrated ability not only to reduce the rate of pulmonary exacerbations, but also to preserve lung function and improve how patients feel, all while displaying a safety profile that was comparable to placebo is something that we believe has the potential to be life-changing for patients living with bronchiectasis.

We look forward to releasing additional data, including prespecified subpopulation data from the ASPEN trial at the CHEST conference in October in Boston. I want to reiterate that these subgroups have shown good consistency with the overall results of the study. So there should not be any negative surprises when these data are presented.

We are immensely proud to be a part of this type of breakthrough for patients. And if approved, we look forward to getting Brensocatib into the hands of those who need it as quickly as possible. We continue to prepare for the expected US filing of Brensocatib in bronchiectasis in the fourth quarter of this year. And our progress towards that goal remains on or even slightly ahead of schedule.

Importantly, all of the necessary clinical and preclinical data required for the filing have already been completed, so there are no large gating factors left in front of us. As you know, the ASPEN trial represents an enormous dataset and we are focused on thoroughly documenting those results for the filing, including making the final determination on whether we will file one or both doses for approval. We continue to anticipate a launch in the US in the middle of next year.

Our commercial team has also been diligently preparing for that expected launch. Nearly all of the additional 120 sales reps we intend to add to the US sales force have already accepted offers, and these were chosen from a pool of more than 7,000 resumes. We expect to have all 120 new sales reps trained and in the field by October of this year.

This time line for deployment of sales reps follows a similar pattern as the ARIKAYCE launch. We put those reps into the field six months ahead of the approval. And we believe that proactive approach contributed to ARIKAYCE ranking in the top 10 of non-oncology rare disease launches.

For Brensocatib, we intend to have reps in the field even earlier where they will work on disease state awareness and education, while also detailing ARIKAYCE to physicians in the hopes of helping more patients who can benefit from that treatment.

In addition, we have made great progress with both national and regional payers on disease state education and have engaged close to 90% of US patient lives via payer discussions already. Payers have been receptive to learning about the disease and the permanent damage caused by bronchiectasis exacerbations. Our medical team is already sharing the ASPEN data reactively upon request and more detailed pre-approval discussions will follow our NDA filing next quarter.

Finally, it is important to note in the context of our anticipated launch next year that we are in a very good position from a supply perspective with ample API inventory already in hand. In fact, by the end of this year, we expect to have converted enough of that API into tablet form to meet our current anticipated demand for Brensocatib in the US through at least the first year of its launch.

As a matter of policy, we always look to prioritize continuity of supply for our patients. It was that principle that allowed us to maintain a steady supply of ARIKAYCE even during a global respiratory pandemic by establishing robust supply chains and a sufficient safety stock of inventory.

Even though Brensocatib is easier to make in large quantities and on shorter notice compared to ARIKAYCE, we intend to build meaningful inventory and establish backup supply chains, and that work is well underway.

Moving beyond bronchiectasis, we continue to be encouraged by the progress of our ongoing Phase 2 study in CRS without nasal polyps, which we expect to readout in the second half of 2025. We continue to see improvements in average symptom scores in the blinded data from that study, which appear to correspond with the time when NSP reduction from DPP-1 inhibition should be occurring.

We acknowledge that the data is blinded and still early, but we find it encouraging nonetheless. We are excited to be moving forward with our previously stated plans to kick off a Phase 2 study of Brensocatib in hidradenitis suppurativa, now that the ASPEN study has demonstrated the potential of the DPP-1 mechanism. We remain on track to have the first active US sites open before the end of the year with the first patients being screened shortly thereafter.

Finally, I want to comment briefly on the work we are doing to develop next generation DPP-1 inhibitors in an effort to maintain our leadership in this important new class of medicines. This work is not new having begun shortly after the Phase 2 WILLOW results first read out.

In fact, we have already synthesized and screened over 850 novel DPP-1 inhibitors and have filed over 10 unique patent applications that disclose and claim these compounds. We are now advancing first candidate from this group into IND enabling studies, and we expect one to two more to follow closely thereafter.

Based on the strength of the efficacy and safety data from ASPEN in patients with bronchiectasis, we are evaluating if there may be other indications we want to explore using DPP-1 inhibition. This can include other indications with significant neutrophil involvement and where patients continue to face significant unmet needs despite current treatments such as rheumatoid arthritis, lupus nephritis and other inflammatory conditions.

Keep in mind that we could develop these molecules for these new indications ourselves or we could choose to sell or partner them with others who already have a presence in those markets. Either way, these follow-on compounds are expected to keep us at the forefront of this exciting new drug class.

Now let me turn to ARIKAYCE. I am pleased to report that ARIKAYCE continues to perform well commercially, delivering 17% growth this quarter compared to the second quarter last year. Much of that success is directly related to the strong execution of our commercial teams across the world.

Keep in mind that these same teams will be the ones to launch Brensocatib, assuming regulatory approvals are achieved. In addition to commercial execution, we have also made progress on ARIKAYCE clinical development this quarter.

As previously indicated, we met in June with the division of the FDA responsible for patient reported outcome measures. That meeting resulted in us successfully aligning with the FDA on the primary endpoint for the ENCORE study that can support label expansion to include all MAC lung patients and full approval for the current refractory indication if the data are positive.

Now that we have this clarity from the FDA, we have reevaluated ENCORE's enrollment target with the goal of ensuring we give the study the best chance of success in achieving its objectives using appropriately conservative powering assumptions.

Based on that evaluation, we have updated ENCORE's target enrollment to 400 patients with targets powering of more than 90% for the primary endpoint. Importantly, recruitment for the trial has been proceeding very well throughout 2024 following the ARISE study result.

As a result, we expect to be in a position to stop screening new patients later in the third quarter and would then expect the top line results for ENCORE to readout in the first quarter of 2026. As we've commented before, we can now approach the FDA about the possibility of an accelerated filing under Subpart H. We expect to have that answer by the end of this year.

As a reminder, our expectation continues to be that the ENCORE data will be required for all global regulatory filings to potentially expand the label for ARIKAYCE to include all patients with MAC lung disease. We will update you as we learn more from our interactions with the FDA.

Let me also provide a quick update on our TPIP development program. Enrollment in our Phase 2 PAH study has also accelerated recently, likely resulting from the strong Phase 2 trial readout in PH-ILD in May. We now have more than 75% of the enrollment completed in our PAH trial, which keeps us on track for an expected readout in the second half of 2025.

We are consistently monitoring the results of the study on a blinded basis, which continue to show impressive reductions in pulmonary vascular resistance for many of the patients in this study. These improvements in PVR would not normally be expected for patients who have not had a change in their therapy. All of this adds to our excitement for the upcoming readout of the trial and for the potentially compelling profile that began to emerge with the recent PH-ILD top line results.

If I can summarize today's update, it is this. Insmed is preparing diligently for the expected launch of Brensocatib in bronchiectasis next year, including regulatory filings, commercial readiness, payer discussions, and inventory planning, all of which is progressing on or ahead of schedule.

This launch represents the type of opportunity that only comes along once in a career, if you're lucky. We all recognize the enormity of what lies ahead and how important it is for us to get it right for our patients, investors, and other stakeholders.

While we acknowledge the critical importance of the successful launch of Brensocatib, I also want to recognize the remarkable progress we are making in parellel across every other area of clinical development and research and the exciting opportunities that this work has the potential to unlock.

Shortly after we launch Brensocatib, we anticipate additional clinical readouts that could represent sizable growth opportunities in their own right, such as Phase 2 readouts for Brensocatib, in CRS without nasal polyps, and TPIP and PAH, followed by the Phase 3 readout of ARIKAYCE in newly diagnosed MAC lung infection. We look forward to continuing to execute on behalf of patients and our stakeholders as we enter the unique period of potential growth that lies ahead of us.

Now I will turn the call over to Sara to walk through the financials for the quarter.

Thank you, Will, and good morning, everyone. I'm happy to share some of the details of Insmed's financial performance for the second quarter of 2024. We ended the quarter with $1.25 billion in cash and cash equivalents, representing an increase of $651 million compared to the end of last quarter. This increase in cash was driven primarily by our equity raise during the quarter, which added $713 million on a net basis and was supplemented by cash received by the company through the exercise of stock options during the quarter. When these items are excluded, the underlying cash burn for the quarter was approximately $139 million, which is relatively consistent with our historical cadence.

Before I move on to talk more about our performance this quarter, I wanted to provide a brief update on our $225 million convertible debt instrument, which was set to mature in January 2025, but which we called in June. As of August 7, 99.9% of those notes have already been converted to approximately 5.7 million shares of our stock ahead of the redemption date on August 9.

I will now walk you through some of the highlights of our commercial performance in the second quarter of 2024. Global net revenues this quarter were $90.3 million, representing 17% year-over-year growth compared to the second quarter of 2023. Not only does this result reflect the highest quarterly sales for ARIKAYCE in its history, but it also establishes new all-time highs for sales in each of our three commercial regions.

In the US, net revenue for the second quarter 2024 was $63.8 million, up 11% compared to prior year quarter. New patient starts in the US have remained very strong, reflecting the value that physicians see in using ARIKAYCE for the refractory patients. The quarter's performance also benefited from a rebound in active patients following the disruptions caused by the Change Healthcare cyber-attack in the first quarter of the year.

In Japan, second quarter 2024 net revenue was $21.1 million, reflecting 35% growth over the same quarter last year. The record setting performance in Japan this quarter was primarily driven by stronger demand resulting from an increase in physician reach as we have worked to expand our sales force and to a lesser extent, favorable inventory patterns in the quarter.

In Europe and the Rest of World net revenue in the second quarter 2024 came in at $5.4 million, up 37% compared to the same quarter last year, driven primarily by strong performance in the UK and Germany. Importantly, this quarter's performance keeps us on track to achieve our reiterated full year 2024 global revenue guidance of $340 million to $360 million.

Let me now turn to a few additional financial items. In the second quarter 2024, our gross-to-nets in the US were 15.4%, which was consistent with our expectations, we continue to anticipate that gross-to-net will settle in the mid to high teen range for the full year. Cost of product revenues for the second quarter of 2024 was $21 million or 23.2% of revenues, which is also consistent with our historical performance.

Turning to our GAAP operating expenses. In the second quarter, research and development expenses were $146.7 million and SG&A expenses were $106.6 million, reflecting investment in both our early and mid to late stage pipelines as well as our ramping investment and launch readiness activities for Brensocatib.

One additional financial highlight, each quarter, we record the non-cash charge, the non-cash change in fair value of deferred and contingent consideration liabilities, which relate primarily to future stock payments associated with two of our past acquisitions.

With this charge being directly linked to the change in our stock price each quarter, the expense this quarter was significant at approximately $104 million. Importantly, this is not a new expense, is non-cash and has no impact on our cash runway or balance.

In closing, Insmed's financial position remains very strong. We produced our best ever revenue results in the second quarter, keeping us firmly on track to deliver our full year guidance with well over $1 billion of cash on our balance sheet.

Now we would like to open the call to your questions. Operator, can we take the first question, please.

(Operator Instructions) Jessica Fye, JPMorgan.

Hey, guys, good morning and thanks for taking my questions. I'd like a competitive landscape question for Brenso. I was curious if you could share with us your take on the BI Phase 2 top line data at World (inaudible) , and what you're going to be watching for when more detailed results from the early study become available? And then second, can you just confirm exactly what the primary endpoint is for ENCORE and how it differs, if at all from ARISE or if it's, I guess, identical, thank you.

Yeah. So just I'll take the second question first, which is the ENCORE primary endpoint is the PRO measure that we've agreed to with the FDA. And the primary distinction now is just that they'll be eight questions, not nine, but the consequence of that is not any impact on our expectations.

We ran models of both eight and nine questions against the ARISE results. And in both cases, we had clear wins. So this has just been a clarification. It takes a long time to get the PRO group and FDA to alignment. I'm glad we're there.

We did a lot of extra analysis for them to get them to that place and they're very comfortable and so are we. It's a consequence we're super excited about flipping over that data card, which we now expect to be in the first quarter of 2026.

On the BI front, I'll actually ask Martina to chime in here in a sec. My take on that because I was there in Dundee was that, that was a pretty, I think disappointing presentation. They had data, but it was more modeled data. It wasn't really a readout of the underlying different dose effects on a statistical basis.

And there wasn't any detail about safety, which I think everybody in assembly was surprised by. The expectations that they might say more in Austria at the European Respiratory Society meeting in September, but we didn't really see what we were expecting to see there. I don't know, Martina, if you want to add any color to that.

Yeah. Maybe just as a reminder, the study was actually looking at testing three different doses, and it also was a dose response study. At the end, we really didn't see any result for any single dose. That is something I think everybody would be looking for and we will be looking for that at ERS in September.

We'd also would like to see what is the actual safety data because there wasn't any data presented apart from a line that says there are skin effect, which wouldn't be anything that is surprising on the mechanism of action, but understanding of the extent of any skin effect, but also in general on the tolerability, whether it is GI related or any other symptom class. So there wasn't really much at this point that we can conclude and those would be the things we'd be looking for in Vienna.

I'll just add also that our assumption is that we're going to see competition. So we're planning for that, whether it's from BI or some other source over the years into launch. We're running as though we've got people on our heels.

Thank you.

Ritu Baral, TD Cowen.

Good morning everyone. Thanks for taking the question. Will, Martina and Drayton actually, I think this question is for all three of you. How are each of you thinking about one versus two doses in the NDA? Like what are the clinical considerations? What are the commercial considerations?

I mean, based on all the well, discussions and presentations in Scotland, it seems Like You're going to have to use it in file for the 25 mg, otherwise, the KOLs will come for you. But why would you consider using a lower dose?

And then as part of that NDA, how are you or that NDA filing, how are you thinking about the indication language? Well, could it be that you -- could you get an indication for treatment of bronchiectasis or do you think it will necessarily be limited to reduction of bronchiectasis exacerbations? Those were both my questions. Thanks.

Sure. So I'll take the second first. The treatment of bronchiectasis is, in fact, the label we expect to get. That's what we're going to be requesting. We do not think it will be limited based on two or more exacerbations.

I think where that may play out in more or less degree is in the payer landscape, which is something we're already working on the disease education front right now. My perspective on the two doses, and I'll invite Martina to comment on it is I think look, both are clear wins, and that's the most rewarding aspect of this study, both from a safety and from an efficacy standpoint.

As we move from 10 mg to 25 mg, we see some additional benefit that is clearly captured in the slowing the rate of lung function decline as measured by a couple of different metrics, both FEV1 and forced vital capacity. And then as we look at how patients respond and how they feel the quality of life measure and also the diary, a bulk captured improvements from the patient's point of view.

And we think all of that information is very compelling. And certainly we've heard that from all of the experts in the field. The most important point for both 10 mg and 25 mg is that they have comparable safety profiles. So the risk reward calculus you run when you go from 10 mg to 25 mg, you don't get any real additional risk in our opinion for getting those extra benefits.

And that suggest 25 mg as a very appropriate dose to think about for initiating patients at and I think we've heard that pretty loudly from a lot of the experts in the field. We're not making that commitment now because we want to have the dialogue with FDA to capture the benefit of their perspective on the 10 mg versus the 25 mg.

But I think we'll keep an open mind and end of that dialogue we'll come forward with a proposal here with their responses. But I think the 25 mg clearly suggests itself as having some added benefit over the 10 mg without there being much of a trade-off on safety. I don't know Martina, if you'd add anything to that.

Yeah, I think you already described it well. And you know, sometimes you think about starting with the lower dose and have an opportunity to go to a higher dose is something that physicians think about. In our case, you have overall on the reduction of pulmonary exacerbations, such a clear win for both doses that you now look at what is the additional benefit that patients can achieve.

And here, if you look at the lung function data and you look at the FEV1, clinically, if you're a pulmonologist and you could think about my patient currently loses about 60 milliliters to 70 milliliters every year, if I can bring that patient to 30 milliliters, what would be a normal loss of milliliters or FEV1 for any adult as we age, that would be a very, very strong argument.

And given the safety even for ease of special interest that is so good and there is very, very little difference truly between those doses. I think we have a very strong argument for the 25 mg.

Joseph Schwartz, Leerink Partners.

Hi, thanks very much. I have a couple of questions on CRS. First of all, what are the powering assumptions that govern BiRCh? And then are you endotyping patients in BiRCh or stratifying patients in any way? And lastly, how did you decide on the two doses of 10 mg and 40 mg milligrams there?

Yeah. So super excited about that trial because now that we've validated the mechanism, we're kind of glad we started that one a little bit at risk to be to be candid. We didn't want to go full bore with all of the subsequent trials. So it just starts at the end of this year.

But the way we think about this as having validated the mechanism we're not going to be exploring in our sort of hierarchical rank of where we think we could have the most impact and there's the clearest unmet medical need. And so that's why we turned to CRS without nasal polyps next.

That market opportunity for those patients, the unmet medical need there is every bit as big in my mind as bronchiectasis. And I think it's pretty compelling if we're able to demonstrate impact there. So far, we're bringing forward the 10 milligram and the 40 milligram dose, as you pointed out in the study.

Going to the higher dose, we could certainly do that in other settings. We didn't have the [tox] data done, I just want to remind everybody about that. By the time we launched Phase 2, we can now go as high as 65 milligrams if we ever wanted to in the disease because we have that tox work done. And it's clear.

Each disease is different or respond differently to the DPP-1 inhibition. So it seems to us appropriate and particularly in hindsight of ASPEN to go up to 40 mg as the next dose. But I don't know powering assumptions off top my head, Martina, do you know them? Maybe you can address that.

Yeah, of about the powering of 80% to detect a difference of 1.34 units and were 90% powered to detect one between 1.55 units and so what you see as a primary endpoint we have to sign is total symptom score.

As you may know, this is a composite score of symptoms related to CRS and includes nasal congestion, facial pain, loss of smell. And those will be the things that we will be looking for as a primary endpoint. And that's the powering part.

And I'll just add that while blended and blinded and very early, there is temporal alignment between improvement in that symptom score on an overall basis. And when we would expect the onset of the drug to take effect. So that suggests that there may be something going on here that's positive. Obviously, we don't know that until we unblind, but it's a encouraging trend nonetheless.

And Joe, I would just remind you that $5 billion of peak sales that we referred to at our Commercial Day, that was bronchiectasis alone. So the upside for CRS is not included in that number. And as Will already mentioned, we believe that could be a sizable patient population.

Thanks. That's helpful. And how you view the whether it makes sense to endotype or stratify patients based on the mechanism?

What we're looking for is we're looking at patients who are below 300 eosinophils and above 300. But we know that in CRS without nasal polyps also there is an eosinophilic component, as you know, with all of these diseases, it is not something that is a pure mechanism that is looking only at eosinophilic. So we look at both of those patients, but we know there is very strong neutrophilic and driven group for both of them.

Makes sense. Thank you.

Jeffrey Hung, Morgan Stanley.

Hi, good morning. This is Catherine on for Jeff. Thank you for taking our question. Just one looking ahead to the expected Brensocatib launch, can you talk more about your strategy for targeting patient groups at launch?

Will you be focusing primarily on the diagnosed population? Or do you have plans to target or go after the undiagnosed population or the asthma COPD comorbid patients experiencing exacerbations as you mentioned during your R&D day?

Yeah. So thanks for the question. I think the way to conceive of what we are going to be doing with our launch is that disease state awareness is already well underway. And I think that's the first hurdle to clear. We know from our previous experience of being a first in disease launch that is very important to raise the awareness among physicians of the disease and its sequelae, and that process began at the American Thoracic Society, a year ago, this last May.

So we've been out there for a while, we're doing the same thing with payers. And as we raise that awareness, I think physicians will turn their attention to patients that may be appropriate for treatment, assuming that we are approved and cleared all the regulatory hurdles.

We know from our dialogue with physicians that those patients who are diagnosed today are the ones that they're going to immediately turn to for use of the drug, assuming it's approved. And I think that's fully appropriate.

But we're also aware that there's a growing dialogue and chorus among treating physicians that there's probably a decent number of patients who have COPD or who have asthma that may have been misdiagnosed or that have those conditions and are potentially comorbid with bronchiectasis.

We talked about that on our Commercial Day. And I think that has gained a lot of momentum, frankly, independent of us. And as people gain that awareness and they become aware of our medicine and its ability to have impact on these patients, again, presuming that it clears the appropriate regulatory hurdles, that's going to be an exciting time.

Because I think what often happens in these kinds of first and disease indications is that there are many more patients out there than people would have originally thought. But the short answer to your question is that 0.5 million patients that we know are diagnosed today with bronchiectasis, those are the first ones we're going to be targeting, and we'll see and learn along the way how much broader that may get.

Great. Thank you so much. And then just a quick one, if I may. You previously provided the range of $40,000 to $96,000 as a likely US price. Can you just remind us of the factors here that may drive the price to one end of that range or the other? Thank you so much.

Sure. Well, I think whenever you consider price, you have to think about the idea of the value for money and that proposition is frankly spelled out in the label. So until we know what that's going to look like, it's hard to really think about price with any greater specificity.

I think across that range, given what we've seen in the data and presuming that is something that is reflected in the label, which is appropriate or is available to physicians for their contemplation, we have every reason to believe that anywhere along there is something that is appropriate.

We got a lot more work to do before we're going to settle on price. But I think what we have found in these data and the response to these data is that they are remarkably compelling. This is -- I call that a landmark study, and I know every company lays claim to having the ability to produce good data.

This is one of those rare moments where this drug is going to speak for itself. And the physicians have already told us that and they're excited to put their patients on this drug, presuming it's approved. And I think we're going to find the right balance between setting a price that will reflect that value for patients and allow us to move forward as a company and reinvest in other promising medicines.

Thank you.

Andy Chen, Wolfe Research.

Hi, guys. This is (inaudible) on here for Andy Chen. In CRS, besides that fig, any internal bar for a go no-go decision into Phase 3? And what's a good compare here for efficacy and safety? Is (inaudible) your bar or you seek to be better in order to move forward? And I have one quick follow-up. Thank you.

So just to be clear. On CRS without nasal polyps, there's nothing approved to treat that condition. There is some medicine that is used to treat CRS with nasal polyps. But and that includes things like HUMIRA. But for CRS without nasal polyps, largely neutrophil driven, there is nothing.

And when we talk about this disease indication, we refer to the incidence population, the annual rate of patient numbers that are either subject to surgery, repeat surgery, or eligible for it. And that's in the hundreds of thousands of patients, that's every year. So that's quite a substantial opportunity.

We talk about the overall prevalence population is being in the US alone, close to 29 million people. So to talk about the disease indication with nothing approved of that magnitude and going as we did with ARIKAYCE after the severe end of the patient spectrum out of the gate, that's really the strategy here.

What is sufficient for us moving into Phase 3, well, I think honestly, we have to look at the Phase 2 data and have some reflections on whatever that is going to be. There aren't great animal models for this, and there isn't precedent because there's nothing approved. So we're going to have to take a close look at that.

But once again, the standard we always use is this going to make a dramatic impact on the patients. And we talk about patients who are subject to repeat surgery or avoiding surgery, the ability to provide benefit that's meaningful for that patient group would be sort of how we think about it. I don't know, Martina, if you want to add anything on that.

Yeah, apart from stats taking the primary endpoint, one of the things we look is the secondary endpoint is the Lund-Mackay CT that something that is very often used in standardized used in this disease where you actually look of what kind of a classification do you see in the sinuses. So that is another efficacy measure.

Got it. Thanks. And can you comment (inaudible) sales momentum by geographic region. Should we be expecting some attrition, especially in areas like Japan and how much is left in that region? Thank you.

So I think we feel very good about the performance this quarter, but I'll actually ask Sara if she wants to make any commentary on the regional basis.

Sure, happy to make a comment. And just to start off on a global basis, we were really encouraged by the continued double digit growth across all of our regions. As you know, we're in our 6 year-plus of launch in the US and still see this level of growth is absolutely tremendous and talks about the patient need and the need and importance of ARIKAYCE.

In the US, we saw tremendous growth. We continue to be really impressed by the commercial organization. As a reminder, that's the commercial organization that we anticipate will launch Brensocatib, assuming approval by FDA by middle of next year. So couldn't be more pleased, obviously augmenting that sales force in the US.

And as Will mentioned in the prepared remarks, those 120 reps on nearly all hired from a very large pool of candidates. So we feel confident we have top talent that is augmented into our commercial organization that will now be able to have ARIKAYCE as well as well as the disease state awareness.

So US, we feel really comfortable on that continued growth, Japan, 35% growth, can't ask for much more for a reason. So really pleased to see that continued performance. We did add some additional therapeutic specialists in Japan to continue with that growth. In Europe, it's smaller number, but very material from a percentage perspective and really excited to see that. So couldn't be more pleased on the growth across each of the regions and feel really confident in our $340 million to $360 million full year guidance.

And I just will add a quick shout out to the commercial team around the world for the excellent job they did this quarter and the momentum that they're generating for the second half of the year.

Got it. Thank you.

Jason Zemansky, Bank of America.

Hey, good morning. This is Cameron Bozdog on for Jason, congrats on the quarter and thanks so much for taking our question. I guess looking ahead to Brenso launch. Here you mentioned your plans to hire sales force of 120, but can you maybe elaborate a bit more on additional steps the team has taken to build out the commercial infrastructure and maybe what's still left to do?

And then what do you expect to be the biggest or at least most time consuming challenge at this point? Is it going to be physician awareness, payer issues, or maybe something else? Thank you.

So I can just comment in again reverse order that the single most important thing, while it all has importance. The single most important thing that keeps me focused is the payer access. I think now more than ever in the era in which we operate, getting that right is really the key to successful launch.

And I could not be more pleased with the strength of the team we have, in the work we've already done. As we mentioned, we've already been in dialogue with more than 90% of patient lives in the US, the groups that cover them.

And we have a very good and robust dialogue going on about disease state awareness there. Those efforts run in parallel, and second, I'll ask Martina to talk about medical affairs, separate from commercial, obviously.

But on the balance of the commercial front, we have every one of our what we refer to as customer facing groups in growth mode and in preparation mode for this launch. We set the standard by our ARIKAYCE launch, which was to have everything ready about six months before approval.

In this case, it's going to be more like nine months before approval. I just would highlight the most recent effort to hire the additional 120 sales reps. I think as of yesterday, we had all but one who had accepted those positions and the reason why that last one is not on board yet is because for every one of these positions, although we had more than 7,000 resumes, we have held ourselves to the standard of not only excellence but cultural fit within the company.

One of the great strengths of Insmed is that we have folks that are here that are really interested in helping patients get better. And I can't emphasize that enough as an important cornerstone element of what this company is all about.

And the purity of that, it needs to be preserved even as we find scale in larger opportunities. So I'm very pleased with the work that's been done to date. Our leadership team is absolutely crushing it on every front. As we've said in the remarks we are at or ahead of schedule on pretty much every metric.

And I can say having just reviewed it during our Board meeting over the last two days, I think we all sit here today feeling very good about our preparation for next year. There's a lot of work still to be done, I don't want to take anything away from that.

But we feel very good about the strength of our position, the strength of the team, content of the character of the people we brought on board and the efforts that we're putting on this opportunity. It can't be overstated how significant this is and therefore how important it is for us to get it right. Martina, do you want to talk about the medical side of the equation.

Yeah, happy to. So in addition to what you speak to is a payer from a commercial perspective and should they provide access and how do you think about it? What's important is payer organizations have medical directors, just as many other organizations do. And those are the people who understand and learn about what is the true unmet medical need here, what other treatments are, available, what are the path to diagnosis, how does the patient go through the system.

We have colleagues of from medi. We speak about our medical outcomes liaison colleagues who are on a regional basis in the field who understand what is relevant for the medical director in the payer organizations, providing them that information.

And they also serve as the point of contact to explain, not only today as we talk about, for example, ASPEN, what is the data overall, but what does that mean for the population that these payers cover in the sense of medical terms and unmet need.

Jennifer Kim, Cantor Fitzgerald.

Hey, guys. Thanks for taking my questions. I wanted to go back to the one versus two dose for Brenso. It seems like everyone has an agreement that there's a compelling reason to go for the higher dose or include the higher dose. Is there a reason why the FDA would have hesitation on that front? And then my second question is, could you give any color on exactly where you're at with ENCORE enrollment?

Sure. So on the FDA front, we don't anticipate that there's going to be any pushback. I think that the guiding principle that the FDA follows is what's the lowest effective dose? And when you think about going up in dose, what is the risk reward balance that you are encountering as you go there.

So as we go from 10 mg to 25 mg, what we observe is some clear itemizable, if that's the right word benefits from prevention of lung function decline, which is Martina expressed earlier, is very quantifiable and meaningful for every physician we've spoken to.

In addition, the quality of life benefit that we observe at the 25 milligram dose is also meaningful. It's meaningful for physicians, for patients, obviously, because they feel better. The physician can indicate you may feel better on this medication or at least they're aware of that.

And most importantly, the payers know that when they pay for a medicine, the patient is more likely to take it if there isn't a bad side effect profile. So all of that suggests that 25 mg in a very positive light. And I think the question the FDA has is do they agree with that risk reward profile that there is added benefit and not a lot of additional risk going up to 25 mg.

To us, that seems to be the landscape, but there's more to learn. And again, I'll remind everybody we're doing a lot of detailed analysis on what is a very substantial database. We haven't seen anything yet that would suggest that this equation would be viewed differently.

We're just trying to preserve the right to continue to analyze the data, enter into a very open dialogue with FDA and put forward what we think makes the most sense. I just want to emphasize most importantly that whether we go with one or two doses, we will be ready. We have adequate supply for both. We're prepared to detail both. And so this is a nice place to be whether there's one or two doses. And I think I'll just leave it at that.

On ENCORE, you asked when -- what's our status of enrollment, that continues to do well and frankly accelerate as we get near the end here, we've said we'll close off enrollment in the third quarter, that feels very good to us.

I will just add that this is another one of those moments where we have revisited our assumption set and made sure that we are looking at this through a very conservative prism. When we look at the landscape of all MAC NTM, right now, there is no competition on the near term horizon.

We want to make very sure that the strength of these data stands the test of time, much like it did with ARISE, much like it has done with CONVERT, much like it has done with ASPEN. So those same principles inform the final design and powering assumptions going into ENCORE.

And the way we are approaching this as we look to close down enrollment in the third quarter of this year is greater than 90% powered to hit the primary endpoint of this study. So we feel like we're in a very good position based on what we saw in ARISE to produce the result, we hope successfully with ENCORE.

That's helpful. And if I could sneak one more question and just thinking about those first few quarters of the Brenso launch, just net-net, would you anticipate the Part D redesign to help or hurt that launch? Thanks.

You're referring to IRA. I'm sorry, I didn't hear the question.

Oh, yeah, the Part D?

Yeah, the Part D (inaudible) Look, I think it's going to help. I think it's going to help Brenso, I think it's going to help ARIKAYCE, I think it's going to help across the board. The most important thing about that piece of legislation is that for the first time they addressed the burden that is placed upon patients for medicines that are expensive and the fact the matter is it doesn't really in our benefit to patients to load them up with additional cost that they find a financial burden in reaching.

There has been many studies that have shown that making medicine more accessible and lower cost at the pharmacy counter top results in better usage rate, better adoption rate, and the consequence of that is patients are healthier.

So for every angle, this is a piece of legislation on that particular point that, in my view, has been a long time incoming and very necessary. I think as patients realize that they have a lower burden of a maximum of $2,000 out of pocket across all their medicines, which can be spread over on a monthly basis, that becomes a much more affordable equations than carrying 5% of the overall burden of past catastrophic thresholds that they've had to face in the past.

And that's what's produced the really terrible stories about people who take out mortgages and find a large sums of money to gain access to life saving medicines. I think we're finally past that era, and I think that's a very good thing.

Great, that's helpful. Thanks again.

Leon Wang, Barclays.

Hey, congrats on the quarter and thanks for taking my questions. So we think about the competitor landscape, BI Phase, I think they reveal that they will be enrolling all (inaudible) bronchiectasis patient population. Can you remind us why you recruited in non-CF bronchiectasis? And how does this change in their potentially registrational study affect your thoughts on the competitive landscape going forward, if at all?

And second question, as you work towards submitting the NDA in the fourth quarter, do you plan to update us on that -- when that submission is in and what form could that be in, be this like in a press release or would this just be an update at a later conference? Thanks.

Yeah. So I think that the answer to the BI question begins with first of all, seeing their data and we haven't done that yet, right? We don't know what they really have. Until we know what their data is, it's hard to interpret the modifications they had to their entry criteria that were different from ours and what that resulted in.

There were a lot of assumptions behind those modifications that they were quite vocal about before the fact but we didn't really see that in the dataset. So I think there's probably going to be some revisitation of whether or not that direction or claim that we're heading in is going to be viable.

From our point of view, it doesn't make any difference. It doesn't affect the outcome. There's still going to be securing a label for bronchiectasis patients. So I don't -- I'm not particularly worried about it. Again, we've assumed all along, including with our peak sales numbers that we have competitors in the marketplace.

BI seem to be the most proximate. The one thing I would say about their data is it does appear that there was some biological effect or whether that was statistically significant or not, it wasn't clear. But what I will say is I think it does validate the mechanism of action of DPP-1 inhibition. But maybe Martina, I'll turn it over to you for your reflections?

Yeah. I think what I would be looking for in the data is also if you look at the patients, they did enroll (inaudible) that's one of the considerations. What we don't know and they haven't shown yet is what is the response.

As you know, having two previous exacerbations is the strongest predictor for future exacerbations. I think it's a good line -- guideline to inform you and have an ability to estimate how you would power a study because you do need to understand your background rate, and that may be one thing that they are working on.

We don't haven't -- we haven't seen that data, but that is one thing that will inform it. If you enroll (inaudible) who have maybe only one exacerbation, you do not know how that would actually impact your powering.

So on your other question about NDA submission, we do plan to announce that. That's our current intention once that's completed.

Right. Thanks for taking my question.

Vamil Divan, Guggenheim Securities.

Yeah, great. Thanks for taking my question. So just one maybe shifting gears to TPIP. I think you've mentioned the PH-ILD data, I think you did say it will come later this year. I'm curious if you can provide any more insights into which conference you're targeting on that.

And then just going back to the question earlier on the pricing side for Brenso. You did mention you've had some initial conversations with payers. Maybe you can just provide any sort of feedback that you're receiving there.

It sounds like you're still comfortable with that range you've provided before. But just any sort of insights on the initial sort of dialogue and how they've been reacting to the disease and the profile as you've been discussing it?

Yeah. So we're super excited about the data generation from TPIP and PH-ILD and we were certainly hoping to have it at a conference this year. I will say the conference schedule is fairly busy and the consequence of that is it's probably going to slip into 2025 before able to put out all of that data.

But I will say that that process continues to be underway. So we'll update you once we have that. We want to get it out as soon as possible. There's a lot there to like and we'll have more to say about that in the future. But we want to do it in a peer-reviewed setting as we previously represented.

And then on the pricing side, I know it's still too early to talk about price with specificity and certainly where we are in our dialogue with all of the different constituents here in talking about disease state awareness and understanding the burden of this disease and what role.

If it's approved at the appropriate time, we'll begin to talk about Brenso, that won't happen for a while. But right now, it's about disease state awareness and making sure people understand the burden. I will say that our interactions and the perceptions that people have across the treating community, including the payers, continues to support our belief and the work we've done in pricing studies that the range we gave you, were very comfortable with.

I think once again, as I said earlier, the content of what we have to offer, the target product profile from the actual ASPEN results is better than what we had originally tested. That preservation of lung function is very powerful data as is the patients feeling better. So we'll see how that plays out over time, but more work to be done there, and we'll certainly update you as we get closer.

Okay. Thank you.

Liisa Bayko, Evercore ISI.

Hi, there. Thanks for taking the question. First question, when you talk about a broad label, would that include CF? And then also with respect to the IRA, how should we think about margins on the product, as I know, with the benefit of spreading the $2,000 payment that the Medicaid -- Medicare patients are responsible for also the catastrophic coverage, 60% of it above catastrophic is going to fall on the payers. I'm just wondering how they're going to react to that in terms of wanting some sort of rebates, discounts, things along those lines? Thank you.

Yeah, sure. So on the first point, the broad label would not -- we would not anticipate would include cystic fibrosis patients. This would be in for non-cystic fibrosis bronchiectasis. Having said that, obviously, the data we saw in the CF study we completed was very compelling. And that certainly is out there.

I think that if there are patients that are experiencing exacerbations successfully being treated by drugs that are offered by other companies, then there may be a physician who wants to think about this. But we would point out that that's a fairly small group and it certainly isn't something we're going to target because that would represent off-label.

Okay.

I think about the IRA and payers, yeah, I don't know if we want to go over this with any specificity, but the thinking there is that you're going to see ARIKAYCE is not is considered -- has this the small manufacturers benefit, a Brenso would not. So the distribution of the costs as the drug rolls out, would be more significant on us for Brenso than it would be on ARIKAYCE and sort of what we've achieved that benefit.

We can go over that in some greater granularity because year over year, the manufacturer versus the plan percentage allocations are very different based on whether or not you secure that designation, having to do that sidebar.

But I don't think it's going to impact the overall pricing reflection that we have because this is about value for money from the medicine. And I think what we've heard so far is that payers recognize the permanent damage that is done by pulmonary exacerbations experienced by patients with this disease.

And while there's nothing in the category right now, the data that we have from ASPEN is very compelling. And this is kind of one of those places where I think we're going to find a very productive dialogue with payers in terms of their willingness to support this.

And Liisa, the only other thing I would add is the projections that we provided on Commercial Day took all of this into account. So our $5 billion peak sales, and the opportunity we see from a commercial perspective on the revenue side took all of these factors into account. Thank you.

Okay. That's helpful. Thanks. And can I just do one follow-up on reps. Are those -- are the additional reps you're hiring going to be detailing all of your products, in other words, ARIKAYCE as well maybe as a second? Or how do you imagine prioritizing your sales force with respect to the products? Thanks.

Yes, they are going to be detailing both products, assuming approval for Brenso. And indeed, assuming the expanded label for ARIKAYCE, assuming ENCORE goes as we expect it will. So what we're looking at here is now a much more robust and -- but it highlights probably the single most important aspect of all of this, which is the synergy.

So the same sales force that launched for refractory MAC, ARIKAYCE or refractory MAC is going to be assuming, again, these regulatory approvals fall in place, all MAC NTM and Brenso and bronchiectasis. And so the teams are being trained for disease state awareness in bronchiectasis.

And in the meantime, we'll call on physicians for appropriately diagnosing and treating them for refractory MAC with ARIKAYCE. So that's going to give us some extra horsepower as we get to the end of this year and into next year on that indication. But it is our intention that they will bring both forward for the foreseeable future.

And just one other comment on the synergies as you're thinking about the COPD Foundation and the Care Center Networks that they formed, that's been over 100 care centers around the United States. And those are going to be specialized in NTM and bronchiectasis. So just more sort of highlight on the synergies between the two disease settings.

Okay. Thank you.

Graig Suvannavejh, Mizuho.

Hey, good morning. Congrats on the progress. Thanks for taking my questions. I just wanted to revisit the enrollment update with regards to ENCORE that you're now targeting [400]. Could you just remind me was the prior target somewhere in the neighborhood of [250]?

And then maybe if you could provide a little bit more granularity on kind of what you did in terms of revisiting either the patient inclusion or exclusion criteria to give you kind of a better sense that with 400, you will get the result that you are looking for?

Sure. So the most important thing to realize about ENCORE is that it was enrolled at the same time that ARISE was enrolled, right? So we've continued that enrollment after ARISE read out. But the backdrop of choosing the primary endpoint and what the powering was, we didn't have any basis for that because there have been no validation of a PRO.

So we're sort of flying blind when we set the original target. And that target, as we indicated, the time was likely to need to go up. That was 250 patients and that was several years ago. Once we saw the ARISE study, we knew it was going to have to increase materially.

The assumption going in was that the minimum important difference here was going to be 8 points and in fact ended up being about double that. But that's because no one had ever tested the PRO in NTM patients. So we learned a lot from that. That was why we did the ARISE study the way we did.

It was sort of a canary in the coal mine, as you'll recall. And it puts us in a very strong position now because we did see that difference between the two groups both on a per patient and between group basis. And that is what informs the powering assumptions for where we go from here.

There was a slight difference between eight or nine in the number of questions. But what all of this complexity means in yields after you've done all the analysis is that we won either way on ARISE, whether it was eight questions or nine questions.

It then became a very simple question of how much power do we want to have in the Phase 3 ENCORE study to achieve the expected outcome based on ARISE and we target just north of 90%. So that's where the 400 number comes from. We'll close off enrollment in the third quarter of this year.

That keeps us on track to produce data by what is now probably going to be the first quarter of 2026. We feel great about all of that and that would put us in a place where we would have this label expansion opportunity, once again, a first in disease indication. And as of now no near term competition on the horizon.

And I would just remind everyone on the magnitude of the label expansion. Today, in the US, there's about 12,000 to 17,000 patients, all MAC in the US is around 100,000 patients. So as we think about revenue guidance this year, you know, it's obviously very impressive at $340 million to $360 million.

But what we shared on the Commercial Day is we believe ARIKAYCE with the label expansion has the ability to be $1 billion plus product sales. But we believe this label expansion with the strength of the ARISE data and have the feedback from FDA, we couldn't be more encouraged about the opportunity in the broader franchise.

Martina, I don't know if you want to add anything about the specifics of the trial?

Yeah, Graig. So from the powering, as you know, we're powering of a primary endpoint on the PRO and there's the two pieces we want to show a difference of at least 4 points between the groups that's why we are north of 90% power, but we're also powered north of 90% for culture conversion.

Great. Thank you. And if I could just my follow-up would be just on the heels of the positive Brenso data that you generated, have you been able to undertake any new market research engaging with either physicians and or payers and any early insights if you have completed any of those market research studies?

Well, we're going to continue to do market research between now and the day of launch, to be honest. And I would say that probably the top line take away is the target product profile we had gone out and done our prior market research with, what we saw from ASPEN in actuality is actually better.

So there's more to learn, more to understand. But I think we're just in as strong a position as we could hope to be and if anyone was there at Dundee with us, they would have heard just the enthusiasm from the experts who treat in this field around the world for the potential arrival of this medicine and the profile that they saw there, it was nothing short of a celebration.

Nicole Gemino, Truist Securities.

Good morning. Thanks for taking my questions and congrats on the progress. For Brenso, beyond the diagnosed bronchiectasis population in order to tap into the patients with COPD with potential overlap of comorbid bronchiectasis, what's the potential strategy to capture those eligible patients in this segment? Like how do you convince doctors to give a CT scan in addition to a spirometry diagnosis or what needs to happen in order to capture more patients with existing COPD?

Yeah. So on that front, it's really the definitive diagnosis for bronchiectasis is a combination of a CT scan and a basically a diagnosis by a pulmonologist for certain symptom profile. But the CT scan is an anatomical read that radiologists are very experienced in doing in identifying that anatomical change in diagnosing bronchiectasis. That first element is not a new effort that will have to be undertaken. It's simply a question of getting the patient to get the CT scan.

Through the disease state awareness campaigns we've already kicked off. And I think the existing awareness among the treating physicians that there are many patients who probably have bronchiectasis and are either comorbid or have been misdiagnosed, that is something that has found a lot of resonance with the folks that we've spoken to.

So I think you're going to see an increased trend of contemplation by the physicians in this field as to whether or not the patients who are for example, on max dose (inaudible) and are experiencing exacerbations may in fact be bronchiectic either as well or as a primary diagnosis. In either case, they're one CT scan away from that diagnosis. And once they've had that and the pulmonologists have identified it as such, then they're eligible and on label and were approved.

So I think this is not a far journey. I mean, it will take some effort to motivate some of perhaps the more community level physicians. But I can tell you that some of the key opinion leaders that we spoke with in Dundee have already systematically begun the process of looking at their patients and asking whether or not they may also have bronchiectasis and indeed ushering forth that request for a CT scan and moving that forward as a next step.

So I think you're going to see this shift happen pretty regularly, but we'll have to see how it plays out. I don't know, Martina, based on your dialogue with physicians, what you've heard.

Yeah, I think you know, every time you have a new disease coming onboard, which is basically a focus now for certainly for pulmonologists, but it is also a focus for patients. So you have to think about if you are being treated for something whether it's COPD or asthma and you continue not to be well controlled, you have a conversation with your physicians.

And so both from a physician and from a patient side, there is an awareness. And now you have an opportunity to where it actually makes sense to do a CT scan, screen and say is this a patient who has more and that I think is a similar situation that you may have seen several years ago with interstitial lung diseases and IPF, that only became onboard an awareness for both patients and physicians once there were treatments available.

So we see this now, bronchiectasis has become a major topic. I think for all the major congresses in respiratory ATS, ERS, certainly for World (inaudible) , but it is now a recognition of a disease that was underdiagnosed and not understood and frankly, because people couldn't treat it.

Great. And then one quick follow-up. And so with over $1 billion in cash, what is your strategy to continue creating value?

Well, I think the short answer to that is the first two pillars in the near term, will be yielding not only continued growth as we've seen from ARIKAYCE and the refractory setting on the commercial front, but also presuming approvals the ability to come launch for bronchiectasis with Brensocatib and then subsequently, assuming ENCORE goes the right way, the expanded label indication for ARIKAYCE. I think those two pillars and the execution of those two areas are going to drive value for many, many years at this company.

We couldn't be more excited about that. We also have pillar three and pillar four, we'll set those aside for now, but I certainly expect there to be of significant value driven from there. I'll ask Sara to talk about how we think about our cash position and where we go from here. And we've been very clear that we're not funded to cash flow positive, but we got a lot of levers to pull and we're an embarrassment of riches in terms of which programs we want to fund and at what time.

Yeah, sure, happy to. And couldn't be more pleased with our cash position, $1.25 billion at the end of the quarter and appreciate all the support from all of our shareholders and our recent equity raise and the strength that we've been able to show since ASPEN data on that raise.

As Will mentioned, we are laser focused on the successful launch of Brensocatib, assuming approval by FDA and the rest of the regulatory authorities as well as the underpin of the commercial infrastructure today with ARIKAYCE in that future label expansion, again, pending regulatory approval.

As we think about where we go from here, we have a line of sight on becoming a self-sustaining biotech company. So what does that mean that we obviously have line of sight onto profitability. We have not committed to specific timing, but that is very much in our forefront.

And as we're thinking about future investment and trade-off and all of those good things as well, said we do have an abundance of riches. TPIP is a very interesting asset, and we believe wholeheartedly in that program. We'll know more about that asset next year with the PAH data once that's in hand, and we'll learn more about Brenso with the CRS data next year.

The ENCORE data, obviously, we spoke a lot about today. We really had a change in our kind of financial identity as we think about the converts and how we've been able to show successful execution across many different opportunities around the balance sheet. So we couldn't be more pleased on where we are and what the future holds for us.

Great. Thank you.

Andrea Tan, Goldman Sachs.

Good morning. Thanks for squeezing me in here. Will as a follow-up to your comment just now on maybe setting aside TPIP and the fourth pillar. As you think about what could drive value for the coming years. I wanted to ask on your commitment to continued development of TPIP and under what scenarios might you consider out-licensing of the asset versus keeping that in-house?

It's a great question. We think that TPIP has chance to be a best in class asset for the treatment of both PAH and PH-ILD based on what we've seen to date. We keep trying to emphasize. The people understand that effectively what we've done here has found a way to get more of the underlying moiety of prostinil into the lungs of patients through the most effective means of delivering that, which is inhalation and the most convenient means which is dry powder.

And the consequence of that has been so far remarkable results in what we've seen some of it blended blinded, but in terms of PVR reduction, in terms of the data that we saw in PH-ILD in Phase 2 just earlier this year, we think this supports a best-in-class profile.

And when we look at PVR reduction, we frame against what's out there right now from prostanoids. And we also look at sotatercept, which got into the sort of the low end of the 30% PVR reduction range on average at its best data point.

We're looking to get close to that, maybe match it, and we'll see maybe do a little better. We'll have to see what the data shows next year. But that would represent an unbelievable potential combination for the treatment of these patients.

If you think about those drugs and what they would bring with different mechanisms of action that we haven't done that testing yet, we don't know that, but it is certainly the way the key opinion leaders are thinking and that suggested this is a very important and prominent asset.

They've told us point blank. This would change the way they think about the use of prostanoids in the treatment of both classes of patients if the data continues to prove out what it has to date. And that means that this asset would have a lot of value.

We're always thinking from our shareholders' point of view, what's the best way to deploy capital. And we're aware that the time between now and cash flow positivity is going to be marked by several additional trials that will begin to add some cost. So we want to measure those, so that it's not a constant return to investors for additional capital without a clear proof and advance along the way.

Where does that put us with TPIP, it means that when we unveil the PAH data at the end of next year, which is the timing we expect, we will have a very clear read on the inherent value of this compound. And I think that that's likely to be recognized by investors and strategics alike.

So couldn't be more bullish about it. I can't say at this point what we might do with it. We're always open-minded to maximizing value.

Okay. And then if I may ask one more. Just as you have engaged more shareholders post the ASPEN data, has your thinking around the $5 billion peak sales potential evolved refined in any way? And then can you just quickly remind us what underpins your conviction that the early launch cadence could mirror that (inaudible)

Yeah. So I think it's really important. When we talk about peak sales and we have very detailed, I draw everyone's attention to the Commercial Day that we held where Drayton went through in great detail each of the different opportunities and where our conviction comes from, that has not abated in any way.

And if anything, the strength of the data and the response from the medical community gives us greater conviction in what we have seen and explored with our research to date. Where do we go from here with that, I think we'll continue to refine it. We'll continue to think about opportunities.

I think it's way too early to be talking about launch curves and what they might look like. Obviously, we are aware of the benchmarks that are out there when we think about some of the strongest launches. We think about things like Dupixent, which probably marks the very upper end, the Mount Everest, if you will, of what could be accomplished.

I think if I remember correctly, if you look at their quarters three through six it would correspond to a first full calendar year, I think they ended up with over $700 million in revenue which is just sort of astonishing. Some of the other products that are out there, we think about TEZSPIRE and others.

They during the same timeframe, might have been around $600 million. So we're way far from setting what a launch curve might look like. But we certainly know that that represents the upper end of the thin atmosphere of what can be accomplished.

And so in my mind, we'll be looking very carefully at precedence like Dupixent, FASENRA, TEZSPIRE, (inaudible) and understanding what their trajectories were and what we think we're going to be able to accomplish.

The overall peak sales number, we have a lot of conviction in. What the shape of the curve looks like, we've got a lot more work to do that will obviously be driven by price, which will be driven entirely by value, and that will be captured in our dialogue with FDA and the payer discussions.

Okay, thanks for the color.

Steve Willey, Stifel.

Hey, good morning, guys. This is [Toby] on for Steve. Thank you for taking my question. I just have two quick one on my end. The first one is related to Phase 2 PAH data readout timing. If I remember correctly, I think you guys were previously guiding to these data readout in second quarter of next year, but it looks like it has (inaudible) shifted to basically second half of next year. I'm just wondering if there is any reasoning that I happened to miss if you guys provide an additional color on that expansion that would be great.

And the second question is related to this one versus two dose dichotomy, do you think there will be an additional data that will be presented at the upcoming CHEST conference that could actually just kind of positive high or achieved provide incremental view into in terms of like benefit and safety of these two doses? Thanks.

Yeah. So I'm not sure what the misunderstanding might have been on the PAH front. We are north of 75% enrolled on that trial, but we have always had the second half of 2025 as the timing for the top line results for that. That hasn't changed at all.

And in fact, if anything, the PAH enrollment has accelerated a little bit, which gives us even greater conviction that we're going to hit that time frame. On the CHEST data front and the one versus two doses, I don't know that there's going to be anything additional there that would shape the comprehension of that.

I would say right now, we already know enough to see the benefit of 25 mg versus 10 mg. It really becomes a risk reward discussion. I think a dialogue with FDA and out of respect for them, we want to make sure that we're approaching this in the right constructive way.

But I don't think there's any other shoe to drop that's going to inform one dose selection over another at this stage. Both look good. Both win, both are effective, and both are safe from our examination. It appears there's some additional benefit at the 25 milligram dose, and we find that to be very compelling. And so that's the basis from which we'll enter our dialogue with FDA.

Ladies and gentlemen, that does conclude the Q&A session in today's conference call. Thank you for your participation. You may now disconnect.