Insmed Q1 2024 Earnings Report

Insmed EPS Results

• Actual EPS: -$1.06
• Consensus EPS: -$1.22
• Beat/Miss: Beat by +$0.16
• One Year Ago EPS: -$1.17

Insmed Revenue Results

• Actual Revenue: $75.50 million
• Expected Revenue: $77.76 million
• Beat/Miss: Missed by -$2.26 million
• YoY Revenue Growth: +15.80%

Insmed Announcement Details

• Quarter: Q1 2024
• Date: 5/9/2024
• Time: Before Market Opens
• Conference Call Date: Thursday, May 9, 2024
• Conference Call Time: 8:00AM ET

Insmed (NASDAQ:INSM) Incorporated is a biopharmaceutical company focused on developing and commercializing therapies for patients with rare and serious diseases, with a particular emphasis on difficult-to-treat pulmonary infections. Headquartered in Bridgewater, New Jersey, the company concentrates its research and development efforts on targeted drug delivery technologies and novel formulations intended to improve clinical outcomes for patients who have limited treatment options.

The company’s principal marketed product is ARIKAYCE (amikacin liposome inhalation suspension), an inhaled liposomal formulation of the antibiotic amikacin that is approved by the U.S. Food and Drug Administration for use in adults with refractory Mycobacterium avium complex (MAC) lung disease. ARIKAYCE is designed to deliver high concentrations of antibiotic directly to the lungs, and Insmed has pursued both commercial uptake and further regulatory and clinical work to explore additional indications and geographic approvals.

Beyond its marketed product, Insmed maintains a clinical-stage pipeline focused on pulmonary and other rare disease indications, leveraging formulation science and targeted delivery approaches. The company conducts clinical trials, regulatory interactions, and commercial activities aimed at expanding patient access to its therapies. Insmed also engages in partnerships and business development efforts to support international registrations and distribution.

Insmed presents itself as a specialty biopharma organization combining R&D, regulatory, and commercial capabilities to serve patients with high unmet medical need. Its operations encompass clinical development, regulatory strategy, manufacturing partnerships for specialized formulations, and patient support programs intended to facilitate access and adherence for those living with chronic and complex conditions.

Insmed Q1 2024 Earnings Call Transcript

Key Takeaways

• In the Phase 2 safety study of TPIP in PH-ILD, 79.3% of patients reached the 640 μg dose by week 5 with no worsening of resting or exercise oxygenation, and fewer serious adverse events and discontinuations versus placebo.
• Blinded interim data from the Phase 2 PAH trial show a mean 19.9% reduction in pulmonary vascular resistance and a 43 m increase in 6-minute walk distance at trough, suggesting durable benefit with once-daily TPIP dosing.
• The Phase 3 ASPEN trial of brensocatib remains on track for a top-line readout between mid-May and end-June after all adult patients completed their 52-week visits and database lock preparations are underway.
• ARIKAYCE net revenues of $75.5 M in Q1 grew 16% year-over-year (15% US, 13% Japan, 42% Europe/ROW) despite distribution headwinds, keeping Insmed on target for $340–360 M full-year guidance.
• Insmed closed Q1 with $596 M in cash and an adjusted burn of ~$125 M, ensuring financial runway for TPIP Phase 3, brensocatib filing and other pipeline milestones.

Presentation

[Operator]

Thank you for standing by. My name is Dee, and I will be your conference operator today. At this time, I would like to welcome everyone to the Insmed First Quarter 2024 Financial Results Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press Star followed by the number one on your telephone keypad. If you would like to withdraw your question, press Star one again. Thank you. I would now like to turn the call over to Brian Dunn, Head of Investor Relations. Please go ahead.

[Brian Dunn, VP and Head of Investor Relations at Insmed]

Thank you, Dee. Good day, everyone, and welcome to today's conference call to discuss Insmed's first quarter 2024 financial results and provide a business update. I am joined today by Will Lewis, Chair and Chief Executive Officer, Gene Sullivan, Chief Product Strategy Officer, and Sara Bonstein, Chief Financial Officer, who will each provide prepared remarks before we open it up for your questions. 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.

[Brian Dunn, VP and Head of Investor Relations at Insmed]

Also note that our call today will include blinded observations from our ongoing phase II study of TPIP in pulmonary arterial hypertension. These observations may not be representative of results once the study is completed and all data is collected and analyzed. As a result, any future interim data readouts and the final data from this study may be materially different than the observations described today. Finally, the information on today's call is 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.

[Will Lewis, Chair and CEO at Insmed]

Thank you, Brian. Welcome, everyone. Today, we intend to review the progress from three of the company's main programs, ARIKAYCE, TPIP, and brensocatib. Let's begin with TPIP. The first of this quarter's two important data readouts came this morning with the announcement of the top-line results from our phase 2 study examining TPIP in patients with pulmonary hypertension associated with interstitial lung disease, as well as an update of blinded data from our ongoing phase 2 study in pulmonary arterial hypertension. In a moment, Gene Sullivan will review these data in greater detail, but let me just say that we couldn't be more pleased with the progress and the clinical results that continue to come from this exciting program. Turning to brensocatib, the highly anticipated top-line release of the phase 3 ASPEN trial remains on track to read out in the second half of this quarter.

[Will Lewis, Chair and CEO at Insmed]

Let me take one additional moment to touch on the detailed events and timelines relating to brensocatib. At the end of March, all adult patients in ASPEN had completed their 52-week visit, which is the point at which the primary and secondary efficacy endpoints are measured in the trial. As a result, we remain confident that the readout will come during the 45-day window from mid-May to the end of June that we have outlined previously. We look forward to sharing the top-line results, which will include the pre-specified primary and secondary endpoints, as well as safety data across treatment arms, once the work to clean, compile, lock, and analyze the data is completed. In regard to ARIKAYCE, we were pleased that ARIKAYCE delivered double-digit year-over-year growth across all three of our geographic regions and 16% growth overall compared to the first quarter of 2023.

[Will Lewis, Chair and CEO at Insmed]

We delivered this result despite minor headwinds that occurred in the quarter, which Sara will walk you through in her remarks. Notwithstanding those isolated events, our performance this quarter keeps us on track to deliver on our previously announced revenue guidance for the year. Turning now to the potential expansion of ARIKAYCE to all MAC NTM patients, I'm pleased to report that our presentation of the full ARISE results has been selected for a plenary session at the upcoming ATS conference in San Diego later this month, which speaks to the significance of that study and the excitement for it within the medical community. I'm also pleased to report that the Data Monitoring Committee for the ongoing ENCORE trial held their fourth meeting in April, which resulted in a recommendation to continue the study unchanged.

[Will Lewis, Chair and CEO at Insmed]

As a reminder, there are no interim efficacy analyses built into the ENCORE study, so this represents a best-case outcome from that meeting. With regard to securing agreement on the PRO, we are now scheduled to meet with the team of patient-reported outcome experts at the FDA in late June, after which we will settle on a final statistical plan for ENCORE. We intend to provide you with additional updates once that work is complete. Finally, I want to take a moment to note the changing approach within the medical community to the treatment of NTM and bronchiectasis, and the clear synergies that are being recognized by patient advocacy groups and physicians as they contemplate how to bring forward the best possible care to patients with these two diseases.

[Will Lewis, Chair and CEO at Insmed]

This quarter, we signed on to be the founding sponsor of the COPD Foundation's new Care Center Network for patients with bronchiectasis and NTM. Through this initiative, the COPD Foundation aims to create 150 multidisciplinary centers of excellence across the U.S. This will establish consistent standards of care coming from expert-led academic centers and share them with the broader community in an effort to bring more comprehensive care to patients with NTM and bronchiectasis as they strive to meet treatment goals. This effort recognizes the clear synergy that can be achieved by physicians treating NTM and bronchiectasis, and we will be structuring our medical support efforts to augment this new approach to patient care across the United States. We consider it an honor to be supporting this important work on behalf of patients.

[Will Lewis, Chair and CEO at Insmed]

Now, let me turn the call over to Gene to talk about the big news of the day, the results from our TPIP program.

[Eugene Sullivan, Chief Product Strategy Officer at Insmed]

... Thank you, Will, and good morning, everyone. I'm pleased to share with you the data we have produced to date from each of our 2 programs that have been running in parallel for TPIP. I will start with the top-line results from our recently completed phase 2 safety study of TPIP in patients with pulmonary hypertension associated with interstitial lung disease, which were posted to our website this morning. I will then walk through the most recent blended blinded data from our ongoing phase 2 efficacy study of TPIP in patients with pulmonary arterial hypertension. Let's begin with PH-ILD. This study originally targeted an enrollment of 32 patients, but was over-enrolled with 39 patients. The study utilized a 3-to-1 randomization scheme, and as a result, 29 patients were randomized to receive TPIP, and 10 were randomized to receive placebo for the 16-week treatment period.

[Eugene Sullivan, Chief Product Strategy Officer at Insmed]

The maximum TPIP dose allowed in the trial was 640 micrograms once daily. As a reminder, a TPIP dose of 640 micrograms contains roughly 60% more treprostinil, as compared with the total daily dose of the current market-leading treprostinil dry powder product, which is dosed four times daily. Patients were titrated up to their maximum tolerated dose over the course of the first three weeks of treatment, with a final dose increase allowed at the five-week visit. Patients were not permitted to increase their dose for the remaining 11 weeks of treatment. Participant demographics and baseline characteristics were generally well-balanced between study arms. However, a higher percentage of female participants were randomized to TPIP arm at 31% versus the placebo arm at 20%.

[Eugene Sullivan, Chief Product Strategy Officer at Insmed]

Also, on average, patients in the TPIP arm of the study required 1 additional liter per minute of supplemental oxygen at baseline. The study's primary objective was to evaluate the safety and tolerability of TPIP in patients with PH-ILD, including assessments of oxygenation at rest and during exercise. Let's begin with tolerability. Among patients in the TPIP arm, 79.3% were successfully able to reach the maximum dose of 640 micrograms by week five, compared with 100% of those taking placebo. If we look at the patients who were able to reach at least 480 micrograms by week five, nearly 90% of TPIP patient, TPIP patients were able to achieve that threshold.

[Eugene Sullivan, Chief Product Strategy Officer at Insmed]

This indicator of the tolerability of TPIP in this patient population is very encouraging, given the relatively short titration period included in the trial and considering the severity of the underlying disease process. Of note, while we adopted a titration period of five weeks for the purposes of this trial, in clinical practice, a more prolonged titration period could be applied, which may allow for even more patients to reach higher doses. Additionally, we saw that patients taking TPIP were less likely to experience a treatment-emergent adverse event that would lead them to discontinue the treatment, with 13.8% of patients in the TPIP arm experiencing such an event, compared to 30% in the placebo arm. We consider a higher treatment discontinue rate in the placebo versus treatment to be very noteworthy.

[Eugene Sullivan, Chief Product Strategy Officer at Insmed]

In terms of overall safety, 93% of patients in the TPIP arm experienced any adverse event, which was similar to the 90% of patients on placebo, and 20.7% of TPIP-treated patients experienced a serious adverse event, compared to 40% of placebo-treated patients. 0 patients in either arm experienced a serious adverse event that was judged to be related to study drug. There were 4 deaths in the trial, including 6.9% of patients randomized to the TPIP arm and 20% of patients randomized to the placebo arm. All deaths in the trial were related to disease progression or comorbid causes, and none were attributed to study drug. One of the key reasons to conduct an initial safety trial in this population was to confirm that inhalation of TPIP would not negatively impact oxygenation.

[Eugene Sullivan, Chief Product Strategy Officer at Insmed]

Therefore, we were very pleased that we saw no worsening of oxygen saturation levels at rest and no increase in the use of supplemental oxygen for patients taking TPIP. Additionally, we also measured oxygen saturation continuously during and after the six-minute walk test to capture the lowest blood oxygen levels reached during that entire period of time and found no meaningful differences between the TPIP and placebo arms on that measure, which is what we had hoped to see. I do want to note that we did see a slight decrease in oxygen saturation from baseline levels when measured after the six-minute walk test, with the TPIP arm showing an absolute decrease of 8% compared to placebo patients, who saw an absolute increase from baseline of 1%.

[Eugene Sullivan, Chief Product Strategy Officer at Insmed]

However, I would emphasize that there was no standardization in the trial regarding the timing for when that measure was recorded following exercise. So there is likely to be significant variability in that data point. As a result, we believe that the values reflecting the resting and the lowest oxygen saturation are the best indicators of the effect of the drug on oxygenation. Although we were previously not sure whether we would have any results from our exploratory endpoints in this study to share with you at the time of the top-line safety readout, I'm pleased to report that we do have several of those data points available to share today. Let me begin with the six-minute walk distance. We were pleased to see a 30-meter improvement compared to placebo at week 16 in patients taking TPIP, using the study's pre-specified analysis for that comparison.

[Eugene Sullivan, Chief Product Strategy Officer at Insmed]

However, let me provide a note of caution on overinterpreting that exploratory endpoint in a study this small. As we have said many times in the past, six-minute walk distance often includes a substantial amount of variability, as emphasized by the wide confidence intervals we see in this data set. As expected in a study this small, the improvement in six-minute walk distance did not approach statistical significance. On NT-proBNP levels, the TPIP arm showed a slight improvement from baseline, and the placebo group showed a slight worsening. However, the difference between groups was not meaningful, which is to be expected in this small of a study. Finally, in this study, we measured events of clinical worsening, which was defined as a hospitalization due to a cardiopulmonary indication, a lung transplantation, death from any cause, or a decrease in six-minute walk distance of 15% or more from baseline.

[Eugene Sullivan, Chief Product Strategy Officer at Insmed]

To be clear, we did not expect to see a signal on this exploratory measure, given the study's small size. However, clinical worsening events were shown to be more common in the placebo arm, with 50% of placebo-treated patients experiencing such event, compared to 10.3% of TPIP-treated patients. This difference produced a nominally significant P value of 0.0164. We are extremely encouraged and pleased with today's results and look forward to sharing more of the pharmacokinetic and additional safety and exploratory endpoints from the study at an upcoming medical conference later this year. Importantly, based on today's data, we intend to move this program forward to phase 3, aiming to initiate a global study in 2025.

[Eugene Sullivan, Chief Product Strategy Officer at Insmed]

Now, let me spend a few moments providing you an update on our ongoing phase 2 trial of TPIP in patients with pulmonary arterial hypertension. The trial is progressing as expected, now with well more than half of the target enrollment achieved. In March, the second Data Monitoring Committee meeting was held to review the safety data from this trial, and the committee's recommendation was to continue the trial without any changes. In regard to dosing, among the first 43 patients in the trial to complete their 5-week visit, 79% were able to reach the maximum dose of 640 micrograms or matching placebo, which is consistent with our last update and is very encouraging.

[Eugene Sullivan, Chief Product Strategy Officer at Insmed]

We have already received the necessary regulatory approvals in 10 of 17 countries where the study is being conducted to amend the protocol in the open label extension of this trial to allow for even higher dosing, up to a maximum of 1,280 micrograms once daily. We are excited about what these higher doses could potentially mean for patient outcomes. Today, I would like to share an update on the blinded efficacy data we have seen thus far in this trial. This update includes data from the first 44 patients randomized in the trial. Of those patients, four discontinued the trial prior to completion, leaving 40 patients who completed the full 16 weeks of treatment. As a reminder, this trial is randomized 2 to 1, so roughly two-thirds of the patients will be receiving TPIP and one-third will be on placebo.

[Eugene Sullivan, Chief Product Strategy Officer at Insmed]

Starting now with the blinded data on pulmonary vascular resistance, or PVR. Among the 40 patients who completed the study as of the data cutoff, the mean percentage reduction in PVR at week 16 compared to baseline is 19.9%. This observed reduction in PVR is comparable to the best clinical results produced with prostanoid treatments in the past, despite the fact that our result for TPIP is a blend of treated and placebo patients. What is equally encouraging is that we continue to see patients in the study who experience dramatic improvements in PVR. We are also excited by what we were seeing on six-minute walk distance, which is another key efficacy measure for these patients. On average, across these 40 patients, including the TPIP and placebo arms of the trial, the improvement in six-minute walk distance from baseline was 43 meters.

[Eugene Sullivan, Chief Product Strategy Officer at Insmed]

As I mentioned a few moments ago, six-minute walk distance is a highly variable measure and especially difficult to interpret on a blinded basis, but we are nonetheless encouraged by what we have seen so far. It is worth pointing out that for both efficacy endpoints that I've described today, PVR and six-minute walk distance, these measures were taken at the end of the dosing interval, or nearly 24 hours after the most recent dose. This was designed intentionally to highlight the potential durability of TPIP's effect. However, it makes these results more difficult to compare to the other key study of inhaled treprostinil, which reported hemodynamic measures obtained in the period immediately following the dose at the time of the drug's maximum effect.

[Eugene Sullivan, Chief Product Strategy Officer at Insmed]

The fact that we are seeing profound effects in some patients in our study, nearly a full day after taking a dose, makes us very excited for the potential of this treatment. As a final reminder, we do not know which of these first 40 patients were taking TPIP and which were taking placebo, and the numbers I have shared today on PVR and six-minute walk distance will continue to change as more patient data is generated. However, we believe today's data supports our view that TPIP has the potential to be a best-in-class treatment for patients with PAH and PH-ILD, combining a potentially differentiated clinical profile with the convenience of once-daily dosing. Now, let me turn the call over to Sara to walk through the detailed financial results from the first quarter.

[Sara Bonstein, CFO at Insmed]

Thank you, Gene, and good morning, everyone. I'm happy to be with you to share some of the details of Insmed's financial performance for the first quarter of 2024. We ended the quarter with $596 million in cash and cash equivalents. This represents a cash burn for the quarter of approximately $185 million. As we have stated previously, our cash burn in the first quarter is higher than other quarters in the year due to the timing of our annual employee incentive compensation payout. In addition, this quarter was also impacted by larger payments for contract manufacturing services and inventory build for clinical and preclinical products than our usual cadence. When these items are excluded, the underlying cash burn was approximately $125 million, which is in line with recent quarters.

[Sara Bonstein, CFO at Insmed]

Consistent with our statements on last quarter's call, we have not used our at-the-market equity offerings since last year, and we do not intend to use this program between now and the ASPEN data readout. Turning to our commercial performance in the first quarter of 2024. Global net revenues for the first quarter of 2024 were $75.5 million, representing 16% year-over-year growth compared to the first quarter of 2023. In the U.S., net revenues for first quarter 2024 was $56.3 million, up 15% compared to the prior year quarter.

[Sara Bonstein, CFO at Insmed]

The growth this quarter was driven by the highest level of enrollment forms that we have seen in the U.S. since the third quarter of 2019, when ARIKAYCE was in its fourth quarter of launch and ramping quickly. The positive impact of this increase in enrollment forms was partially mitigated, however, by temporary disruptions to the distribution of ARIKAYCE due to the Change Healthcare cyberattack, which impacted the dispensing of medicines across the United States, particularly for patients starting a new treatment. That said, we are continuing to work to help patients gain access to ARIKAYCE who had difficulty starting treatment due to the cyberattack. In Japan, first quarter 2024 net revenue was $14.9 million, representing 13% growth over the same quarter last year.

[Sara Bonstein, CFO at Insmed]

Although foreign exchange did not have a material impact on the overall business, the impact of changes in the foreign exchange rate on our revenue in Japan this quarter was notable. In fact, if average exchange rates this quarter were the same as they were in the first quarter of 2023, the year-over-year growth in Japan would have been approximately 27% or more than double the reported growth rate. I would also point out that the timing of inventory drawdowns led to a sequential decline in sales in Japan compared to the fourth quarter, which saw record-setting strength in ARIKAYCE sales volumes. Overall, our view on the opportunity in Japan continues to be very positive, and we look forward to the progress from this important region in coming quarters.

[Sara Bonstein, CFO at Insmed]

In Europe and rest of world, net revenue in the first quarter 2024 came in at $4.3 million, up 42% compared to the same quarter last year, and well ahead of our internal expectations as that region's collective efforts are paying off. While we continue to expect the relative contribution to global sales from Europe to remain modest, we are pleased to see their efforts gain momentum, especially as we round the corner to the potential launch of brensocatib, assuming positive ASPEN and regulatory approvals. Importantly, today, we are reiterating our full year 2024 global revenue guidance of $340 million-$360 million.

[Sara Bonstein, CFO at Insmed]

As a reminder, the midpoint of that guidance range represents 15% growth compared to 2023, which is consistent with the 16% year-over-year growth that was delivered in the first quarter. Furthermore, as I mentioned on last quarter's call, the first quarter of each year historically contributes slightly more than a fifth of each year's total sales due to the seasonal impacts in both the U.S. and Japan. By that same measure, our first quarter performance puts us squarely on track to achieve our guidance range for the full year. Let me now turn to a few additional financial items. In the first quarter 2024, our gross to nets in the U.S. were approximately 21%.

[Sara Bonstein, CFO at Insmed]

As in prior years, we expect the gross to nets in the first quarter of the year to be a bit higher before coming down in the remaining quarters of the year. We continue to expect gross to nets will settle in the mid- to high-teens range for the full year. Cost of product revenues for the first quarter of 2024 was $17.5 million or 23.1% of revenues, which is consistent with our historical performance. Turning to our GAAP operating expenses. In the first quarter, 2024, research and development expenses were $121.1 million, and SG&A expenses were $93.1 million dollars, reflecting continued investment in both our early and mid- to late-stage pipelines, as well as launch readiness activities for brensocatib.

[Sara Bonstein, CFO at Insmed]

In closing, Insmed's solid financial performance in the first quarter keeps us on track to deliver on our full year guidance. More importantly, we remain well-positioned financially as we see double-digit growth from our global commercial efforts, positive top-line results from the investment in clinical work in TPIP, continued progress across all of our clinical programs, and the imminent ASPEN data readout, with nearly $600 million of cash, giving us substantial optionality on the other side of that event. Now, we would like to open the call to your questions. Operator, can we take the first question, please?

[Operator]

Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again. If you are called upon to ask your question and are listening via loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking question. We do request for today's session that you please limit to two questions per person, and if you wish to ask further, you can please rejoin the queue. Again, press star one to join the queue, and your first question comes from the line of Andrea Tan from Goldman Sachs. Please go ahead.

[Andrea Tan, Stock Analyst at Golden Sachs]

Good morning. Thanks for taking our question. Sara, maybe I could start with you. Just wondering if you could provide some additional color on what you're seeing that drove such a high rate of enrollment for MAC this quarter. And when you think about your estimated $1 billion peak sales for ARIKAYCE, what assumptions underpin that with respect to how the drug would be used in the refractory versus the frontline setting?

[Sara Bonstein, CFO at Insmed]

Sure. Happy to address that, Andrea, and thanks for the question. You know, I continue to be so impressed with our commercial team and their performance. At the beginning of the year, we set out to have double-digit growth, and that's exactly what we showed in Q1, and we saw that across all three of our territories. So really, gives us great confidence in reiterating the guidance of $340-$360. The commercial team continues to execute, and as you point out, Andrea, the medical team continues to execute as we are laser focused now on the potential label expansion.

[Sara Bonstein, CFO at Insmed]

We feel if you look at the underlying patients, it's a 3- to 5-fold increase in the patients we think we will be able to attract with a potential label expansion, giving us a clear line of sight to a $1 billion opportunity, pending regulatory approval for ARIKAYCE. We believe that the price that we charge today for refractory will be able to carry forward into the label expansion. And as we've mentioned previously, we are planning on hosting a commercial day on the other side of ASPEN to do a deep dive across all of our pillars, including ARIKAYCE, to continue to educate on the broader label expansion opportunity.

[Andrea Tan, Stock Analyst at Golden Sachs]

Okay. And then, Gene, maybe I could just ask you quickly on the, on the blinded, blended PAH data. Just wondering if you're able to share what proportion of patients did see an improvement in PVR, and of those, what their average rate of improvement was. Just curious if it's still... I guess maybe curious if the magnitudes are still similar to the first cut of the data, where the average PVR reduction in those patients was 47%, and there had been some commentary around some patients seeing an excess of 65%. Thanks so much.

[Eugene Sullivan, Chief Product Strategy Officer at Insmed]

Yeah, sure. Thank you for the question. And, as you said, last time, we noticed that we could divide it very clearly into those that improved and didn't improve, and the ratio of that was roughly mirrored our 2-to-1 randomization, and so we presented some data on if you looked at just those who improved. Now, with increasing number of patients, if we use the definition of any improvement of PVR at all, we would capture some patients who had really negligible improvements, like very, very small, you know, 2%, 3% reduction in their PVR. And so we didn't really feel like that was really representative. To answer your question directly, if you take that exact definition of any improvement of PVR, no matter how small, it was more like 75% of the patients had that.

[Eugene Sullivan, Chief Product Strategy Officer at Insmed]

But again, we wouldn't really wanna call someone who decreased their PVR by 5% a real responder, and so we didn't do that analysis of, like, responders versus non-responders. We did talk internally, like, would it make sense to then divide it into three groups, which is sometimes done, like groups that responded, groups that, you know, got worse, and a group that sort of stayed about the same. But we didn't wanna sort of change the metric that we were reporting from the last time, so we just didn't do that analysis. We do continue to see patients who have pretty remarkable decreases, like remarkable in the sense that this shouldn't happen without the addition of a new therapeutic.

[Eugene Sullivan, Chief Product Strategy Officer at Insmed]

Our investigators are very impressed when you see a 50% reduction in PVR. Like, that just doesn't happen, like what you would expect, if anything, would be a decline in patients who have not had a change in their therapeutic regimen because it's a progressive disease.

[Andrea Tan, Stock Analyst at Golden Sachs]

Okay, thanks so much.

[Operator]

Our next question comes from the line of Vamil Divan from Guggenheim. Please go ahead.

[Vamil Divan, Senior Biopharmaceuticals Research Analyst at Guggenheim]

Hi, this is Daniel on for Vamil Divan. Thanks for taking my questions. I have a couple questions on TPIP, if I can. So the first one, for PH-ILD, you see that there's about, like, 38% of patients that show, like, a drug-related cough. It seems fairly mild, but I guess, are there any things that can be done to maybe lower this cough for patients? And I guess I'm just kinda curious if that—if this might be extra important for those patients that might be moving up to an even higher dose in the open-label extension in PAH. So that's my first question. And then the second question is maybe more on, like, the broader TPIP opportunity.

[Vamil Divan, Senior Biopharmaceuticals Research Analyst at Guggenheim]

It was previously, you know, said it's a $2 billion plus opportunity. I was wondering if you can maybe break down this opportunity between the different indications and then maybe between geographies of U.S. and the ex-U.S. markets. And I'm just curious if this data has any recent impact on your views on this. Thank you.

[Will Lewis, Chair and CEO at Insmed]

Daniel, I'll just jump in, and then I'll ask Gene to take the specific question on cough. I think with regard to the opportunity, stay tuned. We're gonna go in a much deeper dive on the commercial day that Sara made reference to in the aftermath of the ASPEN data production, into what the TPIP opportunity is. I will tell you this: our target product profile is completely supported, if not surpassed, by the data that we've seen today. And if that continues, I think we feel, continue to feel very comfortable with the sort of peak sales at $2 billion+. And, and certainly based on what's been happening in PH-ILD, and PAH generally, that is a, is a comfortable target for us. These data today, I think, are striking. They're early.

[Will Lewis, Chair and CEO at Insmed]

We wanna emphasize the PH-ILD study is small, but the efficacy measures, while they're exploratory, are encouraging, I would say. And should they end up being the exact target product profile, the commercial profile we've suggested, we feel very comfortable with, and we'll have more to say about that, Daniel, on the commercial day. Gene, do you wanna take the question about cough?

[Eugene Sullivan, Chief Product Strategy Officer at Insmed]

Sure, yeah. You know, the first point to make is that the PH-ILD population is different than the PAH population. In PAH, the lung parenchyma is essentially normal. The histologic abnormality is in the vasculature, and cough really isn't a significant symptom of the disease. Where in interstitial lung disease, cough is a significant symptom of disease. It's present in all- in most patients to some degree or another. So that was sort of the you know, part of the reason to go in and do an initial safety study in PH-ILD, just to see how this drug would be tolerated in patients who have this underlying parenchymal disease. And so you point out that we did see an imbalance in terms of study drug-related adverse events, and that was particularly driven by drug-related cough.

[Eugene Sullivan, Chief Product Strategy Officer at Insmed]

What that means is there was something about the cough in patients on active that made the investigator believe it was related to the, to the drug, and what that was, was the temporal association with dosing. So it tended to be in, you know, in discussions with the investigators, it tended to be a very mild cough right after taking the, the drug, and really wasn't problematic, you know, was rated as mild, did not, you know, result in anyone, you know, discontinuing treatment and so forth. And, you know, kind of the proof is in the pudding that they, despite that, that imbalance in cough, they were able to titrate up to 6 to the highest dose, the 640. So, you know, we feel pretty good about it.

[Eugene Sullivan, Chief Product Strategy Officer at Insmed]

What we wanted to exclude was that in patients with underlying parenchymal lung disease, would this drug be somehow, you know, more, you know, exacerbate their underlying cough to a degree that was problematic clinically? And really, you know, I think the data suggests that's not the case, and so we're really pretty pleased with that. I think you raised the question of what happens when we go higher, and we'll see, as we've said before, the data on more is better, if you will, with prostanoids, is very clear with pulmonary arterial hypertension. You know, with all of the routes of administration of treprostinil, it's very clear that the higher you can go, the more efficacy you can get.

[Eugene Sullivan, Chief Product Strategy Officer at Insmed]

We definitely are, as I mentioned, amending the protocol to the open-label extension to allow for these higher doses to just kinda see where we can go in PAH. We chose not to do that in the open-label extension for PH-ILD primarily, the data that more is better is not entirely clear in PH-ILD. You know, there just is less clinical experience in that regard, so we weren't sure that it was necessary. And also, we'd like to get some clinical information on PAH patients, how they start to tolerate higher doses. So hopefully that answers your question.

[Will Lewis, Chair and CEO at Insmed]

I'll just add one final punctuation on that, Daniel, which is a reminder that treatment-emergent adverse events leading to discontinuation were actually higher in the placebo arm than they were in the TPIP arm, with 30% in the placebo arm and 13.8% in TPIP. So in terms of what it means for patients, as Gene said, continuing to be able to take the drug, it didn't seem to be an impediment.

[Vamil Divan, Senior Biopharmaceuticals Research Analyst at Guggenheim]

... Okay, great. Thank you very much for answering my questions.

[Operator]

Our next question comes from the line of Jessica Fye from J.P. Morgan. Please go ahead.

[Jessica Fye, Managing Director and Senior Equity Research Analyst at JPMorgan]

Great. Good morning. Thanks for taking my question. Sort of a two-part question on brensocatib. Thinking back to the WILLOW data, can you remind us why, or what the hypothesis is behind not really seeing meaningful changes on quality of life, St. George's, LCQ, and those kind of measures? So basically, what would explain benefits that are measurable on exacerbations, but not those domains? And the second part, kind of related to that, is I think you've talked in the past about doctors in the ASPEN trial, kind of suggesting they can tell if patients are on drug or not, similar to WILLOW.

[Jessica Fye, Managing Director and Senior Equity Research Analyst at JPMorgan]

I'm curious what they cite if it may not be, you know, quality-of-life measures, given that exacerbations are fairly infrequent, and I'm not sure that would be kind of the tip-off. Hope that made sense.

[Will Lewis, Chair and CEO at Insmed]

Yeah. So I'll take a shot at that, Jessica, and then I'll invite Gene to come in anything further he'd like to. I think with regard to WILLOW and quality of life, I'll remind everyone that that was a 6-month study, and it takes about a month for drug to get to full pharmacodynamic effect. So really, it's not a lot of time for patients to be able to capture and express an impact on quality of life, so we didn't really expect to see one there. We're hopeful we may be able to see one in the 12-month study that we're conducting, which is the ASPEN study. But once again, I would turn attention to the key focus of the study, which is the exacerbations. That is the thing we're really trying to impact.

[Will Lewis, Chair and CEO at Insmed]

And if we accomplish that, which is the primary endpoint of the study, then absolutely, we are confident the drug will be adopted and utilized by patients and physicians alike with a lot of enthusiasm. I think, when patients talk about their experience on the drug and convey this to physicians, it's a combination of different things that each patient feels. And of course, one always has to take with a huge grain of salt any qualitative characterization from a physician. But we did hear this in Willow, and we are hearing it again in ASPEN, and that's why we mentioned it. I think typically this is related to the patient's experience with exacerbations.

[Will Lewis, Chair and CEO at Insmed]

And if they're feeling that those are not occurring, or that they are feeling a greater degree of energy, or perhaps the characterization of the sputum, all of these things are different experiences that patients have that collectively make them feel like they're experiencing a benefit. And so we're hopeful the QOL will capture that, but it's not certain. And of course, our primary focus is on the exacerbation impact. If we achieve that, then we'll- we will certainly have accomplished victory. I don't know, Gene, if you want to add anything further.

[Eugene Sullivan, Chief Product Strategy Officer at Insmed]

No, I think that was very well said. I really don't have anything to add to that.

[Jessica Fye, Managing Director and Senior Equity Research Analyst at JPMorgan]

Okay. Can I just add a quickie on TPIP and the PH-ILD data on oxygen saturation? I don't know if I just missed it somewhere, but can you give us the baseline oxygen saturation for each arm?

[Will Lewis, Chair and CEO at Insmed]

Gene, I don't know if we have that. Do you wanna address that, if it's, if it's handy? If not, we can circle back.

[Eugene Sullivan, Chief Product Strategy Officer at Insmed]

Yeah. I don't know that we've included that in the results. Is there something that you're getting at with that question? I mean,

[Jessica Fye, Managing Director and Senior Equity Research Analyst at JPMorgan]

I just wanted to make sure it was balanced.

[Eugene Sullivan, Chief Product Strategy Officer at Insmed]

Yeah. Oh, we didn't include that in the baseline demographics information, did we? There was some indication that the TPIP group were a little sicker. You know, their use of supplemental oxygen was a little bit higher, their FVC was a little bit lower, and frankly, during the six-minute walk test, they tended to desaturate at baseline a little bit more. So there was some evidence that they were a little bit sicker. So that's why we presented, you know, change from baseline for each of the measures.

[Jessica Fye, Managing Director and Senior Equity Research Analyst at JPMorgan]

Great. Thank you.

[Operator]

Our next question comes from the line of Leon Wang from Barclays. Please go ahead.

[Leon Wang, Healthcare Sector Specialist at Barclays]

Hey, thanks for taking my question, and congrats on the data. So a couple on TPIP. One, on slide 7, the six-minute walk distance was not available for the placebo arm. Can you just remind us on, you know, was this because of an inability to collect data, or it's just lack of data? And also, any color on the time to response in PH-ILD, specifically looking to see if you can characterize the exploratory efficacy measures and how that changed from week 12 to week 16. Thank you.

[Will Lewis, Chair and CEO at Insmed]

Gene, you wanna take those?

[Eugene Sullivan, Chief Product Strategy Officer at Insmed]

Sure, yeah. In that slide 7, the NA refers to the fact that what we're presenting here is the placebo-corrected change from baseline. So the 30 that appears under week 16 is the placebo-corrected effect size. So there's no comparable data point to put under the placebo arm. So it's NA, meaning not applicable more than not available, if that makes sense. So what we've included in that box is to emphasize that the point estimate is 30. With the point estimate, and that's remarkably similar to the point estimate of the effect size on six-minute walk that was seen in the pivotal trial for Tyvaso, for PH-ILD, the so-called INCREASE trial, it was comparable. However, we wanna be very, very clear, and we put two indicators of the variability.

[Eugene Sullivan, Chief Product Strategy Officer at Insmed]

The confidence intervals are extremely wide in that square, and then the p-value is, you know, not even close to statistical significance. So that is. I think that hopefully that responds to your question about what that NA means. And the other, you asked about sort of the cadence of the improvement, and we have not released that yet. We haven't analyzed that closely to see, you know, how quickly we start to see a difference. I think that that's, you know, Will, is data that will emerge as in more fulsome presentations of the data. But since, you know, the pivotal trial endpoints would be, you know, from change from baseline to the end, that's what we decided to focus the top-line results on.

[Brian Dunn, VP and Head of Investor Relations at Insmed]

Thank you.

[Operator]

Our next question comes from the line of Joseph Schwartz from Leerink Partners. Please go ahead.

[Joseph Schwartz, Senior Managing Director and Biotechnology Analyst at Leerick Partners]

Hi, congrats on the very strong TPIP data. I was wondering, how many of the patients in the phase 2 study of TPIP and PAH have been enrolled in the 10 countries which are allowing you to titrate up to 1,280 micrograms? Are you still talking to other countries' health authorities about doing this, or will it just be those patients when we see that data? Then I have a follow-up on brensocatib, please.

[Will Lewis, Chair and CEO at Insmed]

Yeah, so we are talking to other countries. I can answer that part of it. I don't know, Gene, if you want to take the other one, if we know that.

[Eugene Sullivan, Chief Product Strategy Officer at Insmed]

Yeah, I don't have the specific figures because for the reason is that we don't think the door isn't closed in other countries. It's just that the back and forth is ongoing, you know, either with the, you know, first you have to go through the regulatory authority, then you have to go through the ethics committee or IRP. So those conversations are ongoing, so we haven't. It doesn't come to mind how many patients are currently covered, because I think we expect more of those countries to eventually allow the expanded dosing.

[Analyst]

That's helpful. Thank you.

[Will Lewis, Chair and CEO at Insmed]

We haven't given data out-

[Joseph Schwartz, Senior Managing Director and Biotechnology Analyst at Leerick Partners]

And...

[Will Lewis, Chair and CEO at Insmed]

Sorry, go ahead.

[Joseph Schwartz, Senior Managing Director and Biotechnology Analyst at Leerick Partners]

No, please, Will, sorry about that.

[Will Lewis, Chair and CEO at Insmed]

I was just gonna say, we don't, we haven't given out any specific data about patients that have progressed in the open-label extension. And just to note, that only will be taking place in the PAH study, not the TPIP study.

[Joseph Schwartz, Senior Managing Director and Biotechnology Analyst at Leerick Partners]

Right. Okay. Thank you. That's helpful. And then on brensocatib, to what extent do you think the market opportunity could be influenced by the magnitude of effect size that we see in ASPEN? And what's the right way to contextualize the clinical benefit of something like a 15, 25, or 35% reduction in exacerbations? How have your discussions-

[Will Lewis, Chair and CEO at Insmed]

Yeah, so-

[Joseph Schwartz, Senior Managing Director and Biotechnology Analyst at Leerick Partners]

physicians and payers gone on that front?

[Will Lewis, Chair and CEO at Insmed]

Yeah, I think what we've been tried to be very clear about is that, you know, the clinical meaningful threshold, I think that everybody sort of agrees there's a floor, is about 15%. People would like to see 20%, and I think we certainly have tried to design the trial to capture that treatment effect. We have sort of oriented our entire thinking about this, by saying that if we can get below 0.01 and a treatment effect of around 20%, for either dose, we would consider that a home run. That, then we've got a drug. And that, we think, will be a very successful outcome. Of course, we saw higher than that in WILLOW, and we certainly hope that is replicated in ASPEN.

[Will Lewis, Chair and CEO at Insmed]

We have no reason to believe that it wouldn't be. The baseline characteristics, the execution of the trial, all the design elements, are in parallel to what was seen in WILLOW, so we're very hopeful. But, that's sort of how we think about the threshold. As it goes up, it certainly would speak to the demand, you know, and the degree of enthusiasm, I think, that people will have in the physician community for calling their patients in. Which is a fact we've already heard, that if this were to be find its way to clinically meaningful thresholds of, you know, call it 20% or more, I think patients will be called in to receive the treatment by physicians with enthusiasm. If that number goes up even more, it'll probably affect the enthusiasm.

[Will Lewis, Chair and CEO at Insmed]

I don't know that it's gonna dramatically affect the way we think about the addressable market, but we're certainly gonna reflect on the target product profile in its totality, which includes both efficacy and safety, and some other reflections. But all of the education about this has already been underway with our medical, group and indeed in our market access, front as well. So we feel like we've got a pretty good understanding of how people are gonna react to this, and that's why we emphasize getting below 0.01 with one dose and a treatment effect of 20% or more.

[Joseph Schwartz, Senior Managing Director and Biotechnology Analyst at Leerick Partners]

Thank you.

[Operator]

Our next question comes from the line of Nicole Germino from Truist Securities. Please go ahead.

[Nicole Germino, Biotech Research Analyst at Truist Securities]

Hi. Thank you for the question. How does drop in oxygen levels compare to the period, and is this a non-target effect?

[Will Lewis, Chair and CEO at Insmed]

I'm sorry, I'm having a hard time understanding the question. It sounds like your line is a little broken up. Could I just ask you to repeat it, please?

[Nicole Germino, Biotech Research Analyst at Truist Securities]

Sure, I apologize for anyways. Just going back to the TPIP and PH-ILD, how does the drop in oxygen levels compare to Tyvaso experience and the non-target effects?

[Will Lewis, Chair and CEO at Insmed]

Gene, did you hear that question? That sounded like how does it compare to Tyvaso?

[Eugene Sullivan, Chief Product Strategy Officer at Insmed]

How does, which aspect?

[Will Lewis, Chair and CEO at Insmed]

TPIP, on the-

[Nicole Germino, Biotech Research Analyst at Truist Securities]

Uh-

[Will Lewis, Chair and CEO at Insmed]

... PH-ILD side. Is that right, Nicole? Did I get that right?

[Analyst]

Yeah, that's right. How does drop in oxygen levels compare to the Tyvaso period, and if it's a non-target effect?

[Will Lewis, Chair and CEO at Insmed]

... Well, I'm really having a hard time hearing you. I think it was the oxygenation levels in the PH-ILD. How does it compare to Tyvaso?

[Will Lewis, Chair and CEO at Insmed]

She's asking if the oxygen, the drop in oxygen levels, how do they compare?

[Eugene Sullivan, Chief Product Strategy Officer at Insmed]

To Tyvaso? You know, we didn't do a direct comparison, 'cause again, this is a small study, and we're not trying to make claims against Tyvaso. I think what we were looking for here was just to see that it didn't harm patients. So I think the one point I wanna make is that patients with interstitial lung disease desaturate when they walk. You know, that is a function of the disease. And we wanted to make sure that, one, there was no negative impact of the drug on their oxygenation at rest, or no negative impact on their desaturation during the course of exercise. And we think that's what we saw.

[Eugene Sullivan, Chief Product Strategy Officer at Insmed]

The reason we were even looking for that, the reason we were even, you know, considering that as a safety finding of interest, is that when you deliver a vasodilator to the lung, where there is underlying lung disease, there is a potential danger of dilating the vasculature in an area that's not ventilated. And you get what's called shunt, blood going past the lung, which is not getting oxygenated, 'cause the area of lung that it's delivered, blood to, is not getting ventilated. And there have been problems when systemically administered vasodilators have been used to treat PH-ILD, and in fact, have led to contraindications in the product labels for riociguat and for ambrisentan.

[Eugene Sullivan, Chief Product Strategy Officer at Insmed]

The general understanding is that it's not a good idea to deliver a vasodilator systemically, orally or IV, in these patients. But as the INCREASE trial showed, the INCREASE trial is the trial, for everyone's benefit, of the Tyvaso in this population, was that it, that wasn't a problem. And the theory behind that is that we're delivering the vasodilator primarily just to the regions that are actually being ventilated, 'cause you're delivering it by inhalation. So we just wanted to... You know, they apparently did not see it in, with Tyvaso, and we just wanted to monitor that in our trial as well. And again, we were pleased to see that, at baseline pretest, there was no change. In fact, patients on placebo required a little bit more oxygen.

[Eugene Sullivan, Chief Product Strategy Officer at Insmed]

The patients on active drug had no change in their oxygen supplementation. Then, with exertion, there was really no significant decline compared to placebo.

[Operator]

Our next question comes from the line of Graig Suvannavejh from Mizuho Securities. Please go ahead.

[Graig Suvannavejh, Managing Director at Mizuho Securities]

Hi, this is Jerry on for Graig. Thanks for taking our questions, and congrats on the TPIP data. I guess first, you know, on TPIP, based on what you know now, what would a Phase III study in PH-ILD look like? And then I do have a follow-up on brensocatib as well after.

[Will Lewis, Chair and CEO at Insmed]

Yeah, I'll take that quickly. We haven't really put any thoughts in the public domain about what that phase 3 study will look like. We obviously wanna have some interaction with the FDA and other regulatory authorities to ensure that what we produce from that trial will be adequate for full approval. I think today's data certainly suggests that there's gonna be a clear path to being able to create such a trial. We'll rely very likely on what has worked in the past, but it's difficult to commit to anything further than that in the design sense, because we're just obviously, the data's fresh, and we're digesting it, and then we're gonna wanna have dialogue with regulatory authorities.

[Will Lewis, Chair and CEO at Insmed]

But as soon as that is accomplished, we'll get that design out to everyone so that they can understand what it's gonna look like. Sorry, I can't be more specific.

[Graig Suvannavejh, Managing Director at Mizuho Securities]

No, that's fine. That's, that's helpful. And then for, I guess, the upcoming ASPEN readouts, since, you know, you've managed to comment that all patients at ASPEN have reached that 52 weeks of all the adults at that time period, wondering if I could get any more granular timing on the timing of that data release?

[Will Lewis, Chair and CEO at Insmed]

Boy, I tell you, that is the question of the day. I wish I could be more specific. We tried to narrow it down to the mid-May, end of June timeframe, which is, you know, 45 days. That's pretty specific for a biotech company. Let me just perhaps give a little bit more color on what is the sequence of events when you, when you get to this point on a large trial. It's not simply the production of the top-line results, as is often the case for something like a phase II study. In this case, we not only need to produce the top-line results, but we need, by the time we lock the database, for every detail and quality issue to be resolved, because this is a submission database.

[Will Lewis, Chair and CEO at Insmed]

What I mean by that is, this is the database that's going to the FDA and to the other regulatory authorities around the world. So if you will, there's an additional level of quality control and scrutiny to ensure that the database is submission quality. We would hate to snatch defeat from the jaws of victory by having good top-line results, and then a database that got rejected for some, you know, quality issue. So we're taking the necessary time to ensure that both goals are accomplished, that we can produce the data and that the database is in good shape. I'm happy to report every aspect of that effort at the company has gone incredibly well, and incredibly proud of our clinical team for what they've been able to accomplish in that regard.

[Will Lewis, Chair and CEO at Insmed]

But it will be within that 45-day window. We're confident of that, and, that's as specific as we can get. But those are the reasons that are sort of pacing when that database will be ready for review.

[Graig Suvannavejh, Managing Director at Mizuho Securities]

Gotcha. Thanks for the color, and congrats again.

[Operator]

Our next question comes from the line of Jason Zemansky from Bank of America. Please go ahead.

[Jason Zemansky, Stock Analyst at Bank of America]

Good morning. Congrats on the data, and thanks for taking our questions. I was hoping you could provide some color on the discontinuation rates for TPIP. Appreciating these are small numbers, but about at 14%, it's twice what was observed for the Tyvaso BREEZE study. That said, the rate of treatment-emergent AEs looks to be in line, and it doesn't look like cough was the source of this. Was there something about the four patients who discontinued, whether it was, I don't know, underlying disease severity or, or dose received, or, I don't know, was it early in the study, especially as you noted, you know, the titration schedule was a little more aggressive? And then a follow-up, if I may.

[Will Lewis, Chair and CEO at Insmed]

Gene, do you wanna take that?

[Eugene Sullivan, Chief Product Strategy Officer at Insmed]

Yeah, sure. I think, you know, when we sort of use the Tyvaso as the benchmark, we don't so much look at the BREEZE study as we do the INCREASE study. And I think the discontinuation of treatment in our study actually compares favorably to the graph that you'll see in the publication that shows the discontinuations of treatment in the active arm with Tyvaso. So I guess I'd try to point you to the INCREASE study as the better comparator than the BREEZE study. And then the second question was... Well, the second part of it was?

[Jason Zemansky, Stock Analyst at Bank of America]

Well, was there something specific about these four patients? And like you'd said, the titration schedule is a little bit more aggressive than what you normally see with Tyvaso. Is that when they dropped out, or again, was there something about the dose that they received? I'm just curious if there was something consistent amongst the patients.

[Eugene Sullivan, Chief Product Strategy Officer at Insmed]

Oh, the actual dropouts from the study were not drug related, and nothing, you know, no, no signal of an inability to titrate the drug or anything like that, in the PH-ILD study.

[Jason Zemansky, Stock Analyst at Bank of America]

Got it. Okay. And then just kind of thinking more broadly, when thinking about TPIP's potential in your guidance, how important is it that patients get to the 640 milligram or microgram dose or higher? You know, is it the assumption that the drug will provide more benefit, given the higher dose? Or, you know, is, is its value really in, you know, moving from four times daily to, to once daily administration?

[Will Lewis, Chair and CEO at Insmed]

Yeah. So I'll just jump in on that one and then ask Gene to comment. I think what you hear from treating physicians is the higher they can go, the better from their point of view. Indeed, when we first developed the drug and were working on the target product profile, we spent a lot of time with KOLs and asked them, would they prefer a drug that had lower side effects at a dose consistent with what's already being used, or a drug that had perhaps some side effects but could go up in quantity of drug administered? And the universal response, quite enthusiastic, was, "Go as high as you can," 'cause that's what we do with patients. We push them to max tolerated dose in practice.

[Will Lewis, Chair and CEO at Insmed]

So we, we picked 640 micrograms for this study, which is 60% greater than what treprostinil , is the equivalent of treprostinil that's administered over 4 times already. So it, it's quite a substantial step up. The physicians are very encouraged by that. They've now encouraged us in the PAH setting to double that yet again, based on the safety profile that they've seen, and we consider that to be a, an, a ringing endorsement, not only of what we've been able to accomplish so far, but, but the, what the future may hold, given some of the improvements we've seen in PVR, just getting patients to 640.

[Will Lewis, Chair and CEO at Insmed]

So I think, there's a lot of promise here for the, clinical result that we expect to see from PAH as patients move from 640 to even higher levels. And that is, that is a wonderful clinical objective that we have set for ourselves, and it's a very high bar, but, you know, being able to get to higher doses should produce that result. To be able to do it with a once-a-day, administration is, is the benefit of convenience as well as the, the clinical side I just mentioned. And the once-a-day piece was enough to get enthusiasm from treating physicians, in and of its own right.

[Will Lewis, Chair and CEO at Insmed]

Even if the clinical profile is the same, the fact that we're able to suggest we may be able to get even better clinical outcomes and have the once-a-day is really, sort of the holy grail we're after, and why we think this will be, as some have said, the potential go-to, prostanoid of choice for the treatment of these patients. I don't know, Gene, if you have other reflections.

[Eugene Sullivan, Chief Product Strategy Officer at Insmed]

Yeah, I mean, I just... The only thing to add to that, you know, first of all, the basic assumption with prostanoids, in PAH, is that the more you can get in, the better, and generally, patients and doctors tolerate a little bit of prostanoid-related side effects to kind of max the efficacy. I will say that there tends to be a spectrum of tolerability, like some patients tend to get, just, you know, get, are more sensitive to the, the, prostanoid-related side effects than others. So if you look at a population of patients on Remodulin, for instance, you know, there'll be patients at lower or higher doses, depending on their individual sensitivity to the prostanoid-related side effects. So I don't necessarily think, we need to get everyone up to the top dose.

[Eugene Sullivan, Chief Product Strategy Officer at Insmed]

It's more a matter that there's ability to keep going up if the patient is tolerating it, the ability to keep increasing the dose. And you have that ability with Remodulin, but just to keep increasing the dose. With Tyvaso, because of the, you know, the peak systemic exposure immediately after dosing, you kind of don't. You get up to, you know, you titrate up to the target dose, and then you stay there, and the label does not include continuing to dose escalate. I think that's probably related to the, you know, the pharmacokinetic pattern. So because of our lung kinetics, we hope to be able to dose TPIP in a manner more similar to the way IV treprostinil is dosed. In other words, you can continue to increase the dose according to the patient's tolerability.

[Eugene Sullivan, Chief Product Strategy Officer at Insmed]

We think that, you know, in addition to the once daily versus four times a day, that's a great distinction. This is another distinction. You get the, the benefit of delivering the lung, the drug directly to the lung, but also the ability to titrate it in a manner that they do with a parenteral product.

[Jason Zemansky, Stock Analyst at Bank of America]

Interesting. Thanks for the color.

[Operator]

Our next question comes from the line of Ritu Baral from TD Cowen. Please go ahead.

[Ritu Baral, Managing Director and Senior Biotechnology Analyst at TD Cowen]

Hi, guys. Thanks for squeezing me in. And I apologize in advance. I still swear I hate biostatistics more than any of you. But when we did the analysis on WILLOW and ASPEN for brensocatib, our statistical consultant basically said that it was the distribution of the data that mattered far more almost than the event rate. And then so looking back to the distribution constants between the arms and historical studies, we noted that WILLOW obviously had very low variance of sort of like 0.04-0.1, and historicals were in the 0.4-0.5 range. Have you been able to look at all at the ASPEN data and what distribution of data that has been seen either over time or at the very end?

[Ritu Baral, Managing Director and Senior Biotechnology Analyst at TD Cowen]

Because it does seem to make an important difference in power. And I've got a quick follow-up.

[Will Lewis, Chair and CEO at Insmed]

Yeah, I hate to disappoint, Ritu, because I know the work that you've put into this and I appreciate the focus on this particular aspect of the data set. But that's not something we've talked about publicly, other than to say that generally, looking at everything in the study, we continue to feel very positive about what we're seeing. And, you know, no one variable controls, but, you know, there really is nothing in this study that has given us pause or alarm with regard to what the expected results will be. We'll know it shortly enough, but I think we've seen remarkable consistency with WILLOW across many parameters, and that's about as far as I, unfortunately, can go.

[Ritu Baral, Managing Director and Senior Biotechnology Analyst at TD Cowen]

Fair enough. Just on discontinuation rates in ASPEN, have you tallied the final discontinuation rate, whether it stayed within expected parameters, per the last update?

[Will Lewis, Chair and CEO at Insmed]

Yeah. What we can say is that, while we haven't given any update with the vast majority of data already in, we've been indicating that the safety is as good, potentially even a little better than WILLOW. We'll obviously see once we unblind by various arms, etcetera. But the blended blinded data continues to look very favorable with regard to safety and discontinuation.

[Ritu Baral, Managing Director and Senior Biotechnology Analyst at TD Cowen]

Got it. And got it. And just squeeze one last in. On the TPIP ILD study, Eugene, I think you mentioned that cough was the main reason to stop the titration upward. Were there any other unusual symptoms that could be unique to TPIP that emerged either to impact titration or discontinuation? Thanks.

[Will Lewis, Chair and CEO at Insmed]

Gene, do you want to take that?

[Eugene Sullivan, Chief Product Strategy Officer at Insmed]

Yeah. Yeah, and just to be clear, I think what I was commenting on before was the patients with study drug-related adverse events, and that, in fact, when there was cough, doctors tended to identify it as study drug-related. You know, that it's up to the investigator to decide, "Do I think this is study drug related or not?" And they tended to attribute cough to the drug more frequently in TPIP and did not attribute it to the placebo. And again, that's probably related to the temporal nature. As a lot of these patients have an underlying cough that would be just representative of the disease. So just to clarify what I meant on that.

[Ritu Baral, Managing Director and Senior Biotechnology Analyst at TD Cowen]

Mm-hmm.

[Eugene Sullivan, Chief Product Strategy Officer at Insmed]

But to your broader question, we are not seeing any particular safety finding that's that would be unique to TPIP, something unexpected at all, and certainly nothing that's impinging upon dose escalation. Because we're getting so many people up to really the maximum or, you know, we also released the number of patients who got to the second to the top dose, and that was pretty high, too. That if you go to that, it's 90% of patients. So we're not seeing problematic AEs that limit a dose escalation, and we're not seeing any novel, you know, safety events that would give us concern that's something unique to TPIP.

[Will Lewis, Chair and CEO at Insmed]

I would only add that-

[Ritu Baral, Managing Director and Senior Biotechnology Analyst at TD Cowen]

Super. Thank you so much.

[Will Lewis, Chair and CEO at Insmed]

... the timeframe we have for that for that titration Ritu is five weeks. So in the real world, physicians could continue to try to dose escalate over perhaps a longer period of time and might find greater success. But backbone here is 80% of patients are getting the maximum tolerated dose of 640 in this study, in the ILD study, and 90% of them are getting to the penultimate level, which is just a remarkable outcome from our point of view.

[Ritu Baral, Managing Director and Senior Biotechnology Analyst at TD Cowen]

Thanks.

[Operator]

Our next question comes from the line of Jeff Hung from Morgan Stanley. Please ask your question.

[Jeff Hung, Stock Analyst at Morgan Stanley]

... Thanks for taking my questions. For TPIP, based on the data, can you just comment if you see any evidence of disease modification? And then I have a follow-up.

[Will Lewis, Chair and CEO at Insmed]

Gene, do you want to address that?

[Eugene Sullivan, Chief Product Strategy Officer at Insmed]

Yeah, and by disease modification, I presume you're referring to the underlying pulmonary fibrosis, which I know that that was an observation made in the INCREASE trial, that there may be some evidence of effect on the pulmonary fibrosis. And United Therapeutics is currently conducting a large trial to try to detect that. Where we might see any effects on the underlying disease process would be the lung function, and we have not analyzed that data yet. However, it's extremely unlikely that we would see any evidence of that with such a small study and such a small placebo group. It's only, you know, 10, 10 patients.

[Eugene Sullivan, Chief Product Strategy Officer at Insmed]

The 3-to-1 randomization was intended because what we really wanted to do is just get some safety information, to give this drug to patients with PH-ILD and make sure nothing untoward happened, and that's what we saw. So we don't expect to see any information that could inform whether or not treprostinil impacts the pulmonary fibrosis.

[Jeff Hung, Stock Analyst at Morgan Stanley]

Okay, great. And then you started education efforts for brensocatib fairly early. Can you just talk about how far that's come, and how much more education you think is still needed for physicians for potential launch? Thanks.

[Will Lewis, Chair and CEO at Insmed]

Well, I'm happy to report that we have the similar experience of being a first-in-disease drug and the first-ever approved drug for ARIKAYCE use in refractory MAC patients. So that experience informs our approach once again to the larger opportunity that would be represented by bronchiectasis using brensocatib. And so that medical education got underway with the American Thoracic Society really last year at this time and has been ongoing, and that will continue right up through our expected launch in the U.S., which would be the middle of 2025.

[Will Lewis, Chair and CEO at Insmed]

In parallel to that, we are also right now started at the end of last year, working on the market access front, to make sure that that education on the disease state is handled appropriately and that everybody is informed. Our experience is that by doing these things, people are in a much better place to understand if there is a drug that is approved, and it has an effect, people know how to place that into context and what that would really represent for patient care. And that's the purpose behind all of it. But certainly, starting early when you're first in disease is crucial, and we've been doing that, and that's a critical investment we've been making.

[Will Lewis, Chair and CEO at Insmed]

I'll also report that on the commercial front, the progress with regard to bringing additional resources in, first in the U.S. and then in Japan and Europe, is also underway at the area director and regional director level. Those critical promotions and hires have taken place. I will say I am shocked at the degree of interest that is coming from the outside world for these positions. When we indicate that there might be a position available, we are getting scores of candidates signing up to try to gain access to the opportunity.

[Will Lewis, Chair and CEO at Insmed]

So I think everybody feels what is coming is incredibly exciting and want to be a part of that, appropriate disease education and ultimately, the commercial launch of the drug, should everything go as expected, about the middle of 2025. Hopefully, that's helpful.

[Jeff Hung, Stock Analyst at Morgan Stanley]

Great. Thank you.

[Operator]

Our next question comes from the line of Liisa Bayko from Evercore ISI. Please go ahead.

[Liisa Bayko, Sell Side Analyst at Everscore ISI]

Hi, guys. Congrats on the TPIP data. Just a couple of follow-up questions on ASPEN. To kind of play off of what Ritu was saying, but in a more high-level way, I noticed there was a lot of patients in your baseline paper from the Latin America region. It was, I think, more than a quarter of the population, which they seem to have milder disease. Can you talk about your comfort level, making sure, like, some specific large groups like that are, you know, well-balanced across the arms? That's my first question. Then my second question relates to how we can think of a quiet period around the data. Are you planning, you know, kind of a couple of week quiet period, a couple of days?

[Liisa Bayko, Sell Side Analyst at Everscore ISI]

Just wondering if we can, if we stop hearing from you guys, if we might think data's coming. Thanks.

[Will Lewis, Chair and CEO at Insmed]

I'll take the second question first and just tell you that, when the moment comes, I think... Certainly, we'll be going quiet, but I think that is more a by-product of us needing to take a step back and make sure that, as I mentioned earlier, the quality of what we're doing is meeting the standard. The hierarchy here is very clearly, and always has been, quality first, speed second, budget third, in that order of priority, in terms of making sure we produce the best possible outcome here. So I don't know, to be transparent, how long it will take from the moment that we decide we're ready to lock the database to the moment that we're analyzing the data and interpreting the results. Obviously, some of that will depend on the results themselves.

[Will Lewis, Chair and CEO at Insmed]

But so it's hard to give guidance, Liisa, as to how long we would be quiet. It, it's just... It could be any length of time, and most importantly, I would not interpret a longer period of silence as meaning that there is, in any way, something wrong. Indeed, we are very focused, as I said before, on the quality, and that may be something that we just wanna refine. So that would be my answer to that. With regard to the concentration of patients in different parts of the world, we remain very comfortable with the profile of what we have recruited into the study. There's remarkable, I would say, consistency in our experience with this-...

[Will Lewis, Chair and CEO at Insmed]

Trial so far, based on our careful monitoring of regions on a weekly basis down to the country level, to ensure that there weren't significant deviations or aberrations from other areas of the world. And so that's been an ongoing process that we've had. I think what we saw in terms of concentration from Latin America is not in any way problematic or concerning. In fact, I think I don't know how to respond to the comment about milder disease because that is not something that we would identify as being necessarily the case. But I can tell you we feel very good about the baseline demographics here and the distribution around the world. Hopefully, that answers the question.

[Liisa Bayko, Sell Side Analyst at Everscore ISI]

Did you stratify for Latin America specifically, or does that just go into rest of world stratification?

[Will Lewis, Chair and CEO at Insmed]

We didn't stratify in that sense, to the best of my knowledge. Someone else can correct me if I'm wrong. But we do obviously track how, where patients come from, and we can certainly cut the data that way, should it become necessary to do so.

[Liisa Bayko, Sell Side Analyst at Everscore ISI]

All right, great. Thank you.

[Brian Dunn, VP and Head of Investor Relations at Insmed]

Let me step in here for just a second. We actually did stratify based on region-

[Will Lewis, Chair and CEO at Insmed]

Oh.

[Brian Dunn, VP and Head of Investor Relations at Insmed]

So Latin America is on the list, but other regions as well, Western Europe, Eastern Europe, et cetera.

[Liisa Bayko, Sell Side Analyst at Everscore ISI]

Okay.

[Will Lewis, Chair and CEO at Insmed]

Oh.

[Liisa Bayko, Sell Side Analyst at Everscore ISI]

Okay, great. Thank you.

[Will Lewis, Chair and CEO at Insmed]

There you go.

[Operator]

Your next question comes from the line of Jennifer Kim from Cantor Fitzgerald. Please go ahead.

[Jennifer Kim, Equity Research Analyst at Canto Fitzgerald]

Hey, guys. Thanks for taking my questions, and congrats on the TPIP data. Maybe to start with brensocatib, I think the answer is yes, but I just want to confirm. Is it fair enough to say that the data isn't coming at ATS, just given the timing of deadlines? And then also, to follow up on the last question, when you're monitoring on a regional basis, on a blinded, blended rate basis, are you saying that the rates are sort of in line with what you would expect on a regional basis? And does that also take into account the differences in, I guess, macrolide background regimens? Looking at Japan, I know we saw in the paper there's a much higher use of that, for example. Thanks.

[Will Lewis, Chair and CEO at Insmed]

So I'm not gonna comment on the timing of the data any more than I already have. We've given the window from mid-May to the end of June, and sometime in that timeframe, we'll produce it. In regard to the specific question about what we're monitoring on a country basis, I think there are a lot of things we look at. I don't want to go into the specifics of how we—what we've seen, or what we conclude, or any of that interpretation. I would just encourage everybody to not overinterpret comparisons from the past or other studies. I think the simple answer is we're proximate enough to the actual data from ASPEN to just sort of wait for that data.

[Will Lewis, Chair and CEO at Insmed]

I don't think it is possible, and we have much better information than all of you, to interpret what these results will really be until we unblind. We feel good about the direction of everything that is contained within the study. We see remarkable consistency with WILLOW. Those things are encouraging, the qualitative commentary from physicians, but the data will ultimately control, as we all know and understand. And I think at this point, the simple and most honest answer is we need to just unblind the data and see what we have. I don't know, Brian, if you want to add anything, specifically about the question, just in light of the last one.

[Brian Dunn, VP and Head of Investor Relations at Insmed]

Nope, all good.

[Jennifer Kim, Equity Research Analyst at Canto Fitzgerald]

Okay, thanks. And if I could ask a question on TPIP, maybe for Gene. I wanted to confirm, is phase 3 advancement in PHILD still contingent on getting PAH top-line data? Maybe to get a better sense of powering. And I know that the confidence intervals are wide, but can you say what the six-minute walk change was in placebo in PHILD and what the baselines were for both arms? Thanks.

[Eugene Sullivan, Chief Product Strategy Officer at Insmed]

Sure, so the question is about phase 3 and moving forward into phase 3. I think, you know, that'll be primarily based upon the results of this trial as we analyze these results and the ones that'll come in subsequently, and also on the experience of Tyvaso in this population. I think it's harder to extrapolate data on efficacy and data on a lot of things from a PAH population to PH-ILD. It's such a different disease process that I don't think we're gonna be looking at the PAH data to inform key aspects of a design of a phase 3 trial for PH-ILD. And I think your second question had to do with the six-minute walk test.

[Eugene Sullivan, Chief Product Strategy Officer at Insmed]

We've given the delta, right, the 30 meters placebo-controlled, and so you— were you asking what was the actual change from baseline in the treatment groups?

[Jennifer Kim, Equity Research Analyst at Canto Fitzgerald]

I was asking what the placebo six-minute walk change was. I think you, you've given the, the placebo-adjusted change, and then so the placebo change, and then also what the baselines were for both arms.

[Eugene Sullivan, Chief Product Strategy Officer at Insmed]

So I'll just say broadly that, you know, probably the best way to do it is placebo-controlled. That would be the primary, you know, analysis. In general, what we saw in the primary analysis was that there was a decline among placebo patients and a stability among active treatment patients. So that, you know, general pattern was what resulted in the 30-meter delta between the two.

[Jennifer Kim, Equity Research Analyst at Canto Fitzgerald]

Okay, thanks for taking my question.

[Operator]

Your next question comes from the line of Stephen Willey from Stifel. Please go ahead.

[Stephen Willey, Managing Director and Senior Equity Research Analyst at Stifel]

Yeah, good morning. Thanks for squeezing me in. Just a quick ASPEN question. So-

[Stephen Willey, Managing Director and Senior Equity Research Analyst at Stifel]

... I know the, the manuscript detailing patient baselines suggests that there were about 20% of patients with elevated eosinophils. I'm curious as to whether or not you've said anything about, eosinophil levels as it pertains to WILLOW. And then just kind of curious as to, your thoughts around, you know, the impact of brensocatib in this elevated eosinophilic population, where maybe inflammation may be not so neutrophilic in nature. Thanks.

[Will Lewis, Chair and CEO at Insmed]

Yeah, the short answer is I don't know the answer to that question, Stephen. I can ask Gene if you know offhand, otherwise, or Brian, if someone else wants to comment, otherwise, we'll have to get back to you.

[Eugene Sullivan, Chief Product Strategy Officer at Insmed]

Yeah. The only comment I'd make is that when, you know, patients have elevated eosinophils in their secretions, either sputum or, or nasal secretions, it, it doesn't mean that all of these inflammatory cells are eosinophils. It just means there's a lot of them, and actually there are a lot of neutrophils, even in patients who have, you know, elevated eosinophils. A lot of the inflammation is, is still neutrophil driven. So I think there's, you know, still a reason to expect a benefit even in those patients. That's why we didn't, like, exclude eosinophil patients. So that's the only thing I, I'd want to clarify. 'Cause sometimes, people think that when it's elevated eos, it's at the expense of the neutrophils, but in that milieu, in the inflammatory milieu, there are plenty of neutrophils there as well.

[Will Lewis, Chair and CEO at Insmed]

We can get you the specific numbers if we have them, and they're public, with a follow-up.

[Stephen Willey, Managing Director and Senior Equity Research Analyst at Stifel]

All right, thanks.

[Operator]

Your next question comes from the line of Andy Chen from Wolfe Research. Please go ahead.

[Andy Chen, Director and Senior Analyst of Equity Research at Wolfe Research]

Hi, this is Aman for Andy. Thanks for taking our question, and congrats on the data. Just a couple quick ones on our end. I guess, how big is the existing ARIKAYCE sales force? And then assuming brensocatib is successful, what's the target sales force size there? And that's one. And then on PAH, regarding the average improvement in six-minute walk distance from baseline of 43 meters, how should we interpret this data point? I know during the call it was mentioned it's a highly variable measure, so it's difficult to kind of interpret this, but would you say this is a modest or big success? Was there kind of an internal bar? Thank you.

[Will Lewis, Chair and CEO at Insmed]

So, Sara, do you want to take the question on sales force expansion? And, Gene, you can take the one on the six-minute walk on TPIP.

[Sara Bonstein, CFO at Insmed]

Sure, happy to. Thanks for the question. Existing sales force in the U.S., we have about, you know, 65, 70 reps, existing in the U.S. We will look to expand that. You know, what we've said publicly, 200-220 is what we've said publicly. We'll share more on those details on the commercial day that we've alluded to, throughout the Q&A session. What I would like to comment on is the, immense crossover between ARIKAYCE and brensocatib and the synergies that we will have. ARIKAYCE obviously calls on pulmonologists and ID docs. brensocatib, you know, primary call is, pulmonologist. So it's such two very synergistic products that you don't necessarily see, so we're really excited about being able to leverage the infrastructure. Gene, over to you.

[Eugene Sullivan, Chief Product Strategy Officer at Insmed]

Yeah, sure. So on the six-minute walk distance, in the blended blinded of 43 meters, of course, you know, we say this over and over again, it's, it's a very variable measure, and, and more importantly, we don't know who's on active and who's on, on placebo, and so it's very difficult to interpret 43 meters. But we are happy to see improvements. We're seeing patients with improvements, and if those, you know, represent patients who are on active drug, that's great, and, and, and the 43 meters would be, would be plenty. The other point I want to make, though, is that even at the end of this trial, it's, it's, it's a larger trial than the PH-ILD study, but with 99 patients, we're not, powered to see a, statistically significant effect on six-minute walk distance, even with the final unblinded data.

[Eugene Sullivan, Chief Product Strategy Officer at Insmed]

You know, we'll get a point estimate, we'll get a sense, but, I just wanted to, to point out that even with 90, 99 patients or so, we, you know, that, that likely is not enough. If you look at the pivotal trial for Tyvaso in PAH, that was over 200, I think it was 230 or so patients to show a statistically significant benefit. So, you know, we see the improvement in the blended population. We don't know who's on active and who's not, but we're pleased with it. It's a good number, and, and there are patients who are clearly improving, and, we'll just have to wait to see the, the unblinded data.

[Andy Chen, Director and Senior Analyst of Equity Research at Wolfe Research]

Great. I appreciate the answers.

[Operator]

That concludes our Q&A session for today. I would like to hand back to management for closing remarks.

[Will Lewis, Chair and CEO at Insmed]

Thanks very much, everyone, for joining us today.

[Operator]

This concludes today's conference call. Enjoy the rest of your day. You may now disconnect.

Participants

Executives

• Brian Dunn, VP and Head of Investor Relations
• Eugene Sullivan, Chief Product Strategy Officer
• Sara Bonstein, CFO
• Will Lewis, Chair and CEO

Analysts

• Andrea Tan, Stock Analyst at Golden Sachs
• Andy Chen, Director and Senior Analyst of Equity Research at Wolfe Research
• Graig Suvannavejh, Managing Director at Mizuho Securities
• Jason Zemansky, Stock Analyst at Bank of America
• Jeff Hung, Stock Analyst at Morgan Stanley
• Jennifer Kim, Equity Research Analyst at Canto Fitzgerald
• Jessica Fye, Managing Director and Senior Equity Research Analyst at JPMorgan
• Joseph Schwartz, Senior Managing Director and Biotechnology Analyst at Leerick Partners
• Leon Wang, Healthcare Sector Specialist at Barclays
• Liisa Bayko, Sell Side Analyst at Everscore ISI
• Nicole Germino, Biotech Research Analyst at Truist Securities
• Ritu Baral, Managing Director and Senior Biotechnology Analyst at TD Cowen
• Stephen Willey, Managing Director and Senior Equity Research Analyst at Stifel
• Vamil Divan, Senior Biopharmaceuticals Research Analyst at Guggenheim
• Analyst