INSM - NASDAQ

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. [Operator Instructions] I would now like to turn the call over to Bryan Dunn, Head of Investor Relations. Please go ahead.

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; Eugene 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. 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.

Thank you, Brian. Welcome, everyone. Today, we intend to review the progress from 3 of the company's main programs, ARIKAYCE, TPIP and brensocatib. Let's begin with TPIP. The first of this quarter's 2 important data readouts came this morning with the announcement of the top line results from our Phase II 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 II study in pulmonary arterial hypertension. In a moment, Eugene 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 III ASPEN trial remains on track to read out in the second half of this quarter. Let me take one additional moment to touch on the detailed events and time lines relating to brensocatib. At the end of March, all adult patients in ASPEN have 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 prespecified 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 3 of our geographic regions, and 16% growth overall compared to the first quarter of 2023. 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. 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 the 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 2 diseases. 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 COP 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. Now let me turn the call over to Eugene to talk about the big news of the day, the results from our TPIP program.

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 II 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 II 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 3:1 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. 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 4 times daily. Patients were titrated up to their maximum tolerated dose over the course of the first 3 weeks of treatment with a final dose increase allowed at the 5-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, higher percentage of female participants were randomized to TPIP arm at 31% versus the placebo arm at 20%. Also, on average, patients in the TPIP arm of the study required one 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 5 compared with 100% of those taking placebo. If we look at the patients who were able to reach at least 480 micrograms by week 5, nearly 90% of TPIP patients were able to achieve that threshold. 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 5 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. 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.

Thank you, Eugene, 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. Consistent with our statements on last quarter's call, we have not used our at-the-market equity offering 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. 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 cyber attack, 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 cyber attack. In Japan, first quarter 2024 net revenue was $14.9 million, representing 13% growth over the same quarter last year. 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. In Europe and Rest of World, net revenue in the first quarter of 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 asset and regulatory approvals. Importantly, today, we are reiterating our full year 2024 global revenue guidance of $340 million to $360 million. 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 contributed slightly more than 1/5 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 of 2024, our gross to net in the U.S. were approximately 21%. As in prior years, we expect the gross to net 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 net 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, reflecting continued investment in both our early and mid- to late-stage pipelines as well as launch readiness activities for brensocatib. 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 and 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 Instructions] And our first question comes from the line of Andrea Tan from Goldman Sachs.

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 forms 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.

Sure. Happy to address that, Andrea, and thanks for the question. 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 3 of our territories. So really gives us great confidence in reiterating the guidance of $340 million to $360 million. 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. 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 $1 billion opportunity pending regulatory approval for ARIKAYCE. We believe that the price that we charge today for refractory, we'll 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.

Okay. And then, Eugene, maybe I could just ask you quickly on the blinded blended on 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 is 47%. And there have been some commentary around some patients seeing in excess of 65%.

Yes, 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 2:1 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, 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 in PVR, no matter how small, it was more like 75% of the patients have that, but again, we wouldn't really want to call someone who decreased their PVR by 5% as a real responder. And so we didn't do that analysis of like responders versus nonresponders. We did talk internally like would it make sense to then divide it into 3 groups, which is sometimes done like groups that responded, groups that got worse, and a group that sort of stayed about the same and then, but we didn't want to 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 fairly remarkable decreases, like remarkable in the sense that this shouldn't happen without the addition of new therapeutic and our investigators are very impressed when you see a 50% reduction in PVR, like that just doesn't happens, like what you expect, if anything, would be a client in patients who have not had a change in their therapeutic regimen because it's a progressive disease.

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

This is Daniel on for Vamil. I have a couple of questions on TPIP, if I can. So the first one for PH-ILD. You see guys about like 38% of patients that show like kind of 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 was kind of 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 PAH. That's my first question. And then the second question is maybe more on like the broader TPIP opportunity. It was previously said 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. I was just curious if the data hasn't had any recent impacts on your views on this?

Vamil, I'll just jump in and then I'll ask Eugene to take the specific question on cough. I think with regard to the opportunity, stay tuned, we're going to 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 plus. And certainly, based on what's been happening in PH-ILD and PAH generally, that is a comfortable target for us. These data today, I think, are striking. They're early. We want to emphasize the PH-ILD study is small, but the efficacy measures, while their 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. Eugene, do you want to take the question about cough?

Sure, yes. 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 is present in most patients to some degree or another. So that was sort of the 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. What that means is there was something about the cough in patients on active that made the investigator believe it was related to the drug. And what that was, was the temporal association with dosing. So it tended to be in discussions with the investigators. It tends to be a very mild cough, cough right after taking the drug and really wasn't problematic, was rated as mild did not result in any one discontinuing treatment and so forth and kind of the proof is in the pudding that they -- despite that imbalance in cough, they were able to titrate up to the highest dose, 640. So we feel pretty good about it. What we wanted to exclude was that in patients with underlying parenchymal lung disease would this drug be somehow more exacerbate their underlying cough to a degree that was problematic clinically. And really, 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 said before, the data on more is better, if you will, with prostanoids, is very clear with pulmonary arterial hypertension. Now with all of the routes of administration of prostanoids, it's very clear that the higher you can go more efficacy you can get. And so we definitely -- we are -- as I mentioned, amending the protocol to the open-label extension to allow for these higher doses to just kind of see where we can go in PAH. We chose not to do that in the open-label extension for PH-ILD in primarily the data that more is better, it's not entirely clear in PH-ILD. 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.

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, 13.8% in TPIP. So in terms of what it means for patients, as Eugene said, continuing to be able to take the drug, it didn't seem to be an impediment.

Our next question comes from the line of Jessica Fye from JPMorgan.

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, SGRQ, 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. And I'm curious what they cite. Curious what they cite if it may not be 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 makes sense.

Yes. So I'll take a shot at that, Jessica and then I'll invite Eugene to comment anything further he'd like to. I think with regard to WILLOW and quality-of-life, I remind everyone that, that was a 6-month study, and it takes about a month for drug to get the 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. 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. 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 will certainly have accomplished victory. I don't know, Eugene, if you want to add anything further?

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

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

Eugene, I don't know if we have that. Do you want to address that if it's handy. If not, we can circle back.

Yes. 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, -- yes, we didn't conclude that in the baseline demographics information, did we? There was some indication that the TPIP group were a little sicker. Their use of supplemental oxygen was a little bit higher. Their FVC was a little bit lower. And frankly, during the 6-minute walk test, they tended to desaturate at baseline a little bit more. So there were some evidence that they were a little bit sicker. So that's why we presented change from baseline for each of the measures.

Our next question comes from the line of Leiyang Wang from Barclays.

Congrats on the data. So a couple on TPIP. One, on Slide 7, the 6-minute walk distance was not available for the placebo arm. Can you just remind us on -- was this because of an inability to collect data or it's just a 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.

Eugene, do you want to take those?

Sure. Yes. The -- in that Slide 7, the N/A 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 N/A meaning not applicable, more than not available if that makes sense. And so what we've included in that box is to emphasize that the point estimate is 30 with a point estimate, and that's remarkably similar to the point estimate of the effect size on 6-minute walk that was seen in the pivotal trial for Tyvaso for PH-ILD, the so-called INCREASE trial, it was comparable. However, we want to be very, very clear, and we put to indicators of the variability. The confidence intervals are extremely wide in that square. And then the p-value is not -- does even close to statistical significance. So that is -- I think that -- hopefully, that responds to your question about what that N/A 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 how quickly we start to see a difference I think that, that will -- is data that will emerge in more fulsome presentations of the data. But since the pivotal trial end points would be from change from baseline to the end. That's what we decided to focus the top line results on.

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

Congrats on the very strong TPIP data. I was wondering how many of the patients in the Phase II study of TPIP and PAH have been enrolled in the 10 countries, which are allowing you to titrate up to 1,280 micrograms. And are you still talking to other countries, health authorities about doing this? Or will it just be those patients when we see that data? And then I have a follow-up on brensocatib.

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

Yes, 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 either with first, you have to go through the regulatory authority then you have to go through the Ethics Committee or IRB. So those conversations are ongoing. So we haven't -- it doesn't come to mind how many patients currently covered because I think we expect more of those countries to eventually allow the expanded dosing.

I was just going to say, 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.

Right. Okay. That's helpful. And then on brenso, 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 with physicians and payers gone on that front?

Yes. I think what we've been -- tried to be very clear about is that the clinical meaningful threshold, I think that everybody sort of agrees as 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% that we would for either dose, we would consider that a home run. 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. 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 and the degree of enthusiasm, I think that people will have in the physician community for calling their patients in, which is the fact that we've already heard that if this were to be find its way to clinically meaningful thresholds of 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 will probably affect the enthusiasm. I don't know that it's going to dramatically affect the way we think about the addressable market, but we're certainly going to 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 is 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 going to react to this, and that's why we emphasize getting below 0.01 with 1 dose and a treatment effect of 20% or more.

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

[indiscernible]

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?

Sure. I apologize. No worries. Just going back to the TPIP, [indiscernible]

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

How does, which aspect, TPIP on the PH-ILD side. Is that -- did I get that right?

Yes, that's right. How does drop in oxygen level [indiscernible].

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

She is asking if the oxygen -- the drop in oxygen levels, how do they compare.

To Tyvaso. We didn't do a direct comparison because 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 want to make is that patients with interstitial lung disease desaturate when they walk 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 then we think that's what we saw. The reason we were even looking for that. The reason we were even 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 because the area of lung that is 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, and 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 show, the INCREASE trial is the trial for everyone's benefit of the Tyvaso in this population was 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 because they're delivering it by inhalation. So we just wanted to -- 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, the patients on active drug had no change in their oxygen supplementation. And then with exertion there was really no significant decline compared to placebo.

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

This is Jerry on for Greg. Congrats on TPIP data. I guess, first on TPIP. Based on what you know now, what a Phase III study in PH-ILD look like? And then I do have a follow-up on brenso [indiscernible] after.

Yes. I'll take that quickly. We haven't really put any thoughts in the public domain about what that Phase III study will look like. We obviously want to 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 going to be a clear path to being able to create such a trial will 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 is fresh, and we're digesting it and then we're going to want to have dialogue with regulatory authorities. But as soon as that is accomplished, we will get that design out to everyone so that they can understand what it's going to look like. Sorry, I can't be more specific.

That's fine. That's helpful. And then for, I guess, the upcoming ASPEN readout. Since you managed to comment [indiscernible] 2 weeks of all the adults in that time period. Wondering if I can get any more granular timing on the timing of that data release?

Well, I'll 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 time frame, which is 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 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 detailed and quality issue to be resolved because this is a submission database. And 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 quality issues. 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. And 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. 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.

Our next question comes from the line of Jason

Congrats on the data. I was hoping if 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 BREE

Eugene, do you want to take that?

Yes, sure. I think when we sort of use the Tyvaso as the benchmark. We don't so much look at the BREE

Well, was there something specific about these 4 patients, like you've 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.

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

Got it. Okay. And then just kind of thinking more broadly, when thinking about TPIP potential in your guidance, how important is it that patients get to the 640-milligram or microgram dose or higher, is it the assumption that the drug will provide more benefit given the higher dose? Or is it value really in moving from 4-times daily to once-daily administration?

Yes. So I'll just jump in on that one and then ask Eugene 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 we're working on the target product profile, we spend 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 because that's what we do with patients. We push them to max tolerated dose in practice. So we picked 640 micrograms for this study, which is 60% greater than what treprostinil is the equivalent for treprostinil administered over 4 times already. So 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 ringing endorsement not only of what we've been able to accomplish so far, but what the future may hold, given some of the improvements we've seen in PVR just getting patients to 640. So I think there's a lot of promise here for the clinical results that we expect to see from PAH as patients move from 640 to even higher levels. And that is a wonderful clinical objective that we have set for ourselves, and it's a very high bar, but being able to get to higher doses should produce that result. To be able to do it with a once-a-day administration is the benefit of convenience as well as 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, 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 prostanoids of choice for the treatment of these patients. I don't know, Eugene, if you have other reflections.

Yes. I mean just the only thing to add to that, 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 get a lot more sensitive to the prostanoid related side effects than others. So if you look at a population of patients on Remodulin, for instance, 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, 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 to just keep increasing the dose. With Tyvaso, because of the peak systemic exposure immediately after dosing, you kind of don't. You get up to the -- you titrate up to the target dose and then you stay there and the label does not include continuing to dose escalate. And I think that's probably related to the pharmacokinetic pattern. So because of our own kinetics, we hope to be able to dose the 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. And we think that in addition to the once daily versus 4 times a day, that's a great distinction. But this is another distinction. You get the benefit of delivering the drug directly to the lung, but also the ability to titrate it in a manner that they do with the parenteral product.

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

Thanks for squeezing in, and I apologize in advance. I still square, I hate biostatistics more than any of you. But when we did the analysis on WILLOW and ASPEN for brenso, our statistical consultants 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 constant between the arms and historical studies we noted that WILLOW obviously had very low variance of sort of 0.04 to 0.1 and historicals were in the 0.4 to 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, because it does seem to make an important difference in power. And got a quick follow-up.

Yes. I hate to disappoint, Ritu, because I know the work that you've put into this and 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, no one variable controls, but 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 -- unfortunately, that I can go.

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

Yes. What we can say is that while we haven't given any update with the final data, with the vast majority of the 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, et cetera, but the blended blinded data continues to look very favorable with regard to safety...

Got it. And just squeeze one last in. On the TPIP, ILD study, 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.

Eugene, do you want to take that?

Yes. And just to be clear, I think what I was commenting on before was patients with study drug-related adverse events. And that, in fact, when there was cough, doctors tended to identify it as study drug-related, it's up to the investigator to decide, do I think this 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. But to your broader question, we are not seeing any particular safety finding 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 we also released the number of patients who got to the second to the top dose, and that was pretty high, too. If you go to that, it's 90% of patients. So we're not seeing problematic AEs that limit dose escalation and we're not seeing any novel safety events that would give us a concern that's something unique to TPIP.

And I would only add, the time frame we have for that titration, Ritu, was 5 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 to 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.

Our next question comes from the line of [indiscernible] from Morgan Stanley.

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.

Eugene, do you want to address that?

Yes. And by disease modification, I presume you're referring to the underlying pulmonary fibrosis, which I know 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 that 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 10 patients. We really -- the 3:1 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.

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 do you think is still needed for physicians for a potential launch?

Well, I'm happy to report that we have the similar experience of being a first-in-disease drug, and first ever approved drug for the 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 to run through our expected launch in the U.S., which would be the middle of 2025. 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. 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. 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 by the middle of '25. Hopefully, that's helpful.

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

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 the 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 1/4 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 well balanced across the arms. That's my first question. And my second question relates to how we can think of the quiet period around the data? Are you planning kind of a couple of quiet period, a couple of days. Just wondering if we can -- if we stop hearing from you guys if we might think data is coming.

I'll take the second question first. Just tell you that when the moment comes, I think the -- certainly will be, will be going quiet, but I think that is more a byproduct of us 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. But -- so it's hard to give guidance, Liisa, as to how long we would be quiet. 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 want to 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 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.

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

We didn't stratify in that sense, to the best of my knowledge, somebody 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.

Let me step in here for just a second. We actually did stratify based on region, so Latin America is on the list, but other regions as well, Western Europe, Eastern Europe, et cetera.

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

Congrats on the TPIP data. Maybe to start with brenso. 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 and 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 and looking at Japan, I know we saw in the paper, there's a much higher use of that, for example.

So I'm not going to 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 time frame will produce it. With 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 over-interpret 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. 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. 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.

No, I'm good.

Okay. And if I could ask a question on TPIP, maybe for Eugene. I wanted to confirm, if Phase III advancement in PH-ILD, 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 6-minute walk change was in placebo in PH-ILD and what the baselines were for both arms?

Sure. So the question is about Phase III and moving forward into Phase III. I think that will be primarily based upon the results of this trial as we analyze these results and the ones that will 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 going to be looking at the PAH data to inform key aspects of a design of a Phase III trial for PH-ILD. And I think your second question has to do with the 6-minute walk test. We've given the delta, right, of 30 meters placebo controlled. And so were you asking what was the actual change from baseline in the treatment groups?

I was asking what the placebo 6-minute walk change was -- I think you've given the placebo-adjusted change, and then so the placebo change? And then also what the baselines were for both arms?

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

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

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

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

Yes. The only comment I'd make is that when patients have elevated eosinophils in their secretions, either sputum or nasal secretions, it doesn't mean that all of the 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 elevated eosinophils. A lot of the inflammation is still neutrophil driven. So I think there's still a reason to expect a benefit even in those patients. That's why we didn't like exclude eosinophil. So that's the only thing I'd want to clarify because sometimes people think that when it's elevated EOS, it's at the expense of the neutrophils. But in that milieu and the inflammatory milieu, there are plenty of neutrophils there as well.

We can get to the specific numbers if we have them in the public with a follow-up.

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

This is Eman for Andy. Congrats on the data. Just a couple of quick ones on our end. I guess, how big is the existing ARIKAYCE sales force? And then assuming brenso is successful, what's the target sales force size there? And that's one. And then on PAH regarding the average improvement in 6-minute walk distance from baseline of 43 meters. How should we interpret this data point? I know during the call 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.

So Sara, do you want to take the question on sales force expansion, and Eugene, you can take the one on the 6-minute walk on TPIP.

Sure. Happy to. Thanks for the question. Existing sales force in the U.S., we have about 65, 70 reps existing in the U.S. We will look to expand that. What we said publicly, 200 to 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, called on pulmonologists and ID docs. Brenso, primary call is pulmonologists. So it's 2 very synergistic products that you don't necessarily see. So we're really excited about being able to leverage the infrastructure. Eugene, over to you.

Yes, sure. So on the 6-minute walk distance in the blended blinded of 43 meters, of course, when we say this so and over again, it's a very variable measure. And more importantly, we don't know who's on active and who's 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 represent patients who are on active drug, that's great, and the 43 meters would be plenty. The other point I want to make, though, is that even at the end of this trial. 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 6-minute walk distance, even with the final unblinded data. We'll get a point estimate, we'll get a sense, but I just wanted to point out that even with 99 patients or so, we -- 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 we see the improvement in the blinded population. We don't know who's on active, who's not, but we're pleased with it. It's a good number, and there are patients who are clearly improving, and we'll just have to wait to see the unblinded data.

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

Thanks very much, everyone, for joining us today.