Evercore ISI, really pleased to be speaking to Will and Roger today. I've known Insmed for a very long time, you know, from the development of ARIKAYCE, from the early days all the way through. They're now a commercial company. They've expanded greatly into multiple pillars. We're gonna get into all of that, but I want to turn it over to Will. Maybe you can just give us a brief overview, and then we'll dig into some interesting questions.
Sure. So I think appreciate the opportunity to be here. The way I always summarize the company is there are four pillars, and I haven't come up with anything more interesting than that as a way of describing it. But it captures the notion of the first product you mentioned, ARIKAYCE, which is commercially approved in the U.S., Europe, and Japan for the treatment of refractory MAC lung disease. We've recently put out ARISE data, which is the first component of the expansion of that drug into a broad label for all MAC, NTM. And to put that in perspective, that's a 3- 5 fold increase in addressable market for that product. That product is expected to do roughly $300 million in revenue this year. That's our guidance. It's actually $298 million-$302 million or something like-
395 .
3,395, yeah. So, but roughly in that range. And the second pillar is one that captures a lot of attention. This is brensocatib. It's a DPP-1 inhibitor. It's in a very substantial phase III trial right now for the treatment of bronchiectasis. That reads out in the second quarter of 2024. All eyes are certainly gonna be on that program. We have recently kicked off the BIRCH trial, which is for CRS without nasal polyps. That's now enrolling. It's a phase II trial with the same drug for the treatment of that condition. And we are targeting kicking off a trial in hidradenitis suppurativa, or HS, in the second half of next year, a phase II trial using the DPP-1 for that. Pillar three is TPIP. This is the...
What we refer to as the sleeper drug within the company. It's a treatment for pulmonary arterial hypertension or pulmonary hypertension associated with interstitial lung disease. We have two phase II trials running in that. We've recently put out blinded, blended data that showed some very interesting results, albeit with the caveat that it's blended and blinded in small numbers. Nonetheless, I think there's a lot of enthusiasm building around that compound. And then the fourth pillar, which is a collection of different platforms and technologies and research that will become more relevant in the next one to two years as those programs move into the clinic. But really, that's gonna be the answer to the question of what's next, assuming the first three pillars work, which we believe they will.
So let's just get into, like, I think most topical right now is brensocatib. I field a ton of questions on it, and, look, it's been a graveyard of disease development. You've got some provocative phase II data. It wasn't perfect.
Mm.
It was not a dose response, but I think blew people away by what you saw. Why are you so confident about phase III? I mean, clearly, this is a very difficult area of drug development.
Yeah, I think because of that difficult area of drug development, we spent a lot of time before we even went into what was called the WILLOW study, the phase II study, and before we kicked off the ASPEN study, the phase III study, looking at those prior trials. What is interesting about those trials is that, first of all, they were all inhaled antibiotics, so a different mechanism of action.
Mm-hmm.
All of them did not study the primary endpoint that is used in phase III and phase II. So they weren't really getting good information in phase II to inform phase III. We, in contrast, studied in phase II the endpoint of time to first pulmonary exacerbation and frequency of pulmonary exacerbation, which are relevant for phase III. So we had a good read on what was needed, and we saw statistically significant results. There was not a dose-response curve, as you point out, at least superficially, but studying those trials, we came away with several important points. The first is, you have to have enough events for your drug to be able to show its efficacy. So we had very restrictive description qualifications of what constitutes an exacerbation.
We had to have those documented two or more to get into the trial. That's in contrast to a lot of these past studies. Even in their phase IIIs, we had to have radiography that was viewed by a third party to confirm the bronchiectasis diagnosis. Again, not done in these other studies. So I think what ended up happening is they let in a lot of patients that were really not moderate, or, moderate to severe. They were mild, and so you didn't see a lot of events, and the result was that the studies weren't powered to show an effect. They came close, but they didn't hit.
So, just to drill down on that a little bit, if you look at, like RESPIRE 2, that's a study where the event rate in placebo, you had 58% of patients in placebo who didn't have a single exacerbation during a 12-month period. That's quite remarkable, but it also tells you that those patients were very mild. So we think we've done a lot in phase III, including increasing the power. We have more than 1,600 patients in this study to show a 30% reduction, and we're more than 90% powered to accomplish that. By contrast, we were 80% powered to show a 40% reduction, and we hit that threshold in phase II.
Both the strictness of the definition of exacerbation, the number of patients we've put in, and the way we've powered this gives us a lot of confidence that this is gonna work.
Not to be cynical-
No, no.
but let's just like-
Go ahead.
- just to try to put on a-
Yep
... critical mind frame. Let's say we get to ASPEN-
Yep
... and it, it doesn't pan out. What, in retrospect, like, what are you—what are the key risks that you see? What, what did you have to design, you're like, "Shoot, do we do it like this or that?" Or like, what, in retrospect, do you think, like, could go wrong?
So Roger and I were talking about this earlier today, and the difficulty we have is that, you know, we couldn't come up with anything that was evident. What I will say is that we have designed this trial so that the trial will not fail this drug. It is powered heavily. It is responding to prior experience where failure had taken place, as you pointed out, and we have built off of the success of a phase II study that got published in the New England Journal of Medicine. So for all those reasons, we think we've done everything. The unknowns that are out there really center around, do you generate enough events, and do you have a different patient profile because you're going to more sites, right?
The way we've addressed that is to look at the baseline characteristics of WILLOW and ASPEN, and we see that they match almost perfectly. The overlap is remarkable, and so we're going from a 300-odd patient study to a 1,600-odd patient study. That's a big scale-up in numbers that should give us more than adequate power to show an outcome. Success here is either one of these doses hitting stat sig. If we get 10 or 25, less than 0.01, we win. Indeed, if we get both below 0.01, we may only bring one dose forward, but we wanted to have two shots on goal, and that's why we've approached it this way. I can't come up with anything else. I don't know, Roger?
No, the only other thing I was gonna say is, well, you know, we saw the, the flat dose response with the 10 to the 25 was really driven by these outlier, the multiple, the severe exacerbators, right? So we, was it six exacerbations they'd seen in that six month period, which is really... And they all clustered in that 25 mg arm. So the way we've sort of handled that was just through stratification, so it should be distributed across the arms going forward. So I think the trial is really well designed to, to at least what we can anticipate and what we've learned from studying all the other trials and WILLOW, on how to manage that. So as Will said, it's- I don't think the trial is gonna let down the drug.
We do only need just that one dose, one dose to hit, and we're good. And I think, you know, if we talk to physicians, and we're looking at 90% power for 30% reduction in exacerbations. Physicians, when we talk to them, you know, a 15%-20% reduction in exacerbations is what they see as really significant. That would be a clinically meaningful for them and for their patients. You know, Will often describes the exacerbation as sort of a heart attack for the lung, and that multiple exacerbations or repeated exacerbations is where you see the lung function decline over time. So preventing that is really critical, and so we think that we're well positioned on this trial to demonstrate that.
So I'll say we have a double re-rating that's gonna happen next spring. The first is Wall Street gets over the probability of success question, and the second re-rating will occur when the trial hits on one of those doses, and people begin to contemplate the scope of this addressable market. 'Cause I think people have not yet really done their work on the second question 'cause they're not over the first, which is understandable.
I am getting that question quite a bit-
Yeah, I bet.
Like, what is the end market here? Which I actually kind of like that people are already kind of leapfrogging into that.
Well, once they see how much, I mean-
Well, what do you see it as?
I see, we've said publicly between ARIKAYCE and brensocatib, that those two drugs will be comfortably above $5 billion in revenue. If we could just let that hang out there in the air for a minute. We're talking about a $300 million a year, this year-
Right
... roughly.
Where do you think ARIKAYCE gets to in refractory?
In refractory? Well, well, you know, Roger, you want to take that?
Yeah, so refractory, it's an interesting question 'cause I think the ARISE data is going to change the treatment paradigm for NTM, MAC. So we were just talking about this earlier. So for the first time, we know about, you know, about half the patients, there's a watch and wait sort of paradigm for physicians, so about half the patients, they don't get treated for MAC right now. They wait until they want to intervene with the current standard of care. For the first time at ERS, we had the KOLs get up there and say, "Sure, you can watch and wait, but don't wait too long." What ARISE shows is you're able, with six months worth of therapy, get an 80% culture conversion, so you don't wanna hang around if you can do that.
From a refractory perspective, if you wait, and you just treat with the current standard of care, the best data we have, the CONVERT data, you're gonna get a 30% conversion, right? So intervene early, convert these patients, you're gonna have success. So the KOLs are incredibly excited about that. So I think refractory sort of becomes much less important once frontline is established.
Right.
Now, the good news is, I think for our case, is if you don't, and the guidelines will say, and we'll see, we'll see what the ENCORE data tells us, but if you don't convert in those first six months, continue to treat. If you don't convert after the first 12 months, continue to treat until you do get that conversion. So we think ARIKAYCE will continue to be used there, but the success that we're seeing in ARISE, if that's predictive of ENCORE, which we think it will be, it's gonna be a frontline market rather than a refractory market.
One thing, like, I mean, I thought the ARISE data were really great, so let's just start there. I also think that the treatment should be stopped at six months because my concern is when you go to 12 months, that the standard of care catches up. Let's face it, nobody wants to be on these drugs for 12 months. They'd much rather have a six month therapy. Are you concerned at all about that catch-up? Because if you kind of look at how the data tracks, you know, to drug standard of care, it does seem to get... And it was tracking well, right, so far. But you had so, so much of a bigger impact at six months. Is there an opportunity at all to kind of, like, hone in on a six month treatment?
We even saw when you went off drug that you were much more durable in effect, which was pretty impressive.
Yeah, I think... I mean, I'll throw my two cents in-
Mm-hmm.
You can, you can follow up, Roger. I think I'm not really worried about the control arm catching up. I know that that is a point that's been raised, and I appreciate the concern. Well, what if it does catch up over time? History shows us, our clinical trials show us that that doesn't really happen. Most of the patients who are gonna convert are gonna convert early, and if they convert on our drug, they do so in a much more durable way, and I agree with that. The standard of care right now calls for every patient who culture converts to stay on drug for an additional 12 months, so it's a really big ask. I agree with that.
But if you can convert them earlier and do it really definitively, like by giving them a year of therapy to eradicate this, they're in the best possible position to have the two outcomes they want. The first is that, obviously, the bacteria are eradicated, any additional damage done is mitigated, and they get to go off drug. 'Cause there's never a happier day for these patients than when they have to stop taking drug. Particularly if it can be done with a triple regimen that we proposed, I think that really is a game changer for these patients.
You know, on CONVERT, even after these patients have been treated coming into the trial for four years, and then they were able to be converted in a couple of cases on standard of care, within a month, almost—I think every single patient that had been converted was reinfected. The difficulty in stopping too early is that you get a false sense of conversion because there are distal portions of the lung that are still have residual bacteria. So I think patients do need to stay on for longer. That certainly is what the KOLs tell us. But we'll see. I don't know if you have-
Yeah, no, the only other thing I would say there, 'cause I think that—I think we will still... We saw in CONVERT, even with the ARIKAYCE, the separation we saw versus standard of care, we still had additional patients convert on ARIKAYCE the longer we went. And I think the durability is really important as well. So obviously, the liposomal formulation is important because it penetrates the macrophage. So you still have the NTM hiding out in the macrophages. And I think that that's probably one of the reasons why you're seeing that big drop-off from the standard of care at month seven is because it's not re-eradicating the full infection.
I'll defer, as you might imagine, to the KOLs, when they say they wanna treat longer to make sure they've knocked that out, to eliminate or reduce the risk of recurrence over time.
Okay, great. Let's move on to another kind of aspect of your portfolio, and one I totally agree with you. I think TPIP is a sleeping giant, and we did some actual market research work, and docs seem pretty excited to use TPIP in their COPD patients. So what—maybe you can, I don't know, tell us a little bit more about the data that you saw and, you know, how you're interpreting that.
Well, I'll turn it over to Roger, 'cause he's been close to the market, research on TPIP, and maybe you can-
Yes.
... address that part of it.
So I think our experience is similar to what or-
Mm
... very consistent with what you just expressed. I think we took—Before we went into the phase II, we took our profile to physicians for both PAH and PH-ILD. And the way we set that up, the target product profile we tested was really just a once daily formulation, with that 24-hour coverage, so you get nighttime coverage-
Yeah
... and a better tolerated treprostinil that's gonna allow you to get to higher doses-
Yeah
... so maybe you're gonna get better efficacy. So we didn't show any parameters. We didn't talk about the efficacy parameters, but doctors are familiar with treprostinil. They know that the more you can get into the patient, the way they treat, the better they're gonna respond from a clinical perspective. So what we got back was: You're gonna have the market-leading product just based on that profile, just a more convenient, once-daily, better safety, potentially better efficacy. As we see this blended, blinded data, and look, it is blended, blinded, so we have to take everything with a grain of salt, but we are seeing about two-thirds of patients getting a PVR reduction, and we're randomized 2- 1, active versus placebo, so it looks very consistent.
Physicians are so excited about that profile because what it means in clinical practice for them. So I think that it only enhances what was already a market-leading position. They tell us things like... They recommended we double the dose, right? So in our open-label extension, we're gonna look to see if we can get from 640 up to 1280 because they've got-- they think we can continue to go. That's gonna change fundamentally the way they use prostanoids and treprostinil. So they believe that they will be able, in many cases, when patients aren't able to get enough treprostinil inhaled, to have a clinical benefit, and so they go to an IV treprostinil. This TPIP may actually be able to prevent or defer patients actually getting onto IV treprostinil as well.
It's a big deal for these treating physicians as they think about this, and we're really excited to unveil that data and really see where we think this is headed, which is really to dramatically change the treatment paradigm within both of these diseases.
We've got a lot of patient, patients, investors. Investors are maybe my patients, I don't know. Scratching their heads about kind of pillar four and why going there. Like, I guess, well, like, you, you've got so much going on in the kind of pulmonary space. Like, why not kind of stick to that core capability?
Yep.
Why did you decide to branch out into these other areas?
Yeah, I think, the short answer to that is very similar to when we brought brensocatib in, and ARIKAYCE was about to launch. People were like: "Why are you buying this phase II drug from a big pharma company? You know, we know it's gonna fail. It's a distraction of capital and mental energy." I think we wanna be ready with the answer to what's next. If we think about the construction of the company right now, pillars one, two, and really three fall under a broad, defined respiratory umbrella. Our all of the synergistic benefit that comes from targeting that area will be maxed out with ARIKAYCE, refractory frontline, and brensocatib in bronchiectasis. If we're gonna go into another respiratory indication, we would have to beef up the commercial infrastructure.
So it makes sense to me to look elsewhere and to start to think about other modalities. Why research? Why now? It's inexpensive. We're getting some of the best capabilities out there for a fraction of what they used to go for, which is fantastic. It also means that when those things come into the clinic, I think you're gonna see dramatic impact. Fundamentally, when I look at these technologies, I see things that are productivity tools, so gene therapy, synthetic rescue, deimmunizing these, therapeutic proteins. All of these have such profound potential impact on patients that with a phase I, II trial completed, you could secure a conditional approval and thereby cut off the capital and the time necessary for phase III. And that's why we're in this field.
There is a world where many of these programs that we're pursuing right now would become commercial under that regime of phase I, II is good enough for conditional approval. They would become commercial before TPIP. And so you can look at this through the lens of productivity, not just novelty, and I think that's the key.
... So as we kind of wrap up here, talk to us about kind of, how you're seeing kind of, like, your capital flow. You've got, obviously big data coming out for brensocatib. If you don't have that kind of eye on $5 billion, and you're left with TPIP and brensocatib and this fourth pillar, can you still afford to invest in that? You do have convertible debt out there as well.
Yep.
Maybe talk to us about kind of how you're structuring all of this and thinking about the risk there?
Yeah, I think there's a—I mean, no one wants to contemplate the brensocatib failure scenario. But if brensocatib fails, then it fails, and we move on. We don't trickle the data out. We don't continue to run other trials. It's done.
Well, you do have other trials, though.
We do.
With [crosstalk] Jas and-
We would take a hard look at-
Okay
... whether those are viable in a world-
Okay
... where DPP1 has not proven itself-
Okay
... in the definitive trial that's being run. And I think we'd want to look at cost containment and other things. But ARIKAYCE is going into frontline. That's a 4- 5 fold increase in addressable market that takes it, you know, by math, to a billion-dollar drug. And that throws off a ton of cash. TPIP, either running as a commercial product or monetized through sale or licensing, which are very reasonable pathways to follow, gives us the opportunity to harness whatever we want out of the pipeline, and that's a very interesting company. It's not as interesting as brensocatib working because that takes us to the stratosphere. That puts us in a, on a path that's been run by companies like Vertex. And I think that we really are looking at that kind of a future for this company.
We are talking about a re-rating of this company, the likes of which comes across the biotech world very, very infrequently. If brensocatib works, ASPEN comes through, we are a fundamentally different company that is gonna be worth multiples of what it is right now.
Well, we're super excited for next year, Will.
As are we.
Thank you very much for joining us today.
Thank you.