Good day, ladies and gentlemen, welcome to the Insmed FDA Approval Announcement conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session, instructions will be given at that time. If anyone should require assistance during the conference, please press star then zero on your touchtone telephone. I would now like to turn the conference over to your host, Mr. Blaine Davis, Head of IR. Sir, you may begin.
Thanks, Matt. Good afternoon, everyone, welcome to today's conference call to discuss the U.S. Food and Drug Administration, or FDA, accelerated approval of ARIKAYCE, amikacin liposome inhalation suspension, for the treatment of Mycobacterium avium complex, or MAC, lung disease as part of a combination antibacterial drug regimen in adult patients who have limited or no alternative treatment options. There is a slide deck on our website to accompany this call, we recommend you have it, as we'll use it for framing out our discussion today. Before we start, as noted on slide two, let me remind you that today's call will include forward-looking statements based on current expectations. Such statements represent our judgment as of today and may involve risks and uncertainties that may cause actual results to differ from the results discussed in the forward-looking statements.
Please refer to our filings with the SEC, which are available through the SEC's website at www.sec.gov, or our website for information concerning the risk factors that could affect the company. The information on today's call is not intended for promotional purposes and not sufficient for prescribing decisions. Joining me on today's call are members of the Insmed Executive Management Team, including Will Lewis, Insmed's President and Chief Executive Officer, Paolo Tombesi, Chief Financial Officer, Paul Streck, our Chief Medical Officer, and Roger Adsett, Chief Commercial Officer. Once we've completed our prepared remarks, we'll open the call to take your questions. With that, let me turn the call over to Will.
Thank you, Blaine. Good evening, everyone, thank you for joining us. We are thrilled to announce that ARIKAYCE has received accelerated approval from FDA for the treatment of MAC lung disease for patients who have limited or no alternative treatment options. I believe this approval marks a day of hope and inspiration for the patients who, up until this moment, have had no approved treatment specifically indicated for their condition. If we can consider that accomplishment for a moment, we can see this as an occasion where patients, doctors, regulators, and industry have come together to deliver on the promise of the biotech industry for patients with this clear unmet medical need. This product began as an idea at this company more than 15 years ago. Its approval reflects work by Insmed employees across the spectrum of discovery, research, and clinical development.
Their work has been supported by the expertise of all of our company team members around the world who join the vision to create and bring this medicine to patients in need. We now turn our attention to our U.S. commercial team members to bring this medicine to the patients who are waiting. On behalf of the global Insmed team, I want to thank the investment community for its support in making today possible. The consequence of your sponsorship is the introduction of a much-needed medicine from a company that aims to continue to grow and deliver value. We are excited about what the future holds for Insmed. With that, let me now turn the call over to our Chief Medical Officer, Dr. Paul Streck.
Thanks, Will, and good evening, everyone. Let me pick up on slide six. To date, our focus has been on developing ARIKAYCE to address the significant unmet need for patients suffering from MAC lung disease. MAC lung disease is a rare, progressive, and chronic pulmonary infection associated with irreversible lung damage and declining lung function. The disease typically affects an older population and is associated with an increased mortality rate and is often further complicated by multiple comorbidities. Today, we estimate that as many as 30%, or 10,000-15,000 MAC lung disease patients in the U.S. do not respond to the off-label antibiotic regimen that is the current standard of care. ARIKAYCE is a combination of the aminoglycoside antibiotic amikacin, encapsulated in a specialized liposomal technology we now brand as PULMOVANCE. This technology is proven to increase uptake into the lung macrophage and effectively penetrate biofilm.
Moving to slide eight. ARIKAYCE is the first and only inhaled therapy specifically approved to treat patients with MAC lung disease. ARIKAYCE is also the first product approved via the Limited Population Pathway for Antibacterial and Antifungal Drugs, or LPAD. LPAD, which was enacted as part of the 21st Century Cures Act, serves to advance the development of new antibacterial drugs to treat serious or life-threatening infections in limited populations of patients with unmet needs. This is certainly the case for the segment of patients with MAC lung disease who have suffered for years with limited to no treatment options. We're very excited that they will now have a treatment specifically approved for this disease. We're excited about the opportunity for further development of ARIKAYCE as well. We believe that through additional clinical work, we can potentially expand the population of MAC lung disease patients we serve.
As a condition of our approval, we are currently collaborating with FDA on the design of an additional study to explore the clinical benefits of ARIKAYCE in a frontline setting. The study design is proposed to be a randomized, double-blind, placebo-controlled clinical trial to assess and describe the clinical benefit of ARIKAYCE in patients with NTM lung disease caused by MAC. We'll provide additional updates once the study design has been finalized with the FDA. We're also evaluating additional clinical trials to explore efficacy in Mycobacterium abscessus and in a maintenance indication as well. Moving to slide nine. There are a few key points in relation to the approved label. As you can see on the slide, ARIKAYCE is indicated in a limited population.
Specifically, it is indicated in adults with limited or no alternative treatment options for the treatment of MAC lung disease as part of a combination antibacterial drug regimen in patients who do not achieve negative sputum cultures after a minimum of six consecutive months of a multi-drug background regimen therapy. Use is reserved for patients with limited or no treatment options. This label directly reflects the patient population we studied and appropriately characterizes the risk of the treatment. Patients who are prescribed ARIKAYCE will be provided with a medication guide containing important safety information, including the box warning, as well as full instructions for use and a step-by-step guide on how to use the product. Insmed also will send healthcare provider letters describing the scope of the limited population approval and the potential risk of respiratory adverse reactions.
We believe that the prescribing physicians, including pulmonologists and infectious disease doctors, have extensive experience in managing these risks with their patients. This is a great day for our patients, their caregivers, and their families, and we are very much looking forward to delivering ARIKAYCE to patients in need. Let me now turn the call over to our chief commercial officer, Roger Adsett, to provide a quick update on our launch plans. Roger?
Thanks, Paul, and good afternoon, everyone. We're excited to launch this drug as we hope to help the thousands of patients who have been suffering from refractory MAC lung disease for years with no specifically approved treatment options available. As you can see on slide 10, our focus at launch is on the roughly 10,000-15,000 MAC lung disease patients in the U.S. who have limited to no treatment options. This population is reflective of the language in the label, as well as the patients in our pivotal phase III study. Moving on to slide 11. Let me spend just a minute on our launch readiness and the disease awareness efforts that our field team has been executing over the past six months. Our team of 72 therapeutic specialists has been working since early April on executing our disease awareness campaigns and meeting with key prescribing physicians.
Their efforts, guided by the Symphony data we use to identify targets, have proven promising. To date, we have seen 84% penetration for disease awareness calls in our target audience, with 17,000 visits to healthcare professionals from April through late August. A truly impressive effort in just six months. In addition to our field team's disease awareness efforts, we have deployed our key account directors to engage with payers and have hired and trained our ARIKAYCE coordinators who will be assisting appropriate patients in gaining access to ARIKAYCE. We have the infrastructure in place. We have some of the best talent in the industry, and we are ready to begin promoting the product next week. As we have prepared for the product launch, our focus has centered on a refractory patient population, so we are well prepared for launch with this specific indication. Let me now turn to pricing.
We have set the wholesale acquisition cost for ARIKAYCE at $363 per vial. When the product is used daily, as directed, the annual cost of the therapy will be $132,495. We believe this price reflects the value ARIKAYCE offers to a small patient population that is currently underserved and faces a substantial disease burden. This pricing is also in line with other inhaled antibiotics treating rare conditions. When patients start therapy, they will receive a Lamira portable ultrasonic nebulizer and a kit with 28 days of medicine, a handset, and four laser-drilled ultrasonic mesh replacement heads. The kit is designed to facilitate ease of use and provide daily reminders to take therapy. The patient-centric design of the kit reflects our commitment to enhance the patient experience. Access to ARIKAYCE remains the top priority for us, and we have and will continue to have productive dialogue with payers.
We have received positive feedback to date, and now with an approved product label, we can immediately begin detailed dialogue with plans regarding access. We continue to expect that during the early months before plans have placed ARIKAYCE on formularies, we will be relying primarily on the medical exception process to secure reimbursement for ARIKAYCE. The research we have done with physicians who treat patients with MAC lung disease suggests that these doctors and office staff are willing to invest the time and provide the support to secure access through medical exception. We have a clear strategy and an extensive support network of both in-house and field-based personnel to support patient access. With this foundation, we believe we have made the right investments and hired the right people to bring ARIKAYCE to market successfully.
As we progress through the launch, we will continue to provide updates on our access strategy and execution. I would also like to add that while our focus today is on the U.S. launch, our global expansion efforts are continuing. With today's approval, we are even more energized about the potential opportunity to serve patients with MAC lung disease in other regions like Europe and Japan following the receipt of the necessary regulatory approvals. We are all very excited about the approval and launch of ARIKAYCE, and we look forward to sharing our progress with you. With that, I'll hand the call back over to Will.
Thanks, Roger. Let me close out our prepared remarks with a few thoughts on our strategic priorities for 2018, highlighted on slide 12. Obviously, we're laser-focused right now on the launch of ARIKAYCE in the U.S. for appropriate patients. Beyond ARIKAYCE, we are advancing an exciting pipeline of other compounds, and we will have more to say about that as we move into 2019. We plan to do so while maintaining our strong financial position. As always, I'd like to recognize and thank the Insmed team for their continued hard work and dedication. We are thrilled to have obtained FDA approval for ARIKAYCE, and we recognize that this accomplishment is only the beginning. We have assembled an exceptional team whose talents have not only brought us to this moment, but will enable us to have a successful launch.
Lastly, I want to thank the patients and physicians we serve for their continued involvement in our clinical program. We are here to make a difference in the lives of patients and their families, and with this approval, we've accomplished a very important goal. With that, I'd like to open the call to questions. Operator, can we take the first question, please?
Thank you, sir. Ladies and gentlemen, if you'd like to ask a question at this time, please press star then one on your touchtone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key. Again, to ask a question, please press star then one on your touchtone telephone. Our first question is from Ritu Baral of Cowen. Your question, please.
Hi, guys. Thanks for taking the question. Will, your price, what sort of treatment duration do you assume, given that $132,000 annual price? Is it the six months we've heard some doctors talk about? Is it the 12 to 18 months that's more standard? I've got a follow-up.
Sure. Thanks for the question, Ritu. I'm going to ask Roger to address that. I'll just open by saying all of our interactions and thoughts about treatment have followed or run in parallel to the guidelines that exist in this area. Roger, do you want to talk maybe more specifically about those?
Yeah. Thanks, Will. Hi, Ritu Baral. The guidelines, as you probably are aware, specify that treatment should start for a six-month period, and if culture conversion is not achieved in that six months, the doctor should reevaluate and consider continuing for another six months. Once culture conversion is achieved, therapy should continue for another 12 months. It's hard to put a specific duration of therapy on each of these patients. I think the guidelines offer the best prescription for how long these patients will be treated.
Let me just come back to the concept of price, because we spent an awful lot of time thinking about this. Our price choice reflects the balance between value and access. As you know, we have spent more than $1 billion over the 15+ years in the development of this drug. It has some very unique qualities. We believe it eliminates evidence of the infection. That data is pretty crystal clear, and this is for patients who have failed all other treatments out there. A lot of debate went into this. We think this is a good price. It works all of the various constituencies carefully in mind, and I think, as we've said, sits right in the category of other inhaled antibiotics that treat rare diseases.
Has your market research yielded an average treatment duration thus far?
Roger, you want to answer that?
As I said, we don't have a calculation on the average treatment duration. I think the physicians, when we ask them about their intent, they refer to the guidelines as well. It really is going to depend on the individual patient and at what point do they achieve culture conversion. We do get agreement and endorsement of the guidelines that once that culture conversion is achieved, that these patients should be continuing for another 12 months. That is well understood, and we believe that the physicians are telling us that that's what they intend to do.
Got it. My follow-up has to do with how you are targeting your call points. Can you describe how many practice call points you have and what sort of tiering you've got them organized under?
I'll let Roger talk to the specifics. I just want to remind everybody that we made a very strategic decision six months ago to bring on an entire commercial infrastructure in anticipation of this moment. We have made a very substantial investment in the entire infrastructure to assist us with the commercial launch, and Roger can talk a little bit about that composition and how it's being deployed.
Thanks, Will, I want to emphasize that we are ready to go on Monday. Our team is trained. We've been working towards this refractory label in patients with limited treatment options, our team is chomping at the bit. They've requested training over the weekend on the final label, which we will be happy to oblige them with, get them out in the field on Monday. Just a reminder, we're targeting approximately 5,000 of these physicians at launch. That represents about 70% of the physicians who are prescribing in the NTM space. We have tiered them based on how many patients they have. We will be prioritizing accordingly. We think we have a very robust plan, and we're ready to start executing on Monday.
Got it. Thanks for taking the questions. I'll hop back in the queue.
You bet.
Our next question is from Martin Auster of Credit Suisse. Your question, please.
Hi, this is Martin for Marty. Congrats on the approval, and thanks for taking my question. I guess two questions from me. First, could you address if there's any post-approval requirements from FDA? My second question is, based on your early work, how many centers of excellence are there, and how many patients do these centers treat?
Thank you.
I'll take the question on post-approval requirements and ask Roger to comment on the Center of Excellence and how we're thinking about that. We have a series of post-approval requirements and commitments that are outlined in the letter. The only post-approval requirement is the frontline therapy study that we made reference to both in our press release and in our spoken comments. That dovetails perfectly with our life cycle management plan. As you've heard me talk about all year long, it was always our intention to go from the refractory indication into frontline, into maintenance, and into Mycobacterium abscessus, and to design those trials to facilitate our international expansion and support that effort.
The frontline trial will begin as soon as we have agreed on the final elements of it, and once we have those locked down with FDA, we'll look forward to sharing those with you. Then subsequent to that, we'll be happy to share any details about additional life cycle management work we're going to be doing. I think it's very important that everyone understand, we see today as the first in a series of steps that will allow us to hopefully take this drug into broader and broader populations once we have the data in hand that will allow that to be added to the label.
Regarding the Centers of Excellence, there's really a handful of Centers of Excellence with some pretty prominent physicians and centers in Texas, Colorado, Oregon, among other places. What we found out is, while they are obviously important treatment options for these refractory patients, there's a variety of whether they have a regional pool, have a national pool, and how they coordinate care with physicians back in, for example, in some of the states where they travel to these centers to get care. What's emerged more from our perspective, that's more interesting, is these regional physicians that are taking on NTM patients. We see these local and regional experts who have hung out a shingle and started to build a clinic focused on treating these NTM patients.
That's where I think we're going to see quite a lot of interest, and we have seen quite a lot of interest around NTM and our disease awareness efforts to date. We expect that they will be very happy to hear the news of an approved drug for their patients.
Got it. Thank you.
Our next question is from Adam Walsh of Stifel. Your question, please.
Hi, thanks for taking my questions. Let me add my congratulations. Great day for you guys.
Thank you.
You're welcome. I have a few quick questions here. The first one is, on the black box warning, do you think that would have an effect? I know that would have an effect should you get approval in frontline, or maintenance, or some of these expanded populations. How do we look at the black box? That's the first one.
On the black box, the black box contains the kinds of warnings that we had intended to share with the treating physician population. To us, it is not problematic. Let me just invite Roger to comment on the commercial impact.
Yeah, thanks, Will. I agree with that. I think we've been training our team, and we're ready to talk through. We've been training them on our clinical trial. The adverse events that are identified in the black box are the ones that, of course, we saw in the clinical trial. As we're going through that, we're well prepared to discuss with the physicians. These patients are very sick patients. It's one of the things that, in our mind, as a responsible company, we need to be educating physicians on how to appropriately treat these patients. Not only what the benefits are, but what the risks are. I will also go back to how we've hired our sales force.
We have a very experienced sales team, experienced with rare disease launches, and a black box is something that I think almost all of these therapeutic specialists have sold through and encountered in their career. I feel very confident in our ability to be able to appropriately discuss the black box and the AEs with our physicians.
I think it's also worth mentioning that these are physicians that are accustomed to this kind of a profile. They've been treating these patients for a very long time, as you know. I think we enter into this with the idea that they're going to benefit from this dialogue tremendously.
That's helpful. Roger, have you ever disclosed or [inaudible] that you've identified in terms of refractory at launch?
It's hard to hear you there, Adam. I think you cut out. Do you want to repeat it?
Yeah. Sorry, I'm on a train. Roger, the question's for you. Could you share how many patients you've identified at launch?
Go ahead, Roger.
As you know, our efforts were focused on disease awareness. We don't have a count of how many patients we've actually identified, or physicians have identified. I think that as we talk to physicians and as we ask, inquire as to whether they do treat NTM, they confirm the Symphony Health targeting, and the data seems very consistent with that 10,000-15,000 refractory NTM patients that we've seen in the literature. We feel very comfortable with that data based on our efforts so far.
That's helpful. Thank you, and congrats.
Thank you.
Thanks.
Our next question is from Matthew Harrison of Morgan Stanley. Your question, please.
Thanks. Good afternoon. Appreciate you taking the questions. I think two from me. Could you maybe just start out the indication statement that you have sort of highlights limited population, when you read it talks about limited or no alternative treatment options. I'm just wondering how you interpret the indication statement and how you think insurance companies are going to interpret the indication statement in terms of kinds of patients that would be available for treatment.
Sure. I'll just start off then invite Roger to talk about the commercial aspect of your question. I think we all need to just realize and celebrate, as we are, that we have just secured approval for the first-ever treatment for MAC lung disease, we have accomplished this for patients with the greatest unmet medical need. This label that we've received aligns perfectly with the patient population we studied, all of our preparation assumed this outcome. In terms of what the payers are going to respond to, I'll ask Roger to comment.
Thanks, Will. I would say that the indication is exactly what I had anticipated. This is the patient population that we studied, the patient population that when we tested with payers, they recognized the unmet need. Payers have been very consistent in telling us that they will provide a prior authorization, we've talked about that before, and that prior authorization will be focused on making sure that the product ends up in the hands of the appropriate patients according to the indication. For us, that is the patients who have had an inadequate response and have few or limited options because they've not responded to that guideline-based therapy. I see this as very consistent.
I think the research that we've done is consistent with this label, and I remain encouraged by how payers are interacting with us and are supportive of making sure that these patients who are consistent with the label actually have access to ARIKAYCE.
Perfect. Thank you. The second question is just around, you've talked about that there are a couple elements of discussion related to the frontline study. Could you maybe just tell us what areas you still need to discuss and sort of what the range of potential outcomes could be?
I appreciate the question. I think we're going to let this resolve itself in the coming weeks as we finish our dialogue with the FDA. I think the only characterization I would tell you is this was an incredibly accelerated timeline. FDA and we moved mountains to get to this point in time. I think it speaks volumes about the collective interest in wanting to see these patients get treated, and for that, we're particularly grateful. I think from here it should be an expeditious dialogue, and we will be back shortly with all of the details relating to the trial design.
Okay, perfect. Then just if I can fit one other in it. Can you just comment on what sort of expected gross to net we should think about in this kind of population or any ideas of corollaries of other gross to nets for other sort of products that are similarly priced in this population? Thanks.
Sure. I appreciate that question as well. We're not going to comment specifically on gross to net at this time. I think generally when it comes to metrics and how we're looking out, we want to get out into the field and have some experience before we identify the key metrics that will be most useful and transparent in terms of capturing how we're doing. I will just say when we think about this drug from a production point of view, we've often said this before, that because we're talking about a drug device, we focus very much on this as an approval of a drug, but we're talking about a drug and a device, and that combination, I'm happy to say this now, it can make it more onerous to get it approved.
Now that we're on the other side of that, it becomes a real point of support for us. When we think about the composition of the cost profile, that means we're looking at something much more akin to a biologic with a little bit of a single-digit royalty on top of that for PARI, the device manufacturer. We feel rock solid about where we are with this and how we've approached the cost profile. I hope that answers the question. I know you're looking for more specificity. At this stage, it's probably a little premature.
That's fine. Thanks very much. Appreciate it.
Our next question is from Joseph Schwartz of Leerink Partners. Your question, please.
Great. Thanks very much. Congrats on the approval. Have you done work to try to determine what the impact of the black box warning is on the opportunity? These are obviously very sick patients. I don't know if you've done work to see whether it helps you or hurts you. It would seem like setting expectations for how the therapy would be tolerated would be a good thing given you've seen that discontinuations occur and it's mostly early on. Can you give us your thoughts on that? Also remind us what the resources that you're going to be deploying in order to ensure that patients adhere to the treatment via nursing support or whatever resources that you have dedicated to ensure that people can stay on treatment.
Are there certain symptoms in particular that you're going to be helping people recognize that may occur and then how they can manage these things in order to soldier through the treatment and benefit from it? Those would just be all my questions. Thank you.
Thanks very much, and appreciate the congrats. The one thing I would say about this is, while I know the black box becomes a topic of discussion for this call, remember that the research we've done and the work and our preparation was based on a target product profile that captured all of these elements in our discussions with folks. I think we have a pretty good understanding of how they're going to perceive this particular therapy and the black box just enables us to feature that in our discussions with them. I'm not particularly concerned about it.
I'll ask Roger to comment, again on what we're doing to support this and any particular symptoms and the additional personnel we have surrounding this because, as I said before, we made a strategic decision early on to bring the full complement of capability on board in anticipation of an approval and a launch.
Yeah, thanks, Will. I do think you're absolutely right. One of the things that we need to focus on is educating physicians, and then patients on what they can expect on this therapy. It's the key to them continuing therapy and making a success out of their experience with ARIKAYCE. We will be talking with the black box, and talking about and highlighting the AEs. We'll be focused on those that are most common, the sore throat, the hoarseness, and the cough, for example, are things that we need to highlight for them. We have a full ARIKAYCE support program in place. We have our ARIKAYCE coordinators who will welcome the patients to the plan once they enroll. A key part of our support will be the ARIKAYCE trainers that we've retained across the country.
Those trainers will be going in, will be contacting within two days of getting the medicine approved and shipped to the patients, will be going in and talking them and training them on what to expect from their therapy, how to use the Lamira nebulizer, and really focus on making sure that they're very comfortable with the medicine before they actually go. If they need a return visit or if they have any issues with that training, we stand ready to also send those trainers back in to help them through this. I believe that the black box is something that we will appropriately manage with physicians.
It's always been a part of our plan to educate and make sure that folks know what to expect when they're taking that therapy and to stick with it, and hopefully get to culture conversion on the other side of their therapy.
Great. That's very helpful. Thank you.
Our final question is from Dana Flanders of Goldman Sachs. Your question, please. Dana, your line is open. You may want to check your mute button.
Hi. Thank you. Sorry I was on mute. Congratulations on the approval here. As my first question, is there just any additional color you can provide on what the endpoint will be for your follow-on study to show clinical benefit? My second quick one here, on the commercial market, how frequently do patients with refractory disease come in to see their physician? Just trying to get a sense of if there will be a bolus effect or do you think this will more build over the course of 2019? Thank you.
You bet. I appreciate the question. We don't have any additional detail that we're going to be talking about today with regard to the frontline trial design. Again, I just want to emphasize it was the FDA's direction that we study in frontline patients. I think that portends positive things for us. Certainly, our interactions with them were very positive around considerations relating to trial design. As I said before, I think this will be something we'll come to quick agreement on, and when we do, we'll share the details of that. Roger, do you want to address the second part of the question?
Thanks, Will. As best we can determine, these patients are usually managed on a quarterly basis, so they'll usually make a visit approximately once every quarter, is what we've ascertained. I think it's going to be more build than it is going to be a bolus. These patients, don't forget, are very sick. They have a lot of fatigue, and oftentimes, that prevents them from leaving the house. I think that appropriate patients will eventually get the prescription for ARIKAYCE, but I'm not sure it's going to be a huge bolus right out of the gate.
All right. Thank you. Congratulations again.
Thanks very much. With that, I gather that's the last question. What I will just say is thank you for joining us on the call today. I want to do one final callout to the patient community who has been with us in lockstep throughout this process by participating in our clinical trials. It is really, as we spoke internally as a company today, for them that we have completed this work. It's a great day for all of us. We're going to go and celebrate it and appreciate you joining the call.
Ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may now disconnect. Good day