Good day, ladies and gentlemen, and welcome to the Insmed First Quarter 2018 Financial Results Conference Call. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will follow at that time. As a reminder, this conference is being recorded. I would now like to introduce your host for today's conference, Mr.
Blaine Davis, Head of Investor Relations. You may begin.
Thank you, Bruce. Good morning, and welcome to today's conference to discuss our Q1 20 18 financial results. Joining me on today's call are members of the Insmed executive management team, including Will Lewis, President and CEO Paolo Tambasi, Chief Financial Officer and Mudra Adzak, Chief Commercial Officer. For today's call, Will will start with a general corporate update, followed by Roger, who will discuss the continued progression of our commercial activities. Paula will then briefly review the Q1 financials, and then followed by our prepared remarks, we'll open the call for your questions.
Before we start, 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 from our website for information concerning the risk factors that could affect the company. With that, let me now turn the call over to Will.
Thank you, Blaine. Good morning, everyone, and thank you for joining us. We kicked off 2018 with the momentum, drive and ambition, which are key characteristics of the team here. We're excited about our prospects for the year, and our efforts throughout the Q1 are moving us closer to our goal of building a sustainable biopharmaceutical company. We remain optimistic that we will secure approval and launch our lead drug, amikacinliposome inhalation suspension or ALAS for adult patients with treatment refractory non tuberculosis mycobacteria or NTM lung disease caused by Mycobacterium avium complex or MAC, ALICE has the potential to be the 1st ever approved inhaled therapy to treat this disease.
We accomplished an important milestone in this process with the filing of our NDA with the U. S. Food and Drug Administration at the end of the Q1. I'll dive further into the impact this will have on timing for a potential approval and launch shortly.
I would like to take
a moment to acknowledge the team for their efforts in accomplishing this goal on time with the highest quality. To remind you, the disease we are fighting is a rare and progressive pulmonary infection associated with irreversible lung damage and declining lung function. We estimate that as many as 30% of NTM MAC patients failed treatment when using the off label antibiotic regimen that is the current standard of care, and we are aiming to offer an important treatment to address these circumstances.
The following
of our NDA was based on the full 6 month data from our INS-two twelve study. Recall that this study evaluated ALLIS plus guideline based therapy or GBT versus GBT alone with the primary endpoint of culture conversion by month 6. We achieved that primary endpoint unequivocally with a p value of less than 0.0001. Results show that the addition of ALICE to GBT led to culture conversion by a 20% margin over GBT alone, with 29% of patients on ALLIS plus GBT converting within 6 months of treatment. Our robust clinical program was designed to gather additional information on the potential long term clinical advantages of Allis.
To remind you, patients who culture converted in 2 12 are continuing in the trial for an additional 12 months of treatment. Patients who did not culture convert had the option to enroll in our INS-three twelve study in which all patients receiving ALICE plus GBT. The solid top line results seen in the 212 study were corroborated by the additional positive data from these two studies that we shared earlier this year. 1st, the interim culture conversion data from the 312 study echoed what we saw in 212 with 28% of patients previously on GBT alone achieving culture conversion by month 6 in the study. This rate of conversion was similar to what we observed in 212 at month 6, demonstrating consistency, reinforcing our confidence in the strength of the clinical data set we used in our NDA submission.
2nd, we observed the benefit in 212 in patients on ALLIS plus GBT from longer term treatment beyond 6 months, with 12% of prior non converters achieving culture conversion by month 6 and 312. These data further support the treatment of patients for at least a year results in more patients achieving culture conversion, which we believe is an important aspect of the value proposition of Allis. As a reminder, current guidelines indicate that once a patient culture converts, they remain on therapy for an additional 12 months. We also know through market research that many patients remain on guideline based therapy for much longer periods of time. In fact, the median time on GBT for patients entering in the 212 study was more than 4 years.
3rd, the 212 extension study has also shown durability of culture conversion is substantially higher for patients receiving ALICE plus GBT versus those patients treated with GBT alone. Durability of culture conversion is of particular importance as this is a focal point for full regulatory approval. The 2/12 interim data showed that durability of culture conversion 3 months off of all treatment was substantially higher in the ALICE plus GBT arm at 61%, compared to GBT alone at 0%. We believe an important aspect of the full approval of ALICE will be the FDA's examination of durability of culture conversion 3 months off all treatment. While these data were not included in our NDA submission, they are public, and we are prepared to discuss these findings with FDA if requested during the regulatory review process.
And finally, we believe these studies demonstrate a consistent and acceptable safety profile across both studies. As we previously shared, serious treatment emergent adverse events observed in INS-three twelve are similar to those in INS-two twelve. The safety profile remains consistent with that seen with the use of other inhaled antibiotics. Let me remind you that both the INS-two twelve and INS-three twelve studies remain ongoing. We anticipate the INS-three twelve study to be completed with top line data available sometime in late 2018.
Let me spend a few minutes on an exciting event for us coming up in a few weeks, the American Thoracic Society International Conference, or ATS, taking place May 18 through May 23 in San Diego. Awareness of NTM continues to grow across the treating community of health care providers, and ATS will provide another opportunity for us to further educate the treating community about our disease awareness efforts and our clinical results. First, we'll have an oral presentation outlining the results of our Phase III study of ALICE for the treatment of NTM MAC. These results will be discussed on Tuesday, May 27, by one of the principal investigators of the CONVERGE study. 2nd, we will have poster presentation detailing results on the 6 minute walk test, patient reported health outcomes, open label study results and predictive identification of individuals at risk for NTM lung disease.
We look forward to sharing these additional data with you and importantly to unveil this data at a forum which has increasingly focused on NTM and how to address the challenges associated with this disease. 3rd, there will be an oral presentation of an investigator initiated open label trial of ALICE in M. Abscessus lung disease. Finally, while at ATS, we will continue to interact with thought leaders to gather insights and further enhance our understanding of the disease and share learnings from all of our work in the field to date. These conversations continue to be important in building disease awareness and guiding us in our development of this important potential new treatment option.
As I mentioned earlier, we've made great progress on the regulatory front for Allis with the end of March U. S. NDA filing under Subpart H with the division of anti infective products. We should know by the end of May or early June when to expect a PDUFA decision, but we anticipate a 6 month priority review by the agency. This should result in a PDUFA date at the end of the third quarter.
As Roger will discuss in a moment, we are currently planning for a potential commercial launch at the start of the 4th quarter. We are also expecting and preparing for an advisory committee meeting prior to the PDUFA goal date, consistent with the FDA's practice of convening advisory committee meetings in connection with the agency's review of novel products in therapeutic areas with unmet need. We will continue to prepare for an adcom and look forward to the dialogue. Let me spend a moment on the progress of our geographic expansion. In line with our focus on Japan as the next priority market, efforts on this front have also advanced very well
over the past few months.
I have just returned with the team from a fruitful trip to Japan, where we met with over a dozen key opinion leaders in connection with the Japanese Respiratory Society meeting. This is part of our ongoing effort to further build awareness around the disease to support our geographic expansion strategy. We also gained further understanding of the local perspective on the treatment of NTM in Japan. The prevalence of refractory NTM lung disease is higher in Japan than elsewhere in the world, with approximately 15000 to 18000 refractory NTM MAC patients receiving treatment, more than are currently identified in the U. S.
Our process to advance the data package and filing strategy with the PMDA, including pursuit of orphan drug status, is ongoing. We look forward to providing further updates on our progress in Japan throughout the year. Turning to Europe. Compassionate use programs in several European countries have given a number of patients access to ALICE. Following a successful U.
S. Approval, we intend to establish a named patient program in Europe to allow access to the drug. While this program will be limited, nonetheless, these patients are fully reimbursed and our ability to treat them broadens our relationships with the treating community across Europe. As you can see, we are rapidly moving ahead with the preparation for the regulatory review process, the build out of our pre commercial organization and geographic expansion. These efforts will help to support potential U.
S. Approval, a successful U. S. Launch later this year and the global expansion of our organization. The Insmed team is also working to advance a number of other programs in rare disorders with INS1007 our next area of focus.
As we have noted previously, the program's initial focus in non CF bronchiectasis has been of particular interest to the NTM and CF treating community due to the significant amount of overlap in these patients. Development activities for INS1007 continue to advance, and we expect to accelerate these activities in the second half of this year. We look forward to sharing more details as these programs advance. Let me pause here and turn it over to Roger now for an update on our commercial activities, followed by Paolo who will cover our Q1 financials. Roger?
Thanks, Will, and good morning, everyone. Let me spend just a few minutes providing you with an update on our pre commercial efforts to date. We deployed our therapeutic specialist team at the end of March and have already made solid progress in expanding our care professionals' awareness of the disease. In the 1st 5 weeks, our therapeutic specialists were in the field conducting disease education. We have engaged with about half of our Tier 1 targets.
As a reminder, we are targeting just under 6,000 physicians. We are pleased that the experience validates the targeting work we conducted using the Symphony databases. While it's early, our engagements with our targeted physicians have been well received and they welcome the discussion to learn more about NTM Lung Disease.
We continue
to gather insights from
our engagements with the healthcare professionals and we will use that information to further enhance our preparation for the commercial launch. We are also actively engaging with payers through our key account director team to gather further insights about their view on NTM. Thus far, those discussions have been productive and to date we believe that payers are supportive of our efforts in the disease state and recognize the importance of access to a potential new product in the disease state with no currently approved therapies.
We've also been hard at
work in the build out of our patient support services that will allow for an efficient process by which a script that is generated and a patient receives that product. In addition, we have onboarded our ERIC HARRIS team of 10 patient support specialists who will play a critical role in ensuring the entire patient experience is as positive as it can be. We have an excellent set of partners who work with us through this process and we are well on our way to making the necessary investments to support patient access to Allis. And one final area of focus is the build of our commercial inventory for launch. Thus far, that process has gone smoothly and we continue to invest in the production of commercial batch quantities, which we will continue to build through the Q2 and beyond, so we can have a solid inventory of drug and device supply at the time of launch.
With an expected 3 year dating, we expect to build sufficient safety stock in preparation for our U. S. Launch. Collectively, having each of these critical elements onboarded and operational this early will go a long way towards ensuring we have a great launch when we're able to secure approval. I'm excited about where we are as a commercial organization.
This is a first great team and we are looking forward to the activities over the coming months that will bring us closer to the potential commercial launch of Allis later this year. And with that, let me turn the call over to Paolo to review the financials for the quarter.
Thanks, Roger, and good morning, everyone. Thank you for joining us today. I will spend the next few minutes reviewing the Q1 2018 financial results. This morning, we reported a net loss of $68,500,000 or $0.89 per share compared with a net loss of $37,400,000 or $0.60 per share for the Q1 of 2017. Research and development expenses were $30,100,000 for the Q1 of 2018 compared to $22,300,000 in the Q1 of 2017.
The increase was mainly due to an increase in external manufacturing expenses from an increase in additive production related activities and higher compensation and related expenses to an increase in headcount as compared to the Q1 of 2017. First quarter G and A expenses were $32,700,000 versus $13,700,000 for the Q1 of 2017. The increase was due primarily to higher investment related to our pre commercial planning activities for Allis, many of which Roger highlighted in his remarks and higher compensation and related expenses due to an increase in headcount as compared to prior year period. Cash based operating expenses for the quarter were $56,300,000 A reconciliation of our GAAP operating expenses to our cash based operating expenses is included in our press release, which is available in the Investor Relations section of our website. As you would expect, we anticipate our expenses will continue to rise as our efforts remain on the building of our commercial and corporate infrastructure as well as inventory and other activities in support of a potential product launch at the end of this year.
Capital expenditure in the Q1 of 2018 were $5,400,000 primarily related to the build out of long term Alice production capacity at 1 of our 3rd party manufacturing facilities. As a result, our total cash base operating expenses and cash expenditures were approximately 62,000,000 in the Q1 of 2018. We ended this quarter with $686,600,000 in cash and cash equivalents. This cash position reflects the net proceeds of $436,000,000 received through the successful public offering of the 1.7 5% senior convertible notes we completed in January of 2018. As a reminder, at the end of February, we paid our debt to Hercules Capital.
The total payment to Hercules, including the back end fee and early prepayment penalty, was approximately $58,000,000 This debt repayment resulted in an overall improved cost of capital. Currently, the return on our cash offsets the interest expense of the convert. Turning now to our guidance. We continue to expect that cash based operating expenses and capital and other cash investment will be within the range of $145,000,000 to $165,000,000 for the first half of twenty eighteen. This range mainly reflects spending for the ongoing INS-two twelve study, the follow on INS-three twelve study as well as continued regulatory and commercial investment to support ALKS.
The estimates also include expenses related to INS1007, including ongoing clinical activities. As we focus on and are guided by our upcoming milestones this year, we will continue to budget appropriately and utilize our financial resources responsibly. With that, I will turn it back to Will.
Thanks, Paolo. Clearly, we've carried the strong momentum of 2017 into the Q1 of this year. We continue to make impressive progress in advancing an important new treatment option with the potential to address a serious unmet medical need. We are excited about the many milestones ahead of us, and we at Insmed remain confident in our ability to execute as a team. I'd like to thank everyone for their continued hard work and dedication.
I also want to thank the patients and the physicians for their continued involvement in our clinical program. We've been excited to see a positive response from physicians who are looking to make a meaningful difference in the lives of patients. Now let's open the line and take your questions. Operator, can we take the first question, please?
And our first question comes from the line of Matthew Harrison from Morgan Stanley. Your line is now open.
Hey, this is Ishmael on for Matthew. Thank you for taking our questions. We have a couple on expenses in Japan. First, can you talk about how you think about commercial expenses in the second half of twenty eighteen? And if it should peak by the Q2 of twenty eighteen?
Also, how should we think about manufacturing expenses and inventory build on Zirpane? What remaining steps need to be completed for filing? And how much commercial spendactivities are going on there? Thank you.
So I'll just start and then turn it over to Paolo. But we're not going to go into detailed breakouts beyond the guidance that we've already provided for our cash consumption. And I think the way to characterize Japan is to say that we are going to be looking to put the ball control for that in the hands of the general manager, who we hope to announce very shortly. We've had a number of very impressive candidates that we've been looking at and I think we're close to being able to announce that in the not too distant future. And given the importance of that part of the world being owned by a team of local knowledge, we really want that person on board before we're starting to set up guidelines and direction on what's going to happen.
What I will tell you is having just come from Japan, it is an extremely interesting opportunity for us. I was excited about it before I went. Having just come back from JRS, Japanese Respiratory Society meeting, I am even more so. It is very clear that disease awareness about NTM in Japan is extremely high and that our ability to provide a potential product for that disease is going to be very well received by the community over there. As I mentioned during the remarks, there are more patients in Japan with a refractory NTM MAC than there are in the U.
S. So this is a very significant opportunity for us, and we're going to resource it appropriately. I don't think we have any other details on guidance, do we, Paolo? No.
No, Sufif. Okay. So I
think that's unfortunately, I can't be more specific in response to your detailed questions. With regard to Japan spend, you did ask about inventory build. As Roger mentioned, we are resourcing that very substantially as well. That investment is expensed because we're still in the developmental stage. So that's an important aspect of 3 year dating or at least we anticipate having that.
So anything we build now will be a nice safety stock at the time of launch. And anything beyond that, we'll be able to use over the course of the coming years during the launch time frame. So hopefully, that's helpful.
That was helpful. Thank you.
And our next question comes from the line of Martin Auster from Credit Suisse. Your line is now open.
Hi. This is Tiago on for Marty. Thanks for taking the question. So perhaps if you could just talk a little bit about some of the key learnings that you have had from physicians' interactions thus far, especially as it relates to disease awareness? And perhaps what are some of the key focus points for your physicians' interactions that you expect to have at ATS?
Thanks.
Yes. I'm going to actually turn that one over to Roger.
Yes. Great. Thanks for the question. I think as a reminder, we've had about 5 weeks of our therapeutic specialists out in the field and they've engaged with about half of our Tier 1 targets. And so we've taken some encouragement, I think, from those early interactions.
We're calling on about 6,000 physicians in total. So maybe the most encouraging thing for me is that the physicians we're calling on have these NTM lung patients, right. So one of the things in the rare successful rare disease launch is to be able to find these patients and make sure that they're available for treatment. That's something that we validated with these efforts. The physicians we're calling on have a strong interest in NTM Lung Disease and have the patients in their practice that they're actively treating.
And they self report the number of patients and that's very consistent with what we're seeing from the epidemiological data that we've shared with you previously. And so that's encouraging validation of what we think the size of the patient opportunity is. And they also report a substantial portion of those patients that are not responding very well to the guideline based therapy. So I think all of those things are particularly encouraging for us. The educational resources are very well received.
So our therapeutic specialists have access to the physicians. They're welcome to come into the office, talk about the disease awareness that really validates our decision to make the investment, to educate the healthcare professional community about the disease. And they particularly welcome because they now finally have some materials that they can provide to the patients about the disease where they had really didn't have anything before. So I think that we'll continue to learn from the experience we have with our therapeutic specialists. We're all very encouraged by the early experience.
And we continue to invest in our digital disease awareness capabilities. We've seen strong performance across digital channels, and we continue to see active engagement both from the healthcare professional side of things, but also from the patient side, interacting with our digital efforts.
And I'll just add on the ATS front. I think we're seeing a lot of enthusiasm from physicians on in regard to NTM. One of my favorite recent anecdotes is when I started at this company a little over 5.5 years ago and I went to the European Respiratory Society meeting and there was an NTM session being held, there were about 20 people in the room. At last year's session, it was standing room only with 1,000 people, physicians, waiting to hear the oral presentation on NTM. So I think it's a harbinger of what's to come.
Oftentimes, when you see whether it's PAH or IPF, a disease that has a drug that may soon be arriving that is going to have an impact on the disease state, it becomes the topic of discussion. And into this circumstance, we have found our very strong Phase III results set against the unfortunate failures in the non CF bronchiectasis arena where the Phase III trials for both bare necktar and erudigm griffles did not meet their statistical significance endpoints and were not approved. So this is the hot topic, I think it's fair to say, And that means ATS is going to be talking an awful lot about it. And from the physicians we've interacted with, there is just a lot of enthusiasm for the potential approval of this product and its impact on this disease.
Great. Thanks for taking the question.
And our next question comes from the line of Adam Walsh from Stifel. Your line is now open.
Hey, good morning guys and thanks for taking my questions. I've got a couple here. I guess given the possibility that FDA could grant to Alice either narrow label in the refractory patient population or I guess in theory perhaps a broader label that would include frontline treatment or naive patients. How are you planning internally for those potential two scenarios from a manufacturing and commercial standpoint? And then just a quick follow-up here, some clients have mentioned that prior filings for drug device combos have had a lower rate of first pass approval than simple drug filings.
Given that ALICE is a drug device combo, what are your thoughts there? Thanks.
Sure. I'll take a quick stab. The preparation on the CMC side is pretty simple. Just make as much as we can, so that we're ready for whatever the circumstance may be. And the reason for that is simple.
1, we want to get into the habit of having that full commercial production running constantly. And there are always adventures along that journey. But having said that, we're doing very well in that regard. I think we're going to have plenty of supply at the time of launch and with what we anticipate to be 3 year labeling, it really is not linked in any way to whatever label we may or may not get in our discussion. I will just mention because you brought this label concept and what's going to happen.
I think you put your finger on what AdCom is going to be all about. It's difficult and a little premature to be speculating on content or discussion. But I view ADCOM as a discussion of the label, not so much a debate about the approvability. I think that's an important distinction from perhaps some more recent adcoms and other context because our Phase III primary endpoint was so definitively surpassed. And I think also I'll just remind you, we're filing under subpart H where if you hit your primary endpoint and that's agreed upon, that's what you need to do to secure subpart H approval.
So I think this is going to be a discussion of label, not of approval. Drug device combos, we've heard this as they can be more challenging in some regards. I think here where we have an advantage is that this is a device that has already been approved by the FDA and most recently at the end of last year. So this is not some device that they will want to take another fresh look at. They just took a fresh look at it in the fall with the approval of a drug from synovion.
So from that point of view, I think we are belt and suspenders prepared and that will continue to be the case. We're going to continue to invest in preparation, etcetera. I don't know, Roger, if you want to talk a little bit about the commercial preparation for whatever the outcome may be.
Yes, absolutely. So as you might expect, we are contemplating both outcomes and in the case that we do get that broader label. I think we've done I know we've done some specific research with physicians and the value of Allis, I think the physicians see a very high value to the product. The highest value initially that they see in the place for therapy initially is overwhelmingly within that refractory population that we studied. Nonetheless, I think given the profile and given the unmet need in the disease state, if there was a broader label, I think you would see physicians' intent to prescribe to a broader population would come through, although not nearly as strong as a refractory population.
But to consider that
and to prepare for that,
as Will said, we are making as much out as we can. We're also engaging on our pricing research, thinking about the different label scenarios and what that would mean for appropriate pricing of the product and the value that the product would convey in both scenarios. We're also engaging with payers. And as we talk to them about the value of the product and the unmet needs in the disease state, we contemplate to them what a prior authorization, for example, might look like under a narrower label versus a more broad label. So we are preparing for both scenarios.
I think the good news from my perspective is we feel very confident in both scenarios that we'll have a strong opportunity given the value that Allis provides to the patients and the receptiveness of the physicians to the therapy.
And I'll just add one other thought on the interaction with the regulatory authorities. Of course, our enthusiasm as we approach Om is supported by the fact that we have every regulatory designation the FDA offers, breakthrough therapy designation, QIDP, orphan. As we mentioned, we expect priority review, Part H accelerated approval. We've got them all. And we enter into this AdCom with the discussions with that wind in our sails.
Hey, thanks for the color and see you at ATS. Look forward to it.
And our next question comes from the line of Joseph Swartz from Leerink Partners. Your line is now open.
Thanks very much. So you mentioned that payers appear supportive and recognize the importance of patient access to Alice. Does this differ according to whether a payer is focused on a Medicare plan versus a commercial plan? And I know you've mentioned the significance of launching off cycle for Medicare previously.
So how do these how does the feedback so far
jive with some of that early thinking?
Thanks. Yes, great. So, hi, it's Roger. Let me just say that we've recently conducted an advisory board with the payers and we did this with a number of large plans, pharmacy directors, medical directors from several key accounts. And I was really encouraged with the feedback from the advisors.
I think that they recognize the unmet need in this disease state. They recognize the need to educate around not just the accounts and actually their membership and their management, but also the physicians. They're very supportive of the efforts we're currently conducting and educating the physician community around NTM. I think overall, we see recognition that this is a fairly small population in the grand scheme of things. These patients are already in their systems and we've previously shared data where they know that these patients are expensive.
They're consuming a lot of resources and the available therapies are not particularly effective for these patients. So my conclusion is that payers really see a clear place for Allis in that right patient population. And we talked about the Medicare off cycle phenomenon, and I think that that's something that still exists. However, I do believe that in engaging with the Medicare payers, they see this as a very strong option. It will be very difficult for them to deny access to the appropriate patient and medical appeals process that we think we're going to be deploying, we'll be putting into place and supporting with our patient support system over the 1st few months of launch.
However, I do think that there's a possibility that we will see some off cycle adds in Medicare plans. And I do think that that's something that is maybe a little more encouraging than I had initially contemplated when we were laying out our plans. From a commercial perspective, it really is we'll see some possibility of some early adds in the commercial plans as well. They also recognize the value. I think the difference there will be just the kinds of plans that the commercial are selling through to their customers.
There may be some issues where they won't add new therapies or cover new therapies for a period of time. But overall, I would say very consistent feedback on the need for Alice, the recognition of the clinical trial results, endpoint. And as long as the appropriate patient population is identified for the product, I think we will have eventually those patients will get access. It's a matter of when, not if.
Great. Thanks for the added information.
And our next question comes from the line of Drew Barrow from Cowen. Your line is now open.
Hi, guys. Thanks for taking the question. Maybe back to the ad Com, beyond the label, the broad label, Will, what are some of the other things that you guys are preparing for? I know there's been some discussion amongst in the investment community about how FDA may perceive the functional data, the 6 minute walk. And any sort of tells from recent applications on how they might look at aminoglycoside safety?
Sure. So I think, look, it is difficult and I'll just caveat that as we get closer and closer to this event, we're going to be more and more reticent to be speculating because we don't want to be seen as provoking the agency or directing the dialogue. It's their adcom, not ours. We're there to be responsive, and we respect that process. Having said that, I think this is not a complex submission.
There's not a lot of debate about the data that is being presented. So it's why I turn to the idea that this is probably not an intense debate about approval, it's more an intense debate about labeling. And I think in that context, we go in with a great deal of confidence, having done well on our primary endpoint and having all those regulatory designations. The topics for discussion are always safety first and then efficacy. And on the safety front, again, as we characterized during our remarks, we continue to be very encouraged by the safety profile of this drug.
It's consistent with other inhaled antibiotics. We don't see anything distinct that as relates to aminoglycosides to your particular point. And I think remind everyone that we have released the data on hearing loss. We didn't see that in this study. So the consequential concern of using aminoglycosides for sustained period of time was not in evidence here.
That alone is an encouraging improvement in terms of safety profile. Didn't see nephrotoxicity. That also is encouraging from an aminoglycoside point of view. So I think we enter into this with a pretty solid feeling on the safety side. On the efficacy side, there's the primary endpoint, which is unequivocally achieved.
I think we've got the other secondary endpoints, 6 minute walk test, which everyone I know is well aware of, where we were able to show an improvement in 6 minute walk for those patients who culture converted. I think that's an important aspect because it does link the culture conversion primary endpoint to the functional benefit in a way that is demonstrated clearly in the study in a blinded fashion. And then beyond that, our time to culture conversion and patient reported outcomes. And in that last category, we weren't expecting to see a lot in the 1st 6 months of treatment. So I think overall, we these will all be discussed, I'm sure.
There'll be questions about them to
understand it more fully from the point of view of folks in the treating community. But let's say, folks on the panel are going to be ID and pulmonologists. And into that group, the data set that we have, I think, will be very well received as the appropriate kind of characterization of the drug as a safe and effective use for the treatment of refractory NTM. I hope that addresses the question.
Yes, very helpful. Well, thank you. And then on your most recent trip to Japan, did you have any regulatory interactions or regulatory consultant interactions? I'm wondering about what you're thinking of the regulatory timeline in Japan? Yes.
So we're putting more refinement on that until our GM
Just to place Japan into context for those who may not remember, before we went through our Phase III study, we actually visited with the PMDA, and we got their endorsement of the design of the Phase III trial. We received from them a specific number of Japanese subjects that they wanted to see in the trial, and we significantly exceeded that. They wanted 25, I think we had 43. And we have also said publicly that the sub analysis of those Japanese patients was statistically significant on the primary endpoint. In fact, it was there was a zero response rate in the guideline based therapy arm and I think in the mid-twenty percent on the treatment arm with ALICE.
So very strong data in Japanese subpopulation into a community where treatment of NTM is widely understood and pursued. From here, we will file for orphan status. We will file for approval as soon as we can translate the NDA into a J NDA. That process takes some time and obviously quality first, timing second. But having said all that, what we have seen from Japan thematically is an embrace of the rare disease products and diseases that seems to be something that is that you've probably seen with some other companies.
But we think this is a very favorable environment to be entering in. So that's why given the enormity of it, we're so excited and encouraged by this most recent trip.
Got it. And last quick question. Can you just briefly go over the status of the inspection status or GMP certification status of your manufacturing sites? Were they relatively recently inspected? And are you expecting other inspections closer to the approval date?
Yes. So we're I mean, it is a part of the review process for the FDA to engage in potential inspection of facilities and the same with sites that are involved in the clinical trial. We don't have any specific comments on if and when that's going to take place. But I will tell you that we have certainly resourced the heck out of being ready for such an eventuality, which is always anticipated widely by companies. So I feel very good about where we are in that regard for all of our different facilities that may be the subject of their attention.
Got it. Thanks for taking all the questions.
Sure.
And our next question comes from the line of Lisa Bacall from JMP Securities. Your line is now open.
Hi, good morning. I wanted to ask about and just follow-up on some discussion. You said the main, you think kind of the conversation now will relate to the label. Can you maybe run through sort of base case, no worst case, best case scenarios in terms of how you think the label could play out? Thank you.
Sure. Well, I don't know that there's a best, worse and mid case. The way we think about this is the study was designed to look at refractory NTM MAC patients. That's what the data clearly demonstrates. Under subpart H, we feel we have a clear path to approval there, and that is what we are assuming we will end up with following our discussion with FDA.
There has been some precedent recently in other divisions where FDA has gone beyond the refractory population and expanded the label slightly. Here, I'm thinking of SOLIRIS for myasthenia gravis, where they asked for refractory and were given a broader label. So I think it's prudent to contemplate that there could be a broader label, but it is not my expectation going in that that's where we would end up. Having said that, there's a logic to it because we're talking about the treatment of bacteria and a bacterial infection in a refractory patient don't differ from a bacterial infection in a non refractory patient. They just are less responsive to the guideline based therapy regimen.
So there is a logic to granting a broader label and that certainly seems to be some of the spirit in certain divisions of the FDA that has been in evidence recently. So I think it's prudent to be prepared for it. But just to be crystal clear, our
assumption as we come out of
ADCOM and our approval PDUFA date with a label to treat refractory NTM MAC patients.
Thank you.
Of course.
And at this time, I'm showing no further questions. I would like to turn the call back to Will for any closing remarks.
Thanks everyone for joining us this morning. Look forward to giving you updates on the next quarterly call and seeing many of you hopefully at ATS.
Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program and you may all disconnect. Everyone have a great day.