Thank you for joining us on this our first day of our 2024 healthcare conference in Las Vegas. I'm pleased to introduce Will Lewis, Chair and CEO of Insmed, one of our more popular names ahead of some fairly significant catalysts. So thank you, everyone, for joining us. We'll open the floor up for some questions at the end, but chat for about a half hour. So with that, Will, thanks for joining us.
Thanks for having me, Jason.
Perfect. Well, you know, I think let's start with arguably the biggest catalyst, the readout of the phase 3 ASPEN of DPP1 inhibitor, brensocatib for bronchiectasis. Maybe just to reorient investors for whom this may not be top of mind, could you please provide a brief background, a recap of the program? I mean, what is bronchiectasis, what role do neutrophils play, and why could DPP1 be a validated target?
Sure. So DPP1 inhibitor that we have, brensocatib, we got from AstraZeneca back in 2016, and it was originally licensed to us because the belief was that it was going to be effective potentially in bronchiectasis, which at the time was thought to be an orphan respiratory condition, same call point where our infrastructure was already operating. So a pretty logical overlap, and it seemed to make a lot of sense. What was not understood at the time is the reason why DPP1 might be effective, and that data really came to light shortly after we in-licensed it, much to the chagrin, I think, of AZ, although in fairness to them, it wasn't known at the time they outlicensed it.
So this was a sort of a seminal paper written by Chalmers, a physician up in Scotland who correlated reduction in neutrophil elastase with reduction in pulmonary exacerbations, which are the primary damaging manifestation of bronchiectasis. This is a pulmonary condition which is typified by the inability to clear the lung, the resulting probability of increased infection, damage to the lung, and then what are called exacerbations being a byproduct of that interaction. An exacerbation is the best way I can describe it: like a heart attack for the lung. It does permanent damage, and it is really the focus of all treatment and intervention. You want to prevent those exacerbations from happening.
Neutrophil elastase, alongside other neutrophil serine proteases, are thought to have a role in it. It's much better understood now, but at the time were thought to have a role in the inflammatory cascade that leads to these exacerbations in the setting of bronchiectasis. So through the paper that he wrote and the work that he had done, and then subsequently through our phase 2 study and other work that's been done by other academics and physicians around the world, it's begun to be clear that there is a belief that there is this, or not just a correlation, probably a causal effect between reducing NSPs, which include neutrophil elastase, cathepsin G, proteinase 3, and the resulting inflammatory cascade that leads to these exacerbations.
What's fascinating about DPP1 and why it's such an interesting readout that's about to come forward is if it works in bronchiectasis, it may well work in other neutrophil-mediated diseases, diseases like chronic rhinosinusitis without nasal polyps. We're, we're running a phase II study now, hidradenitis suppurativa, a dermatologic condition, where we're going to kick off a phase II study at the end of the year, assuming ASPEN is successful. So DPP1 is really a mechanism we're unlocking that has its first approach in bronchiectasis, and which we've been working on for eight years now, but we're coming to the end of what has been a long and very focused development period that really, I think, is going to break open a whole new mechanism of action.
Got it. Well, I think that's a great segue. I, I think there have been some questions about the mechanism of action, particularly as candidates advanced by, say, GSK, AstraZeneca, and Bayer haven't had much success. How does brensocatib differ? I mean, when you look at the literature, there are suggestions that it may have better tissue penetration, especially into the marrow where, neutrophils are matured and packaged. It's reversible as well. Are these sufficient to, to maybe explain the differences in, in outcomes?
So one of the things I always look for whenever we're considering a novel medicine or a new mechanism of action is actually a genetic precedent for that kind of intervention. In the case of DPP1 inhibition, there's a disease called Papillon-Lefèvre syndrome where total inhibition of DPP1 has some clinical manifestations in the form of hyperkeratosis and gingival disease. These are the manifestations of complete DPP1 inhibition. We know what the, if you will, off-target effects are from intervening in this way. What we've done with our DPP1 inhibitor is look for gradual onset of inhibition, reversibility, as you point out, and partial inhibition. So the combination of those three things we think really creates, if you will, a Goldilocks intervention that could create some benefit in inflammatory cascade without doing off-target damage or issues of side effects.
We saw that in phase II. The dropout rate in placebo was higher than it was in either of the treatment arms. It was remarkably, looked remarkably safe from that phase II study, and that was incredibly encouraging as we went into phase III. So I think, ours differs from GSK. GSK was a very potent inhibitor. It had rapid onset, as you point out. It was not reversible. So any side effect profile, the concern was you wouldn't be able to alleviate that, that treatment effect. So there's just a lot to like about the distinction between our DPP1 and others. It's also fair to say that after GSK who was the lead at the time pulled their drug and decided not to develop any further, people abandoned the class. But it's important to remember that they were pursuing this class to go after asthma and COPD.
These are diseases where there are a lot of approved drugs. The hurdle for approval and commercial acceptance is pretty high. You have to have a very benign profile, easily administered, and through that lens, what GSK saw in phase I didn't make any sense to go any further. What we saw with ours is we didn't see that side effect profile. And in the field of bronchiectasis, where there's nothing approved, the risk-reward is skewed very differently. So, we've sort of come out at the other end of the tunnel here with a really a best-in-class asset, we think, that could be the first-ever approved therapy to treat bronchiectasis.
Got it. The phase III ASPEN, you set up to look primarily at pulmonary exacerbations. I think there's been a fair bit of confusion on the different outcome scenarios that you could have. Maybe just, again, for context, could you articulate what these three different scenarios are in terms of where the p-values sit, what those correspond to in terms of pulmonary exacerbation reductions, and then what, what implications, what are the outcomes based on, on that level?
So we sit here today with a lot of conviction that we're going to have all the answers with this phase III study. That's not always the case with the phase III program, but our phase III program is enrolling 1,700 patients, roughly. That is more than 60% larger than the next closest combined twin phase III program that has preceded it. So we're going to have a mountain of data that we can, work through to understand, what the treatment effect is. As a consequence of it being designed as a single phase III study, the p-value we need to clear is 0.01. We need to be lower than 0.01. We've brought forward two doses.
If either dose is lower than 0.01, we have a winner, and we have the first-ever we believe we have the pathway to the first-ever approved therapy to treat bronchiectasis, which is a massive market opportunity. So that's the hurdle we need to clear. We have looked at all sorts of gradations around that in the unlikely event or unexpected event that it comes out with a different result. What might those be? If we were below 0.05 as opposed to 0.01, then typically you would say you need two well-controlled studies that are below 0.05 to get approval.
Because our phase II WILLOW study was statistically significant at the 0.05 level and numbered more than 250 patients, we asked FDA, "Could we file with ASPEN and WILLOW combined, looking at 0.05 as the threshold, and submit those for review?" And the FDA said, "Yes, it would be a review issue. They would not reject the filing." That's a really important open door in a world where ASPEN ends up being below 0.05 but not 0.01. And that unlocks the possibility that we could have a path to an approved drug at a more modest treatment effect, that still would be the first-ever approved in this condition. When we think about what is the treatment effect we want to see, we'd like to see north of 20% reduction.
We know the regulatory threshold is about 15%, and we also know that if we were below 15%, it's not going to get rejected out of hand. It's probably going to represent a different profile commercially than would otherwise be the case. So we still think there's a path to approval in that scenario, but it just would probably result in an adjustment in price, an addressable market. But we would still file if we are below 0.05 with either dose. That's the point I want to make sure people understand.
Got it. And the 20% reduction in pulmonary exacerbations, does that represent the 0.01 p-value, and 15% 0.05?
So, a lot of variables go into that, as you well know, but we think right around 20% reduction is both clinically meaningful from an enthusiastic investigator's point of view and from the point of view of where we think our p-value would result. So if we were at less than 0.01, we could get down to as low as the low 20s.
Got it. In terms of your market research, what are pulmonary pulmonologists likely to key in on here? You know, fundamentally, if the reduction is closer to 15%, given that there's really no other good treatment option, you know, what sort of use do you think you would see?
So we'll have to look at that through the lens of the complete dataset, which would include, you know, not just the effect on pulmonary exacerbations but the side effect profile, the safety profile. So far, that has been remarkably encouraging, and that gives us a belief that physicians would be willing to try this medicine for patients that are on the more severe end of the spectrum. And in that case where the reduction is more modest, we would probably also want to look at the distribution to see, you know, are there outliers that are doing better? We would think that the instinct on the part of physicians would be to go after those more severe patients or those that appear to have a profile that are responsive to the medicine.
But again, I want to emphasize, this is in a world where we're below the 20% threshold. We don't think we're going to end up there. We think this drug is going to be a winner. If you look at phase II, the lowest level of reduction we saw was 25% in the 25-milligram arm. The higher reduction we saw was close to 37%, and that was in the 10-milligram arm. So there's a lot to like about the phase II proof of concept study demonstrating that DPP1 inhibition has a treatment effect on the most important outcome measure, which is pulmonary exacerbations. As we go down in efficacy, so too would you think that value for money. You would probably come down in price. You would come down in perhaps the number of patients where this would be enthusiastically tried out. That's perfectly acceptable.
At the baseline, where we're north of 20% reduction, we think there's 1 million patients addressable at the time of launch between the US, Europe, and Japan, where we have commercial infrastructure today.
Where do you think the floor is? I mean, I have to imagine based on, you know, your word choice there, you know, heart attack of the lungs. You know, for a condition that's chronic, each exacerbation causes permanent damage. Is there not value for a drug that reduces exacerbations, you know, north of, say, you know, 10%?
I think there is. And my only reason for not emphasizing that is because the more we talk about that lower data scenario, the more the street starts to think that that's what we think is going to happen. And I want to be really clear. We continue to have a lot of enthusiasm and belief that this is going to do better than 20% reduction. If it ends up in, in the category where it's north of 10%, once again, it's, it's a, more of an assessment, in my mind, of market access, physician enthusiasm. But as you rightly point out, there is nothing approved for these patients. And the treatment burden here, this is a once-a-day pill. The safety profile was very good in, in phase II, and to date, it has been very strong as well in phase III.
I think we are set up here for a very, potentially massive outcome that will really rerate the entire company.
Got it. I wanted to circle back on one of your other comments regarding safety and tolerability. Is the primary concern here, these dental, skin, and infection rates, owing to the mechanism of action, or should we be more concerned about, say, discontinuation rates?
I think it's the former. I would want to be clear, when we talk about the side effect profile that's seen from total DPP1 inhibition in the genetic condition of Papillon-Lefèvre syndrome, that gingival disease and the hyperkeratosis skin manifestation, those are things we looked for in great detail in phase II and didn't see in any degree that was concerning. That's a really important point because those were adverse events of special interest we tracked very carefully. The question about infection rates, we looked at that very carefully in phase II, and we did not see that either. That's something you always want to keep an eye on when you're tinkering with a neutrophil in any way. Happily, we didn't see an effect there. So we took the same two doses we had in phase II and brought those forward.
That's why we have a lot of conviction that the risk-reward here heavily favors approval, even in a scenario where the treatment effect may be less than what we would all like to see.
Got it. You've guided toward a potential peak of $5 billion. Wanted to clarify what that includes in terms of the outcome of ASPEN, which indications and, I guess, which scenario is that?
Yeah. So in the scenario where we get at least a 20% reduction and our p-value is below 0.01, we're on track for that number for the bronchiectasis indication and the CRS without nasal polyps indication. Phase II study for that is underway. We've said publicly that the combination of those two indications would result in peak sales north of $5 billion in revenue. And I'm very comfortable with that number today.
Got it. In sort of a mid-range scenario, what does that, that outlook look like, at least in terms of peak potential? You know, when do you start to revisit the opportunities in, you know, the more I&I-based conditions rather than, you know, less pulmonary?
Yeah. I think, as we begin to drop below lower in efficacy, we would not abandon these subsequent indications. We would just want to measure our degree of investment there until we saw full approval in usage and had a chance to really study the full dataset. So I think cautious optimism would be the word or the phrase as we are coming out of a world where it's not 20% or more, but there's still a treatment effect. We would assume that treatment effect would carry over into any neutrophil-mediated disease. And there's no reason to think it might not be equally or more effective in CRS without nasal polyps than it is in bronchiectasis, which is a disease that has a lot of things going on in it.
Got it. Maybe real quickly, can we discuss some of the puts and takes regarding pricing, especially when considering dynamics about reaching, you know, more, more mild patients or patients with more mild disease versus, you know, potential payer pushback?
Yeah. I think one of the things I'm really happy about is that we've already started the investment and the effort to speak to the market access world. We brought on some really world-class talent in that arena along with medical affairs, folks that we've hired to go out and educate the market about the disease state, to listen to them about how they would perceive, you know, the ability to have an influence on this disease and how that all comes together to help us formulate an understanding of the kind of impact we might have and what that might be worth. I can sit here today and tell you that we are very encouraged on all fronts by both the degree of enthusiasm for this mechanism on the part of the treating community, the patient community, but also the market access community.
I think this is going to be a drug that is going to be well-received if it finds its way to full approval, as we expect it will. And when we talk about pricing, we've given guidance to the outside world that we think, you know, a floor pricing in a world where we get at least a 20% reduction in exacerbations would be somewhere around where Fasenra prices today. And that's for a eosinophilic asthma treatment that AstraZeneca has.
Got it. Speaking of AstraZeneca, in March, the company exercised its second option to license brensocatib for COPD or asthma. Can you walk us through what this means and what the implications are?
Not surprisingly, after the data came out that indicated the DPP1 may well have benefits not just in bronch but in other areas, part of the agreement with AstraZeneca included their ability to initiate at their, on their decision, a discussion with us about the potential to develop the drug in COPD and asthma. We've said publicly that they've activated that second option to begin that discussion, and we will continue to have those conversations in good faith.
Got it. Maybe with one more question on brensocatib, can you remind us again on the timing of the readout? You know, we have ATS coming up very, very soon. Should we start booking our flights to San Diego?
No. In fact, what we've said is, or we're, we're willing to say today is that we will not be at ATS with the data. Unfortunately, we, just this is the very beginning of the 45-day window we've provided. It's going to we want to make sure we get this right. We want to make sure that we are able to have the data in, in the kind of condition it needs to be for submission and approval in a world where we think it will be positive. So from that perspective, this, we can tell people they, they don't need to book their flights to San Diego for that reason. We do have data at a plenary session on ARISE, which showed an 80% culture conversion rate for our other commercial asset, ARIKAYCE. So I would draw attention to that.
We have some additional data on WILLOW and, indeed, some additional data on TPIP. So there's lots to see there that isn't the ASPEN data. So if you have your ticket, I'd say keep it and go and check out that other data. But, if you were only going for ASPEN, then you can get the refund.
Perfect. Wow. Let's switch gears to TPIP. This is your prodrug of treprostinil, a very established vasodilator of the prostacyclin class for PAH and PH-ILD. Maybe, you know, you referred to it as a potential category killer, assuming some background here. Is the value proposition primarily in a lower administration burden or improved tolerability, or, or are you assuming that, that there could be potential for greater benefit from exposure to the underlying vasodilator?
So it's both. And that's what makes this particularly interesting drug. We are once a day covering 24 hours of exposure and administration. So what that means is we have a lower peak and a longer trough in terms of the profile of this drug. Patients are kept in a vasodilatory state, experiencing the vasodilatory state for a 24-hour period. That means for the first time, they're getting nighttime coverage. During the period of administration, we actually measure all of the different metrics we look at in this at the trough level, so after 24 hours—24 hours after the drug has been administered, and it provides a really exciting option to be able to give these patients once-a-day dosing with 24 hours of coverage compared to the best available, which is 4 times a day with no nighttime coverage.
In addition to that convenience factor, we are looking for better clinical results. And I think the data we put out just recently for TPIP and PH-ILD and PAH is strong enough to suggest that we'll be able to accomplish that. And it's really not too much of a stretch to think that because we are getting these patients to much higher dose levels of the underlying moiety than anyone else can accomplish. When I say much higher, at the highest dose in the recent Phase II data, where we got close to 80% of the patients, it's 60% more underlying treprostinil than the next closest highest dose drug available.
So for treprostinil, I think it's fairly well established that efficacy is strongly correlated to exposure. So, you know, given that you are also looking at a protocol amendment that would increase potential dosing to 1,200 over 1,200 micrograms, you know, how far do you think you could press the dose?
So this is something that we were brought to do by the key opinion leader and investigators in the PAH community. It speaks to the excitement and enthusiasm for this compound. We talk about this as a category killer because, as far as prostacyclins go, there's nothing else that's out there that could be a once-a-day. There's nothing else out there that gets to these levels of dosing of underlying treprostinil, nothing even close. At our current highest dose of 640 micrograms, as I mentioned a moment ago, we're 60% greater than the highest dose that's available using Tyvaso. At the conclusion of that dosage work, the AE profile was so benign in the minds of the KOLs, they encouraged us to once again go even higher to double that dose. So we have put through a protocol amendment.
In many of the countries where we're administering this trial, others will follow that will take this in the open-label extension for PAH up to 1,280 micrograms, which is a very significant escalation of additional drug. It's a very exciting thing to think about. The blended blinded data we have right now at the, in some in multiple cases, we're already at 640 microgram max tolerated dose target. We're already seeing some patients, with PVR reductions that exceed 60%. I'll remind everyone that sotatercept got to 34% on its best day as, on an average. So those outliers suggest that this drug is really going to have a big effect. And if we can go to double again that dose, we're talking about a potential game changer for these patients. This is a fatal disease. So this is a big deal.
In a world where sotatercept is widely adopted, we see this as a combination product, and we see this as the prostacyclin that is the go-to in the class. That's why we call it a category killer.
Wanted to tease this out a little bit more. During your phase or first quarter update, obviously provided some data. I think upwards of about 80% of patients both in the PAH and ILD studies managed to get to that high 640-microgram dose. Of that 20%, was that an issue due to the very rapid titration? Was there another issue there? I mean, ultimately, you know, how many patients do you think can get up to those extremely high doses?
So the way the protocol is set up, that titration scheme to get up to the max dose must happen in 5 weeks. It's a very abrupt time. It's a 16-week study. And we wanted patients to be on their max tolerated dose as determined in the first 5 weeks so that we could watch their performance for 11 weeks. In the real world, they would have more than 5 weeks to get to that max dose. And I suspect, given that we saw 90% of them get to the penultimate dose of 480 micrograms or whatever it was, that we could probably get everybody up to the max tolerated dose. Or certainly, that would be our aspiration. And it's what gets key opinion leaders really excited. I do want to point out, that there's a lot of data in here that's very exciting, particularly on the PH-ILD side.
But these are very sick patients. And so some of the patients that didn't manage to complete the study are for reasons that are quite severe or unrelated to drug, things like there was one patient who had a subdural hematoma because they fell and hit their head. There's another patient who had lung cancer. These are not drug-related events that we're talking about here, but it also speaks to the underlying severity of the patient population. And then one final caveat on all the TPIP data, both PAH and PH-ILD. These are small studies. So there is variability, and there is limitation in interpretation. But there's no question that the data that we've seen from both of them is incredibly encouraging.
We've seen that manifest in an increased enrollment rate as a byproduct of sharing some of these blended blinded data with the key opinion leaders and, in particular, on the heels of the PH-ILD top-line results, which are encouraging us to aggressively go into phase III as quickly as we can.
Got it. You mentioned earlier, of course, sotatercept's approval. It's one of the, I think, more momentous, occurrences in, in the, PAH field. A lot of debate over what happens to the prostacyclins. Maybe if you could just comment, where do you think TPIP, if approved, would slot into the treatment paradigm here?
Yeah. Wherever sotatercept is used and a patient continues to would benefit from additional PVR reduction and NT-proBNP and other markers that the physician would like to see improve, we think this would be the combination therapy of choice. This is already today a combination market. So this is not a new direction that physicians would be going. They would be adding a prostacyclin to sotatercept. Sotatercept, now owned by Merck, they've already come out and said they think this will extend patients' lives. If that happens, we're talking about patients living longer and benefiting from that therapy, all the more reason to add a second therapy to try to extend that opportunity even further. To be clear, we don't have any data to support that claim today, but that would be our ambition over time.
And certainly, if you're going to add a prostacyclin, you're going to add the once-a-day that gives you 24 hours of coverage over any other offering in that category.
Perfect. Well, maybe just real briefly, if we could move to ARIKAYCE, look, if you go back to sales growth coming out of the pandemic, there's been an impressive 23% CAGR. What is necessary to maintain this upwards trajectory, beyond the first-line setting, which we'll get to in a second? What growth levers are still available to you?
So the first thing you need is a great commercial team and, and, a client-facing team. And we have that on the medical and on the commercial side, with ARIKAYCE. And that's critical to understand, not only the continued growth in this market opportunity, but the way that dovetails perfectly into this opportunity in bronchiectasis. It's the same call point. All the relationships we've developed, all the success we've had with ARIKAYCE, which has been substantial, leads into supporting this next opportunity that is so exciting where we'll be seeing data soon. And I would just say, as we look forward, we think the growth story of ARIKAYCE continues unabated into the future. We see good trends and saw double-digit growth in Japan, Europe, and the U.S. And in the case of the U.S., this is a drug that's been on the market for six years.
So it's really a testament to the unmet medical need, the capabilities of the team, and I think, the opportunity that's represented by the drug. And I'll just finish by saying, this is just the beginning for that asset because we had ARISE data last fall that suggests we're going to be able to go into front-line patients, which are, at least 3-5 times more numerous than the refractory patients we currently treat. So this, this drug has a lot further to go.
A great segue. You know, obviously, ARISE convincingly established an appropriate PRO, which has sort of been an overhang on, on moving to that first-line setting, while also reaffirming ARIKAYCE's efficacy, which you alluded to earlier with regards to ATS. So, you know, to the extent that you can say, how plausible is an accelerated approval pathway in the US?
That really is a decision for the FDA, as you might imagine. We think there's a case to be made there. We intend to make it. We have positioned that the ENCORE study, which is the other phase III study that's currently ongoing, will be required for full approval. But we think there's a legitimate shot. And if FDA is amenable to considering that, the ARISE data showed an 80% culture conversion rate, which is the objective of the treatment, in the first six months after use in front-line patients. To put that in perspective, we saw about a 30% culture conversion rate in refractory patients after six months of treatment. So the simple way to think about this is, if you wait to treat these patients, you're going to have a lower chance of converting them, later on than if you treat them upfront.
It's a very exciting opportunity, and the data lays the groundwork for that. We hope the FDA will consider it.
Perfect. Well, I think that's it for time. I wanted to thank you so much for joining us up here and for the insightful debate.
Thanks, Jason. Appreciate it.