Great. Hi, everyone. Thanks for joining us. My name is Leon Wang, and I'm covering mid-cap bio over here at Barclays. I'm pleased to be joined by Sara Bonstein, the Chief Financial Officer of Insmed. Sara, thank you for joining us.
Yeah, thanks so much for having us. Really appreciate it.
Definitely. You wanna do a little intro with about Insmed, and then we can get into questions?
Sure. I'll be happy to give you an overview of, you know, high-level overview of the company. As you know, our focus is serious and rare diseases. When I, as we think about our North Star, the patient, it's really about how do we develop either best in class, first in class, best in disease, first in disease drugs with the focus of impact to our patients. How can we have the best impact to patients? As we take those as our guiding principle, we have broken down the company into four pillars. Our first pillar, ARIKAYCE. ARIKAYCE is a commercial product in NTM, refractory NTM lung disease. We are commercial in U.S., Europe, and Japan and have guided to revenue of $285 million-$300 million this year.
In addition, we are underway our label expansion study into frontline, which would, assuming success, result in a multi-fold increase, and we'll have data from our frontline program third quarter of this year. Our second pillar, brensocatib. That's our DPP1 inhibitor that we in-licensed from AstraZeneca back in 2016. That program has a couple different indications. Bronchiectasis is our leading program, which we are in pivotal right now. We will expect to see enrollment in that very large phase III program this quarter and look for top-line results second quarter of 2024. Then we will also look to start our phase II in CRS without nasal polyps. Our third product, our third program, TPIP, treprostinil palmitil inhalation powder.
We have two phase IIs ongoing today, one in PAH, one in PH-ILD, where we will look to provide data second half of this year on blended blinded data on how high can we titrate up to. As well as first half of next year, we'll look to provide top-line results in ILD. Lastly, our fourth pillar, which we refer to as our early-stage research, we will look to have an R&D day May 8th, where we really dive into all the different facets we have going on in our research engine and be able to provide more information then. All of that is backed by a very secure balance sheet, over $1 billion of cash to allow us to reach these catalysts.
Great. Thank you.
Yeah.
Why don't we kick off with ARIKAYCE. You came off a very strong year of sales, but it's interesting in terms of the sales for this product. You've launched before the pandemic, then you had two years during the pandemic, which was very much, you know, took away your main prescriber base. As you think about the U.S. coming, you know, out of COVID, I think 2023, pretty much COVID is an afterthought at this point. Where do you see the sale increasing on the margins? Like, what patients do you think you'll be able to capture? How have you adjusted your commercial sales force or any sales strategy to basically make guidance?
Yeah. Yeah. We were really proud of the achievement in 2022. We put up $245 million, which represented a 30% growth year-over-year, which was the goal we set at the outset, so really proud of the commercial team and the broader global team to be able to reach that goal. In 2023, we have now put out guidance of $285 million-$300 million. Continued momentum, continued growth. In the U.S. specifically, we are entering our 5+ year of launch. We launched back in 2018, and we really kicked off with a remarkable start, putting up, you know, well over $130 million in its first full year of launch where the Street thought we'd put up about $50 million.
Really, 10 rare disease launch. COVID was obviously a challenge across the board for folks, especially for a respiratory drug. What we found in that time is we were able to continue to show consistent performance, which I think was remarkable knowing that diagnoses rates were down. As recently as last year, now be able to return to growth in the U.S. We grew about, you know, 15%, 17% in 2022, which was remarkable on a standalone basis. U.S. sales force is now fully back to pre-COVID levels. We do believe this is a commercially sensitive product. Our sales force is now back to pre-COVID levels. It's wonderful getting access to physicians.
I think the headwind that still exists, this isn't Insmed or ARIKAYCE specific, is just the healthcare industry in general and the shortage of healthcare workers and available appointments and those types of things. The headwind that patients may experience, I'll say access to their physicians still exists. We have to remember, these are refractory patients that have established relationships with ID docs. We've been really encouraged by the performance to date, as we enter 2023.
Gotcha. In terms of quarter-over-quarter performance, do you see any potential seasonality trends that may be, potentially more notable now that we're coming out of COVID versus being in COVID where everybody was kind of just stuck at home and with limited contact with, you know, outdoor activities and those type of things?
U.S. specific or more broadly?
U.S.
With U.S.?
Yeah.
Yeah. Perfect. Perfect. What we see as all rare disease drugs, you always see Q1 is, we have the donut hole. That is, you know, again, ARIKAYCE specific, what we see historically, and we would have no reason to believe that would be different this quarter. That's really the only sort of seasonality component I would mention. You can say are we year five of launch in the U.S.? Are we in year three because of the COVID entrance over those last two good years? Our commercial team is really focused on how can we sort of operationalize like we are in the third year of launch and continue to have that work.
Gotcha. Japan is a key territory for ARIKAYCE. In 2022, that country's been hit by COVID. Really the progression of how they're coming out of COVID is different from what we're seeing over in the U.S. Can you talk about kind of what to expect in Japan being such a, you know, it's gonna be more and more of a revenue driver and quite frankly, it seems to be perhaps at an earlier stage. Well, it is at an earlier stage in launch. Now are we looking to, perhaps do 30%+ or anything that can kind of help quantify what your expectations are?
Yeah, yeah. Absolutely. Japan was obviously an important contributor to our revenue last year. Put up $55+ million, and had a lot of headwinds. Japan, with COVID, I think last year, early this year, they were on their eighth wave, ninth wave of COVID. Our Japanese colleagues were in a position where they needed to launch this product in the middle of COVID and in the middle of lockdown, and we're still able to produce, what I would consider, you know, a meaningful contribution to the global number, you know, that $55+ million last year. As we progress into 2023 and beyond, I believe that there is continued opportunity for growth in Japan specifically.
While I can't quantify it, per se, because we kind of just provide that guidance at the global level, what I can say is Japan has a lot of opportunity. 15,000-18,000 diagnosed patients, actually slightly higher than the U.S., patient numbers. The patients are there. This is something they screen for annual physicals. This is something that the Japanese regulatory authorities asked us to file early for. They want this drug. I think the access to physicians has been a headwind, because the country has been locked down. I had the opportunity to finally get to Japan last month, that was wonderful to be able to see and be with the team there. Access is opening up.
It is slower, and I really see, believe that the second half of the year will be a key growth opportunity for the Japanese market.
Gotcha. That's perfect. Why don't we move on to ASPEN? As we get closer to read up in 2024, how has your level of confidence evolved, let's say, from when you initially started the phase III, and now we're here? Has there, let's just say, been anything that you were surprised about throughout the enrollment process or anything you'd like to highlight right now?
Yeah. As a reminder, our ASPEN program, that's our phase III program in bronchiectasis. It's an over 1,600 global phase III. We had New England Journal publication off of our phase II WILLOW data, so obviously a lot of momentum in the space. No approved therapy for these patients. On the outset of this program, we started enrollment in December of 2020. You know, COVID had been with us for a period of time at that juncture, and we were launching a global broad respiratory phase III program. The speed at which we've been able to enroll this program, to put it in context for you, our phase III is over 50% larger than other development phase III programs in this space.
We have been able to enroll this program in just about the same amount of time, a little over two years, and that was during a global pandemic. That gives me a ton of confidence on the need for this drug from for patients and the acceptance of the medical community to welcome this drug and be able to enroll such a sizable program. We probably could have enrolled it faster, but we thought of quality first. We feel capped on countries, so no one country would enroll, you know, a disproportionate amount of patients. We were very thoughtful on the exclusion criteria around the strictest definition of what an exacerbation is. We powered this program to win.
Obviously, the mechanism needs to work at the end of the day, but the way our philosophy is on drug design is design the development program to win. Don't design it to have any gaps. We have overpowered WILLOW, our phase II, 80% powered for a 40% reduction. We powered this one 90% for a 30% reduction. If there's one complaint someone can give me is you're probably enrolling more patients, so it's theoretically it's taking longer and costing more. That's a complaint I'm willing to take to be able to give the drug the best ability to be successful. Complete screening. We announced that last month on earnings. We remain on track to complete enrollment by the end of this quarter.
We remain on track to share data top line second quarter of 2024. It's remarkable that we've been able to stick to those timelines that we set out right from the beginning of this program.
Digging a little bit more into ASPEN.
Mm-hmm.
In WILLOW, you talked about hyper-exacerbators.
Mm-hmm.
That might have influenced the readout for not having a clear dose response.
Mm-hmm.
Can you talk about kind of, what you've done to, perhaps what you've done in terms of the hyper-exacerbation patient population? Should we see a stratification, on the readout or before the readout on how many exacerbations that these patients have at a, from a baseline perspective?
One of the learnings that we had from our phase II study is the include and exclusion criteria is two or more exacerbations over the prior 12 months. What we saw in WILLOW is we had several hyper-exacerbators, meaning they had many exacerbations in the past 12 months. Sort of as the luck would work, they all got put in the 25 milligram arm. That skewed some of the data because you had some of the hyper-exacerbators. Despite that, we were able to show in our phase II, stat sig on the primary endpoint in the primary and secondary in the 10 and primary and 25 trending on secondary. Again, we're able to show success in that program, but we took those learnings and so we stratified for hyper-exacerbators.
If you have two exacerbations in the prior 12 months, you would be stratified between the three arms. If you had three or more exacerbations in the prior 12 months, you would be stratified. Raw numbers that may have worked out either way, even without the stratification, just because of the size of the program. We had said, "Let's be buttoned down with this." We made that stratification. I know we have gotten some questions on, are you going to share the baseline characteristics and those types of things? We'll be thoughtful. What makes sense from a medical, meeting perspective on those things. I'll comment on it today. We know everyone's very eager for this data. We are too.
We wish we could fast forward to 2Q of 2024, but really, really proud of the team's accomplishment thus far, to get this very large global program off the shelves by the end of the year.
One of your of the exclusion criteria, and correct me if I'm wrong, was patients who exacerbated within the past four weeks or something similar to that. Can you talk about the meaningfulness and how does that kind of influence the potential ASPEN readout? From our conversations with KOLs, there seems to be some evidence that folks who have exacerbated recently are more likely to exacerbate. Can you just kind of talk about that dynamic?
Yeah. If a patient has experienced exacerbations, they're more likely to experience more frequent exacerbations in the future, right? The goal here for patients is to reduce the amount of time they exacerbate because we don't want that to have the build on effect for the patients. The goal of the drug, right, is to reduce the time to exacerbation and the frequency of how much they are exacerbating. Our drug specifically takes two to four weeks to reach full effect. And, you know, what we saw in the WILLOW is we were able to see that we were able to have an effect on, you know, time to and frequency of exacerbations and have a meaningful impact.
We hope to show the same thing, and reduce the amount of continuous on these patients.
Gotcha. Okay. You are pursuing other indications for brenso outside just bronchiectasis. CRS without polyps.
Mm-hmm.
Can you talk about, you know, are there overlaps between your brenso population and population who have CRS without polyps? If there is, were there any learnings from this or any insight that you can provide?
As we think about ARIKAYCE, our commercial program, and brensocatib in bronchiectasis in either non-CF and CF, lots of synergies there from a commercial infrastructure perspective, assuming success, and the ability to have relationships with the pulmonologist ID doc. The idea would be success in the front line label, say, I'm seeing assuming success with Aspen, that commercial infrastructure would be able to support those programs. CRS without nasal polyps is another very interesting disease that we are, you know, going to be pursuing the middle of this year. We'll kick off that phase II program.
As we thought about what is the next indication or indications, we looked at diseases that were inflammatory by nature and that again, back to that first in disease, first in class and where we can have greatest impact. Today, there's no approved drugs for patients with CRS. There's, I don't know, 70 million patients worldwide. We're obviously not targeting 70 million patients worldwide. We believe we can target, you know, the severe end of that patient population. It's probably around 400,000 at initial product. In the U.S. alone, there's, you know, 100,000 patients annually that get surgery because of CRS.
This is, we obviously need to show clinic, but this is where we think a once a day small molecule pill at a higher dropout rate of placebo than in study arm in our phase two could really be a meaningful difference for folks. This could be an ENT call point, with the, you know, the docs that would be considering that. Like I said, for ARIKAYCE brenso, for ARIKAYCE, refractory frontline brenso bronchiectasis, CF non-CFS, that's a full bag for Aradigm.
Gotcha. The dosing that you have for CRS, it's kind of bookending it at 40 milligram and also at the 10 milligram-
Mm-hmm.
dosing. Is this basically should we kind of take this as 40 milligrams? We've seen some data. It looks to be safe. Going forward, because there's so many other indications that brensocatib can target, should we expect to see more of, I guess, the dose of brensocatib trending to the 40 milligrams? If that's the case, you know, you have chronic bronchiectasis that's at 25 milligrams. Do you think that there's a potential to see 40 milligrams future for that indication, or would there be additional benefit?
Yeah. Yeah. When we did the ORA study, we had the tox work for 10 milligrams and 25 milligrams, the rationale to move those two doses forward. What we saw on that program was 10 milligrams was showed a lot of effect. 25 milligrams obviously showed effect as well. We think those are the best doses, and we obviously will move those forward. Now the tox work for 40 milligrams and 65 milligrams, we went up to 40 milligrams in the CF study that we shared earlier this year. We saw a clear dose response across all three NSPs on 10/25 with CF. A clear dose response on blood NE across all three of the studies sort of done in this, in this space.
Lot of confidence on dose response for the mechanism in general. As we evaluated CRS, we just said moving forward with 10 milligrams and 40 milligrams makes sense for us from a development perspective. We're gonna be thoughtful on how much we invest in each one of our pillars. We will progress this forward, and we've not looked to progress another indication forward, HS, another indication we identified until after the ASPEN card.
Gotcha. Okay. Why don't we move on to probably the second most talked about readout outside of ASPEN, and that's ARISE. There's been some confusion regarding the readout. Just for those who may be unfamiliar, can you give us a quick background and really what should investors expect to see on the readout in third quarter?
Yeah. Third quarter will be the readout for ARISE. That's our frontline program. As you know, there's two frontline programs. ARISE is the first of them. ENCORE is the 12+. For ARISE, what we're looking to be showing is for the PRO, for respiratory and fatigue, for those two domains, I'll be able to see directional change difference between treatment arm versus non-treatment arm. You know, obviously, ARISE is not powered to be statistically significant. That's what ENCORE is for. The idea is to be able to show a directional difference between treatment and non-treatment arm. We will also look to show for culture conversion effect and time on culture conversion and then the correlation between those. That complete data package is what we will look to share with you all in third quarter of this year.
One of the goals out of ARISE is, as you know, there's not a validated PRO for NTM patients today. We have taken questionnaires, QOL-B, PROMIS Fatigue, and all of our knowledge of the space to create what we believe is the appropriate PRO for NTM patients. Any learnings that we get out of the ARISE program, we would be able to make any adjustments if necessary and have that be affected in ENCORE, as ENCORE will still be blinded, and it would essentially be a change in the SAP for ENCORE. The same data would be collected, and all of that has been discussed and aligned with from FDA.
If we do need to make change, what those changes would be, we obviously need to talk to FDA first, so we won't be able to communicate that in third quarter. Probably take a couple of months to have those conversations, but we will be as transparent as we can with the market around, what change are we seeing on PRO scores from baseline to one month after therapy, as well as what impact are we seeing on culture conversion, time to and effect of, and then the correlation.
Can you talk about some of what you have seen in terms of culture conversion in first line? Would you say that there is a bar to hit for percentage culture conversion at this point?
Yeah. It depends on what treating physician you ask on what they see in culture conversion for their frontline patients. It varies. What we are really looking to show is how much change or how much effect can we have on increasing conversion. Throughout the refractory setting, we've been able to show a real world setting 5+ years now market of effect on culture conversion. Much so that we are seeing in the refractory setting patients complete therapy, culture convert, clear their bug, get reinfected with 'cause it's, you know, ubiquitous in the air, come back on therapy. That I think also speaks volumes on how effective this drug is and that the patients are seeing it as well as their.
Gotcha. One of the other things that was surprising about ARISE is that the discontinuation rates were a lot lower than what you'd seen before. A couple of questions in the time we have left.
Mm-hmm.
Has your discontinuation rate in ARISE while you're enrolling, Basically, has there been a change between when you first started discontinuation rate versus what you see now in terms of discontinuation rate?
Yeah. What I can comment on the discontinuation rate, in the refractory pivotal program, we saw a little over a 30% discontinuation rate. In ARISE, we saw a 15% discontinuation rate. That we were really encouraged and excited about is frontline patients. Were they going to be less tolerable to therapy? What we saw is the opposite. We saw that there was a very favorable discontinuation rate, and that also gives a lot of confidence in some of the power and assumptions for ENCORE. Because as you think about, you know, obviously that's a low discontinuation rate from what we saw in the refractory setting. That just gives us more comfort in, you know, the design and size of ENCORE.
All right. Amazing. Sara, thanks for joining us.
Thanks so much for having us. Really appreciate it.
Great. Thanks.