Insmed Incorporated (INSM) Earnings Call Transcript & Summary

Okay. Okay, great. I think that's probably a good point. Maybe we'll transition to from brensocatib. And I guess, maybe for everybody's benefit to just set the context, talk about what you think of key points that you achieved in Phase II? And then what kind of Phase III program you're considering?

Yes. So I want to just take a moment here. If there's one big attention grabbing moment, I would like to put out there for investors, it's to turn your attention to brensocatib. The ARIKAYCE franchise is a very compelling franchise. It is without competition, it is global, it is growing. We have a very strong position there and a very high probability of success in expanding our label, as I said, fivefold. Brensocatib addresses, based on the WILLOW data, the bronchiectasis market as a first disease state, where you're looking at an addressable population at the low end of 0.25 million people in the U.S. nothing approved to treat it. And a price point that is probably -- we don't know, we have a lot of work to do there, but probably somewhere near where Fasenra is for AstraZeneca, that's $30,000 to $40,000 a year. And we think that the addressable market is actually much larger than the 0.25 million that are suggested right now. And that's because both COPD and asthma patients, especially at the severe end, are bronchiectatic. And the literature would suggest that somewhere between 4% and north of 50% of those markets. So if we just take COPD alone, that's 12 million people in the U.S., somewhere between 4% and 50% of that market could be diagnosed and on label for bronchiectasis. Should we secure approval with brensocatib, we are looking at a blockbuster drug. This is a monster of an opportunity and not just because of bronchiectasis, but because the pathway of DPP1 inhibition, we believe, is unlocking something that is similar to complement at Alexion. This is a very significant pathway that directly addresses neutrophil immunomodulation and unlocks the treatment of the inflammatory cascade in a number of diseases, the first of which is bronchiectasis, but which, as we have been studying and we have been learning more and doing more preclinical work, we're seeing positive signs in CF, GPA, alpha-1 antitrypsin deficiency, certainly in models like Crohn's and other inflammatory conditions. We are just at the tip of the iceberg of what DPP1 inhibition can unlock. And so I think this Phase III program, just like the frontline program for ARIKAYCE, both will start by the end of this year. We need to get this started and completed in a quality way, but as fast as possible because what we unlock at the other end of this is a monstrous amount of investor value. And I think we talk often at the company about the importance of treating patients, and that is clearly our focus but for investors who are looking for an opportunity that is going to reveal itself over the coming years that is substantial, it's going to be very hard to find something that is going to unlock the scale of what we are looking at.

Okay. Good point. And yes, I think the commercial opportunity here is obviously quite large. I guess there are a couple of things that are worth touching on. So first, can we talk about the safety profile, right? That's obviously been something that has hurt this class in the past. You obviously did a lot of work in Phase II to make sure that you looked at those events. And I think you feel pretty comfortable about that, but maybe just address that for everybody, so they understand.

Yes. And to go to your earlier question, I didn't address it specifically. We saw primary endpoint was time to pulmonary exacerbation, secondary endpoint was frequency of pulmonary exacerbation. We were statistically significant at the 10-milligram dose on both of those and at the 25-milligram dose on x2 with directionally very strong data on frequency of. What I would say about our data is that it was, to our minds, unbelievably strong and unexpectedly so. We've put out the forest plots to show people that despite the heterogeneity of this patient population, we were effective on almost every measure almost without exception. So the breadth and consistency of the impact of this drug was remarkable. The safety profile, in summary, I would simply say, the dropout rate was higher in placebo than it was in either the 10- or 25-milligram arm. And as we look at the adverse events of special interest, probably the most important thing about DPP1 is a pathway and inhibitor in that class is that we saw impact on the clinical endpoints we wanted to affect in the inflammatory cascade of bronchiectasis, but we did not see an impairment in any way of the importance of the neutrophil and fighting infection. And that's always been the historic concern. But because we didn't see that, it's a really strong outcome. There are some other adverse events of special interest we tracked, nothing that rose to the level of concern. I think we feel very good, and we'll go into this in great detail on September 30 when we do our research day, where we will talk about the Phase III program and how we think about safety and how the regulatory dialogue we've had to date has gone. I would say, overall, probably the best punctuation for this is, as you know, last week, we were published in the New England Journal of Medicine, the results of this study. And there are a handful of drugs that in Phase II get published in the New England Journal. This is the first time in 20 years that the New England Journal has published in bronchiectasis. So this is this is a big deal. One of the spokespeople at the American Thoracic Society, referred to this drug is the holy grail of pulmonary medicine. So although we are enthusiastic in counting the Phase II trial results, I think people can look to the third-party perspectives in the form of these commentators in the New England Journal publication and understand that the industry of and community of physicians thinks this could be a game changer for this disease.

And Will, can you just talk a little bit about scope, size, scale, time lines for Phase III, just broadly? I know you can't maybe talk about details, but just give some -- people some perspective on what this may look like. And then I think second point as you obviously talked about other indications where this drug could be useful. How are you thinking about potentially pursuing them in the near term?

Yes. So what I would say about the Phase III program is we're going to go into great detail on September 30 and describing exactly what that program is and what it's going to look like, number of patients, powering all those sorts of details. Generally speaking, if you look at the historic trials in the treatment of bronchiectasis, they've been twin Phase III programs that have focused on treating bacterial infections. And those have not played out well because reducing the bacterial burden does not link directly to the clinical impact that's needed, which is reducing exacerbations, either in frequency or time till the exacerbation. And what is important about this drug is that the mechanism of action addresses the inflammation that gives rise to those exacerbations, and we demonstrated a statistically significant impact in Phase II already. Historic studies have not done that, and that is one of the major distinctions between our program and the others and why we got published in the New England Journal. I would say that going forward, we intend to power this study in a way to ensure that it is successful. And what I mean by that is, it is always my belief that enrolling in a program in a fulsome way is the surest path to proving out the thesis that underlines the medicine and its use in disease. You saw that in our ARIKAYCE Phase III program, where we had a p-value that was less than 0.0001. And I think we're going to look for the same kind of definitive answer here because we are trying to address all bronchiectasis patients who had 2 or more exacerbations in the last year. Those would be fairly described as moderate-to-severe patients and that's a very big population. So we want a robust study that can address that and secure a label for the treatment of that group.

And one other thing maybe before we move on to 1009. Commercial opportunity, you obviously talked about U.S., and I think people understand the commercial opportunity there. Differences in the commercial opportunity in Japan and Europe, where you're also going to have infrastructure already?

The opportunity is proportionate to the populations over there. It numbers in the hundreds of thousands, if not above, and it will be very dependent on how much we're able to discern that the COPD patients at the severe end are bronchiectatic perhaps a point on that because I think that's going to be the subject of some study in the coming months and years. Unlocking the percentage of asthmatic and COPD patients that are truly bronchiectatic is key to expanding the addressable market and being on label for the treatment of bronchiectasis in these populations. We think those numbers are substantial. Our initial work suggests that they are. If you look at Europe and Japan, there are significant populations of patients who will benefit from this drug if Phase III looks like Phase II. The other place where there is a massive opportunity, and one we're going to be looking at addressing, is China. COPD is epidemic in China. Our estimates put the addressable market for that at over 150 million in patients. And so how we might approach that and what partner we might work with to unlock China is to be determined. But that is a market where we're unlikely to build our own capabilities, obviously. And in the current circumstance, there are some significant challenges to doing so. But over the course of the next period of time, we're going to find the right partner and the right pathway to unlock the substantial value that we think exists over there. All of these markets -- as you pointed out, we've built our own infrastructure in Europe and Japan. We will have experience, having launched refractory NTM and frontline NTM and add to that bronchiectasis. There is a 40% overlap in the call point here in these populations. So we have very little additional infrastructure to add to be able to launch this ourselves. And I think the proof of what we're able to do with ARIKAYCE suggests we'll be commercially successful with brensocatib as well.

Okay, great. For 1009, not an asset that people have historically talked a lot about. I think people are familiar with treprostinil and derivatives. So maybe just talk a little bit about what you're trying to achieve there and how you're progressing that product?

Sure. While it's early, it's exciting. This is a third pillar that we're going to be pursuing at the company, and we want to sort of have the coming-out party at the September 30 event. So we'll be bringing in a KOL to talk about what he sees in this program and where it might have a role to play. I want to be really clear with investors. This is a modest amount of additional capital to move this program through and into Phase II, where we'll have human data next year. My expectation is that this description will profile its potential target product profile, it will give you a very good sense of what this drug, what role it can play. This is a dry powder inhaled version of treprostinil, but it is significantly reformulated. And the consequence of that is localized delivery and benefits that actually go downstream in the animal models and demonstrate remodeling of the disease. And we want to talk about that in detail and validate that in a human model and produce that data next year. So people understand, this is not just a drug that will be improving side effects and be more convenient. Both of those things are going to be true, and they are very important, but it's even more than that in our mind. And as that plays out, I think this drug will begin to have significant intrinsic value. And we have some real expertise inside the company in this arena. Our Chief Product Strategy Officer, Gene Sullivan, who is the former Deputy Director of the Pulmonary division of the FDA, he's also the former Chief Medical Officer of United Therapeutics. So he knows the PAH space well. He's been an important guide as we've looked at this program and validated in our minds that it has something very substantial to contribute to the PAH market, notwithstanding all the products that are already approved.

Okay. All right. Well great. I guess maybe just last -- just touch on the financial profile briefly. In terms of your relative spend and your cash position and how you're thinking about your ability to prosecute what are a large amount of significant studies.

Yes. And so we're going to be focused on execution and moving these studies forward under the very capable leadership of Sara Bonstein, who's our Chief Financial Officer. We currently have over $641 million in cash as of the end of the second quarter. That is very focused on driving these 3 priorities: 1009, brensocatib and the ARIKAYCE franchise. The revenue from the ARIKAYCE franchise is obviously going toward offsetting our cash burn in an important degree, and that will continue as we expand abroad. So I think we feel very good about our current financial profile. And I think in the past, we had said that we had cash that would take us forward several years, we'll have more to say about that at the September Analyst Day, but you can expect that we are in a place where a lot of this work is already accounted for in our planning and resourcing. And that puts us in a very enviable position to be able to produce important data and progress on what are very disruptively large opportunities.

Well great. Well I think that's a great place to end. Thanks for being here. I appreciate the time.

It's a great pleasure. Thanks very much, Matthew.