Insmed Incorporated (INSM) Earnings Call Transcript & Summary

Good morning, and welcome to the Insmed's R&D Day Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Sara Bonstein. Please go ahead.

Good morning, and thank you for joining us for Insmed's R&D Day, where we will share exciting updates across our pipeline. The slides from today's presentation will be made available on our website shortly after the presentation is concluded. During today's presentation, you will be hearing from various members of the Insmed leadership team around some meaningful corporate advances. Importantly, we believe we have funding to cover our current planned programs over the next 3 years, which you'll hear about today. You will first hear from Will Lewis, Chair and Chief Executive Officer of Insmed. Following his comments, we will turn to Dr. Eugene Sullivan, Chief Product Strategy Officer at Insmed; as well as Dr. Ronald Oudiz, an internationally recognized expert in pulmonary arterial hypertension, or PAH, for a discussion of recent developments as well as the opportunity present in treprostinil palmitil inhalation powder, or TPIP. I will then turn to our brensocatib program where Dr. Kevin Mange, Senior Vice President, Head of Clinical Development; and Colleen Silk, General Manager of brensocatib, will provide development program updates and the opportunity that brensocatib represents for Insmed. Next, I will pivot -- we will pivot to an update for ARIKAYCE, Insmed's first commercial product, where Dr. Mange; Neil Hughes, General Manager, Head of Europe, the Middle East and Africa, or EMEA; and Roger Adsett, Chief Operating Officer, will provide a discussion around our label expansion efforts and anticipated ex-U.S. launch plans for ARIKAYCE. I will then conclude with a financial update and closing remarks. Following the prepared remarks, we will open up the call for questions. For the Q&A portion of the call, you will be able to submit questions through the teleconference as well as the webcast portal. Before we begin, let me remind you that today's presentation will include forward-looking statements based on our management's current expectations and beliefs. Such statements represent our judgment as of today and imbibes -- and involves substantial risks and uncertainties that may cause actual results to differ materially 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 risks and uncertainties that could affect the company. And please note, this event is being recorded. With that, I would now like to turn the call over to Will.

Thank you, Sara. I would like to start off by discussing what it means to build one of the next great biotech companies, one grounded in science with a purpose to tackle multiple therapeutic challenges and transform how patients across the globe with difficult diseases are treated. At some point along that journey, a company needs to make the leap from being a single product company. It needs to build on its initial success by developing a portfolio of medicines that have the potential to profoundly impact the lives of patients. I'm thinking of a handful of biotech companies that have made that leap, companies such as Vertex, Alexion and Gilead. Our ambition at Insmed is to join this group. And today, we will outline the cornerstones of our strategy to achieve this vision. Three years ago, when we hosted our last R&D Day, we stood before you on the cusp of a turning point for our company, the readout of the Phase III clinical trial for ARIKAYCE. We predicted that the success of that trial will lead to ARIKAYCE becoming our first approved product in the United States, followed by our first commercial launch. At that time, that was viewed as an especially bold goal. Since then, we commercialized ARIKAYCE ourselves in the U.S., a step that many biotech companies fail to make. We drove exceptionally strong growth in our first year of launch. The launch of ARIKAYCE exceeded expectations, especially for a rare disease for which no product had previously been approved. Looking back, we can now say that we successfully met the challenge. But today's meeting is about much more than that achievement. Today, Insmed is a fundamentally different company. We have a demonstrated track record of success in research, development, regulatory engagement, commercialization and business development. We can now see before us the pathway to a company with 3 overlapping pulmonary programs, each of which has the potential to profoundly rewrite the way patients are treated in their target diseases. We are ready for our exciting future and are purpose-driven to repeat and build upon our recent accomplishments. And importantly, we are well capitalized as we execute against our high ambitions in the next chapter of Insmed's growth. Our presentations today will highlight these capabilities from lab to market and the development expertise that bridges the 2. But first, I wish to share how we view each of these 3 product candidates within our overall growth strategy. The first program we will discuss today is treprostinil palmitil inhalation powder, or TPIP, which was formerly known as INS1009. Developed in our labs, this potentially highly differentiated prostanoid may provide a disease-modifying effect in a less frequent, better tolerated therapy. Essentially, we are trying to unlock the full potential of prostanoid therapy and thereby create what we hope will be the leading choice for physicians treating PAH patients. We are honored to have Dr. Ronald Oudiz, one of the most well-respected thought leaders in PAH, here today to provide his perspective on how this product could fit into the PAH treatment landscape. He will be introduced by our own Dr. Eugene Sullivan, also an expert in this field with a distinguished background, having served as the Deputy Director of the FDA's Division of Pulmonary and Allergy Products and as the former Chief Medical Officer of United Therapeutics. Gene will provide a detailed look at the preclinical data we are sharing today for the first time. Following this opportunity, we will turn to brensocatib, our DPP1 inhibitor. There is much to discuss about this compound as we approach the start of our planned Phase III ASPEN trial for the treatment of bronchiectasis. We are very optimistic in the potential success of this trial because it is intentionally designed to closely track and repeat the success of our Phase II WILLOW study. Please note that all references to bronchiectasis in this presentation refer to non-cystic fibrosis bronchiectasis, consistent with the patient population seen in the WILLOW study and planned for in the Phase III ASPEN trial. The impact of the WILLOW study cannot be overstated. It is a game-changer for Insmed. This is because it is not just a drug to treat bronchiectasis. The WILLOW study revealed a new potential pathway for treating inflammatory diseases that are impacted by neutrophil recruitment. We believe it is a pathway potentially as robust as complement was for Alexion. This broad mechanism was recognized with the publication in the New England Journal of Medicine just a few weeks ago, the first time in nearly 20 years that the journal has published on the topic of bronchiectasis. One of the most important takeaways from today's Research Day is that the DPP1 pathway represents the possibility of an entirely new platform technology for the treatment of neutrophil-mediated diseases. In the hands of our research department, we now have a platform for development to fuel future growth. Our initial focus for this platform is in bronchiectasis, where we believe the opportunity is significant. As you will learn today, bronchiectasis stands as one of the more globally prevalent pulmonary conditions with no approved treatment options. We believe we are on the cusp of achieving through our Phase III ASPEN program, what one physician at the American Thoracic Society late-breaker session described as the holy grail of pulmonary medicine. From a strategic standpoint, NTM and bronchiectasis are well aligned. The call point is the same, giving us perfect access to global thought leadership and allowing us to leverage synergies in our commercial organization. However, the bronchiectasis market is many, many times larger than even the frontline NTM opportunity. Our research suggests this number may be far greater than currently appreciated, with significant overlap with COPD and asthma patients who today are undiagnosed. But we intend to go much farther than just bronchiectasis. We plan to extend this platform and become a leader in the neutrophil-mediated disease space, leveraging both our expertise and intellectual property. We have devised a step-wise strategy to expand development into new diseases using this pathway where early data and established animal models already indicate promising results. Today, we will discuss the first of those expansion opportunities. Coming back full circle, we intend to build upon the successful backbone of our company, the ARIKAYCE franchise. Having honed our commercialization skills via the successful U.S. launch, we are now prepared to replicate that success for refractory MAC lung disease globally. This begins with the commercial launch of ARIKAYCE in Europe this year, having recently received CHMP positive opinion and anticipating to receive EU marketing authorization next month. If ARIKAYCE is approved in Japan on our anticipated time line, we plan to further expand access to ARIKAYCE for patients in Japan by the middle of next year. Our goal is to extend the ARIKAYCE franchise to become the standard of care for NTM disease worldwide. To accomplish this in the near term, we will be launching our ENCORE and ARISE trials to support full approval of ARIKAYCE in the U.S. and potential expansion into the larger frontline opportunity in MAC lung disease in the U.S., Europe and Japan. If successful, this would represent a more than fivefold increase in the addressable market for ARIKAYCE. Taken together, we have several overlapping programs addressing clear unmet medical needs for patients around the world. Let me put the series of opportunities we are discussing today in a perspective that this audience will appreciate. Successful approval and launch of these therapies could translate into several billion dollars of revenues annually in the not-too-distant future. We have the proven development and commercialization capabilities, global infrastructure and the right expertise in place to execute our strategy and transform Insmed into one of the great biotech companies. Indeed, one of the most important elements to bring this all about is talented people with the right motivation and mindset. If you were to look deep inside our company, you would find a cadre of extremely capable and motivated people who are in this for the patients. Within the company, we often speak about how much of a difference we are making for patients. By helping patients with meaningful life-altering therapies, we will continue to build a great company and drive shareholder value. I would draw your particular attention to the people on this slide who are leaders within Insmed. These people and their teams are the ones who have led the company to the position it enjoys today. Whatever this team has set its mind to, it has accomplished. I want to thank you for joining us today and giving us your attention. I invite you to join us on the next leg of our journey as we set our sights on becoming one of the next great biotech companies. If we are successful with the programs we are describing today, we will be that much closer to accomplishing this goal. Now let me turn the call over to Gene Sullivan, our Chief Product Strategy Officer, to unveil in detail our newest program from our research labs, TPIP.

Thanks, Will, and good morning, everyone. Starting with Slide 8. As many of you know, I've had a long-standing interest in pulmonary arterial hypertension, or PAH, having cared for patients with the disease during my clinical academic career and having participated in the development of various drugs to treat PAH over the years. PAH has been an area of significant interest over the past 2 decades, and we have seen meaningful innovation in the space over that time. Prostanoids, in particular, have provided notable clinical benefits for patients, but there remains a substantial need for more effective and better tolerated therapies. So I'm particularly excited to provide an update on our work with treprostinil palmitil. When we originally started working with this drug several years ago, we were primarily focused on the opportunity for the prodrug formulation to provide improved tolerability and convenience relative to the existing prostanoid options. However, our perspective has evolved over time as we've gained more experience and have seen the preclinical data emerging from this program. We now believe that the lung connects we are seeing may not only result in less frequent dosing and an improved tolerability, but also could allow us to increase the therapeutic window and drive improved efficacy. It is well-known that in vitro, prostanoids exert an antiproliferative effect, but it isn't clear that the existing prostanoid therapies have been able to exert this effect in the clinic. Based in part on some of the data that I'm going to show you today, we believe that the potential improved tolerability and ability to maintain sustained high local concentrations of the drug in the lung may lead to a disease modification or remodeling effect. With the lung kinetics that we have achieved with this novel formulation, we may be able to harness the maximum benefit of this important class of drugs. And this compound may prove to be a differentiated prostanoid and an important new therapeutic option for patients with PAH. Today, I'm joined by Dr. Ron Oudiz. Dr. Oudiz is a Professor of Medicine at the UCLA, David Geffen School of Medicine and the Director of the Pulmonary Hypertension Center and Acting Chief of the Division of Cardiology at Harbor-UCLA Medical Center. Dr. Oudiz is an internationally recognized expert in PAH and is the past Editor-in-Chief of the scientific publication, Advances in Pulmonary Hypertension. He is also the lead investigator for our planned Phase IIa trial for treprostinil palmitil inhalation powder, or TPIP. We are pleased to have him here today to provide some perspective on the PAH treatment landscape and the potential role for a differentiated prostanoid in the treatment of PAH. Turning to Slide 9. Here's an outline of this morning's presentation. Dr. Oudiz will begin by providing a brief overview of PAH, addressing the nature of the disease, the currently available therapies and the remaining unmet medical need. I will then detail our work with TPIP and review highlights of some of the preclinical work that we've done with an eye toward how the preclinical findings suggest that TPIP may prove to be an important new product. Finally, we will discuss our path forward. And with that, let me turn it over to Dr. Oudiz.

Good morning, everybody. Thank you, Gene, and thank you, Will, for inviting me to speak today. If we can go to Slide 11. This cartoon is what I use to help orient people, and I apologize if this is a review for some of you. But the concepts here are important and the understanding of what pulmonary hypertension, specifically pulmonary arterial hypertension, is extremely important. So the hemodynamic definition of pulmonary hypertension is one that says that the pulmonary artery pressure is higher than it should be. We have been using a mean of 25 millimeters of mercury. That's been recently revised to be about 20. Most of us sitting around today probably have mean in the teens at the highest. So the problem is, if we go to the next slide, that we have some perturbations in the system that involves the pulmonary circulation. And so on your left is the blue blood that is venous blood that returns from our veins into the right side of the heart and is pumped into the lungs where the alveolar capillary membrane exchanges gas, specifically oxygen, coming in turning the blue blood red. And then in the pulmonary veins, the red blood returns to the left side of the heart where it pumps to the rest of the body and then circulation continues. So as you see here on the bottom right, left-sided heart disease is something that raises the pulmonary venous pressure because downstream from the pulmonary veins, there's a problem in the heart. It could be valvular heart disease. It could be after a heart attack and the pump is not pumping well. Something results in a backup, and the pressure increases because the right ventricle on the left side of your screen has to pump that blue blood through the lungs and force the blood into the left side where the backup is. So that's where the pulmonary hypertension comes from in left-sided heart disease. On the top right, we see lung disease hypoxemia. The alveolar capillary membrane, where gas exchange occurs, is affected with conditions like interstitial lung disease, where that gas exchange is no longer occurring normally. The reflex in the body is to vasoconstrict, is to reduce the diameter of the blue blood coming in the pulmonary arteries on the left side. And the idea there is that, let's say, you have a pneumonia where there is not good gas exchange occurring in the body, the natural response is to shunt blood or to constrict blood to that area so that blood goes to places where there is gas exchange occurring. So when you have diffuse interstitial lung disease, there is diffuse phase of constriction and the arteries narrow and the right ventricle then has to generate a higher pressure to overcome that resistance. If we go to the next slide, thromboembolic disease is not uncommon in patients who have had a pulmonary embolus. And so what happens in some of these patients is, over time, they develop chronic emboli that essentially mechanically plug up the pulmonary circulation. And then again, the resistance goes up, the right ventricle has to pump a higher pressure to get the blood to go forward and continue the circulation. So if we go to the next slide, what you end up with when you excluded left-sided heart disease and interstitial lung disease and thromboembolic disease, then you're left with what we call pulmonary arterial hypertension in several forms, idiopathic and those associated with certain conditions. If we go to the next slide, this is an outline of those conditions. We call it Group 1 pulmonary hypertension, which is essentially saying that it's not Group 2, not Group 3, not Group 4. Group 5 is a grab bag of conditions that are known to be associated with pulmonary hypertension, but either the mechanism is unclear or multifactorial. So the proper diagnostic workup involves patients that have a suspicion or proven pulmonary hypertension and ruling out the other kinds of pulmonary hypertension. Next slide, you'll see that I've stamped no approved therapy for Groups 2, 3 and 5. There is one medical therapy and there's surgical options for Group 4, but really, there's no other indication for PAH or PAH drugs in these other groups. Most of the drugs we're going to be talking about today -- all of the drugs we're going to be talking about today have indications specifically for pulmonary arterial hypertension. There are different kinds of PAH. In other words, the idiopathic one is where there is no apparent underlying associated condition known to be associated with pulmonary hypertension. There is a heritable form that is associated with certain genes that have been discovered and other familial forms where the gene yet has not been discovered. And then probably most commonly that we see in our clinic is 1.4.1 connective tissue diseases. This in effect is also idiopathic in the sense that if you have a disease, an autoimmune disease like scleroderma and you develop pulmonary hypertension, in your lifetime, the expectation is that you might have a 10% lifetime risk of developing PAH. In the idiopathic form, it's 1-2 per million per year. So there's something about the scleroderma patients that predisposes them, but we don't know what it is. So in that case, it's still idiopathic and it's still deadly and progressive. Next slide describes what I mean by progressive. So we think that there is some kind of time line. Whether this is minutes, hours, days, months or years, we don't really know. But if you start on the left side where PVR, pulmonary vascular resistance, PA pressure, PAP and cardiac output, CO are normal, and then you start to get the disease that I showed you in that cartoon of the blue pulmonary artery circulation narrowing. Over time, the resistance goes up and the body has a pretty good way to compensate. The right ventricle continues to pump under higher pressure, but it continues to maintain cardiac output for a certain amount of time. And during that time, we are unfortunately asymptomatic or we call this presymptomatic. And I say unfortunately because if we were able to detect that there was a problem at this point, we might be able to intervene much, much sooner. By the time we get to point B and, unfortunately, most of the time where we're at point X, cardiac output has started to fall as PVR continues to rise, and we get decompensated heart failure. The black box there is a small picture of an echocardiogram in the short axis. On the bottom right, at about 5:00, if you tilt your head to the right a little bit, it forms the letter D. That ventricle, the left ventricle, has been smashed, if you will, or pushed aside by the right ventricle, which is up at 11:00, the larger black circle that is now a dilated and flabby right ventricle that is no longer able to continue to pump when the demand is there. As you see here, the overall 2-year mortality untreated from a database many years back before we had treatments and all we could do is record what happens to these patients is about 50%. If you were a functional Class IV patient at the time in that registry, you had a 6-month 50% survival. So it's a very progressive and very devastating disease. The cartoon at the bottom describes what we think aligns with this time line, where we have the intima, the media and the adventitia that all affected and over time produce this narrowing of the blood vessel. It's very proliferative, very inflammatory, even in-situ thrombosis, thrombotic, kind of a hotbed of a Cauldron of Disease. At the very end, on the bottom right, you see that there is neovascularization, what we call the plexiform lesion, where there is blood vessels that are trying to be formed and, unfortunately, that results in further encroachment of the lumen and increase in resistance. We go to the next slide. We'll see this depiction of what I was talking about with the D shape, the very bottom on the left, the left ventricle forms the letter D. It is not a nice round structure that is able to normally pump. It is generally starved for blood because the blood can't get through the pulmonary circulation to get back to the left ventricle for pumping to the rest of the body. The right ventricle, as you see, is dilated and becomes flabby and thin. And on the right, you can see that the pulmonary arteries are normal on top and then progress to very, very narrow on the bottom. Next slide. There is an algorithm for diagnosing pulmonary hypertension, as I alluded to. There is a sequence of things that one must do to exclude other causes of pulmonary hypertension. But the first sign that there might be pulmonary hypertension is usually either symptoms or an echocardiogram that noninvasively detects pulmonary hypertension. And you go down this list, you get to the bottom, you refer to a PAH expert center hopefully, if you've been reading the literature, and you understand, next slide, again, this is just highlighting the idea that the echo is the first window in the opportunity. And next slide continues the algorithm at the expert center. Next slide will show that central to this algorithm is the right heart catheterization. You, in fact, cannot be considered having pulmonary arterial hypertension until you have the right heart catheterization. And the date you're diagnosed is the date of that first right heart catheterization that, number one, confirm pulmonary hypertension exists; and number two, excluded left-sided heart disease, which really can't be done effectively and reliably without the catheterization. Next slide. So now that we have that background, we can talk about the pathways affecting PAH treatment. There are thousands, if not tens of thousands or more, pathways that have been identified that mediate or propagate or are a marker of pulmonary hypertension. We're focusing on these 3 in this slide and later on, we're focusing on just one. The first one briefly is endothelin pathway and is targeted by endothelial receptor antagonist. Endothelin is one of the most potent vasoconstrictors known to man, and it is found in high levels. Endothelin receptors are upregulated in pulmonary hypertension. So it was genius to develop a drug that blocked endothelin and, in fact, had clinical improvements in patients when you use these endothelin blockers. The nitric oxide pathway, as the prostacyclin pathway, is a pathway that involves vasodilation and bathing the circulation in substances that are not only antiplatelet but antiproliferative and vasodilatory, thereby facilitating improved pulmonary blood flow. In patients who have pulmonary arterial hypertension, nitric oxide levels and prostacyclin levels are low. So again, genius to replace that and augment the effect of these drugs to improve pulmonary blood flow. So we're talking about the prostacyclin pathway then, on the far right, mediated by arachidonic acid. And as I alluded to before, there are things like antiplatelet and antiproliferative properties of prostacyclin that we, as experts, consider as the sort of gold standard, most potent, most effective, but unfortunately, most toxic drugs around for pulmonary arterial hypertension. Next slide. This box here is really to remind me to mention that these patients who have pulmonary arterial hypertension, for the most part, are given prostacyclin as either a second-line therapy or when they are very sick. It sometimes doesn't make sense when you think about giving the most potent and the best drug out there only for the very sick patients. Why not give it to them early? And that's actually a really valid question, and we will speak to that later when it comes to the opportunity to use an inhaled drug that is targeted to the lungs themselves. Next slide. So the 3 different pathways here are again outlined: prostacyclin, endothelin and PDE-5. Focusing on the left, the prostacyclin analogs come in IV forms, they come in inhaled forms, they come in subcutaneous forms and also oral forms. And next slide. Part of the problem with these drugs and with prostacyclins in general is not just the toxicities or the tolerability issues, but it's also the dosing and the pharmacokinetics. So if we look at the top, the oral has a very obvious advantage of being oral. The problem is that when you take prostacyclins in oral form, they can be very dose-limiting, usually because of GI, but sometimes more systemic side effects, things like headaches and muscle aches and things like that. The parenteral therapies, as I said, are probably -- not probably, they are definitely the most effective and the most potent, but they also have the most toxicity. There are systemic toxicity such as hypotension. It is common for patients to have some nausea or anorexia. Diarrhea is common. Some patients are on antidiarrheals several pills a day in some cases. Headache and vasodilatory flushing and the peculiar jaw pain are also associated with these, especially at the higher doses. Now the inhaled dose. The inhaled prostacyclins were given or developed as a way to target prostacyclin therapy to the lungs. One of the limitations with the inhaled therapies is that we don't seem to be able to get doses high enough or consistent enough to mimic the parenteral therapy. So the parenteral therapies are the most potent because, number one, we can get them in high doses. Unfortunately, that means they're systemically administered and systemic side effects, but we can also get a constant delivery. And the levels in the body are not only high, but constant. But with the inhaled therapies, currently, we have intermittent dosing. We have generally QID dosing and this sort of up and down, as you see here, sawtooth PK/PD profile that we would like to smooth out and we would like to get a higher dose for it. Next slide. So the goal for this new prostanoid therapy, for example, TPIP, is to provide a more convenient administration. Clearly, a dry powder administration is much easier to use than a nebulizer with a device that's battery operated and uses a liquid and needs to be cleaned and prepped every time you do your QID inhalation. But we want a sustained effect, a long-lasting effect without the ups and downs and we want to target high doses. And specifically, if we can do that without systemically exposing the body to systemic prostacyclin, there is that potential that we could get all 3 desired effects in our patients with 1 or 2 doses, let's say, of an inhaled dry powder. So with that, I'll send it back to Gene for a continuation of the discussion.

Thank you very much, Dr. Oudiz. Let me now move to Insmed's investigational product, treprostinil palmitil inhalation powder, or TPIP for short. As noted on Slide 30, TPIP is a dry powder formulation of treprostinil palmitil. Treprostinil palmitil is a prodrug, consisting of treprostinil linked by an ester bond to a 16-carbon chain. The prodrug is itself inactive. In vivo, esterases cleave off the 16-carbon chain, resulting in the active moiety, treprostinil. The dry powder is formulated for use in a simple capsule-based inhalation device. Of note, our treprostinil palmitil drug substance was previously formulated as an inhalation suspension for administration using a nebulizer. This older formulation was evaluated in a Phase I study, which included a cohort of subjects who also received Tyvaso. I'll show you some data from that study in a few minutes. But first, I'm going to describe a series of preclinical experiments that together demonstrate a number of key differentiating attributes of inhaled treprostinil palmitil, as shown on Slide 32. These include improved pharmacokinetics compared to treprostinil; prolonged duration of pharmacodynamic activity compared to treprostinil; the ability to exert a local pharmacodynamic effect after delivery by inhalation; an impact on the hallmark histopathologic features in the Sugen-Hypoxia model of PAH; and finally, a reduced incidence of cough in a commonly used guinea pig model. The potential implications of these preclinical findings, if borne out in the clinical development program, are quite compelling. First, the prolonged lung residence time, prolonged half-life and prolonged duration of pharmacodynamic activity suggests that the product could be dosed once or twice daily. The prolonged lung residence time and the local pharmacodynamic effect suggests that the high systemic exposures that are achieved with other forms of treprostinil may not be necessary in order to achieve clinically-relevant vasodilation. Comparable effects may be achieved with lower systemic exposures. The effect on the histology in the Sugen-Hypoxia model suggests that the achievement of sustained local concentrations in the lung may allow treprostinil palmitil to exert disease-modifying activity. Finally, the lower Cmax and reduced incidence of cough may translate into improved tolerability to both the systemic and the local effects of inhaled treprostinil. Today, we will walk through the data supporting this potential product profile. I will start with the preclinical data that demonstrate the improved pharmacokinetics achieved with treprostinil palmitil in both rat and dog. Turning to Slide 39. On the left, in the rat, the top panel shows that while inhaled treprostinil, shown in blue, rapidly passes through the lung, inhaled treprostinil palmitil remains in the lung for many hours. This results in a much lower plasma Cmax and a prolonged plasma half-life, as shown in the bottom left panel. In the dog, shown on the right, the comparative PK is quite similar. The Cmax of inhaled treprostinil was tenfold higher than for inhaled treprostinil palmitil. And treprostinil palmitil demonstrates a much longer plasma half-life. Turning to the next slide. The next question is whether the prolonged residence time in the lung is associated with prolonged pharmacodynamic activity. Can treprostinil palmitil exert prolonged vasodilatory activity? As you can see on Slide 41, the answer is yes. Here in an experiment where the animal is subjected to a hypoxic challenge, we show that the vasodilatory activity of TPIP extended for many hours, in fact, out to 24 hours at the 2 higher doses. This is far longer than the duration of activity of inhaled treprostinil, which typically lasts for only about 2 hours in this type of model. As seen on the next slide, we ran the same type of experiment in the dog and showed very similar effects. In this case, we used dogs who had indwelling right ventricular catheters to allow for serial measurements during hypoxic challenges. As was seen in the rat, inhaled treprostinil palmitil resulted in very prolonged vasodilatory activity out to 24 hours at all, but at the very lowest dose. So these 2 figures demonstrate that the prolonged retention of the drug in the lung may result in significant prolongation of the pharmacodynamic effect of vasodilation. Next slide. The next preclinical finding I'd like to highlight is a phenomenon that we refer to as a local pharmacodynamic effect. To me, this is one of the most exciting findings that we've seen. A persistent question, which until now has been rather difficult to address, is whether or not treprostinil is truly a locally-acting drug when administered by inhalation. That is, is inhalation simply another means of getting the drug into the circulation where it can then exert its effect? Or does treprostinil exert its effect, at least in part, locally in the lung parenchyma prior to reaching the circulation? This experiment in the rat was conducted to address this question. And the results shown on Slide 44 indicate that there is indeed a substantial local effect. This is a bit of a complicated slide, but I'd like to walk you through it because I think this phenomenon of a local effect may have very important clinical implications. So in this study, we challenged rats with a thromboxane mimetic, which results in pulmonary vasoconstriction. As a pulmonary vasodilator, treprostinil will reduce the degree of vasoconstriction resulting from this challenge. We then plotted the exposure response curves for infused treprostinil and for inhaled treprostinil palmitil using plasma treprostinil concentrations as the measure of exposure. The top figure is the exposure response curve when treprostinil is administered intravenously. You can see, moving left to right, that at a certain plasma treprostinil concentration, IV treprostinil begins to demonstrate vasodilation in this model. The bottom figure shows the exposure response when treprostinil palmitil is administered by inhalation. What you can see is that the entire exposure response curve is shifted to the left. Remember that in these figures, the exposure is expressed as plasma treprostinil concentrations. So this means that you can achieve pulmonary vasodilation at significantly lower systemic concentrations when you deliver treprostinil to the drug -- to the lung by inhalation in the form of treprostinil palmitil. Therefore, these data indicate that treprostinil exerts a local pharmacodynamic effect beyond the effect that can be attributed to the plasma concentrations. We conducted the same type of experiment in dogs, this time using a hypoxia challenge. I won't walk you through this figure on Slide 45. It's available with additional detail in the cited manuscript. But in short, we saw the same phenomenon in dogs that we have seen in rats. At any given plasma treprostinil concentration, the vasodilator effect was markedly greater with inhaled treprostinil palmitil than with IV treprostinil. In fact, the difference between IV and inhaled was even more dramatic in dogs, with the EC50 being 550x lower with inhaled treprostinil palmitil compared to IV treprostinil. Our findings aren't entirely new. This 2005 publication in the Journal of Applied Physiology noted a similar phenomenon in a sheep model using inhaled versus intravenous treprostinil. The problem was that because of the rapid transit of treprostinil out of the lung, the only way to demonstrate it was to continuously nebulize the treprostinil. That's not a feasible approach clinically. Because it leaves the lung so rapidly, intermittently-dosed inhaled treprostinil can't take advantage of this local effect phenomenon. We believe that due to its prolonged residence time in the lung, treprostinil palmitil may be able to capitalize on the local effect, as suggested by the results in the rat and dog models. This would mean that effective vasodilation may be able to be achieved at much lower systemic concentrations. The next finding I'd like to highlight are the results of experiments that we conducted using the rat Sugen-Hypoxia model of PAH. As many of you know, the Sugen-Hypoxia model is favored because in addition to resulting in pulmonary hypertension, this model also results in histopathologic features that are reminiscent of the proliferative plexogenic vasculopathy that is seen in the lungs of patients with PAH. Slide 48 shows the results of our first experiments using the Sugen-Hypoxia model. What we saw was that in addition to the expected effects on pulmonary arterial pressure and right ventricular hypertrophy, shown on the left, we also saw dose-dependent effects on the histopathologic features such as arterial wall thickening and vascular muscularization, shown on the right. These findings really intrigued us. Until we saw these data, we primarily looked at treprostinil palmitil as a means of delivering treprostinil more conveniently and with fewer adverse events. But these data suggested that because of the local effect and improved tolerability, we might be able to really harness the antiproliferative activities of this class of drug and achieve a remodeling effect. So we went back and repeated the rat Sugen-Hypoxia study, this time adding in comparator groups representing other prostanoid therapies. Specifically, in addition to inhaled treprostinil palmitil, we included comparators of inhaled treprostinil, IV treprostinil and orally administered selexipag. We wanted to explore whether the improved pharmacokinetics that we saw with TP might translate into improved signs of efficacy in the Sugen-Hypoxia model. These are the results of the rat Sugen-Hypoxia comparator study. In these figures, the values for the healthy unchallenged animals appear on the left in purple, followed by the 4 treatment groups, each with its own vehicle control. First of all, in terms of the hemodynamics and resulting right ventricular hypertrophy, what you can see is that all of the drugs showed some degree of benefit on the elevation in pulmonary arterial pressure on the left and the development of right ventricular hypertrophy on the right, which are induced by the Sugen-Hypoxia challenge. However, [ that leads to the ] effect was generally most pronounced with TPIP, shown in green, particularly at the higher of the 2 doses. Now in terms of the effect on the histology, on Slide 50, we show 2 of the histologic readouts from the model, vascular wall thickness on the left and vascular muscularization on the right. Again, we see that each of the prostanoid drugs showed some degree of effect on these parameters, but the effect was generally most prominent with TPIP, particularly at the higher of the 2 doses. The next slide is a spider graph, intended to visually depict the degree of treatment effect of each of the compounds used in the comparator rat Sugen-Hypoxia study in 6 different domains, representing both the hemodynamic effects and the remodeling effects. The individual parameters are represented on separate axis radiating out from the center of the figure. Each parameter is normalized between the normal healthy state, a score of 0 at the center of the figure, and the vehicle control of Sugen-Hypoxia injury, a score of one at the periphery of the figure. The findings for each compound are depicted in various colors. In this type of figure, the closer that the lines are to the center, the more efficacy they demonstrate. Here, you can see that the high dose TPIP in dark green demonstrated a superior overall profile. We believe that the high dose TPIP represents a clinically relevant dose level. As we move into early clinical development, we will learn more about whether we may be able to exceed that dose level with chronic dosing in patients with PAH. Finally, I'll share some of the results of the study that we did using a commonly employed cough model in a guinea pig. The data that I showed you earlier speak to the potential to achieve greater efficacy with an improved systemic safety profile. As many of you know, one of the bothersome side effects of inhaled treprostinil is cough. With our product, the compound that is being inhaled is the prodrug, treprostinil palmitil, rather than the active moiety, treprostinil. To the extent that the cough may be attributed to upper airway deposition of the active moiety, we wondered whether treprostinil palmitil might be less likely to induce cough than treprostinil. Slide 53 shows the dose response data for inhaled treprostinil on the left and for inhaled TPIP on the right. What you can see is that the threshold concentration for causing cough was 7x higher with TPIP than with treprostinil. The data that I just reviewed is part of the basis for our belief that TPIP may prove to be a differentiated product and one that may be an important addition to the therapeutic arsenal for the treatment of patients with PAH. The preclinical data are certainly very encouraging, but of course, we'll need to explore whether the features that we've seen in rats, dogs, sheep and guinea pigs will also manifest in humans. We do have a first look at one aspect in man, the pharmacokinetics from our previous Phase I clinical study of treprostinil palmitil inhalation suspension. These data were presented at the 2016 European Respiratory Society Meeting and are shown on Slide 55. In that study, we saw pharmacokinetics in man that were very reminiscent of the animal PK. Similar to what we've seen in animals, we saw a tenfold lower Cmax as compared to the molar equivalent dose of Tyvaso, and we also saw a very prolonged systemic half-life. In addition to the obvious convenience of a portable dry powder inhaler, the existing preclinical data suggests that TPIP may allow for once or twice daily administration due to the prolonged lung residence time, prolonged half-life and prolonged duration of pharmacodynamic activity. It may also result in improved systemic and local tolerability related to the lower Cmax and the reduced incidence of cough. In addition, we have the potential to achieve greater pharmacodynamic vasodilatory effect at significantly lower systemic exposures due to the combination of the prolonged lung residence time and the local pharmacodynamic effect that has been seen in 3 different animal models. As we move into the clinic, we will be exploring how this may translate into an ultimate product profile, that is how high can we go on the dose in order to maximize efficacy while still maintaining tolerability. We hope to learn more about these trade-offs in our Phase I and early Phase II experience. And finally, these characteristics may allow treprostinil palmitil inhalation powder to more fully realize the therapeutic antiproliferative potential of the prostanoid class with resulting disease-modifying activity as suggested by the findings in the rat Sugen-Hypoxia model. So where do we go from here? As noted on Slide 58, we recently initiated a Phase I study in the U.S., and I'm happy to report that the first subjects have been dosed. This is a single ascending dose and multiple ascending dose in healthy volunteers, with a key goal to understand the PK and tolerability profile. We expect to announce top-line results in the first quarter of 2021. The next study, which will be conducted by Dr. Oudiz at UCLA, will be the first use of treprostinil palmitil in patients with PAH. This will be an open-label exploratory Phase IIa study in a small number of patients to establish the time course of the hemodynamic response and to better understand the relationship between the pharmacokinetics and the pharmacodynamics of the drug and to assess the tolerability of the drug. The patients will be continuously monitored in the clinic over a 24-hour period. We expect to get some very rich information out of this study, which will help us to quantify the local effect that I mentioned earlier. We expect data from this study to be available in 2021. Finally, I'll just note without much detail that we are tentatively planning to initiate a Phase IIb study in the second half of 2021. The planning is underway for that study, and the goal there will be to establish the evidence that will be needed to move into a pivotal registration program. With that, I want to thank you for your time and attention. We look forward to addressing your questions during Q&A. For now, let me turn it over to Kevin Mange, Senior Vice President of Clinical Development, who will lead off our discussion of the brensocatib program.

Thank you, Gene, and good morning. I'm here today with my colleague, Colleen Silk, General Manager of the brensocatib program. We're excited to share with you our clinical strategy and the commercial dynamics for brensocatib in bronchiectasis as well as opportunities for further development in the near-term. Turning to Slide 60. At a high level, we view brensocatib as a pipeline in a product and a cornerstone of our efforts to build a portfolio around neutrophil-mediated diseases and the DPP1 pathway. This novel, oral, once-a-day reversible DPP1 inhibitor represents an entirely new way to address a broad array of diseases where high neutrophil activity in this pathway is a component of the disease process. These include rare diseases like cystic fibrosis and granulomatosis with polyangiitis, or GPA, which we'll discuss today. And beyond that, we see opportunities in inflammatory bowel disease, lupus nephritis, rheumatoid arthritis, COPD and asthma, among others. We also plan to leverage our experience in neutrophil immunomodulation to bring forward additional programs to build a portfolio. Colleen will describe our portfolio strategy in more detail shortly, but I will start with what we consider our launch pad in this initiative, our clinical development program in bronchiectasis. To better appreciate the relevance of brensocatib in this setting, let's revisit a graphic that we have shared in the past to help visualize the vicious cycle of this disease. It starts with abnormal mucociliary clearance on the right-hand part of the slide, which leads to bacterial infection. This then drives chronic inflammation on the left that ultimately leads to airway destruction. Unlike prior bronchiectasis programs in the industry, we are addressing the neutrophil-mediated inflammation associated with the disease process. Studies have shown that neutrophilic inflammation is related to frequent pulmonary exacerbations, which are a hallmark of this disease. In contrast, prior clinical drug development programs focused on the bacterial colonization process of the bronchiectasis cycle where they used intermittent exposure to inhaled antibiotics over predetermined time intervals recycling. Brensocatib instead focuses on the inflammatory component. Our Phase II WILLOW study validated our approach with positive data on the time to the first and the rate of exacerbations in patients with non-CF bronchiectasis, whereas the Phase II studies of these other earlier programs focused on reducing colony-forming units of bacteria. As noted on Slide 63, these results were recently published online on September 7 in the New England Journal of Medicine. This was the first time in nearly 20 years that the New England Journal of Medicine had published on the topic of bronchiectasis, underscoring the importance of these data and raising the visibility of the program to the broader scientific and clinical community. The importance of these results is further underlined by the infrequent publication of data in the New England from Phase II studies. We're very proud of the results and publication, and encourage you to review the article if you haven't already. I won't be walking you through the full study results today, but I do want to briefly draw your attention to a few key highlights, as we've carried over many of these elements into our Phase III ASPEN study, which I will describe in more detail in a moment. Slide 64 shows the WILLOW trial design, which evaluated 10- and 25-milligram doses once-a-day versus placebo and focused on exacerbation endpoints with the time to first exacerbation as the primary endpoint, which both doses achieved. In terms of efficacy, I want to highlight the consistency of these data from the WILLOW study in what is generally considered a heterogeneous patient population as shown in these forest plots. For the rate of exacerbations, which will be the primary endpoint for our Phase III study, both doses in the WILLOW study showed numerical reductions in the rates versus placebo in almost every subgroup. The levels of sputum neutrophil elastase based on a single measurement at baseline were not predictive of brensocatib effects. Across the 2 doses study, there was only one outlier of a point estimate of an effect versus placebo that was seen in the 10-milligram forest plot. It's important to note that none of these subgroups based on sputum neutrophil elastase levels are statistically different from one another, and they are wide confidence intervals. Based on these data, we conclude that patients benefited from treatment with brensocatib regardless of sputum neutrophil elastase baseline levels, and there is no larger benefit in patients with levels less than lower limit of quantitation at baseline, but what is important is the consistency of the effects of both doses on a clinical outcome with the overall impact for patients. Strength of these results is reflected by the acceptance of the study by the New England Journal of Medicine. On this slide, we see that via the mechanism action of brensocatib, there were significant reductions of 3 sputum NSPs, including neutrophil elastase, which are aligned with the beneficial effects of brensocatib and the statistically significant reduction of the clinically meaningful outcome of exacerbations. DPP1 is an enzyme that will lead to the activation of several proteases. The most studied is neutrophil elastase, but for individual patients, their disease is impacted potentially by the combination of this and other proteases as well, for example, cathepsin G. We see here a consistent effect of brensocatib on the reduction of measurable speed of neutrophil serine proteases, or NSPs, with a reduction in neutrophil elastase, PR3 and cathepsin G. These data further demonstrate the mechanism of action for brensocatib and point to the potential in a range of neutrophil-mediated diseases that involve the DPP1 pathway. Turning to Slide 67. We summarize the overall safety data from the WILLOW study. For the brensocatib groups, the safety data were acceptable as events were mild to moderate in severity. Patients in the placebo group had higher rates of serious treatment-emergent adverse events and discontinuation of treatment due to adverse events as compared to the brensocatib groups. With that background, let's now discuss our Phase III study for brensocatib in bronchiectasis, known as the ASPEN trial. As shown on Slide 69, the ASPEN study was developed, integrating feedback from both the FDA and EMA, realigned on the adequacy of one global study with a primary endpoint that is of clinical relevance to patients and a design that retains many key elements from the WILLOW study. This path forward for brensocatib in bronchiectasis is a recognition of both the significant unmet need and the strength of the WILLOW data, which led to breakthrough therapy designation earlier this year by the FDA for the bronchiectasis program. The WILLOW data certainly increases our confidence in the ASPEN study, having shown statistically significant reductions in exacerbations for 2 dose groups and consistent data across patient subgroups. Our discussions with the health authorities were very productive and we were pleased with the level of engagement around this program. So based on the FDA/EMA feedback and if we achieve a positive trial outcome in the ASPEN study, we would be able to file for approval of brensocatib for the treatment of bronchiectasis in the United States and the European Union based on a single Phase III study. We have planned interactions with the Japanese health authority before the end of the year and look forward to their feedback. A single large study will avoid the challenge that confronted prior development programs across the industry of having to have 2 positive Phase III studies for approval. Additionally, the number of patients from our entire program with brensocatib across all studies will support a safety database consistent with international counsel for harmonization general guidance for drugs intended for long-term use. So let's now review the specifics of the trial design as noted on Slide 70. Similar to WILLOW, the ASPEN study will enroll patients with at least 2 documented bronchiectasis exacerbations treated in the past 12 months. For the single study, 540 patients were received 10 milligrams or 25 milligrams of brensocatib or placebo once-a-day for 52 weeks for a total of 1,620 patients. The primary end point will be the rate of pulmonary exacerbations over 52 weeks within an identical definition for pulmonary exacerbations as we've used in the WILLOW study. The ASPEN study is powered at 90% to show a 30% reduction in exacerbations with a p-value of less than 0.01. Key secondary endpoints include time to first exacerbation, which was, in fact, the primary endpoint in the WILLOW study, the proportion of subjects remain exacerbation free as well as change in FEV-1. This trial will also include 2 sub-studies, a CAT scan study of approximately 225 patients to evaluate their lungs and an approximately 300 patient PK/PD study to evaluate sputum and blood NSPs. Turning to Slide 71. We are on track to launch the study in the fourth quarter of this year. We plan to enroll patients across approximately 480 sites in 36 countries. In order to drive enrollment, we are fast-tracking 6 countries and expect to have sites activated by year-end. We are also targeting sites that were involved in the WILLOW study, of course. We look forward to providing updates as this trial progresses. So let me now turn the call over to Colleen to discuss the commercial landscape for bronchiectasis as well as our strategy for the broader brensocatib program.

Thank you, Kevin. As discussed earlier, the mechanism of brensocatib provides us with multiple opportunities across a broad range of neutrophil-mediated disease areas. We plan to prioritize and capitalize on the potential inherent in this program and work toward building an industry-leading portfolio around brensocatib. The first step, we'll begin with bronchiectasis, which we expect will serve as the foundation of our franchise. We are focused on executing the Phase III ASPEN trial and preparing for a launch of brensocatib in bronchiectasis in the U.S., EU, and Japan, leveraging the relevant experience and infrastructure we have built in these markets for our ARIKAYCE franchise. To expand our portfolio in the near-term, we plan to focus on advancing a development program in cystic fibrosis. At the same time, we will advance our research efforts to support expansion into other rare diseases like GPA and to broader indications like IBD, RA or lupus nephritis. As we've shared previously, we believe there is significant global opportunity in the bronchiectasis market. Today, there are no approved therapies specifically targeting the inflammation and exacerbations associated with this chronic and serious pulmonary disease in the U.S., EU or Japan. Based on our market research, we believe that brensocatib, which has been shown to significantly delay the time to first exacerbation and reduce the frequency of exacerbations, could address the needs of multiple stakeholders, health care providers, payers, and most importantly, patients. For patients living with bronchiectasis, the impact of this disease on quality of life is severe. Everyday symptoms of cough, dyspnea and fatigue interfere with daily activities, and fear of exacerbation negatively impacts their emotional and social well-being. This quote from a 54-year old bronchiectasis patient is striking. She said, "It's like waiting for a hurricane. There's a constant level of fear and anxiety of the unknown. When will an exacerbation hit?" Health care professionals call for more effective treatments specific to this disease, treatments that are supported by robust clinical trial data. And from the payer perspective, there is a need for approved drugs that provide greater efficacy and reduced pulmonary exacerbation. As Will and Kevin mentioned, the New England Journal of Medicine Publication was the first bronchiectasis study published in their journal in nearly 20 years, which underscores the broad desire for treatment that specifically target this disease, particularly given the number of patients affected. On Slide 75, we provide an overview of the global market opportunity. In the U.S. alone, an estimated 340,000 to 520,000 patients have bronchiectasis. Estimates suggest a similar per capita prevalence in the EU5 countries. And while the estimated prevalence of the disease in Asia lacks full consensus, reported rates, particularly in urban areas, support an estimated 1 million to 5 million patients in the region. There are limited epidemiology reports specific to Japan, but with our Insmed GK team, we plan to refine our market expectations in the near-term. We expect these global prevalence numbers will evolve as we sharpen our understanding of the global bronchiectasis opportunity. And as shown on Slide 76, we believe prevalence may be substantially higher given the under-diagnosis of bronchiectasis. As we've discussed previously, there is significant overlap between bronchiectasis and COPD and asthma. Estimates again vary with anywhere from 650,000 to 9 million U.S. COPD patients also having bronchiectasis. This represents an estimated range from as few as 4% to as many as 54% of COPD patients, depending on the literature report. In asthma, the overlap of patients who also have bronchiectasis falls between approximately 450,000 and 675,000 patients in the U.S. or approximately 2% to 3% of asthma patients. Our early market research and analysis of U.S. claims databases corroborates the suspected overlap in patients, giving us a high degree of confidence that there could be a meaningful number of COPD and asthma patients that are currently undiagnosed with bronchiectasis. We will continue to do more work to understand the extent of this overlap. But even at the low ranges, there is a possibility that the market in bronchiectasis could be multiple times higher than reported prevalence numbers suggest. Now let's turn to our commercial focus for brensocatib and bronchiectasis, shown on Slide 77. The Insmed team is uniquely positioned to commercialize brensocatib if approved, given the synergies that exist between bronchiectasis and NTM lung disease. Based on initial research and our ARIKAYCE experience, we know that bronchiectasis patients are typically seen by pulmonologists and that there is a meaningful overlap in patient population, allowing us to leverage our existing commercial infrastructure. In addition, the work we've done over the past several years to build a team to reach and support the NTM lung disease community can be rapidly mobilized to support the potential launch of brensocatib for bronchiectasis in the U.S., EU and Japan. Notably, our experience in patient identification, execution of disease awareness campaigns and work with patient advocacy groups positions us well for a global launch of brensocatib, if approved. Now let's discuss where we plan to go next with the brensocatib program. With bronchiectasis as our launchpad, our next near-term focus will be initiating a development program in cystic fibrosis, a disease that despite recent advances in treatment option, still represents an area of serious unmet need. At the same time, we'll continue to explore opportunities across the neutrophil-mediated disease landscape, including GPA. As you can see on Slide 80, each of these opportunities is backed by clear scientific rationale, strong value proposition and road maps for clinical development and regulatory approval. Starting with CF, the role of neutrophils and neutrophil elastase in CF is well understood. The inflammation associated with chronic bacterial infection is neutrophil-mediated, and patients generally present with very elevated neutrophil counts. We believe that brensocatib could fill the gap in the treatment landscape for a CF-specific anti-inflammatory therapy, a category currently not met by marketed products. For those CF patients who experience any pulmonary exacerbations, it could represent an important additive therapy on top of CFTR modulators. As many of you know, previously approved products in CF provide a road map for development, and there is a well-established research network in the U.S. and EU. We anticipate finalizing our approach to clinical development, including Phase II protocol design, in the first half of 2021 and look forward to engaging the CF community, scientific advisers, and regulatory agencies as we advance our plans. We are also excited about the scientific rationale that supports brensocatib in GPA. GPA is an autoimmune vasculitis characterized by systemic inflammation within tissue and small blood vessels, harmful inflammatory tissue masses or granulomas and organ damage. In GPA, antibodies target proteinase 3, or PR 3, which is expressed on the neutrophil surface, triggering a pro-inflammatory response by the body. This autoimmune response affects multiple organ systems, but has a predisposition for the upper respiratory tract, lungs and kidneys. We believe brensocatib could play a role in this disease, working through 2 distinct MOAs. In addition to the inhibition of NSPs, brensocatib may also reduce the expression of membrane-bound PR 3. We view brensocatib as a potential additional treatment option for GPA patients across the disease spectrum, helping to get more patients with active disease into remission and helping to keep them in remission. Finally, I want to touch on our ongoing investigator-sponsored trial in hospitalized patients with COVID-19, which is being conducted in the U.K., outlined on Slide 75. As it becomes increasingly clear that COVID-19 will be with us for an extended period of time, treatment options for infected patients will be needed, and we are hopeful our drug will be a useful therapy. As part of this study, there will also be additional follow-up to assess how patients are faring in a post-hospitalization [ scene ] since many of these patients have long-term [ deploy ]. The STOP-COVID-19 trial is ongoing, with a potential data readout in the first half of 2021. We look forward to updating you on our efforts across the brensocatib program as we move towards launching ASPEN, expand into trials in CF and gain more insights about the global bronchiectasis market. Our enthusiasm for the brensocatib potential is based not just on the robust clinical data we've generated to date, but also on our experience in developing and successfully launching our lead product, ARIKAYCE. The Insmed team has demonstrated that we can take a compound from concept to commercialization, and at the same time, continue to look for opportunities to expand the pool of potential addressable patients. We are excited to share our plans for expanding the ARIKAYCE label beyond refractory MAC lung disease. And to discuss this program in more detail, I'm going to turn the call back to Kevin Mange. Kevin?

Thanks, Colleen. Good morning, again, everybody. I will start with Slide 84 and spend the next few minutes reviewing our registration program and strategy for seeking approval of ARIKAYCE as frontline therapy to treat MAC lung disease, which still represents a significant unmet medical need. This program will use a PRO-based primary endpoint for the FDA and durable culture conversion for Europe and Japan. Currently, ARIKAYCE is the first and only medication approved by the FDA for the treatment of MAC lung disease as part of a combination antibacterial drug regimen for adult patients who have limited or no alternative treatment options in a refractory setting. MAC lung disease is a rare, progressive and chronic condition, but if not successfully treated, it can lead to severe and permanent damage to the lungs. Patients often find that symptoms, including cough, dyspnea, fatigue, fever and chest pain, worsen over time. The disease is caused by mycobacterium in the environment and tends to affect those with underlying lung conditions such as bronchiectasis or COPD. ARIKAYCE is an inhaled once-daily formulation of liposomal amikacin taken with a nebulizer and utilizes our Pulmovance technology to deliver the drug directly to the lungs. This mode of administration allows for prolonged release of amikacin, while limiting systemic exposure. Finally, as Insmed's first commercial product, the lessons we've learned through the development of ARIKAYCE and informed development and commercialization across our portfolio, giving the overlap in patient populations. Specifically, over 60% of bronchiectasis patients also will have a nontuberculous mycobacteria, or NTM, infection. Moving on to Slide 86. Our registration program to pursue FDA approval of ARIKAYCE as a frontline therapy aims at the overarching goal to establish a new standard of care for patients suffering from NTM lung disease with a 3-drug regimen. Our efforts to improve the treatment paradigm for patients suffering from this disease involve a planned clinical program that includes 2 separate but interrelated clinical trials that will be conducted in parallel but have staggered ends. The first trial is the ARISE trial that is expected to enroll approximately 100 patients with newly diagnosed MAC lung disease. This will be an interventional study designed to validate longitudinal characteristics of the PRO tools that will be used in the second study, the ENCORE study. But the ENCORE study will be the pivotal trial designed to establish the clinical benefits of ARIKAYCE in this new patient population. We expect to enroll approximately 250 patients. Data from the ENCORE study is intended to fulfill the post-marketing requirement to allow for full approval of ARIKAYCE in the United States and would support a supplemental new drug application for the use of ARIKAYCE as a frontline treatment for patients with MAC lung disease. We plan to initiate both trials globally during the fourth quarter of 2020 with fast track countries, including the United States. On the next slide, 87, you can see the designs of these 2 trials. The study designs have been discussed extensively with global disease experts, including those who have developed the recently updated NTM guidelines, and have integrated feedback from the FDA. The ARISE study will be measuring and validating additional cross-sectional and longitudinal characteristics of the PROs in our frontline setting. Other secondary endpoints will be measured as well, including rates of culture conversion and time to culture conversion. The primary endpoint for the ENCORE study will be changed from baseline to 113, which is 1 month off-treatment, and respiratory symptom scores for the FDA, with the endpoint of durable culture conversion at month 15, which is 3 months off all treatments as the primary endpoint for other health authorities. Other secondary endpoints will be evaluated, including those related to sputum culture conversion and recurrence of entity symptoms. Moving to Slide 88. While we're developing a respiratory symptom score and potentially a fatigue score to support potential approval for a frontline indication, it is important to note that we are not starting from scratch and developing a de novo instrument. We're leveraging existing instruments and specifically the quality of life bronchiectasis tool and [ chronic ] fatigue tool, and evaluating the subset of these questions and responses from these instruments are appropriate for the frontline MAC population. We believe this strategy can save us at least 1.5 to 2 years' worth of time compared to traditional development of de novo instruments. This year alone, we've completed the concept elicitation work needed for the FDA with these instruments among patients with newly diagnosed MAC pulmonary disease. As anticipated, questions or responses within these questionnaires do cover those respiratory and fatigue symptoms that are important and relevant to these patients. We are now moving on to the last part of the qualitative work cognitive interviews that is also needed for the FDA and will be completed later this year. This work will finalize the subset of questions and responses that, subject to FDA review, we expect will be the basis of collecting data for calculating respiratory and potentially fatigue scores at the end of ARISE and ENCORE studies, along with the sputum culture data. And let me underscore the PRO-related work is being done specifically to address the FDA needs, but does not impact our efforts in Europe or Japan, where durable culture conversion will be the basis of efficacy evaluation for ARIKAYCE in the frontline setting. Moving to Slide 89. When it comes to developing a PRO or symptom score for the frontline indication, we've looked to lessons learned from prior drug development programs in designing our approach. Not unique to our program, the FDA requires longitudinal data to support the validity of the PROs or scores in the patient population of interests. We believe it is best to do that separate from the Phase III registrational study so that these data are available early enough to potentially adapt what may be done in the Phase III study. ARISE is scheduled to complete while ENCORE is enrolling, and this will give us the ability to adjust, if needed, the approach to computing symptom scores for the primary analysis for ENCORE, while preserving the integrity of the ENCORE study. Given the concept that sputum culture conversion or reduction of bacillary load will drive symptom changes, we reexamined data from the ARIKAYCE Phase II study in refractory MAC patients. While the data are quite limited for a short period of time of treatment, but there is the indication that patients who converted had numerically higher, meaning better, respiratory scores from the [indiscernible] instrument than the patients who had not converted with the addition of ARIKAYCE to the background therapy. Although quite limited, these data give us confidence that by achieving higher rates of sputum conversion with the use of ARIKAYCE, that a higher proportion of patients will have improved symptom scores in the ARISE and ENCORE studies. We have powered the ENCORE study at 90% for the primary endpoint. And additionally, the study is powered at over 90% for durable sputum culture conversion. However, we have built into the ENCORE study an interim blinded sample size reassessment so that we can be confident that, that targeted number of patients still allows adequate powering for the potential treatment effect. Since ARISE ends earlier than ENCORE by design, the data from ARISE will give us earlier insights into what might be expected and inform on the final approach to computing symptom scores in the longer ENCORE study. In closing, we are excited about advancing ARIKAYCE as a potential front line therapy to treat MAC lung disease. The Insmed team continues to make great progress on our registration program, and we look forward to providing updates at a future time. So with that, let me now turn the call over to Neil Hughes, General Manager, Head of EMEA, for an update on the planned European launch of ARIKAYCE.

Thanks, Kevin. Good morning, everyone. Starting with Slide 91, ARIKAYCE has been and continues to be a successful commercial product in the U.S., and we're excited about its global potential. It has one of the top 10 most successful non-oncology rare disease launches following initial commercial efforts in the U.S., and we're fully utilizing all we've learned from this success as we prepare to approach the European and Japanese markets. Our strong U.S. launch was the direct result of our efforts to engage health care providers and educate the U.S. patient population, while working concurrently with payers in support of positive reimbursement trends. We plan to utilize the same efforts as we look to global expansion for ARIKAYCE. The EU market is quite different from the U.S., not only in terms of the reimbursement environment, but also with regards to treatment pathways for NTM disease. And notably, unlike in the U.S., ARIKAYCE is not a drug-device combination product in the U.S. or Japan. In other words, the Lamira nebulizer manufactured by PARI is a separately listed product. Despite these differences, there are critical learnings from the U.S. that we can take and apply as we prepare for future launches. As one example, we will apply the U.S. insights around optimal support for health care providers and patient education, which in many EU markets will be 3 third parties, when initiating treatment with ARIKAYCE. Turning to Slide 92. Our education efforts with health care providers will be of great importance given the updated international treatment guidelines for NTM lung disease published earlier this year where ARIKAYCE received a strong recommendation for use as part of the treatment regimen for MAC lung disease. Specifically, the newly issued treatment guidelines strongly recommend the addition of ARIKAYCE for adult patients with MAC lung disease with limited or no alternative treatment options who failed to convert to a negative sputum culture after at least 6 months of standard treatment. The guidelines also recommend that treatment of MAC lung disease should be continued for 12 months after culture conversion. These guidelines are the globally recognized standard for the prevention, diagnosis and treatment of NTM lung disease, with the goal of providing the latest evidence-based guidance to improve patient care and outcomes. This is the first update to the guidelines in more than a decade, marking a significant milestone in the management of NTM lung disease. The inclusion of ARIKAYCE in these clinical treatment guidelines underscores the critical role ARIKAYCE can play in the management of patients with refractory MAC lung disease. We view this as an important opportunity to reinforce the optimal treatment approach for refractory MAC patients, including the recommended duration of therapy, and look forward to working with global NTM experts in educational efforts. A key focus in Europe to date has been to ensure that we have a strong team in place to execute on our goals, as shown on Slide 93. The EU team is highly experienced. Team members have deep respiratory rare disease experience and our country leadership have impressive track records of successfully launching rare disease products in their market. This experienced and passionate team has the dedication and knowledge necessary to successfully educate treating physicians around the treatment benefits that ARIKAYCE can provide. We certainly have a clear vision to make ARIKAYCE available to patients at a global scale. Roger will walk you through our efforts in Japan shortly, but let me now focus specifically on our efforts in Europe. Turning to Slide 94. The literature suggests that there are approximately 14,000 total diagnosed NTM patients in the European 5 countries, with approximately 1,400 refractory MAC patients. As we've looked into this more closely, we've seen some indications that the opportunity for ARIKAYCE may actually be larger, as I will discuss shortly. Turning to Slide 95. We received a positive opinion from the European Committee for Medicinal Products for Human Use, or CHMP, in July of this year and anticipate receiving EU marketing authorization in October. Based on the CHMP positive opinion, the indication for ARIKAYCE in Europe will be for the treatment of NTM lung infections caused by MAC in adults with limited treatment options due to non-cystic fibrosis, and so it's a bit wider than only refractory MAC patients. Essentially, this indication would also allow physicians to prescribe ARIKAYCE to treat patients who can tolerate first-line treatment or those who are contraindicated. Since receiving the positive CHMP opinion, we've worked steadily on finalizing translations and packaging in preparation for commercial product availability in Europe before the end of the year. Our initial assessment of the European opportunity for ARIKAYCE was conducted a few years back. More recently, on Slide 96, new analysis suggest that the actual size of the NTM population and the percentage of those patients with MAC infections may actually be higher than previously thought. Data also suggests that a higher percentage of patients than previously believed are refractory to treatment. It's quite typical when introducing a treatment for a rare disease, which previously had limited or no treatment options, to see true prevalence of the disease become more apparent as it's more strict than natural situation. If as these recent analysis suggests, there are, in fact, significantly more cases that are currently not being diagnosed and referred, then it will take some time and effort to bring them to light. But over time, we're optimistic that the size of the opportunity may indeed be larger than originally thought. Turning to Slide 97. Let me walk you through our European launch strategy. In preparation for the launch, we first built a strong lead infrastructure and have focused on 4 operational priorities. These include supporting value pricing and access, identifying and improving the NTM lung disease ecosystems to identify appropriate patients, ensuring Insmed's launch readiness and building support for both patients and health care providers. This last effort is critically important to ensure that patients and treating physicians have a positive experience for initiating ARIKAYCE. Our experience in the U.S. and with early access programs in Europe has clearly demonstrated that there's a significant difference in both satisfaction and treatment outcome when patients and health care providers receive adequate training and support, perhaps not surprising for daily nebulizer therapy. In particular, analysis from our French ATU program showed that with comprehensive patient and clinician support for treatment initiation in place, adherence was many times greater when compared to if patients received minimal support. The final launch priority is to ensure that the team executes launch strategy in Europe. We've utilized launch minus 12 months and minus 6 months reviews and resourcing deep dives to ensure that all the pieces will be in place and operating smoothly to support a strong launch. Slide 98 outlines Insmed's footprint in Europe. As I mentioned earlier, we've built a targeted organization here. Our country managers have been in place for several years and are experts in the management of NTM disease in their respective regions. Our model combines building our own commercial entities and field force in major markets, while utilizing distributor models where appropriate. We expect that by the end of this year, we will have 24 field-based customer-facing personnel, and we anticipate that to grow to about 50 by 2022. The timing and shape of this growth is reflecting the anticipated phased reimbursement and actual demand across Europe. Reimbursement in the EU is a country level exercise, typically initiated after receiving the pan-EU marketing authorization. The chart shown on Slide 99 shows our current estimates for timing of reimbursement launches in various markets. These estimates are just that, a range of where we would expect launches to initiate, typically several quarters post-approval as reimbursement timing will be based on individual negotiations, not past historical data. I should also mention that we plan to keep any list price differential between the U.S. and Europe to a minimum and to a relatively flat global pricing approach. The model in Germany is of particular importance as this is a key market for us given its size and early launch. Drilling down a bit more here on Slide 100, we expect that Germany will represent the largest market for us in Europe. The interrelationship between regional expert centers and community pulmonologists as well as the strong support when desired for both clinicians and patients will all be supported by our 3-up territory model shown here. In other words, the commercial field manager, medical science liaison and third-party patient support program nurse all share a common geography. We believe this approach will allow for seamless customer experience. Finally, turning to Slide 101. The corollary of having a lean organization, of course, is that you need to ensure that you have the right resources in the right places. This slide illustrates how we've gone about this in Germany. Here, we've mapped centers of excellence, high potential community of pulmonology centers and centers who've had clinical experience with our case already. Based on this analysis, we can identify high potential areas in which to focus our resources. Once we've launched, we'll further validate these analysis and we anticipate adding additional commercial field staff in some of the higher potential areas by mid-2021. We're extremely pleased with our progress to date in preparing for the European launch of ARIKAYCE. And I'm proud of the team's ability to make such impressive progress ahead of the anticipated approval, leaving us in a solid position to make ARIKAYCE available to patients by the end of the year. With that, let me turn over to Roger Adsett, our Chief Operating Officer, to walk you through our efforts to prepare for potential commercialization in Japan.

Thank you, Neil, and good morning, everyone. Insmed took the decision to register ARIKAYCE ourselves in Japan and, if approved, to commercialize ARIKAYCE ourselves, adding this market to our core geographies in the U.S. and Europe. We see Japan as an attractive market that we can access without a partner because of our corporate strategy focused on discrete patient populations with high unmet medical needs. We believe that building a high-quality team in Japan to bring ARIKAYCE, if approved, to Japanese patients in a refractory population first, followed by frontline therapy is the right strategy that leverages our global infrastructure and can be accomplished with a modest local footprint. More broadly, given the overlap with bronchiectasis and NTM lung disease, the investments we are making now position us extremely well for a potential future launch of brensocatib in Japan. We are extremely excited about the potential of the Japanese market and the progress we have made with our commercialization plans in Japan. As shown on Slide 103, the opportunity in Japan is significant with an estimated 15,000 to 18,000 refractory MAC lung disease patients. There are several factors that may explain this prevalence, including the fact that Japan is an island nation and proximity to water is a risk factor for NTM as the mycobacteria aerosolizes above bodies of water. It's a large elderly population and underlying lung disease from smoking. In addition, Japanese annual physicals typically include chest imaging that could aid diagnosis. It could simply be that Japanese physicians are better at diagnosing NTM lung disease. Turning to Slide 104. We are on track for approval in the first half of 2021 and an anticipated launch in Japan midyear 2021. As we previously disclosed, we filed our JNDA for ARIKAYCE as planned in March of this year. We anticipate a 12-month review putting potential approval in the March time frame, if all goes according to plan. If ARIKAYCE is approved, we would anticipate a 3-month price negotiation, putting our potential launch in the middle of 2021. The Lamira nebulizer was approved by the Japanese Ministry of Health, Labor and Welfare, or MHLW, in June of this year, again, in line with our expectations. This is an important milestone as ARIKAYCE is not considered a drug-device combination in Japan. Turning to Slide 105 and pricing. The reimbursement process in Japan is different than what we see in the U.S. and Europe. A base price is calculated using a number of inputs and the government then looks to a basket of countries, specifically the U.K., Germany and France, for the list prices in those markets. They then apply a foreign price adjustment. If the calculated price is lower than 75% of the foreign price basket, the government may adjust up to the 75% level. We anticipate that we will have supportive list prices in Germany and the U.K. to inform a favorable Japanese foreign price adjustment. We have a capable team working towards securing this reimbursement, and we'll be constructively engaging with the government to negotiate a mutually acceptable price. The Lumira device is reimbursed separately. Government reimbursement will support the base device plus disposables such as the handset and the mesh head, and will also provide a medical fee to the physicians for training the patient on how to use the device. There are some key characteristics that are unique to the Japanese market, shown on Slide 106. We want to highlight some of those nuances to better inform on the opportunity for ARIKAYCE. First, for the first year that the drug is on the market, prescriptions are limited to a 2-week supply for patients. This means that if ARIKAYCE is approved, patients would need to return to their pharmacy every 2 weeks to replenish their ARIKAYCE supply. Second, Japan is a co-pay market where all approved drugs are reimbursed at fixed rates and there are various programs to support elderly and lower income patients. And finally, unlike in the U.S. and Europe, if ARIKAYCE is approved, the Insmed team would not be permitted to directly train patients on the use of ARIKAYCE with the Lamira device. Rather, we would explain how to use a device to physicians and physician offices will conduct training for patients. This is why securing reimbursement for the device and medical fees to cover training is important. To support our anticipated launch if ARIKAYCE is approved, we built a strong presence in Japan shown on Slide 107. Our infrastructure thus far currently includes 28 people under the leadership of Mr. Yuji Orihara. Mr. Orihara joined us in 2018 and our success in recruiting talent in Japan has been due largely to his efforts and his reputation. Mr. Orihara has worked for many large biopharmaceutical companies, most recently Gilead, where he oversaw the launch of their hepatitis C franchise in Japan. Under Mr. Orihara's leadership, we already have in place a very qualified and motivated team. Moving to Slide 108. So how will this team maximize the potential launch of ARIKAYCE in Japan and reach patients and health care providers? We have already had appropriate medical engagement with major medical associations in Japan, including the Japanese Association for Infectious Diseases, the Japanese Respiratory Society and the Japanese Society of Tuberculosis and NTM. It is perhaps noteworthy that the Japanese Society of Tuberculosis added NTM to the society's name in January of this year, indicating strong interest in NTM lung disease. Japanese KOL interest in ARIKAYCE is very strong, and we are gratified for the early support they have offered to Insmed in bringing ARIKAYCE to Japanese patients if it is approved. Let's discuss our sales force in Japan. Please turn to Slide 109. Our current sales force deployment plan is to deploy 15 sales representatives to call on physicians at 215 key hospitals. They would call on over 550 physicians within these hospitals. Based on prescribing data, we estimate this covers approximately 80% of the refractory MAC lung disease market. One of the lessons we learned in the U.S. launch involved a knowledge gap in NTM guidelines and the need to offer educational support to physicians on guideline recommendations for treating NTM lung disease. To address this gap, by the fourth quarter of this year, we plan to have 15 sales representatives calling on doctors under collaboration with Japanese manufacturers of clarithromycin. This will allow us to educate health care providers on the treatment guidelines for MAC lung disease in a manner that complies with Japanese law. These efforts will include education around the utilization of a macrolide as recommended by NTM treatment guidelines. Additionally, to further support these medical education efforts, we intend to deploy 4 medical scientific liaisons or MSLs by year-end. In summary, I'm thrilled with the progress of our launch plans in both Japan and Europe. The Insmed team has worked hard to apply the knowledge gained through the U.S. launch, and we are putting into practice the expertise gained as we implement plans to launch ARIKAYCE in Europe and Japan. I want to thank those teams for their efforts and continued dedication. I am looking forward to seeing the fruits of their labor. More broadly, as I take a step back and reflect on the ability of Insmed to operate as an international company; executing multiple launches across diverse geographies; handling regulatory filings and approvals with multiple government agencies; managing complex supply chains to ensure our drugs and devices are available to patients wherever they are; executing clinical trial programs across multiple products, disease states and phases of development; all the while bringing additional impactful differentiated products forward from our labs, I couldn't be more impressed by the people we have within Insmed working to make a difference in the lives of patients. I'd like to thank them for their efforts to date and encourage them to continue to strive to make a difference. I'd now like to turn the call over to Sara Bonstein, our CFO, for closing remarks.

Thank you, Roger. Today, the team is taking you on a tour from the test tube to the global commercial markets for important treatment opportunities, both realized and potential. I want to close with a high-level view on the collective impact of these programs. The past 3 years have been a whirlwind for the company as we've advanced from a development stage operation to a commercial company with a global footprint and an enviable pipeline beyond. And we fully expect the next 3 years will prove to be even more exciting given the opportunities ahead of us. As we hope you've seen through today's presentation, we are well on our way to building what we believe will be the leading pulmonary-focused pipeline in the industry. In the short term, over the next few months, we expect to initiate a registrational program for ARIKAYCE as a frontline treatment for NTM. In tandem, we are well underway in our efforts to expand global access to ARIKAYCE for patients with NTM outside of the United States. We also plan to initiate a registrational trial for brensocatib as a treatment for bronchiectasis. Finally, we expect to advance treprostinil palmitil inhalation powder, or TPIP, into Phase II development in an effort to transform treatment for patients suffering from PAH. Importantly, from a financial perspective, we are well capitalized to execute on these planned studies as we advance our mission. We ended the second quarter of the year with a strong cash position of $641.9 million, which we believe will support our operations for over 3 years. This includes our global expansion efforts with ARIKAYCE, supporting both our planned ARIKAYCE confirmatory and frontline studies and our planned brensocatib ASPEN study for the treatment of bronchiectasis as well as the planned Phase II study of TPIP with PAH. Consistent with our commitment to focused investment, we will continue to closely align our expenses with our strategic priorities. Earlier, Will outlined the growth trajectory for Insmed, and I want to take a moment to discuss how we expect the many opportunities we outlined today could translate into meaningful revenue growth for Insmed, leveraging our existing development and commercial infrastructure around the world. For ARIKAYCE, on the heels of a successful U.S. launch, we are well positioned to support global expansion efforts, if approved, into the EU and Japan. Neil and Roger outlined the strong teams we have on the ground and region-specific strategies to support the launch in those markets. We believe successful outcomes in our planned ENCORE and ARISE trials could support full approval of ARIKAYCE in the frontline setting in the U.S., Europe and Japan, which we believe could establish ARIKAYCE as the standard of care for any patient with NTM. We believe this, in turn, could represent a fivefold increase in the addressable market for ARIKAYCE, making ARIKAYCE a product capable of generating over $1 billion in annual revenue. We believe that the frontline setting could leverage our established commercial infrastructure from the refractory indication. For the brensocatib program, we fully intend to leverage the transformational potential in this once-daily oral therapy, starting with bronchiectasis. As Colleen outlined, we believe the market here is underappreciated as it is likely that many brensocatib -- bronchiectasis patients are not accurately diagnosed. The bronchiectasis indication alone could represent an addressable market opportunity 10 to 20x larger than ARIKAYCE. Even the low end of this range would yield substantial revenues, potentially into the billions, for Insmed. Notably, we believe we could accomplish the potential commercialization of brensocatib with only modest investment in our commercial infrastructure. Given the overlap in the NTM and bronchiectasis patient populations and treating physicians in the U.S., we anticipate only a modest increase in our current sales force would allow us to reach the majority of the bronchiectasis community in the U.S. We believe the strong alignment in geographies where these 2 diseases tend to be prevalent would also allow us to leverage our commercial footprint in both Europe and Japan. We view the ARIKAYCE expansion and bronchiectasis opportunity is only the beginning. We expect the next growth cycle beyond that will be fueled by our brensocatib platform. Finally, with TPIP, we have a potentially highly differentiated prostanoid that may provide improved benefit with a better tolerability profile and even the potential for a disease-modifying effect. Given the over 200,000 diagnosed PAH patients globally, we see the potential for significant value creation around TPIP in this initial indication. We are very excited about the many opportunities ahead for the Insmed portfolio. I would like to thank Dr. Oudiz for taking the time today to share his perspective on the PAH treatment landscape. In addition, I want to thank our shareholders for their continued commitment to Insmed and our shared vision to bring forward new treatments that can fundamentally change treatment paradigms in their target indications. And I would like to thank the talented Insmed team for their efforts in transforming this organization. I truly believe that at Insmed, if we put our minds to it, we can achieve it. I'm extremely proud of this team and all that's been accomplished and the potential that lies ahead of us. We look forward to sharing our future successes with you. With that, let me open the call for questions. Operator?

[Operator Instructions] Our first question today comes from Ritu Baral with Cowen.

I'll stick to 2. We'll start with the ASPEN study. You mentioned there was a 300-patient PK/PD subgroup. Can you address the purpose of this subgroup, and I think you said biomarker data that it will be generating? And then my follow-up just has to do with some additional detail around the ASPEN design, stratification, background treatment and whether you are looking at any additional quality of life measures in that study?

Thanks for the question, Ritu. I'm going to ask Kevin to comment on the 2 questions, the first, PK/PD sub-study within ASPEN. And then in answering the second one, we may also throw in there one of the questions that was written in, which is, what are the -- what's the hierarchy of the other secondary endpoints? And what's the rationale for that hierarchy?

Thanks, Will. Thanks for the question. So with respect to the PK/PD substudy and the ASPEN study, that will focus on collecting data from both blood and sputum on the NSPs for which we've already measured in the WILLOW study, we'll do the same here in the ASPEN study, perhaps with additional NSPs as these become available. So that will be the focus of the PD part. PK part, we'll be gathering additional information on the levels of brensocatib in this population, again, just to add to the wealth of data we already have here. So that's really the focus of that 300-patient PK/PD substudy in ASPEN.

And is that data that will be used commercially potentially to manage these patients?

So no, I don't think so at this present time. I think the data that we're going to collect are useful data for scientific clinicians in this disease space to help further understand the effects we see with brensocatib via its mechanism of action on exacerbations with a clinically relevant outcome.

And then maybe, Kevin, you can comment on the hierarchy and the secondary endpoints in the study and the thoughts behind that.

Sure. So just to be clear, the primary endpoint for ASPEN is the rate of pulmonary exacerbations over 52 weeks. As we've shown in Slide 17, the secondary endpoints are listed according to the hierarchy that we proposed so that the first -- secondary endpoint in that hierarchy is time to first pulmonary exacerbation over the 52-week period. The next is the proportion of subjects who are free of exacerbations. And the third is the percentage change in post-bronchodilator FEV1 during that time. And in terms of some of that rationale, it gets us and the health authorities to different aspects of exacerbations that we've already, in fact, shown favorable effects in WILLOW. So we've shown an impact on the time to first exacerbation. That gives you some additional information as opposed to the primary endpoint, which is rates of exacerbation, which is really more than one exacerbation. The other secondary endpoint, the proportion of free, will give us the total -- exactly as it says, the total number of patients at the end of the study who are free of any exacerbations, different information from the time to first exacerbation. And then the last one -- not the last, secondary, but in that hierarchy, the change of post-bronchodilator FEV1. Interesting data from WILLOW that we shared at ATS Virtual as well as described in the New England Journal where placebo-treated patients showed a numerically larger decline than the brensocatib-treated patients, although not statistically significantly different, intriguing enough, different enough that perhaps through 52 weeks, we might observe something in an area that will provide additional useful information to clinicians.

And Kevin, in that data that we saw where placebo declined in Phase II, was the decline seen in the placebo patients consistent with expectations?

Yes, absolutely. I think our assumption here, the rate that we would see was almost virtually head-on to what we had predicted for that, so yes.

Okay. And Ritu, I want to make sure we answered your second question adequately.

Yes, but also just what you're allowing for background treatment for ASPEN and stratification.

So 2 questions. So let me take the first one first, in terms of background therapy. So these patients -- the patient population that we're enrolling, virtually the same as the WILLOW population. These are people who have had a history of 2 or more exacerbations, as I said earlier, within the prior 12 months requiring treatment. And so these patients, as you would expect, are on various inhalers that you know well. So those will be a lab. What will be important though is they have -- are on stable dose and stable types of medications for at least 4 weeks before actually getting randomized, and that's really important here. And that's what we did in the WILLOW study as well, too. To the second question, in terms of stratification factors for randomization, we're going to be using the use, non-use of macrolides at screening, the -- whether they had 3 or more exacerbations or less. Everyone has to have at least 2 or more. And then lastly, the presence or absence of pseudomonas during the screening in their sputum. So those are the stratification factors that we'll use.

And then did we look -- are we going to be looking at quality of life or any PRO sort of benefit?

Yes. So as for example, the quality of life bronchiectasis tool would be using the bronchiectasis severity index as well. It's another example and something that will be useful information, I think, for clinicians.

And then finally, how are we going to handle background-inhaled steroid usage? That was another question.

Sure. As -- for this patient population who has 2 or more exacerbations, it's expected that pulmonologists and their present care of these patients today are using ICS, inhaled corticosteroid. And we saw that in the WILLOW study as well. I'll just come back to the point is they can use it, but they have to be on a stable dose for several weeks, 4 weeks before they actually get randomized into the ASPEN study.

Terrific. Ritu, does that answer all your questions?

Yes, indeed.

Our next question comes from Matthew Harrison with Morgan Stanley.

Thanks for hosting the call. And this is Connor Meehan on for Matthew. So this is a question on TPIP, maybe for Dr. Oudiz, if he's still on.

Still here.

Great. How does the rule out technique affect the addressable market for TPIP? So do you think certain subtypes of patients would benefit more? And if you are to target idiopathic disease, how do you think that will affect patient outcomes and enrollment?

I apologize if I made any points towards the use of this drug only in idiopathic pulmonary hypertension. My intent was to show that Group 1 is the rule out disease, and Group 1 encompasses all PAH. As it stands, all currently approved FDA-approved drugs for PAH are approved for all subtypes of Group 1. And we don't usually make any specific subset distinctions so that anything that you saw in that list, the Group 1, which would include idiopathic heritable associated with connective tissue disease, pulmonary hypertension, et cetera, would be candidates for inhaled prostacyclin as they are currently.

Got it. And then so just one other. So on brensocatib, I guess, whoever might be the best for this one. What do you expect in terms of a dose response, given the relatively mixed efficacy across dose levels? But in a prior call, you had mentioned that, that was due to the trial just wasn't powered for that. So if you could just comment on what your expectations are for each dose level in ASPEN?

So this goes to the heart of the question of dose response that was observed in the Phase II study. And for that, I'll ask Kevin to respond.

I think as Will was alluding to in the WILLOW study, both doses were clearly effectively showed statistically significant effects, as you know, on the time to first exacerbation here. And we said, it may be that we did not see a dose response effect there on those endpoints, and it may take us longer to show that. Interestingly, through its mechanism of action on those sputum NSPs that we measured, there was clear dose responsivity there that I showed today, and it's also -- we've shown at European Respiratory Society. So clearly, the DPP1 mechanism has a significant role in the risk for exacerbations. And I think via brensocatib, as we've shown on WILLOW, we expect that we will, one, have an impact on rate of exacerbations. And it remains to be determined, perhaps through a longer trial, whether we'll see dose responsivity between the 2 exposures that we're studying.