Insmed Incorporated (INSM) Earnings Call Transcript & Summary

Welcome, everyone, to the 2021 Credit Suisse Healthcare Conference. I'm Judah Frommer, senior biotech analyst here at CS. And we're thrilled to have Will Lewis, Chair and CEO from Insmed, here with us. I'll just remind the audience, if you do have any questions you'd like to ask Will, you can certainly e-mail those over to me, [email protected].

And with that, let's jump in. Will, you've outlined the framework of 4 strategic pillars for the company. So maybe to better understand the Insmed story, can you walk us through those pillars before we delve deeper into each one?

Sure. And I have to say, to start out, we are in a fantastic position as a company. I mean I think we have centered around these 4 pillars as a way of describing the opportunities within the company. But maybe a better way to just give you a sense of how far we've come, we number more than 600 employees now around the world with commercial operations up and running in the U.S., Europe and Japan. When we were approaching the COVID epidemic, we have 1 clinical trial running. Right now, we've got more than 10. And I would just tell you that all of these represent incredible value-creation opportunities for our investor shareholders, and that's largely because each and every one of them, we think, will be impactful on patients. If we take each pillar in turn, the first one is, of course, ARIKAYCE, which is already approved in the U.S., Europe and Japan for the treatment of refractory MAC. Our strategy there is to have those launches in Europe and Japan really take hold in 2022, and to see the U.S. return to growth post the Delta variants receding and us entering an endemic phase of this COVID infection cycle. As we think about future, it's obviously frontline opportunities for that drug, and that is something that is well underway. We have ARISE and ENCORE, the 2 trials there, which are enrolling around the world to support approval in those different territories of that market opportunity, which would be several times the size of the refractory market opportunity. So we feel great about ARIKAYCE and its expansion potential. Probability of success there is high because we're expanding within the same disease state where we already know we can impact the sickest of the sick patients. We're just going upstream to patients who are initially diagnosed. As we go to the second pillar, this is brensocatib. And this one, the potential size of this opportunity can't be overstated. We're talking about a DPP1 inhibitor first-in-class, which would be the first-in-disease treatment for bronchiectasis. The Phase III ASPEN trial is well underway. We are enrolling patients there, consistent with our own internal expectations. And on the heels of that, we are also looking at its potential in cystic fibrosis. And early next year, we will talk about 2 additional clinical trials that we'll be running, one of which will kick off next year in additional indications. So we see not just the opportunity in bronchiectasis, which we think is quite significant, but the potential of the compound and DPP1 inhibition as a new pathway for unlocking the treatment of neutrophil-mediated diseases. As we go into our third pillar, that's TPIP. That's a treatment for pulmonary arterial hypertension and Group III patients as well. So PH-ILD patients. This is a prostanoid that we have reformulated to create a treatment profile that we think, at least according to the animal model so far, has the potential to induce hemodynamic change in patients that can even result in histologic change. So we're talking about the possibility of disease modification using a prostanoid. And some of the earliest looks at data from that will be available, hopefully, by the end of this year in a handful of patients from our Phase IIa study, quickly to be followed by Phase IIb studies in PAH and Phase II in PH-ILD next year. Our fourth pillar, which we'll be spending increasing amounts of time in the next year or 2 talking about is the translational medicine pillar, and that really looks at the byproduct of our research department, which is responsible for creating our first and third pillars. So already a very distinguished track record, augmented by a series of acquisitions we've done to introduce really new and cutting-edge technologies that we think will generate some very exciting treatments that will have a very significant opportunity to impact patients' lives outside of the pulmonary arena and outside of many of the technologies we've used to date. So this is really the engine of the future of Insmed, and it will answer the question of what's next for many years to come, starting with our first IND, we think, next year. So I'll stop there. Those are the 4 pillars. We're very well financially resourced to move them all forward. And I think we sit in a very enviable position among our peers in terms of the strength of our pipeline, the degree to which it's derisked and the capital we have in our disposal.

Okay. That's a great overview. And maybe one more before we jump in to ARIKAYCE. One thing we tend to hear is that Insmed may have some loosely defined time lines around kind of your key trials that are underway, ASPEN and ARISE, specifically. So I believe you've talked recently about maybe better defining those time lines. Kind of what are the plans as we get into the new year to give investors kind of more milestones to look forward to?

Yes, that's a very fair criticism of the company. I think we have been hesitant to provide clarity in a world of uncertainty surrounding COVID. Having said that, the first quarter of next year, we intend to give very specific updates on our various clinical trials and when we think those will read out and those sorts of things, first enrollment, then readout obviously. And as well, give some perspective on how we think ARIKAYCE will do in a future world now that we're launched in 3 different territories. So that specificity is coming. I do want to be clear, it's not going to be at JPMorgan, that's a crowded time, and we think it's better to take the time and to give the perspective. So sometime in the first quarter, probably a combination of our quarterly call, year-end and a research day will convey all that information.

Understood. And okay, maybe jumping into ARIKAYCE here. So you talked about the launch, obviously, accelerating the launch of a respiratory drug during COVID is tough. So where would you say we are today in terms of the ARIKAYCE launch, 2021 nearly behind us relative to where you were before the pandemic? And how would you say the pandemic has affected the launch, specifically in the U.S.?

I think the data is pretty clear. We had a very resilient compound and an extraordinary effort from our commercial team around the world, but in particular, in the U.S., which really had some brutal headwinds that came in wins and magnified form. There's the political overtone of everything that was going on. And it made it very difficult to operate in a way that was supportive of physicians and their patients. Having said that, if you look at the numbers, we were pretty much flat, plus or minus, throughout the various quarters of this pandemic stage. I think we're entering endemic stage. I don't know when that's going to be fully arrived. I'm hopeful for the first quarter of next year. Might we see some before then? It's possible, but we're rapidly approaching the holiday time of the year, when things tend to be a little bit start-stop anyway. And I think this year, probably we're all looking forward to a little time off. And I imagine, not so much from the company side, but physicians who are exhausted from a year of COVID are going to need some time away. So I'm not expecting an acceleration as we enter the end of the year, but I would say that I think as we enter endemic phase of this, we will begin to see those patients come in, and those physicians are very keen to treat these patients that they have not had a chance to turn their attention to. And I just -- I would say the company feels like we're in a very hopeful position for the near term of the ARIKAYCE franchise because it's been a long hard slog to get through these various surges of various variants.

Sure. And would you say COVID has affected patient starts? Or maybe it's affected duration of therapy for patients already on therapy? Have you looked at it in those ways? Or does it not matter as we come out, you should get kind of both fixing themselves?

No, we've looked at this very carefully. And I would just, again, say I think in large part due to the excellent work of the commercial team and the patient care team and all the support folks that surround that, medical affairs, et cetera, we've had a remarkably steady performance among patients that are on drug. I think the new patient starts are the most dramatically affected. And it's important to emphasize the regional variability for 2 reasons. One, it explains why some areas are super cold and then super hot. But two, and this is perhaps more important as we look forward, in the third quarter, we saw territories that were hit particularly hard by the Delta variant, and those are ones that had a high concentration of NTM patients. While at the same time, we had areas that were traditionally not performing as well, see real improvements. And I think that's a byproduct of the creativity that the commercial team brought to those areas. And the consequence of that was the ability to reach patients that we previously hadn't identified and get them on treatment. And so those areas helped to buoy what was otherwise a very hard hit to some of our higher concentration regions. And that portends good things as we think about next year, because if we can get that same kind of outperformance in our traditionally heavier producing territories, then that could really bode well for the U.S. as a return to growth, which is what we're all hopeful for.

Okay. That makes sense. And maybe hovering into your ex-U.S. markets, right? So you recently rolled out in Japan. Can you frame the opportunity -- the commercial opportunity in Japan? And can we roll Europe in there also relative to the U.S.?

Sure. I think when we think about the opportunities, let's take Europe first. I mean people -- our European team has done fantastic work building relationships with physicians over there and supporting patients, as an example, in the French ATU program, which was extended even after we were approved somewhat unusually, but that's a statement about the impact that the drug is having on patients. And the folks over there have gone to extraordinary ends to make sure that patients have had access where possible. As you know, there's the approval process and then there's the reimbursement process in Europe, and we are well underway for the reimbursement process now having been approved. So we are approved in Germany. We're approved and supported price-wise in the Netherlands. The French ATU program has been expanded. We're approved in Wales now, which we're very happy about. And we foresee in the near-term expansion from there into some of the other markets in the U.K. over into Italy and perhaps other countries across Europe. What this will mean is Europe will be contributing more fully in 2022 than it was able to in '21 recognizing that a lot of the health care system in Europe put the brakes on just about everything it could because of the cost of the COVID epidemic over there. Europe is estimated to be about 1,400 refractory patients. We think it's more than that, but we're talking about, in terms of patient numbers, a much smaller market than the U.S., a fraction of it really. But we did manage to secure a list price that was equivalent to the U.S. So we think there's real opportunity there, and I'm confident that team is going to be able to unearth it. As we turn to Japan, we see a market that actually has more refractory patients diagnosed than even the U.S., more than the U.S. and Europe combined. So that's a very interesting addressable market. And the support from key opinion leaders over there has been very good. We've secured a list price that again is equivalent to the U.S. and Europe. So that's remarkable. So we're very excited about that. And early signs from the launch over there are very positive. Obviously, we launched into a lockdown and we launched into an undervaccinated population. That has since turned around. The lockdown has been lifted and the population is now vaccinated, I think, at a rate that is at least at parity with the U.S., if not higher. So that all is very positive for what that could contribute in the near and medium term. We're very excited about the Japanese market opportunity, but it's early days and we need to see how it unfolds.

Yes. And what's the process for establishing reimbursement in Japan? What should we look for in terms of time line there?

Yes. So that is secured. We have the price identified at least equivalent to the U.S. and Europe roughly. And it is single payer, so it's the government. And they importantly are reimbursing not only the drug but also the device and the training. And the way this works in the Japanese market is every new drug that is launched gets prescriptions filled at 2-week increments for the first year, and that's because of their sensitivity around pharmacovigilance and safety. They are following the same pattern they followed with the introduction of pulmonary arterial hypertension drugs, in that they're hospitalizing patients for the first 4 to 7 days as they bring them on the therapy. We think that could pay dividends. It's not for all patients, but for more than half of them, they're certainly doing this. And that also dampened a little bit the launch dynamic because, of course, those beds were reserved for patients with COVID potentially. So as that is alleviated, I think that opens up more opportunity. And so we'll be once again tracking this very carefully in the early months of launch. But as Roger said on the last quarterly call, the slope of that launch is off a lower base, but it's parallel to what we saw in the U.S. at this stage, and that's quite encouraging.

Okay. Great. And maybe moving into the potential to enter the frontline setting. Can you talk about the differences in the ARISE and ENCORE trials? And kind of the relative positioning of each trial with regards to supporting approval there?

Sure. So in Japan, it's different from the U.S. In Japan, they want to see culture conversion as the primary endpoint. And so that is, in fact, the primary endpoint we'll be studying in the Japanese studies. In the U.S., it's the PRO, or patient-reported outcome tool that we've developed. And the ARISE ENCORE design was really done to address the uncertainty that might surround the PRO's first use in a clinical trial setting. We have a lot of confidence in the PRO, but we thought the lesson of Global Blood Therapeutics was to test the PRO in a smaller trial before you went for the full approval trial. And what we've done here is just that. So we have what is effectively a sentinel study in ARISE that will study the drug compared to the control arm using the PRO over a 7-month period. Six months on drug, 1 month off with the measurement at the baseline and then 1 month off all drug. And then the main study, the ENCORE study, will run in parallel for 13 months. Again, same design comparing the 2 arms and the primary endpoint being 1 month off drug at month 13 versus baseline compared to the other arm. If we see something in ARISE that tells us that the PRO is behaving differently in clinical practice than what we expected, we, because it's still blinded, can modify the ENCORE study. Either the weighting of the different questions or the actual statistical analysis plan, enrollment numbers, all those sorts of things are available to us. But that is particularly relevant for the U.S. market. As I said before, in Japan, it's culture conversion where we have a high conviction rate that we'll be able to succeed there.

Okay. And maybe just specifically on the PRO. How should we think about placebo response within the PRO? And then kind of the translatability of the PRO from a refractory setting to a frontline setting?

Well, it's important to understand that, of course, we track patients' response to our drug, and we've seen other clinical trial uses that give us some insights here. This is the quality of life bronchiectasis questionnaire, which we have used previously. And we know what the symptomatic response is of patients on our drug. After they get through the adjustment period of going on the drug, in many cases, you see a reduction in sputum expectoration. You see a reduction in the fatigue levels that they've experienced, things like that. And so those are weighted more heavily, based on our direct experience with the drug, in this patient population. As we think about translating that across all frontline patients, that's where some of the uncertainty lies. But I think we feel pretty good, based on our work with the KOLs, that this is going to work and it's going to win. And I think it's never as exotic perhaps to be moving into a frontline setting from a refractory setting with a drug, but it is absolutely the best bang for the buck for investors because the probability of success here is extraordinarily high. We know it works in the sickest of the sick, all we're talking about is moving it upstream. And the artificial cutoff of you have been on background therapy for 6 months is effectively something we invented. This line we've drawn for patient profiles is fairly artificial. And I think once we move upstream, we'll see the same kind of response to this drug that we've seen in refractory patients, probably even more. My expectation is more dramatic. One of the things we saw in Phase III and in Phase II going way back was the speed with which these patients culture converted. And we were seeing it as early as 1 month in. And for a newly diagnosed patient to culture convert sooner than the control arm, I think that's where real opportunity lies to distinguish the importance of this treatment approach.

Got it. And can you just remind us of the market opportunity in your view within the frontline setting? And how reimbursement conversations could change around that?

One of the things we thought about when we set the initial price of this drug was the broader frontline market. So we weren't pricing for refractory or we would have priced much, much higher. So I think that, that will weigh into the discussion that we have with the market access world. This is a market that in raw numbers is probably as much as fivefold larger than the base refractory market. My guess is there'll be some percentage of that, that will be truly addressable, and that will be based on the fact that physicians are inclined to move to an aggressive treatment approach the moment these patients are diagnosed. That's clearly where the KOL and thought leaders are in their desire to use this drug upstream, but it may take a while for that to percolate into the market. So my cautious nature is that this perhaps is 2 or 3x the size of the baseline market.

Got it. And maybe just a couple of specific lines in the P&L tied to ARIKAYCE's life cycle. How should we think about SG&A and maybe cost of goods being impacted as potentially not only the drug launches in Europe and Japan, but also potentially moves into the frontline setting?

I'm not expecting a material margin change in any of our -- because of the way we're going about production, the way we're -- what we need to accomplish in that arena for the foreseeable future, if that were to change, we'll certainly communicate it. But I think this is a very expensive drug to make. It's a very complex process. Encapsulating in liposome is not easy to accomplish in a consistent and reliable way, and we've now done that at scale at multiple facilities. So we've got it down, in my mind, but I don't see that impacting margins anytime soon. As far as SG&A goes, I think largely, our investments are made, we may incrementally add. But the most important takeaway on the cost profile of this company is that we are building the base upon which the launch of brensocatib will take place. This is the same call point. We will enhance our commercial efforts, but the team that brought you a top 10 orphan non-oncology launch with this treatment for NTM is the same team that we will be using to launch in brensocatib, and that is an incredibly encouraging thing because of the enormous opportunity that brensocatib represents.

Got it. Okay. So maybe let's move into Pillar #2. I'll combine a couple of questions here just in the interest of time. Can you maybe frame kind of what you've seen thus far from the Phase II WILLOW results? And how that's going to -- or how that informs the Phase III ASPEN trial design?

Yes. So Phase II WILLOW, I think, by any objective measure, was a wild success. And so I'm of the view that when you build a robust Phase II as we did and it meets with success, you want to change as little as possible as you go to Phase III. Phase III is not a time to answer new and interesting scientific questions, it's a time to ensure success. And so Phase II was 80% powered to show a 40% improvement, and it hit statistical significance on the primary end point. When we look at Phase III, we are 90% powered to show a 30% improvement. So we are more heavily powered to show a more modest improvement. To that, we add that the baseline event rate is estimated to be 1.2 events per patient per year. Same patient profile as WILLOW, and WILLOW rate was actually 1.37. So what that tells you is that we're taking a more conservative view on the number of events we'll see. And we track that on a monthly basis, both overall and country by country. So we're tracking this extremely carefully to know that we have enough events to show the impact of our medicine. The forest plots from Phase II showed across-the-board response regardless of patient profile. So all that tells me is that unless there's some wild aberration here, this drug should work in Phase III and the design is powered to do so.

Got it. And can you talk a little bit about the relationship of neutrophil elastase and bronchiectasis? And what did you see in Phase II that gives you confidence that you should see functional benefit going forward?

Well, we saw an impact on the outcome that is the clinical measure, which is exacerbations. And if we see a reduction in exacerbations, that's what we need to win. We saw that clearly and statistically significantly in Phase II. We expect to see it in Phase III. Within that, there's the biology of what's causing that to happen. The belief right now is that by inhibiting DPP1 partially and gradually with reversible treatments, you are beneficially interrupting the inflammatory cycle that comes as a result of the neutrophil being recruited and releasing these NSPs that include neutrophil elastase, cathepsin G, proteinase 3, NSP4. Those are the elements that we are muting, if you will, at the time of their release so that, that inflammatory cascade can be interrupted. It's the first approach to treating bronchiectasis using that inflammatory approach. And so the results are very encouraging. And obviously, that's why they were published in the New England Journal of Medicine. We saw NSP levels drop consistently in Phase II. People were focused on the degree of drop and whether 10 was more than 25 or were they the same or that sort of thing. I think it's really important to understand, when you're talking about novel compounds like we have here in mechanisms, the assays themselves are novel too. And so the ability to measure with specificity and certainty the exact performance is a little bit more tenuous. But the most important thing is that they dropped. And then when we withdrew the drug, they returned to normal levels. And what we can say during that time is we saw a statistically significant impact on the clinical outcome measure. So all of that ties together as a story, I think, very strongly.

Okay. Great. And you touched on an upfront the unmet need in bronchiectasis. But can you talk a little bit more about the market opportunity for brensocatib and kind of the addressable market here?

Yes. This is something we're still going to be getting our arms around for some time. I think when we think about bronchiectasis, we know today that they are diagnosed probably in the neighborhood of 300,000, 350,000 patients in the U.S. with bronchiectasis that would be addressable for this drug. As we think about the potential, we start to realize that COPD and asthma patients are probably either comorbid or many of them may be misdiagnosed. And that range is quite wide. The literature suggests somewhere between 4% and 54% of COPD patients may also be bronchiectatic. And within that group, there's going to be an on-label targeted group that we think would be suitable to approach. How big that is? We don't yet know. But what I can say is that just looking at those numbers, there are 20 million people in the U.S. with COPD. Any percentage of that market that would be on label for this changes this drug dramatically into a really substantial, probably one of the most significant pulmonary launches, assuming everything goes as expected, in recent decades.

Got it. And we did have a client question come in kind of on this topic, specific to your AstraZeneca relationship and second and final option negotiations. Are there any details you can provide on when we'll get clarity on AstraZeneca's intentions there?

Yes. I think everyone understands that AstraZeneca continues to feel that this is an important compound. They have it in their pipeline listed. We continue to work productively with AstraZeneca. I think for us, our focus is on going after the bronchiectasis market. For those that are not as familiar, they retain the right to negotiate to pursue COPD or asthma subject to our approval. Right now, it's not gone any further than those discussions. And I think that, that is fine. We see the bronchiectasis market is capturing a meaningful part of the COPD and ESMA markets. maybe small percentages, but those are meaningful in terms of numbers. And that's really important to understand because COPD is a crowded market. Asthma is a crowded market. There will be step edit requirements to go through to get -- even if the drug is approved in those indications, it's use in those areas. So really defending and owning the bronchiectasis space is far more interesting to us than to try to dramatically expand the pie and capture a much more significant part of the COPD market where we would obviously be having to think about this commercially very differently. And I don't think, in all humility, that we really need a partner for this. We've shown our commercial chops and launching around the world. I think we can bring that same group of people to bear behind the launch of this drug, and really distinguish ourselves as the first-ever approved therapy in the treatment of bronchiectasis.

Okay. And maybe just rounding out brensocatib. Expectations for testing the drug in cystic fibrosis. How do you envision the drug fitting within the current treatment landscape there?

So it's very important to understand, when we talk about this drug, we mean the pathway DPP1, as I mentioned. Cystic fibrosis is the next logical place to go, but let me just share with you that next year, in the first quarter, we plan to identify 2 additional clinical trials that we will be -- one of which we'll launch next year in additional indications using DPP1. Cystic fibrosis is the next one that we're already underway with, but there will be 2 additional. The reason we're going after CF is because patients who are effectively treated for CF using Vertex, for example, their drug, they still experience exacerbations. And this drug treats that. They effectively become bronchiectatic patients when they are appropriately treated for their cystic fibrosis. And those are permanent damages that they experience in their pulmonary setting when they have exacerbations. So the ability to intervene there and be helpful is quite meaningful for these patients. We think of it as sort of the last mile of what these patients need.

Okay. That's helpful. And moving to TPIP. Can you talk a little bit about differentiating factors of TPIP relative to standard of care, maybe specifically Tyvaso, the formulation, which you've talked about before? But a brief overview would be great.

Sure. I think -- look, the most important thing to understand about this compound that we've developed is we've tested it in multiple animal models against Tyvaso and other approved treatments for pulmonary arterial hypertension. What we see in those models is outperformance by our drug as a byproduct of this ability to vasodilate on a sustained basis. If you think about prostanoid therapy, the goal is to vasodilate the patient to reduce the burden on the right heart and all the other compensatory mechanisms that the body introduces to compensate for this challenge of this disease insult. What we have shown in those animal models is that by using our formulation, we can extend the time of that vasodilation dramatically. Tyvaso will last about 1.5 hours. We went out to 12 even to 24 hours in some of the animal models. What we're hoping in our next exploration with this drug is in Phase IIa to show that we can produce that hemodynamic change of reduction in pulmonary vascular resistance for an extended period of time knowing that if we can do that, the downstream histologic benefits, the disease modification we saw in animals may be within reach. So the first important hurdle is are we getting that extended vasodilation? We'll be setting 112.5 micrograms of our drug administered to patients over a 24-hour time frame in an ICU with a right heart catheterization. So we'll be directly measuring pulmonary vascular resistance in these patients over 24 hours. We'll know the degree of reduction and we'll know its duration. My expectation for success here is if we can get out to as many as 6 hours, and I'm probably going to end up regretting putting an actual number out there, but approximately that level, at our lowest dose, that would be a real victory. That's 4x the duration of what you get with Tyvaso roughly and that would be incredibly promising. And that's what we're hearing from KOLs. So we're excited by these data. If we can accomplish that or even more, what that sets us up for is the possibility of disease modification with this compound. And I think sotatercept tells you what that's worth in this market.

Okay. Great. And maybe you could just clarify, I think what is still an area of a little bit of confusion that I think you cleared it up on the recent earnings call. But why conduct a 24-hour Phase IIa if it's not a gating factor for the Phase IIb?

Yes. I think this came from the KOLs. They were curious to see, can you really accomplish in a human PAH patient what you showed in the animal models because that was quite striking. And if we think about the different components we understand here, it's dose and the resulting duration of that vasodilation, we're talking about starting at 112.5 micrograms here. And we're going to see what that profile produces. We know from our Phase I data, we went north of 600 micrograms in a single administration. So we can titrate up well above 112 to max tolerated dose on a per patient basis as is commonly done in this population. For comparison, Tyvaso's max dose in their label after titration is 54 micrograms. So we're talking about accomplishing the delivery of far more drug to these patients at a given time with the potential benefit of that sustained vasodilation. It's a fundamentally different outcome from this mechanism of action, and we believe it could be a game changer for the way these patients are treated. Indeed, the KOLs have told us this would become the cornerstone of therapy in the treatment of their patients. They've said it would change the way they think about the use of prostanoids to treat their patients. It's a very big deal. And I think Phase IIa is going to unlock some insights there. It won't answer the question of how high can the dose go in patients or what's the clinical benefit of 6-minute walk, but it will give us the first insights that the physiologic change that we need to take place is, in fact, happening. And really, the ability to interpret the outcome from that is pretty derisked.

Got it. So maybe thinking of the Phase IIb, kind of what are our expectations around those functional endpoints? And are there other end points included in the IIb that you haven't studied in prior TPIP trials yet?

So we'll have the traditional measures, and all the details about these trials will be released shortly. And they'll be 16 weeks in duration. We'll go to max tolerated dose six-minute walk is going to be the primary measure because that's the clinical outcome we need for approval. We're not trying to reinvent that wheel, but we will be obviously monitoring a lot of other things as well to try and discern the different impact that this has. We know when prostanoids are used intermittently, as Tyvaso is, that results in clinical benefit. If we can do single administration and stretch that reduction out over an extended period of time, that's going to be a big deal.

Got it. And maybe just wrapping up the TPIP question. How do you think about the market opportunity in PAH specifically if there are Tyvaso generics eventually emerging?

Yes. I think what's really striking about this market is that it is really just beginning in many ways. The PAH market is crowded. There may be a dozen drugs approved to treat that. But what was missing is real innovation on the impact of the patient's disease, and sotatercept established that. Even with Phase IIa data, they showed a promising outcome and a new direction and pathway. We're trying to accomplish the same thing with Phase IIa data here in establishing the potential for disease modification. And so those kinds of drugs that result in that kind of potential outcome have a new place in the treatment of PAH that is going to be preferred over those that are already prepared and accepted in the marketplace. More importantly, that's Group 1. It's the Group 3 market that is really interesting, PH-ILD, PH-COPD patients, these other ancillary groups that have historically not had any attention paid to them. Now suddenly with Tyvaso's approval in PH-ILD and this rapid uptake there, it suggests the real need. And we believe anywhere Tyvaso works, we should work better. So once again, we think for a variety of reasons, sotatercept is not likely to work in PH-ILD, but our drug will. And so these newer markets, which are just beginning, would be ones that would be available to us.

Got it. And maybe just in the last couple of minutes here, we can touch on pillar #4, but maybe -- is there any more detail you can give on what you're potentially looking for here? It sounds like it's not within kind of the respiratory environment. And how does business development play a role? You've done a couple of deals recently as well?

Yes. So in the course of the last year, we've really augmented the research team's capabilities and tool sets. We've added new personnel with unique skill sets in different locations around the country, and we're really happy with the engine we've built. The team that existed here produced ARIKAYCE and TPIP. So we've already got a very strong track record in the research world. To that, we are now adding some of the most cutting-edge tools, and we think have built the engine we want to be able to produce internally all the drug candidates we will ever hope, or want, or need. So that changes the nature of our business development. We will still be looking. We always are. As I've always said, I've been at the company 9 years. I probably looked at, I don't know how many hundreds of opportunities, and we've done perhaps 4. So we're very selective. Each one of these has to have what I consider to be an asymmetric return profile, and that is whatever we're paying for it, it has to be able to yield a massive return for our investors and that comes from a huge impact on patients. This engine goes very far a field of pulmonary, but it stays within rare. And it stays within the lane of high impact on patients and patients that require sort of that white glove surround the patient and the caregiver's effort. We have that proven capability, and that's why we think this fits so well even though the therapeutic area and the technology may be different. I think we'll have our first IND next -- maybe as early as next year. That's an incredibly exciting accomplishment. We are going to be bringing forward a lot of things that I think are going to surprise people. And we're super excited about it. But it falls behind the 3 programs that are well along and advanced and in many ways, derisked. So we think it builds the perfect complement. And if we have more opportunities in business development, we'll obviously bring those forward, but we're very judicious in what we go after.

Okay. Great. I think that's a good place to end it. Thank you very much for all the color and commentary. We appreciate your participation, and everyone, have a good day.

That's a great pleasure. Thanks, Judah.

Thanks.