Insmed Incorporated (INSM) Earnings Call Transcript & Summary

Good morning. Welcome, everyone. I'm pleased to host this fireside chat with Insmed Incorporated. I'm Joe Schwartz from the biotech equity research team at Leerink Partners, and it's my great pleasure to be joined by Sara Bonstein, CFO. Thanks so much for being here to give us an update.

Yes. Thanks so much for having us. We always enjoy the conference. So happy to be here.

Great. So let's start with brensocatib.

Let's not.

No surprise there. So where are you at with the regulatory filing? And how has the review been progressing since the submission in September -- sorry, December '24?

Yes. The interactions with FDA have been really, really encouraging. You obviously saw our announcement on the day 60 letter, the day 74 letter for FDA to come back a couple of days early. That's not always what happened. So that was really encouraging for us. And we continue to have very productive dialogue with FDA. We obviously got priority review. They communicated to us they currently do not plan on holding an advisory committee, our PDUFA August 12. So really just dotting all the Is, crossing all the Ts, having the good interaction with FDA, so I couldn't be more pleased with the progress.

Okay. Great. Based on our math, it seems like you're within the window of where the mid-cycle review meeting should be happening. How are you feeling heading into that?

Yes. So I'm not going to comment on some of the integral steps throughout the process. What I'll say is everything is progressing really well, is encouraging the interaction that we're having, and we're really looking forward to be able to have the first approved therapy for patients with bronchiectasis, obviously, pending FDA approval.

Okay. Great. So can we talk about the potential label and how you're thinking about the patient population that could be included? Do you think there'll be any language around an exacerbation requirement or anything else that could constrain uptake?

Yes. So my expectation is the label will be for bronchiectasis as that's obviously what we studied in the trial. The label will obviously be FDA's decision on where we land there. I do anticipate that in the clinical section of the label, they will reference the ASPEN study and the inclusion/exclusion there, which were 2 or more exacerbations. But I think more importantly, it's on the payer side. I do anticipate that the payers will look for 2 or more exacerbations for their patients. Our goal is to make it as frictionless as possible from a launch perspective for access for patients, for the process for prescribers and for the payers. So working through that process now with the payers. Those are ongoing conversations, as you would expect, and we'll look through what is appropriate rebating to make sure that we have as frictionless of a launch as possible. So we maximize access on day 1 as well as the reauthorization, which is obviously very, very critical for this product.

Okay. And does that expectation come from interactions that you've had to date with payers? Can you give us insight into how that's been going? How much work has been done on that front?

Yes. So we've done a ton of work, as you can imagine. We actually invested with some internal personnel much before the ASPEN data to make sure we have the right skill set in-house. And I'm really happy to say that we have the best of the best as you're thinking about the payer group and team and capabilities. So that is sort of a check one that we've accomplished. We've done a fair amount of pricing work and studies around what would be acceptable, both pre the data and post the data to get very comfortable on what the pricing range should be like as well as what an appropriate rebating strategy. We're in a place where we can think about it holistically as we're thinking about price and rebating and access for patients and looking to maximize impact on patient and maximize, obviously, the revenue curve from a value-creating perspective. So all good. The studies that we continue to do on sort of pricing and access continue to tell us very consistent stories. What we've heard is 90% of physicians do have the intent to prescribe on day 1, and we continue to get good feedback. We've spoken to over 90% of covered lives on the payer side as well.

Okay. Very interesting. And how do you expect things to balance out if you're able to get this high degree of market access based on a verbal attestation? What would be required in terms of a gross to net or a rebating strategy that would -- and how would that translate into a gross to net that we can think about when we model the opportunity?

Sure. Yes. Yes, I love that we want to make sure we get our models right. That's near and dear to my heart. So a couple of things there. Our goal and expectation is that it would be what's called physician attestation. So as we're thinking about how do we, again, make this a frictionless launch, make the administrative process as seamless as possible. So that would be more of working through what that paperwork would look like, and that would be a very simple physician attestation around this is a patient that we believe is an exacerbating patient and have those conversations with payers on what that looks like today as well as for that reauthorization. So those conversations as we're thinking about gross to net and rebating strategy and all that fun stuff. So we are not providing formal guidance. So just to be obviously upfront with that. We are obviously ongoing in those conversations. So I couldn't even provide formal guidance even if I wanted to. What I can say is we have studied a lot of precedents. So we have said, let's look across the universe on successful specialty launches, what did gross to net look like in those instances as well as balancing the IRA impact. So we all know we need to now understand and comprehend the IRA impact. So Insmed will be responsible for the 20% catastrophic coverage for our Medicare patients, similar mix to ARIKAYCE. We believe there will be about a 60% Medicare population. So off the bat, 60% of 20% is 12%. So we believe that will be within our gross net. We'll look to obviously launch after the PDUFA date on August 12. So my expectation is most, if not all, patients will be through their amount and that catastrophic coverage will be on day 1. So 12% plus, again, studying in the precedent, we think anywhere between 25% and 35% seems reasonable at launch based on studying all of that, again, not formal guidance, but just as folks are thinking about sort of their gross number, their net number. We have provided that pricing range of $40,000 to $96,000 from a WAC perspective, we have said we believe we will be on the higher end of that range. And the other piece I would just comment on is we have put a peak sales number out there. We said we believe brenso for bronch alone is a $5 billion peak sales opportunity. That is a net number. So we've taken all of those components into account before we put that number out for you guys.

Okay. Very helpful. And so if there is this frictionless launch with only the need for physicians to attest that their patient that they're prescribing brenso to has had 2 or more exacerbations in the prior year. How does that work at their level? Are they typically documenting this? Or is this documented in health care records? Is that even necessary? And then how many people actually have meet that criteria in the United States and are seen by a physician that you can reach with your sales resources?

Yes. Yes. So a lot of good stuff in there. So today, based on claims data, there's about 500,000 patients diagnosed with bronchiectasis in the United States. So there's already an approved code, 500,000 in the U.S. Based on what we can see in the claims data, we believe about half of those have 2 or more exacerbations. You may recall 2 ATSs ago, so quite some time ago, we started investing in disease state awareness. So with the hope of approval in August by FDA, this would be a first-in-class first-in-disease drug. This is the last sort of large respiratory condition that is not of anything approved for patients. And so we wanted to get ahead of the disease state awareness and get people to be educated on, speak up, tell your physician when you have a flare, tell your physician when you have an exacerbation event. These tend to be elderly female from a patient population. So they tend to be the patients that like to take care of everybody else and forget to take care of themselves. And so it's that unseenism. So it's that education of patients having those appropriate dialogue with their physicians. From a reach perspective, we did increase our therapeutic specialists in the U.S. last year. So they've been in the field as of October 1, cream of the crop as we're thinking about the great folks that are now part of Insmed. So I couldn't be more pleased to have them be part of the team. We added 120 new sales reps. So we have about 185-ish reps here in the United States. They will today have ARIKAYCE as their P1 and disease state awareness as P2 that will obviously switch on the other side of approval, pending FDA feedback. That gives us the capability to call on every pulmonologist in the United States. So we'll still touch on some of the ID docs for ARIKAYCE, but we will now have the ability to call or we now currently have the ability to call on every pulmonologist in the United States. And then one other point that I would just like to highlight that I think is important, the COPD Foundation, they recently came out and said that they are working through creating centers of excellence around the United States. So we all know that there are those handful of centers of excellence across the United States that really know how to -- that excel in the care for NTM -- both NTM and bronchiectasis patients. The COPD Foundation now has an initiative. We are the #1 sponsor of that initiative to be a full disclosure there to create 150 centers of excellence around the United States that specialize in NTM and bronchiectasis, so we can ensure -- so they can ensure that patients receive the best care regardless of what institution they go to.

Very interesting. And I think you have some encouraging early indications of market demand by virtue of some of the FDA-compliant outreach that you've been able to do for disease state education and the like. Can you share what you've been able to garner?

Absolutely. Thanks, Joe. How could I forget? So we have a disease state awareness website. If you haven't gone out to it, it's really informative. I encourage everyone to look at it. But what this disease state awareness site has is we're able to see who's going -- how much traffic are we getting on it? So over 900,000 sort of hits on the website. So obviously, Insmed employees go in and look at it a lot, but not 900,000 times. So...

I've been there a couple of times.

Yes, yes, good. But that's pretty good traffic. And I think even more importantly, 41,000 patients have gone in and signed up and want updates. So that gives an ability for them to get updates as things progress from an interaction with the regulatory authorities. So patients, they want something here. These are patients that have gone into their physicians and have been told they have a disease that they can't pronounce and they've never heard of. And then when they ask the physician, "What do I do for it?" The physician says, "Well, there's nothing really we can do for it." So patients are wanting an option here and the ASPEN data that we put out, obviously, last year was really encouraging. Now it's in the FDA's hands to obviously review all of that and give us feedback.

Interesting. Okay. So is there any way to envision how many of the 500,000 -- beyond what you just shared, which is certainly encouraging -- any other way to envision how many of these patients might be early adopters? Are they the patients that have -- who are these people that are wanting to stay in touch and might get a prescription before others? Are they any of the certain subsets of bronch because we know it's a very heterogeneous population. It's associated with other diseases. Is it those that have more exacerbations, those that have worse exacerbations? What makes any of these patients the right treatment candidate? And when will they get a prescription? Do you think it's after an exacerbation? Or are there other dynamics at play?

Yes. Yes. So a couple of things there. So first is what we hear from physicians is they're going to be calling their patients in. So I think there's sort of 3 paths. One, you hear physicians say we're going to call our patients in. So that's obviously really encouraging. The second is these are now patients that are getting educated themselves via the disease state awareness. So they will -- and you see the action in our -- in the disease state awareness website and the amount of traffic we're seeing there that they are going to be proactive in their health. And then typically, bronchiectasis patients typically see their pulmonologists once or twice a year. So those are sort of the 3 paths on -- so not just one path. So that's obviously very, very encouraging. There is a limit on how many appointments a pulmonologist can obviously have in a day. So there is going to need to be that funnel. But physicians have said that they want to be calling their patients in. And I anticipate they would be calling in those patients that are the 2 or more exacerbations. Those would be the ones that they would be looking to call in initially. I know that there was more to that question, and maybe just...

No, I think you covered it. It was a compound question.

Okay.

Thank you. So -- and you've invested a lot in other aspects of the launch too beyond the sales force, some other field members. Can you tell us who they are and what purpose they'll fulfill?

Yes. So we communicated last year that we obviously expanded our sales force in the U.S. So we had about 64 therapeutic specialists in the field to call on ARIKAYCE. We expanded that by the 120 to get to about 185-ish for ARIKAYCE and disease state awareness for bronchiectasis and then they'll obviously switch pending approval. We've obviously also brought in some leadership to support the sales organization. Also just as important on the market access side. So with ARIKAYCE, we had field access managers and case managers really to help with that sort of white glove service for patients, and we think that is very important for patients to be able to have that additional support. So first half of this year, we'll look to expand both our field access managers as well as our case managers. And we have expanded our field access managers very recently. So they will be in field shortly. There's about 40-ish of them and then case managers, similar kind of number from an expansion. We didn't need to bring them in quite as early as a therapeutic specialist, but obviously want them in field and trained prior to the PDUFA. And we think that, again, helps with that frictionless launch. And as you know, we're good stewards of studying precedents. So we've studied a lot of really successful launches out there and what works. And we've obviously studied our own launch in ARIKAYCE with that being a top 10 rare disease non-oncology launch and learned what worked and what should we kind of expand upon.

Right. That makes sense. Perfect segue to my next question. And then we'll turn to the rest of the pipeline because there's still a lot more to talk about. What launch analogs are you looking at to help frame expectations for the brenso launch? And what is similar for brenso? And what might set this launch apart from others? Are there any distinguishing factors?

Yes. Yes. So again, we studied precedent of really successful kind of respiratory specialty launches. So things like Fasenra, Dupixent, Ofev, Tezspire and really studied what their launch curves look like. And so if you look at the numbers in their first 2 quarters, and I'll just caveat on these are predominantly 2 full quarters, they were in the high tens of millions from a revenue perspective together for both quarters. And then if you look at their next 4 quarters, for all 4 quarters together, they were around $500 million to $600 million. So as you're thinking about what does really good look like, that's what precedent will tell you. Just a couple of other, I think, important pieces as you're thinking through that. We obviously have the PDUFA of August 12. If you think about just ARIKAYCE as an example, it took about 4 weeks for revenue recognition from when we got approval. So our reps, we got approval on a Friday. Our reps were in field on Monday detailing, but it did take us about 4 weeks, which is actually pretty quick. We did everything possible to actually recognize revenue. So as you're thinking about that first "quarter" for brenso with the PDUFA of August 12 and then just the accounting time it takes to recognize revenue, we anticipate that first quarter will be weak.

Okay. Great perspective. Thanks. Okay. Now turning to brenso's potential in chronic rhinosinusitis without nasal polyps.

It's a mouthful, yes.

Yes. I can't imagine saying it if you had the condition, especially if it was acute. So we've heard that this has a lot of parallels to lower airway bronchiectasis, but yet there's a different endpoint. It's a composite. It's comprised of totally different elements than bronch. So can you help us understand a bit more about this indication and the rationale for studying brenso here and what you're hoping to see when you report the BiRCh data at the end of the year?

Yes, yes. So really excited about the BiRCh data. So I'll just remind folks, prior to the ASPEN readout, we decided that it made sense on a lot of levels to invest "at risk" and move forward into chronic rhinosinusitis without nasal polyps Phase II. So we initiated that program before the ASPEN study, and we held off on starting the third indication, HS, until after the ASPEN study. We felt it was the right strategic move to move forward into CRS without nasal polyps before the data because of our strong belief from a mechanistic perspective as well as we obviously thought it was the right thing to do for patients. Chronic rhinosinusitis without nasal polyps, as Joe was alluding to, has some similarities as you're thinking about sort of the inflammatory nature. It's a neutrophil-driven disease. And the endpoint, while obviously very different from exacerbations, it's total sinus symptom score. It is -- has some parallels on sort of like a PRO quality of life, and we obviously saw some nice benefit in the 25-milligram arm in the ASPEN study there. The other piece that I will just comment on is we're starting to -- we always look at what is the data telling us, everything is obviously all blinded and blended, but we're obviously encouraged by what we're seeing in the 2:1 randomization and some of the separation. We obviously need to wait until the end of the year until we can officially put out the data. From a market perspective, we believe that CRS without nasal polyps could be just as big, if not bigger, than bronchiectasis. Obviously, more work to do there, and we know we owe that to the market to give some more education on this. The only other piece I would leave you specifically on CRS is we had originally stratified as you think about eosinophils and said it needs to be lower than 750, but that the primary endpoint would be on those that were less than 300. And based on now having the ASPEN data and seeing that that is not a driver, we're able to have the primary endpoint be on all 270 patients. So that's obviously encouraging as you're thinking about from a market perspective, in the U.S. alone, there's 200,000 patients that get surgery every year. And so if their options could be get surgery or take a pill that had -- if you look at the safety profile in ASPEN and WILLOW was pretty -- yes...

Clean.

Yes, pretty clean, yes. So that is obviously encouraging. And then you have that other layer of the steroid non respondsers of another 3 million patients. So it's a very, very significant market opportunity. And as we're thinking about just the layout of the year on the different catalysts, I think that's going to be a really important one for us at the end of this year.

Okay. And what kind of a change is clinically meaningful on the endpoint? Is this the same endpoint you'd want to use in Phase III? Are you hoping to see stat sig on this endpoint? Any perspective there you can share?

Yes. Yes. So we're 80%. So these are patients that on the score of 0 to 9, they need to be a 5 or greater. So these are severe patients. And we're 80% powered to show a 0.97% difference on either of the doses versus placebo or 90% powered to show a 1.14% difference on either of the doses versus placebo. So about a 1-point change, and we believe that will be meaningful for these patients. If you talk to ENTs and you listen to what they say about these patients, anything that has issue with breathing, that's obviously very impactful for patients. So these are patients that have facial pain, that have congestion, that have discharge and they need something better than the one available therapy today, which is essentially an inhaled steroid.

And any thoughts on which of the elements of that composite that's captured in the endpoint might have the best chance to move based on the mechanism or the duration of treatment?

Yes. So because this is a shorter duration of treatment, this wouldn't necessarily be the endpoint of a Phase III, but this study, the way it's designed is going to be able to give us the insight on do we have an impact on these patients over the 16 weeks that they'll have treatment and be able to inform how we should design the Phase III, assuming success.

Great. Okay. Of course, I want to make sure we spend some time on TPIP. So can you tell us what you're hoping to see in terms of a 6-minute walk and PVR benefit when we get the Phase IIb PAH data this year?

Yes, yes. So we were able to actually move up the timing for our TPIP PAH data to middle of this year. So really excited about that. We had put out some blended blinded data last year really to inform the medical community, and we saw the enrollment pick up, which is great. So middle of this year, that will be here before we know it. And so as we're thinking about this study, the primary endpoint is PVR, so PVR reduction. And if you look at other therapies in this space in the same class, they're sort of in the low to mid-teens to 20%, 21%, somewhere around there in PVR reduction. And so we believe if we can get a little bit higher than that, let's say, a 25% PVR reduction, we think that would be a home run. I'll remind you that our TPIP products, the goal here is to have 24 hours of coverage. So this would alleviate the sawtooth pattern impact that patients are seeing now where they have relief and then it wanes, they have relief and it wanes, this would be consistent relief over a 24-hour period. And the other interesting point to call out is we are studying it at trough. So we are ensuring that we can show this PVR reduction over that longer period of time, which is a higher hurdle. And we did this as a higher hurdle because we want to see, will this be impactful for patients. As we think about our mission as a company is creating best-in-class or first-in-class drugs. And while there are a lot of available therapies for PAH patients today, we believe that TPIP, if the product profile continues to hold up, can really be that best-in-class for a prostanoid.

Great. Okay. Well, there's been such a focus on the brensocatib opportunity, but it definitely feels like TPIP can be a needle mover too. So can you give us your view of the market opportunity?

Yes, yes. So TPIP is probably kind of the sleeper in the company, a lot of focus on brenso, which I appreciate why. And obviously, last year was a transformational event for the company, for our shareholders and for patients. As we're thinking about this year, TPIP, like I said, it will -- the data will be here before we know it. We've said $2 billion of peak sales for ILD and PAH, so both of those indications. If we can really show an improvement on PVR reduction and provide that 24 hour, this is -- I anticipate will continue -- is and will continue to be a combination therapy market. These are life-ending type conditions for patients. And I anticipate that TPIP is going to be a very significant opportunity for the company.

Okay. Great. And maybe in the time remaining, can we just touch on ARIKAYCE and what the current guidance is for -- and how you are thinking about getting to that guidance. You obviously have a ton of insight into this market, which you created and seems to be doing really well still. So what should we expect this year for ARIKAYCE? And then we're very much looking forward to the ENCORE data. So how do you feel you're positioned heading into that confirmatory data set?

Yes. Yes. So ARIKAYCE continues to perform, and we've -- we're in, I think, our eighth year following launch in the U.S. So very significant. In 2024, we were able to continue to show double-digit revenue growth. Our guidance for '25 is $405 million to $425 million on a global basis. That again is double-digit growth. So our commercial team continues to perform and get out to the prescribing community, and it really shows the need for this treatment for patients. I'll remind you the ENCORE program, which that data will be out in first quarter of '26, that is for a potential label expansion today, we're the refractory patient. So in the U.S., that's about 12,000 to 17,000 patients. Total U.S. is about 100,000 patients. So it's a significant potential increase. And that data, like I said, will be out in Q1 of '26. We continue to be encouraged by what we saw in ARISE, which was the first of the 2 programs and ENCORE looking very similar to ARISE gives us a lot of confidence in ARIKAYCE becoming a $1 billion-plus product in the near term.

Okay. Great. Well, we covered a lot of ground, but -- and we're out of time. So we'll leave it there. Thanks so much for the update, Sara.

Thanks so much, Joe.