Insmed Incorporated ($INSM)

Thank you for standing by, and welcome to the Insmed's Phase IIIb ENCORE study of ARIKAYCE in patients with newly diagnosed MAC lung infection not yet treated with antibiotics conference call. [Operator Instructions] I'd now like to turn the call over to Bryan Dunn, Head of Investor Relations. You may begin.

Thank you, Rob. Good day, everyone, and welcome to today's conference call to discuss the top line results of the Phase III ENCORE study of ARIKAYCE in patients with newly diagnosed or recurrent MAC lung disease who have not started antibiotics. I am joined today by Will Lewis, Chair and Chief Executive Officer; and Martina Flammer, Chief Medical Officer. The call will begin with opening remarks from Will before turning it over to Martina to walk us through the results. After the prepared remarks, the presenters will be joined by Kevin Mange, Chief Development Officer; and Sara Bonstein, Chief Financial Officer, for the Q&A session. Before we start, please note that today's call may include forward-looking statements based on our current expectations. These statements represent our judgment as of today and inherently involve risks and uncertainties that may cause actual results to differ materially from the results discussed. Please refer to our filings with the Securities and Exchange Commission for more information. As a reminder, the information on today's call is for the benefit of the investment community. It is not intended for promotional purposes nor is it sufficient for prescribing decisions. And now let me turn the call over to Will.

Thank you, Bryan, and good morning, everyone. We are extremely excited to share with you that the ENCORE trial was a clear success. On the primary endpoint of change in respiratory symptom score from baseline to month-13, we saw a statistically significant improvement in patients treated with ARIKAYCE on top of multidrug therapy versus the active comparator arm consisting of placebo plus multidrug therapy. On the equally important culture conversion endpoints, we were very pleased to see earlier, greater and more durable impacts on culture conversion throughout the study, demonstrating highly statistically significant benefits for the ARIKAYCE arm. This result is particularly impressive as it was being compared to an active comparator arm similar to what a patient might receive as first-line treatment in current practice and demonstrates the potential benefit of using ARIKAYCE earlier in the treatment paradigm. As we celebrate this moment with our investigators and the patient community, it is worth remembering the road that brought us here. As part of our development program, consisting of the ARISE and ENCORE trials, we validated a patient-reported outcome tool for this disease state, a first of its kind, which can be used for future development work in this space. While other promising treatment candidates have fallen short, ARIKAYCE has consistently shown in each study ever conducted that it is demonstrably effective at clearing MAC bacteria from patients' lungs. Now based on today's result, we can also say that it may help patients find relief from respiratory symptoms after treatment. We are particularly excited to see a lower discontinuation rate in this trial than we have seen in any past study of ARIKAYCE and no new or unexpected safety signals in the trial. With this successful readout, we will look to move quickly to pursue regulatory submissions with the FDA and PMDA in the second half of this year, which we anticipate will lead to an expanded label to include all patients with the MAC lung infection. If granted, this would bring our addressable patient population from around 30,000 today to more than 200,000. We also expect these results to support the conversion of ARIKAYCE's current conditional approval in the U.S. to a traditional approval, consistent with Europe and Japan, given that we have now completed the study intended to fulfill the FDA's post-marketing requirement. We are ecstatic about what today's news could mean for patients with MAC lung disease. Now let me turn the call over to Martina to walk you through the results in more detail.

Thank you, Will, and good morning, everyone. I'm pleased to be with you today to share the top line results from our ENCORE study. I'll begin with a brief review of the trial design. ENCORE enrolled 425 adult patients with non-cavitary lung disease with a newly diagnosed or recurrent MAC lung infection that had not yet been treated with an antibiotic regimen for their present infection. These participants were randomized on a one-to-one basis to receive either ARIKAYCE plus azithromycin and ethambutol or an empty liposome placebo plus azithromycin and ethambutol. Treatment was administered once daily over a 12-month period followed by 3 months of treatment. The primary endpoint in ENCORE was the change from baseline to month-13 in the 8-question Respiratory Symptom Score, or RSS, which was derived from the 9-question QoL-B respiratory domain questionnaire. This patient-reported outcome tool was previously validated and agreed upon with the FDA. Multiplicity controlled secondary endpoints in the study included the percentage of patients achieving culture conversion by month-13, durable culture conversion at month-15 and culture conversion by month-12 and month-6 in that order of hierarchy as well as the change from baseline in the PROMIS Fatigue T-score at month 13. Safety and tolerability data were also collected throughout the study. On Slide 9, we provide the baseline characteristics of the trial by treatment arm. Randomization was stratified based on geographic region and whether a patient had a history of previous MAC infection. As you can see, those characteristics used for stratification as well as age, gender and race were all relatively well balanced between the ARIKAYCE and active comparator arms. While there was a modestly higher mean baseline RSS in the ARIKAYCE arm, it is important to note that the primary analysis was designed to adjust for any baseline imbalances in RSS, geographic region and history of MAC infection. Now let's take a look at our primary endpoint of change in RSS at month 13. I'm pleased to report that patients in the ARIKAYCE arm showed a least square mean improvement in score of 17.77 points compared to a mean improvement of 14.66 points in the control arm. This separation of 3.11 points was statistically significant with a p-value of 0.0299. Interestingly, this symptom benefit continued to expand after month-13, with the difference between arms increasing to 4.8 points at month-15 or 3 months off treatment with a nominal p-value of 0.0015. This further highlights the durability of the symptom improvement that can be achieved with treatment with ARIKAYCE. In addition to the comparison I just described, we also conducted a responder analysis using covariate-adjusted cumulative distribution function or CDF curve, which are shown in this slide. On the horizontal axis, the CDF graph plots a continuous view of respiratory symptom score changes, both positive and negative, with improvement on the left of the 0 and deterioration on the right of the 0. The vertical axis plots the cumulative proportion of patients in each study arm that experienced at least that level of respiratory symptom score change. The purple curve represents patients in the ARIKAYCE arm and the blue curve represents patients in the comparator arm. A positive change in respiratory symptom score represents an improvement of symptoms from baseline to month-13 and the negative change represents a worsening of symptoms. Based on our prior work with this PRO tool, we established a range of thresholds that could be considered a meaningful with inpatient change in RSS score, which is the preferred approach recommended by the PRO experts at the FDA. At the low end of that range is a threshold of 16.67 points and at the high end is 20.83 points. Importantly, this graph demonstrates that the ARIKAYCE arm outperforms the control across the range represented by both thresholds. The consistent separation you see on this curve means that regardless of what exact values are selected as the range of meaningful within patient change by the FDA, ARIKAYCE used in combination with multidrug regimen would result in more patients achieving a clinically meaningful improvement in respiratory symptoms. Turning now to culture conversion, which is often cited by physicians as the most meaningful measure of the efficacy of any drug for the treatment of MAC lung disease. To provide some context for our discussion, culture conversion in the ENCORE study is defined as having 2 consecutive months of cultures that remain negative for MAC. The definition of durable culture conversion at month-15 requires all cultures to be negative at month 11, 12, 13 and 15. Consistent with the results shown in our past trials of ARIKAYCE in both the refractory and frontline setting, ENCORE demonstrated that a significantly greater proportion of patients in the ARIKAYCE arm achieved culture conversion compared to patients in the active control arm, and this was demonstrated across multiple time points in the study. Beginning with month-13 or the same time period at which we measure the respiratory symptom score for the primary endpoint, we saw that 82.4% of patients in the ARIKAYCE arm achieved conversion compared to 55.6% in the active control arm, a highly statistically significant difference of approximately 27 percentage points with a p-value of less than 0.0001. Perhaps even more striking is that this high rate of culture conversion in the ARIKAYCE arm was maintained over time. On Slide 13, you will find results from the key secondary endpoint of durable culture conversion at month-15 or 3 months off treatment. 76.2% of ARIKAYCE patients remained converted, while only 47.6% of patients in the active comparator arm maintained negative cultures. This result reflects a separation of approximately 29 percentage points and a p-value that was less than 0.0001. This is a particular notable outcome because durable culture conversion is the most important data point for the Japanese regulatory authority and for many prescribers, both in the U.S. and Japan. The greater durability of treatment we see in ENCORE is consistent with what we saw in both the CONVERT study in refractory patients and the ARISE study in newly diagnosed patients, where dose in ARIKAYCE saw a much higher level of maintained culture conversion measured at 3 months and 1 month off treatment, respectively. It is important to note that at any measured time point from the start of treatment through month-15, more patients receiving ARIKAYCE achieved culture conversion compared to those on the active control arm. In fact, the secondary endpoints of culture conversion at month-12 and month-6 were also highly statistically significant with each achieving p-values of less than 0.0001. The ARIKAYCE arm also showed a significant benefit on median time to culture conversion, which was achieved at month-2 or the first possible time point, meaning that cultures were negative at months 1 and 2. The median time to culture conversion in the active comparator arm was achieved at month-3, meaning that cultures were negative at months 2 and 3. The associated hazard ratio for this measure was 2.03, suggesting that patients treated with ARIKAYCE were roughly twice as likely to achieve earlier culture conversion. The nominal p-value for this comparison was less than 0.0001. It is also notable that the separation you see on this slide was driven by very strong conversion rate in the ARIKAYCE arm rather than any underperformance in the control arm, which demonstrated similar conversion rates as we saw for the control arm in the ARISE study and which might be expected for a macrolide-based treatment regimen in the real world. Finally, I want to briefly discuss the safety results from the ENCORE trial. The tolerability profile for ARIKAYCE in combination with multidrug therapy in ENCORE was consistent with the known profiles of this antibiotic treatment. No new safety events were observed in the ARIKAYCE treatment group and safety in general was as expected in both the ARIKAYCE arm and the control arm. The ARIKAYCE treatment discontinuation rate observed in this trial was 18.3%, which compares very favorably to the 34.8% rate that we saw in the CONVERT study in refractory MAC patients and to the 22.9% rate we saw in the ARISE study. The improvement compared to ARISE is particularly notable because the treatment period in ENCORE was twice as long. The empty liposome control discontinuation rate in the control arm in ENCORE was 11.8%. Importantly, the percentage of patients who completed the study was over 90% for both arms in the trial. Drilling down a bit further, treatment-emergent adverse events were reported by 98.1% of patients in the ARIKAYCE arm and 97.2% of patients in the control arm. Adverse events that occurred at least 10% of patients in the treatment arm and more frequently in the ARIKAYCE arm were dysphonia, cough, fatigue, dyspnea, nausea and headache, all of which are consistent with the known safety profile of ARIKAYCE. The rate of serious treatment-emergent adverse events was 14.1% for the ARIKAYCE arm and 11.3% for the control arm. In summary, the combination of all the data we have presented today a statistically significant benefit on patient symptom scores, greater, more rapid and more persistent culture conversion and a consistent safety profile provide clear evidence that treatment with ARIKAYCE and in particular, early treatment with ARIKAYCE can lead to improved results for patients with MAC lung disease. I'll now turn it back to Will.

Thank you, Martina. Today's results are incredibly exciting for all of us at Insmed, but more importantly, for all those who struggle with MAC lung infections and for those who provide treatment to and care for those patients. ENCORE has provided new hope that with the early addition of ARIKAYCE to the treatment paradigm, patients can experience improvement in their respiratory symptoms and have a greater chance to convert sooner and stay converted for longer. We will now work with urgency toward making this important treatment available as an approved treatment option for use in all patients with a MAC lung infection. We want to thank our patients and investigators for their courage and support on this journey, which we hope will result in many more patients benefiting from treatment with ARIKAYCE. And with that, operator, I'd like to now open the call to questions. Can we take the first question, please?

[Operator Instructions] Your first question today comes from the line of Graig Suvannavejh from Mizuho.

Congratulations on this data. Just for context, bigger picture with respect to how to put this data in the context of the current standard of care, so to speak, which is like triple antibiotic regimen given the study while nicely positive. Can you give a sense of maybe how physicians might look at this data and put it into practice in the real world?

Sure. Well, one of the most exciting things about this study was when we were originally designing it, we worked closely with the KOL community as to what would be the right way to look at this in the frontline setting. And what you see today is very clear evidence that ARIKAYCE in addition to a 2-drug regimen provides a real benefit both in symptoms and in culture conversion. That 2-drug regimen plus ARIKAYCE sets a new standard of care for how to treat initial patients who are diagnosed with MAC lung infection. And that was really the intention behind the study to create a path toward a new standard of care. The drug that is sometimes included later on is rifampin. It's always been very controversial as to whether or not there's real benefit from its addition, and there are known safety effects there that really dissuade a lot of physicians from using it. So it was left out in this case, and we're happy to be able to present these positive results that show it is not only highly beneficial to add ARIKAYCE, but that really when you look at the baseline or the comparator positive control arm, you don't see any absence of effect or benefit from the removal of rifampin. So positive on all fronts.

Your next question comes from the line of Jason Zemansky from Bank of America.

Let me echo my congratulations on the data. Maybe just a follow-up here, but Will and Martina, especially given the culture conversion data, what sort of long-term benefit is this likely to mean for patients? I mean is there a potential for a survival benefit? Or are we just sort of talking about the benefits associated with the discontinuation of rifampin?

Thanks for the question. I think I'll just make a comment and then turn it over to Martina. The study is obviously unequivocally positive on all fronts, and we're super excited about that. What it may mean for the longer term, I think, can begin to be imagined just by virtue of the experience we've had to date, where the drug has been on the market for 8 years now in the United States. And in that context, lots of patients and lots of physicians have seen the benefits from its administration. We haven't done a specific study to look at things like survival benefit, but those are the kinds of questions that we are certainly going to be curious to engage in and answer. And we're now going to be able to do it from a much larger pool of patients as we move to the all MAC diagnosed population. I don't know, Martina, anything you want to add?

Yes. What I would add is it just shows you what the durable culture conversion benefit is. So these patients at month-13 has been 1 month off drug and at month-15 has been 3 months off drug. And the hypothesis here is that sometimes for the control regimen -- for 2 regimens, you may get a negative culture, but you may not get a full clearing of bacteria. And ARIKAYCE appears highly effective in eradicating bacteria because of its mechanism of being right there in the lung, and that is something that might not be achievable with a systemic oral antibiotic. So if you think about the achievement and the opportunity a patient can get from treating with ARIKAYCE in that regimen, it is something to consider also to prevent that patients potentially become refractory. So treating early here is based on this data evidence that would be helpful for patients.

Your next question comes from the line of Ritu Baral from TD Cowen.

Let me add my congratulations on this data, especially this culture conversion rate. I did want to focus on safety and tolerability, especially as it relates to if there's a type of first-line patient you're going to target and what it might mean for pricing. Martina, if you could talk about the dysphonia rate and the transient of the dysphonia if patients recovered or if there is any permanent dysphonia and how that may relate to the risk benefit that first-line patients -- basically, which first-line patients might be appropriate for it and then the impact on gross to net?

Go ahead, Martina.

Yes. So dysphonia, along with cough and are very well described potential side effects for ARIKAYCE. And we've seen in the study that the dysphonia rates were slightly higher, and they're at 58.7%, while we see them at 8.5% in the control arm. But what we also know after 8 years on the market and the experience with ARIKAYCE on both the investigator, but also with physicians in general side has now, of course, been increased. We also have educated sites of how do you prepare patients for what potential side effects or respiratory side effects they may experience. And we've also learned that if you put in certain measures, for example, gargling with warm water or taking ARIKAYCE before that time is a benefit and can ameliorate the symptoms. So overall, the benefit risk is actually very strong. This is a 12-month treatment and patients have -- as you see, the discontinuation rates are lower than what we've seen in ARIKAYCE for ARISE and certainly for CONVERT. So I think everybody has learned how can I work best with this drug. And it is, I would think, even a strengthening of the benefit risk.

Thanks, Martina. And Ritu, on the pricing and GPN question, we had priced originally ARIKAYCE for the broader label, so no change in WACC on gross to net. For this year, as you know, we guided low to mid-20s. You will see a natural uptick in gross to net as the small manufacturer sort of bleed-in happens for ARIKAYCE more broadly, but we have always done and we'll continue to do appropriate and targeted contracting. This will be -- ARIKAYCE is the only controlled product that is approved and now pending FDA approval, will also be that in the broader label.

Your next question comes from the line of Joe Schwartz from Leerink Partners.

Congratulations on the super outcome. Can you help us understand how representative the ENCORE trial population is relative to real-world treatment practices for frontline MAC and how that should inform our expectations for these results to translate into market penetration assuming approval?

Thanks for the question. Sorry, I couldn't be there today, Joe. Over to you, Kevin.

Yes. So thanks for the question. So it is representative of real world. The comparator here is a clinically relevant comparator out of the gate and it's the same control group that we used in the ARISE study. And so as Will had said earlier, often a third antibiotic that's used either right away or subsequently is rifampin, what -- in talking with external experts when we started this program for the United States is more times than not rifampin gets stopped and patients are on azithromycin and ethambutol. So we do think the study is representative of real-world experience. The control group had activity as would be expected for the conversion rates at month-12. And so I think definitively, this study being the largest study ever done in the disease is a double-blind, randomized controlled superiority study, I think, shows very clearly the benefit of adding ARIKAYCE on top of the background regimen for symptomatic improvement and microbiological improvement as well, too.

Your next question comes from the line of Vamil Divan from Guggenheim Partners.

Congrats as well on the data. And maybe building on some of the other questions people have been asking just about sort of putting this in context. How do you think about the duration of therapy? Or what are you sort of modeling as the average duration given the positive results we're seeing with the culture conversion? Do you think they will stay on a year plus? Or is this a shorter duration? Just any insights there would be helpful as we think about how to model this out.

Martina, do you want to take that one?

Yes. So what we've seen in this study is the 12-month treatment gives patients not only a higher and an early and a greater achievement of culture conversion, but it also gives the durable culture conversion and being 3 months off treatment and still seeing how good the effect was on the ARIKAYCE arm versus as soon as you see that the treatment stops in the control arm, it goes in the other direction. And that goes with the hypothesis that you may have enough control of the bacteria in the control arm to have a negative culture, but not necessarily enough to sustain that and come to an eradication of the bacteria. And you see that also reflected that patients feel better while they are on treatment also in the control arm. But as soon as that is stopped, you see a decline in the respiratory symptom score, which is also aligned with what we see in the culture conversion at both month-13 and 15.

It's clear that 12 months produces these kinds of results. It will obviously be up to the physician's discretion what they want to do. But I don't think there's any doubt that the 12-month treatment here is seen as beneficial and sustained over time. And that's the most important point, particularly from the market access world where they want to see that kind of impact. And uniquely, because we also did the ARISE study, we have a sort of snapshot of what a shorter duration of treatment might look like. And the simple answer is both the efficacy and the safety are at least arguably better in ENCORE than they are in ARISE. So that also paints a very positive picture for the 12 months of duration.

Your next question comes from the line of Ellie Merle from Barclays.

Congrats on the data. What do you think drove the lower discontinuation rate that you saw in the ENCORE data versus in the ARISE study? And I guess, how are you thinking about what the discontinuation rate would be in the real world?

So discontinuation rate, I think, as Martina commented earlier, is in large part due to people becoming more familiar with how this drug needs to be used, how you prepare the patient for what they can expect. And I think importantly, increasingly, the ability to express to the patient the benefit they will receive if they remain on therapy. I think it's just a collection of all those things and the experience over time that is slowly, but surely improving the adverse event rate that we see reported in this study as compared to ARISE and certainly compared to CONVERT. I think that is the most important point of this study is that all of the data here and from ARISE and from CONVERT clearly show that you want to treat earlier in order to avoid the patient becoming refractory. Once they're refractory, the dropout rate from the drug gets much higher, the difficulty of taking it, the duration, all of those things, you still see clear benefit, and that's why the drug was approved for that population initially. But here, we see some unexpected and positive findings that the dropout rate is lower. Remember that we thought it actually could be higher because these patients were less sick, perhaps less willing to tolerate the treatment, and yet that is not the case. It's dramatically lower, almost 15% to 20% lower than CONVERT. And that implies to us that at least at some level, the severity of the disease and its engagement -- our engagement with the antibiotic are causing some of the side effect profile. In other words, as you overcome that -- the presence of the much more established refractory infection, you may produce more side effects as you achieve ultimate culture conversion. Acting earlier lowers the severity of that experience because the infection, at least theoretically is not as well established. So for all those reasons, I think the discontinuation we see in ENCORE is indicative of what we can expect in the real world, and that's a very positive thing as we move up in the treatment cycle to an earlier-stage patient.

Your next question comes from the line of Maxwell Skor from Morgan Stanley.

Congrats on the update. So as you move to convert ARIKAYCE's conditional label to traditional approval and, of course, expand into a broader population, how should we think about any shifts in payer behavior or reimbursement? And could you just talk about the, let's say, cadence of uptake that you expect over the next 12 to 24 months in both the U.S. and Japan?

Sure. So I think as Sara mentioned earlier, we originally priced this drug for the assumption that we'd be treating all MAC patients. So we don't anticipate a different approach in our discussion with the market access world. And what's important here is that all of the data points in a very positive direction for this earlier use of the drug. I think the symptomatic benefit, the culture conversion benefit, all of these things being aligned makes it a really easy discussion from my perspective when it comes to market access. As for the uptake in the next 12 to 24 months, what I would say about that is we are seeing an expansion in the total addressable market from 30,000 patients to more than 200,000, but we need to develop the target product profile now based on these data from the study and take that out into the market and do some research, which we will now do in earnest to get a better sense of what we think that will result in, in terms of uptake and what the ultimate benefit will be. And when you begin to see revenue in 2027, assuming that we get approvals in the U.S. and Japan, as we fully expect to, we'll have more to comment about the direction that those revenue growth curves might take.

Your next question comes from the line of Matt Phipps from William Blair.

Let me extend my congrats as well. Maybe can you tell us what percentage of ARIKAYCE patients today use your inLighten patient assistance program? And again, kind of thinking about moving to front line, how do you expand that program to try to capture those patients and any benefits from any changes in the out-of-pocket that has happened with Medicare?

Sure. So while we haven't given out the specific percentage, what I can tell you is that if you were to take a high benchmark for what would constitute an attractive rate of getting patients into such a program, we are well above that threshold, and we always have been with this. This is a very all-encompassing outreach to patients to help them on their journey through the use of this drug and the hopes that it will be the most effective. We fully anticipate being able to extend that to all MAC lung infection patients. And remember that this is the same backbone architecture that we use not only for ARIKAYCE in the refractory population, but also for BRINSUPRI in the bronchiectasis population. And so the resources we need to be able to address this much broader population with ARIKAYCE are already in place and experienced. So we expect this to be a smooth transition and a full expansion with hopefully the same kind of conversion into the program that we've seen to date.

And just to comment on the out-of-pocket, I'll just also remind you that we estimate about 60% of the current ARIKAYCE label, about 60% of the Medicare patients. So their out-of-pocket under IRA is for all their medicines, capped to $2,000. And then for the commercial payer patients, we have a co-pay assist.

Your next question comes from the line of Ash Verma from UBS Financial.

Congrats on the progress here. So yes, maybe if you can talk about the time line for getting the frontline data on the label? And would the uptake be contingent on getting this added to some of the guidelines? Or is it more that the FDA approval opens up the label for the uptake for physicians?

Sure. So obviously, the data once processed by both the U.S. and Japanese regulatory authorities would result in label expansion. And we expect that, that will be the case. We've indicated that we'll be filing that by the second half of this year. And we would anticipate that those approvals and our ability to launch would take place in 2027, just so we're clear. And I think that, that will be a relatively smooth process. I don't know if anyone wants to add any other comments.

I think maybe just on the guidelines, just to be clear, guidelines are usually completed independently by professional organizations and experts. Obviously, we are independent of that. But what you often see is if there is new, especially important data becoming available, there is a consideration of that.

And let me just make a comment, this is a particularly difficult disease to treat. Every other company that has come along trying to bring forward a medicine has failed to be able to produce clinical trial results in a double-blind study that are adequate for approval. And I think that just highlights the desperate need for this patient population. So a clear and strong win like we have today, I would anticipate would be something that is noticed pretty rapidly by the key opinion leader community that is authoring these guidelines.

Your next question comes from the line of Leonid Timashev from RBC Capital Markets.

Congrats on the data, and thanks for taking my question. I wanted to ask also on the opportunity. I guess there's been significant ex U.S. use of ARIKAYCE, so I guess with the label expansion, I'm trying to understand how you're thinking about the balance between ex U.S. and U.S. revenues, especially given that you guys have been somewhat cautious of MFN impact? And then related to that, is there anything you can say on epidemiology and just the trends you're seeing with diagnosis rates or prevalence of infection over time?

So thanks for the question. Yes, we do get a meaningful percentage of revenue from Japan, in particular, for MAC lung infection in the refractory setting. And that's -- it's important to remember that while it's not fully understood what causes the MAC lung infection to develop in particular patients, factors that certainly lean in favor of that are an elderly population, prior history of smoking or lung issues, proximity to water. And when we talk about the island nation of Japan, that's pretty much a perfect description of its population. So with that in mind, it's not surprising to understand that there are more -- today, there are more diagnosed MAC patients in Japan than there are in the United States. So the opportunity there is quite significant. There is a price differential there that has evolved over time, but it is important for people to understand, we priced at parity between the U.S. and Japan when we launched on a list basis. So I think Japan will continue to be an interesting opportunity. There are more MAC patients there than there are in the U.S. Another feature of their annual checkup is that they include an x-ray as a matter of basic practice. So there's a higher propensity to be able to identify this infection that may be contributing to the higher diagnosis rate. So all of those things collectively suggest that we would expect to continue to see material revenue generator from Japan as the label expansion occurs. I don't know if anyone else has any other comments.

Your next question comes from the line of Faisal Khurshid from Jefferies.

Just one quick one. You kind of commented or characterized the overall TAM expansion of being sort of like greater than 6x the refractory TAM in terms of number of patients. Could you characterize like what you -- how you think about the peak potential uptake into this opportunity? Like where do you see this potentially maxing out from a revenue opportunity perspective, given like the other standards of care?

Yes. Thanks. I appreciate the question. We're still working on the answer to that question, to be candid. And we needed the target product profile specifically generated from this study in order to be able to go out and have the dialogue with physicians to see how they interpret the risk reward, how they see it for their patient populations and what the application might be in the practical setting. I think what is important to note here is that the data from this study is unequivocally positive from the perspective of physicians who are seeking to eradicate evidence of the infection in their patient populations. Moreover, if you just reflect on where CONVERT took us, we saw about 1/3 of patients convert after the CONVERT trial to a point where they had no evidence of bacterial infection. In the case of ENCORE and ARISE, we're seeing north of 80% of the patients converted by month-6. That is a striking improvement compared to what happens if you let a patient become refractory. So there is a powerful motivation in the data to move to treat these patients earlier and the dropout rate going down suggests that actually the treatment burden for the patient is reduced. So that collectively paints a very positive picture for expansion into this broader population. How big, how fast and what that ultimately means for peak sales, we need to come back to you with specifics on that. But certainly, we anticipate moving in a very positive direction.

Your next question comes from the line of Danielle Brill from Truist Securities.

This is Alex on for Danielle. Congrats on the data. Just a detailed check box question on the discontinuation rate. Given there was a slight imbalance in the rate of discontinuations between the arm, did you perform any sensitivity analysis to query the potential impact of the imbalance? And if so, were the findings consistent with the top line analysis?

I'll turn that one over to Kevin.

Yes. So bottom line is those patients that may have discontinued their treatment and had missing values, they were considered in a prespecified way in the analysis. So what you're seeing here in the RSS as well as culture results does consider all that. And so it's a really strong reflection of how robust the study was and insensitive to things like that.

And there are no further questions. This concludes today's conference call. Thank you for your participation. You may now disconnect.