Insmed Incorporated (INSM) Earnings Call Transcript & Summary

Okay. Hi. Good morning, everyone. Welcome to day 1 of our Cantor Healthcare Conference. My name is Olivia Brayer. I'm one of the senior biotech analysts here at Cantor. And really excited to kick off today's conference with Sara Bonstein, who is CFO of Insmed. Sara, thank you so much for being here with us.

Yes. Thanks so much for hosting us. Really appreciate it.

So a lot is going on at Insmed this year, and you guys just came out with a really big update in terms of peak sales guidance. So maybe just talk us through the decision to come out with that update. Why now? And how did you ultimately get to some of those numbers, right, the $7 billion and the $6 billion and the $1 billion?

Yes. Yes. Well, thanks for the question. And again, thanks for hosting us and having us here. And a little old Insmed put up $14 billion in peak sales is our estimate between our 3 either commercial or late-stage products. So really tremendous and our level of conviction is very, very high in those numbers, obviously. So specifically, why did we do the update now? As we go through our own internal processes, we do an annual -- we call it our strategic plan every year. We do our annual strategic plan in the July, August time frame, share that then with the Board in August during our strategic offsite with the Board. And so we had all of this new information to share. We had almost a year of launch now under our belt with BRINSUPRI. And while we had a ton of conviction in the $5 billion number that we were able to put out, which was obviously a monster number, we learned more about some of the underlying assumptions. And we had shared previously throughout the journey of the launch up to that phase that we were either meeting or exceeding or doing better than our own internal sort of assumptions and benchmarks. And you see us pull that through in our revenue model and in the guide that we shared with all of you by increasing from [ 5 ] to [ 7 ]. So that's a 40% increase in our conviction in BRINSUPRI. And I'll just put a pin in, that is the base launch. That does not account for this sort of secondary launch that I'm sure we'll touch on in potentially underdiagnosed patients that have COPD and/or asthma today. As we think about TPIP, previously, we had a $2 billion number out there for TPIP for 2 indications. It was for PH-ILD and PAH. And we had put that number out before we even had our Phase II data in hand because it was a proven -- a known mechanism of action. Now with the strength of the Phase IIb PAH data, the while small but very encouraging Phase IIa PH-ILD data and then most recently, the OLE data for PAH, we now had, again, more new information as well as made the decision internally and shared with all of you to progress into 2 additional large indications, PPF and IPF. So that update from $2 billion to $6 billion for TPIP reflects all 4 indications, each of which we believe could be a blockbuster in and of itself. ARIKAYCE, we had always assumed for the success of the label expansion, and that was already embedded in the $1 billion. And so yes, tremendous amount of revenue potential, and that obviously doesn't take into account some of our earlier-stage pipeline.

Yes. And maybe we'll start with BRINSUPRI, just given how much focus there is on it. A question that I get asked, and I'm sure you get asked a lot is why the decision to actually increase from -- or what gave you the confidence, right, to increase from $5 billion to $7 billion rather than we'll just get to that $5 billion number maybe faster? Or maybe the answer is both.

Yes. So maybe we'll actually rewind and think through before we launched BRINSUPRI, we were putting out analogs for the best specialty respiratory launches that existed. So we looked at Ofev and Tezspire and Dupi and Fasenra. And in their first year of launch, they put up about $500 million to $700 million in revenue. And that's what really, really successful respiratory launches that I think we would all sit here and agree have been game changers in their space. And as we have now launched BRINSUPRI and put up the very impressive revenue numbers that we have from an actual basis and have been able to previously had the $1 billion-plus guide for this year and then most recently updated our revenue guide to the $1.25 billion to $1.4 billion this year. That is double plus what really successful specialty respiratory launches look like, right? So our execution, the operational excellence that our commercial team has been able to show in the early days of the launch is absolutely tremendous, and you see that being pulled through in the actuals and the revenue guide for this year. And we needed to continue pulling that through in our peak sales estimate now that we have this level of conviction in the launch.

Yes. And you mentioned your launch. Obviously, you guys are having an incredibly successful launch. What are some of the metrics that maybe are tracking ahead of your own internal expectations that are maybe some of the biggest tailwinds that you guys are experiencing?

Yes. So a lot of sort of unsung heroes in this launch. The team has just been kicking it out of the park. I'll remind you, we started disease state awareness for this launch. Thank you to everyone that supported us financially to be able to do that 3 years before the launch. And that has really shown to be successful, right? This is a first-in mechanism, first-in-disease launch. There was a needed education to set the foundation going into the launch, and you're seeing sort of the fruits of those labors in the actuals. The team that's on the ground executing, educating compliantly on if it's a therapeutic specialist, it's the field access managers, if it's the case managers, if it's the field-facing medical team, they are all hitting it out of the park with their execution. A lot of, like I said, on unsung heroes, the pricing reimbursement and access side of this is going wonderful. We've commented about 90% payer approval. Patients are getting their drug within about a week. Those are very high marks to be meeting. Patients are feeling better. They're starting to get that feedback loop in the physicians' offices, and the medical offices. So a lot of really strong opportunity there. We're seeing depth and breadth -- we're seeing sort of increases in the amount of writers. You saw that continue to increase in our Q2, where we went from about 5,000 prescribers cumulatively to about 6,300 cumulative prescribers from Q1 to Q2, and you saw us grow in how many scripts folks had written. Previously, it was about 20% of the physicians had written 5 or more, and we were able to, while adding new writers, increase that to about 30% have written 5 or more. So really, really impressive. We still have a lot to go. We now have -- if you sort of add up all the new patient start numbers, a little over 26,000 as of Q2, new patients on drug. I'll remind you, there's 500,000 diagnosed patients today with bronchiectasis. That's data that's a couple of years sort of rear in the facing and about half of those are 2 or more. So we've just started to scratch the surface. on patients that could be impacted positively with this medication, and there's over 20,000 prescribers, about 28,000 prescribers. So again, have a ways to go. So we've done really well on all of those metrics, but still more opportunity.

You mentioned that, that 500,000 number is maybe a couple of years old, right, in terms of when you all provided it. So I'm going to ask a little bit of a forward question, but could that number maybe be bigger than we expected? Or could that number maybe be growing over time as awareness and as a new product comes to market?

Yes. I think the number is growing. I think just naturally TAMs grow. And so we'll kind of walk through U.S. patient population, obviously, that's sort of the straightforward one, everyone is aware of that. If you look sort of broadly speaking, any time there is a new product available for a first in disease, you will naturally see TAMs grow. So that's something a dynamic that you will have here. And then the interesting piece with bronchiectasis, while it is a condition that is life altering for those that suffer from it, it is typically not in the sole indication, it is typically not life ending. And so you have the unique perspective here where you have incidents and prevalence stacking on top of each other. And so that will naturally grow our TAM. And then the other, I think, important piece to highlight is while our label is broad for bronchiectasis indication, the conversations that we've had with payers is that 2 or more exacerbating patients, and we had commented on the diagnosed patients of 500,000, about half of them were 2 or more exacerbating per the claims data that we had at the time. Naturally, over time, if you have an exacerbation, you are going to have future exacerbations. That's just how this condition works. It is a progressive condition. So you will naturally have over time, your TAM increasing and you will naturally have over time, the patients that are fewer exacerbating patients moving into the more frequent patients. So that sort of organic growth is happening and will continue to happen before we even touch on adding to the top of the funnel for this sort of secondary launch for the underdiagnosed potential for COPD and or asthma patients.

And you also brought up just a number of prescribers that you guys do have writing scripts. So as you think about the launch unfolding from here, I mean, what is the priority between depth versus breadth and kind of balancing the 2? I mean, how many more prescribers do you think you can get to start writing? And then how do you start to convert some of those initial prescribers into writing that 5 or more script number that is your top I guess, 30%.

Yes. So we triangulate the data in all the possible ways we can and ensure that our folks' time is being spent as appropriately, compliantly and efficiently as possible. And so as you look at sort of that top decile of prescribers and sort of decile 1 and 2, they may have up to 100-plus patients in their treatment office. So there is a lot of opportunity in depth in sort of decile 1 and 2. And then as you look at sort of your mid-tier, that's where you have the breadth. And so because we are -- we all live in sort of a data-rich world, we're able to appropriately target time allocation for where we believe we can have the biggest impact on patients.

Okay. Very helpful. And then the other thing that comes up quite often with this launch, and I know last quarter was a big topic of conversation is just persistence and continuations on drug. Maybe just talk about the dynamics there, how you see those unfolding? It sounds like most people have kind of come to the same conclusion in terms of what they should be modeling. But maybe just kind of help us solve for how to think about persistence going forward on BRINSUPRI.

Yes. So persistence compliance continuation, that whole sort of bucket continues to track what we commented on most recently continues to track really well. We're -- we continue to be encouraged by what we're seeing there. We commented on the access side of the world. I know this was a discussion earlier in the year. There is a difference between clinical trial continuation and real-world continuation across the industry. And it is something that we, again, were celebrating on how well the team has been able to execute on this. So sort of nothing to see here, and you could see in our conviction of being able to go from $5 billion to $7 billion that this is a drug that we believe is needed for patients and will be one that will be long-standing.

And then as you think about the launch unfolding, you guys have talked about Symphony TRx being a good proxy. I think all of us in this room track that pretty consistently on a Friday morning basis. So is that something that we should still be looking at in terms of launch proxy on a TRx basis?

Yes. Yes. I really appreciate the question, and we love these types of opportunities to be able to update the market on Symphony. So our most recent public statement had been through the sort of weeks reported through July that Symphony continued to track on a proportionate basis. I'm happy to say here, we don't have -- I think there's a couple of days left in August that haven't been reported. But through all of the reported that has been presented through the month of August, it continues to track on a proportionate basis and it continues to be up and to the right. And so that obviously should give folks encouragement on the strength of the launch.

And we have seen a pretty linear launch curve. And I think that kind of continues to track over the last few weeks as well. So maybe I'll ask like from an expectation perspective, do you continue to expect your launch to stay linear? I mean at what point in the launch do you start to see that curve maybe not plateau, but maybe see the slope start to change?

Yes. So obviously, I won't comment anything intra-quarter forward-looking other than sort of the revenue guide of the $1.25 billion to the $1.4 billion that we continue to have conviction on. We're still learning in the launch. It's still early days. We're still going through certain seasons and all that -- those good things. But the underlying fundamentals of the launch are so strong, and the team is executing on all cylinders and BRINSUPRI is on track to be a top 20 launch of all time.

Congratulations. to you and the team. Gross to net is another thing that I think surprised people to the kind of upside on your second quarter earnings call. Maybe just talk about gross to net. Where is it today? How has it evolved over the launch? And as you think about gross to net going forward, I mean, maybe I'll ask like how have you been able to keep gross to net so low? And do you still have conviction that you can kind of continue to track very favorably from a gross to net perspective.

Yes. So we said right from the beginning on we -- access is really important and appropriate and frictionless access for patient and targeted contract and where appropriate. And so we've been able to execute on that. As I mentioned, around 90% payer approval. And so we've been able to have line of sight into what our contracting sort of needs will be for the year. Our original gross to net guide was mid-20s to low 30s. We were able to -- now that we have that line of sight, be able to narrow that to mid- to high 20s while still maintaining that positive payer approval perspective. So again, kudos to the team internally on being able to ensure patient access and we continue on that front. I won't comment on forward-looking gross to net, obviously, at this point in the year, but our focus will continue to be on frictionless access for patients.

Are there additional payer contracts that could start to come online going forward? Or at this point, have you all hit the sweet spot?

For 2026, we feel like we have a clear line of sight into what 2026 will look like. We will continue to have appropriate conversations in the future with payers if and when appropriate.