Insmed Incorporated

Hello everyone and welcome to the INSMED fourth quarter and full year 2022 financial results. My name is Nadia and I'll be coordinating the call today. If you would like to ask a question at the end of the presentation, please press star followed by one on your telephone keypad. We ask you please link yourselves to two questions. If you wish to ask a follow-up, please rejoin the queue. I will now hand over to your host, Eleanor Barrister, Investor Relations to begin. Eleanor, please go ahead.

Thank you, Nadia. Good morning and welcome to today's conference call to discuss our fourth quarter and full year financial results for 2022 and provide a business update. Before we start, let me remind you that today's call will include forward-looking statements based on current expectations. Such statements represent our judgment as of today and may involve risks and uncertainties that may cause actual results to differ materially from the results discussed in the forward-looking statements. please refer to our filings with the Securities and Exchange Commission, which are available through the SEC's website at www.sec.gov or from our website for information concerning the risk factors that could affect the company. The information on today's call is not intended for promotional purposes and it is not sufficient for prescribing decisions. Joining me on today's call are members of the InSmet Executive Management Team, including Will Lewis, Chair and Chief Executive Officer, and Sarah Bonstein, Chief Financial Officer. Please note that today's call includes slides, which are available through the webcast on the Investor Relations section of our website. Let me now turn the call over to Will Lewis for prepared remarks. Upon completion of those remarks, we will open the call up for your questions.

Thank you, Eleanor, and good morning, everyone. We believe the instrument that you know today will completely transform in less than 18 months. During this critical period, we expect to produce clinical data from each of our four pillars. And as a result, we believe you will begin to see the benefit of the investments you have enabled us to make over the last several years. We expect to evolve from addressing patient populations of tens of thousands to over a million. It is our intention that each of our programs will represent a first-in-class or best-in-class treatment for the disease in question. For my prepared remarks, I would like to walk through upcoming milestones in chronological order, focusing on the first set of potentially transformative milestones anticipated in the next 18 months. To begin, I am very excited to announce that as of today, all screening in adults is completed for our phase three Aspen study evaluating Brenzocatib for the treatment of bronchiectasis. This is a major achievement, and it means we can continue to expect enrollment completion in the first quarter of this year, and more importantly, we remain on track to report top-line results in the second quarter of 2024, as previously indicated. This is an enormous accomplishment. Targeting greater than 1,600 patients, our Aspen study is more than 50% larger than previous Phase III programs in this indication. Despite the global respiratory pandemic, we have completed all screening in adults in a similar amount of time to these previous programs. This also speaks to real world existence of these patients and their need for treatment. There is great enthusiasm for the potential of this clinical trial to read out as successfully as the previous Willow study, and we all anxiously await the top line results expected in just over a year's time. Looking ahead to the second quarter of this year, I am excited to invite you to mark your calendars for our research day on May 8th in New York City. Plan to bring the top artificial intelligence, protein engineering, and gene therapy specialists on your teams because we will be bringing ours. This event has been a long time coming and that is because we wanted to have validating preclinical data and the first IND filing completed before we held the review of these platforms. We believe we possess world-leading research capabilities that should now be seen as a meaningful part of our business and, as a result, be factored into your evaluations. To be more specific, you can expect an overview of the multiple research platforms we possess with a deep dive into several specific programs. On May 8th, the first platform we will review is the team out of Dartmouth based in the Hitchcock Medical Center. This group is focused on using artificial intelligence to create de-immunized proteins. a technological process we are calling de-immunized by design. Earlier this year, we were pleased to share the initial targets of this program, rheumatology, immunology, and improved viral capsids. Leading this work are Drs. Carl Griswold and Chris Bailey Kellogg, former professors at Dartmouth who have been advancing their programs through a startup enterprise when we joined forces with them almost two years ago. Second, we will provide a deep dive into several, but not all, of our gene therapy programs, including the first product candidate and a musculoskeletal indication that we anticipate will enter the clinic this year. We expect to have already filed an IND for that candidate by the time we speak with you on May 8th. We will also discuss the first indications we will target in CNS and ocular and the expected timing for their entry into the clinic. along with a review of supporting preclinical data behind these programs. Although there are many companies in the gene therapy space, we have taken a strategic approach to this technology and believe we can offer improved efficacy, safety, novel delivery, as well as established capabilities in chemistry, manufacturing, and controls compared to others in this field. Dr. Brian Kaspar, the scientific founder of Avexis and our chief scientific officer, oversees our gene therapy programs based in San Diego, and he is joined by several key members of the original Avex's scientific and regulatory team. Our third research platform is focused on a potential manufacturing capability that, if successful, we believe would dramatically lower the cost to produce proteins, from the viral capsids used in gene therapy to a range of other therapeutic proteins, including those being developed by our team in New Hampshire. We are excited for the potential of these different platforms and expect them to be both cost effective and productive. Our early stage research has represented and we expect it will continue to comprise less than 20% of our expenditures in the near term and yet still generate at least six new INDs and or phase one studies by year end 2025. We will only advance each program to the next stage of development upon seeing successful data. If it sounds like there is enough going on in our early stage research that it could be its own company, we agree. In fact, we believe each of the four pillars at Insummit could stand as independent companies in their own right, given the promise of the lead indication for each and the potential to expand beyond their first indication. However, strategically, we want to reemphasize that our approach is to use the cash flow we anticipate from our more advanced programs to fund the development work in the medium to long term. The result, we hope, will be a leading self-sustaining biotechnology company. In short, we feel that progress we have made in our early stage research is substantial, and we invite you to join us for this exciting first review of our capabilities. We look forward to seeing you on May 8th, either in person in New York City or virtually for this event. Later that same month, in May of this year, we will have a strong presence at the American Thoracic Society International Conference, or ATS. I'm pleased to report that we submitted eight abstracts across error case, and TPIP, and all eight were accepted for presentation at ATS. Stay tuned for additional details on these presentations, which will include error case adverse event mitigation in a real-world setting, long-term hospitalization burden in NTM, and an analysis of patients with bronchiectasis by disease severity subgroup from the Willow study. In addition, ATS will be an important forum for us to discuss disease state awareness in preparation for the potential launch of Brenzocatib if it's approved. As you can appreciate, May will be a particularly busy month for us, but shortly thereafter, we expect to arrive at the next important program milestone. In mid-2023, we plan to initiate a phase two trial of Brenzocatib in chronic rhinosinusitis without nasal polyps, or CRS. Subject to input from the FDA, the basic design of this trial will be approximately 270 patients randomized to either 10 milligrams of Brenzocatib, 40 milligrams of Brenzocatib, or placebo over a 24-week treatment period. The primary endpoint will be change in daily sinus total symptom score, which measures various nasal symptoms. And it is our current intention to use this same endpoint in a phase three study. Similar to bronchiectasis, recall that there are no approved therapies for CRS without nasal polyps. And while there are tens of millions of people who suffer from CRS without nasal polyps, we will be initially targeting the most severe patients who experience recurrence and potential surgery, which we estimate is 400,000 addressable patients in territories where we have commercial infrastructure. Let's now move to catalysts in the latter half of 2023. The next major update from the error case frontline program will be ARISE top line efficacy and safety data, which we expect to report in the third quarter of this year. This readout will include the differences in the patient reported outcome results between the two treatment arms using respiratory and fatigue scores, the effect of error case on culture conversion, time to culture conversion, and the associations between culture conversion and change in respiratory and fatigue scores. The goal of ARISE is to show a directional effect on difference in endpoints between treatment groups. It is not powered for statistical significance. We are extremely excited about the overall progress of ARISE. Earlier this year, we reported a blinded treatment discontinuation rate at ARISE of 15%. We believe this slow discontinuation rate is an encouraging sign that patients with earlier, less severe disease may tolerate error case well. and also suggests an exciting possible advantage of treating patients sooner versus the watch and wait approach currently undertaken by some physicians. As a reminder, the frontline opportunity offers a potentially multifold increase to the current addressable market in the refractory setting. Moving to the next update. In the second half of 2023, we anticipate sharing interim blinded dose titration and safety and tolerability levels from some of the patients in both TPIP Phase II studies. one in PHILD and the other in PAH. Recall that these trials utilize a max tolerated dose approach. High doses of inhaled prostanoids have been shown to demonstrate benefit by reducing pulmonary vascular resistance and pulmonary arterial pressure. Our ability to reach higher doses in these trials should improve our chances of success. Finally, we anticipate the ENCORE trial will be fully enrolled by the end of this year. While this is an ambitious goal, our team is hard at work to meet this objective. Encouragingly, OnCourt is showing a solid pace of enrollment that has accelerated since the RISE enrollment completed in October of 2022. This now takes us to the catalyst we can expect in the first half of 2024. We continue to anticipate reporting top-line data from the TPIP Phase II trial and PHILD in the first half of next year. Also in the first half of 2024, we plan to share musculoskeletal clinical data from a few of the earliest patients we were able to enroll in a phase one slash two clinical study using gene therapy. All of this will lead us to the second quarter of 2024 when we anticipate top line results from the Aspen study. The call to phase three study examines two doses of brenzocatab and bronchiectasis, an indication with no currently approved therapies and approximately 1 million addressable patients at launch. In addition to those 1 million patients, there are up to 6.7 million patients misdiagnosed or comorbid with COPD or asthma that could represent additional patients who could benefit from a reduction in pulmonary exacerbations beyond our initial launch focus. The ASPEN trial continues to progress as planned. As we announced in January, the blended blinded rate of pulmonary exacerbations observed in the most recent three months of the study ranged from 1.12 to 1.15 events per patient per year. This is an encouraging event rate that suggests, from a powering perspective, enough pulmonary exacerbations are occurring. And it also aligns with what we saw in the successful phase two willow study. Let me take a moment to review the recent cystic fibrosis, or CF, data we put out earlier this year. which further reinforced our confidence that the mechanism of action of Brenzocatib is performing the way we anticipated. Last month, we were excited to release positive top line data from the phase two pharmacokinetic pharmacodynamic study of Brenzocatib in patients with CF. We saw a clear dose-dependent and exposure-dependent inhibition of blood neutrophil serine proteases, or NSP levels, in patients treated with Brenzocatib across all doses. Safety and tolerability were consistent with what was observed during the Phase 2 Willow study, with no significant drug-related findings, despite the fact that we used an increased dose of 40 milligrams for certain patients in the CF study. Because of the clear and significant NSP inhibition we saw in these results, we concluded that an additional cohort evaluating 65 milligram dose was not needed, although we have the clean toxicity data to allow us to treat to this level. Observing the needed efficacy and safety at 10, 25, and 40 milligrams may allow us to leverage equivalent dose data from both the Willow and Aspen trials. Finally, I'll close out with an update on the EraCase franchise. As previously communicated, we are pleased to have achieved 30% revenue growth in 2022. As you are also aware, the guidance we issued at the beginning of this year anticipates EraCase global revenues to be between $285 million and $300 million for the full year 2023. Underlying this guidance, we have confidence in our ability to continue to drive growth globally. SARA will provide additional perspective on the dynamics shaping our expectation in each of our key geographies. Let me close out my remarks by reiterating our excitement for the future of INSEAD. 2023 is the year we hope to begin realizing the impact of the multiple investments we have made over the last several years. I hope you share my anticipation for the many important clinical data events coming over the next 18 months to say nothing of what lies beyond that timeframe. We look forward to updating you on our progress. With that, I'll turn the call over to Sarah for her commentary.