Insmed Incorporated

Thank you for standing by. My name is Enrique, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the INSMED second quarter 2023 financial results conference call. All participants have been placed on mute to prevent any background noise. After the speaker remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you'd like to withdraw your question, press star one again. Thank you. Now I would like to turn the call over to Brian Dunn, Executive Director, Investor Relations. Please go ahead.

Thank you, Enrique. Good day, everyone, and welcome to today's conference call to discuss Innsmouth's second quarter 2023 financial results and provide a business update. I am joined today by Will Lewis, Chair and Chief Executive Officer, and Sarah Bonstein, Chief Financial Officer, who will each provide prepared remarks before we open it up for your questions. Before we start, please note that today's call will 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, which are available at www.sec.gov and on our website for more information concerning the risk factors that could affect the company. As a reminder, the information on today's call is for the benefit of the investment community. It is not intended for promotional purposes, and it is not sufficient for prescribing decisions. I will now turn the call over to Will Lewis for prepared remarks.

Thank you, Brian, and good morning, everyone. What an incredibly exciting moment we are in at Insummit. From a commercial perspective, in the second quarter of 2023, we achieved the highest quarterly sales in our history, up 18% compared to an already strong first quarter. As a result of this outperformance, we are raising our revenue guidance for the year, making what was the best-case scenario under our previous range of expectations now the midpoint of our current guidance. Clearly, the commercial engine at InceMed is really humming, and I want to thank the customer-facing part of our organization throughout the world for their extraordinary efforts which led us to this result. If we are successful with clinical trials and approvals, These same colleagues will one day be the teams to launch Brenzocatib and our other pipeline assets, which increases my confidence in the company's future as a profitable and sustainable commercial organization. As impressive as this quarter's performance has been, even more exciting is what we have in store. We are now finally arriving at the time we have been anticipating for years, when we expect to produce meaningful data across our entire research and development portfolio. culminating in the release of the Aspen data for Brenzocatib in the second quarter of next year. I mention Aspen as the culmination of this period of catalysts because it will undoubtedly mark a huge milestone in the history of this company. But Aspen is by no means the end of our meaningful R&D updates. Let me give you a taste of what I mean, and please keep in mind that this list will not be exhausted. In 2024, we anticipate a steady stream of updates from our gene therapy programs. including first patient data in DMD and an additional one to two IND filings for other gene therapy programs, including Stargardt disease. In parallel, we believe we will have accomplished the production of complete capsids using algae, potentially validating our Algen-X manufacturing platform. Then moving into 2025, we expect our first IND submission from our de-immunize by design platform and potentially the successful scale-up to full commercial manufacturing of proteins using algae. We also expect to file an IND for ataxia telangiectasia, which is related to a recent acquisition that I will tell you more about in a moment. All of these data catalysts would be in addition to potential top-line results from several other studies from our first three pillars, which could significantly de-risk large commercial opportunities for INSUMED if they are successful. One of those is our ongoing study of TPIP in patients with pulmonary arterial hypertension. Another is a study which we plan to initiate before the end of this year for our second indication using Pransocatib in patients with chronic rhinosinusitis without nasal polyps. Much like bronchiectasis, CRS without nasal polyps is an area of high unmet need with few or no treatment options and very large numbers of affected patients. The timing for top line readouts from each of these studies will ultimately be determined by their respective pace of enrollment. All of that is to say that the next year, as exciting as it is, is only the beginning for NCMED, and we can't wait to deliver it. It will all start next month with the release of top line results from our ARISE study of error case in patients with newly diagnosed or recurrent MAC lung infection who have not started antibiotics. I spoke about this data set at length last quarter, but as a reminder, The goal of this data readout is to validate a patient-reported outcome tool, which will be used as the primary endpoint in the registration-enabling OnCore trial. I'm often asked what good would look like in this dataset. From my perspective, the ideal outcome would include three key elements. First, we will, of course, want to see that the medicine demonstrates a safe and well-tolerated profile for use in this patient population. Second, ideal data would clearly show that we have a PRO that works without the need for a significant amount of modification. This would give us confidence that the PRO can be relied upon to predict when patients are feeling a meaningful improvement in their symptoms and can therefore be used as the primary endpoint measure in OnCore. And third, we would want to see at least a trend toward PRO and culture conversion superiority for the error case arm compared to the control arm. Both the PRO and culture conversion trends would ideally be at levels which give us a clear path to achieve a statistically significant outcome in the on-course study. To be more specific on culture conversion, if we can achieve a placebo-adjusted improvement in the conversion rates in the 10% to 20% range in ARISE, and or if we see meaningful improvements in time to conversion in the ER case arm of the trial, we believe that would be very encouraging. If ARISE checks all of those boxes, then I would consider it an extremely positive result. one which would significantly add to our confidence in the error case opportunity in the broader MAC lung disease indication, which is three to five times larger than the current refractory indication, and which, even on its own, we believe would greatly strengthen our financial position by adding a potentially significant source of revenue growth as we move toward financial sustainability. As a reminder, we will host a conference call to discuss the data once the ARISE topline results are shared. While we are discussing the error case development program, Let me give you an update on ENCOR as well. Enrollment in the trial has remained strong, and we continue to expect to enroll 250 patients by the end of this year. Following the ARISE data, we will quickly have another data set to share, this time from our tropostinol palmitoyl inhalation powder, or TPIP program, which we currently are studying in pulmonary hypertension associated with interstitial lung disease, PHILD, and pulmonary arterial hypertension, PAH. We continue to expect to share blinded dose titration data from our Phase II PAH and PHILD studies in the second half of 2023, with the Phase II PHILD topline readout expected to follow in the first half of 2024. In my opinion, TPIP is probably Insemed's most underappreciated pipeline asset. Given that proprostanil is a well-known and well-used medicine for patients with PAH and PHILD, we already know quite a lot about its profile. First, we know that administering higher doses of tropostanil results in a dose-dependent improvement in patient response. Second, we know that tropostanil has a relatively short half-life, which requires patients to inhale doses of it four or more times per day in an attempt to maximize the dose delivery. This results in spikes and troughs of drug exposure throughout the day, and leaves patients unable to maintain the drug's effect during a full night of sleep. And finally, we know that there is already a large and rapidly growing market for tropostanil in these indications. TPIP is a prodrug which gets converted slowly and steadily to tropostanil once inside the lungs. If successful, TPIP could allow patients to cut their dosing schedule down to once a day while maintaining a steady treatment effect throughout the day and even while they sleep. Beyond that, we believe that TPIP has the potential to safely deliver troprosinol at significantly larger quantities than even the highest approved dose of the currently available inhaled troprosinol products. We believe that these higher daily doses could result in enhanced efficacy. Now, you might say that blinded dose titration data from a study that is still ongoing is not likely to be very meaningful, and normally I would agree with you. However, TPIP could be an exception given that what we already know about tropostanil and how it is currently dosed. For context, the highest FDA approved maintenance dose of Tyveso DPI is 64 micrograms four times per day, totaling 256 micrograms being delivered to the lung each day. Our phase two studies are designed to titrate up to 640 micrograms once per day. That is nearly a 60% higher daily amount of proprosenil being delivered when you exclude the weight of the 16-carbon chain of our molecule. This blinded data will show us whether that can be done in a safe and tolerable manner. If this blinded data show that we can successfully titrate patients up to 640 micrograms per day, I would argue, given the history of the mechanism, that it is a very encouraging early sign of the potential for TPIP to provide greater benefits for these patients. To emphasize that point about efficacy, we are also watching with great interest some of the key efficacy signals from those studies, such as reduction in pulmonary vascular resistance. Granted, the patient numbers are small and the data is still blinded at this point, but what we see so far is very encouraging. We look forward to sharing more about the blinded efficacy signals we've seen with you in the future apart from the dose titration data. The next exciting clinical data readout we expect will come from our early stage research engine, or our fourth pillar, which we unveiled at our recent R&D day. In the first half of 2024, we anticipate releasing biopsy data for at least one patient from our Duchenne muscular dystrophy gene therapy program. This will be our first look at human data using intrathecal dosing, which we believe could lead to enhanced safety and efficacy for these patients, based on the preclinical work that we showed you in May and have continued to produce since that time. Importantly, this data readout for DMD, if successful, could also serve as an important point of validation for our gene therapy platform more broadly, which would add to our confidence in the additional INDs that I mentioned earlier. Now, I want to conclude with the clinical development program I'm the most enthusiastic about at the company, our Aspen trial of Brenzocatib and non-CF bronchiectasis. This is clearly the single most important trial running right now at InSmed and I remain as confident as ever in its likelihood for success. The Aspen top line readout in the second quarter of next year will be the most impactful event in the company's history and we can't wait for it. I can tell you that we aren't the only ones excited about this program. Just two weeks ago at the World Bronchiectasis Conference in New York City, One KOL said to us that they believe this data set next year will change everything and will be the most exciting time in the history of bronchiectasis for that patient community. We agree 100%. Before I turn it over to Sarah for some remarks on the quarter's financials, I want to briefly touch on another important development within our early stage research, which we could not yet discuss at our R&D event. In June, we completed the acquisition of a privately held company out of Cambridge in the United Kingdom called Adrestia Therapeutics. Adrestia's focus has been in the area of synthetic rescue, which could open up the possibility of addressing diseases which have been untreatable in the past, even with gene therapies. Through the application of advanced CRISPR screens combined with human genetics, Adrestia is identifying novel targets across a broad range of diseases. They then select the best modality for these targets based on the intended patient population. be it small molecules, oligonucleotides such as ASOs and siRNA, or gene therapy. The first indication will be ataxia telangiectasia, a devastating condition that is often fatal by the second or third decade of life and currently has nothing approved to treat it. Although Adrestia is a relatively lean company in terms of headcount, they have made tremendous strides in terms of establishing themselves with patient advocacy groups and moving their work forward on behalf of that community. We expect to have an IND filed for this indication in 2025. This acquisition would make sense just for the technologies being brought into INSMED alone. But in addition to that, we also welcome some of the brightest and most impressive scientists and colleagues you will find anywhere in the world, including Professor Sir Steve Jackson from the University of Cambridge, whose past work in the DNA damage repair space led to what we know today as LINPARSA. the world's first synthetic lethal medicine, which is now a blockbuster medication benefiting thousands of cancer patients around the world. As good as the people at Adrestia are, history has shown that combining companies only works well when cultures align. I'm pleased to say that we couldn't have asked for a better fit. What we have found with Adrestia is not just a group of great scientists, but kindred spirits with the culture of Insmed. There will undoubtedly be much more to share about Adrestia in the future. For now, we are excited by the developments coming from this team's work and the early interactions and plans for collaboration between the Adresia team and our other researchers at sites in New Hampshire, New Jersey, and San Diego. We look forward to updating you on the cutting edge work being done and giving you a chance to meet some of the incredible people behind it. Importantly, this acquisition changes nothing about our previous commitment to keep the investment in our fourth pillar activities to less than 20% of our overall spending. Furthermore, as we look to the future, our estimates for the revenue production flowing from our first two pillars will more than cover the anticipated cash needs of the early stage programs we are currently contemplating, putting Intamed on a path to financial sustainability, even as we bring multiple new medicines through clinical development to the market for the benefit of patients around the world. I'll now turn the call over to Sarah to walk through our second quarter financials.