Insmed Incorporated

question simply press star followed by the number one on your telephone keypad it is now my pleasure to turn the call over to Brian Dunn you may begin thank you Amy good day everyone and welcome to today's conference call in which we will discuss insmed's first quarter 2025 financial results and provide an update on our business 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 for more information concerning the risk factors that could affect the company. The information we will discuss on today's call is meant for the benefit of the investment community. It is not intended for promotional purposes and it is not sufficient for prescribing decisions. I'm joined today by Will Lewis, Chair and Chief Executive Officer, and Sarah Bonstein, Chief Financial Officer, who will each provide prepared remarks, after which they will be joined by Martina Flammer, Chief Medical Officer, for a Q&A session. I will now turn the call over to Will.

Thank you, Brian, and welcome everyone. 2025 is off to an exceptionally strong start for InsMed, with our research and development, regulatory, and commercial teams executing on their ambitious goals for the year. Our case delivered another quarter of double-digit year-over-year revenue growth in Q1, and each of our mid to late stage clinical programs are on or ahead of schedule. Perhaps most importantly, we have continued to facilitate the FDA's ongoing review of our NDA filing for brenzocatab and bronchiectasis, which has been steadily progressing without disruption despite the changes occurring at the agency. We continue to expect the FDA's decision on their review by the August 12th PDUFA date. Before I walk through our recent progress in more detail, I'd like to reflect briefly on where Insmed currently stands on its development journey, and importantly, what still lies ahead. Insmed is advancing three mid- to late-stage programs with Brenzocatib, TPIP, and EraCase. We have achieved an uninterrupted string of positive clinical data for at least one indication from each program, which is a rare accomplishment. These results have offered patients new hope and have given us the confidence to pursue additional indications. In the next 12 months, we look forward to reading out data from TPIP for PAH, Brenzocatib for CRS without nasal polyps, and the EraCase Encore trial for all MAC lung disease. If we are successful, these potential additional indications would represent a meaningful advancement for patients and a substantial growth opportunity for the company. Now let's dive deeper into each of these programs, starting with Brenzocatib. Last month, the full results of the Phase III Aspen trial of brenzocatib and bronchiectasis were published in the New England Journal of Medicine, emphasizing the importance of this dataset to the medical, scientific, and patient communities. The publication puts brenzocatib among a rare category of drugs that have had both their Phase II and Phase III results for the same indication highlighted by the New England Journal of Medicine. At the FDA, the review team continues to be engaged and responsive. and we are not aware of any turnover or other disruptions to the FDA's review activities. In fact, all components of the review process have occurred on schedule, including the mid-cycle review meeting and all applicable inspections to date. We look forward to the FDA's decision in the coming months and are hopeful that it will result in this important medicine finally becoming available to bronchiectasis patients waiting for a therapy like Brenzocatib. As the regulatory process in the U.S. progresses, we are also making meaningful strides on our launch readiness. I am pleased to report that as of the end of April, our disease state awareness website has had over a million unique visits and over 53,000 self-identified patients who have taken action such as downloading support tools or signing up to be kept informed about the latest updates in bronchiectasis. In addition, we continue to engage with both national and regional payers, which is critical as we prepare for our goal of a frictionless launch. So far, we have found a constructive audience in response to the proposals we presented within our initial discussions. As you know, additional US sales reps were hired and deployed in October of 2024 with the aim of educating healthcare professionals about bronchiectasis while also detailing error case. In fact, that team has already successfully engaged with more than 27,000 healthcare professionals in the US. We've also recently completed the expansion of our patient support function, building on the strong foundation that we provided Eric case patients for many years. This function will be critical to fulfilling our mission to transform the lives of patients living with serious diseases by supporting them through their journey. Another indication of the promise of Brent so Canada is the encouraging regulatory reception it's receiving internationally. Like at the FDA both the European and UK regulatory authorities have accepted our filings of Brent so Canada and are conducting their respective regulatory reviews. We also continue to advance our filing for Japanese regulators and we look forward to submitting that application soon, importantly, this progress keeps us squarely on track for potential approvals and launches in each region in 2026. Our second indication for brenzocatib, CRS without nasal polyps, is also advancing at an impressive pace. After sustained strong recruitment, the phase two BIRTCH trial completed enrollment last month with 288 randomized patients, exceeding our original 270 patient target. We continue to expect top line results by the end of this year. We remain encouraged by the blinded data we have seen from the study so far and look forward to what those data could mean for patients. If successful, we believe that the Birch Phase II clinical study could unlock a significant additional commercial opportunity for brenzocatib that could match or even exceed that of bronchiectasis, given the larger number of patients suffering from this condition. I'm also pleased to mention that, while still early, enrollment in our Phase II CDER trial, which examines the potential role of brenzocatib in hydradenitis suprativa, is proceeding well. Based on our current enrollment rate, we anticipate the interim futility evaluation of the first 100 patients to occur in the first half of next year. I also want to briefly touch upon DPP-1 inhibition and the meaningful progress we are making to develop our next generation of DPP-1 inhibitors. The potential of this novel pathway for treating neutrophil-mediated diseases is still in its infancy and represents one of the most exciting and important areas of research we are exploring for patients. As a leader in DPP-1 inhibition, our research team is working tirelessly on next-generation molecules with the potential to address other diseases where neutrophilic inflammation is relevant, such as COPD, rheumatoid arthritis, and many others. We anticipate the first of our next-generation molecules could enter the clinic as soon as next year. Turning now to our TPIP program. Our phase two trial of TPIP in patients with pulmonary arterial hypertension continues to progress toward a top line readout. The last patient's week 16 visit occurred in late March, and we are now in the process of cleaning and locking the database before unblocking the results. Based on this progress, we are narrowing the expected timing for the top line readout to June, or the earlier end of our previously communicated timing of mid-year. As we approach that readout, our excitement continues to grow for what it could mean for patients. Given its proximity and in keeping with our usual practice, I want to be clear about what we would see as success for this trial before we turn over those results. If the treatment shows a placebo-adjusted reduction in pulmonary vascular resistance from baseline of 20%, we would view that as a clear win. If it shows a 25% reduction on that measure, we believe it would be a home run representing a best-in-class PVR reduction for a prostanoid in this setting. When you also consider that participants in this trial are heavily pretreated and that we are measuring this endpoint 24 hours after the most recent dose of TPIP, in other words, at trough or the most conservative time point, such a result would be all the more impressive. Separately, Although this study is not powered to show a definitive effect on six-minute walk distance, our hope is that we will see a 15 to 20-meter directional benefit favoring TPIP. Regardless of the efficacy results that are achieved in this Phase II, it is important to remember that this could be the starting point for TPIP's efficacy profile, given that the study's max tolerated initial dose was set at 640 micrograms. While this max dose represents about 60% more troposynil than the combination of four daily doses of Tyveso DPI, we have been encouraged by our studies investigators to allow for even higher dosing. In our phase three program, we intend to allow patients to titrate their dose up to a maximum of 1,280 micrograms, or double the highest dose that was allowed in this phase two study. Given that higher doses of tryprosinol have been shown both in clinical trials and in real-world practice to yield greater efficacy in a dose-dependent fashion, the potential for safely increasing the dose of TPIP is extremely exciting. Taken together, the prospect of greater efficacy combined with once-a-day dosing emphasizes how potentially powerful this therapy could be for improving patient outcomes in PAH and PHILD. One final update that we believe underscores the excitement of our investigators and study participants. Of the patients who completed the full 16 weeks of treatment in our phase two PAH trial, about 95% of them have chosen to enroll in the open label extension, which allows patients to titrate up to a max of 1,280 micrograms, and some have already reached that high dose. Data from this open label extension will be made available at a future medical conference after the top line readout. Collectively, we will use the information from our Phase 2 trials of TPIP to finalize our clinical plans for Phase 3 trials in both PHILD and PAH, with PHILD expected to start in the second half of 2025 and PAH to follow shortly thereafter. Finally, let me touch on our Error Case Development Program, which aims to satisfy the post-marketing requirement for full approval of its current refractory MAC lung disease indication while also supporting the expansion of the label to include all patients with MAC lung disease. The phase three encore trial continues to progress on schedule toward its anticipated readout. As you know, this trial has a primary endpoint that is based on a patient reported outcome measure applicable for the US regulators, which will be measured at month 13. It also has a separate durable culture conversion primary endpoint that is applicable for the Japanese regulators, and that is measured at month 15. It is our intention to wait to unblind all the data until the month 15 culture conversion results are available. As a result, we expect the top line results will be available in the first half of 2026 and we will provide more detail as this time approaches. Encouragingly, we have been monitoring the data from ONCOR on a blinded basis, which continues to look very similar to what we saw in the successful ARISE study. Before I hand the call over to Sarah, let me simply say that INSEMED is ready for the exciting future ahead. Each of our development programs is showing meaningful progress. Our regulatory filings and launch preparations for BRNSO-CATIB are all advancing on or ahead of schedule, and our commercial performance continues to deliver strong year-over-year revenue growth in each of our regions. Let me now turn the call over to Sarah.

Thank you, Will, and good morning, everyone. I'm thrilled to be addressing you during one of the most inspiring periods that we have ever seen at Innsmed. In the midst of all the excitement going on inside the company, I want to take a moment to address concerns that I often hear about what is happening outside the company, particularly as it relates to tariffs. We have done extensive work to understand the potential impacts of various tariff policies on Innsmed. And based on that work, we are comfortable that Innsmed is well positioned to thrive even in an environment of relative geopolitical uncertainties. Importantly, InSmed's US intellectual property resides in the US. This means we would expect tariffs to be applied only to the actual cost base of the product without any additional exposures due to markups or transfer price strategies, which are commonly used by others in our industry. In addition, InSmed intends to expand its current U.S. manufacturing footprint. We've had underway for some time to establish a second source of manufacturing for Brenzocathib in the United States. Importantly, all manufacturing for gene therapy programs is already based in the U.S. Based on the tariffs currently in place, we estimate the impact on our business to be in the single digit millions annually over the next few years. We will continue to monitor and assess any impacts as the macro environment evolves. Let's move on to our first quarter results, beginning with the strong commercial performance of Aircase, which is illustrated on this slide. We were pleased to deliver double digit year over year growth in each of our geographic regions in the first quarter, representing the sixth quarter in a row for this achievement. Particularly striking was the percentage growth rates we saw in Japan and Europe, both hovering around 50%. These impressive results were driven by strong volume trends due to an increase in new patient starts. In addition, our U.S. commercial team delivered strong 14% growth for Eric Case this quarter, a remarkable result for a product in its seventh year post-launch. Due to the strength of this performance across each of our commercial regions, we remain on track to achieve our 2025 full-year Eric Case net revenue guidance of $405 to $425 million. As a reminder, this guidance range is specific to error case and does not include any future contributions for Brent or CASIP if approved. On slide 18, you can see our cash balance as of the end of the quarter. At approximately $1.2 billion in cash, cash equivalents and marketable securities, we are well capitalized as we approach our upcoming clinical and commercial catalysts later this year. As is typically the case in the first quarter, our cash burn was higher than our usual quarterly cadence as a result of the timing of our annual employee incentive compensation payout. If you remove the impact of that payment, as well as the cash we received due to stock option exercises in the quarter, our underlying burn in the quarter was comparable to prior quarters. Although we don't guide to cash burn levels, in general, we continue to expect our burn to increase as we build out the necessary personnel and infrastructure in anticipation of the Brent O'Catsip launch. On the other side of that launch, we anticipate that increases in spending will be more than offset by revenue growth, leading to progressively smaller quarterly operating cash outflows. As I have said many times, we are not currently funded through profitability, but importantly, that is by our own choice. because we believe the investments we are making now will lead to outsized returns in the future. We continue to have line of sight to becoming a cashflow positive company and believe our purposeful investments along with future potential revenue growth have put us on that path. Additionally, we expect to have many options for accessing the capital we need when the appropriate time comes. Last month, we announced that we were calling the remaining $570 million of convertible debt on our balance sheet which would have matured in 2028 with a redemption date of June 6, 2025. If all the debt is converted prior to redemption, it would result in the issuance of approximately 17.8 million additional shares of common stock. This conversion would not only lower our ongoing interest expense, but would also meaningfully reduce our outstanding debt. We look forward to providing you with an update after the redemption date. Moving to the next slide, you could see our operating expenses for the quarter. Cost of product revenues for first quarter 2025 was $21.3 million, or 22.9% of revenues, which is consistent with our historical performance. As expected, both our research and development and SG&A expenses were higher this quarter than they were in the previous year's first quarter due to the significant growth of our company during the past year to support our commercial readiness initiatives in anticipation of the U.S. launch of Red Sokacib. as well as our increasing investments in our early and mid to late stage pipelines. However, I will point out that our operating expenses this quarter were down from the levels we saw in the first quarter of 2024, in the fourth quarter of 2024. This was driven largely by lower research and development costs across Brents of Katsop for bronchiectasis and TPIP. We anticipate that research and development expenses will increase going forward as we kick off the phase three programs for TPIP, continued investments to advance Brenzocastib in both CRS and HS, and advance multiple gene therapy product candidates into the clinic. In closing, we believe InSMED is in a unique position of strength, both financially and operationally. We continue to deliver strong error case revenue growth in all of our regions. The expected launch of BrentsoCASIP later this year has the potential to significantly accelerate our revenue growth. In parallel, our team continues to execute with meaningful clinical and data catalysts in the near term. All of this is supported by our strong cash position. I couldn't be more pleased with where InnsMed stands. With that, we would now like to open the call to your question. Operator, may we take the first question, please?