Welcome to the Morgan Stanley Global Healthcare Conference. I'm Jeff Hung, one of the Biotech Analysts. For important disclosures, please see the Morgan Stanley Research Disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. For this session, we have Insmed, with CEO, Will Lewis, and CFO, Sara Bonstein. Welcome, Will and Sara. Thank you. Thank you so much for having us. For those who may not be as familiar with Insmed, can you provide a brief introduction? Sure. So Insmed is a company that is focused on treating rare and serious diseases, and we're really designed around four pillars. The first of those is a product called ARIKAYCE. This is our commercially approved product, conditionally approved in the U.S., fully approved in Europe and Japan for the treatment of refractory MAC lung disease. It was the first ever approved product in this disease, and it is included in the global guidelines with a strong recommendation for use. We have recently just last week announced ARISE data, which is a phase III program that is the first of two, reporting out on the expansion of the use of this drug into the all MAC NTM category. We can talk about more about that later. But it was much better than expected data, so we're very excited about that. It's always great to come to a banking conference with great data in hand. To that, we add our second pillar, which is brensocatib. It's a DPP1 inhibitor for the treatment, initially of bronchiectasis, but it will also be targeting other diseases. There's a phase III program running for that drug, which is quite large. We'll read out in the second quarter of next year. This too would be a first in disease and a first in mechanism program. It's estimated by most to be a multi-billion-dollar potential opportunity, treating more than 1 million patients at the time of launch, so it's a very substantial program. Our third pillar is TPIP, which is a treatment for pulmonary arterial hypertension and pulmonary hypertension related to interstitial lung disease. There are phase II trials up and running in that. Our fourth pillar is a combination of several research platforms, addressing modalities like gene therapy, synthetic rescue, de-immunized proteins, and artificial intelligence in drug development. More the research end of the spectrum, but we have our first target there in Duchenne muscular dystrophy, a gene therapy, which should read out its first patient data in the first half of next year. Great. Thanks, Will. Let's start with recent updates. You mentioned last week that you announced top-line results from ARISE. Can you just walk us through that goal of the study and then what you saw? Yeah. So ARISE was a study that was designed to test a patient-reported outcome tool, which the FDA had requested that we use as a primary endpoint for the approval of the all MAC NTM indication. And the good news is that the study was very successful. The PRO tool was shown to be effective, and we were also able to show that our drug, in combination with a background regimen, outperformed versus the control arm. So that was a very positive outcome. Another aspect of the study was to look at culture conversion. This is the eradication of the, infection, the removal of the bug, as it were. And there we showed much better than expected culture conversion, and in summary, we saw that we converted patients earlier to a greater degree and more durably than the control arm. Safety was as expected, with nothing new, so that too, was a success, and the dropout rate was lower than expected. So overall, the story was a very big success for us, and indeed, we're going to be exploring our dialogue with regulatory authorities to see whether or not it might be possible to actually accelerate our timelines for potential approval. And so maybe on that last point, have you had prior conversations with the FDA about the potential for accelerated approval? And how should investors think about the likelihood of this being granted? Yeah, so we haven't had those discussions, and in fact, it was the outperformance of the study that prompted the reflection on our part. I would continue to say, as we have, that we think the ENCORE study, which is up and running right now, another phase III study in this indication, which will run for longer than the ARISE study, will be the base case for approval. However, we do think there's a credible argument to be made for Subpart H approval with the FDA and for accelerated approval in our - in the market in Japan. If I had to put odds on it, I'd say there's probably a 2/3 chance that we get approved as a result of ENCORE, and maybe a 1/3 chance based on accelerated approval. It's not by any means a certain thing or even a high probability of success, but we do think the data was strong enough to warrant the discussion. Can you just talk about maybe what is the potential timeframe that you would discuss the ARISE results with the FDA? And, you know, is there a particular timeline where you would expect to know definitively whether the accelerated approval pathway is available to you? Yeah. So the first thing we're gonna do is, resolve with the FDA, the PRO and its validity. That was the primary goal of the ARISE study. There's a separate division within the FDA or a separate group within the FDA that looks at PROs or patient-reported outcomes. These are sort of qualitative measurements of how patients respond to drug therapy. So we wanna make sure that this is locked down. We don't see any hurdles or risks with that, but we wanna complete that process. Once that is completed, then we would pivot to a discussion with the review division to ask them if they would be amenable to the idea of a Subpart H application. And again, once we hear that and their feedback, we'll be in a better position to assess the probability of success. Meanwhile, you're planning to continue enrolling patients in ENCORE next year. Can you just remind us what you want to see in that study to consider it a success? You know, are there aspects of the ARISE data that you think are particularly bode well for the ENCORE readout in 2025? Yeah. So the first thing I would say is that PRO approval process will probably be completed by the end of the year, and then we would approach the FDA in sort of the first quarter timeframe plus or minus next year for the accelerated approval possibility. We'd be approaching Japan in parallel. So as a result, we're gonna keep the ENCORE trial continuing to enroll into 2024. Once we've made the agreement with FDA, and we understand whether this is a registrational study or a confirmation study, then that will inform how we think about its ultimate design and how we power it, et cetera. And at that time, we'll be in a better position to be able to provide guidance for what that would look like. I do think that we'll still have top-line results in, we're hoping in 2025, but that'll also, of course, be impacted by things like enrollment rates and stuff, and those things are likely to improve in the wake of the strength of these most recent data. Just one other thing to remind folks on. The same exact patient population that were enrolled in ARISE are those patients that are enrolling in ENCORE. So the positive data that we saw in ARISE gives us some more confidence in, what's to come for ENCORE. Great. Maybe one question on the refractory disease. You had a strong 2Q and raised the guidance for ARIKAYCE revenues. What has been driving the strength in ARIKAYCE sales, and where are you expecting growth to come from going forward? Sara, you want to take that one? Sure. So Q2 was our strongest performance in ARIKAYCE franchise history. We're really proud of the performance across all three of the regions in U.S., Japan, and Europe. We had, in the U.S., complete return to normal since COVID. We had our therapeutic specialists being able to be out there, speaking to all of our healthcare professionals, so really excited about that performance. Japan. So Japan actually lifted its restrictions in May. So until that point, there were restrictions in country on availability of beds in hospitals and being able to access. We are a very promotional-sensitive product, so we were able to start to see the momentum there. Europe is a small portion of our revenue, it's less than 5%, but obviously an important part, and we were able to see some momentum there. We're really encouraged to be able to increase our full year revenue guidance, and we're $295-$305 for full year is the guidance. Great. Well, let's shift to brensocatib. Your ASPEN data in to Q 2024 is increasingly the focus among investors. Can you talk about the learnings you've applied from WILLOW to ASPEN, including in the stratification for, you know, hyperexacerbators? Yeah. So just to refresh everyone's recollection, WILLOW was the name of our phase II study. This was the first study looking at the mechanism of DPP1 inhibition for neutrophil-mediated inflammation, which is a way of saying that we're looking at bronchiectasis through the lens of inflammation, not infection. That's a sea change in approach. To date, no one has successfully developed a drug in bronchiectasis. All of the efforts have been made with inhaled antibiotics to fight the infection. So our approach is very novel. It's using effectively an anti-inflammatory type of agent to interrupt that cascade, to bring about improvement in reduction in exacerbations in bronchiectasis patients. And so what we did in WILLOW was to actually power that study fairly substantially. It was about 256 patients, and the goal of that study was to look at the primary endpoints that we would need to clear in phase III. Indeed, we saw that we were able to do so. Time to first pulmonary exacerbation was statistically significant in both the 10 mg and 25 mg dose. Frequency of pulmonary exacerbations, a key secondary endpoint, was statistically significant at the 10 mg dose and trending in the 25 mg dose, and this sort of ties to your question. We had a couple of patients in the 25 mg dose that were what we call hyperexacerbators. They had a lot of exacerbations in a very short period of time, real outliers. So we wanted to make sure we controlled for that in phase III, and, and we have done so by stratifying for that variable in phase III. But the single most important thing I can leave you with is the phase II study was the first time in over 20 years that the New England Journal of Medicine published on this disease state because of the success of this program. The only reason people aren't more familiar with it, and it didn't get more attention, is that happened right after COVID started. So, word to the wise, never launch successful pulmonary results in the middle of a COVID global epidemic. But where we go with this is that our phase III study is designed exactly on the success of phase II, and it is, healthily powered to accomplish that. What do I mean by that? Phase II was 80% powered to show a 40% reduction in exacerbations, and we hit that. Phase III is 90% powered to show a 30% reduction in exacerbations, and we have over-enrolled that study with more than 1,700 patients worldwide. So this is a very substantial study. It's probably, what, Sara, 60% bigger than the. Yeah. Yeah, it was, you know, 256 patients to 1700 patients. We over-enrolled. We designed this study to win. So the drug has to work at the end of the day, but the design of the study and the statistical analysis plan around it, we set the trial up for as much success as possible. Yeah. So I think, you know, where we sit today is that trial is fully enrolled. It's on track. All the metrics that we look at are lining up. Even as we sit here right now, the European Respiratory Society is underway in Milan, Italy. We just came back from there, and I can tell you that there was a standing room only event held last night with some of the thought leaders in the space. Everybody is tracking this study, and in Q2 of next year, we will finally get the results that we've been waiting for. You talked about 30%, 40% reductions for your powering assumptions. What do you need to see on the rate of pulmonary exacerbation to be clinically meaningful? So I think, most physicians will tell you that between 15% and 20% reduction would be meaningful, but given there's nothing approved in the disease state, I'm sure they'd take almost anything. We've powered the study so that we can be clinically meaningful all the way down into the low 20%. So that, gives us a really good shot, given that that's about half of the efficacy we saw in phase 2. But we think this is the right way to approach it, and, and I have to say, we are, extremely excited to be turning over this data card in Q2 of next year. The one other thing I would just remind you all is we saw a higher dropout rate in placebo than in the drug arm in WILLOW. This is an extremely safe, mechanism, and obviously, FDA looks at safety first, efficacy. So we see, a potential very clear pathway to, getting this drug out to a much-needed patient population. It's probably worth mentioning that the patient population we're talking about is, we size it today, in adding the U.S., Europe and Japan, patients who would fit the entry criteria for our phase III study. This is 1 million patients at launch. This is a very substantial market opportunity, and the mechanism itself, and our results were described as the holy grail of pulmonary medicine at the American Thoracic Society. So, we're really excited about where what this may mean for patients. And so maybe on that last point, with regards to the 1 million patients, you know, what kind of commercial launch activities have you begun? And can you just talk about how you're planning to target patients? Yeah. So, we have gone all in on this. We have already started disease state awareness activities. So at American Thoracic Society this year, we kicked off in pursuit of those. As the only potential entrant into this space, the field is really ours. There's one other company who's, since we've had our success, started up in this area, and that's Boehringer Ingelheim. They are also providing some disease state awareness activities, but, we're full at it. We're at ERS right now. We had probably, I don't know, including all our European and Japanese team members, we probably had more than 70 people at the event, and I can tell you that everybody is really giddy with excitement about it. The next stage is also obviously to raise awareness and education among patients, and we think that's gonna be an important component of this. That is also underway. We've already identified all of the infrastructure and all of the architecture that will be needed to be brought on board in time for the successful launch, and that will be stage-gated. Sarah always likes to remind me on the basis of successful ASPEN data. So we're ready to go. We're starting early, but this is an incredible. I would call this a once in a career opportunity kind of product launch. Now, the second indication is chronic rhinosinusitis without nasal polyps. Can you just remind us why you chose this indication? Sure. So when we think about DPP-1 inhibition, the novelty here is not just that it may be the first-ever approval for the treatment of bronchiectasis, but it's the validation of the mechanism of action. The idea that by inhibiting DPP-1, which is involved in activating neutrophil serine proteases, neutrophil elastase, cathepsin G, proteinase 3, NSP 4. By inhibiting their activation, you prevent the inflammatory cascade from taking place. Now, where is that relevant? Well, anywhere those neutrophils are recruited to the body at a time of inflammatory response. So the next possible areas that we could look at are things like rheumatoid arthritis, lupus nephritis, hidradenitis suppurativa, but we chose CRS without nasal polyps. There are today 26.5 million people in the U.S. that have CRS without nasal polyps, and there is nothing approved to treat that condition either. So we look at bronchiectasis with 1 million patients at launch and probably more beyond that, and we look at CRS without nasal polyps, and we see that vast number of patients of whom we would probably treat a narrow, very severe phenotype. Those who are eligible for surgery or who have already been operated on, those patients we know would be very likely to rapidly uptake the product. So the phase II study for this kicks off at the end of this year. We're very excited to get that underway, and if this mechanism is validated and we can show efficacy in ASPEN, we can have a real belief and a confidence that it's likely to be effective elsewhere, where neutrophil-mediated disease takes place, some of these other indications. We are not gonna go after all of these with just our drug. We have other DPP-ones in development right now. We might partner them, we might co-develop them, or we might, we might just choose to pass. But the first couple of indications we have right now, are looking incredibly promising. Great. Well, moving to TPIP, can you just talk about what differentiates it from other prostacyclin analogs on the market? Sure. So TPIP or treprostinil palmitil inhalation powder, is a dry powder formulation of the drug treprostinil. This is a drug that is prostanoid. It's well known. The difficulty with prostanoids and treprostinil in particular, is that they pass through tissue very, very quickly. So what we did with this formulation was to append a 16-carbon chain onto the treprostinil molecule and then put that in dry powder form. It's very easy to inhale that. It is inhaled in an inactive form that reduces the side effect profile. The consequence of that is that the bond, which is an ester bond, is cleaved by esterases in the lung. It releases the active drug, and you get a lower peak and a longer trough. And clinically, what that means is you can give patients this drug once a day. The most comparable drug that's out there, which is a billion-dollar drug, is dosed four times a day and gives no nighttime coverage. So right out of the gate, if this drug continues to find success, it's gonna be the only once-a-day and best-positioned prostanoid there is. What we're excited about is that because of that formulation and profile, we can give more of this drug to these patients, and this is a terminal disease that you wanna give as much of this drug to patients as you possibly can, as much as they can stand. So, in phase II, we were able to go up quite substantially. If you look at the drug that's on the market, that's the best comp, it's Tyvaso. They get to say, 60. Around 65 micrograms, four times a day. So if you sort of equate that out, it's a little over 250 micrograms in a day. So we're getting to—they're getting about 250 micrograms in the course of a day with a different sort of peak-to-trough pattern. We can get, in phase one, to 640 micrograms. And so in the current phase two studies, one of the things we're looking at very carefully is how high can we dose? Because if we could get all the way to that level, that represents 60% more drug, and there is a direct proportionate benefit in historical trials that have been done with treprostinil to the amount of drug you can, you can onboard for patients. So this could be not only incredibly convenient for patients once a day, but it would mean getting a substantial amount more drug to the patient, hopefully with a good AE profile. To accomplish that would make this absolutely the cornerstone of therapy in this patient population and the best-in-class prostanoid available. You plan to report data from both PH-ILD and PAH studies this year. How's enrollment going, and what should we expect to see? Yeah. So, we like to be transparent. Enrollment is slow. These studies are always slow to enroll, but, we're making good progress. There's a lot of interest in this compound, and as word gets out about its potential and its mechanism, I think that we can say we are seeing that interest grow pretty dramatically. Where we go from here is to get these trials enrolled as quickly as we can. The pulmonary hypertension study that looks at interstitial lung disease, phase II top-line results for that study will be available in the first half of next year. Between now and the end of the year, we intend to put out information about how high we're able to titrate these drugs. And by that I mean, what's the highest dose you can actually get patients to? What does the AE profile look like there? We'll provide that for PAH and PH-ILD sometime between now and the end of the year. You know, if we can get these patients to higher doses, really, the rest should take care of itself. It should substantially de-risk this program. So we think that information could, could be interesting to put out. We're also obviously looking at the blended blinded data, and what we see so far on the hemodynamic front in PAH is very encouraging. But, you know, we'll have, we'll have some of this data out between now and the end of the year, the top-line results from PH-ILD in the first half of next year. And importantly, all of the stuff we're talking about so far is data that should get out before the ASPEN study in Q2 of next year. For the phase II data that you expect in the first half of next year, what do you need to see to consider that study a success? So I think it's primarily a safety study, but we're looking at some secondary endpoints in there. Once again, if we're able to titrate these patients up to higher levels and we're seeing a good PK/PD profile, we should have a winner. There's only one drug approved right now to treat PH-ILD, that's Tyvaso. It has had a very rapid uptake with that approval, and we think we're gonna. And that is, again, dosed four times a day. We think we should be able to do better and with one dose a day. I guess, moving to your earlier stage pipeline, you mentioned this at the beginning, you're starting a trial on your DMD gene therapy this year. Can you just remind us how it's differentiated? Sure. So, our gene therapy program is designed and is evolving, we hope and believe to be best in class. It starts with the team we have, which is absolutely second to none. This team has advanced the Duchenne muscular dystrophy gene therapy program, and we expect to have biopsy data from our first patient between now and the time of ASPEN readout in Q2 of next year. The interesting modification for this approach that differentiates it from other companies like Sarepta is that it is delivered intrathecally. And if you look at the non-human primate data, all the preclinical data supporting this, that shows that with a lower dose, you can accomplish what we believe will be a better safety profile and better transduction across all the relevant tissues, including cardiac tissue, which is critically important for the Duchenne population. It is the first generation program from us. We think it's gonna show superior efficacy to those that are already out in the market. More importantly, we don't stop there. We have several other technologies we're trying to take advantage of at the moment, which include in the field of RNA end-joining. That allows us to construct a larger protein. In gene therapy, you're delivering a viral capsid, which then ends up producing a protein that would otherwise not be produced in the body. In the case of Duchenne muscular dystrophy, the critical protein is dystrophin. And because of the capsid constraints that gene therapy presents, you end up having to use a truncated version of that or a micro dystrophin, as they call it. So it's not as effective as a full-length dystrophin would be. RNA end-joining is a game-changing technology, which we have licensed in and developed to solve that problem. It allows us to have multiple viral capsids, deliver portions of the protein of interest and reform it inside the body. We're also using this technology in another disease state called Stargardt. So this is an ocular disease of blindness, and that we would hope to file an IND. Not exactly sure when. Have we said exactly when? No, not specifically. So, we're excited about telling you more about that next year. But, the point of all of this is to mention that DMD should differentiate itself with a lower dose and better efficacy. Stargardt is capitalizing on the same kinds of technologies that our second-generation DMD program will capitalize on. And this is just the beginning. We have another CNS disease we've made unbelievable progress in, and we're excited to tell you more about that in the not-too-distant future, because that, too, is looking like a best-in-class treatment for another rare condition. All of this will be reading out sort of proximately to ASPEN in terms of progress and data. So it's just—it's a hugely powerful component of our research division. I guess I would say that is just the scratching of the surface there. Everything that we have ongoing in this sort of pillar of our business, as we think about it, we think about across our company, how can we have impact on patient? So you can see this is, with a focus on significant impact on patient, either first-in-class, best-in-class. Specifically in this area of the business, we're also able to be thinking around stage-gating investment. I know we mentioned it earlier. As we think about assuming ASPEN success, certain things are stage-gated. Similar with here, we're able to answer questions and then make the determination, how much more would we spend? So we're able to stage-gate and keep this area of our business under 20% of our overall investment. And I guess the only thing I would add to that, Sarah, is, like, I think that should not belie how much ambition we have for this area. We are looking at gene therapy and owning this technology. A lot of companies have gene therapy programs. I don't know of any company that is working on manufacturing gene therapy out of algae, as we are, which would cut the cost of production. Using RNA end-joining to extend the length of the proteins that can be delivered and effectively utilized by the body. De-immunizing the viral capsids that are used so that you could potentially redose viral capsids in the use of gene therapy. That comes out of our acquisition from the folks up in New Hampshire. That's powered by an artificial intelligence backbone that helps us design those. It's a very impressive set of technology. And then most recently and dramatically, we bought another company in Cambridge, England, called Adrestia Therapeutics. That is focused on synthetic rescue. This is a world-class group of scientists who are taking a totally novel approach, using both small molecules and antisense oligonucleotides for the treatment of really devastating diseases. So we have a very rich pipeline that is timed to arrive on the heels of these first few pillars that we've talked about. So we have a very robust commercial engine that is coming next year, and we have a very strong pipeline of programs behind that, that will continue to feed innovation and impact on patients for years to come. We don't need to do anything else. We can, but we don't need to. We've built the whole ship now, and, and we're really excited to be able to deliver for shareholders based on the success of all these programs. Great. Maybe one last question. Can you just remind us how much cash you have and the runway that gets you? Yeah, sure. So last reported cash, over $900 million, thanks to all the support that we have from our shareholders and partners. We have a focus on bringing shareholder value. Last week was just the start of that with the ARISE data. We have our cash balance allows us to unlock these continuous data readouts that we spoke about today, the several on TPIP, the data readout from DMD on the muscle biopsy data, the ASPEN data in second quarter next year with meaningful cash on the other side. Our focus here today is driving that value and being able to unlock what ARIKAYCE, brensocatib, TPIP, and Pillar Four can do for our patients as well as our partners. Great. Well, let's leave it there. Thanks so much for your time. You bet. Thank you.