Q4 2022 Insmed Inc Earnings Call
Hello, everyone and welcome to the Internet fourth quarter and full year 2022 for not too much else.
My name is not yet and I'll be coordinating the cool today, if you would like to ask a question at the end of the presentation. Please press stuff and it's like why don't know telephone keypad. We ask you. Please have yourself a few questions. If you wish you ask a follow up please we joined the case.
How how did it but you'll have to add a note barbicel investor relation to begin Elina. Please go ahead.
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 updates.
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 uncertainty that may cause actual results to differ materially from the results discussed in the forward looking statements. Please refer to our filings with the security.
That exchange Commission, which are available through it seems website at www Dot S. E C dot 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 our members of the executive management team, including Louis Chair, and Chief Executive Officer, and Sarah Vonstein, Chief Financial Officer. Please.
Please note that today's call includes lives, which are available through the webcast on the Investor Relations section of our website.
Let me now turn the call over to will Lewis, we're prepared remarks upon completion of those remarks, we will open the call up for your questions.
Thank you all the more good morning, everyone.
I believe you said that you know today will completely transform it works in a few months.
During this critical period.
To produce clinical data for each of our four pillars. Those results. We believe you will begin to see the benefit of being bookings you have enabled us to make over the last several years.
We expect to evolve from addressing patient populations tens of thousands to over a million.
It was our intention with each of our programs will represent the first in class or.
In class treatment for the disease in question.
My prepared remarks, I would like to walk through upcoming milestones a corner logical order focusing on the first date of potentially transformative milestones anticipated in the next 18 months.
To begin I am very excited to announce that as of today all screaming in adults is completed for our phase three aspirin study evaluating brings okay at it 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 topline results in the second quarter of 2024, that's previously indicated.
This is an enormous accomplishment.
Getting greater than 1600 patients are asking study is more than 50% larger than previous phase III programs in this indication.
Despite the global respiratory pandemic, we've completed all screaming in adults and 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 was 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 and 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 hours.
It's been a long time coming and that is because we wanted to have validated preclinical data and the first IMD filing completed before we held the review of these platforms.
We believe we possess world leading research capabilities. This 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 the team out of darkness based in the Hitchcock Medical Center.
This group is focused on using artificial intelligence to create the immunized proteins a technological process, we are calling D immunized by design.
Earlier. This year, we were pleased to share the initial targets of this program rheumatology immunology and improved viral capsid, leaving.
Leaving this work our doctors call Griswold and Chris Bailey Kellogg, former professors that darkness, who had 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 muscular skeletal indication that we anticipate will enter the clinic this year we.
We expect to have already filed an I D for that candidate by the time, we speak with you on may 8th.
We will also discuss the first indications, we will target and CNS, an 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 do 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.
After Brian Caspar scientific founder of <unk>, and our Chief Scientific officer overseas or gene therapy programs based in San Diego and he is joined by several key members of the original effects as 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 capsid 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 are.
Early stage research has represented and we expect it will continue to comprise less than 20 per cent of our expenditures in the near term and yet still generate at least six new <unk> one studies by year end 2025.
We will only advanced each program to the next stage of development upon seeing successful data.
If it sounds like there was enough going on in our early stage research that it could be it's own company. We agree in fact, we believe each of the four pillars, it and submit it 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 re emphasize.
Our approach is to use the cash flow. We anticipate from are 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've 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 months in May of this year, we will have a strong presence at the American through asks Society International conference or a T S.
I'm pleased to report that we submitted eight abstracts across ARIKAYCE brings okay at at and T. P. I P and all eight were accepted for presentation at a T S.
Stay tuned for additional details on these presentations, which will include ARIKAYCE adverse event mitigation in a real world setting long term hospitalization burden in N T M and in and out all sorts of patients with bronchiectasis by disease severity subgroup from the Willow study.
In addition, ETS will be an important form for us to discuss disease stayed awareness in preparation for the potential launch a prince who cat it 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 <unk> and chronic rhinosinusitis without nasal polyps or Crs.
Subject to input from the F. D. A the basic design of this trial will be approximately 270 patients randomized to either 10 milligrams of Britain. So cabinet 40 milligrams of <unk> or placebo over a 24 week treatment period.
The primary endpoint will be changing daily sinus total symptoms score, which measures measures various nasal symptoms and it is our current intention to use the same endpoint and a phase three study.
Similar to bronchiectasis recall that there are no approved therapy for Crs without nasal polyps and while there are tens of millions of people who suffer from Crs without nasal polyps will be initially targeting the most severe patients who experience recurrence and potential surgery, which we estimate is 400000 addressable patients.
In territory's, where we have commercial infrastructure.
Let's now move to catalyst in the latter half of 2023.
The next major update from the Iraqis frontline program will be arrive top line efficacy and safety data, which we expect to report in the third quarter of this year.
Read out will include the differences in the patient reported outcome results between the two treatment arms using her spirit Tori and fatigue scores the effect of air case, Unculture conversion time to culture conversion and the association between culture conversion and change in respiratory and fatigue scores the goal of varieties to show a directional effect.
On different student points between treatment groups. It is not powered for statistical significance.
We are extremely excited about the overall progress of arrives earlier this year, we reported a blended treatment discontinuation rate and a rise of 15%.
We believe this slow discontinuation rate is an encouraging sign that patients with earlier less severe disease may tolerate ARIKAYCE 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 of the frontline opportunity offers a potentially multi fold increase to the current addressable market and 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 and both P. P. I P. Phase two studies one M. P. H I L D and the other P. H recall that these trials utilized inbox tolerated dose approach.
High doses of inhaled Prost and always have been shown to demonstrate benefit ah, reducing pulmonary vascular resistance and pulmonary arterial pressure or.
Our ability to reach higher doses in these trials should improve our chances of success.
Finally, we anticipate the oncor 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 encore showing the solid piece of enrollment that has accelerated since arise enrollment completed in October of 2022.
Now it takes us to the catalyst we can expect in the first half of 2024.
We continue to anticipate reporting top line data from the T. P. I P phase two trial and P. H I L D and the first half of next year.
Also in the first half of 2024, we plan to share muscular skeletal clinical data from a few of the earliest patients we were able to enroll in phase one slash two clinical study using gene therapy.
All of this will lead us to the second quarter of 2024, when we anticipate topline results from me ask them study.
The call. This phase III study examines two doses of <unk> of Canada 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 C. O P D or asthma that could <unk>.
<unk> additional patients who could benefit from a reduction in pulmonary exacerbations beyond our initial launch focus.
The aspirin trial continues to progress as planned as we announced in January the blended blended rate pulmonary exacerbations observed in the most recent three months of this study ranged from 112 to 1.15 events per patient per year. This isn't 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 pays to Willow study.
Let me take a moment to review the recent cystic fibrosis or see updated we put out earlier this year, which further reinforced our confidence that the mechanism of action of bread. So cabinet is performing the way we anticipated.
Last month, we were excited to release positive top line data from the phase two pharmacokinetic Pharmacodynamic study Ah Brentsville cat of in patients with C. F. We saw a clear dose dependent and exposure dependent inhibition of blood neutral bolstering proteases or NSP levels in patients treated with Britain, so cat across all <unk>.
<unk>.
Safety and Tolerability were consistent with what was observed during the phase two 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 study.
Because of the clear insignificant NSP inhibition, we saw it in these results. We concluded that an additional cohort evaluating 65 milligram dose was not need it. Although we have the queen 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 has been trials.
Finally, I'll close out with an update on the <unk> franchise.
As previously communicated we are pleased to have achieved 30% revenue growth in 2022.
You are also aware the guidance issued at the beginning of this year anticipates ARIKAYCE 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, Sarah will provide additional perspective on the dynamics shaping our expectation and each of our key geographies.
Let me close out my remarks by reiterating our excitement for the future of 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.
Thank you and good morning, everyone earlier.
Earlier today, we issued a press release with our detailed fourth quarter and full year financial results.
Walk through a few of those results for you know.
We ended 2022 with $1.15 billion in cash and cash equivalents and marketable securities. We anticipate this robust cash position will allow us to reach every inflection point over the next 18 months as outlined on today's call inclusive of technical asking data with the potential for.
Meaningful cash remaining on the balance sheet post asking me out.
Earlier. This year, we were pleased to share with you our approach to capital allocation to remind you we anticipate over 80% of our total expenditures will be on our mid to late stage in commercial programs are Keith printer cabinet and keep Yankee.
We anticipate less than 20 per cent of our overall and we'll be on our early stage research programs.
That is either new nor incremental.
<unk>, we have followed for the past several years.
Let me know locked your ARIKAYCE revenues for the full year 2022, and the regional dynamics driving performance in each market.
Total net revenue for ARIKAYCE was $245.4 million for the full year 2022.
<unk> 30 per cent currently and we set out to achieve over 2021.
On a regional basis net revenue for 2022 was $186 million in the U S $56 $5 million in Japan, and $2.9 million in Europe and <unk>.
As well mentioned, we believe there is an opportunity for continued growth across our three key geography.
Although quarterly revenue Liberals can fluctuate inventory and cross snap changes in the U S. We've been encouraged by positive trends in several key metrics, including enrollment forms and new patient starts in fact, these metrics grew quarter over quarter throughout 2000, and try and kill we're also back.
Pre COVID-19 levels in terms of our therapeutic specialist ability to visit physicians in person.
Together the positive try at this point so what we anticipate will be another solid year of growth in the U S market.
Turning to Japan.
Pan remains a crucial territory for us and we are seeing evidence that fundamental demand continues to be strong.
In 2022, we did see the effect of Covid searches on the launch as well as the impact of foreign exchange rate on global got a new levels. However.
However, as locked out of pain and he's the pressures on the Japanese health care system and as we roll out our relaunch initiatives. We believe the back half of this year could usher in growth in this important market.
Looking ahead to the second quarter of this year in Japan, We anticipate a one time price caught in the high single to mid teen range, which was expected and also consistent with what we have seen on prior product launches in this territory.
Moving to Europe .
As expected the European market continues to make up a relatively small percentage of the global revenues.
In France, we agreed to a final reimbursement price for the a T compassionate use program, which much lower than expected.
As a result, we recorded a one time charge in the fourth quarter of 2020 $275 million of which $5.8 million was related to prior periods.
Nonetheless, Europe remains an important territory for us strategically and supports our operations across the many indications we are pursuing.
Including medical community thought leadership tax benefit and cost effective manufacturing as well as a significant contribution to our clinical trial programs.
In an effort to support our development programs. It is our ambition to continue to drive global revenue growth from our commercial franchise to that and as previously disclosed we expect 2023 global revenues to be between $285 million and $300 million let.
Let me know touch on some additional financial highlights from a year.
In 2022 are gross to not to meet you asked for approximately 13%, which is in line with our guidance of mid teams throughout 2022, and consistent with our crowds snuck in prior years.
In 2023, we continue to anticipate are close enough to be in the mid range.
Product revenues for the full year, 2022 was $55.1 million or 22% of revenues on a percentage basis.
Turning to our GAAP operating expenses.
For the full year 2022 research and development expenses for $397.5 million and SG&A expenses for $265.8 million, reflecting continued support of the operation is driving or early stage research programs and need to late stage pipeline.
In closing and Smith and your 2023 in a strong financial standing with two important elements in our favour over $1 billion in cash on the balance sheet and a 70 steady revenue stream that supports our pipeline.
Looking ahead to our existing transformation period, we are exactly where we want to be as we begin to realize a series of clinical catalysts that have been in the making for the past several years.
I'll now turn the call back to about for closing remarks.
Thank you Sarah I'd like to thank our shareholders their patients during what has been an intense execution period for intimate.
Now we are prepared for the momentum of a catalyst rich future.
I would like to thank the patients who participate in our studies, the caregivers and families to support them.
<unk> team and those who have sponsored as financially we are extremely grateful for your support and are excited to deliver on this for all of you and with that I'd like to open the call to questions Nutty, Yeah can we take the first question. Please [noise].
Of course, if you would like to ask questions say pays pester Philippi why not really kind of think he Pat we occupy you commit yourself to take questions. If you wish to ask a follow up pays rejoined the kids all of.
Can I ask questions today cause she gets cat fight or J P. Morgan Jessica. Please go ahead. Your line is a pain.
Hi, This is Nick on suggests thanks for taking our questions two from US first on Air case. It looks like you are transferred down slightly on a quarter by quarter basis and then.
There's some mentioned a positive trend throughout the year, but just thinking about 2023, how should we think about the magnitude of growth versus say, Japan is the product interest the fifth year is it <unk>.
Is there any part of telling that you're seeing or is it just moderated.
Yeah, so the ARIKAYCE in Q4.
You know that that quarter was a little light relevant to what we were expecting there are a number of forces that sort of augmented that including some inventory shifts.
But I would just tell you that what we're seeing right now is very positive in the U S and I think this is finally, the culmination of the returned to normal C post COVID-19.
We've been waiting for and that is manifest in the form of the ability to access physicians.
We're seeing the early signs that are the enrollment forms et cetera in the right direction and if that trend continues in the U S isn't a good and strong position I would say for a return to growth.
Of the time, we would we would like to see in 2023.
Great and just a quick one on their eyes data I believe it takes some extra time to collect the colts need to collect some of the culture conversion data. So is there a scenario, where we could see P. R. A D. P. R. O data first and three two followed by Coltrane conversion data or should we expect them all at once.
So our intention is to put it all out at once because I think the context is important for interpreting anything we have by way of data. So that's our plan for Q3, you are right. It does take a little longer to get the results because you have to grow out cultures that can take as long as three months because you need to.
Confirm that there's nothing there.
But the simple conclusion is topline results will be a package deal in Q3.
Great. Thanks, so much.
Thank you and the next question Betsy, Jason Domanski of Bank of America, Jason painful had your line as a pattern.
Good morning, everyone. Congratulations on the quarter and thank you so much for taking a call.
Just a quick question on spend here it looks like research and development.
Was up pretty significantly both quarter over quarter and year over year, how should we think of spend moving forward is this primarily the result of the investment and the new fourth pillar and what does that look like moving forward.
Yes, Sir you wanted to take that one.
Sure <unk>, Jason Thanks for the question. So as we mentioned in our prepared remarks the investment in the early stage research program is less than 20% that is not new are incremental and the bulk of our expenditure over 80% will be on our mid to late late stage programs are Keith <unk>.
C. P. I P. You see some fluctuation and started some timing and uhm R&D expenses you see in queue for you have asked that arise encore attendant. The two things to the a T. P. I P.
As well as the support medical work for these.
Catch all you know opportunity and perhaps a Catholic assuming success in Aspen to seeing those that investment what I will say is we have the cash to support ourselves to all of these very meaningful value in <unk> like some points that we outlined on the on today's call inclusive I'd be asking me up.
Great. Thanks, and then maybe a follow up on ARIKAYCE in terms of kind of the big growth drivers in the U S is it do you think primarily new patient starts or access to physicians or is there something else in the mix that can accelerate.
The pace moving forward.
You're right. It is a mix, but I think the most encouraging thing we look for is the ability to access.
The physicians directly but this is a very promotions sensitive product and so seeing that trend is a.
Positive and then that carrying through and manifest into some of the K P. I is that we looked at a early indicators of success being positive is why we we've got some enthusiasm for the United States right now in terms of its performance.
Great. Thanks for like one thing I would add their color.
One thing I would just add Jason is in the U S. Specifically, what we talk about internally is are we on your three year year five of launch because of those two years during COVID-19. So well we launched at the end of the 18, which would mean that we are in your five and we believe that there could potentially be some additional opportune.
Descending through being.
Being more selling your three that makes sense.
Absolutely.
Thank you.
Thank you and the next question does he just hung of Morgan Stanley . Just please go ahead. Your line is a pain.
Thanks for taking my questions last fall you indicated the lowest price in U S. Europe , and Japan were the same and so with a final reimbursement price in France, how should we think about European pricing relative to that in the U S.
Yeah, I mean, the simple answer is we've said this for a long time Europe is a very challenging market environment.
For pricing for for many drugs and indeed, you're seeing a trend of of companies, leaving Europe as a consequence of the of the low reimbursement rates I think that flows from real financial pressures that European countries are feelings for a whole variety of reasons that people are well aware of.
The good news I guess for US is that the refractory market for N T. M. In Europe has always been a <unk>.
It would be a very small contributor to our global revenue number so while the French price is disappointing in terms of our ability to get in and be active in <unk>.
Supporting patients more robustly.
It is not material in the way, we think about our revenue growth on a global basis going forward.
Great and then for their rights topline results. If you have to make changes to the P. R. O. How should we expect that to read out in the press release like what it say that you need to make adjustments and then we just have to wait until you have agreement with the F. D a or would there be any indication as to what changes might need to be made.
Yeah. So it's a great question I think where we are and that is we're gonna have to look at the data first right and then what we'll do is share and be as transparent as we can about the implications of the data as we see it.
That's gonna get captured in a press release, because I think it's just gonna be too much nuance.
There's a scenario where there might not need to be any changes, but realistically I think.
Bureaus, sometimes surprised and so we want to look at that data see where it takes us and the good news is we have the ability to adjust the bureau, and the statistical analysis plan in a way that can enhance our probability of success an encore.
And that that's the whole reason for the arise trial and while we're anxious determined those data cards over.
And we will be as transparent as we can so that to be clear, if we anticipate making a change the process for that would be that we would identify we want to make some changes we would approach F. D. A about what those would be F. D. A needs to process that and get back to us, we probably would not hear back from FDA until the end of the year, but we would certainly be.
As specific as we could be maybe directional because we don't want to.
Offend the FDA by sort of saying the direction. We think we're gonna go, but we certainly want to be as transparent as we can with all of you as to whether or not we intend to make try to make changes to the bureau, and what those would would involve.
Great. Thank you.
Thank you and the next question gives you Andreev kind of Goldman Sachs. Andrea. Please go ahead, you don't use a pen.
Good morning, everyone. Thanks for taking my question well, maybe a follow up there on the PRL just characterize for after your level of confidence that this troll there'll be able to detect clinically meaningful changes how does your blinded look at the data support desk and then is there a scenario or the F. D. A might not agree with the changes that you would look to it.
<unk> <unk>.
Yeah. So I think the confidence in the Bureau, and its ability to detect change is pretty high and that comes from the fact that we've been treating these patients commercially for <unk> you know we're in our fifth year of launch we've got a lot of experience with these the patients.
And we know what the symptom changes are the Bureau reflects that we also spent a great deal of time consistent with the F. D. A requirements talking to physicians talking to patients to understand what are the changes they experience and and how best to track and capture those using the modified bronchiectasis question.
There for MTM patients. We think is it is it gives us a high likelihood of success in detecting change in symptoms scores you a specific question about blinded data we have looked at the blended blended data and we do see collections of patients that are experiencing significant.
What would be considered clinically meaningful changes in symptom scores.
So if if if those are as we hope in the.
Treatment arm, then then we have success.
So we won't know that until we turn over the cars, but certainly what we would need to see in order to have success isn't evidence and that is very encouraging if we were to identify changes we wanted to make.
We would approach the F D a depending on what we're proposing I suppose the F. D. A might have commentary I don't anticipate us looking to do things that would be radically uncomfortable for the FDA and point in fact, our relationship with FDA is really as good as we could hope for it to be.
That flows from the fact that we have done I think a good job over the last several years of.
Addressing these patient populations in a responsible and compliant manner and.
They've also been witness to all of the data from these patients treatment that has been so successful and we now have full approvals in Europe , and Japan without any restrictions and that has gone.
Very successful as well as the numbers today indicate so I think overall picture is very positive will have a good dialogue with FDA should we need to and I think that will lead to a very high likelihood of success an encore.
Great and then maybe just one questions as you think about Japan for your Sarah could you speak more on your efforts there. He sat in front of these potential launches a friend so are the frontline expansion in N T N. What learning specifically are you taking from the current experience.
And never factory setting.
Sure. So the good news is we just all of US that the executive Committee were over in Japan, We spent a week there meeting with a.
A whole variety of people not just our our employees, but also key opinion leaders really digging into understanding that market.
A more fundamental level and making sure people understand what's coming because the market right now for refractory Mac in Japan. The fundamentals are incredibly strong the patients are there the ability to reach the physicians has been constrained significantly by Covid re.
<unk>, which has been repeated while we were there we were all fully messed up and anyone from the U S who saw what Japan has like would would be reminded of some of the more intense periods of control taking place in the United States.
The good news is that is beginning to a bait and that's why we say we think.
Probably more towards the second half of this year it could be sooner, but certainly second half of this year that we will see improvements in that marketplace.
We are augmenting our capabilities over there because of the opportunities for frontline and bronchiectasis.
And I would say the learnings we've got our that it is incredibly important to have strong relationships with these physicians and hospitals and those are the kinds of things, we're trying to build out and augments because that access is what enables us to to.
To get the appropriate patient treated for for air case in in the future frontline and <unk> I think you know I can't say enough about.
How positive, but the fundamentals are over in Japan at the moment.
Thanks, so much.
Thank you and the next question does he <unk> Kevin can you. Please go ahead, you might as a pattern.
Hi, guys. Good morning, this is <unk>, Oh, I'm sorry to.
I wanted to ask about the <unk> and study for the daily sinus <unk> Uhm, what can we expect I want a reasonable downtown centers and coins.
And then <unk>.
So it's something we're still looking at I think because.
The the the score the implant were using we're still not past fda's sign up I want to be hesitant about getting too much into the weeds about what we're expecting to see you know that's all gonna unfold.
You can expect us to communicate additional detail in the future is that studied gets kicked off in terms of what we think would be adequate.
To measure and how the study is statistically powered around that once we've completed our dialogue with FDA I will say that we feel really good about.
The potential into syndication we've done a lot of work here and and this is a very sizeable market with nothing approved to treat it. So the opportunity for Britain. So just just continues to grow even beyond the enormous market opportunity to bronchiectasis, but will come back with a little bit more detail. After we've completed our discussion would that be if that's.
Okay.
And do you have any I was actually gonna ask more about asking interactions this year for friends or both so I that is C. R. S program and for <unk> do you plan any interactions.
Uhm would that be the same for aspirin.
Do you know if there's been any change in F E thinking about that specific N D. A.
No none.
Our our interaction with F D a around Britain so for bronchiectasis.
Parallels the enthusiasm we've encountered in both Japan and Europe .
Just to remind everyone. We were the only respiratory product it's received prime designation in Europe .
So the regulatory authorities I would say are leaning in to help in whatever way they can as they see the compelling data from the Willow study and are very anxiously awaiting the results of phase. Three this is an incredibly robust very well powered study that is going to provide just an enormous amount of clinical data.
Which I'm sure the FDA and <unk> and <unk> and UK authorities will all review with great interest but.
But we don't have any formal interaction plan for those folks.
With regard to Brentsville and Bronchiectasis, we will of course be reviewing.
Reviewing the protocol with it with the regulatory authorities as we moved the Crs without nasal polyps study forward.
Mmm. Thank you and one quick question will that'd be data point that Uhm, then let's give us a calico program presented after my a C. I N D day and before the first data in one H.
So the when you see the first data.
I'm not sure I'm following your.
So will that'd be okay can we expect it to be any data after the R. N D. The R&D day that before that's first declaration of that program in the first half of 23.
And so the the intention is that we will strictly a compromise.
Yeah. So the intention is that will start the clinical trial of this year and depending on how we're able to enroll bat b earliest patients from that will.
Certainly be <unk>.
Data that we can share with the market and we intend to do so with the timing for that we would just sort of frame out as being expected before we would put out the aspen data. So we will have a important point is we'll have a clinical read on this gene therapy program prior to Aspen data being turned over and.
That sort of leads into our theme of having all of the pillars reporting a meaningful clinical data before the aspirin study.
Okay.
Alright, Thank you [noise].
Thanks, Thanks for taking the essentials.
Thank you and the next question <unk> of credit. Please can I. Please go ahead, you minus a pin.
Yeah, Hi, good morning, guys. Thanks for taking my questions. A couple from US first is maybe a little more clarification on on if the P. R. O does change based on what you see in her eyes.
Can or would that affect encore timing you know is it is it data collection analysis would you have to wait for.
For that conversation with FDA broken encore kind of continuous plan.
So <unk> will continue as planned what we've said with the F. D. A and they've agreed to is that you know if we're gonna proposed to make changes. They obviously, we want to be a part of that conversation, but so long as encores blinded.
Perfectly appropriate to to propose and make changes because it's not like we're looking at the oncor data and making changes post hawk.
So I don't anticipate.
There'll be any impact on on coordinating to pause or anything along those lines at all would we change the size of the Oncor study I don't anticipate that it's it's designed empowered.
We think adequately based on what we know in our assumptions there's nothing in the blended blended data that would suggest that that would need to change but of course once we reveal the detailed data will look at that carefully and I suppose it's possible that I would characterize it from what we know today is unlikely.
Okay. That's helpful. And then someone connected just on on the cash runway commentary I think the commentary was you have cash to get through the next 18 months and you have cash left after <unk>.
Pivotal aspirin read out it should should our assumption on the market's assumption beta that would be the next potential.
Capital raising opportunity are are there any other catalysts, sir milestones that you've talked about kind of between now and aspin that you'd consider going to market around or or should we be thinking about 18 months from now.
Sure do you want to take that question.
Sure can we obviously augmented the balance sheet fourth quarter of last year.
Great how far the supporters in that in that range are now in a position that we don't have to.
Worry about capital augmentation, I, obviously cannot comment on if and when we will you know uhm cheese to raise money, but we are now in a position that we have a balance sheet to support all these catalysts that we just spoke thrill.
Including the estimated.
Great. Thanks.
Okay.
Thank you and the next question does he Joseph Shaw S. D. B Securities stages. Please go ahead. Your line is a pain.
Hi, Thanks, very much I have a couple of questions in the pipeline first on frontline M. T. M. And then on brings a cat at first I was wondering if you can call us with any insight to how many degrees of freedom you have to just the weddings of the domains included in the Bureau.
Used for <unk>.
Based on what you see in a rush.
Are there any other examples of other sponsors who've waited individual components differently.
That you can share with us so we can understand what precedent for this kind of an analysis.
Sure. So let me take on the second half of the question and understand that there is no <unk> that has been approved for N T M.
Therein lies the challenge the process of developing one to Novo takes years. So what we've agreed to with FDA is to use a modified bronchiectasis questionnaire alongside of fatigue questionnaire to specifically address the symptoms we identified through our research following the fda's protocols for such.
Work, when we talk with patients and physicians and indeed, the FDA. So we feel this P. R. O that we have is a winner that's based on our experience and training these patients for more than five years. The other clinical trials, we have and we utilize the bronchiectasis questionnaire and the refractory setting previously so we have.
Seeing the performance of it in that setting so there's a lot of good data that goes into this.
This design and it's what gives us a high conviction rate there was an active debate about whether we even needed to do the arise study internally, but what we are students of as precedent as you ask and when we look at things like global blood, where they had a piano that they were confident in but it missed when it finally was utilized because it had never been tested prior.
Her to that clinical trial, we thought the prudent thing to do is to test the bureau, and validated and with that information should we find changes are needed we can go and enhance.
Our probability of success in the Oncor study by making those changes FDA agreed with that so long as encore is blinded we can make changes just as if we were running two separate trials separated by time, we've just run them in parallel and shortened one.
To ensure it reads out first and so that design is novel, but the F. D. A blessed it and because encores blended the changes can be made but you would see the same approach and anyone developing a bureau, where they were trial. The Bureau, and then based on that make adjustments to it before using it in the clinical setting.
All we've done is run those in parallel no one to my knowledge has done it this way before but but I think it speaks to our desire to [laughter], you know use time and capital efficiently.
While also increasing our chances of success.
Okay. Thank you and then some friends of cat of it's interesting that the blind it blended rate of exacerbations in Aspen is 1.1 to 1.15, which is lower than what you saw on Willow and your power assumptions for asthma and so do you have any insight into what degree. This is driven by an overall lower rate of exacerbate.
<unk> overall during a pandemic quarantine times versus the potential beneficial effects of friends, a cat is and how does this how does.
The power in calculus looking scenarios worthy event rate is driven more by an overall lower rate of exacerbations versus.
The drug performing.
Performing well.
Yeah as soon as you might imagine we look at many scenarios.
<unk> and I would characterize our conclusion from all of that work is feeling very positive about.
The event right in the brand so aspin Bronchiectasis study the reason for that is that despite what you're describing which is true that during COVID-19. There was a decline in the number of events taking place in Bronchia caddick patients not specifically in our study, but just generally that was the trend that was.
Scene, because people wear masks and they were indoors and less likely one assumes to getting sort of virally driven.
Causes for exacerbation, the key thing to understand about aspirin and why it's such and such a good position in our mind is that we were recruiting patients. During the time that everyone was locked down and those patients had to have documented two or more exacerbations in the prior 12 months dirt.
During the time of Lockdown, so that means that the patients in our study where reliable exacerbating patience and therefore, if we're seeing a bad rates that are consistent with Willow, we have a patient profile that's consistent with Willow that suggests that the trial is going this is needed and if we think about historic <unk>.
Giles again to the to the column of precedent what we've seen in the past as if there had been an inadequate number of events to have adequately powered trial showing the effect of in these cases inhaled antibiotics in our case, we are very well power 90 per cent power to show a 30% reduction in <unk>.
Acervation.
And I think given that two or more exacerbations are required for entry into the study we feel really good about the event rates, we're seeing the powering of this study and therefore, the likelihood of our drug to show its impact and therefore I have success.
Great. Thank you for the insight.
Thank you and the next question Guy She Steven Y Stifel. Steven. Please go ahead. Your line is a pain.
Yeah. Good morning, I'm, sorry, if I missed this earlier, but could you maybe just kind of speak a little bit to the rationale for the selection of the dosage that you chose for the page to Sierra study with British a cat it.
I guess, specifically why the 40 big dose.
He had a little bit of experience with it and the C. F study, but while I dropped 25 altogether.
I just have a <unk> well I think.
Yeah, we're trying to tease out in this population, which is that the severe end of the spectrum for Crs.
The drugs true effect and.
You know the 40 milligram dose looked really clean and C F.
We would have gone to 40 in the original Willow study, but we did not have the toxicity data in hand, and we did not want a hold up the initiation of that study to wait for that toxicity readout. We now have toxicity readouts for 40, and 65 and both are clean so the ability to go up.
Does.
Does not is.
Not impeded in any way and so it seems to us since it's a phase two study the most effective way to get the answers we want which are you know what's the dose response curve look like in Crs without nasal polyps.
Book ended with 10 and 40.
And that that's sort of the logic behind it.
Okay, and then maybe just quickly on air case I guess.
If you assume that encore.
It works out you do find my way would expansion how do you think about just the persistence either case utilization Refracts resetting.
I know you've talked about some of these.
Retrievers trends that you can see I think mostly in the U S. A.
How do you just think about the sticky this of.
Refractory franchise. Thanks.
Yeah, I think it's you know unfortunately, it's going to be there and the reason for that is we hear this from Kols all the time and I'm sure you have as well when you talk to them once a patient comes into their clinic as a refractory MTM patient they never leave.
They get treated for a period of time they were successful in the eradication of the underlying infection that gives the patient reprieve, but these patients are vulnerable to these infections and the pathogens that give rise to the infection are ubiquitous in the environment.
Soil, the air water and consequently vulnerable patients.
Stand a good chance of being Reinfected, and so it's going to be necessary to retreat them when they when they present I think that the promise here is that especially given the low discontinuation rate. There's a very strong case that is being created informed around early and aggressive intervention to prevent these patients.
From getting to the place where they become refractory.
But we know from experience that even successfully treated patients.
Will require re treatment and indeed retreatment patient is in effect a refractory patient so.
I think we will see the refractory market continue we know that there are some refractory patients who frankly stay in acute chronic treatment for years now and so that's why I think it's gonna continue to be unfortunately, a market that will that will be Brazilian.
Great. Thanks to your questions.
Thank you and the next question does he Liana Wang I'll stop. Please. Please go ahead your line is a pain.
Hey, Hi, folks. Thanks for taking my question I have a question on Europe , So when you're normalizing the trend for sales. It seems like there is your your decrease how do you expect that to kind of play out going forward in terms of sales and also you took the.
One time charge.
Due to unfavorable pricing and France is that something that could potentially happen with other countries in Europe I'm just trying to understand if there is potential for additional one time charges in the future and how that kind of like sales play out.
Yeah. So on the one time charge, we don't expect another one time charge from another country.
And do the specifics of the a T U program and it's the way it works.
Remind everybody before a drug is approved you can petition the French government for the ability to use and get reimbursed for a drug under the a T. U program and we were very successful in doing that for a number of years and treated successfully a number of different patients.
<unk> and in many cases these were patients that had obsesses as well as Mac.
And that experience was a very positive one regrettably because of the dynamics in the European market in particular in France. There is significant pressure being placed on health care budgets and.
That caused them to set a very low price.
In France for full time going forward reimbursement and then there's Ah Ah Ah may call for whatever we have.
Been charging through the <unk> program. That's how that operates we don't see that because there is no equivalent program anywhere else in Europe .
So we don't see that as a risk the positive trends in Europe or in places like the UK, where reimbursement is that a very attractive level. The patients are there. It takes a little while to to get things off the ground and of course Europe overall, it's not a major driver of our revenue, but I would tell you that notwithstanding.
<unk> the over pressure of pricing.
[noise] excuse me I'm actually kind of bullish about what we might see out of places like the UK in Germany, where we're making some concerted efforts and think there will be some some success.
But the overall picture in Europe is it is it difficult and challenging one for health care and for biotech companies in general.
And if I gotcha.
Oh, sorry, just one more question.
Okay go ahead Sir.
Just one more point, the 7.5 million adjustment that we booked in queue for a reminder, that 5.8, if that was related to prior period says you're looking at here over here that would've been.
An impact to the prior periods for France, as well as just all being Bucks in Q4 of 22.
Great Super helpful and one more question related to print Zoe and C. R. S can you share any of the powering assumptions.
So we're we're not doing that today, but we will be happy to provide that once we come to agreement with F. D. A on that this trial is proposed is acceptable we don't anticipate any difficulty in that discussion, but just out of respect for them. We want to wait until that process is finalized and then we can present.
What has been agreed with F D a and indeed any characterizations that come out from that interaction.
Gotcha. Thank you.
Thank you and the next question cause she'd like see if I'm not age Mister Hastie cavities great. Please go ahead, you want as a pin.
Okay. Thanks, so much take my question.
I know you started off your prepared remarks by talking about your translational medicine effort. So maybe since like question has been asked there and not to make me feel your thumb down your may 8th 90 day, but uhm I'm curious as to.
Kind of the overall.
Picture that maybe you can uhm paint for me again, which is and now that you brought in.
Some very experienced people from the <unk>.
There are other biotech companies that are standalone that are spending I would assume lots more than you might be able to spend and perhaps investors don't want you to spend all that much what what is it really that you think is gonna help you differentiate versus the other uhm effort cetera out there does it.
Literally more about the people in the know how or is there. Some other technological edge that you think that you have as it relates specifically to your gene therapy efforts. Thank you.
Yeah. So I think the gene therapy space, which is but one component of the fourth pillar in the different platforms, we have and we will be talking about on on may 8th.
But it's a particularly powerful technology and the reason I like it so much is because I see it as a productivity tool there aren't many of those in biotech. It's a tool that can shorten the time and cost too commercialized drugs that are impactful because with a phase one to trial that is.
<unk> real impact on a disease state you can secure potentially a conditional approval for that and moved to commercialize it earlier at less cost and.
So just fundamentally the technology is a productivity tool is an important thing for the market to digest and understand because most of the drug development pathways, you're following our phase one two twin phase Three's time and money are quite significant as we progress through gene therapy, I think we possess a number.
Of advantages, we have a strategic view on this market is you know I used to sit on the board of unit cure I've been around the gene therapy space for a very long time, and so we understand that it is a very bespoke technology and therefore it requires the very best people and that is what we have very quietly assembled out in San Diego.
And for the last 18 or more months, they've been working very hard and diligently to advance a number of different programs in parallel because of their experience. They can do this very efficiently as we've said or spend for the entire fourth pillar will be less than 20 per cent of our overall spin and that trend will continue so this will not become a.
White Elephant project.
This is a program that is being driven by people I consider to be the very best in the world at this and the data that will be talking about on May 8th I think will support that assertion as we think about where we can go next there are a number of different opportunities. In addition to people we have very specific approaches and technologies that we think.
<unk> could be game changing in this space and we will be sharing those in some detail on on <unk>.
Thank you people, it's technology and its experience.
Thank you and the next question does he can if I can of Cantor Fitzgerald genocide. Please go ahead, you're not as a pin.
Okay. Thanks for taking my questions Uhm, maybe to start off with ARIKAYCE frontline could you clarify for you is approval that's encore needs to hit only on the respiratory symptoms score or does it have to hit on the fatigue symptoms square as well.
So those two are a combined sort of mosaic of patient response to the the drug you know.
It will depend on what we see but my guess is you'll you'll see impact on both measures, it's not pre specified that one or the other must hit.
And of course the F. D. A's assessment is does the drug make a patient feel function or survive longer better.
The not being on the drug and so I think a clear win on either one of those is a very strong argument for approval, but let me remind you that this is really only the U S market that is particularly focused on the piro and the instruments that underlie that in Japan culture conversion is what they're focused on and so we have.
One trial all of the answers to both markets, but a split opportunity. If you will if we hit Unculture conversion, we're good in Japan, and that's a very substantial market. If we hit on the pure Oh, that's good in the U S and that's a very substantial market each will read into the other and so that will provide some I think <unk>.
Little opportunity to make an argument should something go a little bit sideways. We don't anticipate that's going to be the case, we think we know how these patients respond we've seen them culture convert and as a consequence of this study is designed to capture that and I think it's going to do so successfully.
Okay, and then maybe hitting on Japan, I know, there's a pricing adjustment coming up do you have any color on the exact timing in terms of whether or not that's coming in the first quarter or or maybe later in the second word.
Yes, Sir or do you want to take that.
Sure. So what we communicated as we anticipate it will occur in the second quarter of this year and it will be in the high single can maintain range and that's expected and plans and what you see for products in Japan.
Okay and then my last question is T. P. I P. The interim blended data coming in the second half.
So it seems like it's coming from both studies and I think previously you said, Mississippi P. H I L. D. Only is there a reason for that change and does that indicate I guess the enrollment rates that you're seeing for either study so far.
Yeah. So what I would tell you is that we want to share as much data as we can because we think showing the blended blended titration data really gives insight into the likelihood of success of the of the trial and the impact of the drug. So if there are sufficient patients in from each study that will make the sample.
That we're presenting meaningful we will share it if for some reason for example, the ph studies enrolling slowly then then we might not have enough data, but our expectation right now is it by the end of the year, we'd have enough data to share from both studies and that in fact data from from each would be helpful to people.
Understanding I can tell you that there is a lot of enthusiasm for this program not just among key opinion leaders, but among the sites were talking too and I think we're gonna be able to get some some a real sense of the likely success of this drug.
As anecdotes build throughout the year.
Alright, thanks, so much guys.
Thank you we have nice out of the question is how how about when they're with any taking the Max.
Thank you all for joining us today.
Thank you <unk>. Thank you so much for joining you may now disconnect your lines.
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