Q3 2024 Insmed Inc Earnings Call
Jeanne: Thank you for standing by. My name is Jeanne and I will be your conference operator today. At this time, I would like to welcome everyone to the INSMED Third Quarter 2024 Financial Results Conference Call.
Jeanne: All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session.
Jeanne: If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad.
Jeanne: If you would like to withdraw your question, press star 1 again.
Jeanne: We do ask at this time to limit yourself to two questions and re-cue if you would like any follow-ups.
Speaker Change: Thank you. I would now like to turn the conference over to Brian Dunn, Head of Investor Relations. You may begin.
Brian Dunn: Thank you, Jeanne.
Brian Dunn: Good day, everyone, and welcome to today's conference call to discuss InsMed's third quarter 2024 financial results and provide a business update. I am joined today by Will Lewis, Chair and Chief Executive Officer, and Sara Bonstein, Chief Financial Officer, who will each provide prepared remarks, after which they will be joined by Martina Flammer, Chief Medical Officer, for the Q&A session.
Brian Dunn: 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.
Brian Dunn: Please refer to our filings with the Securities and Exchange Commission for more information concerning the risk factors that could affect the company.
Speaker Change: 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 will now turn the call over to Will for prepared remarks.
Will Lewis: Thank you, Brian, and welcome, everyone.
Will Lewis: The announcement of the positive Aspen data earlier this year marked the start of a new era for INSMED, one that will be defined by our ability to execute on the many opportunities we have in front of us.
Will Lewis: Our performance this quarter demonstrated that level of execution and sets us up for this exciting new chapter of Insomniac's story.
Will Lewis: The opportunities before us are significant, not only in terms of their potential impact on patients and our company, but also in terms of their sheer quantity. I'm proud to say that our team across the organization have continued to show a remarkable ability to deliver simultaneously on all of them.
Will Lewis: For example, in the third quarter, our commercial team once again delivered double-digit year-over-year sales growth for Aerocase across all of our regions.
Will Lewis: At the same time, the U.S. team was also working to build out its infrastructure by nearly tripling its sales force in preparation for the expected launch of Brenso Catib in the middle of 2025.
Will Lewis: Similarly, our clinical development team remains on track to file the MDA for brensocatib in the U.S. this quarter, while at the same time they have been driving increased enrollment rates across our ongoing clinical trials and working to present and publish data from the Aspen trial.
Will Lewis: Today, I intend to highlight the progress we have made across multiple ongoing initiatives at INSMED and why this progress should add to confidence in our ability to execute on the tremendous opportunities ahead. Let's begin with Brent Socata.
Will Lewis: Earlier this month at the American College of Chest Physicians annual meeting in Boston, we presented subpopulation data from 19 pre-specified categories from the ASPEN trial based on baseline patient demographics, comorbidities, and disease severity measures.
Will Lewis: In a population that is known to be very heterogeneous, it was remarkable how broadly beneficial treatment with Prensicatib was observed to be across these various subgroupings.
Will Lewis: which is similar to what we had observed in the Phase 2 Willow trial.
Will Lewis: We continue to expect to file the NDA for Brent Sokadev in the fourth quarter of this year. Presuming that filing is accepted, we would expect to announce the acceptance, along with the expected timelines for a decision by the FDA in the first quarter of 2025.
Will Lewis: Moving to our U.S. commercial launch preparations, I'm pleased to report that all 120 new U.S.-based sales reps have been trained and are currently deployed in the field, bringing our total sales reps to 184.
Will Lewis: These additional sales territories have been constructed based on claims data showing us where the diagnosed patients are being treated.
Will Lewis: Our intention is to have broad sales representation from day one, not just in the academic centers and centers of excellence, but also in the community pulmonologist offices, where many of these patients receive care.
Will Lewis: In fact, the U.S. sales force is intentionally sized to enable INSMED to call on every pulmonologist in the United States.
Will Lewis: We believe that these early investments will position Brent Socata for a strong, successful launch in bronchiectasis, pending FDA approval.
Will Lewis: Let me also provide an update on the two additional indications we are currently pursuing with brensocatib, chronic rhinosinusitis without nasal polyps and hydradenitis supertiva.
Will Lewis: The Phase 2 BIRCWH study in CRS without nasal polyps has been rapidly bringing new sites online in Europe and in the U.S. and is now more than 40% enrolled with many more patients currently in screening. We continue to anticipate top-line results by the end of 2025.
Will Lewis: Our Phase 2 HS study is also steadily progressing on schedule toward its first site being open before the end of this year.
Will Lewis: The study, which will be called CDER, is expected to enroll approximately 204 subjects, randomized one-to-one-to-one, to receive brennsocadab 10 mg, brennsocadab 40 mg, or matching placebo once per day.
Will Lewis: The primary endpoint in the study will be percent change from baseline in total abscess and inflammatory nodule count measured at week 16.
Will Lewis: The study is then expected to continue until week 52 with those randomized to the brenn cell catabombs Continuing to receive that same dose
Will Lewis: Those who are randomized to the placebo arm would join one of the brenn-sucatib arms at week 16 based on randomization which would also have occurred at baseline on a blinded basis.
Will Lewis: As we have signaled in the past, this study will include an interim futility analysis conducted by an independent data monitoring board, which will examine data from approximately half of the patient population once they reach week 16. This will allow us to stop the study early if the data does not look promising.
Will Lewis: If the recommendation from that interim analysis is to continue the study, we will remain blinded to the data that is reviewed by the monitoring board. There is no interim efficacy analysis built into the trial design, so there is no potential for early stoppage due to overwhelming efficacy.
Will Lewis: If the study continues to completion, we would read out the top-line results after all patients reach Week 16.
Will Lewis: We expect more details for this trial to become available on clinicaltrials.gov before the end of this year, and we look forward to providing updates as the trial progresses.
Speaker Change: Now turning to EraCase, which posted its seventh consecutive quarter of double-digit year-over-year revenue growth in the third quarter of 2024. We have become accustomed to seeing this level of growth from EraCase, but when you remember that EraCase is now in its seventh year post-launch, it makes the achievement all the more unique and impressive.
Speaker Change: In addition to strong commercial execution, we are also making great strides clinically.
Speaker Change: Last quarter, we stated our intention to stop screening new patients for the Phase 3 ENCORS study by the end of the third quarter. Thanks to very strong recruitment, we were able to close the screening of new patients a little ahead of that schedule.
Speaker Change: While we won't know the exact enrollment number until all patients have finished the six to eight week screening process, I'm pleased to report that we have already randomized more patients than the trial's target enrollment of 400 participants.
Speaker Change: Importantly, this level of enrollment will mean that the study is powered at well over 90% for both the patient-reported outcome primary endpoint for U.S. regulators, as well as for the durable culture conversion primary endpoint for the Japanese health authorities.
Speaker Change: We plan to meet with the FDA this quarter to discuss the possibility of an accelerated filing under subpart H using the successful phase 3 ARISE trial data.
Speaker Change: As we have previously mentioned, we feel the most likely pathway to a potential label expansion for error case will require the full data set from the ongoing ENCOR trial, which remains on schedule to read out in the first quarter of 2026.
Speaker Change: Finally, let me provide an update on TPIP.
Speaker Change: Last quarter, I was excited to report that enrollment in our Phase 2 study of patients with PAH had accelerated and that we had passed 75% of the target enrollment as of that date.
Speaker Change: Today, I am equally pleased to share that this momentum has continued. As of last week, we had enrolled more than 90 percent of the target for this trial, keeping us firmly on track to report the top-line results in the second half of 2025.
Speaker Change: In PHILD, we expect to present the full results from our Phase II study, which had a top-line readout in May of this year, in early 2025 at the Pulmonary Vascular Research Institute's 2025 Annual World Congress in Rio de Janeiro. We look forward to sharing those details then.
Speaker Change: We are also working to optimize the manufacturing of TPIP so that higher doses can be delivered using the same quantity of dry powder as lower doses.
Speaker Change: This improved delivery, which would allow patients to take doses up to 640 micrograms in a single capsule, is how we expect TPIP to be offered in the commercial setting, presuming clinical and regulatory success.
Speaker Change: We're doing this work now so that our phase 3 program can be conducted using that same commercial ready product Which would be required for a potential future NDA filing
Speaker Change: We remain on track to kick off that Phase III program for TPIP and patients with PHILD using these optimized doses in the second half of 2025.
Speaker Change: In summary, I couldn't be more pleased with where we are as an organization.
Speaker Change: I am proud of how we have been able to maintain and strengthen Intamed's culture during an unprecedented period of growth for the company.
Speaker Change: Last week we announced that we were ranked as the number one employer in science's annual top survey of top employers for the fourth consecutive year. The only other company in the history of this survey to have earned this honor at least four years in a row was Genentech.
Speaker Change: This external recognition validates what I see every day, which is that even as we transform as an organization, we remain grounded in our core values. The consistent progress that I have seen to date across the company, both operationally and culturally, only adds to my confidence in the future of Insumed.
Speaker Change: For most companies in our field, any one of the opportunities in our late-stage pipeline, from the potential error case label expansion, to the potential launch of a product representing a promising new mechanism of action, like brensocatib, to the chance to develop a potentially paradigm-shifting medicine like TPIP, would represent the single most exciting opportunity at the organization.
Speaker Change: At InciMed, we not only find ourselves in the rare position to execute on all three of these programs at once, but I'm also proud to say that we are three for three so far, with each program having already demonstrated meaningful clinical success.
Speaker Change: We take the responsibility to deliver these therapies to patients very seriously and we are committed to following through on these promises.
Speaker Change: I'll now turn it over to Sara who will walk us through this quarter's financial results.
Sara Bonstein: Thank you, Will, and good morning, everyone. I want to start with a few words about the strength of our financial position.
Sara Bonstein: When I last spoke to you in August, INSMED was in a very secure position financially. I am happy to share that today, we are in an even better position due to the deliberate steps taken in the past quarter to strengthen our balance sheet.
Sara Bonstein: These actions include calling our 2025 convertible debt, opportunistically utilizing our at-the-market equity offering program, and restructuring our existing term loan.
Sara Bonstein: Let me provide you some details on each of these activities.
Sara Bonstein: As discussed on last quarter's earnings call, in August, we called our $225 million convertible notes.
Sara Bonstein: which were set to mature in 2025 and issued approximately 5.7 million shares of stock to note holders Which simultaneously lowered our ongoing interest expense burden while also improving our debt to equity ratio
Sara Bonstein: Additionally, in the third quarter, we utilized our ATM to raise approximately $371 million in net proceeds at an average sales price of $75.64 per share.
Sara Bonstein: As a reminder, during our most recent follow-on offering in May, the sale price was $51.50 per share.
Sara Bonstein: Finally, as announced this morning, we were able to successfully restructure our $350 million term loan with Pharmacon. As a reminder, the loan previously carried a variable interest rate based on the SOFR rate plus 7.75%, which normally put our actual rate paid in the low to mid-teens and was set to mature in 2027.
Sara Bonstein: Under the terms of the restructured agreement, Pharmacon will provide us an additional $150 million in proceeds to be received in the fourth quarter.
Sara Bonstein: Importantly, the interest rate on the full principal amount was lowered to a fixed single-digit rate of 9.6 percent.
Sara Bonstein: In addition, the maturity for the loan was pushed out to 2029, which is important because we anticipate that our cash inflows from operations during the latter part of the decade would easily support repayment of the loan balance.
Sara Bonstein: As a result of these actions, our cost of capital is being reduced while our cash runway is being lengthened.
Sara Bonstein: As of the end of the third quarter, we had approximately $1.5 billion of cash, cash equivalents, and marketable securities on our balance sheet, which represents an increase of approximately $221 million since the end of the second quarter.
Sara Bonstein: As a reminder, the current quarter's cash balance does not reflect the additional $150 million of proceeds from the Pharmacon term loan previously discussed, and will be reflected in the fourth quarter's financial statement.
Sara Bonstein: Net of cash inflows related to the ATM, as well as the impact of stock option exercises, our underlying cash burn in the third quarter was approximately $166 million, which, as expected, was somewhat higher than recent quarters.
Sara Bonstein: A portion of this increase is related to the $12.5 million cash milestone payment made to AstraZeneca this quarter, which resulted from the announcement of our intention to file for the approval of brentsocatib for the treatment of patients with bronchiectasis.
Sara Bonstein: The remainder of the increase is due to higher headcount and other expenses related to ongoing preparations for the potential launch of brentsocacib.
Sara Bonstein: As a result, we expect our underlying cash burn to increase compared to historical levels between now and the time that Brento begins contributing revenue, assuming regulatory approval and commercialization.
Sara Bonstein: Before I move on, I would like to address the subject of profitability, as I appreciate this is an important topic for many of our shareholders.
Sara Bonstein: We do not yet have sufficient cash on hand to fund our business until it becomes profitable on its own. But we continue to be mindful of reaching our ambition of becoming a self-sustaining biotech company.
Sara Bonstein: Given our progress this quarter, we are now in a position in which we can be patient and flexible as we think about our future financing needs.
Sara Bonstein: I will now walk you through the highlights of our commercial performance in the third quarter of 2024.
Sara Bonstein: Global net revenues this quarter was $93.4 million, reflecting 18% year-over-year growth compared to the third quarter of 2023.
Sara Bonstein: This represents the highest quarterly sales for Aircase in its history and the second quarter in a row in which we have set a new record for global sales.
Sara Bonstein: In the U.S., net revenue was $66.9 million, up 13% compared to the prior year period. This growth was driven by continued strength in new patient starts, reflecting the volume-driven growth we continue to see for error case.
Sara Bonstein: In Japan, net revenue is $21 million, up 31% compared to the prior year period. This performance was driven by higher new patient starts and a strong treatment continuation rate amongst existing patients.
Sara Bonstein: In Europe and the rest of the world, net revenue was $5.6 million, up 45% compared to prior year period, driven primarily by continued strength in Germany and the UK.
Sara Bonstein: Importantly, this quarter's performance keeps us on track to achieve our full year 2024 global revenue guidance of 340 to 360 million dollars.
Sara Bonstein: Let me now turn to a few additional financial items.
Sara Bonstein: Our U.S. gross SNFs this quarter were 14.2 percent, which was consistent with our expectations. We continue to anticipate that gross SNFs will settle in the mid to high teens for full year 2024.
Sara Bonstein: Cost of product revenues for the third quarter of 2024 was $21.2 million, or 22.7% of revenues, which is consistent with our historical performance.
Sara Bonstein: Research and development expenses in the third quarter were $150.8 million, and SG&A expenses were $118.9 million, reflecting continued investment in our early and mid-to-late stage pipelines as well.
Sara Bonstein: as investments in BRNSO-CATSIP commercial readiness initiatives.
Sara Bonstein: In closing, INSMED currently finds itself in a unique position of strength, both financially and operationally. We produced record-setting revenue in the third quarter, keeping us on track to deliver on our full-year guidance.
Sara Bonstein: Additionally, we have approximately 1.5 billion dollars of cash, cash equivalents, and marketable securities on our balance sheet, which allows us to comfortably fund our operations as we enter this transformational period ahead.
Sara Bonstein: one in which we anticipate the launch of BRENSO-CATIB, as well as additional meaningful mid to late stage data readouts from across our portfolio. We would now like to open the call to your questions. Jeannie, may we take the first question, please?
Speaker Change: Thank you. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue.
Speaker Change: If you would like to withdraw your question, simply press star 1 again. Again, we ask to please limit yourself to two questions and then re-queue for additional questions.
Speaker Change: If you are called upon to ask your question and are listening via loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when answering your question.
Speaker Change: Your first question comes from the line of Joe Schwartz with Leering Partner. Please go ahead.
Joe Schwartz: Hi, thanks so much and congrats on the progress. I was wondering first if you could talk some more about the expanded sales force in terms of how effective it can be in launching BrinziCAD and based on its size and focus.
Joe Schwartz: as well as how much the disease state awareness activities can help you prepare for a launch, and whether you've looked at analyst estimates for BRINSCAT and sales early on, and is there anything we should keep in mind as we model the ramp?
Speaker Change: So thanks for the question, Joe. I mean, I think I would tell you I've had the.
Speaker Change: Pleasure of spending some time with the people that we brought on board
Speaker Change: And they have two general.
Speaker Change: dimensions that I think are worth noting. The first is...
Speaker Change: They are a very experienced group of people. They have done multiple launches. We've got a lot of multiple President's Club winners in this group.
Speaker Change: I always like to remind folks that we had more than 7,000 resumes for 120 positions.
Speaker Change: So it just speaks to the volume of interest that existed for these roles. So we really got the best of the best, and I would tell you, hand on heart, I think I would match this sales force against any in the industry and feel like we're going to come out ahead. The second point about these people is that they're an excellent cultural fit.
Speaker Change: to a person. They are focused on patients and delivering for those patients.
Speaker Change: And that's an incredibly important part of our culture, as you know.
Speaker Change: As we think about the actual launch itself and what this empowers us to do, as I mentioned, we literally have the ability to call on every pulmonologist in the United States with this kind of capacity. And importantly, as we think about what they're doing right now, because as we said, as of October 1st, they're in the field, fully trained, both calling about Ericase, but also doing disease state awareness about bronchiectasis.
Speaker Change: And that is a model that may ring familiar to you because it is the exact same approach we took when we launched Aircase. Aircase, as you'll remember, the street had us at doing about $40 to $60 million in the first year, and we ended up doing more than $130.
Speaker Change: and that's an indication of what this kind of early stage education and relationship building can provide by way of uptake of medicine when the medicine is clearly a benefit to patients. So I couldn't be more excited about the group we've assembled and
Speaker Change: Yeah, I think you're going to see really first-in-class, best-in-class performance.
Speaker Change: Okay, thanks. And then, does the aforementioned expected price range for Brenzo refer to the 10 milligram dose, the 25 milligram dose, or both? I'm just wondering how you're thinking about whether it makes sense to use flat or graduated pricing. For example, do payers appreciate the added value that the 25 milligram dose provides?
Speaker Change: So, you know, we haven't made any decisions on pricing yet. It's going to be a long time before we do, but I would tell you that you know, we think
Speaker Change: The objective here in all our clinical studies is to understand what the medicine can do, and that forms the basis of the value proposition. I do want to come back to your comment about...
Speaker Change: they put up high double-digit millions in revenue and then if you kind of carry that forward into their next four quarters of launch it's about five to six hundred million I think the best
Speaker Change: with Dupuy was about $700 million, so very significant revenue numbers. And while I can't comment on specifically what the shape of the Brenso curve will look like, these are best-in-class launches and I think analogs that any company would strive to even come close to.
Speaker Change: Thanks for all the helpful color.
Speaker Change: Your next question comes from the line of Jessica Fye with JP Morgan. Please go ahead.
Jessica Fye: Hey, guys. Good morning. Thanks for taking my questions.
Jessica Fye: I wanted to ask on TPIP
Jessica Fye: For PHIL-D, can you talk a little bit more about what needs to happen between now and the commencement of that Phase III trial in the back half of next year? Is it that manufacturing work you referenced? And if so, can you expand a little bit on what specifically is happening there?
Jessica Fye: And then, can you also talk about how you think about the enrollment timing for the Phase III in PHILD? Should we use the increased trial enrollment as a guide? Does the increased awareness with type A as a strong launch in that setting help you, or is it a headwind to enrollment to have an approved drug in the space?
Jessica Fye: So like would you look to enroll me in the XUS as a result of that just trying to kind of understand from you know What what it's going to take to kick that study off and then how to think about enrollment once it does start
Speaker Change: Yeah, sure. So thanks for the questions. I think, you know, the first thing I would say about TPIP is it's probably the most underappreciated asset in our portfolio. I'm really excited about what I think this drug already has shown and what I think it will show when we look at the phase 2 data in PAH next year. We do intend to move forward into phase 3 for PAHLD.
Speaker Change: We have a lot of the work for that already ongoing. The second half of next year is a target for kicking that off.
Speaker Change: is really driven by both the preparation for wanting that trial to go particularly well, wanting to ensure that our dialogue with FDA clarifies the approval pathway for phase...
Speaker Change: 3, i.e. 1 versus 2 phase 3 studies. Our expectation is we'll only need one, but we have to confirm that.
Speaker Change: And then I would say, finally, and most importantly, the work being done in manufacturing, which is sort of being done in parallel to all this. Specifically, what we want is to make this...
Speaker Change: very easy for patients, and so regardless of how much drug they intend to or need to take,
Speaker Change: We'd like it to be one capsule.
Speaker Change: And so, if you're going to go up as high as 640 micrograms...
Speaker Change: Remember that you know
Speaker Change: that's a really high dose relative to what people are able to get to now. To be able to do that also with a single capsule makes it supremely easy to take and just smooth the utilization of the drug. So that's the thought there, and it is the merger of all of those different forces that is shaping the launch timing for the drug.
Speaker Change: When we think about enrollment, we're always frustrated in the PAH space, PAH space generally, because these are difficult trials to enroll, these patients are very sick.
Speaker Change: In a sense, we're in a little bit better position when we start PHLD and when we look at PAH in phase three as well because the competitive landscape of other trials will have decreased in its density by that time.
Speaker Change: So, I couldn't be more excited about this. I'm really excited to see the PAH data in the second half of next year and also to kick off the ILD phase three.
Speaker Change: Hopefully that answers your question. Thank you.
Speaker Change: Your next question comes from the line of Emile Duvan with Guggenheim Securities. Please go ahead.
Speaker Change: Hi, this is James today on Revomel. So we've been receiving some investor questions this morning around the general financial position
Speaker Change: with the Pharmacon term loan amended, and it seems that you've raised some additional money through the ATM. So I was wondering if maybe you could talk more generally about your financial position now.
Speaker Change: your plans going forward as you prepare for the Brendo launch next year. Thanks.
Speaker Change: Yeah, you bet. I'm going to turn it over to Sara in a minute, but I've got to just open up by telling you I could not be happier about...
Speaker Change: the breadth and depth of the strength of our
Speaker Change: balance sheet improvement this last quarter. We are now in a very strong financial position to take on the breadth of opportunities this company has, and we happen to be hitting on all cylinders, both in terms of commercial, clinical development, and preparation for next commercial launch. This resourcing is going to be helpful to that cause. But, Sara, maybe you want to talk about it. Yeah, absolutely. Really appreciate the question. Just on the onset, InfMed is in the strongest financial position it's ever been since I've been at the company, and probably since the company's history, and could not be more proud of the achievements of everyone, part of the InfMed family, and all the support that we continue to get from all of our partners, shareholders, note holders.
Speaker Change: debt holders. A couple of comments specifically on the actions that that we took. Specifically on the ATM, that is an opportunistic tool that
Speaker Change: Pretty much every biotech company has that is not at a profitable level.
Sara Bonstein: used that in small amounts. It was, you know, about 2% of our overall market cap over the period of time. But I think the most important piece there is the focus on dilution and being sensitive to dilution for shareholders. And as we think about the raise that we did earlier this year and the utilization of the ATM, the ATM average price was almost a 50% premium to our last raise. So we were very cognizant of dilution pricing, as well as during the time of trading on the ATM, our stock price actually went up. So we were very careful on that. On the Pharmacon restructure, couldn't be more pleased that Pharmacon was willing to put additional monies and to push out the payment. A couple of, I think, really important pieces there.
Sara Bonstein: there, by being able to get a fixed interest rate and being able to lower it into single digits, our interest burden on the company essentially remains the same and we have additional capital now and we will now have the benefit of having the Brenso launch and need to pay back that principal amount towards the latter part of the decade. So could not be more pleased with where we are financially and we are now in a position where we want to be able to resource appropriately the Brenso CAPTIP launch. This is a once in sort of a lifetime type of launch that we have the opportunity to be part of and the capital that we now have on our balance sheet will allow us to appropriately resource that program.
Speaker Change: Great, thank you.
Speaker Change: Your next question comes from the line of Ritu Bharo with TD Cal, and please go ahead.
Speaker Change: Hi everyone, this is Nicole on the line for RETO. Thank you so much for taking my question. So, I was hoping to get some initial or additional color on labeling language that you expect for brenzocatib. Do you think it's going to be more broad with just treatment of bronchiectasis, or do you think there might be some more specific language?
Speaker Change: about the reduction of the exacerbations, and then a quick second follow-up question is are you planning on including adolescents in the labeling as well? Thank you. So I'm going to actually ask Martina to take that on first.
Speaker Change: Yeah, hi, Nicole. So, yes, we do expect a broad label language.
Speaker Change: and that would be for non-tumor, yeah, bronchiectasis. We also will ask...
Speaker Change: for adolescent patients. They've been part of the trial. It depends on what the FDA's judgment will be on that.
Speaker Change: we expect a broad label language. And usually the label language doesn't specify your inclusion or exclusion criteria, it speaks to the indication.
Speaker Change: Yeah, the only comment I would add to that is that, of course, there's different audiences we have to impress. One of them is the FDA. The other is market access. Market access is the one that's going to be a little bit more focused on whether or not the patient has had two or more exacerbations consistent with our label. So while the FDA label language will probably be broad, the market access, at least initial interaction, is probably going to be a little more focused around those two prior exacerbations. And we're hoping to accomplish that through attestation, but that will, of course, come closer to the time of launch.
Speaker Change: Thank you.
Speaker Change: Your next question comes from the line of Nicole Germino with Truist Securities. Please go ahead.
Nicole Germino: Good morning, thanks for taking my question. Excuse me.
Nicole Germino: We're getting questions around CRS without mesopolyps and could potentially and it could potentially be as big as bronchiectasis given the potential benefit and steroid non responders patients requiring surgery. Sorry.
Nicole Germino: So how many of those patients are seeking additional therapies beyond standard of care or getting repeat surgeries and can you help us understand how big this opportunity is and how big could it be and will be focused towards anti broadly or anti-surgical specialists?
Speaker Change: It seems like a very small focus, but we wanted to get your thoughts.
Speaker Change: Yeah, so I appreciate the question. I think you are right to perceive CRS without nasal polyps as a very, very substantial opportunity. Just to remind everybody, this is a patient population in the U.S. alone that numbers more than 26 million people currently without anything approved to treat it.
Speaker Change: Now, when we approach a disease state of that magnitude, we look for the sickest patients and we look for our medicine to have the most material impact on them. And in that group, we sort of focus on for our initial foray. We've talked about how that...
Speaker Change: is an incidence rate of about 400,000 patients a year. So not a prevalence, but an incidence. That's that number of patients coming in that are broadly defined as being eligible for surgery or having had repeat surgeries at a severity point that would justify the use of this medicine. It may get bigger than that, but I would just start there to sort of understand the broad opportunity that this market would represent. And next year, we're gonna have a very clear understanding of whether our drug is gonna be impactful on these patients with the readout of the phase two study.
Speaker Change: So, I think this is, you're going to hear a lot more about this indication once we know our ability to impact it, and we understand the profile of patients within the study, and the nuances of what the medicine does.
Speaker Change: Remember that we're testing both 10 and 40 milligrams in this study. So that's also a distinction from what we did in bronchiectasis where we had 10 and 25. Overall, super excited about that program and a lot more to come in terms of specificity.
Speaker Change: Oh, and one quick, thanks so much, and one quick follow-up. For Brenzocatib and bronchieftasis, can you confirm if both doses are gonna be filed or how, what can you share?
Speaker Change: Yeah, so our...
Speaker Change: Intention is to file the data from both doses. As we've talked about before, there's some very interesting details in the 25 milligram secondary endpoints that we find and other KOLs have found particularly compelling. But the ultimate decision about which dose to be selected or both doses to be selected is in the hands of the FDA based on the data that they will review. So we want to provide them all that data. The good news is...
Speaker Change: both doses work, both are compelling. So whatever the FDA's conclusion is, we'll be in a position to launch commercially and we'll have more information on that once we've heard from FDA.
Speaker Change: Great. Thank you so much.
Speaker Change: Your next question comes from the line of Jason Zemanski with Bank of America. Please go ahead.
Jason Zemanski: Good morning everyone. Congratulations on the quarter and the progress. Appreciate you taking our questions.
Jason Zemanski: Thanks for the color on Birch. Curious, what are you looking for in terms of efficacy, at least from the sinus total symptom score on the top line, to be encouraged about its activity in CRS?
Jason Zemanski: and then maybe how translatable are these results to other non-pulmonary indications in your view.
Speaker Change: Yeah, so I'm going to ask Martina to address that.
Martina Flammer: Hi Jason. So what we're looking for in CRS is that we're detecting a difference of
Martina Flammer: 1.34 to 1.55 it depends on what treatment effect that we're seeing but we are 80% power to show that if it's on that 1.34 point difference
Martina Flammer: and we do that for an alpha level of 0.05. So if you compare that to the only other treatment really that is right now approved for that and that is the enhanced.
Martina Flammer: spray, nasal spray, which is basically a fluticasone. Based on that they've shown a difference of 1.4 to 1.9 and that was depending on whether these patients had used steroids in addition or not. So I think we're well in that range.
Speaker Change: Got it and you know I appreciate you haven't shared some of your your broader strategies here but but assuming that there is efficacy in both CRS and HS I mean what makes an ideal INI condition to pursue for BRENSO?
Speaker Change: Yeah, so I think it's.
Speaker Change: Those are two distinct diseases, both CRS without nasal polyps as well as HS.
Speaker Change: and...
Speaker Change: So, we have to see what we see in both of those indications. The reason we're testing for the 10 and to the 40 milligram dose, that in this, both of these diseases, in a way, we may see that there is an additional benefit coming from a higher dose, reason being that in, for example, HS, there is net formation and can, when we push down NSPs even further, impact that net formation. And the same is true for CRS. Both of them are related to the intensity of neutrophil inflammation.
Speaker Change: And the only thing I would add to that is, of course, this relates to Brenso Cadmium and what we're learning from it. If we take a step back, we think about DPP-1 inhibition and its ability to impact neutrophil-mediated diseases.
Speaker Change: What has been unlocked with the Aspen study and the Willow study, and hopefully with Birch and Cedar, is this realization that there is broader applicability of this mechanism. So to that end, after the Willow study, we initiated some extensive work in our research labs.
Speaker Change: And that has been able to produce hundreds of additional DPP-1 candidates that we have now refined down to a smaller number and which we intend to bring into the clinic as second-generation DPP-1s. You'll be hearing more about this in the coming years, but let me just highlight that, you know, one of the indications that we're giving consideration to is rheumatoid arthritis. Another one is COPD patients.
Speaker Change: These would be novel DPP ones that would go through development process, but with our understanding at the beginning that the mechanism is effective in these target populations.
Speaker Change: Each additional clinical study we complete, we learn more about this mechanism, and I think you are correct to assume that there will be potential applicability of it to many more diseases, and that's why this library of DPP1s is being developed, each which will be hopefully more specifically targeted to the unique features of the disease we're pursuing.
Speaker Change: Got it. Thank you, Martina and Will, for the color.
Speaker Change: Your next question comes from the line of Jennifer Camlitt with Kantor. Please go ahead.
Jennifer Camlitt: Hi, thanks for taking my question. Um, I have one on Renfro.
Jennifer Camlitt: Can you remind us what's left for filing and what your confidence is in getting priority review? And then somewhat related, Sara, you pointed to other launches and seeing high double digits, millions in the first two quarters.
Jennifer Camlitt: I think if I look at Doopie, in the first full quarter of launch, it was something like high 20s, and based on the timing of filing this being a new drug, it looks to me like this could be more of a July or August launch, so is that something people should also factor into their models?
Speaker Change: So the determination of priority review is made by the FDA and their first
Speaker Change: written response to us. Typically, that arrives by day 74, so they have their verbal communication around day 60, and then there's a written response that comes on day 74. It's important to understand that
Speaker Change: Until we have that written response in hand, we won't know for sure anything, right? You always want to have it in writing from FDA. Well, we expect that we will, and we are on track to file this quarter. So if you do quick math,
Speaker Change: just take it from the end of the quarter to make it easy and add 74 days that gives you some sense of when in the first quarter we'll have a greater understanding. Obviously once we have that in hand we will share it with you and that will hopefully indicate that we have been granted priority review. Nothing is for certain but our fingers are crossed for that and that would put the timing somewhere around the middle of the year for launch assuming everything goes as expected. If we don't get priority review it'll be toward the end of the year.
Speaker Change: Either way, we're going to be ready, and I couldn't be more excited about where we are positioned and how everything is going.
Speaker Change: Yeah and then Jennifer specifically on the question of timing as well just kind of walked you through on the different scenarios from a timing perspective the analogs that I I shared I won't get into sort of the details on this call around
Speaker Change: The first quarter of each of those, was it a full three months? Was it two months? But I do think that's something that as folks are building their models, they need to be thoughtful of as they're thinking about revenues for 25 versus 26 for Brunson and what that curve looks like.
Speaker Change: Okay, that's helpful. If I could sneak a quick one for Eric Case. I know you said you've already reached target enrollment of 400 patients. Can you give any color on how many patients are left in that six to eight week screening period? Thanks again.
Speaker Change: So, you know, the honest answer to that is I don't know off the top of my head, but I know that it's going to supplement in addition to the 400. I'm just going to ask Martina. She may know.
Martina Flammer: Yeah, so we have about an additional 40 to 45 patients that are in the screening period.
Martina Flammer: And, as you know, it takes about six to eight weeks for the culture to come through, but I think we're highly confident that we will see that in this quarter. And how many of those do we normally... And the screen... So, normally on the screen from these patients, we would expect to be another 15 to 20 randomized. Perfect.
Martina Flammer: There you go.
Speaker Change: Your next question comes from the line of Lisa Baco with Evercore ISI. Please go ahead.
Speaker Change: Hi, this is Sima on for Lisa. I have two questions on advocates
Speaker Change: So, in Japan, there seems to be no growth in revenue this quarter over last quarter. So how should we think of future growth in this territory? And my second question is, you're meeting with FDA this quarter to discuss the possibility of an accelerated approval to expand the label for ADKs.
Speaker Change: In front line, this year Japan did not consider ARISE data for label expansion enough because of the shorter duration of treatment.
Speaker Change: So including like other reason of that, it did not include Japanese patients.
Speaker Change: So, where do you see the possibility that FDA might agree to accelerated approval?
Speaker Change: Those are my questions. Thank you. Sure, so I'll take the second question first and ask Sara to take the first one. You know, with regard to the probability of getting accelerated approval, I think we've been pretty consistent over the years just saying that we think this is a long shot, but it's an appropriate long shot to take because the data was compelling. There are certainly other divisions within FDA that have found data that is in this sort of
Speaker Change: realm of clear and compelling, plus the background history here of the success of the drug, its full approval in Europe and Japan. There's a lot of reasons to believe.
Speaker Change: that what we have really should be enough.
Speaker Change: But FDA has very strict rules, and each division interprets them differently. So I think, we think this is probably a low probability of success, but we do think it's a prudent dialogue to have.
Speaker Change: And, of course, if we manage to get it, we would be super excited. We are ready to pivot to a launch earlier than expected if the accelerated approval comes our way. So I want to be clear about that. But we're not expecting that this is the highest probability outcome. In fact, I'd say it's low. I'd say it's less than 25 percent.
Speaker Change: So, look, it's hard to put the odds on. You're right. Japan did say no. We didn't have any Japanese patients. That always makes it difficult for them to want to approve in an early setting. But I do think it could be indicative of the way the FDA sees it as well, just in terms of the overall data set.
Speaker Change: And then specifically on the Japan performance for the quarter, listen, I couldn't be more pleased with the performance in Japan, $21 million this quarter. And if you think about that from a year-over-year perspective, that was, you know, over a 30% growth, so I was very pleased with the performance. If you look at the specific dynamics between Q2 and Q3, and, you know, we don't usually get into this level of detail, but I'm happy to share it. There was a new warehouse open in Japan with some old inventory. We needed to work down some of that inventory in Q3, so there was some favorable inventory dynamics that we mentioned in Q2. So, you know, there is some lumpiness just in general, but the fundamentals of the Japanese business continue to hum, and the continuation rate is really great there. The new patient starts are really great there.
Speaker Change: couldn't be more pleased by the team's performance.
Speaker Change: Thank you.
Speaker Change: Your next question comes from the line of Jeff Hung with Morgan Stanley. Please go ahead.
Jeff Hung: Thanks for taking my questions. Just to clarify, can you just talk about the $150 million from Pharmacon and 4Q, given the cash that you have? Is that mainly for the Brunso launch? And then, can you talk about your current thinking on the TPIP phase 3 study and PHLD, like the endpoints, and any aspects of the phase 2 results that influence how you've been thinking about the design? Thanks.
Jeff Hung: … . . . . .
Speaker Change: Do you want to take the question from Farmacom? Sure. The $150 million that we will receive from Farmacom, that will be reflected in our Q4 financials. That's not reflected in the approximate $1.5 billion that we have on the balance sheet today. We don't specifically say, you know, what money is specifically earmarked for which program. Programs, of course, we have that latitude, but as we ramp up and focus.
Speaker Change: on shareholder value, Brent Zocasip is top of that list and we are now resourced to ensure that we are fully able to appropriately resource Brent Zocasip. I'm sorry your first question was on the design of the PHLD study?
Speaker Change: Yeah, I was just curious, you know, any aspects of the Phase II results that influence how you've been thinking about the design of the Phase III study and the endpoints that you, you know, might be using?
Speaker Change: Yes, so we're not we're not disclosing where we are in the final design of that study yet. I think what I would say is
Speaker Change: If you think about the Phase 2 study, which was really a safety study, and had, you know, less than 40 patients, randomized 3 to 1 treatment to placebo, and we still saw some very compelling directional data there that suggests, you know, improvement on time-to-clinical worsening, improvement in 6-minute walk, like, there were some remarkable findings for what are essentially a handful of patients.
Speaker Change: and the ability of the patients to go up in dose as high as they did. All of these things are very positive. So I think that sets us up for a lot of enthusiasm for Phase 3, but the specifics of the study we haven't refined yet.
Speaker Change: Your next question comes from the line of Leon Wang with Barclays. Please go ahead.
Leon Wang: Hi, thanks for taking my question. I guess one on CDER. So, you know, as you kick off this study, you mentioned earlier about using a 10 milligram and 40 milligram dose and the endpoint at 16 weeks. That's all pretty standard for HS studies, but just want to clarify, what are you guys thinking in terms of the primary endpoint? Should this be
Leon Wang: should we expect a high score, 75, as many of the new studies are kind of in the H.S. are kind of heading in that direction for the primary endpoint. And also, second question on error case. So you reiterated guidance
Speaker Change: And right now, I would say the consensus is around the high end of that. I have 357.
Speaker Change: Can you give any pushings and pulls on what might shift your number for 24 to be either in the top end of the guidance or maybe on the low end? Thanks.
Speaker Change: Sure, so on the CEDARS study, I want to make it really clear, this study is an exploratory study to get a proof of concept on the mechanism in this very difficult-to-treat disease setting.
Speaker Change: So we are not looking for a statistically significant result with the design of the Phase II study.
Speaker Change: Instead, what we're looking for is directional information that there is a benefit through this mechanism of action in this disease state.
Speaker Change: That is a very important point because, as we know, to get a statistically significant study would require many more patients. You'd have to take conservative assumptions about everything, and we really don't have the data to inform that design right now. What we're looking to do is get that directional information. It's important to also understand that we're...
Speaker Change: including this interim analysis. So once we're past about a hundred patients or half of the study have reached 16 weeks, we're going to take, we're going to have a committee take a look to see if there is real efficacy that's in evidence. And if there is, we won't learn anything more about that. We'll just continue to study. But if there isn't, we're going to shut it down so that we know we're not wasting precious resources.
Speaker Change: So, but with that, maybe, Martina, you can talk a little bit more about the specifics of the primary endpoint.
Martina Flammer: Yeah, so in that context, in the primary endpoint, you know, we're looking for a percentage change from baseline in the abscess and nodules count. That is also pretty standard as you talked. We will also look at the secondary endpoint as the first key secondary for the high score is 50, as well as for the high score 75. Both of those will be informing how we would design a phase 3 study.
Sara Bonstein: Your next question comes from the line of Stephen... Oh, I'm sorry. There was another... Can you just hold on, because there was another question there about error case and the range for the year. Sara, do you want to take that? Yeah, sure. Leon, thanks for the question. So, specifically on the range, we were proud to be able to reiterate our guidance of 340 to 360. From a range perspective, I'll just remind folks that we're in our seventh year after launch, and at the midpoint of that range, it's a 15% year-over-year growth, so still very significant growth, and we were continually able to put up double-digit growth across each of the regions. So, I couldn't be more pleased. Obviously, I can't, you know, share the, you know, where in that range, but we do now have the additional 120 reps.
Sara Bonstein: in the field. They have been deployed and are in the field as of October 1, and we feel confident to be able to reiterate the 340 to 360.
Sara Bonstein: Thank you. Thank you.
Speaker Change: My apologies, your next question comes from the line of Steve Worley with Stifel. Please go ahead.
Speaker Change: Yeah, good morning. Thanks for taking the questions.
Steve Worley: Just with respect to the Phase 2 PAH disclosure, curious if we should be thinking about, I guess, the nature of the Phase 2 PHILD disclosure as kind of proxy for
Steve Worley: for how that looks like from a communication perspective.
Steve Worley: And I'm just wondering if you can kind of talk a little bit about how you're thinking about the Hierarchical importance of some of the endpoints that are materializing out of that PAH trial I would imagine given the mechanism that PBR reduction is of
Steve Worley: is of interest, but it's also a small study, six-minute walk distance could be noisy, and I guess...
Steve Worley: there still doesn't appear to be a lot of consensus around PVR reduction being a correlate for clinical outcomes. So just would be interested in your thoughts around the importance of the endpoints you're going to see as well. Thanks.
Speaker Change: Yeah, I think, you know, one of the goals of this study is to understand that the mechanism is going to make a material difference in patients, and if we think about PAH, it is not common to see spontaneous, dramatic reductions in PVR, so to see that in evidence in this patient population, certainly we have on a blinded basis, is very encouraging, and it would lead us to believe
Speaker Change: that we would expect to see some significant impact.
Speaker Change: when we unblind the study.
Speaker Change: You're right, six-minute walk is always noisy, but if we think about the PHLD study and the directional evidence we saw there, different disease, but nonetheless, it was positive. And I think for those reasons, we're encouraged.
Speaker Change: I think when we see other markers like NT pro BNP that are correlated with improvement in patients and those have directionally gone the right way
Speaker Change: You know, all of this suggests a positive outcome here, but maybe, Martina, you can comment on how you're going to reflect on this.
Martina Flammer: Yeah, so the PBR reduction is the primary endpoint for a Phase 2 study. I think this is important to understand. The hemodynamic measures is something that you do in the Phase 2 study, not necessarily something you do in Phase 3. So you do want to understand that. As well as 6-minute walk, you will look also, we have PK that we will be looking at, as well as clinical worsening and quality of life in these patient populations.
Speaker Change: Your next question comes from the line of Andrea Newkirk with Goldman Sachs. Please go ahead.
Speaker Change: Hi all, this is Talani Alfred-Andrea. Thanks for taking our questions. Just one from us. Now that the expanded sales force is fully deployed, if you could just remind us what activities are underway with respect to both AERCASE and the refractory NTM setting and also BRENSA CADM ahead of the launch. Thank you.
Speaker Change: Sure, so the additional 120 folks bringing the U.S. sales force to 184 were deployed October 1st. They are out and detailing error case to the pulmonology community, but they are also doing disease state awareness about bronchiectasis.
Speaker Change: That sets us up to build those relationships and put us in a place.
Speaker Change: for a best practice launch. The goal with this kind of a situation, particularly when you're first in disease...
Speaker Change: and, in our case, that opportunity is very significant here. We draw on the experience that we had for our error case, which was also a first in disease launch. You want to make sure that the community understands the burden of the disease and the need for treatment, and that that dialogue is established. And then, if and when we're approved...
Speaker Change: in the appropriate way, we would then shift at that time to discussing about product. Obviously, we're not talking about that now.
Speaker Change: But they are going to also be calling on error case, and that makes for a very natural conversation with the physician's offices. Many of these offices treat both patients.
Speaker Change: and many of these patients have comorbidities with these two indications. So there's a logic here that is self-evident to the pulmonology community when our folks are in their offices.
Speaker Change: Your next question comes from the line of Greg Suvinovich with Mizzouho. Please go ahead.
Greg Suvinovich: Thanks for taking my questions. I've got two, please. Just, um, maybe three. The first one is just on your OPEX for the quarter. It was a bit higher than I think we were.
Greg Suvinovich: expecting and just as we think about the rest of the year and and perhaps next year just
Greg Suvinovich: how to think about trending. I know you've got trials ongoing, you just expanded the sales force, just if you give some general thoughts around that. And then second, just on the earlier stage pipeline or efforts, just want to know in the context of all you've got going.
Greg Suvinovich: that's more late stage, the prioritization or importance of those early stage efforts, and then if you could just remind me, I might have missed it, expectations on the readout of the ENCOR study for error case in the first line setting. Thanks.
Speaker Change: Sure, so I'll go take those in reverse order and leave the first one to Sara. On the readout for Encore, that's expected in the early part of 2026.
Speaker Change: As we described the enrollment there is going very well. We just need to get this last group of screened patients Randomized and then and then we're off and running for the length of the trial which as you'll recall is 13 months from start to finish when we think about the
Speaker Change: Earlier stage efforts, the fourth pillar, as we like to refer to it, there's a lot going on there, but there's a lot going on at the company generally, and I know that most of the investment focus is on the mid-to-late stage portfolio, so we haven't spent time on describing that in any detail, but please do not take that for a minute to mean that things are not progressing there. Some of the preclinical data I've seen recently in certain disease states we're targeting is among the most compelling I've ever seen in my career. I'm super excited about what these various teams are bringing forward, and again, remember the intention here is for this portion of the company to produce between one and two INDs a year. That will begin
Speaker Change: in the next 12 months. And as that unfolds and the clinical data from that comes forward, using several different approaches to really impactful medicines and very difficult to treat diseases, we will be very excited to share that with the investment community. And I think at that time, when it's clinical data, that's when the investment community is going to pay more attention to it. But there's a lot going on there, and that continues to be the answer to the question of what's next behind these first three programs, and also is a strong sign of what we believe is going to be a capability to produce novel medicines for the next decade or more at this company. Sara, do you want to take the first question? Sure. Happy to take the first question. Thanks, Greg, for the questions. We remain
Sara Bonstein: committed to investing in what we truly believe will drive, you know, the most shareholder value. And you saw the balance sheet augmentations that we did this quarter, and that was really to kind of take the financing off the table. Our strategy on spending has remained unchanged to that point. Specifically on the various lines, SG&A, as expected, we will see, you know, an increase in comp and bend as we brought on the new sales force and investing in the appropriate launch readiness activities to ensure that we will have a world-class launch in what we will believe will be a mega-blockbuster product, assuming regulatory approval. So you'll continue to see that investment. On the R&D side, you know, we'll continue to invest across the portfolio.
Sara Bonstein: and in this case, Brento on the life cycle management programs.
Sara Bonstein: and the additional indications, TPIP, getting ready into Phase 3, obviously the early stage research. So you will continue to see investment there, also medical affairs, that's an important, a very important area that does come through on the R&D line, and that's very important as we prepare for our launches and making sure the right education.
Sara Bonstein: From an expense perspective, they're in line with our internal projections, nothing sort of different there, and we continue to make thoughtful and meaningful investments.
Speaker Change: And your next question comes from the line of Andy Chen with Wolf Research. Please go ahead.
Speaker Change: Hey guys, it's Chuka on the phone here for Andy. Can you comment on the competitive landscape in PAH and PHIOD? Who do you see as strong competitors among the existing products and also upcoming pipeline products? Thank you.
Speaker Change: Thank you. Thank you.
Speaker Change: Sure, so if we talk about PAH and PHIL-D, PHIL-D, obviously the only approved therapy there is a prostanoid. If we think about what we stand to offer versus that, once a day, 24 hours coverage, including nighttime, at much higher doses than what can be achieved with what's available, it's a clear and compelling
Speaker Change: opportunity for physicians to improve patient treatment, assuming that the data and the regulatory path all validate that. We feel very good about the competitive profile in the PHLD setting.
Speaker Change: And I think our intention for TPIP is to be the cornerstone of therapy, the prostenoid of choice, regardless of where it's deployed. When we talk about PAH specifically, everyone is very familiar with cetatorcept and the important role it's going to play.
Speaker Change: in the treatment of these patients.
Speaker Change: We celebrate that. We think TPIP is a perfect complement to that drug, and the combination of those two, we think, could return patients
Speaker Change: to levels of normalcy in terms of PVR and other measures, potentially inviting some remodeling in the disease state. This would be, in my opinion, a breakthrough for these kinds of patients, and that's why we think our drug, as the prostanoid of choice, will change the treatment paradigm for patients with PAH and PHLD.
Speaker Change: and Sara Dunn. Thank you.
Speaker Change: That's the competitive landscape with respect to other programs. Obviously, we saw the data from two other companies that had DPP-1s. I think, as we review that data, a couple of takeaways for us. First of all, we know the mechanism works. This is further validation that DPP-1 is a novel mechanism that is going to have an important role to play in the treatment of a broad range of neutrophil-mediated diseases.
Speaker Change: We're also particularly excited about the relative strength of our data to these other programs. Obviously, there are many years behind us, but we welcome the competition. It raises awareness about the disease state, and it speaks to the importance that everybody sees for this mechanism in the future.
Speaker Change: Got it, got it. Thank you. Appreciate it.
Speaker Change: and Sara Dunn.
Speaker Change: and Sara Dunn. Thank you. Thank you.
Speaker Change: And there are no further questions at this time. Thank you, everyone, for joining. This concludes today's call. You may now disconnect.