Hello, and welcome to the Insmed Third Quarter 2021 Financial Results. My name is Katie and I will be coordinating your call today. I will now hand over to your host Eleanor Barisser to begin. Please go ahead.

Thank you, Katie. Good morning, and welcome to today's conference call to discuss our third quarter 2021 financial results and provide a business update. 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 uncertainties that may cause actual results to differ materially from the results discussed in the forward-looking statements. Please refer to our filings with the Securities and Exchange Commission, which are available through the SEC's website at www.sec.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 not sufficient for prescribing decisions. Joining me on today's call are members of the Insmed Executive management team, including Will Lewis, Chairman and Chief Executive Officer; Dr. Martina Flammer, Chief Medical Officer; Roger Adsett, Chief Operating Officer; and Sara Bonstein, Chief Financial Officer. Let me now turn the call over to Will Lewis for prepared remarks. Upon completion of those remarks, we will open the call up for your questions.

Thank you, Eleanor. Good morning everyone. We're pleased to share our third quarter results with you today. I want to start my comments by saying that Insmed has seen remarkable growth and accomplishment during the time of the pandemic. This growth has created a new framework for Insmed. We are currently advancing four strategic pillars. The first is ARIKAYCE, our marketed product for the treatment of refractory NTM, which is now approved in three major territories around the world: The U.S., Europe, and Japan. Notably, the Japan launch kicked off in July. We're very pleased with the progress to date and we believe there is tremendous opportunity to help patients in this region. We think about the overlap of NTM and bronchiectasis call points. Our commercial operations in the U.S., Europe and Japan are preparing us well in advance for the potential launch of brensocatib, should that product candidate achieve regulatory approval. ARIKAYCE is also being explored in a frontline clinical trial program in patients with NTM lung disease, which will allow us to take advantage of our commercial footprint. The second pillar is brensocatib, or DPP1 inhibitor currently in the Phase 3 ASPEN trial for the treatment of bronchiectasis. In addition to ASPEN, we continue to work towards advancing brensocatib in a Phase 2 trial in cystic fibrosis. Beyond these two initial indications, our team has identified additional opportunities where brensocatib may have utility by way of the DPP1 inhibition pathway. And we look forward to having more to say about the progress we're making in these potential additional indications early next year. Our third pillar is TPIP, a treprostinil prodrug, which we are advancing through clinical development for the potential treatment of pulmonary arterial hypertension, or PAH, and pulmonary hypertension associated with interstitial lung disease, or PH ILD. Finally, our efforts in translational medicine. This pillar is focused on identifying the next set of critical candidates to enter our pipeline with a sharp focus on disruptive technologies in the rare disease landscape that could yield a high degree of impact for underserved patients. We see these investments now as a key to developing a future pipeline that we hope will quickly follow behind the anticipated success of the first three pillars. We believe that within each of these pillars is enormous potential that could catalyze the next phase of growth for Insmed. We expect to share more on each of these pillars early next year. Finally, let me briefly address the ongoing pandemic. Throughout the second quarter, we saw promising signs of return to growth. Early in the third quarter, these signs of growth were muted by the impact of the Delta variant around the world. We continue to see the temporary negative impact of COVID surges when they occur, but believe we have the means to return to growth once they have abated, even in the endemic phase of this virus. One consequence of this persistence of the virus is that we have made the decision to require all U.S. employees of Insmed to get vaccinated starting in mid-December. No doubt this will result in some employees choosing to leave their employment with Insmed. While this is regrettable, we believe this requirement is the best way to protect physicians, patients, caregivers, and employees and to play our part to help bring this pandemic under control. We are at an exciting and pivotal moment in Insmed's growth trajectory. The next 12 months will be an extremely important execution period as Insmed continues to perform across our commercial operations, clinical trial work, and research efforts. I believe we have the patient focus, collective drive, infrastructure, and strong capital position to help us reach our goals. With that, I'll turn the call over to Sara to walk through our financial results.

Thank you, Will. Good morning everyone. Earlier today, we issued our detailed third quarter financial results in a press release. Overall, our financial results were aligned with our internal expectations. Let me highlight just a few of those results for you now. As reported this morning, we ended the third quarter with $847 million in cash and cash equivalents. We anticipate this cash position will support data readouts from the ARIKAYCE frontline program, the Phase 3 trial of brensocatib, and bronchiectasis as well as Phase 2 results for TPIP. For the third quarter 2021, total net revenue for ARIKAYCE was $46.8 million, demonstrating resilience and steady performance of the franchise in the face of the Delta variant. Our gross to net in the U.S. for the third quarter of 2021 was approximately 12%. As previously disclosed, we anticipate our gross to net for our U.S. business to be in the mid-teens for the full year 2021. Cost of product revenues for the third quarter was $10.2 million, or 22% of revenues, which was in line with our cost of product revenues in the third quarter of 2020. Let me now turn to our GAAP operating expenses. For the third quarter, 2021, research and development expenses were $70.3 million and SG&A expenses were $60.3 million. As previously disclosed, our research and development expenses are expected to grow as we continue to support our development pipeline and invest in our research capabilities. In closing, Insmed ended the third quarter with a strong capital position, underscored by an ongoing commitment to a responsible use of cash. With that, I’ll now turn the call over to Martina for an update on our pipeline.

Thank you, Sara and good morning everyone. Insmed made important progress across our clinical development programs in the third quarter. In addition to our ongoing clinical research, our medical affairs efforts continued to serve its key purpose at Insmed. I’d like to highlight a few examples of the range of data Insmed presented at medical congresses during the third quarter. At IDWeek 2021, we presented data demonstrating that in Japan, hospitalization rates were higher for COPD patients with NTM lung disease compared to COPD patients who do not have NTM, underscoring the importance of proper management for patients who present with this comorbidity. These results build on similar data we’ve previously presented regarding increased hospitalizations and mortality among COPD patients who also had NTM in the U.S. highlighting the global need to treat NTM patients with this comorbid condition. At the CHEST Annual Meeting, we shared data from the COPD foundation, U.S. bronchiectasis and NTM research registry, demonstrating that approximately one third of patients treated for NTM identified as refractory have differences in clinical characteristics, such as lower body mass index and reduced lung function compared to patients who are not refractory. These findings suggest that understanding the differences in clinical characteristics among patients may help identify and treat refractory NTM patients at earlier time points. Finally, we shared pharmacokinetics and pharmacodynamics data from our Phase 2 WILLOW study of brensocatib at the European Respiratory Society International Congress. These results demonstrated that patients treated with brensocatib were more likely to have sputum neutrophil elastase levels below the limit of quantification at the end of treatment compared to patients treated with a placebo. In addition, higher systemic exposure to brensocatib was associated with achieving sputum neutrophil elastase levels below the limit of quantification. In our ASPEN trials, we hope to establish a correlation between the reduction in neutrophil elastase level and the occurrence of pulmonary exacerbation. Let’s now turn to our clinical development program. The Phase 3 ASPEN trial of brensocatib in patients with bronchiectasis and our ARISE and ENCORE study for ARIKAYCE as a frontline treatment for patients with MAC lung disease are tracking in line with our expectations. Let me expand on our progress with brensocatib. We’re pleased to convey that the European Medicines Agency Pediatric Committee has approved the brensocatib pediatric investigational plan for the treatment of patients with non-cystic fibrosis bronchiectasis, which means that we now have alignment for our pediatric study plan across the FDA, EMA, and PMDA. Importantly, our ASPEN trial will now include 40 adolescent patients between 12 to less than 18 years of age, which will fulfill the pediatric study requirements to support marketing applications in this patient population in the U.S., Europe, and Japan. We look forward to providing updates on our progress. Our brensocatib clinical development work also continues for the Phase 2 pharmacokinetics and pharmacodynamics study in cystic fibrosis, and we are on track to release results next year. In parallel, we have identified opportunities that we believe will support bronchiectasis expansion to additional neutrophil-mediated indications where there is a clear and strong scientific rationale to support the mechanism of action. In line with our mission, we believe we can deliver the greatest value by focusing on serious diseases that affect a small patient population with a clear gap in the current treatment landscape. We anticipate updating you on our work in additional indications early next year. Let’s now turn to TPIP, which we believe may be able to harness the full potential of the prostanoid pathway. Starting with our Phase 2a study in patients with PAH, recall that this study is designed to measure the impact of single doses of TPIP on pulmonary vascular resistance or PVR over 24 hours. We hope to see PVR reduction that is extended well beyond what is currently available with treprostinil. As a reminder, we’re using a low dose for this study. For our Phase 2b study, we would expect the duration of PVR reduction to be even longer given that we’re using a titration approach, which we anticipate will translate to clinical benefit. COVID-19 has presented enrollment challenges for the Phase 2a trial, as we are seeking patients to volunteer in the ICU setting at a time when Delta variant surges. Nonetheless, we have multiple study sites open and have identified several patients, and we remain hopeful to have data from a small number of patients from this study by the end of the year. In parallel, we’re working to initiate a Phase 2b study, which will measure the impact of TPIP on PVR and six-minute walk distance over a 16-week period in patients with PAH. The Phase 2b study will utilize an upper titration approach to each patient’s maximum tolerated dose. Consistent with our expectations, we remain on track to initiate by the end of the year. We also anticipate initiating early next year a Phase 2 study evaluating TPIP for the treatment of pulmonary hypertension associated with interstitial lung disease or PH-ILD. Let me close out my remarks by addressing the importance of our fourth pillar, translational medicine. We have identified promising clinical candidates from our internal research efforts as well as business development activities to extend our pipeline of clinical programs aimed at treating serious and rare diseases as our late-stage product candidates advance towards potential commercialization. Our approach is to identify at an early stage the next set of candidates to enter our pipeline. We adhere to important criteria in this search, starting with the patient experience, which is of utmost importance at Insmed, with a line of sight to a potential high degree of impact on the course of the disease. Of note, our translational medicine capabilities are not limited to pulmonary therapeutic areas. We look forward to sharing updates from our translational medicine efforts early next year. With that, let me turn the call over to Roger, to discuss some key operational updates.

Thank you, Martina, and good morning everyone. From an operational perspective, Insmed made important progress during the third quarter. ARIKAYCE now has a commercial presence in three major territories: the U.S., Europe, and Japan. While the COVID-19 pandemic continues to shift, and we see regional differences among and within each of these territories, we believe there is untapped opportunity to be found in each of these markets over the long term. Let me begin with our U.S. business, which has shown steady performance in the dynamic COVID environment. While we did see some effects from Delta surges throughout the third quarter, primarily in parts of the country that had the highest NTM patient concentrations, we believe we have passed the peak of the Delta variant and anticipate growth will return once COVID stabilizes. One of these is difficult to predict with any precision. When COVID will subside, but we believe we have the right tools to drive growth when it does, as we continue to see opportunities around the country in regions where there is less of a COVID impact. We believe the keys to growth include NTM patients feeling comfortable returning to in-person doctor visits, and the ability of our targeted pulmonologists and infectious disease specialists to turn their attention away from managing the COVID pandemic to opening up their practices for in-person visits to facilitate diagnoses of refractory NTM lung disease. Let’s now turn to our international commercial efforts, which we expect will continue to add to the global ARIKAYCE revenue profile. Beginning with Europe where we continue to pursue ARIKAYCE reimbursement on a country-by-country basis. Recall that we previously achieved list price parity and reimbursement with the U.S. in Germany and the Netherlands. In the UK, we have previously achieved list price parity with the U.S. and we are pleased to report that in September, we achieved reimbursement in Wales, which is now the first UK nation to reimburse ARIKAYCE. This is a very encouraging milestone as it followed a rigorous assessment of ARIKAYCE's place and value in this market. As a reminder, in addition to our reimbursed markets, the ATU program in France has been extended. We call that Europe follows a central approval process followed by country-level reimbursement and subsequent launch. We anticipate the reimbursement environment will become more favorable as the impact of COVID subsides. As a reminder, we anticipate Europe will represent the smallest revenue contribution of the three regions where ARIKAYCE is commercially available. Near term, we are turning our efforts to securing reimbursement in Ireland, additional countries in the UK, Italy, Belgium, and France. We look forward to keeping you updated on our progress. I’ll now turn to our efforts in Japan. We launched in late July. So it’s early in the launch, but we are extremely excited about our initial progress and the market opportunity in Japan, which according to available literature, represents the largest diagnosed refractory NTM population among the markets that Insmed is pursuing. Let me now expand on a few early positive signs we are seeing in Japan. First, initial uptake of new patient starts has been strong, even in the face of COVID through the first couple of months of launch; the number of patients initiated on ARIKAYCE is lower in Japan than what we saw in the U.S. at the same time point, but the ramp is similar, which is an encouraging early trend. We have also received positive anecdotal feedback from physicians with respect to the tolerability and safety profile of ARIKAYCE with their patients. It’s important to clarify a few nuances of the Japanese market. First, we are currently seeing the majority of patients in the hospital setting during the first week of therapy for the purpose of starting ARIKAYCE treatment, which is not unusual for this market and something we’ve also seen in the PDH market in Japan. We anticipate that the hospital setting will yield beneficial patient management and retention results by allowing doctors to give patients the best attention and care, fully understand the side effect profile, and educate patients on what to expect from their therapy. Patients will also be thoroughly trained on how to successfully administer ARIKAYCE using the nebulizer. An important note is that as a consequence of initiating therapy in a hospital, the initial revenue for a Japanese patient starting on ARIKAYCE is for a seven-day pack rather than a 28-day pack, which a patient would receive when initiating therapy in the U.S. or Europe. For the first year after approval in Japan, doctors are restricted to prescribing no more than two weeks of therapy at the time, which is standard for all new drugs in Japan. We are extremely proud of the ongoing work of our therapeutic specialists in this market. We are tracking well ahead of our internal expectations in the number of Tier-1 targeted hospitals and total hospitals that have adopted the Lamira device. While less than one-third of our therapeutic specialist visits were in-person during the third quarter, Japan lifted the state of emergency at the beginning of October. Currently, about 70% of the Japanese population is fully vaccinated, which we think bodes well for COVID becoming endemic, opening up more beds in the hospital for initiation of ARIKAYCE treatment, NTM patients visiting their doctors, and our sales team having more in-person access to physicians. We are very excited about the progress in this important market. Early indications are that we have a very strong launch and expect Japanese revenues to build over time. I look forward to updating you on future developments as we work to deliver ARIKAYCE to patients. Let me close out my remarks by acknowledging the strength of our technical operations at Insmed. We remain on solid footing regarding the production and inventory of our commercial product. With respect to our pipeline, we continue to manufacture adequate amounts of clinical supply product to support our ongoing trials. In summary, Insmed has made important advancements in the third quarter. With the first quarter of the Japanese launch under our belts, ARIKAYCE now launching in three strategic markets on three continents, we will continue to benefit from a strong commercial position. Looking ahead, our existing commercial operations are laying the groundwork for potential brensocatib commercialization, given the overlap of NTM and bronchiectasis call points. I'm extremely proud of the team's hard work that helped us achieve these milestones and look forward to keeping you updated on our future progress. And I'd now like to turn the call back to Will.

Thank you, Roger. In closing, I believe Insmed is approaching the next wave of transformation as we work to become a leading biotechnology company. The entire Insmed team is unified around a collective goal to deliver life-changing medicines for traditionally underserved patients. I thank the entire Insmed team for their continued dedication, passion, focus, and commitment to this unwavering goal. I would also like to thank the patients and caregivers who participate in our studies. On behalf of the Insmed team, we extend our gratitude to you for driving us in everything we do. With that, I'd like to open the call to questions. Operator, can we take the first question please?

We take our first question from Jennifer Kim from Cantor Fitzgerald. Jennifer, please go ahead.

Hi, thanks guys. Congrats on the quarter and thanks so much for taking the questions. I have a few here. Maybe to start with just commercial color around ARIKAYCE, could you elaborate more on the positive trends in Japan? I think you mentioned that the ramp is somewhat similar to the U.S. I'm wondering if you can give some updated color around the timing of that, when we should see that ramp up bar. And then second related to commercial performance, in the U.S. you said that the peak of the Delta impact has passed. So to what extent do you think Delta muted U.S. growth in this quarter? I'm just trying to get an idea of what we could see in the future. And then going into your pipeline, you mentioned your next clinical candidate will be in the pulmonary therapeutic areas. I apologize if I missed this, but was this an internal or external candidates? And then also is the idea here to be somewhat complementary to, I guess, TPIP, or how are you thinking about how that fits into the pipeline? Thanks much.

Sure. Thank you for the question, Jennifer. And I'll ask Roger to comment on Japan and U.S.

Great. Thanks, Will. So from a Japanese perspective, you did hear correctly. So we're really encouraged by the early trends that we're seeing in Japan. And just to reiterate, we launched at the end of July, so it's still early days. But what we're seeing is initiation of ARIKAYCE patients in the hospital. We think that that's going to be very beneficial as far as training the patients on the device, on the tolerability and managing the side effects, which we know can be significant in the first week and having had the best medical care to help coach the patient through that. I think it's going to be beneficial for the long-term. And while the uptake has been incredibly strong, the number of patients that we have in Japan versus the U.S. is a little lower, but the ramp is following the same trajectory as we've seen or was highly correlated with the trajectory we saw in the U.S. We'll continue to monitor it because it is still early, but we think it's very encouraging sign. With regards to the U.S. and the impact that we saw COVID have in the third quarter, as we had mentioned, I think in the second quarter, we had really seen some encouraging signs. We had seen our prescriptions ramp up month over month, and we were really pleased heading into the summer. And then the Delta variant came out of nowhere and really impacted primarily in the States where we had high NTM concentration. So think about the Gulf States warmth weather, close to the water. And so, that really impacted the ability for physicians to treat NTM patients or NTM patients to seek care. On the other hand, we did see some strong performance in areas where we didn't have such an impact from COVID, where we had potentially higher vaccination rates, for example, and we saw some growth in those regions. So with this we still see that regional variability. We really believe that once we get on the other side of COVID and nobody can predict when another variant is going to hit or when we might see that spike, but at some point we believe we'll hit that endemic phase. And we think that we're really poised for growth based on some of the refinements we've been making to our messaging, our targeting and patients returning to seek care and physicians turning their attention away from COVID. And to some of these more chronic diseases, we know NTM is progressive and as patients return to seeking care for a lot of these chronic diseases, I think we're well positioned to return to growth in the U.S.

I will add to that. If you wanted a snapshot of how bad Delta was, just take a look at the CDC infection rate over the last year or two. It's quite striking, the rapidity of the surge caused by Delta. And if you then go further to understand that, that was concentrated in areas with heavy NTM patient populations. I hope I can say that that's about as bad as it can get, but it was certainly something that came on abruptly and severely, and I'm glad we're past the peak. And I just have to give a shout out to our therapeutic specialists and our facing components of our commercial team, everything from the folks that are helping patients and how to use the medicine effectively and the education efforts that are helping these physicians to deal with these patient populations at a time when they are absolutely called away to deal with the ICU over being overwhelmed by COVID patients. It is really tough on the frontlines. We all hear about it, but we heard a startling statistic the other day that there was a number of these cutting-edge hospitals that are really short-staffed in the midst of all this. So not only is the physician distracted as COVID causing them to work and focus in the ICU, but their ability to lean on their own staff is limited. And so, I think it's really been an extraordinary accomplishment to have this steady performance that we've seen, particularly during this difficult Delta variant. Your third question was about our next clinical candidate, and I want to be clear, I think you said that it was pulmonary. It's actually not. And that was one of the points of distinction we want to make for our translational medicine efforts. Our translational medicine effort is really made up of a collection of personnel and technologies that are really quite exciting. They're cutting edge. I think we're going to be really excited to share more detail about that early next year. And one of the reasons we're socializing it with you now is that you can be mindful of those products, not just coming forward in the form of one or two, but this really represents an engine. This is the future of Insmed. This is the next generation of programs that will follow behind the first three pillars, where we have a tremendous amount of enthusiasm. And I think the commercial potential that flows from being so impactful on patients is self-evident. But we also note that companies that have been wildly successful with their early products sometimes get air pockets where they don't have the answer to the question of what's next. We now have that answer too. And so, we're extremely excited about it, and we'll have more to say about that in detail early next year.

Great. That's super helpful. And thanks for the clarification around your pipeline. Congrats everyone.

We take our next question from Anita Dushyanth from Berenberg Capital Markets. Anita, please go ahead.

Hi, good morning. I just have a couple of questions around the study with TPIP, the 24 hours steady with a 30-day follow-up. Just wanted to know how you're coming up with that enrollment for that considering this small patient population and also if you could talk about the opportunity and timeline for the brensocatib in the pediatric population.

I will ask Martina to address that.

Yes. So from our Phase 2a, this is our study where we're monitoring patients over a 24 hour period. We call this a single dose, low dose study, and with several sites open and we have identified patients already for this study. Also for context if you have a right heart task that is usually a procedure that would take an hour and a half, maybe two hours. We are doing this over a 24 hour period. And that's why we talked to you about the ICU necessity for such a study and that is where it is right now challenging. Nevertheless, we do believe that we will have the data from a handful of patients by the end of this year. So I think that your second question was about the pediatric program for brensocatib. Pediatric programs are of high interest to regulatory authorities and that is true across the globe. And what is really important is that we haven't achieved aligned program. In many cases, the different regulators require different study designs sometimes causing you to have actually two to three different studies. So the importance for us to be able to have 40 patients that are included in ASPEN is first of all important from an effective operationalization, but it also gives us the opportunity to have this data available early right in many cases you have pediatric reports that are coming out quite later than your initial pivotal program.

So thank you, Martina. And just one more question on the ARIKAYCE adoption now that you're able to sort of see a pattern in Japan and also with several countries in Europe coming on board. When are you likely to resume giving guidance?

Sure, Anita. Thanks for the question. So we rescinded guidance in the beginning of the pandemic as you saw many companies do. We understand and appreciate that the investment community would look for us to provide guidance. At this point, we will look to provide a level of forward-looking guidance at some point in 2022.

Our next question comes from Joseph Schwartz from SVB Leerink. Please go ahead.

Hi, I'm Joori dialing in for Joe. Thank you for taking our questions. First question, I guess, are you satisfied that you pulled out all the stops in terms of employing creative initiatives to diagnose and onboard patients remotely in a world where COVID seems like it's going to be for the foreseeable future.

So, I will ask Roger to address that.

Yes, thanks. We continue to look for innovative ways to help patients be diagnosed and treated in a remote setting. We see the ebbs and flows of patients taking telemedicine. One of the unique challenges is to be able to actually collect a sputum remotely from a patient and have them then be diagnosed with refractory MAC based on a positive culture. We are implementing several initiatives, including sponsoring a program to facilitate remote capturing of sputum and sending it off to central labs for testing to facilitate that diagnosis. And we can deploy that regionally as we see these spikes go up and down for COVID. So I think, we'll continue to innovate. We'll continue to look for new ways to facilitate that and encourage patients to continue to seek care for their NTM and to talk to their doctors. I think generally we see across the universe of chronic diseases a lot of patients delaying care for even things such as cancers and hypertension, et cetera. And so, it's important that we work with our patient groups and with our patients to encourage them to continue to seek care and we look for innovative ways to continue to do that.

You know the only thing I would add to that is I want you to understand, and this is a really important point. The patients are there. The physicians are there. We know that there are pools that we have not yet reached. And again, a shot out to the creativity that's been brought to bear by the commercial team out of necessity in this very, very difficult environment. The most difficult period of which is this recent Delta variant that we’ve seen play out. And as you heard in Roger’s earlier comments, one of the most exciting things that I’ve seen in this last quarter is that the impact of some of these creative approaches has been evident. In those areas where Delta was not as prevalent. We did see response to these creative approaches. And I think that deserves a lot of recognition and credit for our commercial team. And it bodes well for the future when the collective United States is beyond this Delta variant. Then I think all those efforts and creativity can be brought to bear and the evidence from that will be clear. And that’s why we have conviction today that even during the endemic phase going forward, we will see growth.

Okay, great. Thank you so much. And then I guess, what are your thoughts on the size of the European and Japanese markets? So for example, do you have a better estimate on the number of addressable patients in Germany and Netherlands now that you're in those countries, are there reasons to believe that there could be more addressable patients than originally anticipated?

Roger, do you want to take this?

Yes, sure. As we’ve previously commented, we see Europe as probably the smallest opportunity from a diagnosed refractory MAC patient population. Having said that, we do believe that there’s probably a significant amount of undiagnosed MAC patients, and that’s one of the efforts that we’ll be pursuing as we get able to launch across Europe. We do think that as patients will be returning to their physician’s offices in Europe as the same dynamic plays out there as it has in the U.S. with impacts of patients postponing care and not being able to enter the clinics to interact with their physicians. But over time we do think that we’ll be able to increase the diagnosis in Europe. And we believe that there’s probably a higher number of refractory MAC patients in Europe than what the medical literature indicates. In Japan, we think that it is the largest diagnosed refractory MAC population larger than the U.S. there’s a few reasons for that. We think that the medical screening, the annual physicals that Japanese patients undergo includes a lung scan. And so they are able to pick this up – pick up NTM a little earlier than they do in the U.S. And we think that the early signs of the launch and the interest we’ve had from KOLs, the interest we’ve had from patients, in ARIKAYCE and the launch validates the assumption that we have in the medical literature that we’ve seen that this is a substantial market. And the uptake we’ve seen so far is very promising and we look forward to updating further on that as we go.

Okay, great. And then if I could just squeeze one more in. How close are you to wrapping up ARISE given that you started it in late 2020 and the same seven months study? Just wondering if you have any line of sight?

Yes, so we haven’t given specific guidance on enrollment timelines for any of our trials. But just out of respect for the unknown surrounding COVID. And I have to say the Delta variant I think probably showed us that that was a wise instinct to follow. We will provide some direction once we get to a place where we see steady performance that we think allows us to interpolate, and do so reliably for the benefit our shareholders. We would expect that that will be sometime in the early part of next year. But at this time we don’t have any further guidance other than to say that these trials are all tracking our internal expectations. And so we feel good about where we are.

We take our next question from Jeff Hung from Morgan Stanley. Please go ahead, Jeff.

Thanks for taking the questions. For ARIKAYCE, you indicated we're past the peak of Delta variant. Can you talk about any changes you’re seeing or hearing on physician offices reopening, patients returning to in-office visits and then customer engagement by your therapeutic specialists in person in the field, and how do these dynamics impact your confidence in growth for the remainder of the year? And then have a follow-up?

Roger, do you want to take that one?

Yes, sure. As we think about the Delta variant, and as we’re tracking the CDC data, we certainly see the cases are going down. And what we hear anecdotally from our field force is that patients are – or physicians are able to turn their attention back into their private practices, take patient visits. And so we do see more in-person interactions from our salesforce with physicians. We think that that’s really important as we’re able to get to a return to growth. And in addition to what we’ve said previously, where we had not had the impact of COVID, we actually saw growth in those regions where the impact was less. And so, as we see those returns, those dynamic returns, particularly in those high NTM concentration markets, we think that bodes well for our return to growth and getting those patients back into the office and treated. As Will mentioned, these patients they’re out there. We know that they’re – that they’re out there. And it’s a matter of them returning to the office, the physician having time and capacity to treat them and we believe that that bodes well for ARIKAYCE in the long-term.

Great. And then in Japan, how has the two week limitation of prescriptions and patients returning to position to get refills? How has that been relative to your prelaunch expectations? And are the proportions of patients getting refills above, below, or in line with your expectations? Thanks.

Roger, go ahead.

Thank you. So, we don’t have specific refill information on Japan at this point. But I will say that this is the common rule across Japan is that we were restricted to the two week limitation within the first year. So Japanese patients and physicians are very attuned and accustomed to this. As we had mentioned that the majority of patients are starting in a hospital setting. So they go in for between four and seven days in the hospital to initiate therapy. And so what they start off with is a seven-day pack rather than two seven-day packs of 14 days. Once they discharge from the hospital they will then receive from the pharmacy, another pack and the equipment to take home with them. We haven’t seen based on the results we’re seeing, it appears that these patients are continuing therapy. The anecdotal response from reports from physicians suggest that patients are actually tolerating the product really well. And we think that bodes really well for continuation of therapy longer term as the treatment progresses. And we don’t anticipate that the two week limitation is going to be an issue for these patients, for the physicians. And just a reminder, this is the first year since approval so approximately, so we were approved in June. And so we’ll see that limitation lifted at that point, assuming there are no side effects and to date, we haven’t seen anything there to be of concern.

Our next question comes from Stephen Willey from Stifel. Stephen, please go ahead.

Yes, good morning. Thanks for taking the questions. So maybe just to follow-up on that last point, I know in – I think it was in the Phase 3 ARIKAYCE relapse refractory trial, you guys characterized the early discontinuation of patients within the first 30 days, I guess to be somewhere around 30%. And based upon your comments regarding Japan, I’m just wondering if you can kind of frame what that early attrition rate might look like relative to that U.S. trial statistic or the Phase 3 trials statistics. And then also just wondering, just given the reduced number of in-patient, or I guess in-office visits in the U.S. that have happened here over the course of the last 12 to 18 months, have you seen that number trend up just given that there’s I guess less patient handholding during the initiation of therapy?

Roger, do you want to take those?

Yes, sure. We actually haven’t broken down their discontinuation rates from Japan at this point. It’s still pretty early, as I said, we’ve got about two months of launch under our belt. So, we don’t have adequate sample breaking down the discontinuation other than the anecdotal reports, which are that the physicians or our team in Japan are happy with how the hospitalization is designed to help patients get through that first week and to manage the side effects and ensure they continue on therapy is – has been well received. So, we can update going forward, what we see there. But at this point, it’s too early to share any specific statistics on discontinuation rate. As you mentioned, in the clinical trial, we saw about a 30% discontinuation rate. And we’ll see what kind of impact that the specific care that these patients are receiving in the hospital setting will have on their continuation rates. Regarding the patient visits. So the data that we have and collect on patient visits is a lagging indicator. So it takes a while for that to get reported. So we don’t have good information at this point as to what patient visits for our patients to the pulmonologists and IDs are looking like. So, I can’t share any sort of forward-looking data there. We did see an impact on clearly during COVID, we did see a patient visits decline and we’re anticipating that as the COVID pandemic becomes more endemic and patients are able to return to offices and physicians are able to open their offices again then we’ll see those trend up, but we don’t have an immediate data source that gives us that real-time sort of information.

So you don’t have any information that suggests a correlation between inpatient visits and then what that early discontinuation statistic looks like?

I get it. Okay. So, I think what’s more important than the physician visits is actually our patient ARIKAYCE trainers that visit the patients to introduce them to the device, to train them on the device on how to successfully initiate therapy with ARIKAYCE and what to expect from therapy. And so we do see that as the in-person training very, so we do remote, and we do in-person, and the patient is absolutely entitled to choose in which manner they want to receive that training. I think we see slightly better results when we have the in-person training. But the virtual training is also effective in introducing the patient. We just see as we're able to get in-person and spend a significant amount of time with patients in their homes and talking and introducing the therapy that has a beneficial impact on patients tolerating and continuing on therapy.

And then just lastly, I think Martina had mentioned that she was hopeful regarding the availability of Phase 2a TPIP data before the end of the year. Is there a minimal threshold of patient numbers that we should be thinking about in terms of you need to enroll in order for us to get that data before year end?

So, I want to just highlight that it’s not particularly critical to me that it be done by date X versus Y. Our guidance has been that we would hope to produce data by the end of the year. We absolutely intend to follow through on that but the one caveat there is the Delta variant, the ICU bed occupancy. What we’re asking somebody to do is to go into an ICU room that is filled with COVID patients and stay there for 24 hours with a right-heart cath, and as Martina said, that’s a procedure that normally lasts an hour and a half. So it’s an enormous ask. And these volunteers are hard to come by. Having said that, the centers and the KOLs that are around this are very excited about this medicine potential and are looking very actively to try to identify such patients. And they have, we are aware of several patients that are available. They need to meet the screening criteria. They need to find comfort in coming in the ICU. And if that happens, then we should be able to produce data very quickly, because this is after all 24 hours of exposure after which we'll have the data effectively immediately. So I think it's not logistically challenging to produce the data once the patients are past the volunteer point and have qualified. And for that reason, we have a conviction that we'll be able to produce data. I think the only other thing I would introduce here is we want to make sure that the data is consistent and that we don't see any variability that would cause us to want to see more data to further validate. Let's be clear that the preclinical animal models around TPIP were very definitive. And this probe's actual mode is very well-known and there's excellent human experience with it. So there aren't a lot of variables here in my mind that would introduce a delay that would be meaningful, and we think we can get the data. We think it's going to be really important, and we're looking forward to sharing it with you as soon as we get it in the proper form.

Great. That's helpful. Thanks for taking the questions.

We have a question from Liisa Bayko from Evercore ISI. Liisa, please go ahead.

Hi, a couple of questions from me. First of all, I missed the gross to net for the quarter did you say exactly, what that was?

Yes, it was 12% Liisa.

Thank you. Okay. Any update on COVID, meaning your effort there not ARIKAYCE influence.

So the information from the trial that Professor Chalmers ran was obviously the top line was released last August, July. So that's been out there hasn't been anything further that has come since then. I'm just looking to Martina to see if there's any additional information. I don't think so.

No.

Okay. TPIP, can you just maybe further explain like what are you looking for in this data? I know you're only going to have a couple of patients, are you going to continue to enroll a full amount? And what really is the actual underlying purpose and isn't gating for kind of the next step? What are you going to glean from this? That will be informative.

Yes. So first of all, it's not gating in any way for the other Phase 2 programs. The purpose of this trial is to identify what happens to pulmonary vascular resistance when patients are given a start dose of our TPIP. What do we think is going to happen here? Well, if we look at treprostinil and Tyvaso and what they do previous studies that demonstrated about an hour and a half of PVR reduction in those studies. That the duration of that PVR reduction extended a little bit as doses go up. And so one of the important distinctions here is in our TPIP study, we're going to start at a fairly low dose, somewhere around 100 micrograms. Just to put that into context Tyvaso after titration in its label guides to a maximum dose of 54 micrograms. So even though we're starting at what we consider to be a low dose, it's actually higher than the maximum dose you can reach through titration in Tyvaso label. What do we think that is going to show? We think it's going to show a PVR reduction that we hope will last significantly longer than the hour and a half that you see with Tyvaso. How much longer we don't know that's really what the study is going to reveal, but you can just conceptually follow that if we are able to extend the duration of pulmonary vascular resistance reduction for multiple hours beyond the hour and a half, then you're effectively creating a steady state of Tyvaso dilation and all of the downstream benefits that flow from that would be realized and in the animal models that resulted in disease modification, and that's the histologic change that was so profound. And it's why we say, we think with this formulation, we'll be able to unlock the full potential of prostanoid therapy.

Okay. And is there a certain duration that you want to see, like kind of that Nadir to really inform that you have, once a day or twice a day or whatever, I know you're targeting once a day product is that?

Yes. So remember that you see critical benefit demonstrated with Tyvaso with four times to seven times a day administration with that short one and a half hour PVR reduction. So we don't think we need to cover 24 hours uninterrupted, but if we were to get anything approaching that, we can assume that we will be able to show at least the clinical benefit that was seen with Tyvaso and our imagination is that it could be more, and that's what the animal models suggested. In fact, they demonstrated because we compared our drug to Tyvaso and to oral and other formulations of treprostinil and saw that we were in fact superior. So I think that's what's got us very excited about the potential here. And the only other point I would make is that in our Phase 1 study, we were able to go with single dose administration without titration north of 600 micrograms. So again, referring to Tyvaso at 54, and I understand it's those four times to seven times a day. So it's a little bit of apples to oranges in terms of those levels, but it's clear we can get to much more significant dosing levels, and we believe that will be extended through titration so that we will be dosing more, that should extend the duration of the PVR reduction. And if we're able to show just the baseline extension at a low dose of say 100 micrograms, one can imagine what that might possibly achieve through a dose titration. And that I think is what this study is really going to unlock. It'd be an early look at the potential for all of those accomplishments, PVR reduction, duration of PVR reduction and the imputed potential to go even further with those titration.

Okay, great. Thank you. And then just, can you give us a sense of like your $47 million of revenue, how much of that was X-U.S.?

Thanks Liisa for the question. We are currently not breaking out our revenue by region. I anticipate that next year we would break it out based on sort of materiality thresholds, but today we only provide a goal – remember.

Okay. And then for Japan, I was looking at the numbers. It looks like you kind of reported in the first quarter launch, over 500 patients. And then the next quarter, the second quarter of the launch was in the U.S. more than 600 or approximately 650 new patients. So it's like almost looks like, kind of like a double. So in terms of your comments, you were saying, it looks it's, the trajectory is for like a double quarter-over-quarter, just it was something less than 500 patients for the first quarter for Japan. Is that the right way to think about it?

Roger, do you want to talk about trends in Japan, I guess. I don't know what data it's maybe apples and oranges in terms of comparison.

Yes. Thanks, Will and Liisa. So without thinking about specific patient numbers because we didn't comment on those specific patient numbers, other than the absolute number of patients in Japan is lower than what we've seen in the U.S., but at least two months into the launch, just remember this is still early, but two months into the launch trajectory. So that build is highly correlated to the U.S. build as we see the patients initiating therapy.

Okay.

And Liisa, those numbers that you were quoting are those are you referencing U.S. patient numbers in the – that was 500?

Yes. That's I just looking back with its how you guys framed it up in the first two quarters of the U.S. launch.

Understood. Yes, we have not provided that level of detail for Japan.

Yes. I know just said kind of the trajectory. It seems like the trajectory was the same though. The initial number of patients was lower than the last, so I was just kind of trying to – thing. Thank you.

We can get question now from Judah Frommer from Credit Suisse. Please go ahead, Judah.

Yes, hi. Thanks for squeezing me and most of my questions have been answered, but just a question on whether you have any color from pulmonologists says, as they may be, do head back to the office, it seems like they will be one of the busier specialties as COVID does become endemic. It seems like that could slice both ways. They could be more focused on long-term respiratory symptoms tied to COVID, but you will have patients in your office. So perhaps there's an opportunity for increased diagnosis of refractory NTM MAC. Do you have any sense for how that might play out?

Yes. I think what we can comment on is that we have seen things snap back quickly when the phases of the pandemic have been more endemic, like even regionally across the U.S. and we know from our marketing work that the index of suspicion of physicians is much higher now than it was pre-pandemic and their instinct to want to treat patients is also higher. I think it is fair to characterize the higher sensitivity to respiratory disease generally. And I do think that will result in more attention. Very likely more diagnosis as people are looking for. What are these conditions that they're suffering from? People want a name for what they're feeling if they have non-specific symptoms. And that is the initial experience with NTM lung disease. And it's not dissimilar; it's early stages in terms of how the patient experiences some of the symptoms than COVID. So you can imagine people starting to get some of those non-specific symptoms and wanting to get into their pulmonologists to understand what is going on, but knowing that there is a condition that they have, and that there's a treatment available. And as Martina mentioned during her medical review in terms of the literature we've been producing and the data we've been examining, there's increasing literature that is suggesting that it's important to intervene and intervene early in order to gain the maximum benefit from treatment of NTM lung disease. All of those things I think will coalesce and paint a picture that is bright for the future of identifying and treating these patients appropriately. But I think we really do need to get past the pandemic stage of this before that started to play out.

Great. Thanks.

Our final question comes from Ritu Baral from Cowen. Ritu, please go ahead.

I’m just and give me a quick follow-up on the TPIP in terms of the Phase 2 data come in and you mentioned that you're starting with the allergic cohort, is there any sequential that it could be a higher dose included and maybe one or two patients. And then on the TPIP study, that's fine to you. Is that offer going to be an up titration? Any guidance on that would be helpful?

Sure. So I think I heard your questions right. Your line was a little muted. The question about, is this going to be up titration? Yes, that will be another titration study. And your first question.

I think the first question we can work about whether we would have a high-end dose included in the Phase 3 studies. Now it will be the low dose for this Phase 2a study in the Phase 2b study will be up titration. And so there will be a maximum toleration on the patient up to potentially 640 month.

Alright, thank you. Sorry about the audio.

Thanks for joining us today. Hope everyone has a good day.

Thank you for joining. This now concludes today's call. Please disconnect your lines.