Good morning. My name is Dennis, and I will be your conference operator today. At this time, I would like to welcome everyone to the Insmed Second Quarter 2022 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. I would now like to turn the conference over to Eleanor Barisser, Investor Relations. Please go ahead.

Thank you, Dennis. Good morning, and welcome to today's conference call to discuss our second quarter financial results for 2022 and to 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 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, Chair and Chief Executive 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. Insmed finished the second quarter of 2022 in a stronger position than ever before as we continue to execute effectively across the four pillars of our business. Our global commercial operations are advancing, evidenced by the tremendous second quarter sales of ARIKAYCE. The second quarter marked our highest active number of patients on therapy since launch. Building on this success, we are advancing a robust pipeline that we expect will deliver transformative improvements to patients' lives and create significant shareholder value. On the clinical development side, our ability to attract patients into our clinical trials has been strong and all of our clinical programs are continuing to track in line with our expectations. Let me briefly touch on the progress we have made across our business. Starting with the first pillar, ARIKAYCE, our marketed product for the treatment of refractory MAC lung disease, on a global level, we are extremely excited to see an increase in demand for our product in the first half of the year in all three markets we serve. As a result of this strong demand, we are reiterating our anticipated revenue growth of at least 30% in 2022. We are particularly excited about this performance in light of the significant foreign exchange headwinds we have experienced. Let me touch upon our recent progress in each market. In the US, the second quarter marked the most successful quarter we've seen since ARIKAYCE launch. During the quarter, we saw higher demand, which we attribute to new patient starts and favorable duration of use and continuation rates in addition to an increase in patients going back to in-person visits with their physicians. We also saw an increase in retreatments, which we believe may be a key driver to future growth. In Japan, we saw an exceptionally strong revenue performance in the second quarter driven by strong continuation rate and underlying demand. Now one year into the launch in Japan, we remain extremely excited about the opportunity and importance of this market to the overall ARIKAYCE franchise. Finally in Europe, we are approaching finalization of pricing decisions in England, Italy, and France. We look forward to updating you on this progress in the coming quarters. Recall that the global market for refractory MAC is sizable, with an estimated addressable population of 12,000 to 17,000 patients in the US, 15,000 to 18,000 patients in Japan, and approximately 1,400 patients in Europe. As you know ARIKAYCE is also being explored in a frontline clinical trial program, which we believe will support full FDA and select international approvals of ARIKAYCE for newly diagnosed NTM patients. As a reminder, the frontline program consists of the ARISE and ENCORE trials. The pace of enrollment has been strong and we plan to complete screening in ARISE before the end of this month, allowing all future recruitment efforts to focus on the ENCORE trial. We reiterate our guidance that ARISE will be fully enrolled by the end of this year and we remain on track to share a range of data from the ARISE trial over the course of 2023. The expansion into the frontline setting would open the door to a much larger opportunity in our two largest markets, the US and Japan. We estimate there are approximately 95,000 to 115,000 diagnosed NTM patients in the US and 125,000 to 145,000 diagnosed NTM patients in Japan. Pending approval, we anticipate that the frontline indication could represent a multi-fold increase to the size of the refractory market alone. Our second pillar is brensocatib, a small molecule oral once-a-day reversible inhibitor of DPP1 that we are using to treat a range of neutrophil-mediated diseases, which involve the release of active neutrophil serine proteases or NSPs. We believe that by inhibiting the activation of NSPs, brensocatib could be a key component in interrupting the inflammatory process, potentially impacting a range of inflammatory conditions. In this way, we see a clear pathway for brensocatib to become a novel addition to the anti-inflammatory class of therapies. We are currently pursuing four separate indications with brensocatib, and we'll continue to evaluate additional disease areas. The first of these is bronchiectasis. Our Phase 2 ASPEN trial is on track to complete enrollment in the first quarter of 2023. Our confidence in our timelines has grown and as a result, we have turned our internal attention and resources to commercial readiness. As part of this process, we have generated a more specific estimate of the addressable patient population at the time of potential launch of brensocatib. We currently forecast approximately one million addressable patients at bronch, an enormous market opportunity for an indication with no approved therapies. An approval in this indication would represent a major advancement for patients in specialized respiratory medicines. I’m also pleased to announce that, for our second indication cystic fibrosis, we have completed enrollment of the CFTR modulator arm of the Phase II PK/PD study, and we anticipate having top line data later this year. For our newly announced indications, we anticipate moving brensocatib into clinical development for chronic rhinosinusitis without nasal polyps or CRS by the middle of 2023 followed thereafter by hidradenitis suppurativa or HS. Taking a step back there are 26 million patients with CRS without nasal polyps in the US alone. With no approved therapies to treat CRS without nasal polyps, this presents another extremely attractive market opportunity for brensocatib. Our initial focus will be on the most severe patients, where we believe on an annual basis, we can target several hundred thousand patients globally. With HS, we plan to target the moderate to severe patient population, which represents approximately 100,000 patients in the US. Currently, there is one approved product on the market for HS, which is an injectable biologic with significant side effect considerations. As a once-a-day pill, brensocatib could be an important therapy for patients. Turning our attention to our third pillar, TPIP, which is the dry powder formulation of treprostinil palmitil for the treatment of pulmonary hypertension, our Phase 2 trial in PH-ILD and Phase IIb trial in PAH are currently underway and sites are continuing to open in line with expectations. Once we have clarity on enrollment rates for each trial, we expect to share specific timing for top line data. At a high level, we currently anticipate having data in PH-ILD first, which could be as early as before the end of next year, followed thereafter by data in PAH. For an update on the PAH Phase 2a study, this study has a novel design which in a practical setting proves extremely difficult to recruit. Nonetheless, we did manage to recruit and successfully treat one patient in this challenging study setting. While data from a single patient is not predictive, we are encouraged by a trend in improvement in various cardiac measures during the 24-hour period. Importantly, the patient also completed the 16-week extension period and was successfully titrated to a dose of 320 micrograms. We did not observe any safety concerns with TPIP. Finally, our fourth pillar is translational medicine encompassing the important work emerging from our research department. We are making progress in a range of disease areas, harnessing gene therapy, protein engineering, and novel manufacturing, all of which work together as a platform of capabilities that we anticipate will yield one to two INDs per year for the next several years. We expect to host a comprehensive commercial and research day at which time we will provide an in-depth look across our four pillars, including details on addressable markets, additional indications, promising technologies, and anticipated data timelines. As you can appreciate, we have made significant progress and performed very well across our four pillars, building on our strong start to 2022. We continue to execute effectively across our operations, and underpinning the work supporting our four pillars is a disciplined approach to cash management. Let me now turn the call over to Sara for further comments about our financial profile during the second quarter.

Thank you Will, and good morning everyone. Earlier today, we issued a press release with our detailed second quarter financial results, all of which fall in line with our internal expectations. We ended the second quarter in a position of financial strength that we believe will continue to support the four pillars of our business. Let me highlight a few of those results for you now. As reported this morning, we ended the quarter with $564.6 million in cash and cash equivalents, and marketable securities. Consistent with our earlier guidance, we anticipate this cash position will support our current ongoing programs into 2024. Our dedicated focus on cash preservation resulted in consistent cash burn levels in the first and second quarters of this year. In addition, we were pleased to show consistent burn levels in the first half of 2022 when compared to the first half of 2021. Total net revenue for ARIKAYCE was $65.2 million for the second quarter of 2022, showing a 44% increase versus the second quarter of 2021. We are extremely encouraged by this performance, especially considering the headwinds related to the exchange rates in both Japan and Europe. On a regional basis, net revenue in the second quarter was $47.2 million in the US, $15.8 million in Japan, and $2.2 million in Europe and the rest of the world. Specifically, in the US, we saw a 13% increase over prior year second quarter performance, showing continued overall growth in our largest market. Let me briefly touch on Japan, an important market for ARIKAYCE. Our Japan launch has been very effective, which is reflected by strong second quarter sales, despite foreign exchange headwinds. In the second quarter, we did benefit from one-time inventory builds in anticipation of the two-week dispensing limit being lifted, which we previously mentioned. We do not expect this increase in future quarters. Guided by a highly effective commercial strategy, we continue to be optimistic about the trajectory of the entire ARIKAYCE franchise and we are pleased to reiterate our guidance of at least 30% revenue growth on a global basis this year. Let me now touch on a few financial highlights from the quarter. Our gross to nets in the US for the second quarter of 2022 were approximately 14%, which is aligned with our guidance of mid-teens throughout 2022 as well as consistent with prior years. Cost of product revenues for the second quarter of 2022 was $16.4 million, or 25% of revenue, which on a percentage basis is also consistent with prior periods. Turning to our GAAP operating expenses. In the second quarter of 2022, research and development expenses were $88.5 million and SG&A expenses were $60 million. These expense levels reflect the continued support of our four pillars, including our ongoing clinical trials in our pipeline and the commercial infrastructure for ARIKAYCE in our three key geographies. In closing, we are extremely pleased with our performance in the second quarter, which builds on our strong start to 2022. Our position of financial strength allows us to support the ongoing execution across our commercial business, clinical pipeline, and early-stage research. I'll now turn the call back to Will for closing remarks.

Thank you, Sara. I am more excited than ever about the future of Insmed. Our priority is to continue executing on our strategy and working tirelessly to bring innovative therapies to patients with serious and rare diseases. Before we move on to questions, I'd like to take a moment to extend a thank you to the entire Insmed team for all of their hard work as well as the patients and caregivers who participate in our studies. They all play a critical role in our success. With that, I'd like to open the call to questions. Operator, can we take the first question, please?

Yes. And the first question is from the line of Jessica Fye with J.P. Morgan.

Hey, it's Nick. Thanks for taking our questions and congratulations on the quarter. I have two questions. First, you previously guided that ARISE would share top-line data in the first half of 2023, but it seems you will be sharing data throughout 2023. Does that mean we won't get top-line data in the first half of 2023? And I'll have a follow-up after that.

Yeah. So the ARISE study its primary objective is to validate the underlying PRO. And without going into too much of the arcane, I would just say that we need to know that the PRO is working. And the way you test that is through what are called measures of sensitivity and responsivity. And we try to dialogue a little bit about this in the queue, so that people could understand. So in the first half of the year, we expect to get the answer to those questions is the PRO sensitive and responsive in terms of showing a change in patients who are on these various therapies. Once that is completed and in hand, we can then assess one arm versus the other. So the simplest way to think about this is, the most important data from the PRO working point of view will be in the first half of the year. Those will be the sensitivity and responsivity measures. And then the sort of comparator what you would think of I suppose is top-line results traditionally will be in the second half and that will be one arm versus the other using those effective measures assuming they've been validated in the first half and that will also include culture conversion.

Okay. Great. And then the second one, can you just elaborate on the favorable trends you saw on cardiac measures over the first 24 hours in that one PAH patient in the Phase 2a trial? Is the PVR lowering effect within that range of six-plus hours that you're thinking about? And kind of are you using trends because of the small sample size or because of the strength of signal?

The challenge of this study is significant, and we only have one patient to discuss. Therefore, we need to be cautious about how we present our findings from this patient. That's why we have kept our description somewhat general, stating that the experience has been positive. Without going into specific details about the patient's progress, I can say that we largely observed what we hoped for. However, the uniqueness of individual patients and various factors in the ICU setting make it difficult to draw definitive conclusions from this case. The key takeaway is that this patient wanted to continue treatment for 16 weeks and expressed a desire to persist beyond that period. They were successfully titrated to 320 micrograms without any safety concerns, which we view as very encouraging. For context, the maximum dose for Tyvaso after titration is 54 micrograms, so reaching 320 for this patient aligns with our Phase 1 experiences. This finding bodes well for the temporal measurements we anticipate from the Phase 2 programs. Although Phase 2a is still open, finding additional patients has proven challenging. We encourage investigators to enroll any PAH patients they have into either the Phase 2 PH-ILD study or the Phase 2b PAH study.

Great. Thanks again.

Your next question is from the line of Jeff Hung with Morgan Stanley. Please go ahead.

Hi. Thanks for taking my questions. Even after a strong quarter you reiterated the 30% growth guidance, which you can meet even if quarterly sales slightly decline from 2Q, how should we think about the seasonal dynamics for the rest of the year? And are there any headwinds that we should keep in mind? And then I have a follow-up.

The COVID experience, I even hate to mention it anymore, but it has taught us a degree of humility and caution about everything that goes on. I have to just leave everyone with one thought. This is the best quarter that this company has had since I've been in the CEO for 10 years. Every part of this company is delivering. And so what you see on the commercial side is mirrored by performance within the clinical trial and operational aspects all the way down to our research group. I could not be happier about where we are. When I think about where do we go in the second half of the year, I come into the second half of the year with a tremendous sense of momentum, but awareness that there are puts and takes around the world in different areas. And maybe, I'll ask Sara to comment on a couple of those and things that she sees.

Yes, of course. Thank you for the question, Jeff. As you can see, there has been a significant change in foreign exchange rates compared to this time last year, with a 25% change in the Yen and about a 15% change in the Euro. Despite these challenges, we are excited to maintain our projection of at least 30% revenue growth globally. Additionally, as Will mentioned, COVID experiences fluctuations. For example, there are reports of COVID outbreaks in Japan. Nonetheless, we achieved a remarkable quarter with $15.8 million in revenue from Japan, which equals our total revenue there for all of 2021. I am really encouraged by our momentum and approach, and we are proudly confident in reiterating our revenue guidance of at least 30%.

Great. Thanks. And then if I can just clarify, are you deprioritizing additional patients in the TPIP Phase 2a? Otherwise, I guess, do you still expect to share more data this year? And based on that first patient how many more patients do you think you would need to present a robust or robust enough set of data? Thanks.

Yes, we've always built on 2a if we could get a half a dozen patients that would probably represent an interesting cohort. I think that's going to be extremely challenging. We've been at this now as you all know for quite a while. And really what ended up happening here is, we had been giving guidance early on from a very well-meaning key opinion leader who felt that he alone at his site could enroll all of the needed patients and that it would be something that he could accomplish. What we've discovered is, the one patient we got actually wasn't even from his site. And once we try to put into practice, the challenging aspect of the study, which is a 24-hour right heart catheterization, that's never been done to the best of my knowledge, nothing even close to it in fact. What we've encountered in most hospitals that are doing investigations in this arena is that they've gone out perhaps a few hours, but never more than say six. So this is a huge ask of patients and it makes the treating physicians cautious. The selection of the patient is highly specific. The consequence of all of that is it's just very difficult to find someone to volunteer to get a right heart catheter for 24 hours in the ICU, whether or not COVID is even surging. And so that teaches us that we probably have bigger eyes than we should have based on the guidance of that one physician. And where do we go from here? We know that the one patient that was successfully treated in that program showed us what we wanted to see and has given us a lot of confidence, given the 16-week exposure, and the successful up-titration to 320 micrograms. If we get no more patients in this study, I'm not going to lose sleep over it. To remind everybody, the whole idea of this study was to give a quick snapshot on the performance of the drug and this has been anything but quick and we accept that. But the promise of the drug remains, and certainly there's nothing from the one patient in the 2a study that gives me pause on the contrary, I'm quite encouraged by what we have seen. And I would tell you that I think the next right hurdle to look for is the data that comes out from the PH-ILD study, which as we said could be before the end of next year, that's going to be a 16-week study in a controlled environment and longitudinal data. So I'm excited about what that will show. To be really clear, it's the right heart catheter procedure that is the hurdle here. We do not anticipate onerous challenges in recruiting patients for either of the Phase 2 programs that I've described. And so our attention really turns to them where any eligible PAH patient could come in and get treated.

All right. Thank you.

Your next question is from the line of Andrea Tan with Goldman Sachs. Please go ahead.

Good morning. Thanks for taking my question. Sara, just one for you in terms of quantifying the magnitude of the inventory build that you mentioned you saw in Japan?

Sure. Thanks for the question. So we haven't quantified it, but you can view it as a handful of weeks. And that is something we anticipated, something that we had forecasted for internally and something that you see traditionally in Japan around these two weeks left.

Okay. And then, just wondering if you might be able to characterize what your current Medicare exposure is for ARIKAYCE. And then, if you have any thoughts on what it might look like for brenso?

Yes. So, on the former, it's about 50%, a little bit, 55% for ARIKAYCE as of right now, the last time I looked at it. Brenso, we don't know the answer to that yet. But certainly for both of these and I don't know if this is why you're touching on it from our perspective, the legislation that's being proposed that would cap the out-of-pocket costs on Part D would be a very significant positive for us from my perspective.

Your next question is from the line of Yamil Scott with Cowen. Please, go ahead.

Hi. I'm on for Ritu. I had a question regarding the brenso study. What is the ongoing event rate versus your expectations?

We haven't revealed the actual event rate on a blended basis. However, we are monitoring it weekly at both a regional and more specific level. Our goal is to ensure that the events we observe align with our expectations. I can confidently say that we are pleased with what we are seeing, even though we are completely blinded to this study. For a study to be successful, it is important to have enough events to show that our medicine can demonstrate an effect, and that's exactly what we are experiencing. I feel very positive about our progress with brenso and ARIKAYCE. All our studies and performance, despite being blinded, look very promising.

Thanks. And one quick follow-up regarding the CRS study, can you give us some more detail on the design of the study? How many patients or the endpoint you're pursuing and potentially what the approvable endpoint for the study would be?

Yes. So that's something we're still looking at. I think we've got a pretty solid handle around the design and the sizing of it, et cetera. What I would say about that is, it's probably best handled at the Research and Commercial Day. We'll go into that design in detail and importantly, the logic behind what we're going to be looking at. I will just reiterate that we're focused on the more severe end of the spectrum of CRS without nasal polyps, that several hundred thousand patients on a global basis a year, that's incident population, not prevalence. So that is a very, very substantial opportunity. Nothing approved to treat that condition and every reason to believe that the neutrophil-driven inflammatory cascade could be mitigated with DPP1 inhibition. And that gives us a great deal of confidence that this could be successful. I can't emphasize how significant that additional population would be and that's one of the reasons why we're really spending a lot of time on the design to make sure that we're looking at different phenotypes of patients coming into the study, which will kick-off in the first half of next year.

Thanks, Will.

Your next question is from the line of Judah Frommer with Credit Suisse. Please, go ahead.

Yes. Hi, guys. Thanks for taking the question and congrats on the quarter. Just hoping for a little more color on the retreatment you're seeing with ARIKAYCE, where is that information coming from? Is it tracking scripts? Is it talking to docs? And kind of what's the message that you're getting? And then separately, can you just remind us of the script dynamics you're anticipating in Japan as you come off the two-week dispensing limit and how that could impact the trajectory of scripts? Thanks.

Yes. So we haven't given a lot of detail around the more minute elements that are driving things. I would just say, overall, things are very positive. With respect to retreatment, specifically, there are a number of ways we look at that. And what I can say is that we've seen a definitive trend there. So we're comfortable talking about it. And I think that bodes extremely well. We've now been on the market long enough and in a post-COVID world environment, at least, in areas for long enough to be able to identify patients coming back in that we believe are being retreated for a new infection. And that is regrettable for the patients because they're obviously getting the infection again, but it's encouraging for us that they feel comfortable returning to ARIKAYCE for treatment and the physician is thinking the same way. It is consistent with what we saw in Phase 3 where we were successfully able to eradicate the evidence of the infection and keep it that way for a long period of time. But ultimately, because these pathogens are ubiquitous in the environment, these patients have susceptibility. They do get reinfected with new infections and that's where ARIKAYCE can play a meaningful role in the retreatment of patients and we are now seeing that trend. With respect to script trends in Japan, because of the two-week change, I'd just say what that really represents is the opportunity for patients to get a larger prescription amount of drug that were restricted to two weeks as every new drug is, for the first calendar year. With the lift of that restriction, they can get up to three months. They have to get a handset every month anyway. So you're probably not going to see a dramatic inflection around that, but you'll see some longer prescription fills albeit, recognizing the patient comes back once a month for the new handset anyway.

Got it. Thank you.

Your next question is from the line of Joseph Schwartz with SVB Securities. Please go ahead.

Yes. Hi. I'm Joori dialing in for Joe. Thanks for taking our questions. First on TPIP, how representative is the one PAH patient in your Phase 2a trial? And when could we expect to see the data for that?

Yes. My hope is that we might see more patients, but I’m not counting on it. As I mentioned earlier, I have shifted my focus to the Phase 2 PH-ILD and Phase 2a PAH studies, which are each 16 weeks long with traditional designs, making them easier to enroll. I believe it will be much easier to enroll in these studies compared to the 2a. Individual patient responses can vary, which makes it difficult to draw broad conclusions from data from a single patient. The key takeaway is that if we can treat these patients with a compound that induces vasodilation, which is what TPIP aims to do, and we can increase their dosage beyond previous limits, we are fulfilling the target product profile. We are providing physicians with what they want: the ability to administer more medication conveniently with a once-a-day dry powder inhalation. Feedback from key opinion leaders shows considerable enthusiasm for the treatment potential for these patients. Additionally, with Tyvaso exploring indications like PH-ILD and trials in PH-COPD and PH-IPF, it’s important to note that there are currently no approved treatments for these conditions. Wherever Tyvaso proves successful, we aim to follow suit, potentially with greater success due to the favorable pharmacokinetic and pharmacodynamic profile of this drug. We observed this in Phase 1 and also in the 2a Phase. I expect similar results in the Phase 2 and 2b studies. This therapy, which is administered once a day as a dry powder, presents a significant market opportunity with a relatively low risk profile. We plan to demonstrate this by the end of next year.

Okay. And my next question is on brensocatib. I guess from the Phase 2 PK/PD study in CF patients, like, what should we expect to see this year? And how does that read through to your Phase 3 ASPEN trial in non-CF bronchiectasis?

So again the PK/PD study we're doing is to examine whether cystic fibrosis patients who metabolize drugs slightly differently as a result of complications in the GI tract related to their condition, whether those patients will need to be dosed at a higher level to get the same PK/PD profile that we would see in other patients. So this is a 28-day study, looking at different doses of the drug and what that PK/PD profile is. It's not designed to be an efficacy study. Certainly, we'll be looking at biomarkers, but in that short period of time particularly given that the drug takes about two to four weeks to get the full pharmacodynamic effect, we wouldn't expect to see major changes. But if we did, I think those would be startling positives. And so I don't expect to have a lot to say after the PK/PD program, other than we know what dose we need to go to for CF patients and that allows us to go right into the CF study, that could secure approval for the drug. And that's I think what is particularly exciting about it. If we see anything, we certainly will share it, but I would say it's sort of upside not expectation.

Okay. Thank you very much.

Your next question is from the line of Stephen Willey with Stifel. Please go ahead.

Yes. Thanks for taking the questions. Maybe just to follow-up on a couple of prior ones. So on the Phase 2 CF study can you speak to the proportion of patients that are on background CFTR therapy? And I guess, do you expect to see a meaningful differential between the two just in terms of PK and PD, based on how the drugs metabolized?

Yes. So in terms of the two, we have obviously many more patients that are being treated with CFTR modulators. And so the Vertex drug is fairly ubiquitous for those patients that are responsive we wanted to check and this is a really important point. Our drug, we expect to work in all CF patients. And what we're trying to treat are the exacerbations, which these patients still experience whether they're on CFTR modulators or not. So we have split the study to have patients both who are on background therapy and those who are not. It's a smaller number that are not on CFTR modulators. Those are harder to find because there are fewer of them obviously. But I don't expect to see a major distinction between the two and that's one of the points we want to make by completing the study, which is that this would be applicable to all CF patients at the appropriate dose.

Okay. That's helpful. And then maybe just for Sara, can you speak to ARIKAYCE gross to net during the quarter, and forgive me, if that was provided earlier. And then, I know you characterized the inventory build in Japan as representing, kind of, a handful of weeks I guess. But is there any way that you can provide just some rough quantification of that just to get a sense of how we should be thinking about sequential growth in that geography? Thanks.

Sure. Yes, no problem. Thanks, Stephen. So gross to net in the US for the quarter was 14%. So reiterated our mid-teens guidance for the full year again that's consistent with last year, so no surprises there. In Japan, we had said that inventory builds, a handful of weeks you can have probably about two weeks-ish is probably like a close enough estimate for you. We talked a little bit about the foreign exchange rate headwinds specifically in Japan previously. And so to put up that $15.8 million in the quarter despite those headwinds I think is really, really encouraging. More broadly as you think about trends, if you look at last year Q2 has historically always been a strong quarter for us. Q3 just seasonality has historically if you look at trends, but a little bit of a lighter quarter. But again, we are really encouraged by this our best performance ever in ARIKAYCE franchise history on a global basis as well as in the US with some of the momentum that Will spoke to.

Great. Thanks for taking questions.

Your next question is from the line of Jennifer Kim with Cantor Fitzgerald. Please go ahead.

Hey, thanks for taking my questions. I have two here. First, on your color in terms of how ARISE will read out. I know you said that the top-line is coming in the second half of 2023. I'm just wondering did anything drive that change, or was that always how you saw the data coming out throughout the year?

We have always viewed the data release in this way when referencing its arrival. Our primary focus from ARISE is on what it reveals about the underlying Patient-Reported Outcomes (PRO) instrument. The key measures here are sensitivity and, more importantly, responsivity. By this, we mean the questionnaire's ability to document a clinically meaningful change based on the patient's experience and correlate that change with an overall feeling of enhanced well-being. These two components are critical for the PRO to be considered valid by the FDA. We will learn in the first half of next year whether the PRO performs as we expect. We are optimistic about the outcome. We are utilizing two instruments: QOL-B and a measure of fatigue. If we can demonstrate that both are sensitive and responsive to these patients' feelings of well-being, we will have achieved our primary goal for the study. Subsequently, with this validation, we can analyze the two arms to determine which one performed better. We look forward to sharing this along with culture conversion data, which is also significant. The primary endpoint of the ENCORE study pertains to Japan, while the PRO is the primary endpoint for the US study. I hope this clarifies how events will unfold next year.

Yes. Thank you. My second question is going back to ARIKAYCE. And you've given a lot of color on Japan like the inventory build and FX impacts and how we should think about that? But specifically in the US, that I guess 16% quarter-over-quarter growth is there anything there that we should keep in mind, or is that something that you think is a fair way to think about future quarterly growth?

I mean, Sara made some comments about trends that we see with regard to seasonality that would be my only cautionary watchword there. But I have to say, coming into the second half of the year, we feel very good about where we are and where we're going. I think in the US, the more we see that return to in-person office visits, the more successful we have been and in a post-COVID world or in a world where people are choosing to live with COVID in a way that allows them to still engage in day-to-day normal activities that just plays to our strength. And I just have to call out the exceptional work that our commercial team has done in this effort. I mean if we think about what has happened over the last year, last year diagnosis rates for NTM were down 25%, 30% and we maintained a steady revenue performance, which means we were gaining share in the midst of a corrected diagnosis rate due to COVID where patients weren't coming in physicians weren't able to diagnose them. As we return to normalcy, my expectation is we could see that diagnosis rate pick up again and that would provide some tailwinds to our efforts. We'll have to see where things go. We also saw the improvement in retreatment trends. So there's a lot to be excited about, but I think caution is the watchword. And as we approach the third quarter seasonality, we'll see which of these different trends becomes more manifest. I think in Japan the only thing, I would call out is the presence of COVID over there is quite extensive at the moment. So we'll have to see what that results in. But if you would ask me at the beginning of the year, do I think the first or the second half of the year is going to be stronger, I would have said in the second half. As we enter the second half of the year, I continue to have conservatism and caution, but we'll see how we go from here. I mean 30% year-over-year growth with the kind of headwinds we're describing in FX. I mean, Japan is off 25% from where it was a year ago, but those are real accomplishments that I think the company feels very proud of.

Great. Really helpful. Thanks, guys and congrats on the quarter.

This concludes the Q&A portion of today's call. I will now turn the call back to Will Lewis for any closing remarks.

Thank you all for joining our call today.

Ladies and gentlemen, thank you for joining Insmed's second quarter 2022 financial results conference call. You may now disconnect.