Hello, and thank you for being here. My name is Tiffany, and I will be your conference operator today. I would like to welcome everyone to Insmed's Second Quarter 2025 Financial Results Conference Call. I will now turn the call over to Bryan Dunn, Head of Investor Relations. Bryan, please proceed.

Thank you, Tiffany. Good day, everyone, and welcome to today's conference call in which we will discuss Insmed's second quarter 2025 financial results and provide an update on our business. Before we start, please note that today's call will include forward-looking statements based on our current expectations. These statements represent our judgment as of today and inherently involve risks and uncertainties that may cause actual results to differ materially from the projections discussed. Please refer to our filings with the Securities and Exchange Commission for more information. The information we will discuss on today's call is meant for the benefit of the investment community. It is not intended for promotional purposes and it is not sufficient for prescribing decisions. Today's call will feature prepared comments by Will Lewis, Chair and Chief Executive Officer; Roger Adsett, Chief Operating Officer; and Sara Bonstein, Chief Financial Officer. After their comments, they will be joined by Martina Flammer, Chief Medical Officer, for the Q&A session. I will now turn the call over to Will.

Thank you, Bryan, and welcome, everyone. As I reflect on the first half of 2025, I'm enormously pleased with where Insmed stands as a company and the potential impact we can have on the lives of the patients we serve. Insmed is now three for three; all three of our late-stage assets, ARIKAYCE, brensocatib, and TPIP, appear to be clear winners, with positive Phase II or Phase III clinical data having been produced by each, which is an extraordinary achievement for any company in this industry. These successes have been made possible by the work we put in over the last 18 months across every aspect of our business, including commercial execution, pre-commercial launch readiness, regulatory interactions, clinical development activities, early-stage research, and enabling functions. I could not be prouder of our teams of dedicated colleagues at Insmed. As a result of this impressive operational performance and our solid financial position, flowing both from the performance of ARIKAYCE and our recent capital raise, we feel Insmed is in an incredible position of strength. I want to emphasize that this is just the beginning. The next 12 months for Insmed are shaping up to be extraordinarily impactful. We expect a steady cadence of meaningful events, both commercially and clinically, that have the potential to significantly expand the company's impact on patients and establish Insmed's next wave of products and indications that will drive future growth. If successful, these catalysts could enable us to address more than 2 million patients with serious diseases across multiple products and indications in the coming years. To summarize the progress Insmed has made and highlight what still lies ahead, I'd like to divide our discussion into two sections: our late-stage portfolio and our early-stage portfolio. Our late-stage portfolio is made up of ARIKAYCE, brensocatib, and TPIP. ARIKAYCE continues to perform in its current indication, demonstrating consistent year-over-year growth in its seventh year of launch. We believe we are on track to achieve our full-year 2025 sales guidance, driven by continued growth in the U.S., Europe, and Japan. Our performance to date has been particularly impressive given that our U.S. sales team has been simultaneously conducting disease state education on bronchiectasis. In the first half of 2026, we anticipate the clinical readout of the Phase III ENCORE study in patients with newly diagnosed or recurrent MAC lung disease who have not started antibiotics. If ENCORE is successful, as ARISE was, approximately 225,000 additional patients could gain access to ARIKAYCE, driving another leg of growth for the franchise. Moving now to brensocatib, we are days away from potentially launching the first indication for brensocatib in the U.S., representing one of the most anticipated launches in our industry this year. Launches for brensocatib in non-cystic fibrosis bronchiectasis in Europe, the U.K., and Japan are expected in 2026. We also expect top line data from our BiRCh study of brensocatib in patients with CRS without nasal polyps by the end of 2025 and the interim futility analysis for our CEDAR study of brensocatib in patients with hidradenitis suppurativa in the first quarter of 2026. As we've indicated before, if successful, these studies could unlock a massive opportunity for brensocatib to potentially serve other large patient populations with very few treatment options. Lastly, TPIP. We have now produced positive results for TPIP in two Phase II studies. We anticipate entering Phase III for PH-ILD in 2025 and for PAH in early 2026. We believe TPIP has the potential to become the prostanoid of choice for the treatment of PAH and PH-ILD pending positive results in these Phase III programs. Turning now to our early-stage portfolio. This portfolio is made up of our gene therapy operation in San Diego, our de-immunized therapeutic protein operation in New Hampshire, our synthetic rescue research efforts in Cambridge, England, and our research work happening in our original labs based in New Jersey. Across all four of these operations, we have more than 30 preclinical programs in active development. We've historically highlighted that our preclinical research efforts are expected to stay below 20% of our overall spend with the goal of producing 1 to 2 new INDs a year on average. To that end, the last several years have produced significant progress. Our San Diego research site, which was acquired four years ago, has published encouraging preclinical data in DMD, ALS, and Stargardt disease, with the latter representing the first application of our proprietary RNA and joining technology. This research site recently initiated its first Phase I study in patients with DMD, with additional INDs expected in the coming years. Our New Hampshire research site, which has been part of Insmed since early 2021, has produced exciting progress as well with its AI-based protein de-immunization platform demonstrating promising results in preclinical models, setting up the possibility for de-immunized proteins to potentially address a variety of conditions, initially looking at uricase and IgG protease. Our Cambridge England site, which we acquired in 2023, continues to make steady progress on identifying targets for its synthetic rescue platform to potentially be employed against some of the world's most difficult-to-treat diseases such as Ataxia-telangiectasia. More recently, they have also advanced a potential treatment in ALS using a different approach from the SOD1 gene therapy being developed by our San Diego team. Finally, our original New Jersey-based research site continues to be a hub of innovation for Insmed. Not only were ARIKAYCE and TPIP produced from these labs, but they have also screened approximately 850 potential next-generation DPP1 inhibitors and are currently conducting pre-IND work for the first of these molecules that we hope will enter the clinic next year. Consistent with Insmed's core values, a spirit of collaboration and mutual support exists between these sites, they are overseen by a research council, which is comprised of two representatives from each location. The council and select members from each of these research sites gather in person twice each year to provide progress updates, offer input, and explore ways to collaborate to potentially accelerate the development process. But there's a lot going on in our early research engine, we will only provide regular updates on the programs that have cleared the IND hurdle. In general, we continue to see meaningful progress across each of our early-stage research platforms and are excited for what is to come. As one example of the progress being made last month, our first patient with DMD was dosed with INS1201, our investigational intrathecally delivered gene therapy as part of our Phase I ASCEND study. Moreover, we anticipate multiple INDs coming from our early-stage research engine over the next year, including our gene therapies for ALS and Stargardt disease, as well as our next generation of DPP1 inhibitors. In addition to the advancement of our internal research efforts, targeted business development remains a priority. As always, we will aim to advance the best opportunities that are aligned with our strategy of bringing first and best-in-class therapies to patients facing serious diseases. With this architecture in mind, it is my hope that you can appreciate Insmed's significant progress while visualizing the exciting future ahead for both our late-stage and early-stage portfolios. Let's now take a few moments to walk through some updates from our late-stage programs, starting with brensocatib. The U.S. launch of brensocatib in bronchiectasis is arguably the most important catalyst for us to get right in the near term. I'm pleased to report that we have submitted our agreement to the FDA about our label. And from our perspective, we remain on track for a decision on or before the PDUFA target action date next week. Given how close we are to launch, I've asked Roger, our Chief Operating Officer and former Chief Commercial Officer, to share some of his own thoughts on how our launch preparations compare to those he has seen throughout his distinguished career. Let me now turn it over to Roger.

Thank you, Will. Good morning, everyone. It's a pleasure to be with you this morning. As I reflect on the resources invested in the preparation for brensocatib's U.S. launch, it's apparent to me that the team is well positioned to execute on this opportunity. A few things in particular stick out to me. First, I've never seen a company prepare its customer-facing organization so far in advance of the launch. As we've shared previously, we had our sales force fully built out, trained, and in the field more than 10 months ahead of time. Many companies wait until approval to deploy these resources or elect to do so only a handful of months in advance. Our proactive decision to expand our commercial organization in this way is one that I believe will result in more patients gaining access to this important therapy and more physicians feeling prepared to prescribe it. Second, I often see companies overlook the importance of developing resources that support the experience of patients and prescribers. If attaining access proves too burdensome for patients or physicians’ offices to navigate, providers may hesitate to prescribe and patients may fail to fill their scripts. It's for this reason that Insmed significantly built out its patient support function called inLighten, which is fully deployed and ready to assist patients and physicians to navigate the complexities of the healthcare system from day one. Additionally, while it's common for companies to conduct outreach with payers ahead of new product launches, payer feedback in our early discussions about brensocatib has been particularly supportive of our approach. The importance of patient access can at times be underestimated in determining a launch's success, particularly when our product is entering a market with no clear competition. I'm pleased that our team has taken nothing for granted on that front. Our prioritization of patient access acknowledges its critical aspect of successful launches and fully aligns with our patient-focused culture. Finally, I want to mention our current understanding of physician enthusiasm headed into this launch. Based on our interactions with key opinion leaders and our extensive survey work, it is clear to us that physicians have a very high intent to prescribe brensocatib to appropriate patients. And while we know the surveyed physicians often assume they will write more scripts than they actually will in practice, the fact that 90% of surveyed physicians indicate that they intend to prescribe brensocatib to their patients with two or more pulmonary exacerbations over the last 12 months is extremely encouraging. Now, as with every launch, not everything will go to plan. And while there's no way to fully anticipate what challenges may arise, I see our brensocatib team as being prepared to respond to whatever may come. They are equipped with a culture in which raising your hand at the first sign of a problem is championed, and they are nimble enough to make necessary adjustments quickly. I also want to remind you that even the best of launches can take weeks from approval to get medicines into the hands of patients. This is primarily due to the time it takes to print final labels and packaging, guide the product through distribution channels, and navigate patient access. As a result, for brensocatib, you should continue to expect only a few weeks of sales for the third quarter, assuming approval by our PDUFA date next week. Having said that, let me emphasize again that everything I've seen from this team's preparation and brensocatib's unique profile leads me to believe that this medicine has the potential to have one of the best launches in the specialty respiratory space. Now let me turn it back to Will.

Thanks for sharing those insights, Roger. I want to stay with brensocatib but move to its second potential indication, CRS without nasal polyps. As we mentioned on our last call, the Phase II BiRCh study was fully enrolled in April and continues to steadily advance towards its completion. Encouragingly, the Data Safety Monitoring Committee held its second meeting last month to review blinded safety information. The committee found no safety signals and unanimously recommended that the study continue unmodified. This represents the best possible outcome from this meeting. Recall that the BiRCh trial is testing 10- and 40-milligram doses of brensocatib, which are different from the 10- and 25-milligram doses that were studied in our bronchiectasis trials. So it is reassuring that there are no safety signals that have emerged even at a higher dose. While we continue to expect the data from the BiRCh trial to become available before the end of the year, the exact timing of the top line readout is still being determined, given our usual practice of taking whatever time is necessary to ensure the data are clean to submission level quality. We remain eager to see those data and look forward to what those results could mean for patients. Our Phase II CEDAR study in patients with hidradenitis suppurativa is also progressing nicely with more than 50% of the target enrollment completed. Given the strong enrollment to date, we now expect to be in a position to share the outcome of the interim futility analysis of the first 100 patients in the first quarter of next year. These two follow-on programs for brensocatib hold the potential to establish DPP1 inhibition as a mechanism that can offer benefits to patients across multiple neutrophil-mediated diseases. Success in either of these indications would add to our confidence both in brensocatib and in the likelihood that our next-generation DPP1 molecules could also serve patients with a variety of other conditions. Turning now to our TPIP program. The clinical highlight of Insmed's second quarter was the top line data release from our Phase IIb trial of TPIP in patients with pulmonary arterial hypertension. The results exceeded even our most optimistic expectations and established in our view the potential for TPIP to become the prostanoid of choice in the treatment of PAH. To recap those results, the 35% placebo adjusted reduction in PVR represented the largest treatment effect ever shown in a well-controlled trial, of which we are aware. Additionally, the 35.5 meter placebo-adjusted improvement in the 6-minute walk distance produced a p-value well below 0.05, which, despite not being adjusted for multiplicity, was especially striking because the trial was not powered to show a statistical outcome on this measure. Even more impressive was the fact that these endpoints were measured approximately 24 hours after the latest dose, demonstrating the sustained clinical benefit of the treatment over a 24-hour time frame. With these data, our focus now turns to our Phase III ambitions. We have made significant strides on that front and are on track to kick off the Phase III for PH-ILD in the second half of this year. The work we have done to update the capsule strengths so that doses up to 600 micrograms can be delivered in a single capsule is now complete, and we have engaged with regulators on our plans for trial design, which will allow for dosing up to a maximum of 1,280 micrograms. We look forward to sharing the details of the PH-ILD Phase III trial design later this year. In addition, our program in PAH is also advancing on schedule. With our final clinical study report of the Phase II trial now complete, we can approach the agency for a meeting to discuss those results and align on a Phase III trial design that will meet the regulators' expectations for approval. We expect that meeting to take place in October, setting up the potential Phase III start in early 2026. Let me conclude my remarks by saying that Insmed is ready. We have been preparing for years to execute on the enormous clinical and commercial opportunities that lie ahead of us over the next 12 months. If we achieve this, we hope to produce a real and profound difference in the lives of patients living with serious diseases while also potentially creating value for those who have supported us in our evolution to this position. Central to our ability to achieve these ambitions is a culture that supports and empowers our people to do their best work. That is why I'm so proud that Insmed was recently certified as a great place to work for the fifth year in a row. This is an incredible honor and it is reflective of how our employees feel about working at Insmed. Our people are responsible for all of our successes to date. And similarly, our people will be the ones who will determine our future. This recognition serves as external validation of what I see internally every day, that the special culture we have built at Insmed is being preserved even as our team expands. As a company, we have never been stronger or more motivated to deliver on our mission. I'll now turn the call over to Sara.

Thank you, Will, and good morning, everyone. Let me begin my discussion of second quarter 2025 results by highlighting the strong commercial performance of ARIKAYCE, which is illustrated here on Slide 16. And what may be our final quarter as a single product company, we were pleased to once again deliver double-digit year-over-year revenue growth globally. These impressive results were driven by the highest quarterly revenue figure ever achieved in the United States, along with yet another quarter of extremely impressive performances in both Japan and Europe, all of which was driven by strong volume trends. In Japan, the 45% growth this quarter resulted from the implementation of new targeting strategies and initiatives to improve the patient experience. For Europe, the 48% growth was driven primarily by strong demand in Germany, Switzerland, and Austria. Due to the strength of this performance, we remain on track to achieve our 2025 full year ARIKAYCE net revenue guidance of $405 million to $425 million. As a reminder, this guidance range is specific to ARIKAYCE only and does not include any future revenue contributions from brensocatib, if approved. On Slide 17, you can see our updated cash balance as of the end of the quarter. This reflects the equity offering that was completed in the second quarter and includes the exercise in full of the underwriters' option to purchase additional shares, which in total resulted in the sale of approximately 9 million shares of our common stock at $96 per share, resulting in approximately $823 million in net proceeds to the company. At approximately $1.9 billion in cash, cash equivalents, and marketable securities as of the end of the quarter, we believe we are extremely well capitalized. Excluding option exercises and proceeds from our recent equity offering, our underlying cash burn for the quarter was consistent with the underlying burn levels that we have seen for the past several quarters, which is remarkable given the additional investments we've made in launch preparations over that period. Although we don't guide to cash burn levels, in general, we expect our burn will begin to decrease in the coming quarters as the expected revenue growth from brensocatib's U.S. launch has the potential to more than offset the expected increases in spending. Moving to Slide 18, you can see our operating expenses for the quarter. Cost of product revenues in the second quarter of 2025 was $28.1 million or 26.1% of revenues, which is slightly higher on a percentage basis than our historical performance and reflects the higher proportion of revenues which came from outside the U.S. this quarter. Additionally, research and development and SG&A expenses increased this quarter compared to the prior year period. This increase was primarily driven by investments supporting our commercial readiness initiatives ahead of the expected U.S. launch of brensocatib, enhancements in our international commercial operations, and continued funding across our early and late-stage pipelines. In closing, I want to comment briefly on where we are positioned financially as a company and what still lies ahead. We have had a remarkable run of clinical successes over the past 18 months that has transformed Insmed and given us one of the most exciting portfolios of commercial and late-stage assets in all of biotech. Over the next 12 months, we anticipate up to 10 additional commercial, clinical development, and regulatory milestones, which we believe have the potential to create incremental value. With our recent equity financing, we believe we are well positioned to lean in and deliver on each of those catalysts. While we never give guidance on our expected cash runway or timing for achieving profitability for purposes of maintaining financial flexibility, I can say without hesitation that Insmed is in the best financial position in its history. We remain committed to thoughtfully and efficiently deploying our capital to maximize the opportunities ahead of us on behalf of patients. We would now like to open the call to questions. Operator, may we take the first question, please.

Your first question comes from Jason Zemansky with Bank of America.

Congrats on the progress, and I really appreciate you taking our question. In conversations with investors of late, there have been some questions over the patient journey given that NCFB and brenso is a new indication. So ahead of next week, I was hoping you could provide some color into what you're doing on a practical level to capture patients. Obviously, interest from the stakeholders is a huge positive, but what are some of the mechanics you're doing to practically move a patient onto treatment? What are some of the key systems you put in place? And ultimately, what gives you confidence the team can succeed, again, given the challenges that this is essentially a new market that you're building on your own?

Yes, I appreciate the question. I think the first thing to remember is that we've been here before. We did the same exact rollout with ARIKAYCE as the first-ever approved product for the treatment of refractory MAC lung disease. And just to remind everybody, because it's a point we like to remember, and try to learn from and also celebrate. When we first came out with ARIKAYCE, I think the average estimate for revenue was $40 million to $60 million in the first year, and we ended up doing a little over $130 million. So triple what most people thought we were going to be able to accomplish. And I think there's always a reticence that taking on a new indication requires more effort, more work, and is more uncertain. But that's why we started as early as we did. And that's why we got our teams out into the field, as Roger mentioned, starting on October 1 of last year. So the first answer to your question practically is to get people out into the field to do disease state awareness and to build the relationships that enable physicians to reflect on if there is a new medicine that is approved, they know the patient profile that would respond, and they can have already thought about that. And so I think we've heard from KOLs and actually community-level physicians that many of them have, if you will, a list of patients that they want to turn to that they think are suitable for this right out of the gate. That information conforms to what we had seen in our research when we went out and sized this market initially, which we've told you is roughly in the U.S. about 500,000 patients that are diagnosed today with bronchiectasis and have an ICD-10 code and all the rest. Of that, roughly half, we think, have had two or more exacerbations in the last 12 months. Down to the physician level, we have now profiled every physician in the United States, and we have information on their expected patient numbers, if you will. So I think we have a very good idea of where all these patients are and how to go about gaining access to them. We've been putting that in place since we kicked off our disease state awareness campaign literally two years ago at ATS. More practically, as the patients come in, whether the physician calls them over the phone or needs to see them in person, either way, once that script recommendation and writing takes place, there's an entire front end of the funnel that will grab the patient and make it available to them to join the inLighten program that Roger made reference to, which is a patient support program, that will help guide them through that process in a compliant and appropriate way. And then there's also all the efforts that the specialty pharmacies will be prepared to make. We have, at a tactical level, across the engagement with patients and physicians and the physicians' offices in a very compliant way, support systems available to ensure that this process is what we refer to as a frictionless launch. And it's our hope that we'll be able to deliver on that. So I hope that gives you a little bit more insight. But I would say, out of the gate, we feel cautiously optimistic that we are ready to engage with this opportunity.

I would like to highlight the establishment of the COPD Foundation and the creation of 150 care center networks across the United States. In the first cohort, around 33 sites were identified as centers of excellence for both NTM and bronchiectasis, and we will soon implement the next wave. This initiative will significantly enhance the patient journey.

Got it. So is there optimism you can capture these additional asthma COPD patients as well?

At this stage, we're initially focusing on the patients we know have been diagnosed as our disease state awareness efforts progress. We believe physicians will start to wonder if they have more patients than they recognize. If a patient with asthma or COPD is on the highest dose available and still experiences exacerbations, it should prompt the physician to consider that there might be more going on. A CT scan can provide clarity on that issue. We're encouraging physicians to reflect on this so they can take appropriate steps. This could lead to identifying patients who also have COPD or asthma if the CT scans confirm they have bronchiectasis and have had two or more exacerbations in the past year. If that describes the patient, we expect them to fit our target label if things go as planned next week. This represents a significant opportunity. Currently, we have 500,000 patients, half of whom have had two or more exacerbations, and there are many more potential patients beyond that. We'll need to monitor this closely.

Your next question comes from the line of Ritu Baral with TD Cowen.

Mine is just a follow-up to the previous question. Will, you used an interesting phrase when you talked about payer feedback. You said that the feedback has been positive on the Insmed approach to these patients. And it sounds like it is patients who have a CT diagnosis who have documented two-plus exacerbations. Are there other aspects to that Insmed approach or Insmed profile that you can elaborate on, like, for instance, do you have an idea at this point about what sort of prior authorizations outside diagnosis or two exacerbations might be? Do you think there might be prescriber restrictions or other diagnostic requirements outside CT to define that appropriate population? Can you also tell us if you plan on providing free drug with launch?

Sure. So I'm actually going to ask Roger to address those questions.

Yes, thank you for the question. What we expect, and Will mentioned this as well, is a smooth launch for brensocatib. Our goal is to streamline the prior authorization process to make it as easy as possible for physicians and their offices who handle the paperwork. As we work with payers, we notice strong agreement on identifying patients who are suitable for brensocatib, specifically those diagnosed with bronchiectasis through a CT scan. We aim to have a confirmation from the physician regarding this diagnosis, which seems to be a reasonable stance that payers also recognize. Additionally, we're looking at the requirement for two exacerbations in the past year, reflecting the patient group we studied in clinical trials, which we believe is appropriate. There is a lot of consensus on this matter. It's important to note that this is a first-in-disease product, and there is excitement around offering a solution for patients who are still experiencing exacerbations. Therefore, aligning on the prior authorization criteria is crucial. Regarding the question about free product, we do not plan to sample brensocatib at this time. However, we will provide patient support, including assistance with co-pays for commercial patients, but there will be no direct sampling for physicians.

Your next question comes from the line of Andrea Newkirk with Goldman Sachs.

I'm looking forward to next week. Maybe I could ask you here with respect to TPIP, as you look to a competitor trial in IPF reading out next month, how are you thinking about the potential for treprostinil to demonstrate an antifibrotic effect there? And what could that then imply for TPIP? And if that study were to be positive, can you just speak to how quickly you could move to advance TPIP into an IPF study? Could you move directly to a Phase III, or would some other dose-finding work need to be completed first?

Sure. I'm going to ask Martina to field that.

Yes. Thanks for the question, Andrea. So with regards to the study, the TETON study that we anticipate reading out, certainly, we will look with great interest at this study if we see positive results or even trends, given TPIP's profile, we would expect that we even have the opportunity to have stronger effects. And so we would be in a position to start off a Phase III study in very short notice, but we all look forward to these results.

Your next question comes from the line of Jessica Fye with JPMorgan.

So we're just around the corner from brensocatib's launch. And I wanted to revisit the analog you provided a few quarters ago, we looked at first-in-class, best-in-class respiratory launches. I think at the time, you said those were analogs that any company would strive to even come close to. So I'm just curious, with all the preparation over the past year plus, can you speak to your confidence in brensocatib achieving a ramp like that?

Sure. So while we're not providing formal guidance as to what we think we'll end up doing, I do have an ambition that we will fall within reach of those ranges. That's certainly what I would expect to hope to achieve. And the consequence of that would be what I think everyone would observe as a successful launch. We've done a lot to get ready. But as somebody observed earlier, this is a first in-disease launch. And so there's always going to be something that goes bump in the night, and that may influence what we see in terms of performance. It's just impossible at this stage to give any greater clarity or know what the future will hold. One of the things I did as a preparation or grounding exercise is that I spoke to a lot of chief commercial officers at other companies that have been involved in launches recently. Almost to a person, they said that whatever their base case scenario was, their ultimate result was wildly off. So it was either much higher or much lower. And I can tell you where I hope we end up. But certainly, we've done the preparation to accomplish that. But I think the key to that is making sure that we keep in mind the patient experience from day one. We want the script to be written for the appropriate patient, of course, and support all that, but we really want the patient pull-through because we know that the drug from the Phase III trial and the Phase II trial makes patients feel better. And when we saw that data, we were encouraged by that, and we hope that that will be an experience that they have on the drug and that will reinforce the launch process, and I think a substantial amount of the future performance of the drug will be determined by that experience. So we look forward to watching that carefully. It's just one example.

And just one other thing just to remind folks of, as we saw with ARIKAYCE and with all products, it takes a couple of weeks from approval to when you actually start booking revenue. So assuming the August 12 PDUFA date took about a month from the approval of ARIKAYCE to when we actually started booking revenue. So just a reminder to be mindful of that during projections.

Look, our ambition here and our preparation is for this to be a strong launch, and I'll be disappointed if we don't demonstrate that.

Your next question comes from the line of Joe Schwartz with Leerink Partners.

Since your reads on blended blinded data have been pretty accurate heading into past data sets, I wanted to ask if you could expand on the qualitative statements you've made about the BiRCh trial showing positive signs before you unblind it. Is there anything in particular that you're seeing in that data which makes you optimistic? And then on a related note, can you talk about what factors are included in your statement that you expect to unblind BiRCh this year, but reporting the data is dependent on taking whatever time is necessary to achieve submission level quality. Is there anything in particular which could delay that readout?

Let me address the second question first. We do not anticipate any delays. People often wonder if the data will be ready by the end of the year when they can expect it. We are indicating that the topline results will be generated, but the process is longer than just finalizing the last few days. It may take a couple of weeks based on what’s happening and what is in the database. However, at this moment, we have no reason to believe there will be delays or obstacles to making that data available. We want to remind everyone that while we expect it to be ready by the end of the year, the time needed for database cleaning and submission preparation will determine the actual release date. Regarding your other question about confidence in the blended blinded data, I want to clarify that we cannot assert positive outcomes based on that data alone, and caution is necessary in our interpretation. The blended blinded data shows patterns that align with expectations if the drug is effective, but this does not confirm the drug's efficacy. For example, if there are differences in treatment groups, we would expect to see certain responses from patient concentrations. Although we cannot see which patients are in which group, we have observed distinctions among groups that seem to indicate varying results from different doses, occurring at a time in the trial when this is anticipated. Nonetheless, I urge caution not to overinterpret these findings. Our cautious confidence regarding effectiveness in CRS without nasal polyps stems from recognizing that this condition is somewhat similar to bronchiectasis in the nasal passages. This is a basic biological comparison, but it seems valid to combine these insights and express that we are encouraged to see things moving in a positive direction. We will need to wait for the results, and we all understand the potential variability in clinical trial results. Thus, while we remain cautiously optimistic, we maintain a prudent outlook.

Your next question comes from the line of Kelly Shi with Jefferies.

Congrats on the progress. For bronchiectasis launch, do you think the eligible patients have exacerbations properly recorded in medical record for all, and any physician feedback on this front? And maybe the strategy implemented in the future will help identify all the eligible patients if not yet?

Sure. Yes. I mean when we size the market at launch at 250,000 roughly, that is consistent with the data cross-examinations and correlations that we've done looking at ICD-10 codes, surveying physicians, doing market research. So we feel pretty good about that number as patients that have documented two or more exacerbations within the last 12 months. The unknown is the opportunity that lies beyond that, and how proximate it is, how many of those patients that are out there that are perhaps comorbid with COPD or asthma and are tracking exacerbations, but have not yet had the CT scan to determine whether or not there is bronchiectasis present. And that's the gold standard that's needed for those patients. So a lot of those patients, I think, are going to get channeled through a CT scan. And I know there are some physicians who are doing that in a very deliberate way because they do believe that there are patients out there. Perhaps a way to ground this for everyone is to return to our WILLOW and ASPEN Phase II and III study results, where we had between 15% and 20% of patients in those trials that were comorbid with COPD or asthma, and we saw a response from those patients as well. That's what gives us confidence that if we can access that undiagnosed or misdiagnosed patient population that they'll not only be able to be identified as bronchiectatic but we'll be responsive to the medication, which is, of course, the goal.

Your next question comes from the line of Graig Suvannavejh with Mizuho.

I wanted to ask about your interim futility analysis that you're expecting next year in HS. And if you could remind us what the bar for success will be in that interim. And then maybe a follow-up, as you think about next indications for brensocatib, is the view that you will similarly look to do interim futility analyses?

Sure. So I think in response to the second question, we don't anticipate taking brensocatib into any additional indications beyond bronchiectasis, CRS without nasal polyps, and HS. But Martina, maybe you want to comment on the first question relating to the futility analysis?

The planning of the futility analysis is based on the initial 100 patients. This analysis aims to detect a signal of efficacy rather than to achieve a specific p-value. This will indicate whether we should proceed with the study. We want to determine if we are reaching a level of efficacy that provides confidence in the indication; however, the focus should be on finding a signal of efficacy, not on looking for a p-value.

The process involves an expert third-party group of physicians reviewing unblinded data to determine if there's significant information present. As for the connection to your previous inquiry, in HS, it's less clear-cut, and there are limited gold standard animal models to guide us on the effectiveness of any specific medicine. Hence, we have proceeded with Phase II trials involving patients. However, due to our cautious approach and commitment to effective capital deployment, we've conducted a futility analysis, which won't impact the ultimate p-value since we won't see the results directly. The expert panel will ultimately indicate whether the trial should proceed or be halted, and we anticipate receiving this information in the first quarter of next year. While we are not pursuing additional indications for brensocatib at this time, it's important to note that we plan to begin clinical trials next year with our next generation of DPP1 molecules developed following the positive WILLOW results. These advancements will open opportunities for additional indications. We have not yet determined which will be the first, but we are considering areas such as COPD, asthma, rheumatoid arthritis, and IBD. Our confidence will increase with each positive indication related to brensocatib. For instance, if both CRS and HS show success, it would be a remarkable outcome for us, prompting us to accelerate the next generation of DPP1 for various indications, as we would then view this as a validation of our potential breakthrough for neutrophil-mediated diseases.

Well, if I could just quickly follow up, just so on your next-generation DPP1, so what then would be an ideal TPP for your next DPP?

We need to develop some new shorthand. Currently, we are confident about our next generation and its subsequent indications, particularly due to the strong brenso results in bronchiectasis. We believe this mechanism can also be effective in other disease states. This isn't just speculation about neutrophil-mediated diseases; we have conducted animal models with both brenso and the successor molecules, which are on track to enter the clinic next year. With this research, we have a clear understanding of what each molecule can achieve in those models. Some of them show promising translatability into clinical use. We are excited about the vast potential this represents since the diseases we are targeting, such as rheumatoid arthritis, COPD, asthma, and IBD, are major indications. Although there are several approved or competitive products, we still aim for first or best-in-class status. If our drug can significantly impact these areas, we plan to advance these subsequent molecules accordingly. Each molecule is intended to target a specific disease, which is somewhat unique, given our obligation under the IRA to achieve return on investments within nine years. Consequently, we are focused on pursuing new molecules for other disease indications, which explains our current position.

Your next question comes from the line of Andy Chen with Wolfe Research.

Another question about CRS without nasal polyps. Our understanding here is that it's both driven by eosinophils and neutrophils. Just wondering, in your understanding of the disease, is it heterogeneous on a population level as in that there are separate endotypes of different patients driven differently by different cells? Or is it on an individual patient level as each patient is heterogeneous and has contributions from both sides?

It's really interesting. We observed in our ASPEN data that there was not much of a distinction when examining eosinophil levels up to 750. Initially, we stratified the study to account for the potential differences in performance related to the phenotypes or endotypes being discussed, which involve a mix of eosinophil and neutrophil-driven diseases. This discovery is quite significant, as it suggests we don't need to be as concerned about that, at least up to that threshold of eosinophil counts. We anticipate that patients with mixed profiles will be responsive since they were included in the ASPEN study. Looking ahead, this also opens the possibility of considering CRS with nasal polyps, which may be more eosinophil-driven, and where we might also achieve a favorable effect. This is something we're currently contemplating. Martina, would you like to add anything to that?

Yes. Maybe just with regards to the endotypes, you're right, similar to what you've seen now in bronchiectasis. Endotypes are more defined of what is the biologic driver behind it. So is it neutrophils, is it eosinophils? And we don't only look at the two big groups. There are subgroup, and neutrophils play a role in all of the endotypes. There is one endotype that is really more driven or largely driven that's eosinophilic, but the largest proportion of patients in CRS is driven by a mixed endotype or strongly neutrophil-driven endotype.

Your next question comes from the line of Vamil Divan with Guggenheim Partners.

This is Daniel on behalf of Vamil. We are curious if there is any potential implication from the BiRCh trial for CEDAR, assuming the BiRCh results are positive. Additionally, we seek clarification on the futility analysis for CEDAR. Is this analysis primarily centered on the primary endpoint concerning changes in abscesses and modules, or do clinical responses also factor into the futility analysis?

As we transition from the BiRCh trial to CEDAR, I want to express my enthusiasm for the potential of BiRCh, particularly regarding CRS without nasal polyps. This condition, in a basic sense, relates to bronchiectasis and the nasal passage. I remain hopeful that we will observe positive outcomes or trends in that study that could lead us into Phase III. HS presents a more complex challenge. Several variables influence this, including the patient profile we are targeting. We moved from focusing on moderate to severe patients and could have considered mild to moderate patients as well. However, this patient selection introduces uncertainties regarding the efficacy of our drug. The absence of robust animal models adds to this uncertainty, making the CEDAR trial riskier compared to CRS, at least from a logical perspective. This is why we implemented the futility analysis, allowing for a thorough review of all data to determine whether the study should continue. Our goal is to avoid subjecting patients to a treatment that may not be beneficial. Martina, do you have anything to add on this topic?

Yes. The futility analysis will focus on the primary endpoint, which is the percentage change in nodule count by week 16. This is important because it shows the immediate change. Additionally, by the end of week 52, we will also examine higher scores, specifically 50 and 75. However, the interim analysis will concentrate on the primary endpoint.

Your next question comes from the line of Stephen Willey with Stifel.

Should we expect registration of TPIP development in PAH to be limited to a single Phase III trial? Or do you think a broader sotatercept-like development program may be in different functional class and risk subgroups that make more sense here just given the strength of the Phase II data?

Yes. I think we'll know more once we've had the October meeting with the FDA, to be candid. And I think our enthusiasm for this program, as we have dug into the data and the aftermath of the topline results, I would say has grown and accelerated to the point where, as Martina mentioned a moment ago, the result of the TETON study is going to be something we watch very carefully. We know how sotatercept is perceived and what a positive contribution that is to the disease state. Remind you that that can only be operative in PAH. So it doesn't have a role to play in PH-ILD. We're sitting with what we believe to be the best clinical profile based on the Phase II data for PAH, for PH-ILD and now possibly for IPF, depending on how the TETON study reads out. With that set of opportunities, we would then obviously pursue our own data in IPF. But that's a really significant profile to be in possession of. And so I think we're going to move aggressively after every opportunity. I don't know, Martina, do you want to comment on any of the sub-approaches that sotatercept has taken in our approach to that?

Yes. So I think we have to have the discussions with the agency on the number of trials or also how trial designs will look like. We will, of course, take into account that sotatercept is on the market and how we will design the trial, reflecting sotatercept. At this point, we can't speculate on what the effect size on top of it would be, but we know that with the Phase II data, the profile, both on the efficacy and on the safety is the strongest one that we think in the prostanoid group. So we have a very strong confidence level on TPIP, and then we'll see what on top of it, sotatercept, how that would look like. We are also able, and you've seen this in the Phase II study, to reach higher doses and therefore have the opportunity to deliver significant efficacy impact, that may sometimes be an opportunity to also go to lower doses of sotatercept, which is a very good drug, but you always look at it in context of what is your overall benefit-risk, what is your safety profile. So I think that remains to be seen, but we will design the trial to make sure we can answer these questions.

Your next question comes from the line of Maxwell Skor with Morgan Stanley.

Congrats on dosing the first DMD patient in the ASCEND trial. I was just hoping you could share any early operational and clinical insights into that experience? And how does your intrathecal delivery differentiate 1201 from other gene therapy approaches in DMD?

So far, everything is going well. We need to be cautious about anything related to gene therapy currently. We are adopting a very careful strategy for every patient involved in this. It must be incredibly distressing for parents of children with this disease to witness recent developments in this area. When we acquired Motus four years ago, our goal was to support Bryan's vision that delivering treatment directly into the spinal canal would enhance safety and effectiveness. The initial animal studies confirmed those concepts. We are eager to see the human data, but we will proceed very carefully due to past experiences. Remember, one of the key benefits of intrathecal delivery is that it bypasses the first-pass effect in the liver. This allows us to use a smaller viral dose for patients, and despite that, the effectiveness we observed in muscle and cardiac tissue was impressive. Therefore, we believe this treatment may offer a profile of lower doses, higher effectiveness, and potentially greater safety when all is taken into account. I would like to add one more point. Martina, do you want to mention the other important issue that sets us apart from others in the gene therapy field for DMD?

Yes. One of the advantages right now on the IT delivery that we have is that we do not have weight-based dosing in our study. And I think that is a different approach also.

We have now reached the end of our question-and-answer session. Ladies and gentlemen, this concludes today's call. Thank you all for joining. You may now disconnect.