INSMED Inc Q4 FY2025 Earnings Call

Thank you for standing by, and welcome to the Insmed Incorporated Fourth Quarter and Full Year 2025 Financial Results Conference Call. All lines have been placed on mute to prevent any interruptions. If you would like to withdraw your question, please press 1. Thank you. I would now like to turn the call over to Bryan Dunn, Head of Investor Relations. You may begin. Thank you, Bryan. Good day, everyone, and welcome to today's conference call to discuss Insmed Incorporated's fourth quarter and full year 2025 financial results and provide an update on our business. Before we start, please note that today's call will include forward-looking statements. 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 further information. Information discussed on today's call is meant for the benefit of the investment community and is not intended for promotional purposes and is not sufficient for prescribing decisions. Today's call will feature prepared comments by William H. Lewis, Chair and Chief Executive Officer, and Sara M. 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 William H. Lewis.

Thank you, Bryan. Good morning, everyone, and thank you for joining us. 2025 was an exceptional year for Insmed Incorporated, defined by extraordinary execution and transformative impact. Commercially, we witnessed the approval of Brinsupri and its stunning early months of launch performance, as well as the continued global performance of ARIKAYCE, which showed significant acceleration from commercial efforts in Europe and especially Japan. Clinically, we saw best-in-class performance from TPIP, entered two new gene therapies into the clinic for DMD and ALS, and completed the acquisition of INS 1148. These accomplishments represent a significant expansion of our clinical pipeline despite the discontinuation of the CRS without nasal polyps program last quarter. We entered 2026 with momentum that positions Insmed Incorporated for sustained leadership in both bronchiectasis and NTM. In the year ahead, we intend to accelerate and expand the US launch of Brinsupri while continuing to grow ARIKAYCE. Rarely does a company have the opportunity to own an entire disease category by virtue of having the first approved medicine in a disease with no competition on the immediate horizon. Insmed Incorporated enjoys two such opportunities in bronchiectasis and NTM, both of which also share a similar call point among pulmonologists. To the strong foundation, we intend to pursue other first or best-in-class therapies within our three target therapeutic areas, which include respiratory, inflammation and immunology, and neurology and other rare diseases. Today, we are pleased to announce revenue guidance for Brinsupri of at least $1,000,000,000 in 2026. We are confident in providing this guidance earlier than expected due to the additional visibility we have gained into the market access environment and the early performance we have seen from Brinsupri so far this year. To our knowledge, only 15 drug launches in history have been able to surpass the billion-dollar mark in their second through fifth full quarters of launch, and every company that has achieved that milestone has gone on to reach a market valuation of $70,000,000,000 or more. Coupled with another expected strong year of performance from ARIKAYCE, we anticipate total company revenue in 2026 to be more than double the revenue we produced in 2025. This guidance gives us confidence that we can achieve cash flow positivity without needing to raise additional capital. However, we may choose to source capital as necessary to support new business development, internal programs, or other potentially value-creating initiatives. We are currently evaluating several such opportunities and will continue to do so as we prudently seek to expand our pipeline. Let us now dive deeper into Brinsupri. In 2025, the US launch of Brinsupri surpassed even our most ambitious expectations. Pre-launch, we set a very high bar for what we believed Brinsupri could achieve using a basket of historically strong respiratory launches as our guide. With $144,600,000 in net revenue in its first full quarter, I am proud to say that Brinsupri is exceeding that bar. And let me be clear, the launch continues to go well, and the team continues to execute at a very high level. As with many successful medicines, the shape of the launch from month to month can be inherently variable. But the overall trajectory for this launch is strongly up and to the right. We believe Brinsupri has the potential to be among the best, if not the best, specialty respiratory launch ever. Let me now take a moment to illustrate where we expect the Brinsupri opportunity to evolve over time. In these early months of the launch, we see Brinsupri establishing itself at the forefront of treating bronchiectasis with no competition for several years. We had previously framed out a peak sales estimate above $5,000,000,000 for this indication, and everything we have seen so far from this launch has only added to our conviction that the opportunity is at least that large. I want to emphasize this point: we believe there may be much more. Let us get specific. We previously defined the total addressable market in the US based on Brinsupri's label as 500,000 currently diagnosed patients with non-CF bronchiectasis. Within that diagnosed population, we estimate that approximately half, or 150,000 patients, have had two or more exacerbations in the last twelve months, matching the profile of the patients who participated in our clinical trials. Based on those figures, the roughly 11,550 new patients who have started treatment with Brinsupri in 2025 represent less than five percent of that patient population. So, there remains an enormous amount of runway within that initial total addressable market. As a reminder, the greater than $5,000,000,000 peak sales estimate was based on us successfully addressing these 250,000 patients only. In addition, we believe that over time, more of the remaining 250,000 currently diagnosed patients with less than two exacerbations will start to move into the category of those who have had two or more exacerbations in a twelve-month period. This is due to the progressive nature of the disease and better patient reporting and documentation of exacerbation events now that there is an available treatment. This belief is supported by real-world data. In the two-year study of claims data for nearly fifteen thousand patients with bronchiectasis, about 47 percent had two or more exacerbations in the first year of follow-up. Then in the second year, another nine percent joined that group, meaning that fifty-six percent of study patients had two or more exacerbations in either the first or second year. Based on that study, it is our expectation that patients will continue to move into the two-plus category over time, which would represent upside to our peak sales estimates. Now I can leave you with one item to focus on: there are 32 million diagnosed patients with COPD or asthma in the US. We believe that many of those patients could have undiagnosed bronchiectasis and, as a result, may continue to exacerbate despite treatment with standard care for those diagnoses. I would encourage you to assess this potential for yourself. Recognizing the size of that opportunity, we are turning our attention to outreach and education to physicians in the hopes that they can assess these patients for the presence of bronchiectasis. The potential additional patients from these populations, which would be on label for Brinsupri if they are confirmed to have bronchiectasis, dwarfs the initial total addressable market we have just been discussing. We are currently working on several different programs to advance the exploration and quantification of these patients. This effort will be supported by evidence generation in several large respiratory centers which intend to use retrospective data to identify bronchiectasis in patients diagnosed with COPD and asthma who are still exacerbating. We are also creating dedicated teams within our medical and commercial operations to identify these potential patients, given the substantial populations they represent. As many of you know, historical medical literature on this topic provides a wide range of estimates. But a more recent publication that looks specifically at the overlap between COPD, asthma, and bronchiectasis suggests that bronchiectasis could be involved in thirty to over fifty percent of patients with moderate to severe COPD and in twenty-five to forty percent of patients with severe asthma. These patients may not have received attention or been identified in the past because until Brinsupri came along, there had been no medicine that physicians could turn to upon diagnosis. As we are able to identify patients that may benefit from Brinsupri from within this broader population, we have a chance to help physicians deliver what we believe could be a game-changing medicine for the benefit of their patients. It is an enormous opportunity to serve patients and it will take several years to more fully manifest, but it has the potential to expand Brinsupri’s impact by orders of magnitude. This is something we are actively working on and will continue to monitor, but it is our belief that we could begin to see these patients as early as the end of this year within the pulmonary practices we already call on, and more evidently in 2027 and beyond. Let me now take a step back and describe what we are seeing within the launch to date. Today, we are still in what I would call the exploration stage of the launch. This is a new medicine, and as is customary, physicians often want to try it out on a patient or two to see how it works, assess safety, and then determine how much more broadly they intend to prescribe. For example, of the 4,000 physicians who have written a prescription through 2025, nearly half have prescribed Brinsupri to just a single patient. As those first patients return to their pulmonologists and share their experience with the treatment early this year, this should play an outsized role in their physician's interest and willingness to write again. Today, we have heard very positive feedback through our interactions with physicians and directly from patients through our support services, as well as through the patient experiences that have been shared in public forums or on social media. It can often take several months for patients to return to their physician's offices to convey these experiences, but this positive early feedback suggests that the knock-on effect of these experiences should start to result in additional prescribing behavior by the second quarter. Given the large number of new patients that were added in 2025, we believe these positive experiences with the current diagnosed bronchiectasis population should also increase the likelihood that physicians will be receptive to proactively tracking exacerbations and screening their COPD and asthma patients for bronchiectasis. Turning now to the mechanics of how patients gain access to Brinsupri. Critical elements of successful launches are favorable payer access dynamics. I am pleased to say that this is progressing very well. In fact, over ninety percent of targeted patient lives have access to Brinsupri reimbursed either through a documented payer policy or medical exception. We chose to engage payers in an effort to encourage them to make access for appropriate patients as frictionless as possible. For those who have been willing to engage with us and settle on simple attestation-based prior authorization and reauthorization criteria, we have offered modest rebates. Others have chosen to require documentation within their medical policies, which typically means requesting documentation of the CT scan and proof of two or more exacerbations. Importantly, we have seen a very high payer approval rate so far even for payers requiring documentation, which is promising. Given our long history with ARIKAYCE, which even now has primarily been reimbursed through medical exception, we have become skilled at providing education to healthcare providers and their offices about documentation and process requirements. We expect these high approval rates to continue in the months ahead as physicians and their staff become more accustomed to the payer reimbursement requirements. While we expect contracts to continue to officially go into effect over the course of the first half of this year, we have concluded enough of these negotiations to feel confident in the general direction of the market access landscape for Brinsupri. I am pleased to say this landscape is aligned with our prelaunch expectations, with broad access to the treatment for appropriate patients and either physician attestation or manageable documentation required for reimbursement in most cases. In summary, the Brinsupri launch continues to be very strong. The rate of patient additions, new physicians, and manageable market access dynamics give us comfort that from the initial patients we are targeting, we see a clear path to reaching our stated peak sales goal of more than $5,000,000,000, with potentially significant upside from the adjacent populations outlined a few moments ago that could take that peak sales number much higher. We will have much more to say in the quarters to come as we gain a clear picture of how big and when those patients may be diagnosed and become on label for Brinsupri. The opportunity itself is one that any biotech company would be fortunate to have, and we intend to aggressively resource the launch to maximize its potential. Now let me spend a moment on ARIKAYCE. Our commercial teams continue to do an excellent job of driving growth of the product. Japan had a particularly impressive 2025, delivering 40% growth compared to 2024, and contributing more than a quarter of ARIKAYCE's global revenues. In Europe, ARIKAYCE grew even faster, albeit from a more modest revenue base. This strong commercial execution sets the stage for ARIKAYCE's next clinical readout, the phase III ENCORE trial, which we expect to announce in March or April. Success in ENCORE could open an opportunity to increase the addressable market for ARIKAYCE from around 30,000 patients today to more than 200,000 patients. Let me now switch gears and spend a moment on TPIP, which was significantly derisked by strong clinical data in 2025, opening up the opportunity for us to pursue four phase three clinical programs in parallel. We are very excited to announce that last month, we were informed by the FDA's Office of Orphan Drug Products Development of their decision to grant orphan drug designation to treprostinil palmitil for the treatment of pulmonary arterial hypertension. To help you understand the basis for this designation, I will read from the actual letter we received from the FDA. Quote: "Our decision to grant designation is based on the plausible high hypothesis that your drug may be clinically superior to the same drugs already approved for the same indication because your drug may be more effective due to greater placebo-corrected improvement in six-minute walk distance compared to other approved oral or inhaled formulations of treprostinil, and by means of a major contribution to patient care compared to the approved subcutaneous and intravenous formulation of treprostinil." Close quote. This decision was based on the FDA's assessment of our phase two data released last year, which is a striking validation of our belief that TPIP has the plausible chance to be a meaningfully differentiated treatment compared to other treprostinil options. In our view, this supports our long-held conviction that TPIP could become the prostanoid of choice for physicians and patients. Last month, we presented the trial design for our PAH phase three trial of TPIP in patients with PAH at the PVRI conference in Dublin. Recall that the FDA agreed, based on the strength of phase two results, that we would need just one phase three trial powered at the standard p-value of 0.05 for a registrational submission. On this slide, you can see a depiction of the trial design for PAH. While much of the design is similar to our phase two trial, there are some key differences. First, the trial has a longer treatment period of 24 weeks versus 16 weeks in phase two. This longer treatment period is intended to provide patients with a practical titration window, given that this trial will allow patients to dose up to 1,280 micrograms, or double the highest dose used in phase two. To put that high dose into perspective, 1,280 micrograms of TPIP, after subtracting the weight of the 16 carbon chain, contains about 813 micrograms of treprostinil. That is more than three times the highest labeled daily dose of Tyvaso DPI for patients that fully comply with the four doses required per day with that treatment. Another difference is that the phase three study will allow patients to be on background Selexipag. Enrollment of those patients will be capped at twenty percent of the overall population and stratified to ensure balance between treatment arms. Finally, the primary endpoint of six-minute walk distance will be measured one to three hours post-dose to approximate TPIP's peak effect, similar to trials of other treprostinil products. We are incredibly excited to get this trial started in the first half of this year. To recap, I am very pleased with where we are as a company. The Brinsupri launch continues to go well, allowing us to announce revenue guidance of at least a billion dollars for that therapy. When combined with the strong performance we expect for ARIKAYCE in 2026, we expect to produce revenue on a company-wide basis that more than doubles from last year. And even that could be just the beginning as we await a near-term pivotal readout for ARIKAYCE that could expand its label, and we work to identify new patients who could benefit from Brinsupri. For TPIP, we have received an orphan drug designation for treprostinil palmitil for the treatment of PAH, and have released a phase three trial design for that indication. If successful, the FDA has indicated that this single phase three would be sufficient to support a filing for TPIP in patients with PAH. Finally, we have a strong and growing pipeline of potentially first or best-in-class investigational programs behind the ones we have spoken about today, many of which should also begin to contribute catalysts over the next year and beyond. With that, let me turn the call over to Sara.

Thank you, Will, and good morning, everyone. Given that Will has already walked you through our 2026 revenue guidance for ARIKAYCE and Brinsupri, let me provide you with a few additional comments on our expected gross-to-net in 2026. In the past, we have highlighted a range of 25 to 35% as a reasonable analog for Brinsupri's gross-to-net at launch. This range was based on precedent launches and the impact of new catastrophic coverage required under IRA legislation. Today, we believe we have good visibility into where payer contracting is headed and are now positioned to provide a gross-net guidance range of mid-twenties to low thirties for Brinsupri in 2026. Importantly, our 2025 gross-to-net for Brinsupri was also in that range, which implies that the rebating expected to go into effect in 2026 will be modest and is therefore not anticipated to have a significant effect on the overall gross-to-net of the product. For ARIKAYCE, gross-to-net for 2026 is expected to range from the low to mid-twenties, a slight increase from 2025 due primarily to the impact of the small manufacturer phase-in and other provisions under the IRA. Let me spend a moment on our cash position. As of the end of 2025, we had approximately $1,400,000,000 in cash, cash equivalents, and marketable securities. Cash burn in Q4 included approximately $70,000,000 of one-time items largely attributed to the asset acquisition of INS 1148 and the milestone payment to AstraZeneca related to Brinsupri's US approval. Excluding those one-time items and the cash received related to stock option exercises in the period, our underlying cash burn for the quarter was similar to the underlying burn levels we saw in the prior quarter. Keep in mind that only a portion of the Brinsupri revenue we recognized quarter had been received in cash as of December 31, so our cash burn does not reflect that full benefit. As we have said before, we expect both revenue and spending to continue to increase as we fully resource and support Brinsupri's launch as well as other programs from across our portfolio that are expected to continue to ramp in the near and medium term. Finally, I would like to reemphasize the statement Will made earlier as it relates to our pathway to profitability. Based on our existing development plan and the strength of our commercial engine and its revenue capabilities, I am confident we can achieve cash flow positivity without needing to access additional capital. That said, I will remind you that we have and will continue to invest in appropriate business development opportunities as well as internal programs and therefore may choose to source additional capital to advance and expand our pipeline and support additional future value creation. Moving now to other relevant financial metrics for the fourth quarter, which are displayed on this slide. Cost of product revenues in 2025 was $44,200,000 or 16.8% of revenues, which is lower on a percentage basis compared to our historical performance reflecting the positive contributions of Brinsupri to the company's gross margin profile. Additionally, as expected, research and development and SG&A expenses increased this quarter compared to the prior year period due to the necessary investments made to support the US launch of Brinsupri and to continue to fund our growing pipeline. In closing, I am pleased to report that Insmed Incorporated remains in a strong financial position, providing us with the capacity to pursue our ambitious goal to expand our reach and our impact on patients. We look forward to continuing to utilize our resources to pursue the potentially value-creating opportunities we have in front of us. We will now open for questions. Operator, may we take the first question, please?

Thank you. We will now begin the question and answer session. We ask that you please limit yourself to one question. You may reach back for any follow-up questions. Your first question today comes from the line of Joseph Patrick Schwartz from Leerink Partners. Your line is open.

Great. Thanks so much and congrats on the very strong performance. It certainly seems like the total addressable market for Brinsupri has a lot of room to expand with a very well-designed strategy to identify patients with COPD or asthma who are exacerbating with bronchiectasis but might not yet be identified as such. I look forward to hearing about that progress as you embark on this initiative. But I was wondering if you have any plans to develop other DPP1 inhibitors within respiratory disease in order to expand your franchise further? And if so, how do these other agents differ from Brinsupri? I appreciate the question. Absolutely. We intend to bring other DPP1s forward, not just in the respiratory indications, but in others. As an example, 1033 will enter the clinic this year for rheumatoid arthritis and irritable bowel disease, a couple of indications within that, and that will be in the second half of this year. In parallel, we are also advancing other DPP1s into conditions in respiratory, like COPD and asthma. That is absolutely on the horizon for us. I think Martina perhaps can comment a little bit here on the distinction between the patients we are targeting who may be responsive to Brinsupri because they are bronchiectatic versus those who are asthmatic and/or COPD of a particular profile distinct from the bronchiectasis patient that these other DPP1s would target. Martina, do you want to address that?

Yes. Sure. We are looking at a phenotype of patients who continue to exacerbate, even if they are optimally treated for COPD or asthma already. Most of those patients not only have a higher increase in pulmonary exacerbation but also an increased acceleration in lung function decline, as well as an increase in mortality. So that is a specific phenotype of the population that we are looking for.

Your next question comes from the line of Jason Eron Zemansky from Bank of America. Your line is open.

Great. Good morning. Congrats on the progress, and thanks so much for taking our question. Will, I was hoping you could provide some additional color regarding the guidance for Brinsupri. Can you speak to some of the specific elements of patient behavior that gives you confidence at this point, specifically with regards to dynamics like compliance, discontinuations, prescription abandonment? I know it is early, but do you have a sense of what that looks like and how that influenced your projections? Thanks.

Sure. So we have, as you might imagine, a number of different data sources we examine, but there is generally a detailed dashboard. What I would convey to you is that across all the metrics, we are seeing at or above our targets, and that is very much behind why we have the conviction that we will do at least $1,000,000,000 in revenue for Brinsupri this year. I would say across the board, we are very encouraged, whether it is market access metrics, low discontinuation rates, reauthorizations going through; I would say we feel very, very good about where things are.

Your next question comes from the line of Olivia Brayer from Cantor. Your line is open.

Hey, good morning. Thank you for the question, and my congrats as well on the quarter. Can you comment at all on the scripts trends that Symphony is picking up? Are those January and early February trends indicative of what you guys are seeing on your end? And anything you can tell us at this point just about how new starts are trending so far this year? And then I did just want to ask around interest in business development activity. It looks like you guys flagged that a couple times in the slides, and potentially raising capital around that. What kinds of deals are you guys interested in pursuing? And what is the rationale for potentially doing a bigger deal at this point?

Yeah. Thanks. As it relates to the performance, I mean, things just are very strong out of the gate is the only way I could describe it. We hear a lot of talk about the Symphony data; obviously, we do not track it, we do not pay attention to it. But what we are trying to accomplish today is that we are always very detailed and transparent about the puts and takes that may be in operation in any given week for any given medicine. This is what could hold it back. This is what could accelerate it. That, I think, is often interpreted as caution or conservatism on our part. What I want to make sure we get across today is that we feel great about the way this launch is going, and we do believe we are going to join that very rarest of groups that can produce a billion-plus in revenue by combining quarters two through five together. There are not many in history that have done it, and those that have have gone on to be very successful companies. And that is because to get to that level by the end of the fourth quarter, you are going to have to be at a run rate that would imply you are going to continue to do very well as you go into 2027 and beyond. So with all that confidence that comes from doing a very refined examination of script trends, physician behavior, surveys that we do, patient behavior on the medicine, and the market access picture, all of these elements combine to give us a very good feeling about the direction we are traveling, and that is why we were able much earlier than expected to give this direction that we will do at least a billion. That then feeds into the notion that we are on track to achieve cash flow positivity without having to access more capital, and that is absolutely the case.

Your next question comes from the line of Ritu Subhalaksmi Baral from TD Cowen. Your line is open.

Yeah. So let me be very clear. The market access picture is fantastic from our perspective. It is ahead of where we thought it would be internally. In no way do I want you to interpret our mentioning of some plans requiring documentation and some not as indicative of any impact on anything other than enthusiasm for our forecast. I would tell you about the existence of those requirements for documentation. We always expected that some portion of these plans would require that; that is why we fielded so many field access managers who can support the back office effectively in navigating that. And to be clear, to date, that is how everyone has done it: it has been all medical exception. Now that the policies have come into place, that will smooth the uptake because our concentration has always been on patients with two or more exacerbations even though our label is for any and all bronchiectatic patients. We have a strong position with regard to market access and uptake.

Thanks for taking the question. I was curious if you could give a little bit of a breakdown of the payers that are requiring documentation versus attestation versus the plans that require medical exception, and what percentage of covered lives does that represent? And then lastly, just to compare, if you could share your confidence in getting policies in place that are currently using medical exemption going forward.

Yeah. So, Alex, I am going to disappoint you. I am not going to break out the covered lives and what requires documentation and what does not. I would just tell you this: the benchmarks we set for what percentage would be required documentation, they are right in line. We are probably a little better than we were thinking. What is important is that all of the guidance that has come out so far is aligned with the guidance that came out at CHEST, which is that the patients you want to be thinking of first for this are two or more exacerbations, and that is the way the market access world is interpreting it. It is the way we have driven physicians to think about the use of this drug in terms of first patients to try it on. All of this aligns nicely, and so what you have seen in the partial third quarter and first full quarter in the fourth quarter is that this market access picture is not expected to change dramatically in terms of our ability to add patients without a lot of friction. That is because not only are we very experienced with the market and the medical exception pathway, but we are getting many plans to agree to doing attestation, which should help the process. The more predictable it becomes, the easier it is for the back office to know what to do, and our teams are there in a compliant way to support that education and execution. I feel very good about the market access picture. I think within the launch, when we look back at this and talk about what has gone very well, market access is going to be one component that we got right.

Your next question comes from the line of Adam Walsh from Roth Capital. Your line is open.

Just curious if you are expecting the majority of patient reauthorizations to occur six months after starting therapy. Your comments seem to suggest that some payers have already required reauthorization at earlier time points. So just curious if there is anything you can say about the seamlessness of the reauthorization experience. The point of greatest friction, I think, in this world is when you get into the first quarter and you have some patients who change medical plans. Does that get bridged effectively? What kind of a break does that put on things? In our first quarter, we feel very good about the way things have gone, so much so that we can give the guidance that we provided. I cannot give a lot more detail beyond that except to say if we were seeing difficulty or breaks of some kind, we would be calling that out, and we are just not.

Your next question comes from the line of Graig C. Suvannavejh from Mizuho. Your line is open.

I really want to tap into the additional Brinsupri opportunity in the 32 million or so patients who have COPD and asthma as a potential revenue opportunity. Just to clarify, to be able to tap into that patient population, is there anything that you need to do? Do you need to run a clinical study, or how would that mechanically work to be able for a doctor to prescribe that medicine? Would that be off-label or just any color there, please? No. We are speaking very specifically on-label exclusively, and that is all we would ever focus on. The way that flow occurs is that for a physician who has, as Martina described, either asthma or COPD, perhaps is fully treated for that condition but continues to exacerbate and perhaps has sputum expectoration, that patient becomes potentially a candidate for a CT scan to evaluate if the additional difficulties they are experiencing are a byproduct of bronchiectasis. The moment that CT scan and pulmonologist have a definitive diagnosis of bronchiectasis, they are on-label for our drug. If they have had two or more exacerbations, their path to reimbursement for the use of the medicine should be very smooth. So what we are describing is that all of those 32 million COPD and asthma patients we estimate is the number, what percentage of those may still be experiencing exacerbations despite best treatment. Our education efforts are both medical and through commercial channels, compliantly raising the index of suspicion about this and hopefully identifying those patients who would benefit with a definitive diagnosis of bronchiectasis and getting them on Brinsupri.

Your next question comes from the line of Ashwani Verma from UBS. Your line is open.

Thanks for taking our questions. Regarding the TPIP IPF study design, how critical do you think it is for you to show survival benefit to claim a major contribution to patient care versus Tyvaso? And does your potential study design change based on what Tyvaso shows on the survival endpoint in the Teton study that is about to read out? What I would say is that that study design is not yet finalized. Martina, do you want to comment on anything further regarding where we are going with the TPIP program and IPF, particularly the survival endpoint you were raising?

Yeah. We had not really looked at exactly what that design will be. Looking at Teton and what endpoints they use is a good guidance. Certainly, that will be one consideration for us, but we have not, at that point, really communicated on the design. But we will discuss that also with the FDA, and then we will share it with you once we have a better picture of what we will move forward with.

Your next question comes from the line of Benjamin Burnett from Wells Fargo. Your line is open.

Hi. This is Jin Chi on for Ben. Just to confirm, the $1,000,000,000 guidance is for all two pulmonary exacerbation patients, and any one PE patient is upside. And on ARIKAYCE, any commentary that you can provide on blinded data, whether it is PRO or sputum conversion rate, and internally, how do you think about a bar for approval and most importantly, commercial success?

Certainly! On the billion-dollar revenue guidance, yes, it is based on patients who have had two or more exacerbations. We think there is upside from the additional 250,000 patients as a progressive disease. We do anticipate that as the most recent paper identifies, some of those patients with less than two exacerbations will fall into the two or more category as time goes on. Regarding your second question about ARIKAYCE, I am pleased to note that we decided we will not be getting into the game of blended data anymore. We monitor that, but the challenge is always knowing that there is an alternate explanation for whatever promising direction it may suggest. We feel confident in the ARIKAYCE ENCORE readout, as we have already run studies using this drug in this disease and seen successful primary and secondary endpoints on more than one occasion.

Thanks for taking my question. It is on Brinsupri persistence. We recently talked to a pulmonologist who likened Brinsupri to a blood pressure pill in that it prevents long-term damage but does not deliver necessarily immediate symptomatic relief, and he flagged the one-year mark as the key discontinuation risk based on his biologic experience. With your earliest patients now approaching six months on therapy, can you share any aggregate persistence or refill data and talk to your strategy about ensuring persistence with the medicine?

Sure. The first thing I would say is that refills so far are going very well, and I think that is a very positive sign early on. We know that what is great about this medicine is— as was once described by someone at one of the faculty at ATS— it is described as the holy grail of pulmonary medicine because it was the last unaddressed patient population, and the treatment burden of a once-a-day pill is unbelievably low relative to what these people typically take for other indications in the respiratory arena or otherwise. As we think about where we go from here, I would tell you that that profile that dynamic should benefit the uptake of the medicine. We know from the secondary endpoints in the phase three study, especially at the 25 mg dose, patients had a highly nominally statistically significant finding in favor of feeling better on the medicine. So it is our expectation that that storyline will come back and empower physicians to write additional prescriptions. Through that process, we would expect things to grow and expand as our depth increases.

This concludes today's conference call. We thank you for your participation, and you may now disconnect.