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Operator: Good morning, and welcome to the Insmed First Quarter 2023 Financial Results. My name is Nandaja, and I will be your operator today. At the end of the presentation, there will be an opportunity to ask questions [Operator Instructions] I shall now hand over to Bryan Dunn to begin.

Bryan Dunn: Thank you, Nandaja. Good day, everyone, and welcome to today’s conference call to discuss Insmed’s first quarter financial results for 2023 and provide a business update. I am joined today by Will Lewis, Chair and Chief Executive Officer; and Sara Bonstein, Chief Financial Officer, who will each provide some prepared remarks. Later, they will both be joined by Dr. Martina Flammer, Chief Medical Officer for the Q&A session. Before we start, please note that today’s call will include forward-looking statements based on current expectations. These statements represent our judgment as of today and inherently involve risks and uncertainties that may cause actual results to differ materially from the results discussed.

Please refer to our filings with the Securities and Exchange Commission, which are available at www.sec.gov and on our website for more information concerning the risk factors that could affect the company. The information on today’s call is for the benefit of the investment community. It is not intended for promotional purposes and it is not sufficient for prescribing decisions. With that, I will turn the call over to Will Lewis for prepared remarks.

Will Lewis: Thank you, Bryan, and good morning, everyone. I am pleased to report that Insmed began 2023 exactly how we hoped it would, with a strong quarter of commercial execution, which delivered 23% revenue growth, while also continuing to fulfill its promises from a research and development perspective. By nearly any measure, the most important pipeline milestone for Insmed in the first quarter was the completion of enrollment in the ASPEN study of brensocatib in adult patients with non-cystic fibrosis bronchiectasis. On last quarter’s conference call, we reiterated our goal to enroll more than 1,600 adult patients in ASPEN by the end of March, which in itself would have been an unprecedented achievement for a study in this patient population, both in terms of overall patient numbers as well as the pace of enrollment.

But in reality, we exceeded even that ambitious enrollment target. In total, the ASPEN study enrolled more than 1,700 adult patients at more than 460 sites in nearly 40 countries. To put that in context, that is more than 75% larger than any prior Phase III program in this indication and was achieved in a similar amount of time despite enrolling during the global respiratory pandemic. In fact, the number of patients enrolled in ASPEN during just the first quarter of 2023 exceeded the entire enrollment of our Phase II WILLOW study. This speaks to the number and motivation of patients seeking solutions for this condition and adds to our confidence in the potential commercial opportunity for brensocatib. None of this could have been achieved without the tireless dedication and passion of our brensocatib clinical colleagues, who deserve tremendous credit for getting us to the position we are in.

Perhaps most importantly, the achievement of this enrollment goal largely derisks the timing of the readout of the ASPEN study, which we continue to believe will be in the second quarter of 2024. This data readout will be a major inflection point for Insmed with the potential to quickly transform the company from one that serves tens of thousands of patients currently to one that could serve more than 1 million upon brensocatib’s potential approval as a first-in-disease, first-in-mechanism treatment for bronchiectasis. And even that number of patients could be just the beginning. Brensocatib and the DPP1 pathway that it targets has the potential to address the host of diseases caused by neutrophilic inflammation with bronchiectasis representing just the first on that list.

And while we’re on the topic of ASPEN, I hope you saw that with our earnings announcement this morning, we also released on our website the baseline characteristics of the participants in the ASPEN study. To put these characteristics into context, we provided a side-by-side comparison of each attribute to that of the participants in our Phase II WILLOW study. Although I won’t talk through all of the details on this call, what you will find is that the patients enrolled in ASPEN are remarkably similar to those who were enrolled in the successful WILLOW study, including age and gender as well as importantly, the percentage who have had 3 or more exacerbations in the 12 months before entering the study; chronic macrolide use and other relevant comorbidities, such as COPD.

All of this adds to our confidence that we have designed this trial to give us the best chance to successfully replicate the results shown in Phase II, potentially opening up the pathway to the first regulatory filings for brensocatib. As you know, the Insmed story goes well beyond the promise of brensocatib. In the time between now and the ASPEN readout, we expect a series of important catalysts from each of our four development pillars. Let me take a moment to update you on just a selection of these catalysts. Just days from now, on Monday, May 8, we will host our Research Day, titled, The Future of Rare at Insmed: Functional Genes, AI-Enhanced Proteins, Glowing Algae, and More. This is the moment that we and many of you have been waiting for, as we finally will have the opportunity to showcase the depth and breadth of our early-stage research efforts, which have been operating behind the scenes and under the radar for nearly two years now.

We are extremely excited to unveil multiple proprietary and cutting-edge technologies and platforms that we have assembled. We believe these acquired capabilities have the potential to work synergistically to transform the treatment landscape for serious and rare genetic diseases. As we have said before, we expect this early-stage research engine to generate at least six INDs by the end of 2025 while accounting for less than 20% of Insmed’s overall spending. We can’t wait to introduce you to what we’ve been working on and to some of the extremely talented people behind that work. If you are not able to join us in person in New York on Monday, we invite you to tune in to the live webcast or replay both of which will be available on our website.

Right after our Research Day, we will quickly turn our attention to the American Thoracic Society International Conference or ATS in the second half of May, where we will showcase new clinical, preclinical and real-world data in 8 presentations across ARIKAYCE, brensocatib and TPIP. This will include real-world ARIKAYCE and NTM lung disease data as well as subgroup analyses from the Phase II WILLOW study of brensocatib in bronchiectasis. In addition to presenting new data at ATS, we will also be engaging with the treating community on disease state awareness as we ramp up activities to support the potential launch of brensocatib in bronchiectasis. In the third quarter, we continue to expect to release the top line efficacy and safety results from the ARISE trial for ARIKAYCE in patients with newly diagnosed or recurrent MAC lung infection who have not started antibiotics.

As a reminder, the efficacy portion of this data set will include PRO or patient-reported outcome data, which is required by the FDA as well as sputum culture conversion measures, which is required by regulatory authorities in Japan and other ex U.S. markets. This PRO continues to be a topic that comes up often in my conversations with all of you. So let me try to be as helpful as I can. The PRO measures we are using for ARISE and ENCORE consists of two separate scores. The first is focused on respiratory symptoms. These questions are taken from the respiratory domain of the quality of life bronchiectasis questionnaire. The second score is based on questions focused on fatigue-related symptoms and comes from another existing questionnaire called PROMIS Fatigue 7a.

Both of these PROs have been validated in other respiratory diseases and shown to be sensitive to patient symptoms, which is why we have chosen to use them as a starting point in our trials. At this point, we don’t know if all of the questions or just a subset of them will prove to be sensitive to changes in patients’ symptoms in the MAC setting. The ARISE study, although not powered to show statistically significant differences between trial arms is designed and sized appropriately to help us validate a respiratory PRO and a fatigue PRO for use in patients with MAC and to provide us with learnings about the questions that are most informative clinically. For example, if there is a specific respiratory-related question that shows no change in either trial arm even while some patients are reporting overall improvement in breathing symptoms, then we might conclude that the question is not especially meaningful.

These types of analyses could result in certain questions being prioritized or deprioritized in how we ultimately calculate the PRO scores within the registration-enabling ENCORE study. This is just one example of many analyses that we will evaluate iteratively after the readout of ARISE in order to determine the most optimal set of respiratory and fatigue questions to be used in ENCORE. After this thorough analysis of the ARISE data is complete, we will then need to discuss our conclusions and obtain agreement with the FDA. So we do not anticipate being in a position to share any of these conclusions at the time of the ARISE top line press release. So what are we expecting to show you when the ARISE data reads out? At a minimum, we expect to disclose the following data points.

First, we will provide the change in patient scores from baseline to month seven, which is one month after ending treatment for both the quality of life bronchiectasis and the PROMIS Fatigue questionnaires in the active and control arms. Next, we will share data measuring how much of a change in the respiratory and fatigue PRO scores is associated with a meaningful improvement for patients in terms of their symptom severity. These data will be collected from the entire population of subjects enrolled into the ARISE study and will be used to validate whether these PRO questionnaires are responsive in this population. We will also disclose the proportion of subjects achieving culture conversion within each trial arm. Although we will be looking at the correlation between changes in PRO scores and culture conversion, showing that correlation in ARISE and ENCORE is not a requirement for FDA approval.

Finally, we will provide information on the safety and tolerability profile observed in the trial. We plan to schedule a call for the day of the data release in order to discuss any questions you may have. While we’re on the topic of ARIKAYCE, let me provide you with two additional updates on the program. I’m pleased to report that the second meeting of the Data Safety Monitoring Board or DSMB was held for ARIKAYCE, where it was recommended that both the ARISE and ENCORE trials continue as planned. As you know, the DSMB only reviews for safety. So this represents the most favorable possible outcome. Separately, we continue to monitor on a blended basis, blinded data, the discontinuation rate in the ARISE trial. Encouragingly, this rate has remained consistent with the 15% figure we disclosed earlier in the year, which is less than half of the rate we observed in the refractory setting.

We view both of these updates as additional points of validation for the potential success of ARIKAYCE in the broader MAC setting. Finally, a brief update on our TPIP program. Earlier this week, the DSMB met to review the safety data from our ongoing Phase II PH-ILD and PAH trials and reported no safety concerns and a recommendation to continue the studies unmodified. This is once again the best possible outcome and an early positive sign for the program. Before I turn the call over to Sara to walk you through the financial performance for the quarter, let me take just a moment to discuss the ARIKAYCE commercial franchise. We continue to believe ARIKAYCE is a growth story, particularly in the U.S. and Japan. Despite the softness that is typical in the first quarter in the U.S. due to the impact of deductible and copay resets for Medicare patients, we saw sequential growth in the first quarter in U.S. ARIKAYCE sales for the first time since its initial launch.

We see this as a sign of positive momentum for the U.S. moving forward. In Japan, as we’ve said before, we anticipate growth may be more weighted to the back half of ’23, especially now that the nation has announced it is finally lifting its COVID restrictions. This is reported to begin next week on May 8. In closing, I’m proud of what Insmed has accomplished to date in the research lab, in the commercial markets and in the lives of our patients. I am excited by what the future holds as we approach a period when key clinical readouts will reshape Insmed, and I believe provide us with multiple potential pathways to transition into a sustainable biotechnology company with a future that is even more impressive than our past. I’ll now turn the remarks to Sara to walk through our first quarter financials.

Sara Bonstein: Thank you, Will, and good morning, everyone. I am pleased to share with you some of the details of Insmed’s financial performance for the first quarter of 2023. We ended the quarter with $999 million in cash and cash equivalents and marketable securities. This represents a cash burn of approximately $150 million since year-end 2022. Although this level inferred is higher than we have seen historically, we do not expect to — it to continue into future quarters this year. While we do have some additional costs that are expected to recur, such as the incremental payments related to our newly issued debt, which accounted for approximately $12 million this quarter, the majority of the increase was specific to this quarter, such as our annual employee incentive compensation payouts.

It continues to be our expectation that our current cash position will comfortably support our operations as we read out the upcoming string of important clinical catalysts from each of our pillars, leaving us with meaningful cash remaining on hand even after the ASPEN data readout in the second quarter of 2024. Looking at ARIKAYCE performance for the first quarter of 2023. Total net revenue for ARIKAYCE was $65.2 million, reflecting 23% growth year-over-year. On a regional basis, net revenue was $49.1 million in the U.S., $13.2 million in Japan and $3 million in Europe and Rest of World. As Will mentioned, despite the deductible and copay dynamics that always negatively impact U.S. sales in the first quarter, ARIKAYCE posted sequential growth in the U.S. compared to fourth quarter of 2022 and was up 20% compared to the first quarter of last year.

We are encouraged by the continued positive momentum we’ve seen in the U.S. in terms of enrollment forms and new patient starts on ARIKAYCE, which supports our belief that there is still more room for growth for the brand in its current indication. In Japan, ARIKAYCE grew 23% this quarter compared to the first quarter of 2022 despite our sales activities being negatively impacted due to persistent COVID restrictions in the country, which have led to revenue coming in slightly below the fourth quarter. As a parallel example, when the U.S. entered a period of strict COVID restrictions in 2020 and 2021, we saw a plateauing of ARIKAYCE revenues while those restrictions were in place before returning to growth as people resume their normal activities.

We are seeing the first part of that play out in Japan right now as the recent sequential performance of ARIKAYCE plateauing indicates. As a result, we expect ARIKAYCE revenues in Japan to remain range-bound through the second quarter when we expect these restrictions to begin to lift, setting up the second half of 2023 for a potential return to sequential growth for the territory. In addition, as we anticipated, next month, a onetime 9% price decline will go into effect in Japan. Encouragingly, this adjustment is on the low end of the expected range that we laid out on our last earnings call and adds to our confidence that ARIKAYCE will be able to achieve attractive growth in Japan in the second half. Finally, Europe continues to contribute modestly to global revenues in line with our expectations.

Today, we are reiterating our 2023 revenue guidance for global revenue of ARIKAYCE of $285 million to $300 million, reflecting continued strong growth for the brand. Let me now turn to a few additional financial items from the first quarter. In the first quarter of 2023, our gross to net in the U.S. were approximately 18%. This is consistent with our internal expectations for the first quarter, which always had higher gross to nets in the remaining quarters of the year. On a full year basis, we continue to expect our gross to nets will be in the mid-teen range, which is in line with our historical performance. Cost of product revenues for the first quarter of 2023 was $13.8 million or 21.2% of revenues on a percentage basis, which is also in line with prior year’s first quarter.

Turning to our GAAP operating expenses. In the first quarter of 2023, research and development expenses were $127.9 million, and SG&A expenses were $79.9 million, reflecting continued investment in both our early and mid- to late-stage pipelines as well as launch readiness activities for brensocatib. Importantly, R&D expenses this quarter included a noncash charge of $10.3 million related to the previously announced acquisition of Vertuis Bio. Excluding that charge, R&D expenses for the quarter would have been slightly down compared to the fourth quarter of 2022. In closing, Insmed continues to perform well with strong commercial execution across the geographies where we operate and a solid cash position that can support the business through the upcoming period of important clinical readouts and beyond.

I’ll now turn the call back to Will for closing remarks.

Will Lewis: Thank you, Sara. I have never been more excited about the trajectory for Insmed. Our team is energized, inspired and determined to meet the ambitious goals we have set out for ourselves. We believe we are well on our way to creating the next great biotechnology success story with multiple meaningful clinical catalysts poised to read out in the near term and an early-stage research engine that we can’t wait to share with you in just four days. I would like to thank the patients who participate in our studies and the caregivers and families who support them as well as our shareholders, all of whom have placed their trust in us to deliver great things for patients with serious and rare diseases. We don’t take that trust lightly, and we are committed to delivering on those promises. With that, I’d like to open the call to questions. Operator, can we take the first question, please? Operator? Dear folks bear with us one second while we try to find our operator.

Operator: Hello, can you hear me?

Will Lewis: We can hear you now. Yes, thank you. Could we take the first question, please?

Operator: [Operator Instructions] The first question comes from the line of Jessica Fye from JPMorgan.

Operator: The next question comes from the line of Andrea Tan from Goldman Sachs.

Operator: The next question comes from the line of Judah Frommer from Credit Suisse.

Operator: The next question comes from Jennifer Kim from Cantor Fitzgerald.

Operator: The next question comes from the line of Leon Wang from Barclays.

Operator: The next question comes from Graig Suvannavejh from Mizuho Securities.

Operator: Our next question comes from the line of Stephen Willey from Stifel.

Operator: Our next question comes from the line of Ritu Baral from TD Cowen.

Operator: The next question comes from Joseph Schwartz from SVB Securities.

Operator: The next question comes from the line of Jason Zemansky from Bank of America.

Operator: The next question comes from Liisa Bayko from Evercore.

Operator: Our next question today comes from the line of Jeffrey Hung from Morgan Stanley.

Operator: With that, our Q&A session comes to an end. And I’ll now hand back to Will Lewis to continue.

Will Lewis: Thanks everyone for joining us, and we hope to see you or have you join us next Monday, March — May 8 at 8 a.m. in New York City.

Operator: That brings us to the end of our call. Thank you for joining. You can now disconnect.