Insmed Incorporated (NASDAQ:INSM) Q4 2023 Earnings Call Transcript

Insmed Incorporated (NASDAQ:INSM) Q4 2023 Earnings Call Transcript February 22, 2024

Insmed Incorporated misses on earnings expectations. Reported EPS is $-1.28 EPS, expectations were $-1.13. Insmed Incorporated isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Good day, and welcome to the Insmed Incorporated Fourth Quarter and Full Year 2023 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] And finally, I would like to advise all participants this call is being recorded. Thank you. I’d now like to welcome Bryan Dunn, Head of Investor Relations to begin the conference. Bryan, over to you.

Bryan Dunn: Thank you, Gavin. Good day, everyone, and welcome to today’s conference call to discuss Insmed’s fourth quarter 2023 financial results and provide a business update. I’m joined today by Will Lewis, Chair and Chief Executive Officer; and Sara Bonstein, Chief Financial Officer, who will each provide prepared remarks before we open it up for your questions. 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 results discussed. Please refer to our filings with the Securities and Exchange Commission 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. I will now turn the call over to Will Lewis for prepared remarks.

Will Lewis: Thank you, Bryan. Good morning, everyone. I’m pleased to be speaking with you today at the start of what I believe will be a uniquely transformational year for Insmed. In just the next few months, we expect meaningful data readouts and other relevant updates from across our late-stage portfolio, the results of which could fundamentally change the trajectory for our company and the patients we serve. We have been carefully preparing for this moment for a long time and we are ready for it. It is said that great drugs tend to announce themselves early. ARIKAYCE, brensocatib, TPIP have been showing us compelling signs of their potential from the earliest data points coming out of their respective programs, and I couldn’t be more excited to see what they will show us next.

If they are successful, we believe that they collectively represent more than $8 billion in peak sales potential, a staggering opportunity for any company but especially one our size. In fact, we believe that any one of these assets, even without the other two could form the basis of a successful biotech company. I have never been more confident in the future of Insmed than I am today. But before I get to the future, let me spend just a moment on our fourth quarter performance. ARIKAYCE sales in the quarter once again set a new record and caused us to exceed our increased guidance range for 2023. Importantly, this result reflects not only the continued strong demand for ARIKAYCE, but also the effectiveness of our sales personnel and infrastructure in the U.S., Japan and Europe.

As I continue to see our commercial team outperform expectations, it gives me greater confidence in the ability to realize the commercial potential of brensocatib. These same colleagues will be leading that launch if the ASPEN results are positive, and they will be able to leverage many of the same call points and relationships that they have already spent years building with ARIKAYCE. As you will hear more about in a moment from Sara in the fourth quarter, we used our at the market equity offering program, or ATM, to essentially keep our cash balance flat compared to the prior quarter. This was important strategically because it further resources the company as we near the important clinical readouts ahead, leaving us with more than three quarters of $1 billion on hand as we enter 2024.

Let me start with an update on ARIKAYCE. We continue to be excited about the strong results shown in our Phase 3 ARISE trial in patients with newly diagnosed or recurrent NTM MAC lung disease who have not started antibiotics, which readout last year. More detailed results from this trial are now expected to be presented at the ATS conference in May, which we anticipate will reinforce the excitement that was generated with the top line data set. As I have mentioned previously, we have been engaging with the team of experts at the FDA who review patient reported outcome tools used in clinical trials. After having received encouraging written feedback late in 2023, we expect to meet with them in the coming months to glean any additional feedback and guidance that they may have before finalizing the statistical plan for our Phase 3 confirmatory ENCORE study.

We will provide you with additional updates once that work is complete. Only after all of that feedback is received and incorporated into our plans would we be in a position to approach the FDA about whether there could be an accelerated approval pathway under Subpart H using the ARISE data to expand the ARIKAYCE label to include all patients with NTM MAC lung disease. As we have said before, we believe that the most likely outcome of these discussions is that our ongoing ENCORE trial will be required for filing. I’m happy to report that the ENCORE trial itself is progressing as planned. The Data Safety Monitoring Committee held its third safety review meeting in November and recommended that the trial continue unaltered. There are no interim reviews for either efficacy or futility in this study’s protocol, so this represents the most positive outcome possible.

Importantly, enrollment in ENCORE remains strong. We continue to expect top line results in 2025. Next, let me give you an update on brensocatib. The highly anticipated ASPEN readout continues to progress as we had hoped and remains on track to readout in the latter half of the second quarter. Last month, I laid out the different scenarios that would result in us moving forward with regulatory filings for brensocatib and bronchiectasis. Let’s take a moment to review those again. If either dose achieves an adjusted p value of less than 0.01 on the primary endpoint of reducing the rate of pulmonary exacerbations, that would be a very clear win. And if either dose achieves an adjusted p value of less than 0.05, we expect to also move forward with a filing.

None of that has changed, but let me offer an additional point of clarity on how we will measure success for this trial. We have heard from payors, KOLs and patients alike that achieving a reduction in the rate of pulmonary exacerbations of around 15% would make brensocatib an attractive treatment option for patients with bronchiectasis. So, particularly in a situation where the reported p value is higher than 0.01 but less than 0.05, we would ideally like to see a treatment effect of at least 15%. If the magnitude of the effect is at that level or higher, then I think we have a drug that is not only approvable, but also potentially one that will drive rapid uptake in a market with no approved treatments. As a reminder, we have said that we believe this drug has a peak sales potential of greater than $5 billion, presuming ASPEN is a clear success.

And that is just for the two indications that we are currently pursuing bronchiectasis and CRS without nasal polyps and just in the geographies where we currently operate. In fact, the closer we get to a readout, the more confident and excited we feel. We continue to hear anecdotal reports from sites across the world of patients in the trial doing better with fewer exacerbations and sputum that is thinner and lesser in volume compared to before starting the trial. Of course, we have to acknowledge that the investigators who are providing us these updates remain blinded, just as we are to which patients are on brensocatib and which are taking a placebo, but even so, we believe it is an encouraging sign. We also have been closely monitoring exacerbation rates by region, country, and even individual trial site throughout the course of the trial’s conduct.

So we know that events are occurring at rates that are in line with our expectations and consistent with the treatment effects that the study has been designed to demonstrate. We have also now been through five independent safety monitoring meetings, all of which have resulted in no safety concerns and unanimous recommendations to continue the trial without any alterations. All of these indicators add to our enthusiasm for ASPEN’s readout. Indeed, if one simply walks the halls at Insmed, it is difficult not to notice an almost palpable excitement amongst our colleagues that seems to grow each day as we get closer to the release of the ASPEN data. We all look forward with great anticipation to sharing the top line results in the latter part of the second quarter.

Now, just a quick update on our TPIP program. Last quarter, we provided some details on the blended blinded data we have been generating from our two ongoing Phase 2 studies of TPIP in patients with PAH and PH-ILD. At that time, we disclosed that eight of the first 10 patients in our PH-ILD safety study were able to titrate up to the highest dose in the study, or 640 micrograms once daily by the week five visit. That study is now fully enrolled with 39 patients, and we expect the top line results in the second quarter ahead of the ASPEN readout. Also, on our last quarterly call, we shared that 83% of the first 24 patients in our PAH study had successfully titrated up to 640 micrograms by week five, and of the 22 patients who had completed the 16-week study, we saw a 21.5% average reduction in pulmonary vascular resistance, or PVR.

This includes all patients those who received TPIP and those who received a placebo in a trial that is randomized two to one. If you look at the 64% of those patients whose PVR decreased during the study, the PVR reduction was 47% on average, with several of them achieving reductions greater than 65% and approaching a range that would be considered normal for PVR. These were encouraging results, albeit blinded and in a relatively small number of patients. When the data for this PAH study is unblinded next year, we would view any PVR reduction above 30% as a clear best-in-class result, and one that is potentially achievable in our view given the blinded results we have seen to this point. I also want to announce today for your planning purposes that it is our intention to share updated blinded data from approximately 40 patients in the PAH study at the time we released the top line results from the PH-ILD study, which we expect will be in the second quarter before the ASPEN data.

In addition, we have submitted our proposed protocol amendment for the open-label extension of the PAH study to the FDA and other regulatory authorities. This amendment once implemented would allow investigators to continue to increase the dose of TPIP from a current max of 640 micrograms once daily up to 1,280 micrograms once daily, presuming it continues to be well tolerated. More than 90% of those who have completed the study so far have opted to join the open-label extension, which is another encouraging sign in our view. Now, before I turn it over to Sara, I want to once again highlight the unique position in which Insmed finds itself. We have spent years meticulously and deliberately constructing a company that would have multiple clinical programs with meaningful readouts over a short time window.

With the positive top line ARISE data in September 2023 and the TPIP data in PH-ILD and the ASPEN top line readout expected to come in quick succession in the second quarter of this year. We hope to complete this long-term vision and establish Insmed as a company with three compelling product profiles, which may be capable of generating greater than $8 billion in aggregate peak sales. If we are successful, I believe Insmed will undergo the type of transformation that one rarely sees in the biotech industry and we are now just months away from finding out. I want to be clear that the data we have observed so far across all three of our mid to late stage programs, from the reports of the independent committees that monitor safety findings to the data generated in previous positive trials, to the detailed blinded data we continuously analyze, to the positive anecdotes we hear from investigators involved in our studies only increases our confidence in the potential for a successful outcome for each of them.

I couldn’t be more pleased or more excited with where things currently stand. I’ll now turn the call over to Sara to walk through our financials for the quarter.

Sara Bonstein: Thank you, Will, and good morning, everyone. Earlier today, we issued a press release detailing our financial results for the fourth quarter and full year 2023. I would like to highlight some details of those results for you now. I am pleased to share that our year-end 2023 cash position of approximately $780 million remains relatively unchanged from our Q3 cash position, as we were able to offset the majority of our burn this quarter with proceeds under our ATM. The uses of our ATM this quarter reflects the significant investor interest that has been building recently. I am proud that our stock increased 23% during the fourth quarter while we were utilizing this program. While we have substantial capacity under our new ATM in the near-term, we do not plan to utilize it proactively.

Having spoken with many of you recently, I know that there are concerns that we may choose to do a large equity raise prior to our upcoming data readouts. I want to be as clear as I can be on this point. Given our strong cash position, we do not currently anticipate the need for a significant equity raise prior to the ASPEN readout. Instead, at the appropriate time, we intend to evaluate all possible options for balance sheet augmentation and choose those options that would be most beneficial to our shareholders, patients and other stakeholders. We see the sale of equity as simply one of the many tools available to us and it is by no means our preferred avenue for raising capital nor do we see a need to take action in the near-term. Looking at our expected cash burn in the coming year, let me remind you that our burn in the first quarter of every year is normally higher than our usual cadence due to the payment timing of annual employee incentive bonuses.

Importantly, our current cash balance provides us with more than enough capital to support our operations through the expected timing of the ASPEN top line results and beyond, leaving us with significant optionality on the other side of that readout. Let me now turn to our commercial performance. Last month at an Investor Conference, we disclosed that our global net revenues for 2023 were $305.2 million, representing 24% year-over-year growth and exceeding the top end of our guidance range for the year. This result is even more impressive when you recall that this range had already been raised earlier in the year due to the strong performance of ARIKAYCE, which had outpaced our internal expectations. On a regional basis, net revenue for 2023 was $224.2 million in the U.S., up 21% compared to the prior year.

This growth was fueled by the strong execution of our teams to continually identify new eligible patients who may benefit from ARIKAYCE treatment, making 2023 the highest year of new patient starts that we’ve ever had. In Japan, 2023 revenues were $65.7 million, representing 16% growth over 2022. As we had expected and highlighted for you previously, the pace of sales growth in Japan increased significantly in the second half of the year, going from 8% year-over-year growth in the first half to 23% year-over-year growth in the second half of 2023, despite a planned 9% price decrease that was implemented this past June. I want to acknowledge, the strong new leadership team we put in place in Japan in early 2023, which led to such a remarkable outcome this year.

The quality and effectiveness of their leadership gives me continued confidence in the growth trajectory for ARIKAYCE in Japan in 2024 and beyond. In Europe and the rest of world, net revenues in 2023 came in at $15.3 million, the strongest result of any year-to-date for that region with growth being driven primarily by Germany and the UK. The performance in 2023 continues to support our view that ARIKAYCE remains in a growth phase globally. Today, we are reiterating our full year 2024 global revenue guidance range we gave last month of $340 million to $360 million. As you think about the quarterly cadence for our sales this year, I will remind you about the deductible and copay resets for Medicare patients in the U.S., which typically lead to a sequential drop in sales in the first quarter compared to the fourth quarter.

In addition, the timing for when hospital budgets reset in Japan commonly lead to lower first quarter sales in that region as well. Historically, the first quarter has contributed a little over a fifth of each year’s total sales. We believe that these same dynamics will impact the first quarter of 2024. Despite this expected seasonal pressure, trends coming out of 2023 were very positive and we believe set us up well for another strong year of performance in 2024. Let me now turn to a few additional financial items. In 2023, our gross to nets in the U.S. were 15.4%, which is consistent with both our mid-teen guidance range and our historical performance. In 2024, we expect gross to nets will settle in the mid to high teen range due to marginal impacts resulting from the implementation of certain provisions of the Inflation Reduction Act.

As in prior years, we expect the gross to nets in the first quarter of the year to be a bit higher before coming back down in the remaining quarters of the year. Cost of product revenues for 2023 was $65.6 million, or 21.5% of revenue, which remains consistent with our past performance. Turning to our GAAP operating expenses. For full year 2023, research and development expenses were $571 million and SG&A expenses were $344.5 million, reflecting non-cash charges related to asset acquisition in 2023, as well as continued investment in both our early and mid to late stage pipelines and launch readiness activities for brensocatib. In closing, I believe Insmed is in a very strong financial position with over three quarters of a billion dollars on its balance sheet and multiple near term clinical catalysts on the horizon.

We look forward to using the resources we have to deliver on the great potential that lies ahead. Now, I’d like to open the call to questions. Operator, can we take our first question, please?

See also 12 Best Marijuana Stocks To Invest In and 25 Safest Cities in Asia to Visit In 2024.

Q&A Session

Operator: [Operator Instructions] Your first question comes from line of Jessica Fye from J.P. Morgan. Your line is open.

Nick Lenard: Hi. This is Nick on for Jess. Thanks for taking our questions. Two from us. First, you mentioned this in the prepared remarks, but I was hoping if you could provide some additional details and maybe timelines around when you expect to have the final stat plans for ENCORE agreed upon with the FDA. And what your latest thinking is around potentially needing or not needing to make any changes to PRO based on any initial feedback.

Will Lewis: So that’s a pretty straightforward one. I mean, we’re in dialogue with FDA, as soon as they are able to meet with us in person, talk through the remaining elements of the PRO to their satisfaction, we’ll give that guidance out. This is one of those things where we don’t have control over the clock. It’s sort of the ball in their court. And I would just reemphasize our interactions with them to date have been very positive. Perhaps, I can go into an example of a detail for how this might unfold. One of the questions that’s contained within the PRO asks about the color of the sputum and from the PRO group that is inside the FDA, right? This is a separate group within FDA. They have been contemplating whether that is really a relevant question in the context of a patient reported outcome.

So whether they keep that question or advise us not to keep that question, it makes no difference in the way we analyze what we need to do or how we’re executing. And indeed, the ARISE data works both ways. We’ve run it both ways, so we’re not concerned about it, but it is the kind of detail that we need to run to ground before we can finalize the statistical analysis plan and therefore communicate what ENCORE needs to look like. But I just would tell you, we’re going exactly as we expected in terms of timeline and progress dialogue with FDA. I would expect this will happen in the coming months and we will communicate it as soon as it’s available. And that would give us the opportunity, once that’s locked down, to then return to FDA, the review division and say, do you think ARISE is adequate for us to file and secure earlier approval in the all MAC NTM indication.

My hope is that they would be willing to engage there. But again, our base case is assuming that we would need ENCORE for full approval.

Nick Lenard: Great. And then maybe taking a step back and thinking about brenso beyond bronchiectasis, this is not to overlook ASPEN, obviously, but how are you thinking about the level of neutrophil mediation involved in the pathology of CRS without nasal polyps and HS relative to bronchiectasis, in terms of it being a driver of each disease?

Will Lewis: Yes. So that’s exactly why we’ve chosen these two as our second and third indications to pursue. They are neutrophil driven diseases, particularly when we talk about something like CRS without nasal polyps versus CRS with nasal polyps. CRS without nasal polyps has nothing approved to treat it. Right now, the patients we’re targeting within that population are those that are undergoing, quite often repeat surgeries. So the threshold here for unmet medical need is quite high, and the ability of this product to influence the inflammatory cascade by mediating that neutrophil driven inflammation looks pretty good. There aren’t great models in the animal world for CRS without nasal polyps, which is why we really need this BiRCh trial to read out.

And we will be interpreting the ASPEN data with exactly that in mind. How much impact do we think we’re having? That magnitude should carry forward into other neutrophil mediated diseases, like CRS without nasal polyps and hidradenitis suppurativa, or HS. HS will kick off a Phase 2 trial by the end of this year, presuming that ASPEN is good and that we don’t learn anything that might mitigate that. Perhaps, a final point of detail on the HS study, we intend to structure it right now in a way where we will look as we go through the study to see that we are seeing some kind of response in Phase 2. And indeed, if that is not a cascade that is resulting in benefit to patients, we would look to shut that study down early. But I think we’re going to be in a good spot with regard to all three of these, because they are neutrophil driven diseases.

Sara Bonstein: And I would just add one thing just to remind folks that bronchiectasis is obviously a very significant market opportunity. CRS is also a very significant market opportunity. 26 million patients diagnosed with CRS without nasal polyps in the U.S. alone. While we will obviously target the more severe ends of that, it’s a very significant TAM and ability to influence patients.

Nick Lenard: Great. Thank you.

Operator: Your next question comes from the line of Jennifer Kim with Cantor Fitzgerald. Your line is open.

Jennifer Kim: Hi, thanks for taking my questions. Maybe to start with brensocatib, I know you’ve said that exacerbation rates are occurring in line with expectations. I think you’ve suggested before that it’s reasonable to expect that rate to tick up as we move further away from COVID. So I’m just wondering, can you remind us what else is embedded in your expectations for these patients given the timing of enrollment and follow-up? And is there more recent literature that sort of covers the natural history of exacerbations in the 2022 and 2023 timing? Thanks.

Will Lewis: Sure. So just to remind everybody, I think it was a little over a year ago that we gave the only guidance we had on the blended blinded rate of exacerbations going on in the study. And that was 1.12 to 1.15. And what we were trying to do there is give you a snapshot with a bulk of the study having been engaged and many patients having completed as to what that rate looks like. And what was exciting to us at that time is that that paralleled what we saw in the WILLOW study, which as you all know was very successful. So it looked as though the behavior of this population was very similar to the WILLOW population. We also released the baseline characteristics, which were almost identical between the two studies. So once again, when we think about the strategy behind the study design, it was to replicate what we saw in Phase 2.

Add nothing new, change as little as possible, so that all we’re really doing is scaling up what we knew was a successful Phase 2 study. As we reflect on influences on rates of exacerbation, seasonality, things like COVID, et cetera, I would just share that when we did the small study using brenso and CF patients, we didn’t see any influence there as a result of the COVID or other seasonal impacts. We didn’t see any impact on the Arise study, it’s a different population, but it’s similarly a respiratory condition. And so for those reasons, we feel good about the backdrop of what a large study can collect and how these things are not likely or expected to be an influence. The vast majority of the patients we have recruited and have been in this study were recruited at a time after the restrictions had been lifted for COVID.

And those that were recruited during the time of COVID restriction had to have two or more documented exacerbations to get into the study. So what does that mean? It means that the key to this study being successful is having enough events in evidence so that our drug can show its impact. And indeed, the blended blinded rate, our examination at the site, country, and regional level, all of these things are consistent with our expectations that we’re seeing enough events and that we should be able to witness the impact of the drugs treatment.

Jennifer Kim: Okay. And maybe one question on ARIKAYCE. The ATS Conference presentation in May, I think before you’ve said that the efficacy is pretty consistent across the individual symptoms. So is there anything new in the detailed data that you would highlight to.

Will Lewis: Well, I would – without sort of jumping the gun here, I would just encourage you to take a close look at ATS. I think we’re going to have a number of different data sets that are out there that are trying to do a more refined look, if you will, at what came out of ARISE, and indeed some other earlier stage work that we’re doing to try to illustrate the ways in which you can lean even more heavily on the results of ARISE, the results of WILLOW, and the promise of TPIP. What’s great about ATS is that all three of those potential compounds or actual compounds, can be featured and discussed among a peer set. And I know from last year, when we had that experience at ERS and other conferences, it’s really quite something to be there and be the subject of discussion among each of those different key opinion leader communities, all of whom are saying to us, your drugs represent first or best-in-class treatments for these populations.

Jennifer Kim: Okay, that’s helpful. Thanks, again.

Operator: Your next question comes from line of Tiago Fauth from Wells Fargo. Your line is open.

Tiago Fauth: Hey, thanks for taking a question. Just two quick ones for me. So, on TPIP, I just want to recap, what are we actually going to get in Q2? I know it’s mostly a safety focus for the PH-ILD patient readout, but I’m wondering when we’re going to get more detailed PK/PD data, maybe efficacy, and what else could we see? Feels like a lot of investors are seeing tip it more as a show me story. And then just on the frontline, ARIKAYCE opportunities still get some skepticism there based on either ease of use or standard of care or even cost. But again, assuming you can replicate data similar to ARISE, how would that play out commercially? Thank you.

Will Lewis: Yes, sure. So on the TPIP front, I mean, I think everything we’ve seen there on a blended blinded basis suggests that this is a best-in-class therapy. I share the observation that there are many who are not, I don’t know, if the right phrase is giving us credit for that asset. I think that’s a miss. Very bluntly, I think if you look at the profile that that drug represents, just looking at the responders in the PH study that we’ve provided so far suggests pretty profound impacts that are best-in-class in this disease state. So it’s a small number of patients, it’s early, we need to see more data. But if it continues to point in that direction, and we’ve tried to be very specific today, north of a 30% PVR reduction, when we unblind the PH study next year, we would consider to be best-in-class.

We remember sotatercept, which was acquired after Phase 2 and showing 33.4% reduction at its highest dose in PVR. And among the responders in our study so far, we’re seeing 47% reduction. Even if it drifts down, that still is a very compelling profile for a drug that nobody currently is giving us a lot of credit for. And I think that one is – that’s the reason I refer to it as the sleeper within the company. We will be providing at the time of the PH-ILD top line results, both the data about the PH-ILD study, which is a safety study, and I’ll talk about those data in a second, but also data from 40 patients in the PAH study to update you on what that blended, blinded data looks like. And does it continue to look as strong as it has been?

And as I say, even if it drifts down a little bit, I think it’s going to be incredibly compelling. On the PH-ILD front, it is – can we get patients to the max dose? And we know that more than 80% have already gotten there so far. And can they get there without experiencing the negative side effects that are so common in this class of therapy. There are a number of other sort of smaller points, we’ll get those data out as soon as we can. But I think we’ve enumerated it in our slide deck on our website as well, if you want to go through to each of the itemized points. Your second question, which was on NTM and the ARISE data and the commercial potential there, let me just put it to you this way. We know from what’s going on in this marketplace and the challenges of treating NTM patients, this is an incredibly difficult disease to treat and to treat effectively.

When we looked at our CONVERT data, we saw a 33% conversion rate in patients who were refractory and that was a remarkable accomplishment in the mind of everybody in this disease state. ARISE showed that after six months we were able to convert 80% of the patients. So I don’t know how much better the data could be than it was in ARISE in terms of ultimately accomplishing the goal of converting patients who have positive sputum. So I think if anything, what you’re going to see is a natural shift to want to treat these patients earlier with ARIKAYCE because you have the chance to eradicate them in six months, up to 80% of the patients. That alone will drive and already has driven the dialogue among KOLs to the need to treat early and with ARIKAYCE.

Tiago Fauth: Understood. Thank you very much.

Operator: Your next question comes to line of Andrea Tan of Goldman Sachs. Your line is open.

Andrea Tan: Good morning. Thank you for taking my questions. Well, just one question here. In the PR, there is this note that the Japanese regulatory agency has this desire to see 12 months of treatment exposure and durable culture conversion. Just wondering if you have a sense if the FDA will have similar requirements and I asked this in the context of this potential path to accelerated approval for frontline that you mentioned?

Will Lewis: Yes. So the FDA and the PMDA have different requirements. This is true going back to when they first started examining the drug and its impact. In Japan, the PMDA is very specific. They want to see culture conversion. In the U.S., the FDA has been equally specific. They want to see impact on PRO. It’s not that they won’t look at culture conversion. And indeed, our conditional approval for refractory MAC was granted because of the profound impact we saw on culture conversion. But they want for – to meet their own mandate of clinical effect as they perceive it. There needs to be an impact on the patient reported outcome. That’s why this tool is so important to get right from the FDA’s perspective. When we look at the landscape of how people evaluate this drug, whether it’s the European or the Japanese regulatory authorities, the key opinion leaders, the market access world or indeed patients themselves, they are all centered on culture conversion.

It is the FDA in isolation that really wants to focus on the PRO. So the direct answer to your question is, while FDA will always be looking at the totality of the data, the thing that they are looking to have evidence of is impact on the PRO. And that’s why ARISE presents us the opportunity to approach them about a Subpart H approval, because we did see a consistent improvement on the PRO in the ARISE results. And so on the basis of that, we think it’s reasonable to go to them and say, given that we’ve had this positive impact on the PRO, would you be willing to permit us to review, to file and secure earlier approval. Also, knowing that ENCORE as a study is already enrolled and largely spoken for. So they don’t have to worry about us not following through, which is a common concern at FDA.