Insmed Inc

NASDAQ:INSM

Earnings Call Analysis

Insmed's Strong Q2 2024 and Future Outlook

Insmed ended Q2 2024 with $1.25 billion in cash, bolstered by a $713 million equity raise. Global net revenues reached $90.3 million, a 17% increase year-over-year. U.S. sales grew by 11%, while Japan and Europe saw 35% and 37% increases, respectively. The company maintains its full-year revenue guidance of $340-360 million. Preparations for the 2025 launch of brensocatib are on schedule, with notable progress in regulatory filings and inventory planning. Insmed remains confident in its commercial readiness and potential growth, underscored by robust performance from ARIKAYCE and positive readouts for brensocatib and TPIP.

Strong Financial Performance and Improved Cash Position

Insmed's financial performance for the second quarter of 2024 was marked by substantial progress. The company ended the quarter with $1.25 billion in cash and cash equivalents, representing an increase of $651 million from the previous quarter. This increase was primarily driven by an equity raise that added $713 million on a net basis, supplemented by cash received from the exercise of stock options. Excluding these items, the underlying cash burn for the quarter was approximately $139 million, consistent with historical trends. Additionally, the company's $225 million convertible debt instrument maturing in January 2025 has been almost entirely converted to stock, showcasing strong financial management .

Revenue Growth Across Key Regions

Insmed reported global net revenues of $90.3 million for the second quarter of 2024, reflecting a 17% year-over-year growth. This was the highest quarterly sales of ARIKAYCE in the company’s history. In the U.S., sales were up 11% to $63.8 million. Japan showed an impressive 35% increase in revenue to $21.1 million, thanks to expanded sales force efforts and favorable inventory patterns. In Europe and the rest of the world, revenue increased by 37% to $5.4 million, mainly driven by strong performance in the U.K. and Germany. The positive revenue growth has kept the company on track to achieve its full-year global revenue guidance of $340 million to $360 million .

Positive Clinical Developments

During this quarter, Insmed achieved several clinical milestones. The ASPEN study for brensocatib showed positive results, demonstrating the drug's ability to reduce pulmonary exacerbations, improve lung function, and maintain a safety profile comparable to a placebo. These promising results were celebrated at the World Bronchiectasis Conference in Dundee, Scotland, generating enthusiasm among patients and physicians alike. Additionally, the Phase II data for TPIP (treprostinil palmitil inhalation powder) in patients with pulmonary hypertension due to interstitial lung disease (PH-ILD) indicated significant reductions in pulmonary vascular resistance, adding to future growth prospects for Insmed .

Preparation for Brensocatib Launch

Insmed is rigorously preparing for the anticipated launch of brensocatib in bronchiectasis. Regulatory filings, commercial readiness, payer discussions, and inventory planning are progressing on or ahead of schedule. The company has already hired 119 out of the planned 120 sales representatives, ensuring a robust commercial infrastructure. Expecting regulatory approval by mid-2025, Insmed is focused on ensuring payer access and physician awareness to make the launch successful. This launch represents a career-defining opportunity for the company and its stakeholders .

Upcoming Clinical Readouts and Developmental Pipeline

After brensocatib's launch, Insmed anticipates additional clinical readouts that could further drive growth. These include Phase II readouts for brensocatib in CRS without nasal polyps and TPIP in PAH, as well as the Phase III readout of ARIKAYCE in newly diagnosed MAC lung infection. Progress is also being made in exploring next-generation DPP1 inhibitors and other potential indications for neutrophil involvement diseases such as rheumatoid arthritis and lupus nephritis. Insmed is advancing its first candidate from this group into IND-enabling studies, underlining its commitment to maintaining leadership in this new class of medicines .

Reiterated Full-Year Guidance and Strategic Goals

The company's performance has aligned with its full-year revenue guidance of $340 million to $360 million. With a strong financial position, Insmed is poised to achieve self-sustaining profitability. The focus remains on the successful launch of brensocatib and the expansion of ARIKAYCE's label, which could potentially make ARIKAYCE a $1 billion-plus product. The company is keen on executing its strategic goals across its four main pillars, ensuring sustained growth and value creation for its shareholders .

Earnings Call Transcript 2024-Q2

[Operator]

Thank you for standing by. My name is John, and I will be your conference operator for today. At this time, I would like to welcome everyone to the Insmed Second Quarter 2024 Financial Results Call. [Operator Instructions] I would now like to turn the call over to Bryan Dunn, Head of Investor Relations. Please go ahead.

[Bryan Dunn, executive]

Thank you, John. Good day, everyone, and welcome to today's conference call to discuss Insmed's second quarter 2024 financial results 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 prepared remarks, after which, they will be joined by 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 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 we will discuss on today's call is meant for the benefit of the investment community. It is not intended for promotional purposes and it is not sufficient for prescribing decisions.

I will now turn the call over to Will Lewis for prepared remarks.

[William Lewis, executive]

Thank you, Brian, and welcome, everyone. The second quarter of 2024 will go down in Insmed's history as the start of an important new era as a mid-cap biotechnology company. During this quarter, we not only saw the continued growth of ARIKAYCE in refractory MAC lung disease, but also positive Phase II data for TPIP and PH-ILD and, of course, most significantly, the successful results of the landmark ASPEN study. We are grateful to be able to mark and celebrate this moment with patients, physicians and investors. It is a time that reminds us why it is so rewarding to work in the field of biotechnology.

Today, I intend to focus on a number of exciting catalysts across all of our pillars. However, we are keenly aware that nothing is more important for our near and medium-term success than flawlessly executing the launch of brensocatib in bronchiectasis. If we can get that right, we believe it holds the potential to transform this company once again, which is why executing on that opportunity will continue to be such a focus for us.

So let me start there with an update on brensocatib. The World Bronchiectasis Conference held in Dundee, Scotland in July was nothing short of a celebration of the positive results from the ASPEN study. We have been touched and honored by the enthusiastic and often emotional responses we've heard from patients and the physicians who treat them to ASPEN's overwhelmingly positive results. Brensocatib demonstrated the ability not only to reduce the rate of pulmonary exacerbations but also to preserve lung function and improve how patients feel all while displaying a safety profile that was comparable to placebo, is something that we believe has the potential to be life-changing for patients living with bronchiectasis. We look forward to releasing additional data, including prespecified subpopulation data from the ASPEN trial at the CHEST conference in October in Boston.

I want to reiterate that these subgroups have shown good consistency with the overall results of the study, so there should not be any negative surprises when these data are presented. We are immensely proud to be a part of this type of breakthrough for patients. And if approved, we look forward to getting brensocatib into the hands of those who need it as quickly as possible.

We continue to prepare for the expected U.S. filing of brensocatib in bronchiectasis in the fourth quarter of this year, and our progress toward that goal remains on or even slightly ahead of schedule. Importantly, all of the necessary clinical and preclinical data required for the filing have already been completed, so there are no large gating factors left in front of us. As you know, the ASPEN trial represents an enormous data set, and we are focused on thoroughly documenting those results for the filing, including making the final determination on whether we will file one or both doses for approval. We continue to anticipate a launch in the U.S. in the middle of next year.

Our commercial team has also been diligently preparing for that expected launch. Nearly all of the additional 120 sales reps we intend to add to the U.S. sales force have already accepted offers, and these were chosen from a pool of more than 7,000 resumes. We expect to have all 120 new sales reps trained and in the field by October of this year. This timeline for deployment of sales reps follows a similar pattern as the ARIKAYCE launch. We put those reps into the field 6 months ahead of the approval, and we believe that proactive approach contributed to ARIKAYCE ranking in the top 10 of non-oncology rare disease launches.

For brensocatib, we intend to have reps in the field even earlier where they will work on disease state awareness and education while also detailing ARIKAYCE to physicians in the hopes of helping more patients who can benefit from that treatment. In addition, we have made great progress with both national and regional payers on disease state education and have engaged close to 90% of U.S. patient lives via payer discussions already. Payers have been receptive to learning about the disease and the permanent damage caused by bronchiectasis exacerbations. Our medical team is already sharing the ASPEN data reactively upon request and more detailed pre-approval discussions will follow our NDA filing next quarter.

Finally, it is important to note in the context of our anticipated launch next year that we are in a very good position from a supply perspective with ample API inventory already in hand. In fact, by the end of this year, we expect to have converted enough of that API into tablet form to meet our current anticipated demand for brensocatib in the U.S. through at least the first year of its launch.

As a matter of policy, we always look to prioritize continuity of supply for our patients. It was that principle that allowed us to maintain a steady supply of ARIKAYCE even during a global respiratory pandemic by establishing robust supply chains and a sufficient safety stock of inventory. Even though brensocatib is easier to make in large quantities and on shorter notice compared to ARIKAYCE, we intend to build meaningful inventory and establish backup supply chains, and that work is well underway.

Moving beyond bronchiectasis. We continue to be encouraged by the progress of our ongoing Phase II study in CRS without nasal polyps, which we expect to read out in the second half of 2025. We continue to see improvements in average symptom scores in the blinded data from that study, which appear to correspond with the time when NSP reduction from DPP1 inhibition should be occurring. We acknowledge that the data is blinded and still early, but we find it encouraging nonetheless.

We are excited to be moving forward with our previously stated plans to kick off a Phase II study of brensocatib and hidradenitis suppurativa, now that the ASPEN study has demonstrated the potential of the DPP1 mechanism. We remain on track to have the first active U.S. sites open before the end of the year with the first patients being screened shortly thereafter.

Finally, I want to comment briefly on the work we are doing to develop next-generation DPP1 inhibitors in an effort to maintain our leadership in this important new class of medicines. This work is not new, having begun shortly after the Phase II WILLOW results first read out. In fact, we have already synthesized and screened over 850 novel DPP1 inhibitors and have filed over 10 unique patent applications that disclose and claim these compounds. We are now advancing the first candidate from this group into IND-enabling studies, and we expect one to 2 more to follow closely thereafter.

Based on the strength of the efficacy and safety data from ASPEN in patients with bronchiectasis, we are evaluating if there may be other indications we want to explore using DPP1 inhibition. This can include other indications with significant neutrophil involvement and where patients continue to face significant unmet needs despite current treatments such as rheumatoid arthritis, lupus nephritis and other inflammatory conditions. Keep in mind that we could develop these molecules for these new indications ourselves or we could choose to sell or partner them with others who already have a presence in those markets. Either way, these follow-on compounds are expected to keep us at the forefront of this exciting new drug class.

Now let me turn to ARIKAYCE. I am pleased to report that ARIKAYCE continues to perform well commercially, delivering 17% growth this quarter compared to the second quarter last year. Much of that success is directly related to the strong execution of our commercial teams across the world. Keep in mind that these same teams will be the ones to launch brensocatib, assuming regulatory approvals are achieved. In addition to commercial execution, we have also made progress on ARIKAYCE's clinical development this quarter. As previously indicated, we met in June with the division of the FDA responsible for patient-reported outcome measures. That meeting resulted in us successfully aligning with the FDA on the primary endpoint for the ENCORE study that can support label expansion to include all MAC lung patients and full approval for the current refractory indication if the data are positive.

Now that we have this clarity from the FDA, we have reevaluated ENCORE's enrollment target with the goal of ensuring we give the study the best chance of success in achieving its objectives, using appropriately conservative powering assumptions. Based on that evaluation, we have updated ENCORE's target enrollment to 400 patients, which targets powering of more than 90% for the primary end point. Importantly, recruitment for the trial has been proceeding very well throughout 2024 following the ARISE study result. As a result, we expect to be in a position to stop screening new patients later in the third quarter and would then expect the top line results for ENCORE to read out in the first quarter of 2026.

As we have commented before, we can now approach the FDA about the possibility of an accelerated filing under Subpart H. We expect to have that answer by the end of this year. As a reminder, our expectation continues to be that the ENCORE data will be required for all global regulatory filings to potentially expand the label for ARIKAYCE to include all patients with MAC lung disease. We will update you as we learn more from our interactions with the FDA.

Let me also provide a quick update on our TPIP development program. Enrollment in our Phase II PAH study has also accelerated recently, likely resulting from the strong Phase II trial readout in PH-ILD in May. We now have more than 75% of the enrollment completed in our PAH trial, which keeps us on track for an expected readout in the second half of 2025. We are consistently monitoring the results of the study on a blinded basis, which continue to show impressive reductions in pulmonary vascular resistance for many of the patients in the study. These improvements in PVR would not normally be expected for patients who have not had a change in their therapy. All of this adds to our excitement for the upcoming readout of the trial and for the potentially compelling profile that began to emerge with the recent PH-ILD top line results.

If I can summarize today's update, it is this. Insmed is preparing diligently for the expected launch of brensocatib in bronchiectasis next year, including regulatory filings, commercial readiness, payer discussions and inventory planning, all of which is progressing on or ahead of schedule. This launch represents the type of opportunity that only comes along once in a career, if you're lucky. We all recognize the enormity of what lies ahead and how important it is for us to get it right for our patients, investors and other stakeholders.

While we acknowledge the critical importance of the successful launch of brensocatib, I also want to recognize the remarkable progress we are making in parallel across every other area of clinical development and research, and the exciting opportunities that this work has the potential to unlock. Shortly after we launched brensocatib, we anticipate additional clinical readouts that could represent sizable growth opportunities in their own right such as Phase II readouts for brensocatib and CRS without nasal polyps and TPIP and PAH followed by the Phase III readout of ARIKAYCE in newly diagnosed MAC lung infection. We look forward to continuing to execute on behalf of patients and our stakeholders as we enter the unique period of potential growth that lies ahead of us.

Now I will turn the call over to Sara to walk through the financials for the quarter.

[Sara Bonstein, executive]

Thank you, Will, and good morning, everyone. I am happy to share some of the details of Insmed's financial performance for the second quarter of 2024.

We ended the quarter with $1.25 billion in cash and cash equivalents, representing an increase of $651 million compared to the end of last quarter. This increase in cash was driven primarily by our equity raise during the quarter, which added $713 million on a net basis and was supplemented by cash received by the company through the exercise of stock options during the quarter. When these items are excluded, the underlying cash burn for the quarter was approximately $139 million, which is relatively consistent with our historical cadence.

Before I move on to talk more about our performance this quarter, I want to provide a brief update on our $225 million convertible debt instrument, which was set to mature in January 2025, but which we called in June. As of August 7, 99.9% of those notes have already been converted to approximately 5.7 million shares of our stock ahead of the redemption date on August [ 9 ].

I will now walk you through some of the highlights of our commercial performance in the second quarter of 2024. Global net revenues this quarter were $90.3 million, representing 17% year-over-year growth compared to the second quarter of 2023. Not only does this result reflect the highest quarterly sales for ARIKAYCE in its history, but it also establishes new all-time highs for sales in each of our 3 commercial regions.

In the U.S., net revenue for the second quarter 2024 was $63.8 million, up 11% compared to prior year quarter. New patient starts in the U.S. have remained very strong, reflecting the value that physicians see in using ARIKAYCE for the refractory patients. The quarter's performance also benefited from a rebound in active patients following the disruptions caused by the Change Healthcare cyber attack in the first quarter of the year. In Japan, second quarter 2024 net revenue was $21.1 million, reflecting 35% growth over the same quarter last year. The record-setting performance in Japan this quarter was primarily driven by stronger demand resulting from an increase in physician reach as we have worked to expand our sales force and to a lesser extent, favorable inventory patterns in the quarter. In Europe and the rest of world, net revenue in the second quarter of 2024 came in at $5.4 million, up 37% compared to the same quarter last year, driven primarily by strong performance in the U.K. and Germany.

Importantly, this quarter's performance keeps us on track to achieve our reiterated full year 2024 global revenue guidance of $340 million to $360 million.

Let me now turn to a few additional financial items. In the second quarter of 2024, our gross to nets in the U.S. were 15.4%, which was consistent with our expectations. We continue to anticipate that gross to nets will settle in the mid- to high-teen range for the full year. Cost of product revenues for the second quarter of 2024 was $21 million or 23.2% of revenues, which is also consistent with our historical performance.

Turning to our GAAP operating expenses. In the second quarter, research and development expenses were $146.7 million, and SG&A expenses were $106.6 million, reflecting investment in both our early and mid- to late-stage pipelines as well as our ramping investment in launch readiness activities for brensocatib.

One additional financial highlight. Each quarter, we record the noncash charge, [ the ] noncash change in fair value of deferred and contingent consideration liabilities which relate primarily to future stock payments associated with 2 of our past acquisitions. With this charge being directly linked to the change in our stock price each quarter, the expense this quarter was significant at approximately $104 million. Importantly, this is not a new expense, [ it is ] noncash and has no impact on our cash runway or balance.

In closing, Insmed's financial position remains very strong. We produced our best-ever revenue results in the second quarter, keeping us firmly on track to deliver our full year guidance with well over $1 billion of cash in our balance sheet.

Now we would like to open the call to your questions. Operator, can we take the first question, please?

[Operator]

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

[Jessica Fye, analyst]

I [ have ] like a competitive landscape question for brenso. I was curious if you could share with us your take on the BI Phase II top line data at World Bronc, and what you're going to be watching for one more detailed results from the [ early ] study become available? And then second, can you just confirm exactly what the primary endpoint is for ENCORE and how it differs, if at all, from ARISE or if it's [indiscernible].

[William Lewis, executive]

Yes. So just -- I'll take the second question first, which is the ENCORE primary endpoint. It's the PRO measure that we've agreed to with the FDA. And the primary distinction now is just that there'll be 8 questions, not 9. But the consequence of that is not any impact on our expectations. We ran models of both 8 and 9 questions against the ARISE results. And in both cases, we had clear wins. So this has just been a clarification. It takes a long time to get the [ PRO group and FDA ] to alignment. I'm glad we're there. We did a lot of extra analysis for them to get them to that place. and they're very comfortable and so are we. As a consequence, we're super excited about flipping over that data card, which we now expect to be in the first quarter of 2026.

On the BI front, I'll actually ask Martina to chime in here in a second. My take on that because I was there in Dundee was that, that was a pretty I think, disappointing presentation that they had data, but it was more modeled data. It wasn't really a readout of the underlying different dose effects on a statistical basis, and there wasn't any detail about safety, which I think everybody in assembly was surprised by. The expectation is that they might say more in Austria at the European Respiratory Society meeting in September. But we didn't really see what we were expecting to see there. I don't know, Martina, if you want to add any color to that?

[Martina Flammer, executive]

Yes. Maybe just as a reminder, so the study was actually looking at testing 3 different doses. And it also was a dose response study. At the end, we really didn't see any results for any single dose. That is something I think everybody would be looking for, and we will be looking for that at ERS in September. We also would like to see is the actual safety data because there wasn't any data presented apart from a line that says there are skin effects, which wouldn't be anything that is surprising on the mechanism of action, but understanding of the extent of any skin effects but also in general on the tolerability, whether it's GI related or any other symptom class. So there wasn't really much at this point that we can conclude and those will be the things we'd be looking for in [ Vienna ].

[William Lewis, executive]

I'll just add also that our assumption is that we're going to see competition. So we're planning for that, whether it's from BI or some other source over the years into launch, we're running as though we've got people on our heels.

[Operator]

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

[Ritu Baral, analyst]

Will, Martina and Drayton actually, I think this question is for all 3 of you. How are each of you thinking about one versus 2 doses in the NDA? Like what are the clinical considerations, what are the commercial considerations? I mean, based on all the [ well ] discussions and presentations in Scotland , it seems like you're going to have to you're going to have to use the -- [ file ] for the '25. Otherwise, the KOLs will come for you. But why would you consider using a lower dose? And then as part of that NDA, how are you -- or that NDA filings, how are you thinking about the indication language? Well, could it be that you -- could you get an indication for treatment of bronchiectasis? Or do you think it will necessarily be limited to reduction of bronchiectasis exacerbations?

[William Lewis, executive]

Sure. So I'll take the second one first. The treatment of bronchiectasis is, in fact, the label we expect to get. That's what we're going to be requesting. We do not think it will be limited based on 2 or more exacerbations. I think where that may play out more or less degree is in the payer landscape, which is something we're already working on the disease education front right now. My perspective on the 2 doses, and then I'll invite Martina to comment on it is that, I think, look, both are clear wins, and that's the most rewarding aspect of this study. Both from a safety and from an efficacy standpoint.

As we move from 10 to 25, we see some additional benefit clearly captured in the -- slowing the rate of lung function decline as measured by a couple of different metrics, both FEV1 and forced vital capacity. And then as we look at how patients respond and how they feel the quality of life measure and also the diary both captured improvements from the patient's point of view. And we think all of that information is very compelling. And certainly, we've heard that from all of the experts in the field. The most important point for both 10 and 25 is that they have comparable safety profiles. So the risk/reward calculus you run when you go from 10 to 25, you don't get any real additional risks in our opinion for getting those extra benefits. And that suggests 25 as a very appropriate dose think about for initiating patients at, and I think we've heard that pretty loudly from a lot of the experts in the field.

We're not making that commitment because we want to have the dialogue with FDA to capture the benefit of their perspective on the 10 versus the 25. But I think we'll keep an open mind and enter that dialogue we'll come forward with the proposal. We'll hear what their response is. But I think the 25 clearly suggests itself as having some added benefit over the 10 without there being much of a trade-off on safety. I don't know, Martina, if you'd add anything to that.

[Martina Flammer, executive]

Yes. I think you already described it well. And sometimes you think about starting with the lower dose and have an opportunity to go to a higher dose is something that physicians think about. In our case, you have overall on the reduction of pulmonary exacerbation. It's a clear win for both doses that you now look at what is the additional benefit that patients can achieve. And here, if you look at the lung function data and you look at the FEV1 clinically, if you're a pulmonologist and you could think about my patient currently it loses about [ 60 ml to 70 ml ] every year if I can bring that patient to 30, what would be a normal loss of milliliters or FEV1 for any adult as we age. That would be a very, very strong argument. And given the safety even for AEs of special interest, that is so good, and there is very, very little difference truly between those doses, I think we have a very strong argument for the 25.

[Operator]

This comes from the line of Joseph Schwartz from Leerink Partners.

[Joseph Schwartz, analyst]

I have a couple of questions on CRS. First of all, what is -- what are the powering assumptions that govern [ Birch ]. And then are you endotyping patients in [ Birch ] or stratifying patients in any way? And lastly, how did you decide on the 2 doses of 10 and 40 milligrams there?

[William Lewis, executive]

Yes. So super excited about that trial because now that we've validated the mechanism, we're kind of glad we started that one a little bit at risk to be candid. We didn't want to go full bore with all of the subsequent trial, so HS starts at the end of this year. But the way we think about this is having validated the mechanism, we're now going to be exploring sort of hierarchical rank of where we think we could have the most impact and there's the clear [ sum ] of the medical need. And so that's why we turn to CRS without nasal polyps next. That market opportunity for those patients, the unmet medical need there is every bit as big in my mind, [ is ] bronchiectasis. And I think it's pretty compelling if we're able to demonstrate impact there.

So far, we're bringing forward the 10 and the 40 milligram dose as you point out in the study. Going to the higher dose, we could certainly do that in other settings. We didn't have the tox data done. I just want to remind everybody about that by the time we launched Phase II, we can now go as high as 65 milligrams if we ever wanted to in a disease because we have that tox work done and it's clear. Each disease is different, and will respond differently to the DPP1 inhibition. So it seems to us appropriate and particularly in hindsight of ASPEN to go up to 40 milligrams as the next dose. But I don't know powering assumptions off the top of my head, Martina, do you know them, maybe you can address that?

[Martina Flammer, executive]

Yes. So we're about [ repowering ] of 80% to detect the difference of 1.34 units, and we're 90% powered to detect one between 1.55 units. And so what you know as a primary endpoint, we have the sinus total symptom score. As you may know, this is a composite score of symptoms related to and includes nasal congestion, facial pain, loss of smell. And those will be the things that we will be looking for the primary endpoint, and that's the powering for it.

[William Lewis, executive]

And I'll just add that while blended and blinded and very early, there is a temporal alignment between improvement in that symptom score on an overall basis and when we would expect the onset of the drug to take effect. So that suggests that there may be something going on here that's positive, obviously, we don't know that until we unblind. But it's an encouraging trend nonetheless.

[Sara Bonstein, executive]

Joe, I would just remind you, the $5 billion of peak sales that we referred to at our Commercial Day, that was bronchiectasis alone. So the upside for CRS is not included in that number. And as Will already mentioned, we believe that will -- that could be a sizable patient population.

[Joseph Schwartz, analyst]

That's helpful. And how do you view the -- whether it makes sense to endotype or stratify patients based on the mechanism?

[Martina Flammer, executive]

What we're looking for is we're looking at patients who are below 300, [indiscernible] and above 300. But we know that in CRS without nasal polyps, also there is an eosinophilic component, as you know, with all of these diseases. It is -- it is not something that is a pure mechanism that is looking only at eosinophilic. So we look at both of those patients, but we know there is a very strong neutrophilic and driven group for both of them.

[Operator]

Your next question comes from the line of Jeffrey Jerry Hung from Morgan Stanley.

[Unknown Analyst]

This is Catherine on for Jeff. Just one, looking ahead to the expected brensocatib launch, can you talk more about your strategy for targeting patient groups at launch? Will you be focusing primarily on the diagnosed population? Or do you have plans to target or go after the undiagnosed population or the asthma COPD comorbid patients experiencing exacerbations that you mentioned during your R&D Day?

[William Lewis, executive]

Yes. So thanks for the question. I think the way to conceive of what we're going to be doing with our launch is that disease state awareness is already well underway. And I think that's the first hurdle to clear. We know from our previous experience of being a first in disease launch that it's very important to raise the awareness among physicians of the disease and its [indiscernible]. And that process began at the American Thoracic Society a year ago this last May. So we've been out there for a while. We're doing the same thing with payers. And as we raise that awareness, I think physicians will turn their attention to patients that may be appropriate for treatment, assuming that we are approved and clear all the regulatory hurdles.

We know from our dialogue with physicians that those patients who are diagnosed today are the ones that they're going to immediately turn to for use of the drug, assuming it's approved. And I think that's fully appropriate. But we're also aware that there's a growing dialogue and [ chorus ] among treating physicians that there's probably a decent number of patients who have COPD or who have asthma that may have been misdiagnosed or that have those conditions and are potentially comorbid with bronchiectasis.

We talked about that on our commercial day, and I think that has gained a lot of momentum, frankly, independent of us. And as people gain that awareness and they become aware of our medicine and this ability to have impact on these patients, again, presuming that it clears the appropriate regulatory hurdles, that's going to be an exciting time because I think what often happens in these kinds of first in disease indications is that there are many more patients out there than people would have originally thought. But the short answer to your question is that 0.5 million patients that we know are diagnosed today with bronchiectasis, those are the first ones we're going to be targeting, and we'll see and learn along the way, how much broader that may get.

[Unknown Analyst]

Great. And then just a quick one, if I may. You previously provided the range of $40,000 to $96,000 as a likely U.S. price. Can you just remind us of the factors here that may drive the price to one end of that range or the other?

[William Lewis, executive]

Sure. Well, I think whenever you consider price, you have to think about the idea of the value for money, and that proposition is frankly, spelled out in the label. So until we know what that's going to look like, it's hard to really think about price with any greater specificity. I think across that range, given what we've seen in the data and presuming that, that is something that is reflected in the label, which is appropriate or in is available to physicians for their contemplation. We have every reason to believe that anywhere along there is something that is appropriate. We've got a lot more work to do before we're going to settle on price.

But I think what we have found in these data and the response to these data is that they are remarkably compelling. This is -- I called it a landmark study. And I know every company lays claim to having the ability to produce good data. This is one of those rare moments where this drug is going to speak for itself, and the physicians have already told us that, and they're excited to put their patients on this drug presuming it's approved. And I think we're going to find the right balance between setting a price that will reflect that value for patients and allow us to move forward as a company and reinvest in other promising medicines.

[Operator]

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

[Unknown Analyst]

It's [indiscernible] on here for Andy Chen. In CRS, besides that sig, any internal bar for a go-no-go decision into Phase III? And what's a good compare here for efficacy and safety? Is [ to fixate ] your bar or you seek to be better in order to move forward? And I have one quick follow-up.

[William Lewis, executive]

So just to be clear, on CRS without nasal polyps, there's nothing approved to treat that condition. There is some medicine that is used to treat CRS with nasal polyps, but -- and that includes things like HUMIRA. But for CRS without nasal polyps, largely neutrophil-driven there is nothing. And when we talk about this disease indication, we refer to the incidence population, the annual rate of patient numbers that are either subject to surgery, repeat surgery or eligible for it. And that's in the hundreds of thousands of patients. That's every year. So that's quite a substantial opportunity, and we talk about the overall prevalence population as being in the U.S. alone, close to 29 million people.

So to talk about a disease indication with nothing approved of that magnitude and going as we did with ARIKAYCE after the severe end of the patient spectrum out of the gate, that's really the strategy here of what is sufficient for moving into Phase III. Well, I think honestly, we have to look at the Phase II data and have some reflections on whatever that is going to be. There aren't great animal models for this, and there isn't precedent because there's nothing approved. So we're going to have to take a close look at that. But once again, the standard we always use is, is this going to make a dramatic impact on the patients, and when we talk about patients who are subject to repeat surgery or avoiding surgery, the ability to provide benefit that's meaningful for that patient group would be sort of how we think about it.

I don't know, Martina, if you want to add anything on the...

[Martina Flammer, executive]

Yes. Apart from that taking the primary endpoint, one of the things we look at a secondary endpoint is the [ LundmaCT ] score. That's something that is very often used and standardized used in this disease where you actually look at what kind of pacification do you see in the sinuses. So that is another efficacy measure.

[Unknown Analyst]

Got it. And can you comment on ARIKAYCE sales momentum by geographic region. Should we be expecting [indiscernible], especially in areas like Japan? And how much is left in that region?

[William Lewis, executive]

So I think we feel very good about the performance this quarter, but I'll actually ask Sara if she wants to make any commentary on the regional basis.

[Sara Bonstein, executive]

Sure, happy to make comment. And just to start off on a global basis, we were really encouraged by the continued double-digit growth across all of our regions. We're in our 6-plus year of launch in the U.S. and to still see this level growth is absolutely tremendous and talks about the patient need and the need and importance of ARIKAYCE.

In the U.S., we saw tremendous growth. We continue to be really impressed by the commercial organization as a reminder, that's the commercial organization that we anticipate we'll launch spread so [indiscernible] assuming approval by FDA by middle of next year, so I couldn't be more pleased, obviously, augmenting that sales force in the U.S. And as Will mentioned in the prepared remarks, those 120 reps nearly all hired from a very large pool of candidates. So we feel confident we have top talent that is augmented into our commercial organization that will now be able to have ARIKAYCE as well as the disease state awareness. U.S., we feel really comfortable on that continued growth.

Japan, 35% growth. Can't ask for much more from a region. So really pleased to see that continued performance. We did add some additional therapeutic specialists in Japan to continue with that growth. In Europe, it's small in number, but very material percentage perspective and really excited to see that. So I couldn't be more pleased on the growth across each of the regions and feel really confident in our $340 million to $360 million full year guidance.

[William Lewis, executive]

Yes. And I just will add a quick shout out to the commercial team around the world for the excellent job they did this quarter and the momentum that they're generating for the second half of the year.

[Operator]

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

[Unknown Analyst]

This is Cameron [indiscernible] for Jason. Congrats on the quarter. I guess looking ahead to brenso's launch, you mentioned your plans to hire a sales force of 120. But can you maybe elaborate a bit more on additional steps the team has taken to build out the commercial infrastructure and maybe what's still left to do? And then what do you expect to be the biggest or at least most time consuming challenge at this point? Is it going to be physician awareness, payer issues or maybe something else?

[William Lewis, executive]

So I can just comment in again, reverse order. The single most important thing while it all has importance, the single most important thing that keeps me focused is the payer access. I think now more than ever in the era in which we operate, getting that right is really the key to the successful launch. And I could not be more pleased with the strength of the team we have and the work we've already done.

As we mentioned, we've already been in dialogue with more than 90% of patient lives in the U.S., the groups that cover them. And we have a very good and robust dialogue going on about disease state awareness there. Those efforts run in parallel, and second, I'll ask Martina to talk about medical affairs, separate from commercial, obviously. But on the balance of the commercial front, we have every one of our -- what we refer to as customer-facing groups in growth mode and in preparation mode for this launch. We set the standard by our ARIKAYCE launch, which was to have everything ready about 6 months before approval. In this case, it's going to be more like 9 months before approval.

I just would highlight the most recent effort to hire the additional 120 sales reps. I think as of yesterday, we had all but one who had accepted those positions. And the reason why that last one is not on board yet is because for every one of these positions, although we had more than 7,000 resumes, we have held ourselves to the standard of not only excellence, but cultural fit within the company. One of the great strengths of Insmed is that we have folks that are here that are really interested in helping patients get better. And I can't emphasize that enough as an important cornerstone element of what this company is all about. And the purity of that needs to be preserved even as we find scale in larger opportunities.

So I'm very pleased with the work that's been done to date. Our leadership team is absolutely crushing it on every front. As we've said in the remarks, we are at or ahead of schedule on pretty much every metric. And I can say having just reviewed it during our board meeting over the last 2 days, I think we all sit here today, feeling very good about our preparation for next year. There's a lot of work still to be done. I don't want to take anything away from that. But we feel very good about the strength of our position, the strength of the team, the content of the character of the people we brought on board and the efforts that we are putting on this opportunity. It can't be overstated how significant this is, and therefore, how important it is for us to get it right.

Martina, do you want to talk about the medical side of the equation?

[Martina Flammer, executive]

Yes, happy to. So in addition to what you speak to with a payer from a from a commercial perspective and should they provide access? And how do you think about it? What's important is payer organizations have medical directors, just as many other organizations do. And those are the people who understand and learn about what is the true unmet medical need here, what other treatments are available? What are the path to diagnosis? How does the patient go through the system. We have colleagues of -- we speak about our medical outcomes, [indiscernible] colleagues who are on a regional basis in the field who understand how -- what is relevant for the medical director in the payer organization, providing them that information, and they also serve as the point of contact to explain not only today as we talk about, for example, ASPEN, what is the data overall, but what does that mean for the population that these payers cover in the sense of medical terms and unmet need.

[Operator]

Next question comes from the line of Jennifer Kim from Cantor Fitzgerald.

[Jennifer Kim, analyst]

I wanted to go back to the one versus 2 dose for brenso. It seems like everyone is in agreement that there's a compelling reason to go for the higher dose or include the higher dose, is there a reason why the FDA would have hesitation on that front? And then my second question is, could you give any color on exactly where you're at with ENCORE enrollment?

[William Lewis, executive]

Sure. So on the FDA front, we don't anticipate that there's going to be any pushback. I think that the guiding principle that the FDA follows is, what's the lowest effective dose. And when you think about going up in dose, what is the risk reward balance that you are encountering as you go there. So as we go from 10 to 25, what we observe is some clear itemizable, if that's the right word, benefits from prevention of lung function decline, which as Martina expressed earlier, is very quantifiable and meaningful for every physician we've spoken to.

In addition, the quality of life benefit that we observed at the 25-milligram dose is also meaningful. It's meaningful for physicians, for patients, obviously, because they feel better, the physician can indicate you may feel better on this medication or at least they're aware of that. And most importantly, the payers know that when they pay for a medicine, the patient is more likely to take it if there isn't a bad side effect profile. So all of that suggests that 25 in a very positive light. And I think the question the FDA has is, do they agree with that risk/reward profile that there is added benefit and not a lot of additional risk going up to 25. To us, that seems to be the landscape, but there's more to learn. And again, I'll remind everybody, we are doing a lot of detailed analysis on what is a very substantial database.

We haven't seen anything yet that would suggest that this equation would be viewed differently. We're just trying to preserve the right to continue to analyze the data, enter into a very open dialogue with FDA and put forward what we think makes the most sense. I just want to emphasize, most importantly, that whether we go with one or 2 doses, we will be ready. We have adequate supply for both. We're prepared to detail both, and so this is -- it's a nice place to be, whether there's one or 2 doses. And I think I'll just leave it at that.

On ENCORE, you asked when -- what's our status of enrollment, that continues to do well and frankly, accelerate as we get near the end here, we've said we'll close off enrollment in the third quarter. That feels very good to us. I will just add that this is another one of those moments where we have revisited our assumption set and made sure that we are looking at this through a very conservative prism. When we look at the landscape of all MAC NTM, right now, there is no competition on the near-term horizon. We want to make very sure that the strength of these data stands the test of time, much like it did with ARISE, much like it has done with [ CONVERT ], much like it has done with ASPEN. So those same principles inform the final design and powering assumptions going into ENCORE. And the way we are approaching this as we look to close down enrollment in the third quarter of this year, is greater than 90% power to hit the primary endpoint of the study. So we feel like we're in a very good position based on what we saw on ARISE to produce a result we hope, successfully with ENCORE.

[Jennifer Kim, analyst]

Okay. That's helpful. If I could sneak one more question in just thinking about the first few quarters of the brenso launch, just net-net, would you anticipate that Part D redesigned to help or hurt that launch?

[William Lewis, executive]

You're referring to IRA. I'm sorry, I didn't hear the question.

[Jennifer Kim, analyst]

Yes, the Part D -- yes.

[William Lewis, executive]

Yes. The Part D, so look, I think it's going to help. I think it's going to help brenso. I think it's going to help ARIKAYCE. I think it's going to help across the board. The most important thing about that piece of legislation is that for the first time, they addressed the burden that is placed upon patients for medicines that are expensive. And the fact of the matter is, it doesn't really [indiscernible] benefit to patients to load them up with additional costs that they find a financial burden in reaching.

There has been many studies that have shown that making medicine more accessible and lower cost at the pharmacy countertop results in better usage rate, better adoption rate and the consequence of that is patients are healthier. So for every angle, this is a piece of legislation on that particular point that, in my view, has been a long time coming and very necessary. I think as patients realize that they have a lower burden of a maximum of $2,000 out of pocket across all their medicines, which can be spread over on a monthly basis. that becomes a much more affordable equation than carrying 5% of the overall burden past catastrophic thresholds that they've had to face in the past. And that's what's produced the really terrible stories about people needing to take out mortgages and find large sums of money to gain access to life-saving medicines. I think we're finally past that era, and I think that's a very good thing.

[Operator]

Your next question comes from the line of Leon Wang from Barclays.

[Leon Wang, analyst]

Congrats on the quarter. So when you think about the competitor landscape, BI's Phase III, I think they revealed that they will be enrolling [indiscernible] patient population. Can you remind us why you recruited non-CF bronchiectasis. And how does this change in their potentially registrational study affect your thoughts on the competitive landscape going forward, if at all? And second question, as you work towards submitting the NDA in the fourth quarter. Do you plan to update us on when that submission is in? And what form could that be in [indiscernible] like in a press release? Or would this just be an update at a later conference?

[William Lewis, executive]

Yes. So I think the answer to the BI question begins with, first of all, seeing their data, and we haven't done that yet, right? We don't know what they really have. And until we know what their data is, it's hard to interpret the modifications they had to their entry criteria that were different from ours and what that resulted in. There were a lot of assumptions behind those modifications that they were quite vocal about before the fact but we didn't really see that in the data set. So I think there's probably going to be some revisitation of of whether or not that direction or claim they were heading in is going to be viable. From our point of view, it doesn't make any difference. It doesn't affect the outcome. They're still going to be securing a label for bronchiectatic patients -- so I don't -- I'm not particularly worried about it. Again, we've assumed all along, including with our peak sales numbers that we have competitors in the marketplace. BI seemed to be the most proximate. The only thing I would say about their data is it does appear that there was some biological effect whether that was statistically significant or not, it wasn't clear. But what I will say is I think it does validate the mechanism of action of DPP1 inhibition.

But maybe, Martina, I'll turn it over to you for your reflections.

[Martina Flammer, executive]

Yes. I think what I would be looking for in the data is also if you look at the patients, they did enroll all comers that's one of the considerations. What we don't know and they haven't shown yet is what is the response. As you know, having 2 previous exacerbations is the strongest predictor for future exacerbations. I think it's a good guideline to inform you and have an ability to how you would power a study because you do need to understand your background rate, and that may be one thing that they're working on. We don't have -- we haven't seen that data, but that is one thing that will inform it. And if you enroll all on comers who have maybe only one exacerbation, you do not know how that would actually impact your powering.

[William Lewis, executive]

So and on your other question about NDA submission, we do and plan to announce that. That's our current intention once that's completed.

[Operator]

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

[Vamil Divan, analyst]

Yes. Great. So just one, maybe shifting gears to TPIP. I think you've mentioned that PH-ILD data, I think you did say today will come later this year. I'm curious if you can provide any more insights into which conference you're targeting on that? And then just going back to the question earlier on the pricing side for brenso. You did mention you've had some initial conversations with payers. Maybe you can just provide any sort of feedback that you're receiving there, the [indiscernible] you're still comfortable with that range you provided before. But just any sort of insights on the initial sort of dialogue and how they've been reacting to the disease and the profile as you've been discussing.

[William Lewis, executive]

Yes. So we're super excited about the data generation from TPIP and PH-ILD, and we were certainly hoping to have it at a conference this year will say the conference schedule is fairly busy, and the consequence of that is it's probably going to slip into 2025 before able to put out all of that data. But I will say that, that process continues to be underway. So we'll update you once we have that. We want to get it out as soon as possible. There's a lot there to like, and we'll have more to say about that in the future, but we want to do it in a peer-reviewed setting, as we previously represented.

And then on the pricing side, it's still too early to talk about price with specificity and certainly, where we are in our dialogue with all of the different constituents here is in talking about disease state awareness and understanding the burden of this disease and what role -- if it's approved at the appropriate time, we'll begin to talk about brenso, that won't happen for a while. But right now, it's about disease state awareness and making sure people understand the burden. I will say that our interactions and the perceptions that people have across the treating community, including the payers continues to support our belief and the work we've done in pricing studies that the range we gave you, we're very comfortable with.

I think, once again, as I said earlier, the content of what we have to offer the target product profile from the actual ASPEN results is better than what we had originally tested. That preservation of lung function is very powerful data. as is the patients feeling better. So we'll see how that plays out over time, but more work to be done there, and we'll certainly update you as we get closer.

[Operator]

Your next question comes from the line of Liisa Bayko from Evercore ISI.

[Liisa Bayko, analyst]

First question, when you talk about a broad label, would that include CF? And then also with respect to the IRA, how should we think about margins on the products? I know with the benefit of spreading the [ $2,000 ] payment the Medicare patients are responsible for also the catastrophic coverage, 60% of it above catastrophic is going to fall on the payers. I'm just wondering how they're going to react to that in terms of wanting some sort of rebate, discounts, things along those lines?

[William Lewis, executive]

Yes. Sure. So on the first point, the broad label would not -- we would not anticipate it would include cystic fibrosis patients. This will be for noncystic fibrosis, bronchiectasis. Having said that, obviously, the data we saw in the CF study we completed was very compelling, and that certainly is out there. I think that if there are patients that are experiencing exacerbations successfully being treated by drugs that are offered by other companies, then there may be a physician who wants to think about this. But we would point out that that's a fairly small group, and it certainly isn't something we're going to target because that would represent off-label.

When you think about the IRA and payers, yes, I don't know if we want to go over this with any specificity. But the thinking there is that -- you're going to see ARIKAYCE is not -- is considered -- has the small manufacturers benefit, brenso would not. So the distribution of the cost as the as the drug rolls out, would be more significant on us for brenso than it would be on ARIKAYCE. And so we've achieved that benefit. We can go over that in some greater granularity because year-over-year, the manufacturer versus the plan percentage allocations very different based on whether or not you secure that designation and having to do that side bar. But I don't think it's going to impact the overall pricing reflection that we have because this is about value for money from the medicine. And I think what we've heard so far is that payers recognize the permanent damage that is done by pulmonary exacerbations experienced by patients with this disease. And while there's nothing in the category right now, the data that we have from ASPEN is very compelling. And this is kind of one of those places where I think we're going to find a very productive dialogue with payers in terms of their willingness to support this.

[Sara Bonstein, executive]

And Liisa, the only other thing I would add is the projections that we provided on Commercial Day took all of this into account. So our peak sales and the opportunity we see from a commercial perspective on the revenue side took all of these factors into account.

[Liisa Bayko, analyst]

Okay. That's helpful. And can I just do one follow-up on reps? Are those -- are the additional reps you're hiring going to be detailing all of your products, in other words, ARIKAYCE as well, maybe as a second? Or how do you imagine prioritizing your sales force with respect to the products?

[William Lewis, executive]

Yes, they are going to be detailing both products, assuming approval for brenso, and indeed, assuming the expanded label for ARIKAYCE assuming ENCORE goes as we expect it will. So what we're looking at here is now a much more robust and -- but it highlights probably the single most important aspect of all of this, which is the synergy. So the same sales force that launched refractory MAC, ARIKAYCE for refractory MAC is going to be assuming again, these regulatory approvals fall in place, all MAC NTM and brenso and bronchiectasis. And so the teams are being trained for disease state awareness in bronchiectasis. And in the meantime, we'll call on physicians for appropriately diagnosing and treating them for refractory MAC with ARIKAYCE.

So that's going to give us some extra horsepower as we get to the end of this year and into next year on that indication. But it is our intention that they will bring both forward for the foreseeable future.

[Sara Bonstein, executive]

And just one other comment on the synergies as you're thinking about the COPD Foundation and the care center networks that they formed that's over 100 care centers around the United States and those are going to be specialized in NTM and bronchiectasis. So just more sort of highlight on the synergies between the 2 disease settings.

[Operator]

Next question comes from the line of Graig Suvannavejh from Mizuho.

[Graig Suvannavejh, analyst]

Congrats on the progress. I just wanted to revisit the enrollment update with regards to ENCORE and that you're now targeting 400. Could you just remind me, was the prior target somewhere in the neighborhood of 250, and then maybe if you could provide a little bit more granularity on kind of what you did in terms of revisiting either the patient inclusion or exclusion criteria to give you kind of a better sense that with 400, you will get the result that you are looking for?

[William Lewis, executive]

Sure. So the most important thing to realize about ENCORE is that it was enrolled at the same time that ARISE was enrolled, right? So we continued that enrollment after ARISE read out but the backdrop of choosing the primary endpoint and what the powering was, we didn't have any basis for that because there have been no validation of a PRO. So we're sort of flying blind when we set the original target. And that target, as we indicated at the time, was likely to need to go up. That was 250 patients, and that was several years ago.

Once we saw the ARISE study, we knew it was going to have to increase materially the assumption going in was that the minimum important difference here was going to be 8 points and in fact, it ended up being about double that. But that's because no one had ever tested the PRO in NTM patients. So we learned a lot from that. That was why we did the ARISE study the way we did. It was sort of a canary in the coal mine, as you'll recall. And it puts us in a very strong position now because -- we did see that difference between the 2 groups, both on a per patient and between group basis. And that is what informs the powering assumptions for where we go from here.

There was a slight difference between 8 or 9 in the number of questions. But what all of this complexity means and yields after you've done all the analysis is that we won either way on ARISE, whether it was 8 questions or 9 questions. It then became a very simple question of how much power do we want to have in the Phase III ENCORE study to achieve the expected outcome based on ARISE and we target just north of 90%. So that's where the 400 number comes from. We'll close off enrollment in the third quarter of this year. That keeps us on track to produce data by what is now probably going to be the first quarter of 2026. We feel great about all of that, and that would put us in a place where we would have this label expansion opportunity. Once again, a first in disease indication, and as of now, no near-term competition on the horizon.

[Sara Bonstein, executive]

And I would just everyone on the magnitude of the label expansion. Today in the U.S., there's about 12,000 to 17,000 patients. All MAC in the U.S. is around 100,000 patients. So as we think about our revenue guidance this year, it's obviously very impressive at 340 to 360. But what we shared on the Commercial Day is we believe ARIKAYCE with the label expansion is the ability to be a $1 billion-plus product. So we believe this label expansion with the strength of the ARISE data and now the feedback from FDA, we couldn't be more encouraged about the opportunity of the broader franchise.

[William Lewis, executive]

Martina, I don't know if you want to add anything about the specifics of the trial?

[Martina Flammer, executive]

Yes, Graig. So from the powering, as you know, we're powering for primary endpoint on the PRO and there's the 2 pieces we want to show a difference of at least 4 points between the groups. That's why we're north of 90% power, but we're also powered north of 90% for culture conversion.

[Graig Suvannavejh, analyst]

Great. And if I could just -- my follow-up would be just on the heels of the positive brenso data that you generated, have you been able to undertake any new market research engaging with either physicians and payers and any early insights if you have completed any of those market research studies.

[William Lewis, executive]

Well, we're going to continue to do market research between now and the day of launch, to be honest. And I would say that probably the top line takeaway is the target product profile we had gone out and done our prior market research with what we saw from ASPEN in actuality is actually better. So there's more to learn, more to understand, but I think we're just in as strong a position as we could hope to be. And if anyone was there at Dundee with us, they would have heard just the enthusiasm from the experts who treat in this field around the world for the potential arrival of this medicine and the profile that they saw there. It was nothing short of a celebration.

[Operator]

Question comes from the line of Nicole Germino from Truist Securities.

[Nicole Germino, analyst]

Congrats on the progress. For brenso, beyond the diagnosed bronchiectasis population, in order to tap into the patients with COPD with potential overlap or comorbid bronchiectasis, what's the potential strategy to capture those eligible patients in this segment? Like how do you convince doctors to give a CT scan in addition to a spirometry diagnosis? And or what needs to happen in order to capture more patients with existing COPD?

[William Lewis, executive]

Yes. So on that front, it's really the definitive diagnosis for bronchiectasis is a combination of a CT scan and basically a diagnosis by a pulmonologist for certain symptom profile. But the CT scan is an anatomical read that radiologists are very experienced in doing in identifying that anatomical change in diagnosing bronchiectasis. That first element is not a new effort that will have to be undertaken.

It's simply a question of getting the patient to get the CT scan. The disease state awareness campaigns we've already kicked off and I think the existing awareness among the treating physicians that there are many patients who probably have bronchiectasis and are either comorbid or have been misdiagnosed, that is something that has found a lot of resonance with the folks that we've spoken to. So I think you're going to see an increased trend of contemplation by the physicians in this field as to whether or not patients who are, for example, on [ Max dose LabLamas ] and are experiencing exacerbations may in fact be bronchiectatic either as well or as a primary diagnosis. In either case, they're one CT scan away from that diagnosis. And once they've had that and the pulmonologist has identified it as such, then they're eligible and on label in a world where we're approved.

So I think this is not a far journey. It will take some effort to motivate some of perhaps the more community level physicians, but I can tell you that some of the key opinion leaders that we spoke with in Dundee have already systematically begun the process of looking at their patients and asking whether or not they may also have bronchiectasis, and indeed ushering forth that request for a CT scan and moving that forward as a next step. So I think you're going to see this shift happen pretty regularly, but we'll have to see how it plays out.

I don't know, Martina, based on your dialogue with physicians, what you've heard.

[Martina Flammer, executive]

Yes. I think every time you have a new disease coming on board, which is basically a focus now for certainly for pulmonologists. But it is also a focus for patients. So you have to think about if you are being treated for something whether it's COPD or asthma, and you continue not to be well controlled, you have a conversation with your physicians. And so both from a physician and from a patient side, there is an awareness. And now you have an opportunity to -- where it actually makes sense to do a CT scan, screen and say, is this a patient who has more. And that, I think, is a similar situation that you may have seen several years ago with interstitial lung diseases and [ IPS ] that only became on board and awareness for both patients and physicians once there were treatments available.

So we see this now. Bronchiectasis has become a major topic. I think for all the major congresses respiratory, ATS, ERS certainly for World Bronc, but it is now a recognition of a disease that was underdiagnosed and not understood and frankly, because people couldn't treat it.

[Nicole Germino, analyst]

Great. And then one quick follow-up. So with over $1 billion in cash, what is your strategy to continue creating value?

[William Lewis, executive]

Well, I think the short answer to that is the first 2 pillars in the near term will be yielding not only continued growth as we've seen from ARIKAYCE in the refractory setting on the commercial front, but also presuming approvals, the ability to launch for bronchiectasis with brensocatib and then subsequently, assuming ENCORE goes the right way, the expanded label indication for ARIKAYCE. I think those 2 pillars and the execution of those 2 areas are going to drive value for many, many years at this company. We couldn't be more excited about that. We also have Pillar III and Pillar IV. We'll set those aside for now. But I certainly expect there to be significant value driven from there.

I don't know, Sara, if you want to talk about how we think about our cash position and where we go from here. We've been very clear that we're not funded to cash flow positive, but we've got a lot of levers to pull, and we're in an embarrassment of riches in terms of which programs we want to fund and at what time.

[Sara Bonstein, executive]

Yes, sure. Happy to. And I couldn't be more pleased with our cash position, $1.25 billion as of the end of the quarter, and I appreciate all the support from all of our shareholders and our recent equity raise and the strength that we've been able to show since Aspen data on that rate. As Will mentioned, we are laser-focused on successful launch of brensocatib assuming approval by FDA and the rest of the regulatory authorities as well as the underpin of the commercial infrastructure today with ARIKAYCE and that future label expansion, again, pending regulatory approval.

As we think about where we go from here. We have a line of sight on becoming a self-sustaining biotech company. So what does that mean that we obviously have line of sight on to profitability. We have not committed to specific timing, but that is very much in our forefront. And as we're thinking about future investment and trade-off and all those good things, as Will said, we do have an abundance of [indiscernible] TPIP. It's a very interesting asset. And believe wholeheartedly in that program. We'll know more about that asset next year with the PAH data once that's in hand. We'll learn more about brenso with the CRS data next year. The ENCORE data, obviously, we spoke a lot about today. We really had a change in our kind of financial identity as we think about the converts and how we've been able to show successful execution across many different opportunities around the balance sheet. So we couldn't be more pleased on where we are and what the future holds for us.

[Operator]

Next question comes from the line of Andrea Tan from Goldman Sachs.

[Unknown Analyst]

Well, as a follow-up to your comments just now on maybe setting aside TPIP in the fourth pillar, as you think about what drive value for the coming years. I wanted to ask on your commitment to continued development of TPIP, and under what scenarios might you consider how licensing of the asset versus keeping that in-house?

[William Lewis, executive]

It's a great question. We think that TPIP is -- has chance to be a best-in-class asset for the treatment of both PAH and PH-ILD based on what we've seen to date. We keep trying to emphasize that people understand that effectively, what we've done here is found a way to get more of the underlying [indiscernible] into the lungs of patients through the most effective means of delivering that, which is inhalation and the most convenient means, which is dry powder. And the consequence of that has been so far, remarkable results in what we've seen, some of it blended blinded, but in terms of PVR reduction, in terms of the data that we saw in PH-ILDLD in Phase II just earlier this year, we think this supports a best-in-class profile.

And when we look at PVR reduction, frame against what's out there right now from [ prostanoids ] and we also look at [ sotatercept ], which got into sort of the low end of the 30% PVR reduction range on average at its best data point. We're looking to get close to that, maybe match it, and we'll see maybe even do a little better. We'll have to see what the data shows next year. But that would represent unbelievable potential combination for the treatment of these patients. If you think about those drugs and what they would bring with different mechanisms of action.

Now we haven't done that testing yet. We don't know that, but it is certainly the way the key opinion leaders are thinking. And that suggests that this is a very important and prominent asset. They've told us point blank this would change the way they think about the use of prostanoids in the treatment of both classes of patients if the data continues to prove out what it has to date. And that means that this asset would have a lot of value. We're always thinking from our shareholders' point of view, what's the best way to deploy capital. We're aware that the time between now and cash flow positivity is going to be marked by several additional trials that will begin to add some cost.

So we want to measure those so that it's not a constant return to investors for additional capital without a clear proof and advance along the way. where does that put us with TPIP? It means that when we unveil the PAH data at the end of next year, which is the timing we expect, we will have a very clear read on the inherent value of this compound. I think that, that's likely to be recognized by investors and strategics alike. So I couldn't be more bullish about it. I can't say at this point what we might do with it. We're always open-minded to maximizing value.

[Unknown Analyst]

Okay. And then if I may ask one more. Just as you have engaged more shareholders post the ASPEN data, has your thinking around the $5 billion peak sales potential, evolved [ or have ] been refined in any way? And then can you just quickly remind us what underpins your conviction that the early launch cadence could mirror that of HUMIRA or [ dupi ]?

[William Lewis, executive]

Yes. So I think it's really important. When we talk about peak sales, when we have very detailed -- I'll draw everyone's attention to the Commercial Day that we held where Drayton went through in great detail each of the different opportunities and where our conviction comes from. That has not abated in any way. And if anything, the strength of the data and the response from the medical community gives us greater conviction in what we have seen and explored with our research to date.

Where do we go from here with that, I think we'll continue to refine it. We'll continue to think about opportunities. I think it's way too early to be talking about launch curves and what they might look like, obviously, we are aware of the benchmarks that are out there when we think about some of the strongest launches, we think about things like [ Dupixent ], which probably marks the very upper end, the Mount Everest, if you will, of what could be accomplished. I think if I remember correctly, if you look at their quarters 3 through 6 of what would correspond to a first full calendar year, I think they ended up with over $700 million in revenue, which is just sort of astonishing, some of the other products that are out there, we think about [indiscernible] and others, they -- during the same time frame might have been around $600 million.

So we're way far from setting what a launch curve might look like. But we certainly know that, that represents the upper end of the thin atmosphere of what can be accomplished. And so in my mind, we'll be looking very carefully at precedents like [indiscernible] to [ Spire ], [ OFEV ] and understanding what their trajectories were and what we think we're going to be able to accomplish. The overall peak sales number, we have a lot of conviction in, what the shape of the curve looks like. We got a lot more work to do. That will obviously be driven by price, which will be driven entirely by value, and that will be captured in our dialogue with FDA in the [ payer ] discussions.

[Operator]

Your next question comes from the line of Steve Willey from Stifel. .

[Unknown Analyst]

This is [indiscernible] on for Steve. I just have 2 quick one on my end. The first one is related to Phase II PAH data readout timing. If I remember correctly, I think you guys were previously guiding to this data readout in second quarter of next year, but it looks like it has mode shift to shifted to basically second half of next year. I'm just wondering if there's any reasoning that I happen to missed. If you guys provide an additional color on that expansion, that would be great.

And the second question is related to this one versus [ 2-doseychotomy ]. Do you think there will be an additional data that will be presented at the upcoming just conference that could actually just like kind of solidify or achieve to provide incremental view into like into in terms of like benefit and safety of these 2 doses?

[William Lewis, executive]

Yes. So I'm not sure what the misunderstanding might have been on the PAH front. We are north of 75% enrolled on that trial, but we have always had the second half of 2025 as the timing for the top line results for that. that hasn't changed at all. And in fact, if anything, the PAH enrollment has accelerated a little bit, which gives us even greater conviction that we're going to hit that time frame.

On the CHEST data front and the one versus 2 doses, I don't know that there's going to be anything additional there that would shape the comprehension of that. I would say right now, we already know enough to see the benefit of 25 versus 10. It really becomes a risk-reward discussion. I think a dialogue with FDA and out of respect for them, we want to make sure that we're approaching this in the right constructive way. But I don't think there's any other [ shoot or ] drop that's going to inform on dose selection over another at this stage. Both look good, both when both are effective and both are safe from our examination, it appears there's some additional benefit at the 25-milligram dose, and we find that to be very compelling. And so that's the basis from which we'll enter our dialogue with FDA.

[Operator]

Ladies and gentlemen, that does conclude the Q&A session and today's conference call. Thank you for your participation. You may now disconnect.