Thank you for standing by. My name is Caleb Baker and I will be your conference operator today. At this time, I would like to welcome everyone to the Insmed Third Quarter 2023 Financial Results. [Operator Instructions]. I would now like to turn the call over to Bryan Dunn. You may begin.

Thank you, Caleb. Good day everyone and welcome to today's conference call to discuss Insmed's third 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. Our call today will also include blinded observations from our ongoing Phase II studies of TPIP. These observations may not be representative of results once the studies are completed, and all data is collected and analyzed. As a result later interim data readouts and final data from these studies may be materially different than the observations described today, including with respect to efficacy, safety and tolerability of TPIP. Finally, 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'll now turn the call over to Will Lewis for prepared remarks.

Thank you, Bryan. Good morning, everyone. What a quarter this has been for Insmed. Starting with our commercial performance. We have now posted our second quarter in a row of record-setting revenues for ARIKAYCE with sequential growth coming from both the U.S. and Japan. On a year-over-year basis, revenues grew 17% compared to the third quarter last year and 19% for the first 9 months of 2023 compared to the same period last year. It is impressive to recognize that this drug after posting one of the top 10 rare disease launches in history continues to deliver this level of year-over-year growth as we cross the 5-year anniversary of its original launch. Even more exciting, this quarter, we released the top line results from our ARISE trial of ARIKAYCE in patients with newly diagnosed or recurrent MAC lung disease who have not started antibiotics. I am proud to say that it really couldn't have been a better result from our perspective. The performance of ARIKAYCE exceeded our expectations in every measurable way. ARISE was clearly established -- clearly established the quality of life bronchiectasis respiratory domain questionnaire as a patient-reported outcome measure that works in this patient population, which was the main goal of the trial. But beyond that, it also demonstrated that ARIKAYCE, when added to a true drug control regimen consistently increases the likelihood that a patient will have a meaningful improvement in their PRO scores regardless of what level score improvement is considered meaningful. Additionally and very importantly, ARISE showed extremely compelling benefits on culture conversion for the ARIKAYCE arm compared to the control arm, including the number of patients who converted during the 6-month treatment period, how quickly those patients converted and how durable that conversion was 1 month after the end of treatment, all of…

Thank you, Will, and good morning, everyone. I'm happy to share some of the details of Insmed's financial performance for the third quarter of 2023. We ended the quarter with approximately $786 million in cash, cash equivalents and marketable securities. This represents a cash burn for the quarter of $132 million, which is consistent with our underlying cash burn in the second quarter. I want to point out that a large portion of our quarterly cash burn is directly related to brensocatib's development, including the cost inherent in conducting a very large Phase III trial as well as ongoing launch readiness activities, all of which we expect to be high return on investment endeavors. We continue to believe that our current cash on hand can support our operations through the ASPEN results in the second quarter of 2024, leaving a meaningful amount of cash remaining on the balance sheet at that time. Now turning to our commercial performance in the third quarter of 2023. Total net revenues for ARIKAYCE was $79.1 million, reflecting 17% growth year-over-year. For the second quarter in a row, this represents the strongest quarter for ARIKAYCE sales since its launch, up 2.4% compared to an already strong second quarter. On a regional basis, net revenue was $59.2 million in the U.S. and $16 million in Japan, both of which represent the highest quarterly sales for ARIKAYCE in those regions to date. This supports our belief that both of these regions continue to be in a growth phase. Additionally, sales in Europe in the third quarter were $3.8 million. Today, we are reiterating our full year 2023 revenue guidance range of $295 million to $305 million, which represents expected year-over-year sales growth for the company in excess of 20%. In the U.S., ARIKAYCE delivered another very strong…

Thank you, Sara. Before we move to Q&A, I just want to take a brief moment to thank all of our investigators and clinical trial participants around the world. We could not achieve any of the bold ambitions embedded in our mission without their courage and commitment. I also want to thank our patients for providing us with the passion to keep pushing every day for life-changing innovations. To our investors for entrusting us with the financial fuel required to make those dreams a reality and our colleagues for their tireless efforts to execute on this vision. Thank you all. Now I'd like to open the call to questions. Operator, can we take the first question, please?

[Operator Instructions]. And your first question comes from the line of Andrea Tan with Goldman Sachs.

Two for me. First, Will, recognize it's early, but just wondering if you could characterize your level of confidence in the ARISE data supporting a path towards accelerated approval for ARIKAYCE.

Yes. So I think -- as we mentioned, I think, a number of times, we still consider the base case assumption to be, the ENCORE data is the thing that will allow us to get the approval. But having said that, I think given the strength of the ARISE data, we'd be remiss if we didn't at least engage with FDA and with Japan, to see about their willingness to permit a faster pathway. And the way I think about this is, if you think about the U.S. Subpart H, is if you have a validated surrogate that's reasonably likely to predict clinical benefit, then you have a case to at least present. And once the PRO is validated, which we expect will happen by roughly the end of this year, that would then enable us to go to the FDA and say, we've seen clear signs of culture conversion, which is linked to, as a surrogate to this clinical benefit of PRO improvement. And so that's the basis for the Subpart H request. They may quickly dismiss it or they may want to engage. We're not going to push this. If FDA shows interest, we will absolutely communicate that and move quickly to try to take advantage of it. In the case of Japan, on the one hand, the strength of the data on the culture conversion side, which is what they focus on, creates an opportunity to have that dialogue -- on the other hand, as we've disclosed in the ARISE, we didn't have any Japanese patients. So that's a limitation. At the same time, the drug is approved in Japan. It's fully approved and it's widely used successfully. So I think there's a comfort there that may permit that to be bridged. But we'll see. I mean, I'm not -- I don't want to be unrealistic about it, but I think it's hand on heart, a very reasonable thing to ask of both regulatory bodies.

And then just for TPIP, congrats on the disclosures today. But maybe one question here as you think about dose escalating beyond the 640. Just can you remind us what you've seen from the preclinical data that supports maybe your comfort in going higher and mechanistically, how are you thinking about the potential that you'll be coming up on a ceiling effect?

Yes. What we've seen so far is a dose response curve in the use of treprostinil where -- and this is also clinical practice, the higher you go, the better. And so what is the enabling ability to go higher? Well, you push it as high as you can in clinical practice and the use of something like Tyvaso or other forms of treprostinil. What ends up happening is because of the peak of that drug because the drug diffuses through tissue so quickly is so high it creates things like throat pain, headache, tightness in the chest, those kinds of side effects. And the numbers that we presented today that more than 80% or higher are getting to the 640 dose, and these are disease patients, PAH and PH-ILB patients suggest that we've still got further to go. I think we're all not surprised but encouraged by what we've seen. Our formulation has a 16 carbon chain appended to the treprostinil molecule. That means when they breathe it in as a dry powder, it's inert. It's not an active drug. So the esterases in the lung cleave off that 16 carbon chain and result in a slow release in the lung of the active drug. So you sort of -- that's why we think we're not seeing the threat pain and irritation that is commonly the dose-limiting side effect of other forms of treprostinil. We're able to get to 640. The PVR reductions here, I think, have, in some cases, been jaw dropping. Again, I want to emphasize, we don't know who's on drug and who isn't, but at the same time to see that and to know the background that we've seen with other drugs, it's really, I would say those discussions during KOL dialogue and with our steering committee have been very exciting. And so that's the reason why they have encouraged us to go higher. And in practice, that's what physicians do. They go to max tolerated dose on an individual patient basis. So I think everything we've seen so far gives us a lot of comfort that the safety is there, and we'll be cautious, but I'm not concerned about going above 640.

And your next question comes from the line of Jennifer Kim with Cantor.

Congrats on the quarter. I want to start off on TPIP. I think you talked about the 6-minute walk test. If my math is right, I think the patients who didn't show PVR improvement average 20-minute walk improvement and the ones who did show improvement showed an average of 36 minute walk improvement. First of all, is that math right? But also, can you sort of contextualize that data for us? And I recognize this is at 16 weeks.

Yes. It's difficult, of course. When we talk about the 6-minute walk test, let's be very transparent about this. This is always a highly variable readout. But to see improvement above 30 meters in these -- across all patients and even higher than that among patients with a PVR reduction is highly encouraging. If we think about blended blinded data and its limitations, we look for signs of elements that can't -- that are unlikely to be spontaneously adjusted. So pulmonary vascular resistance does not typically spontaneously occur in these sick patients. So that would be highly unusual. So to see those reductions and to think that, okay, it's roughly 2/3 of the patients in the trial that's randomized 2:1 is pretty interesting. To see 6-minute walk test improvement on these small numbers already, I think, is quite striking. I'm aware that there was some public data which got one of the treprostinil forms approved with, I think, only a 20-meter 6-minute walk improvement and that was among patients who received drug. So here, we don't know what the actual outcome will be. I do want to highlight that there is often a wide standard deviation around 6-minute walk test in every place it's used, but it seems to be the best available measure to give the FDA comfort and secure a path to approval. So not only is the PVR reduction exciting, but its correlation with 6-minute walk improvement is also suggestive and exciting. And for that reason, we provided it. But again, I think I want to highlight -- the KOLs, the steering committee, they're very excited by these results. So we are excited by these results. And we'll see what comes in the future.

And then I know you talked about enrollment sort of ticking up in ARIKAYCE after the recent data. Could you give any more color on that in terms of -- is that continuing to accelerate as though we go and buy? And how does that impact how many patients you could potentially enroll through the course of 2024?

Look, I think what's striking about it is everyone knows NTM trials can be challenging to enroll perhaps not as challenging as PAH, but they're pretty challenging. And so I would just complement once again, our clinical operations team for producing the ARISE data on time. And on the basis of that strong data, we have seen a notable uptick in enrollment since then. Now that was given out at the beginning of September. So it's been a fairly short period of time, but it has remained, and it is significant. So we're hoping that will continue. It does give us encouragement that we think whenever we end up deciding to enroll in ENCORE, we'll be able to get there in a fairly efficient way, but we'll have to see if that continues to be the pattern. But I would say I'm very encouraged by what we've seen. And I'm not surprised. When I was at ERS walking through the hotel lobby in Italy, we had people coming up and stopping us and saying those ARISE data are really unbelievably good.

If I could sneak one more in just on the R&D expenses. I know in the 10-Q, it's a manufacturing -- lower costs around manufacturing was the driver. But I'm wondering, how do you think about the move in the R&D expenses in your mid to late-stage programs? Because I thought it took a bit down quarter-over-quarter for [indiscernible] like sort of across the line on the external expenses. Do you expect it to sort of stay where it is? Or how should we think about that over the next year or so?

Yes. Thanks, Jennifer, for the question. We obviously haven't provided forward-looking guidance, but what I can say is we continue to have investment in research and development to support all of our programs. Obviously, our early-stage efforts are less than 20% as we've committed to our ARIKAYCE TPIP and brensocatib are 80% plus from an overall investment perspective. The ARISE and ENCORE programs are obviously ongoing. ASPEN is ongoing data readout Q2 of next year and then TPIP, the Phase II is ongoing. And then obviously, the start-up costs for some of the launch readiness activities. Manufacturing costs tend to be lumpy in nature. So I wouldn't read more into manufacturing costs are lumpy in nature.

And your next question comes from Vamil Divan with Guggenheim Securities.

Maybe first just on the TPIP side again. The one question I have about -- so it looks like about 80% of -- sorry, yes, 80% patients are getting to the highest dose across the 2 different groups. I'm curious sort of what's preventing the 20% or so that are not getting there? Is it just cough or something else probably there's no throat irritation or pain so assume it's not that. And then I'm just -- the question we're getting in from some investors. I'm curious. You talked about this a little bit, but what would you say is sort of reasonable placebo responses that we should expect in PH and PH-ILB. Do you just -- I think if you try sort of sort out, obviously, we're still going to get more data here as we go forward. But from what we have right now, trying to sort of how the placebo group may have performed would be helpful. You can give any insights.

So I think what I would say about the trial is that so far it is -- both trials are progressing very well. The perception we're trying to convey from the steering committee and from the KOLs who see these data is incredibly encouraging. And some have even used the phrase, which I appreciated, a category killer, for the description of this drug. So I am incredibly encouraged by what we've seen. It is early in the trials, and so we want to always footnote that aspect of what we're seeing. The 20% that are not getting to the max tolerated dose, I don't want you to walk away and think that there are people who are having significant adverse events here. Some aren't going higher for any number of reasons. It's not that many, but those who are, are still getting to substantial levels -- so they may not make it to 640 in the 5-week time, which is the cutoff time frame, but they are still getting to high levels. And so that are, in some cases, significantly, still significantly above where the best available Tyvaso dry powder can achieve. So from that perspective, we feel really good about every aspect of this trial. I mean on the extreme side, I would say that when you think about PVR, the normal level is around 2 Wood units. And we are seeing some patients who are approaching that level. So that -- if you think about the way this drug works, 24 hours of coverage with a single administration, this is like a continuous infusion to the lung of treprostinil through inhalation. And that is not something that is currently possible. So if this continues to read out the way it is, I think there's every reason to believe that this is going to be a game-changing compound. I don't know if I answered the other aspect of your question.

Placebo response.

Placebo response, yes. I'm hesitant to give a background information on other meds. I know that public -- that information is publicly available. So perhaps we can help you dig that up at sidebar and get that around.

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

I wanted to -- for my first question, pivot to ASPEN a little bit. Will, can you comment a little bit about how you're seeing the blinded data come in with respect [indiscernible] baseline event rates, exacerbation rates and also the blended event rate for that trial? And how should we be thinking about the powering or any additional detail on powering an MCID that you could give us after your discussions at ERS?

Yes. So what I would say about the ASPEN trial is that it is continuing exactly as we would want it to. We start with the awareness that the inbound patients fit the profile of WILLOW almost perfectly. And so that is an encouraging base of information. As we released once before, the event rate hasn't really changed. So there's no real reason to update it. And so -- I mean, it will move around a little bit, but the vast majority of this trial is now completed. And so what I would also say is that along the way, we are cleaning the data as we go. So we are in a very strong position with regard to the completion of the trial and being able to move to the production of the data and ultimately into what we hope will be a filing. So I don't know if there's a lot more to update in terms of blended blinded data we're seeing, except to say that the elements I look for are remaining consistent with what we've publicly stated before, and we continue to hear the anecdotes from physicians that they are seeing patients with notable improvements, although once again, we don't know whether they're on placebo or treatment. From a powering point of view, this study was powered for at least 90% to show a 30% reduction. In Phase II, we were 80% powered to show a 40% reduction, and we were stat-sig. So I think we are well powered. We have conservative assumptions behind event rates. The event rates we're seeing are consistent with WILLOW. I mean this study, it may be big multiples of the size of WILLOW and certainly bigger than anything else that's ever been done in the space before. But we like to say internally that this trial design will not fail the drug. It is always possible that the drug may have some unexpected results, but I do not think that we will be lacking for powering, and I expect that to convey a clear message at the time we unblind.

And then moving to TPIP and its tolerability. You mentioned that most of the cough was mild. Can you comment on the rate of moderate cough? Did you see any serious cough or severe cough?

Actually, cough is one of the points of great strength of this compound. And we did a ton of preclinical work on this. One of our physicians who is an expert in this area, Dick Chapman, really did some pioneering work for us and using gold standard models established that this compound was really able to be used without a lot of that sort of side effect profile. There are patients who experience cough, particularly with PH-ILD because cough is a feature of the disease. And anytime you're using a dry powder in that setting, you're going to expect some cough. But I don't -- again, the message today should be heard that we're not seeing anything out of the ordinary for PAH or PH-ILD patients who are treated receiving treprostinil in other forms and in many ways, ours, to our mind, materially better.

And your next question comes from the line of Jeff Hung with Morgan Stanley.

This quarter, you reiterated your guidance, which at the midpoint would suggest that 4Q could be flat. Last year's fourth quarter ended up declining sequentially. So can you just talk about the factors that we should be keeping in mind for the rest of this year? And then how they compare to those from last year? And then I have a follow-up.

Yes. Sure. Happy to address that, Jeff. Thanks for the question. So we were really encouraged by the performance of ARIKAYCE this quarter, second sequential quarter of substantial growth guidance, obviously tracks [indiscernible] over 20% growth year-over-year with us now getting to our 5th year anniversary. So again, really encouraged by the performance. Japan is, we have always said, is the second half of the year story. That growth started a little bit earlier than we expected, yet we still saw sequential growth this quarter in Japan, and we continue to have expectations for Japan to continue to be strong. Q4, as you can look at historical performance, Q4 in the U.S., gross to net usually is a little bit higher. So just some kind of seasonality there, if you just look at historical performance. But overall, we're really proud of the performance that ARIKAYCE has been able to do now entering its sixth year in the most mature territory.

And then can you talk about the brensocatib commercial readiness activities that you've undertaken so far? And what additional activities are still expected before the data readout next year?

Yes. So on the brenso front, the team has just done exceptional work. And this is medical education. It's preparing the market access story so that we can educate the market access world. I mean, we've got a lot of lessons learned from a first in disease launch that we're applying for bronchiectasis because again, this like NTM is a disease that has nothing approved to treat it. So there's some upfront work we want to do. I think if you benchmark us against any best-in-class effort for drug launch, the efforts that we're making now and the maturity of those efforts and the success of those efforts as seen at recent congresses by the interest level of the medical community are really just top shelf. And they're very early. We are getting underway with this work well over a year in advance of when we expect we'd be filing. So that is a pretty good timeline to be out in front of all this. So I'm really happy with what we've done so far. I expect that we will continue this effort, and you will continue to see, at the congresses, the significant interest in bronchiectasis and potential treatments.

And I would just remind folks of the synergies between our commercial product ARIKAYCE and brensocatib as you think about the call and the relationships that we have already in the NTM community with the pulmonologists and ID docs. Many of those same prescribers would be assuming success on ASPEN. So just the synergies from an infrastructure perspective are tremendous.

And the efforts are underway and the hiring plan is already locked down. We know exactly what we're going to do and trigger it off of data down to the day.

And your next question comes from the line of Jason Zemansky with Bank of America.

Congrats on both the quarter and the data. In terms of TPIP, if I may, the response is, it sounds like there was a bit of a range here. Granted, it's still early, but I was hoping you could speculate a little bit on what are some of the key drivers here? I mean is it dose exposure? Or do you think this is more patient-based in terms of, I don't know, where they are in their disease progression or fundamental level of lung esterases. What I'm trying to get at is, to what extent do you think that moving to higher doses will collectively push responses up?

So I think the short answer to the question is that dose response curve is already well established for treprostinil. And so by going higher in dose, we would expect greater effect; simple as that. The challenge with that historically is the side effect profile. And if you look at the actual PK/PD profile of treprostinil in its earlier approved forms, there's a very high peak and then it collapses very, very quickly, and that's why it's redosed over and over again. And that's an attempt to stay above the therapeutic index and provide benefit to patients. There isn't any nighttime coverage, and there are similar limitations as you try to go up, that peak gets higher and higher, and that's really the origin of the side effect profile that is the most troublesome. What is interesting about our drug is the peak is substantially lower even though you're administering much more drug. And so the peak as it comes down, it's a slow release formulation is the way to think about it. And as a result, you stay above the therapeutic index for up to 24 hours. So you're getting, as I was describing earlier, a kind of constant infusion of the drug, I would think that will over time and with more patients actually reduce the variability. But these patients do have a lot of variants if you look at other studies and history. But the variance we really see is more around 6-minute walk, and I want to just point out an example. There's one of the patients that we know. We don't know whether they're on drug or not that has a different medical condition that is going to impact their 6-minute walk test because it creates a hip problem for them. And as a consequence,…

And then maybe a quick one on ARIKAYCE. You highlighted that you're in a growth phase certainly looks like it. But what are some of the remaining levers out there in terms of the refractory setting? And how sustainable do you think they are? Well, I think we continue to show growth. We think there are many more patients out there. So that's not our concern. The thing that people have to remember is that there is a variable utilization of the drug in terms of duration of use. And so in a sense, after patients have had success with the drug, there will come a time when they'll stop using it. And so you're replenishing that patient population on a regular basis as patients come off. Now there's a -- we've noticed that there's a decent percentage of those patients who are coming back on because they get reinfected. But that's really the dynamic that's at play is that some of these patients are going to stop using the drug. And so it's a kind of acute chronic therapy, if that makes sense.

And your next question comes from the line of Joseph Schwartz with Leerink Partners.

We've heard that seasonality can play a role in promoting some bronchitis exacerbations. And so given you've looked at and shared some of your blended blinded exacerbation data for ASPEN, I was wondering if you have any insight you can share on the seasonality patterns for patients before and after they entered the study? And do you have any sense whether patients who had exacerbations historically during a certain time of the year, have been able to live exacerbation-free during these difficult periods based on blinded data from ASPEN? And then I have a follow-up.

Yes. So the seasonality question is always a tricky one because it's not a clear pattern that is going to apply to everybody. And remember that the trial is designed with both north and south geographies and across the globe so that you get different seasons, if you will, and that necessarily will mute any effect of any one particular area if, in fact, it's on display. I think what gives us the greatest comfort and certainly, what we've heard from the KOLs is the fact that we require patients to have 2 or more exacerbations in order to get into the trial, documented in the last 12 months. And that means regardless of what seasonality they're experiencing, this is a 12-month study, you're going to see events, and that's what we need in order for the drug to show its effect. So from that perspective, I think we're pretty well insulated. That is true. We saw 2 or more exacerbations in the last 12 months, whether it was during the COVID lockdown or outside of the COVID lockdown where the rates were going up or down, we know our patients are exacerbating patients, and that's what we need in order to demonstrate the impact of the drug.

I would just add the baseline characteristics that we put out from WILLOW and ASPEN, just the consistency on those on exacerbations, number of exacerbations, history of COPD asthma, that also just gives us comfort on very similar patients and the strength of the WILLOW data. We all are very aware of and looking forward to turning over the ASPEN data card Q2 of next year.

And then given you've been on the market in Japan with ARIKAYCE for a little while now, I was wondering if you can give us any insight into how the performance has been and how your trajectory looks relative to the U.S. at a similar point in the launch -- in terms of things like sales rep productivity and penetration of physician practices or anything else you think might be important?

Yes. So I'm bullish on Japan. And the reasons for that are several fold. #1, I think the team out there has done a really good job in a very difficult environment. It's hard for us to remember because we basically largely forgotten about the COVID era, I think, for a whole number of reasons. But it was only lifted in Japan in sort of the May, June timeframe of this year. Those restrictions were full on until that moment in time. And so they were working through that in the middle of a respiratory drug launch, which is hard to imagine. The other thing I would remind is that there were a number of surges of COVID where hospitals got filled up, and those were far more frequent and severe at the end in the last 12 to 18 months than they were in the U.S. and that made it even more challenging. So the lifting of those restrictions is one driver that affords us the opportunity. But the more important one, in my opinion, is the new leadership we have in our Japanese territory. We brought on several key senior people in -- at the beginning of this year, and they have really transformed the culture and the capability set of that team and their performance has matched that. And the reason we did that was because we knew not only do we have the refractory market to go and pursue, but we also have to get ready for bronchiectasis and what we expect will be frontline NTM so all NTM patients, and this is the team that can do it, and they've demonstrated that. So there are more patients, there are more hospitals, there are more relationships, and those are growing by the day.

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

Congratulations on the data. First, can you give us a sense of when we can expect the next update from -- I know you're going to obviously amend the protocol and we get a peek at that data or more patients through the study for TPIP?

Yes. So I know that what I can tell you with confidence today is that we believe that we will have PH-ILD data in the first half of next year, the results of the study, and that's probably the one anchor point I can give you. Will we update with additional PAH data? I suppose we can give that some consideration. I don't see why we wouldn't want to continue to at least give people the perspective that we're seeing the same thing or what the trends are. This is an incredibly exciting dataset that we've seen grow and be consistent each time we've cut the data. So I don't have a reason to expect it to change dramatically, but it could, and it's important to highlight that. But so far, it looks good, it looks consistent and so I would expect to continue to be able to share that message. But as far as anchor points in time, I would look for PH-ILD trial results in the first half of next year.

And will you make the same protocol amendment to that study as well?

No. It's -- the PAH study is the one that we're doing the protocol amendment to for the open-label extension.

Yes. Yes. The higher doses for PAH. And then just a question on ARISE. So I know in the placebo arm, you were at a 60% response rate and a much higher response rate on ARIKAYCE. As you look out to 12 months, how are you thinking of that placebo rate evolving if we look at kind of some papers out there, it looks like that could push into the 80% range just on -- based on where it is today. And I know that's some papers by Griffin, et cetera, but I just wondered how you're thinking about that -- I think you actually had like more like a 54% rate, but how that would evolve over the course of the second set of 6 months over the -- to 12 months?

Yes. So I don't -- we don't believe there's much risk of the control arm sort of closing the gap with ARIKAYCE in any kind of significant way over the 12-month period that you would see in ENCORE. It's not the pattern we've seen in the other well-controlled clinical trials in MAC lung patients that we've run. For example, if you think about convert in refractory MAC patients and now in the ARISE study, we saw that the patients who converted on standard of care therapies largely did so in the first 2 to 4 months of treatment. In fact, in ARISE, I think the conversion rate in the control arm stayed relatively consistent from month 3 through month 6, with the peak conversion rate occurring at month 4. So I don't -- I really don't worry about that at all. And that is certainly what you would hear if you talk to the KOLs that are out there who are in the disease. But we'll see. We'll flip the ENCORE card and see where we go. I just would reemphasize that the perception of the ARISE data is sort of universally and overwhelmingly positive. And I don't think people feel like it's vulnerable, I guess, is the right way to respond.

Yes. I think -- I mean, the most impressive thing is you come off therapy and you have very few people who revert back. So I think that's just another point. But anyway, just curious how to think about that.

And your next question comes from the line of Leiyang Wang with Barclays.

And thanks for giving us a peak the TPIP data. And on safety, [indiscernible] with incidence on in terms of irritation is pretty impressive. So on this, have you seen any GI --

I'm sorry, I'm having a hard time hearing you. Can you get closer to your microphone? I apologize. I want to make sure I can hear your question clearly.

Sure. Is this better?

Yes. Thanks. Okay. Yes. I always have some problem with this mic. But -- so anyways, so my question is in terms of safety, have you seen any GI issues in these patients? And any discontinuations that you've seen in either the PAH or PH-ILD patient population?

Nothing that is notable, but it didn't rise to the level of discussion among the medical colleagues. So I'm not aware of anything in that arena.

And one more question on safety as well. Given the differences in dosing, do you think the reason behind having 0 incidents of throat irritation, is that more of a kind of driven by TPIP? Or could this also be a factor in that for drugs like Tyvaso, we've seen even the placebo arm there is around mid-teens throat irritation, but that's also dosed 4 times a day. So I'm just kind of curious on like what do you think is the factor driving the results on the safety side?

Yes. I think as I mentioned earlier, I think the fact that this drug is inhaled as a dry powder in inert form and only once a day is the key to the safety profile we're seeing. You are correct. There are certainly placebo response rates. But as you say, if you're taking a placebo 4 times a day and you're affected by a disease that naturally causes cough already, it's not surprising that you would see some of that irritation. But we've seen remarkably low levels, I would say, and the throat pain that is sometimes indicated and can be a dose-limiting effect for treprostinil, we don't have that -- we haven't seen that in a way that has limited our ability to go up. So I think, once again, the safety profile here is what is permitting us to ask to go to double the current MAX dose, which is already at 640, 60% higher than the highest dose of Tyvaso in dry powder form, and we're planning on going again double that. So it's really extraordinarily high levels. If you were going to see the similar kind of effect in terms of negative impact on the threat, you would have seen it by now in our opinion. But we'll continue to monitor it. And if we see that shift at all or as we go up in even higher doses, we encounter that, we'll share it. I think at this level, given the PVR reductions that we're seeing and assuming that they're correlated with drug use, we're really happy with the profile of this drug.

And your next question comes from the line of Graig Suvannavejh with Mizuho Securities.

Congrats on the quarter. Two questions, please. Maybe I'll ask a question actually on the earlier-stage pipeline. I just wanted to get an update maybe on your DMD program. I think the trial was supposed to start this year. It looks like maybe it's not starting this year. So maybe you could just review kind of the ongoing activities there. And then with that in mind, I didn't know if you had a view on Sarepta's Phase III EMBARK data and whether that data will inform how you think about the program that you're developing? And then my second question is really a financially oriented question. You've got cash well through the readout of ASPEN. And I just wanted to get a sense of assuming that you do get positive data, which I think we're all hoping that you'll see. Can you give us a sense of how you're thinking about any kind of next financing, what that might look like, whether you're thinking about equity debt, a mix of both? Or is there another alternative financing solution that you're considering?

So on the first question, when we think about our research pillar, so-called fourth pillar, as I was saying earlier today, like there are now more than 30 pre-IND programs in that effort. Underneath that umbrella for gene therapy, we have half a dozen that we're pursuing at the moment. DMD is one of those, but they all sort of exemplify the same strategy that we have for this area, which is that we're going to be bringing some really cutting-edge technology to try to advance and improve dramatically on the ability of these modalities to have impact on patients. In the case of DMD, in the first instance, that will involve intrathecal delivery. And so that has involved some back and forth with the agency to make sure that they're comfortable with that technology being deployed in that way. So that process is ongoing. I would say it's very productive. But I'm not surprised that we're going to be having this kind of dialogue with the agency because we're bringing that. We intend to bring forward deimmunized capsids. We intend to manufacture them. And algae, we intend to do RNA End-Joining, which is multiple capsids creating longer length proteins. There's a lot of stuff we're bringing forward that is really going to be able, we think, to transform the way gene therapy is used and the impact that it has on patients. So I expect some puts and takes there. But overall, I would say that all of our programs and all the science behind them continues to get better. So as those programs advance, I think the benchmark we look for internally is when are they in Phase I/II because we know that's when you all will start to pay more attention. It's not that the work isn't important or that it isn't significant. It's just -- it doesn't have as much relevance to the investment community until it's sort of inpatients. So we'll continue to keep you updated as we make progress there. With regard to Sarepta, I'm not -- we'll be watching their data as will everybody else. I think we are hopeful that they'll have success for the benefit of the patients. But we certainly will look at that data and learn whatever we can from it. Once again, we think that our intrathecal approach is going to have a significantly greater benefit to patients. And that's based on the fact that the data that we shared with you in our Research Day suggest that to be the case. With regard to the cash position and what we're doing in the future, I'll turn that over to Sara.

Sure. Yes, happy. Thanks for the question, Graig. And just a reminder, on the early stage, less than 20% of our investment is in that arena, obviously, very important, but can state-gate that investment pretty closely. So on cash, we feel really blessed to be in the position we are over $0.75 billion on the balance sheet as of the end of the quarter. been able to continue to unlock value here, continue to the stock -- it's a tough macro market, but we have been able to continue to outperform, which is great. As you said, we've been very clear. We are not funded through profitability. We will need to raise at some point in the future. But we -- I feel very privileged that compared to many, we have a lot of different levers and have the ability to take -- to be kind of thoughtful as we think about balance sheet augmentation and be able to do it in many different ways if and when we so choose to. So where we are now, shareholder value over $0.75 billion and have a lot of optionality down the road.

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

This is [indiscernible] on for Steve. I hope everyone can hear me okay. Congrats on the data and quarter earnings. I have my question is mostly around TPIP data that you always released. So very first question that I want to start with is that could you guys please provide us with a little bit more clarity on the rationale regarding like why you need to stop dose titration at week 5. And would you expect an even greater proportion of patients to get to the top dose? And lastly, the question related to protocol amendment. So when do you expect this protocol amendment to be finalized? And is there any plan to communicate this protocol amendment finalization through a press release or something like that?

So the design of the study is sort of consistent with other studies in PAH and PH-ILD. I don't think there's any particular magic to the moment of cutoff for titration. All I would say is that the practice in the clinic is to get patients to as high a dose as you can. I think to get equivalency your -- that's just the reason for the structure. And I'm sure that in practice, physicians will take time to increase dose. And I do think that as you go up in dose, as long as there's not an adverse event profile, you're not going to -- you should continue to see benefit. And the idea that you can go even higher is pretty exciting. With regard to the protocol amendment, what we press release when that's accepted or not, I'm sure we'll include it in our disclosure at some point, but I don't expect a separate standalone press release. I think that would just be something we'd convey in a quarterly call or some other medium. I will just add that I think the objective of cutting it off earlier is once you get to your max tolerated dose, you want to track what happens with patients at that highest dose. And so you want at least 11 weeks on the final dose that you titrate to. In practice, though, as I said, they'll go higher, I'm sure, after 5 weeks.

And there are no further questions at this time. Will Lewis, I will now turn it back over to you.

Great. Thank you all for joining us on this morning's call.

And this concludes today's conference. You may now disconnect.