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Operator: Thank you for standing by, and welcome to the Insmed Fourth Quarter and Full Year 2025 Financial Results Conference Call. [Operator Instructions] Thank you. I'd now like to turn the call over to Bryan Dunn, Head of Investor Relations. You may begin.
Bryan Dunn: Thank you, Rob. Good day, everyone, and welcome to today's conference call to discuss Insmed's fourth quarter and full year 2025 financial results and provide an update on our business. Before we start, please note that today's call will include forward-looking statements. These statements represent our judgment as of today and inherently involve risks and uncertainties that may cause actual results to differ materially from the projections discussed. Please refer to our filings with the Securities and Exchange Commission for more information. 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. Today's call will feature prepared comments by Will Lewis, Chair and Chief Executive Officer; and Sara Bonstein, Chief Financial Officer. After their comments, they will be joined by Martina Flammer, Chief Medical Officer, for the Q&A session. I will now turn the call over to Will.
William Lewis: Thank you, Bryan. Good morning, everyone, and thank you for joining us. 2025 was an exceptional year for Insmed, defined by extraordinary execution and transformative impact. Commercially, we witnessed the approval of BRINSUPRI and its stunning early months of launch performance as well as the continued global performance of ARIKAYCE, which showed significant acceleration from commercial efforts in Europe and especially Japan. Clinically, we saw best-in-class performance from TPIP, entered 2 new gene therapies into the clinic for DMD and ALS and completed the acquisition of INS1148. These accomplishments represent a significant expansion of our clinical pipeline despite the discontinuation of the CRS Without Nasal Polyps program last quarter. We entered 2026 with momentum that positions Insmed for sustained leadership in both bronchiectasis and NTM. In the year ahead, we intend to accelerate and expand the U.S. launch of BRINSUPRI while continuing to grow ARIKAYCE. Rarely does a company have the opportunity to own an entire disease category by virtue of having the first approved medicine in a disease with no competition on the immediate horizon. Insmed enjoys 2 such opportunities in bronchiectasis and NTM, both of which also share a similar call point among pulmonologists. To this strong foundation, we intend to pursue other first or best-in-class therapies within our 3 target therapeutic areas, which include respiratory, inflammation and immunology and neurology and other rare diseases. Today, we are pleased to announce revenue guidance for BRINSUPRI of at least $1 billion in 2026. We are confident providing this guidance earlier than expected due to the additional visibility we have gained into the market access environment and the early performance we have seen from BRINSUPRI so far this year. To our knowledge, only 15 drug launches in history have been able to surpass the $1 billion mark in their second through fifth full quarters of launch, and every company that has achieved that milestone has gone on to reach a market valuation of $70 billion or more. Coupled with another expected strong year of performance from ARIKAYCE, we anticipate total company revenue in 2026 to be more than double the revenue we produced in 2025. This guidance gives us confidence that we can achieve cash flow positivity without needing to raise additional capital. However, we may choose to source capital as necessary to support new business development, internal programs or other potentially value-creating initiatives. We are currently evaluating several such opportunities and we'll continue to do so as we prudently seek to expand our pipeline. Let us now dive deeper into BRINSUPRI. In 2025, the U.S. launch of BRINSUPRI surpassed even our most ambitious expectations. Prelaunch, we set a very high bar for what we believe BRINSUPRI could achieve using a basket of historically strong respiratory launches as our guide. With $144.6 million in net revenue in its first full quarter, I'm proud to say that BRINSUPRI is exceeding that bar. And let me be clear, the launch continues to go well, and the team continues to execute at a very high level. As with many successful medicines, the shape of the launch from one month to another can be inherently variable, but the overall trajectory for this launch is strongly up and to the right, and we believe BRINSUPRI has the potential to be among the best, if not the best, specialty respiratory launch ever. Let me now take a moment to illustrate where we expect the BRINSUPRI opportunity to evolve over time. In these early months of the launch, we see BRINSUPRI establishing itself at the forefront of treating bronchiectasis with no competition for several years. We had previously framed out a peak sales estimate above $5 billion for this indication and everything we have seen so far from this launch has only added to our conviction that the opportunity is at least that large. But I want to emphasize this point, we believe there may be much more. Let's get specific. We previously defined the total addressable market in the U.S. based on BRINSUPRI's label as 500,000 currently diagnosed patients with non-CF bronchiectasis. Within that diagnosed population, we estimate that approximately half or 250,000 patients have had 2 or more exacerbations in the last 12 months, matching the profile of the patients who participated in our clinical trials. Based on those figures, the roughly 11,550 new patients who have started treatment with BRINSUPRI in 2025 represent less than 5% of that patient population. So there remains an enormous amount of runway within that initial total addressable market. And as a reminder, the greater than $5 billion peak sales estimate was based on us successfully addressing these 250,000 patients only. In addition, we believe that over time, more of the remaining 250,000 currently diagnosed patients with less than 2 exacerbations will start to move into the category of those who have had 2 or more exacerbations in the 12-month period. This is due to the progressive nature of the disease and better patient reporting and documentation of exacerbation events now that there is an available treatment. This belief is supported by real-world data. In the 2-year study of claims data for nearly 15,000 patients with bronchiectasis, about 47% had 2 or more exacerbations in the first year of follow-up. Then in the second year, another 9% joined that group, meaning that 56% of studied patients had 2 or more exacerbations in either the first or second year. Based on that study, it is our expectation that patients will continue to move into the 2-plus category over time, and this would represent upside to our peak sales estimates. Now if I can leave you with one item to focus on, it is this. There are 32 million diagnosed patients with COPD or asthma in the U.S. We believe that many of those patients could have undiagnosed bronchiectasis and as a result, may continue to exacerbate despite treatment with standard-of-care for those diagnoses. I would encourage you to consider and assess this potential for yourself. Recognizing the size of that opportunity, we are turning our attention to outreach and education to physicians in the hopes that they can assess these patients for the presence of bronchiectasis. The potential additional patients from these populations, which would be on label for BRINSUPRI if they are confirmed to have bronchiectasis, dwarfs the initial total addressable market we have just been discussing. We are currently working on a number of different programs to advance the exploration and quantification of these patients. This effort will be supported by evidence generation in several large respiratory centers who intend to use retrospective data to identify bronchiectasis in patients diagnosed with COPD and asthma who are still exacerbating. We are also creating dedicated teams within our medical and commercial operations to identify these potential patients given the substantial populations they represent. As many of you know, historical medical literature on this topic provides a wide range of estimates, but a more recent publication that looks specifically at the overlap between COPD, asthma and bronchiectasis suggests that bronchiectasis could be involved in 30% to over 50% of patients with moderate to severe COPD and in 25% to 40% of patients with severe asthma. These patients may not have received attention or been identified in the past because until BRINSUPRI came along, there have been no medicine that physicians could turn to upon diagnosis. As we're able to identify patients that may benefit from BRINSUPRI from within this broader population, we have a chance to help physicians deliver what we believe could be a game-changing medicine for the benefit of their patients. It is an enormous opportunity to serve patients, and it will take several years to more fully manifest, but it has the potential to expand BRINSUPRI's impact by orders of magnitude. This is something we are actively working on and we'll continue to monitor, but it is our belief that we could begin to see these patients as early as the end of this year within the pulmonary practices we already call on and more evidently in 2027 and beyond. Let me now take a step back and describe what we are seeing within the launch to date. Today, we are still in what I would call the exploration stage of the launch. This is a new medicine and as is customary, physicians often want to try it out on a patient or 2 to see how it works, assess safety and then determine how much more broadly they intend to prescribe. For example, of the 4,000 physicians who have written a prescription through the end of 2025, nearly half have prescribed BRINSUPRI to just a single patient. As those first patients return to their pulmonologists and share their experience with the treatment early this year, this should play an outsized role in their physicians' interest and willingness to write again. To date, we have heard very positive feedback through our interactions with physicians and directly from patients through our support services as well as through the patient experiences that have been shared in public forums or on social media. It can often take several months for patients to return to their physicians' offices to be able to convey these experiences, but this positive early feedback suggests that the knock-on effect of these experiences should start to result in additional prescribing behavior by the second quarter, given the large number of new patients that were added in the fourth quarter of 2025. We believe these positive experiences with the current diagnosed bronchiectasis population should also increase the likelihood that physicians will be receptive to proactively tracking exacerbations and screening their COPD and asthma patients for bronchiectasis. Turning now to the mechanics of how patients gain access to BRINSUPRI. A critical element of successful launches is favorable payer access dynamics, and I am pleased to say that this is progressing very well. In fact, over 90% of targeted patient lives have access to get BRINSUPRI reimbursed either through a documented payer policy or medical exception. We chose to engage payers in an effort to encourage them to make access for appropriate patients as frictionless as possible. For those who have been willing to engage with us and settle on simple attestation-based prior authorization and reauthorization criteria, we have offered modest rebates. Others have chosen to require documentation within their medical policies, which typically means requesting documentation of the CT scan and proof of 2 or more exacerbations. Importantly, we have seen a very high payer approval rate so far, even for payers requiring documentation, which is very promising. Given our long history with ARIKAYCE, which even now is primarily reimbursed through medical exception, we've become skilled at providing education to healthcare providers and their offices about documentation and process requirements. We expect these high approval rates to continue in the months ahead as physicians and their staff become more accustomed to the payer reimbursement requirements. While we expect contracts to continue to officially go into effect over the course of the first half of this year, we have concluded enough of these negotiations to feel confident in the general direction of the market access landscape for BRINSUPRI. I am pleased to say this landscape is aligned with our prelaunch expectations with broad access to the treatment for appropriate patients and either physician attestation or manageable documentation required for reimbursement in most cases. In summary, the BRINSUPRI launch continues to be very strong. The rate of patient adds, new physicians and manageable market access dynamics gives us comfort that from the initial patients we are targeting, we see a clear path to reaching our stated peak sales goal of more than $5 billion with potentially significant upside from the adjacent populations outlined a few moments ago that could take that peak sales number much higher. We will have much more to say in the quarters to come as we gain a clear picture of how big and when those additional patients may be diagnosed and become on label for BRINSUPRI. The opportunity itself is one that any biotech company would be fortunate to have, and we intend to aggressively resource the launch to maximize its potential. Now let me spend a moment on ARIKAYCE. Our commercial teams continue to do an excellent job of driving growth of the product. Japan had a particularly impressive 2025, delivering 40% growth compared to 2024 and contributing more than 1/4 of ARIKAYCE's global revenues. In Europe, ARIKAYCE grew even faster, albeit from a more modest revenue base. This strong commercial execution sets the stage for ARIKAYCE's next clinical readout, the Phase III ENCORE trial, which we expect to announce in March or April of this year. Success in ENCORE could open an opportunity to increase the addressable market for ARIKAYCE from around 30,000 patients today to more than 200,000 patients. Let me now switch gears and spend a moment on TPIP, which was significantly derisked by strong clinical data in 2025, opening up the opportunity for us to pursue 4 Phase III clinical programs in parallel. We are very excited to announce that last month, we were informed by the FDA's Office of Orphan Drug Products Development of their decision to grant orphan drug designation to treprostinil palmitil for the treatment of pulmonary arterial hypertension. So you can understand the basis for this designation in their own words, I read here from the actual letter we received from the FDA, "Our decision to grant designation is based on the plausible hypothesis that your drug may be clinically superior to the same drugs already approved for the same indication because your drug may be more effective due to greater placebo-corrected improvement in the 6-minute walk distance compared to other approved oral or inhaled formulations of treprostinil and by means of a major contribution to patient care compared to the approved subcutaneous and intravenous formulation of treprostinil." This decision, which was based on the FDA's assessment of our Phase II data released last year, is a striking validation that our belief that TPIP has the plausible chance to be a meaningfully differentiated treatment compared to other treprostinil options. In our view, this supports our long-held conviction that TPIP could become the prostanoid of choice for physicians and patients. Last month, we presented the trial design for our PALM-PAH Phase III trial of TPIP in patients with PAH at the PVRI conference in Dublin. Recall that the FDA agreed based on the strength of the Phase II results that we would need just one Phase III trial powered at the standard 0.05 alpha for a registrational submission. On this slide, you can see a depiction of the trial design for PALM-PAH. While much of the design is similar to our Phase II trial, there are some key differences. First, the trial has a longer treatment period of 24 weeks versus 16 weeks in Phase II. This longer treatment period is intended to provide patients with a practical titration window given that this trial will allow patients to dose up to 1,280 micrograms or double the highest dose used in Phase II. To put that high dose into perspective, 1,280 micrograms of TPIP after subtracting the weight of the 16 carbon chain contains about 813 micrograms of treprostinil. That is more than 3x the highest labeled daily dose of Tyvaso DPI for patients that fully comply with the 4 doses required per day with that treatment. Another difference is that the Phase III study will allow patients to be on background sotatercept. Enrollment of those patients will be capped at 20% of the overall population and stratified to ensure balance between treatment arms. Finally, the primary endpoint of 6-minute walk distance will be measured 1 to 3 hours post dose to approximate TPIP's peak effect, similar to trials of other treprostinil products. Trough measurements will also be captured as secondary endpoints. We are incredibly excited to get this trial started in the first half of this year. To recap, I am very pleased with where we are as a company. The BRINSUPRI launch continues to go well, allowing us to announce revenue guidance for 2026 of at least $1 billion for that therapy. When combined with the strong performance that we expect for ARIKAYCE in 2026, we expect to produce revenue on a company-wide basis that more than doubles from last year. And even that could be just the beginning as we await a near-term pivotal readout for ARIKAYCE that could expand its label, and we work to identify new patients who could benefit from BRINSUPRI. For TPIP, we have received an orphan drug designation for treprostinil palmitil for the treatment of PAH and have released the Phase III trial design for that indication. If successful, the FDA has indicated that this single Phase III would be sufficient to support a filing for TPIP in patients with PAH. Finally, we have a strong and growing pipeline of potentially first or best-in-class investigational programs behind the ones we've spoken about today, many of which should also begin to contribute catalysts over the next year and beyond. With that, let me turn the call over to Sara.
Sara Bonstein: Thank you, Will, and good morning, everyone. Given that Will has already walked you through our 2026 revenue guidance for ARIKAYCE and BRINSUPRI, let me provide you with a few additional comments on our expected gross-to-net in 2026. In the past, we have highlighted a range of 25% to 35% as a reasonable analog for BRINSUPRI's gross-to-net at launch. This range was based on precedent launches and the impact of new catastrophic coverage requirements under IRA legislation. Today, we believe we have good visibility into where payer contracting is headed and are now positioned to provide a gross-to-net guidance range of mid-20s to low 30s for BRINSUPRI in 2026. Importantly, our 2025 actual gross-to-net for BRINSUPRI was also in that range, which implies that the rebating expected to go into effect into 2026 will be modest and is therefore not anticipated to have a significant effect on the overall GTN of the product. For ARIKAYCE, GTN for 2026 is expected to range from the low to mid-20s, a slight increase from 2025 due primarily to the impact of the small manufacturer phase-in and other provisions under IRA. Let me spend a moment on our cash position. As of the end of 2025, we had approximately $1.4 billion in cash, cash equivalents and marketable securities. Cash burn in Q4 included approximately $70 million of onetime items, largely attributed to the asset acquisition of INS1148 and the milestone payment to AstraZeneca related to BRINSUPRI's U.S. approval. Excluding those onetime items and the cash received related to stock option exercises in the period, our underlying cash burn for the quarter was similar to the underlying burn levels that we saw in the prior quarter. Keep in mind that only a portion of the BRINSUPRI revenue we recognized this quarter had been received in cash as of December 31, so our cash burn does not reflect that full benefit. As we have said before, we expect both revenue and spending to continue to increase as we fully resource and support BRINSUPRI's launch as well as other programs from across our portfolio that are expected to continue to ramp in the near and medium term. Finally, I would like to reemphasize the statement Will made earlier as it relates to our pathway to profitability. Based on our existing development plan and the strength of our commercial engine and its revenue capabilities, I'm confident we can achieve cash flow positivity without needing to access additional capital. That said, I will remind you that we have and will continue to invest in appropriate business development opportunities as well as internal programs and therefore, may choose to source additional capital to advance and expand our pipeline in support of additional future value creation. Moving now to other relevant financial metrics for the fourth quarter, which are displayed on this slide. Cost of product revenues in the fourth quarter of 2025 was $44.2 million, or 16.8% of revenues, which is lower on a percentage basis based on our historical performance, reflecting the positive contributions of BRINSUPRI to the company's gross margin profile. Additionally, as expected, research and development and SG&A expenses increased this quarter compared to the prior year period due to the necessary investments made to support the U.S. launch of BRINSUPRI and to continue to fund our growing pipeline. In closing, I am pleased to report that Insmed remains in a strong financial position, providing us with the capacity to pursue our ambitious goal to expand our reach and our impact on patients. We look forward to continuing to utilize our resources to pursue the potentially value-creating opportunities we have in front of us. We would now like to open the call to your questions. Operator, may we take the first question, please?
Operator: [Operator Instructions] Your first question today comes from the line of Joe Schwartz from Leerink Partners.
Joseph Schwartz: Congrats on the very strong performance. It certainly seems like the TAM for BRINSUPRI has a lot of room to expand with a very well-designed strategy to identify patients with COPD or asthma who are exacerbating with bronchiectasis but might not yet be identified as such. I look forward to hearing about that progress on that front as you embark on this initiative, but I was wondering if you have any plans to develop other DPP1 inhibitors within respiratory disease in order to expand your franchise further? And if so, how do these other agents differ from BRINSUPRI?
William Lewis: Yes. I appreciate the question. Absolutely, we intend to bring other DPP1s forward, not just in the respiratory indications, but in others. As an example, 1033 will enter the clinic this year for rheumatoid arthritis and irritable bowel disease, a couple of indications within that. And that will be in the second half of this year. In parallel, we're also advancing other DPP1s into conditions in respiratory like COPD and asthma. That is absolutely on the horizon for us. Martina, perhaps can comment a little bit here on the distinction between the patients we're targeting who may be responsive to BRINSUPRI because they are bronchiectatic versus those who are asthmatic and/or COPD of a particular profile distinct from the bronchiectasis patient that these other DPP1s would target. Martina, do you want to address that?
Martina Flammer: Yes, sure. So we're looking at a phenotype of patients who continue to exacerbate even though they are optimally treated for COPD or for asthma already. And most of those patients not only have a higher increase in pulmonary exacerbations, but also an increased acceleration in lung function decline as well as an increase in mortality. So that is a specific phenotype of patient population that we're looking for.
Operator: Your next question comes from the line of Jason Zemansky from Bank of America.
Jason Zemansky: Congrats on the progress. Will, I was hoping you could provide some additional color regarding the guidance for BRINSUPRI. Can you speak to some of the specific elements of patient behavior that gives you confidence at this point, specifically with regards to dynamics like compliance, discontinuations, prescription abandonment. I mean I know it's early, but do you have a sense of what that looks like? And how did that influence your projections?
William Lewis: Sure. So we have, as you might imagine, a number of different data sources we examine, but there is generally a very detailed dashboard. And what I would convey to you is that across all the metrics, we're seeing at or above our targets. And that's very much behind why we have the conviction that we'll do at least $1 billion in revenue in BRINSUPRI this year. So I'd say across the board, we're very encouraged, whether it's market access metrics, whether it's use, low discontinuation rates, reauthorizations going through, I'd say we feel very, very good about where things are.
Operator: Your next question comes from the line of Olivia Brayer from Cantor.
Olivia Brayer: My congrats as well on the quarter. Can you comment at all on the scripts trends that SYMPHONY is picking up? Are those January and early February trends indicative of what you guys are seeing on your end? And anything you can tell us at this point just about how new starts are trending so far this year? And then I did just want to ask around interest in BD activity. It looks like you guys flagged that a couple of times in the slides and potentially raising capital around that. What kinds of deals are you guys interested in pursuing? And what's the rationale for potentially doing a bigger deal at this point?
William Lewis: Yes. Thanks. As it relates to the performance, I mean, I think things just are very strong out of the gate, is the only way I could describe it. And so we see -- we hear a lot of talk about the SYMPHONY data, obviously. We don't track it. We don't pay attention to it. But what our -- what we were trying to accomplish today -- because we are always very detailed, and I would say, transparent about the puts and takes that may be in operation in any given week for any given medicine. This is what could hold it back. This is what could accelerate it. That, I think, is often interpreted as caution or conservatism on our part. And what I want to make sure we get across today is that we feel great about the way this launch is going. And we do believe we're going to join that very rarest of groups that can produce $1 billion-plus in revenue by adding quarters 2 through 5 together. There aren't many in history that have done it and those that have, have gone on to be very successful companies. And that's because, to get to that level by the end of the fourth quarter, you're going to have to be at a run rate that would imply you're going to continue to do very well as you go into '27 and beyond. So with all that confidence that comes from doing the examination at a very refined level of script trends, physician behavior, surveys that we do, behavior of patients on medicine, the market access picture, all of these things combine to give us a very good feeling about the direction we're traveling, and that's why we're able, much earlier than expected, to give this direction that we'll do at least $1 billion. That then feeds into the notion that we're on track to get to cash flow positivity without having to access more capital, and that is absolutely the case. The only potential issue we want to raise is that if we see something that's interesting on the business development side, we would not hesitate to bring it on board. We think now is the time to press the advantage should we find first or best-in-class compounds that we can bring on board. An example of that would be INS1148, which we got, in our view, for a very modest amount and which has what we consider to be DPP1-like potential in its application across a range of different potential diseases. So more to come on that asset, but assets like that, that we can add, that are sort of Phase II ready, those are in our sweet spot for sure, where we can step right into the clinic, bring to bear our capabilities in clinical development and trial design and get to a next candidate molecule that could be first or best-in-class.
Operator: Your next question comes from the line of Ritu Baral from TD Cowen.
Ritu Baral: Will, can I dig into some of this baseline guidance a little further and Sara as well. When will you and when will we get more clarity on refinement of this $1 billion-plus level because this already sits right around that. And like if you stretch the numbers out, it implies 15% to 20% quarter-over-quarter guidance, which strikes me as relatively modest given the past few quarters and all of the patient finding initiatives. Does this have -- so can you comment on that? And also, does this idea of requiring the additional paperwork, I guess, and the 2 or more exacerbations factor into the uptake? Because it sounds like you guys are expecting a certain number of plans to still require this documentation and that it might be higher than you previously expected.
William Lewis: Yes. So let me be really clear. The market access picture is fantastic from our point of view. It's ahead of where we thought it was going to be internally. So in no way do I want you to interpret our mentioning of some plans requiring documentation and some not as being indicative of any impact on anything other than enthusiasm for our forecast. What I would tell you about that existence of those requirements of documentation, we always expected that some portion of these plans would require that. That's why we fielded so many field access managers who can support the back office effectively in navigating that. And to be clear, to date, that's how everybody has done it. It's been all medical exception. So now that the policies come into place, that smooths the uptake because our concentration has always been on patients with 2 or more exacerbations, even though our label is for any and all bronchiectatic patients. So a strong position with regard to market access and uptake. And with regard to the baseline guidance, look, we have 1 full quarter under our belt. So it's, I think, audacious to put out $1 billion-plus forecast for quarters 2 through 5 since only 15 products in history have ever done it, to the best of our knowledge, and that includes all the COVID products, the GLP-1s, HARVONI in hep C, SKYRIZI, household name programs. And to that list, Insmed intends to add its name -- of BRINSUPRI. So we are incredibly happy about where we are and where we're going. I would not interpret at this stage, which is very early with one full quarter under our belt, thinking that by saying $1 billion, we, in any way, mean to imply that we're slowing down. On the contrary, this is what's giving us the confidence to go and suggest that there's going to continue to be acceleration throughout the year. We will provide more qualitative guidance at least as we go through the year on how the quarters are progressing. But given the dashboard and the direction we're traveling right now, we feel very good about this launch.
Operator: Your next question comes from the line of Gavin Clark-Gartner from Evercore ISI.
Gavin Clark-Gartner: So you said you haven't seen any change in approval rates from start forms to paid drug. What is that actual approval rate right now? And just on a similar topic, have you seen any changes in the conversion speed from start forms to paid drug?
William Lewis: Yes. So we aren't disclosing particular elements of it, like the approval rate itself. What I would tell you is that our benchmark internally based off of our experience with ARIKAYCE, which is very good, is very high, and we are at or exceeding that level. And then with regard to any other thing that is actually driving the launch, as I said, the dashboard for us is green. So I don't know how else to convey to you that we feel that we're in a very strong position.
Operator: Your next question comes from the line of Ellie Merle from Barclays.
Unknown Analyst: This is Jasmine on for Ellie. Congratulations on the progress. What is the ex-U.S. contribution to your BRINSUPRI guidance of $1 billion or more for '26? And can you just talk a little bit more about your launch strategy ex-U.S. for this year?
William Lewis: Sure. So I'll ask Sara to comment on the different components of our revenue in a moment. The strategy is to launch in Europe and in Japan. We want clarity on the MFN policies that are coming forward now. I think we're going to have that in the coming weeks and at the most months. But until that's clear, it seems to us that the prudent thing to do is to sort of put things on hold until we know what that's going to look like. To be very clear, that does not reduce our enthusiasm for going to Europe and Japan. And our teams there are continuing to advance work in contemplation of when that day comes, but we really need clarity from the administration first on what these policies are going to look like so we can assess those trade-offs and understand where we need to go to. Sara, do you want to take the composition question?
Sara Bonstein: Sure. Happy to. And thanks for the question. What I would comment on is, as we have said previously, any ex-U.S. contribution for BRINSUPRI in 2026 is going to be very, very small given the original time lines we put out. We're obviously going to be monitoring the U.S. policy as Will stated. So we feel very confident in the $1 billion plus for BRINSUPRI regardless of sort of the timing of the pause as we're thinking about contributions. And broadly speaking, the contributions for BRINSUPRI will be vastly weighted towards the U.S.
Operator: Your next question comes from the line of Andy Chen from Wolfe Research.
Brandon Frith: This is Brandon on for Andy. Regarding additional capital to support business development or other value creation, to us, it sounds like incremental spend on clinical programs. How are you thinking about this relative to achieving cash flow positivity? And is achieving cash flow positivity more of a near-term 2026 goal or in the outer years?
William Lewis: Yes. So we -- I would just say we see a very clear path to cash flow positivity. I view it as an inevitability just based on our assumptions about where revenues will go for both BRINSUPRI and ARIKAYCE. Our base business that this cash flow positivity journey contemplates includes Phase III programs for HS, which may or may not happen, as we all know, but it contemplates some expenditure in these programs that you're making reference to. So we would put the cash flow positivity journey separate from BD. BD is the thing that is incremental that would result in us approaching the markets for capital. And look, there's plenty of different ways we can do that. And Sara, maybe you want to just take it from here and share your thoughts?
Sara Bonstein: Sure. Happy to, and thanks for the question. Yes, as Will said, we have -- the $1.4 billion provides us that ability to fund through cash flow positivity for our base business, inclusive of the programs that we have under our umbrella today. BD is obviously separate from that. As we think about different ways to augment the balance sheet, there are all levers that exist are available to us, and we have the ability to be thoughtful on that if and when the appropriate BD opportunity did present itself.
Operator: Your next question comes from the line of Leonid Timashev from RBC Capital Markets.
Leonid Timashev: I want to ask a little bit about the depth of prescribing. I think you mentioned that a lot of scripts are only coming from physicians writing just one script. I guess is there something that they're waiting for in that initial experience with patients that's giving them pause for increasing their prescribing right now? Is there any additional education that you guys are doing to sort of try to drive that depth? And I know earlier at one point, you had mentioned that in some of the centers of -- academic centers of excellence, the drug is still working its way through P&T committees. I guess, are you seeing that work its way through? And can we expect an increase in depth of prescribing across physicians and centers?
William Lewis: Yes. So this is really important. With almost half having written only one prescription and obviously, the vast majority of patients added in the fourth quarter, what we're trying to frame out is that what we've seen is physicians will try with 1 or 2 patients. And as I just mentioned, fully half of them have only done one. So as those patients experience the use of the drug with what has been to date a benign safety profile and a pretty good experience that's reported back, we know that, that will fuel the use of the medicine in other patients within those practices. And all of these practices, we think of as having multiple patient candidates for the drug. Now if we take a deeper dive on these physicians and their behaviors, it's typical that they would wait a few months for the patient to return to the office to express what their experience has been. That dovetails nicely with what we saw as the onset of symptom benefit during the Phase III and Phase II programs. That gives us some confidence that as we enter the first and second quarter of the year, those patients come back in, they report positive experiences. Obviously, that won't be universal, but it has been our experience that it has been very positive. And the consequence of that is those physicians are going to be inclined to write again. Of note, we have a very broad prescribing base already. So the ability to gain depth from that positive experience and reinforcement is just one office visit away. And that to us is incredibly encouraging as we come into 2026. And yes, we are absolutely drawing attention to that. We now have up and running an extensive speakers bureau. So this is a compliant way of educating people on the experience of the medicine peer-to-peer, and I think that's going to be very beneficial. We have a number of other programs that we activate to make sure that we get, if you will, vocal about what people are seeing, and that allows everyone to understand what the benefits could be and make their own assessment. But I would say, universally, their experience to date, we have had a very good feedback loop beginning, and I think that's going to in their benefit throughout '26 and beyond.
Operator: Your next question comes from the line of Jessica Fye from JPMorgan.
Jessica Fye: You talked about the launch being up strong and to the right. Well, I think also in prepared remarks, you noted that quarters can sometimes vary along that strong trend line. And back at JPMorgan, you'd kind of flagged some unknowns just related to being so early on in the BRINSUPRI launch. So I'm curious, have any of those unknowns that you alluded to at the start of the year just become more known now that we're at least halfway through the first quarter? And then just a quick kind of second part to my single question. With revenue guidance now in the picture, should we expect Insmed to continue providing things like patient starts and prescriber metrics going forward?
William Lewis: So with regard to the unknowns becoming known, yes, we've seen some things that we weren't aware of or how they would shake out. Things that are very important like market access, policies, the actual experience and timing of getting a prescription filled. Are patients staying on drug or dropping off? Are they getting reauthorizations? Even as they change plans, are those going through? What's the approval rate? Whether you have a policy, or it's just medical exception? All of those things, I would say, are trending positive from our internal benchmarks in a way that gives us confidence to be able to provide the guidance we have. And I think as we think about that revenue guidance going forward, we'll obviously provide additional clarity. But I think, in general, the most important thing we recognize, which is why we put it out today based on our confidence, is that people want to know what this drug's potential could be from a revenue-generating point of view. We see behind each one of those dollars, obviously, a patient that is benefiting from the medicine. And so the revenue is derivative of that patient benefit. And it's very important to keep that North Star in mind because ultimately, that's what we're in the business of doing, is helping these patients, and the positive stories that are coming back from the use and experience with this medicine, we believe, will yield additional revenue benefit, and that's where this revenue guidance is coming from. And as those unknowns, some of which I reviewed, become clear, it absolutely gives us greater confidence that we're going to be, as we say, up into the right. It's a little bit hard after only 1 quarter, full quarter and a partial first quarter to give upside direction in terms of what the cap could be. But I would say we see this as a year of incredible potential sitting there with at least $1 billion just for BRINSUPRI and $450 million to $470 million for ARIKAYCE. That's a very interesting profile where both drugs are first in disease, have no competition for the foreseeable future and are called on by the same commercial infrastructure. So there's synergy, there's leverage, there's upside and growth. And when ENCORE comes out, assuming those results are positive, we have the expansion of that market opportunity. So this is just the beginning of this kind of direction and guidance.
Operator: Your next question comes from the line of Maxwell Skor from Morgan Stanley.
Maxwell Skor: So I was just wondering how do you expect pulmonologists to navigate payer requirements around ruling out COPD or asthma as the primary driver of symptoms. I'm just trying to think about what needs to change in these practices to potentially recognize bronchiectasis as the main driver in maybe a comorbid patient?
William Lewis: Sure. So in our Phase II and Phase III trial, we had about 15% to 20% of patients who are comorbid with asthma and COPD. And importantly, particularly if we take something like asthma, it's a spirometry test in the office that enables the diagnosis of COPD. In order to get a definitive diagnosis of bronchiectasis, you need a CT scan and a pulmonologist evaluation. But you're that proximate to that diagnosis. In many cases, CT scans don't get ordered because, let's say, you were able to diagnose it as bronchiectasis. What good does that do if there's no medicine to treat it? Now there's something that can treat it. That can lower -- demonstrates to lower exacerbations and all the other benefits that we've discussed in the past. Of note, in the 25-milligram arm, preservation of lung function, which is particularly relevant for a COPD patient. So these are exciting opportunities for those patients who have bronchiectasis to gain potential benefit from this treatment, and they are literally one CT scan away. So it's not a difficult distinction to make if you do the CT scan, and that's really the funnel change that will have to take place and why we're encouraging physicians to give consideration when they have asthma or COPD patients who are on max treatments and still experiencing exacerbations, hey, maybe there's an undiagnosed bronchiectatic patient in front of me. And the numbers that are suggested by the literature are quite substantial here. So while this may take a little time to turn and activate in terms of a patient population, literally internally, we think of it as another launch. It will eventually yield, we think, a significant number of patients on label for BRINSUPRI treatment.
Operator: Your next question comes from the line of Matt Phipps from William Blair.
Matthew Phipps: Congrats on continued execution commercially. The work that you guys have mentioned that looks at the COPD and bronchiectasis overlap, is there any correlation with eosinophil levels? And just given you've had 2 biologics targeting type 2 inflammation approved for COPD recently, I wonder if that just becomes another step for physicians before they order a CT scan as you're thinking about additional pathophysiology for their patients.
William Lewis: Sure. And Martina, do you want to field that question?
Martina Flammer: Yes, sure. So I think if you think about the COPD or the asthma patients, physicians will go with what are their standard-of-care and then add medication as patients need it. Many COPD patients or asthma patients have multiple treatments. So for COPD, clearly, those are bronchodilators, inhalers, but also LABA/LAMA combinations and, of course, corticosteroids. So it depends very much of what is the status of your COPD patients? Are they benefiting it or not? And then you have the opportunity to accelerate into a different treatment paradigm and potentially consider what are biologic treatments and might these patients benefit from them? So there is always a treatment paradigm that you look at from -- depending on what the clinical status is of your patients. But you have to have as a physician also the clinical suspicion that it may not only be the underlying disease that you're treating. So the COPD and/or the asthma that you're treating. But if your patient is becoming optimally treated, even if this is a biologic and continues to exacerbate, then the question has to be raised of is that what's driving an exacerbation, not really COPD or asthma. They may still have that and you're treating that optimally, but then you're asking, "Now I have to see if there is something else." And that is where the question comes in, "Have I run a CT scan?" And I think often patients, if you add additional medications along that treatment paradigm, physicians will ask themselves the question, "What else do I have to look for before I continue escalating a treatment paradigm?"
Operator: Your next question comes from the line of Danielle Brill from Truist.
Unknown Analyst: This is Alex on for Danielle. I was curious if you could give a little bit of a breakdown of the payers that are requiring documentation versus attestation versus the plans that require medical exception and what percentage of covered lives does that represent? And then lastly, just if you could share your confidence in getting policies in place that are currently using medical exemption going forward?
William Lewis: Yes. So Alex, I'm going to disappoint you. I'm not going to break out the covered lives and what is documentation, what is not. I would just tell you this, which is the benchmarks we set for what percentage would be required documentation, they're right in line or probably a little better than what we were thinking. And I think what's important is that all of the guidance that's coming out that we've seen so far is aligned with the guidance that came out at CHEST, which is that the patients you want to be thinking of first for this are 2 or more exacerbations, and that's the way that the market access world is interpreting it. It's the way we've driven physicians to think about the use of this drug in terms of first patients to try it on. And so I think all of that aligns nicely. And so what you've seen in the partial third quarter and first full quarter in the fourth quarter is this market access picture that is not expected to change dramatically in terms of our ability to add patients without a lot of friction. And that's because not only are we very experienced with the market medical exception pathway, but we are getting many plans to agree to doing attestation, which should, if anything, help the process. The more predictable it becomes, the easier it is for the back office to know what to do, and our teams are there in a compliant way to support that education and execution. So I feel very good about the market access picture. I think within the launch, when we look back at this and talk about what has gone very well, market access is going to be one component that we got right.
Operator: Your next question comes from the line of Adam Walsh from ROTH Capital. Your next question comes from the line of Stephen Willey from Stifel.
Stephen Willey: Just curious if you're expecting the majority of patient reauthorizations to occur 6 months after starting therapy. And I know your comments seem to suggest that some payers have already required reauthorization at earlier time points. So just curious if there's anything that you can say about the seamlessness of the reauthorization experience you've seen thus far.
William Lewis: Yes. The point of greatest friction, I think, in this world is when you get into the first quarter and you have some patients who change medical plans, does that get bridged effectively? Is the reset of the co-pay? What kind of a break does that put on things? And I would say that in our first quarter, we feel very good about the way things have gone so much so that we can give the guidance that we provided. I don't know that we can give a lot more detail beyond that, except to say that if we were seeing difficulty or breaks of some kind, we would be calling that out, and we're just -- we're not.
Operator: Your next question comes from the line of Graig Suvannavejh from Mizuho.
Graig Suvannavejh: Congrats on the quarter. I really want to tap into the additional BRINSUPRI opportunity in the 32 million or so patients who have COPD and asthma as a potential revenue opportunity. Just to clarify, to be able to tap into that patient population, is there anything that you need to do, i.e., do you need to run a clinical study? Or how would that mechanically work to be able for a doctor to prescribe that medicine? Would that be off-label or -- just any color there, please?
William Lewis: Yes. So we're speaking very specifically on label exclusively, and that's all we would ever focus on. And the way that flow occurs is for a physician who has, as Martina described, either asthma or COPD perhaps is fully treated for that condition and yet continues to exacerbate and perhaps have sputum expectoration. That patient becomes potentially a candidate for CT scan to evaluate if the additional difficulties they're experiencing are a byproduct of bronchiectasis. The moment that CT scan and pulmonologists have a definitive diagnosis of bronchiectasis, they are on label for our drug. If they have had 2 or more exacerbations, their path to reimbursement for the use of the medicine should be very smooth. And so that's really what we're describing is that all of the COPD and asthma patients, 32 million we estimate is the number, what percentage of those may still be experiencing exacerbations despite best treatments. And then of those, how many have either already had a CT scan. And so we can go back and review those CT scans to see if there's evidence of bronchiectasis. Because remember, if you do a CT scan, and it's not that uncommon for many of these patients to have one, it doesn't mean that they would have identified bronchiectasis. They have to go looking for it, or perhaps the radiologist called it out, but it doesn't get coded because back then, there was nothing approved to treat it. So there is advantage in going back and looking at existing CT scans and doing a definitive assessment of whether there's bronchiectasis in evidence. And there's also the patients that are having the experiences I'm describing, getting an additional CT scan for the first time and having it evaluated at that moment. So our education efforts are both medical and through commercial channels, compliantly raising the index of suspicion about this and hopefully identifying those patients who would benefit with a definitive diagnosis of bronchiectasis and getting them on BRINSUPRI.
Operator: Your next question comes from the line of Ash Verma from UBS.
Unknown Analyst: This is Josh on for Ash. A question on the TPIP IPF study design. How critical do you think it is for you to show survival benefit to claim a major contribution to patient care versus Tyvaso? And does your potential study design change based on what Tyvaso shows on the survival endpoint in the TETON-1 study that's about to read out?
William Lewis: Yes. So what I would say is that, that study design is not yet finalized. I don't know if, Martina, you want to comment on anything further with regard to where we're going with that TPIP program in IPF and particularly the survival endpoint he was raising?
Martina Flammer: Yes. So we haven't really looked at exactly what that -- what the design will be. I think looking at TETON and what endpoints they use and also the design is a good guidance. Certainly, that will be one consideration for us, but we have not, at that point, really communicated on the design, but we'll discuss that also with the FDA, and then we'll share it with you once we have a better picture of what we will move forward with.
Operator: Your next question comes from the line of Ben Burnett from Wells Fargo.
Unknown Analyst: This is [ Ethan Chi ] on for Ben. Two quick ones. First one, I just want to make sure I understand correctly. So the $1 billion guidance is all 2 pulmonary exacerbation patients and any 1 PE patients is going to be upside? And second one on ARIKAYCE. Data is around the corner. Any commentary that you can provide on blinded data, whether it's PRO or sputum conversion rate? And what is kind of internally, how do you think about the bar for approval and most importantly, like, commercial success?
William Lewis: Sure. So on the $1 billion question, are they all -- is that -- the revenue guidance, is that based on patients who have 2 or more exacerbations? Yes is the answer to that. We think there is upside from the additional 250,000 patients. This is a progressive disease, and we do anticipate as the most recent paper, I mentioned in the remarks, identifies that some of those patients with less than 2 or more exacerbations will fall into 2 or more exacerbations as time goes on because of the progressive nature of the disease and the heightened awareness of diagnosis and all the rest. In response to your second question, you'll be pleased to know we've decided we're not going to be getting into the game of blended blinded data anymore. We certainly monitor that. I think the challenge of it is always knowing that there is an alternate explanation for whatever promising direction it may be suggesting. Where I feel confident in the ARIKAYCE ENCORE readout is that we've already run multiple studies using this drug in this disease and have seen the primary endpoint and secondary endpoints measured with success on more than one occasion. The exception of that, obviously, is the newly developed PRO, but that PRO was developed in conjunction with the FDA using the ARISE data as the benchmark for understanding what we think is likely to be the way to interpret clinical relevance. And what does that mean? It means that we feel very good going into the discussion with FDA that the results will be compelling enough to enable a full approval for all MAC NTM. In Japan, all they want is culture conversion. Obviously, it has to be safe and effective, but they measure effectiveness by culture conversion, and that's the primary endpoint. And we've never had a trial where we have not definitively won on that front. To remind you, the ARISE trial was basically a 6-month trial with 1 month off, and the ENCORE trial is simply a longer version of that same trial design. We recruited the patients at the same time. We simply randomized more of them to the shorter-term ARISE trial. And so for all of these reasons, we feel very good about ENCORE being -- producing data that will enable approval in the U.S. and Japan. We obviously have to see the data to make final conclusions, but that's right around the corner, and it will unlock a very substantial additional population for ARIKAYCE going from roughly 30,000 addressable patients to over 200,000. So this is a very substantial future contributor starting in '27, assuming that these data are what we expect them to be, and then we're able to launch in the U.S. and in Japan.
Operator: Your final question comes from the line of Adam Walsh from ROTH Capital.
Adam Walsh: My question is on BRINSUPRI persistence. We recently talked to a pulmonologist who liken BRINSUPRI to sort a blood pressure pill and that it prevents long-term damage but doesn't deliver necessarily immediate symptomatic relief. And he flagged the 1-year mark as the key discontinuation risk based on his biologic experience. With your earliest patients now approaching 6 months on therapy, can you share any aggregate persistence or refill data and talk to your strategy about ensuring persistence with the medicine?
William Lewis: Yes. So the first thing I would say is that refills so far are going very well. So I think that, that's a very positive sign early on. We know that what is great about this medicine as was once described by someone at one of the faculty in ATS, who described it as a holy grail of pulmonary medicine because it was the last unaddressed patient population, and the treatment burden of a once-a-day pill is unbelievably low relative to what these people typically take for other indications in the respiratory arena or otherwise. It's often inhaled medicines, as you know, and those kinds of treatments. As we think about where we go from here, I would tell you that, that profile, that dynamic should in their benefit to the uptake of the medicine. We know from the secondary endpoints in the Phase III study, especially at the 25-milligram dose, these patients had a highly nominally statistically significant finding in favor of feeling better on the medicine. So it's our expectation that, that storyline will come back and empower physicians to write additional prescriptions. And through that process, we would expect things to grow and expand as our depth increases. I don't worry so much about the continuation of the use of the drug given some of the early stories we've heard about patients feeling better on the drug. But even without that, knowing the avoidance of losing lung function, which many of these patients are focused on, the 25-milligram dose, we were statistically significant in preserving lung function. So even if you don't feel it, to be told that by your physician, I think, is a very compelling driver for use. And certainly, the refill rate would suggest that.
Operator: This concludes today's conference call. We thank you for your participation, and you may now disconnect.