President and Chief Executive Officer
Thank you very much and I want to thank JMP for inviting us here to talk. Before I begin the investor presentation, I want to draw everyone's attention to our Safe Harbor statement, in particular our public filings which contain important risk disclosures that should be considered when making an investment in Insmed.
Insmed is a is in the process of building a patient-centered, sustainable biopharmaceutical company with as I mentioned patients at the center of intersection of pulmonary disease, orphan disease and infectious disease. Our lead product is called ARIKACE , which is more than 10 years in the making. It is amikacin capsulated in lipids which are endogenous or naturally occurring in the lung. This creates a charge neutral liposome which has excellent profusion when inhaled throughout the lung.
The underlying moiety or antibiotic is well known and has been used extensively in medicine for many years. Its delivered via a state of the art nebulizer system which is battery operated, it essentially fits in the palm under hand. The time it takes to administer this drug which is the first and only once a day formulation is only 13 minutes. That stands in dramatic contrast to some of the other available therapies which take upwards of 20 minutes, two or in some cases three times a day.
Importantly the delivery system also ensures uniform droplet size and consistent kinetics or profusion of the drug throughout the lung which is a significant competitive advantage for us. We are using this drug in the treatment of two unmet medical needs that are orphan diseases one is Pseudomonas infections in patients who have cystic fibrosis and the second is in so called NTM non-tuberculosis mycobacteria lung infection.
Turning our attention first to cystic fibrosis. This is a well known generic disease which results in significant morbidity and mortality with a life expectancy of only 37 years, there are some 35,000 patients in the EU and 30,000 patients in the U.S. that have this disease. By the time, you become goes 70 to 80% who will have chronic infection, due to a this underlying pathogen Pseudomonas aeruginosa. It is very viral pathogen, it grows very quickly. It becomes nucleoid strain and it is impossible to eradicate. So a cocktail of inhaled antibiotics among other medicines are what used to treat and essentially work a holding actions against of the dual effects of this infection which result in a degradation of lung function of about 1% to 3% per year.
So we are bringing to market, we hope is the first every once daily product to address this underlying infection. As I mentioned before, all of the competitive products in the market are two or three times daily. We already have orphan designation for this in both the U.S. and the EU. As I mentioned, the underlying delivery system itself is very proprietary. It is manufactured by the company who also manufactures the underlying delivery system for gilyard casten product. And for those of you that dialed into our Phase III results call the other day, you would have heard Dr. Dan from the UK talk about the interest and demand for once-a-day therapy and how this is going to make material difference to patients.
Most importantly, because it will improve their compliance. If you think about the biggest challenge in the treatment of the infectious disease space, it is the rise of resistance to the existing antibiotic treatment that are out there. This drug is a very effective aminoglycoside, very potent gram negative antibiotic. But by making it once daily you are helping the patients to take their medication which is a significantly important issue. Most patients are not compliant with medication and that does two negative things. One, it means they are not attacking the bugs efficiently and two, it means that they are actually educating or developing resistance in those that remain against the antibiotic.
So we recently reported our Phase III trial results. I am very happy to share with you for those that weren't hardly aware that we met the primary end point of the study which is non inferiority of our once daily treatment compared to the standard of care which is twice daily tobramycin. Ours is a new antibiotic formulation and we as I will show you have clear evidence and consistent evidence of any microbial activity. This is significant not only for our cystic fibrosis indication but also what it implies for our NTM indication.
Sentiment: Strong Buy
I'll second Blank's emotion.
From the wealth of really useful material in that transcript, the following stood out for me -
"Most importantly, because it will improve their compliance. If you think about the biggest challenge in the treatment of the infectious disease space, it is the rise of resistance to the existing antibiotic treatment that are out there."
Lewis may not want to connect the dots, but he certainly provided one with that observation.
We didn't see any unexpected adverse events and there was no difference in serious adverse events - safety is always an important issue and to the extent that we see challenges with the administration of inhaled antibiotic, which are not uncommon for all inhaled antibiotics, I think it's important to remember that more than 75% of the patients that were in our Phase III study agreed to sign on to a two year extension study. For those of you who have been near clinical trail, these are incredibly burdensum to patients so for them to commit after six months of therapy to an additional two years, we think is a strong sign of their interest in using the product.
This is the Phase III primary end point and here you can see we've proved non-inferiority so we are comparable to the standard of care that is available today on the market and the leader in the space. This is driven by our technology which is liposome encapsulation which enables us to have this potent any microbial activity that you see demonstrated here. Again over six months you are looking at a reduction in underlying forming units here. Importantly we saw the same kind of performance in both U.S. and European and Canadian patients during our Phase II study.
So this is an extension of the day that we've seen to-date. I think it implies with the technology's efficacy we can hope for good results in our NTM study which is currently enrolling and ongoing. So where do we go with this positive data outcome from Phase 3? We go to Europe and we go there on our own, because it is profitable to do so. There are patients with clear unmet medical need, the way you roll into Europe from a commercial point of view is not the way you used to. What we are going to do with our first toe in the water is to focus on what we call our tier 1 geographies. We have done extensive primary and secondary market research and we can speak to the location of all of the cystic fibrosis centers in Germany, France and U.K and Ireland.
That represents more than 50% of all cystic fibrosis patient in Europe. In many of these countries the cystic fibrosis centers have more than 50 patients located at them. So high concentrations of patients, small calling effort required. So the infrastructure here in an orphan context is relatively modest, and results in our scaling to cash flow positive in a shorter period of time. We're excited about this launch, when it comes and I think it will lay the groundwork for infrastructure that will be used to serve our second indication which is non-tuberculosis microbacteria lung infection. Importantly, there has been no drug developed to treat NTM in the last several decades. This is an indication for which there is no labeled therapy today. We have recently as we announced received QIDP or Qualified Infections Disease Product status designation from the FDA .
That is received both for the drug itself and the pathogens themselves also been enumerated by the Department of Health and Human Services. We've also been granted orphan status, fast track status and because we have QIDP, we're also granted as a byproduct of that priority review. So let's talk a little bit about the prevalence of this disease in United States. The underlying bacteria here are very virulent pathogens AVM complex and abscesses. There are more than 50,000 patients who've been diagnosed with this. We know this because we conducted a chart audit in the U.S. last year in conjunction with the NIH. It's growing at a rate of 8% a year.
It's commonly found in patients with structural lung damage or otherwise immunocompromised patients. Roughly 85% of the patients who have NTM are suffering from a significant comorbidity like asma, COPD, cystic fibrosis in many cases When you are diagnosed with this through, its usually through a collection and positive identification of speed and culture coupled with high resolution CT Scan. Importantly as with the CF market the pulmonologist is a call point. So we are going to be calling for both diseases on the same location.
And then obviously has important implications for the investment and the infrastructure on the commercial side. The prognosis for this disease weather its upper lobe cavitary form or nodular bronchiectatic form it is not good. If you're over the age of 60, you're 40% more likely to die, if you have NTM . And if you have some of these other comorbidities, there are many who will be out there including Dr. Ramsey we mentioned recently on our teleconference that this is essentially a death sentence for patients who have cystic fibrosis and get NTM .
This underlying passage in microbacteria one disease ABM complex and another way to think of this leprosy is a mycobacterial infection but hits the skin and actually penetrates. So we talk about the severity of what mycobacterial lung infection is and what it looks like. You can imagine something in that room taking place inside the lung. And what you see here are the recommended treatments for aggressing that infection.
The American Thoracic Society and Infectious Disease Society of America or ATS IDSA put out guidelines that were cheered by Dr. David Griffith, who also was on our Phase III data call the other day. These guidelines call for a cocktail of antibiotics to be administered over a very long period of time to try and make it dense in the spread of this disease. These include erythromycin - the side effect profile of used antibiotics is very bad. And the result is that many patients, the vast majority of them either refuse or do not remain on treatment. You will note here we've that three times weeks intravenous amikacin is also recommended is a second line treatment for these infections. That is because it is very potent and it is effective, unfortunately in IV form it also toxic. It causes both autotoxicity and nephrotoxicity.
And so what we believe we can do is localize the delivery to the site of the infection with our inhaled formulation and that will be I believe a major step forward for the treatment of this disease. For patients with ABM complex are obsesses who progress lung is surgical option that is considered here. So again to get a sense of the severity of this, treating physicians yet to appoint where they may consider cutting out the part of the affected lung that is infected if enough of the lung survives to provide the patient the needed oxygen.
Sentiment: Strong Buy
Why do we believe that ARIKACE is going to work? Typically, I tend to avoid invitro and invivo references but we've recently received so many designations and signs of support from the FDA . I'm often asked how did you secured those? So I share with you today for the first time some of the insides that we've seen from invitro and invivo studies that demonstrate the bactericidal side effect of ARIKACE on AVM complex. In this invitro study, you see a nice does response curve when ARIKACE is applied against these different strains of streams. And importantly in the low right hand corner here, you see statistically significant superiority to amikacin in the reduction in log CFU of Mac.
So in the invitro vitro setting we're very excited by this data. I think. I think the FDA and key opinion leaders are as well it suggest that not only is it affective against the underlying pathogens but importantly in this model we didn't see any toxicity towards the lung either infected or otherwise uninfected. To augment that study, we looked at the effect of multiple inhaled doses of ARIKACE against mac in a mask model against IVM which is the standard of care right now used to treat NTM as I mentioned previously. ARIKACE , when it's administered every other day was numerically superior to daily administration of a dose of amikacin in injected form that is 25% higher in concentration.
So we're putting more efficiently the drug to the side of the infection with the results out here and I think this represents a really important additional point of validation. It also highlights I think an important issue with the underlying pathogens in contrast to Pseudomonas these pathogens very viralence but they grow slower. So every day or every other day, we're still having profound impact on the CFU concentration of these pathogens. That gave rise to the design of the study you see outlined here, which is classified as a Phase II study that was initiated in the second quarter of last year. Here we're looking at enrolling 100 patients to treat NTM infected patients who come in on six months of sustained background therapy that meets ATS IDSA guidelines.
We stratify for both cystic fibrosis and non-cystic fibrosis patients and we stratify as well for those underlying pathogens that are Mac versus abscess. So, we'll be able to make intelligent observations about the impact of our therapy against these different classes of patients.
They come in on this background therapy and then they're either given our drug for twelve weeks on a daily administration or they remain on background therapy and have placebo. We have agreed upon clinically relevant end point which is reduction in bacterial density after twelve weeks of therapy and at that point, we will examine the data and enter into a dialogue with the FDA which has already begun, pursuant to the QIPP designation about whether or not this particular trial will stand on its own for registration and a label in NTM patients. We have indicated publicly that we intend to complete both the data production from this study and the dialog with the FDA no later than the first quarter of next year.
To-date we have also announced publicly that we have 81 of the 100 patients already enrolled. As a byproduct of all of this effort as I mentioned the FDA has designated the underlying product for QIDP or qualified infectious disease product status. This includes priority review this is pursuent to the Gain Act that was passed last year. This is an important designation for us because it allows us to have regular and ongoing dialogue with FDA to clarify the adequacy of the clinical data package as we move toward what we hope will be a label and approval and commercial launch of the drug.
Importantly it also includes additional regulatory exclusivity. As I mentioned, we have Fast Track status, which means we can submit completed sections of our NDA on a rolling basis and we have already announced that we have orphan status. So, it would be fair to say that we have the regulatory wind in our sale as we go after this indication. These regulatory exclusivities I should add are additive. So that looks like twelve years of additional regulatory exclusivity for ARIKACE in the treatment of NTM . I would also mention that QIDP designation was given for NTM not the patients that are entering our study which are refractory NTM patients.
So this is a broader designation than simply the entry criteria of our Phase III study. We've already begun the primary and secondary market research to talk about how we will go after this market in the United States very similar to cystic fibrosis. There are concentrated centers of excellence and we have segregated the market into three geographic regions, generally speaking we will be focused on these, what you are looking at here represents comfortably more than 80% of the addressable market in the United Sates.
So once again the advantage of orphan drug development is with a modest infrastructure, you can own a significant portion of the addressable market and that's exactly how we intend to pursue this. If you are going to be ready for commercialization, you obviously have to have your manufacturing house in order both for purposes of the filing in the U.S. And Europe and also you can address patient need that you're generating. So we have made significant headway in this preparation beginning with the hiring of industry veteran Peter Clark who has seen no fewer than three products through to approval. He has our Tech operation.
We have been working consistently without fear for a number of years producing anywhere from three to four batches a month at a 25 meter scale. We are now well underway in qualifying a second site that we've identified that we hope will bring 200 liters online by at least as for qualifications is by the first half of next year. So the simple takeaway here is we're all over CMC we're investing In preparation for commercial launch so that this will not be a rate limiting item with the underlying supply of the Nebulizer this is a very experienced group who has done aerosol delivery for many many years they supply product for and we've had an excellent relationship with them. So we think we are very well positioned from manufacturing point of view to meet the demand that we know is going to be there at the time of launch.
Sentiment: Strong Buy