Good morning. My name is James, and I will be your conference operator today. At this time, I would like to welcome everyone to the Insmed Third Quarter Fiscal Results Conference Call. All lines have been placed on mute to prevent any background noise. And after the speaker’s remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. I'd now like to turn the call over to Sara Bonstein. You may begin.

Thank you. Good morning, and welcome to today's conference call to discuss our third quarter 2020 financial results and provide a business update. Before we start, let me remind you that today's call will include forward-looking statements based on current expectations. Such statements represent our judgment as of today and may involve risks and uncertainties that may cause actual results to differ materially from the results discussed in the forward-looking statements. Please refer to our filings with the SEC, which are available through the SEC's website at www.sec.gov or from our website for information concerning the risk factors that could affect the company. Additionally, the information on today's call is not intended for promotional purposes and is not sufficient for prescribing decisions. Joining me on today's call are members of the Insmed executive management team, including Will Lewis, Chair and Chief Executive Officer; Dr. Martina Flammer, Chief Medical Officer; and Roger Adsett, Chief Operating Officer. Additionally, Dr. Eugene Sullivan, Chief Product Strategy Officer; and Dr. Kevin Mange, Head of Clinical Development, will be available during our Q&A portion of today's call. Let me now turn the call over to will Lewis for prepared remarks. Upon completion of those remarks, we will open the call up for your questions.

Thank you, Sara. Good morning, everyone, and thank you for joining us. We hope you and your families continue to remain safe and healthy. On behalf of Insmed, I am pleased to report a very productive third quarter. The primary drivers of potential value in the near to medium-term are all on track. Starting with our Phase 3 ASPEN study of Brensocatib in non-cystic fibrosis bronchiectasis, we are very pleased with the progress we are making. From a site initiation perspective, we have already secured health authority approval in the United States and expect approval in three additional fast-track countries before the end of the year. We are on track to start enrolling our first patients before the end of this year. We are also working to expand site openings globally and have set ambitious goals in this regard for the first quarter of 2021. Our ARIKAYCE frontline clinical trial program is also on track, with trial sites for both the ARISE and ENCORE studies already in the process of opening in the United States, with additional international sites soon to follow. Across the board, our clinical development teams are executing these trials swiftly and effectively. This is promising news for both the MAC frontline and non-cystic fibrosis bronchiectasis patient populations, neither of whom have approved treatments available for their respective conditions today. We take our role as the sponsor of these clinical trials very seriously. We are bringing all resources to bear to enroll the trials rapidly without sacrificing the focus on quality to potentially bring forth these first-in-disease medications. Our third program, Treprostinil Palmitil inhalation powder, or TPIP, continues to advance. In our Phase 1 study, forward dosing strengths have already been completed, with data currently being examined. Assuming these data are positive, we look forward to advancing…

Thanks, Will, and good morning, everyone. As Will mentioned, we had a strong third quarter where we made significant progress across our programs. As we stated at our R&D Day, we are currently very well capitalized. We ended the quarter with $588.8 million of cash, which we believe will enable us to advance our key strategic priorities - global ARIKAYCE commercialization and label expansion, Phase 3 development of brensocatib in non-cystic fibrosis bronchiectasis and the advancement of TPIP into clinical development. Earlier today, we issued our detailed third quarter financial results in a press release. Let me highlight just a few of those for you now. Despite the ongoing impact of COVID-19 throughout the third quarter, ARIKAYCE sales reached $43.6 million. Our gross-to-net for the third quarter were approximately 10%, and cost of product revenues for the quarter was $10.6 million, with a gross margin of approximately 76%. Turning to expenses. Our GAAP operating expenses for the third quarter of 2020 were $89.2 million compared to $88.9 million for the third quarter of 2019. While total operating expenses have remained generally stable period-over-period, we continue to closely manage our SG&A expenses, while providing the appropriate resourcing to R&D, aligning our expense drivers to our strategic priority. Specifically, our SG&A expenses for the third quarter of 2020 were $46.6 million, compared to $53.3 million for the third quarter of 2019, a decrease of more than 12% period-over-period. Conversely, our R&D expenses for the third quarter of 2020 were $41.4 million compared to $34.3 million for the third quarter of 2019, highlighting our commitment to our growing pipeline. We expect R&D expenses to continue to increase with the initiation of our clinical programs in both brensocatib and ARIKAYCE. With that, let me turn the call over to Martina for an update on our pipeline. Martina?

Thank you, Sara, and good morning, everyone. As Will mentioned, we were excited to share important updates across our pipeline at our recent R&D Day in September. I would now like to highlight our current plans, discuss our progress over the last months, and walk through next steps on each of our three primary programs. Let me start with TPIP, a novel dry powder formulation of treprostinil palmitil. Treprostinil palmitil is a prodrug, which by itself is inactive, but becomes active, but inhaled in the lungs. Let me now discuss our clinical progress. We are advancing TPIP for the potential treatment of pulmonary arterial hypertension, or PAH and recently initiated a Phase 1 trial of TPIP in the U.S. This is a single and multiple ascending dose trial in healthy volunteers. As Will mentioned, four dosing strengths have already been completed, with data currently being examined. We currently expect top line data from the entire study in the first quarter of 2021. We remain on track to move into a proof-of-mechanism Phase 2a trial in patients with PAH in early 2021. This is a small study, and we anticipate enrolling fewer than 20 patients. This open-label study will test single doses of TPIP with the goal of confirming the hypothesis that it can deliver prolonged, clinically meaningful hemodynamic effects in PAH patients with low systemic levels of treprostinil, the active ingredient, due to a substantial local vasodilatory effect on the pulmonary vasculature. We hope to gain key learning from this study; namely, to begin to establish the therapeutic window, test if the exposure response relationship is consistent with the substantial local effect hypothesis, understand similarities and differences between single dose PK in PAH patients versus data gathered in healthy volunteers, and potentially establish a bridge between invasive and noninvasive measurements.…

Thanks, Martina, and good morning, everyone. I am pleased to report that, from an operational perspective, we had a very solid third quarter. We continue to experience strong uptake in the growing ARIKAYCE franchise, with growth in new prescribers during the third quarter that we believe is in part due to the arrival of the new NTM treatment guidelines. Additionally, we were very pleased to receive approval of a supplemental new drug application, or sNDA that allowed important new updates to our U.S. label. We also continue to make excellent progress internationally as we further the global expansion of the ARIKAYCE franchise, which we expect to be a meaningful growth driver for us in 2021. Let's begin with the FDA approval of our sNDA, which we received just last week. We are pleased to report that this approval adds important efficacy data regarding durability and sustainability of culture conversion to the ARIKAYCE label. In preparation for this approval, we tested the new durability and sustainability data in market research with healthcare professionals. Across both, infectious disease and pulmonologist physicians, our market research revealed that they see these new data as very promising, particularly culture conversion three months after ending all treatment. We anticipate that this update may motivate new prescribers to try ARIKAYCE for the first time and increase the confidence of existing prescribers to prescribe ARIKAYCE for additional indicated refractory MAC patients. These new data in the sNDA, along with a strong recommendation in the new NTM guidelines just published in July, give us important information and tools to build momentum for ARIKAYCE. Turning specifically to ARIKAYCE performance. As Sara mentioned, we had revenue of $43.6 million in the third quarter, resulting from our continued success engaging both healthcare providers and patients in this largely virtual setting. COVID-related restrictions…

Thanks, Roger. Let me close out our prepared remarks by reiterating our focus on continued execution during this next important chapter of growth for Insmed. As you've just heard, we are making significant progress across our pipeline and commercial program, and we will carry that momentum forward through the rest of this year and into 2021. We have a demonstrated track record, strong balance sheet, and a clear pathway to potentially advance our exciting pipeline while also expanding the market opportunity for ARIKAYCE. I am confident in the Insmed team's ability to execute on our goals, and I'm grateful for the entire team's hard work, dedication and commitment to patients and healthcare providers. With that, I'd like to open the call to questions. Operator, can we take the first question, please?

[Operator Instructions] Our first question comes from the line of Ritu Baral from Cowen.

Hi, guys. Good morning. Hi, guys. Thanks so much for taking the question, good morning. Can you guys talk about how persistence and duration right now appear to you? Is that increasing with the -- now that the guidelines have been out for some time? And any change in trends on discontinuation in the U.S. market? And then, I've got a follow-up on Europe.

Sure. Well, I'll ask Roger to comment. I think one of the most exciting aspects of this quarter, and in fact the recent week, is the number of elements that are leading to put wind in our sales and momentum behind the ARIKAYCE refractory franchise in the U.S., which, of course, will now pay dividends in Europe, and if approved, in Japan as well. Roger, do you want to take that?

Yeah. Thanks, Will, and thanks for the question, Ritu. So I don't think that we've seen a significant change in the sustainability or the duration of therapy at this point. But you're absolutely right to point out that there's the guidelines recommending 12 additional months of therapy beyond culture conversion. And we see that resonating with physicians as we go out and discuss the guidelines. And just a reminder, although we've been talking about the guidelines for quite a long time, awaiting their issuance, they only came out in July. So we are able to actually engage with physicians and talk with them about the guidelines. And there's two factors that I think are really resonating. The first is a very clear and strong recommendation as to where to use ARIKAYCE, and that gives physicians who are perhaps wondering should I continue to persist with the frontline triple therapy as per the guidelines beyond six months, it gives them a very clear direction that after six months, if these patients are not culture converted, you need to then move to ARIKAYCE, is very strong recommendation. And then, once you pass culture conversion, then you will need to continue to treat for the 12 months. So we expect that to be a very positive tailwind. The other thing, and I know that you're aware of this as well, that we're very pleased about, is the impact we're seeing from the practical management of adverse events for ARIKAYCE. And this is a peer review paper that came out in March that helps physicians manage patients through that first few weeks where the airway is adapting to ARIKAYCE, so helping patients manage through that. And we think that that's going to help patients stay on ARIKAYCE therapy and then be able to complete that full treatment of therapy going to culture conversion, plus an additional 12 months. So we remain pleased with the persistence and the duration, and we expect to be able to leverage the guidelines to further improve that, going forward.

And Ritu, I'll just add to that. We didn't really make a big deal out of it because, to be very blunt, we weren't sure we were going to get it. But the recent approval of the sNDA brings additional clinical data into the label that allows us to point to physicians, in conjunction with the arrival of the guidelines, the benefits that patients can expect to obtain as a result of using our therapy. So it's a powerful combination, and that approval of the sNDA happened only a week ago.

Got it. And I think your question goes to Roger, as well. One, do you know the U.K. reimbursement path that you guys will be facing? I know there's different expedited paths, and I was hoping for a little more clarity. And then, two, you mentioned that you'd have all 50 RevPARs by the end of 2022. Does that mean that you are expecting that the top five markets will be generally secured, reimbursement will be generally secured in the top five by end of 2022?

Roger, you want to take those?

Yes, sure. So I'll take the first question that you asked about the United Kingdom and the reimbursement process, and I guess more specifically around England. So the pricing, as you know, it's a free pricing market, but there are procedures that have to be followed before the price actually gets published and officially reimbursed. We expect that to occur over the first half of 2021. The timelines vary. In the meantime, there are reimbursement processes that can be followed to secure reimbursement for U.K. patients on an individual basis within the U.K., but it takes a little bit longer. So I would say that, in that first half, probably by the second quarter is when we'll see full reimbursement that will allow us to have a robust launch in the U.K. And as we had mentioned previously, Germany will be first to launch and has that free pricing and doesn't have the sort of procedural process that the U.K. does. And then, as far as the top five markets, the timings will vary. And as we're estimating as what they look like, I think the we will have probably by 2021, we're anticipating, based on the benchmarks and how long these usually take to get reimbursement, we're anticipating that Germany, the Netherlands, the U.K., Italy will have approval and reimbursement by 2021. We think that, based on benchmarks, France will likely take longer, so a big market for sure. We'll continue to work with the authorities there, and there's flexibility around the timeline potentially, but I think France is probably the market that will take the longest, based on history and benchmarks.

And Ritu, just one final clarification. For the U.K., just to be crystal-clear, we do not have to go through NICE. That's an important point.

Yeah. Got it. Thanks so much. It would be helpful.

Thanks.

Our next question comes from the line of Matthew Harrison with Morgan Stanley. Go ahead please. Your line is open. Question comes from the line of Matthew Harrison with Morgan Stanley. Go ahead please. Your line is open. Our next question comes from the line of Matthew Harrison with Morgan Stanley. Please go ahead.

I think we probably have an issue with him. Why don't we just go to the next person in queue please.

All right. One moment please.

He will jump back in Matt.

Our next question comes from the line of Martin Auster with Credit Suisse. Go ahead please.

Certainly guys, thanks for taking the question. I had a couple I guess I wanted to follow-up. You mentioned, Martine, that the four dosing cohorts have been complete in the TPIP study. I was curious if you could comment on how many doses you're planning to evaluate in all. And also, if you could sort of maybe frame the doses studied relative to kind of the data that was put out on the nebulized version, the precursor form of 1,009 from a couple of years ago and just kind of frame where you're at in that kind of dose ascension. And then, secondly, just on expenses, the SG&A expenses have been pretty flat so far through 2020 versus 2019. And I know you talked a little bit about kind of some increased hiring in Europe and prepping for a Japan launch. But I was curious kind of for this year, how much of this was just intended, going forward, kind of approach to commercial expenses in the U.S. market? How much of it is maybe there's some kind of one-time reductions because of COVID within the travel restrictions and lack of access to clinician offices and things like that? I just wanted to get a little more color on that. Thanks.

Sure. So, I'll invite Kevin to comment on the first question related to TPIP, and Sara can take the question on SG&A. Kevin?

Great. Thanks. Well, hi, it's Kevin Mange. So, we're quite pleased with the progress that we've made in that study with the four dosing strengths that have completed to-date. And in terms of where we're headed, based on the modeling work from the animal data, is we've got several more strengths that we are able to continue to dose escalate through in healthy volunteers. But as with any SAD/MAD study, we expect that, at some point, we will reach a tolerability dosing strength. So, again, we're happy with how far we've progressed. And with respect to the prior nebulized formulation, we are at an exposure of treprostinil that is above what we saw in that earlier stage as well. But I think right now, although we're looking at data, we're still blinded to the dosing strengths as we have CPOs in that arm. But again, I think, in summary, things are progressing very nicely, and we're very pleased with how it's going.

Real quick, Kevin, can you confirm whether or not you hit those tolerability limits that you're looking for so far for the four dose cohorts or do you continue to escalate the dose from here?

We're still going through dose escalation.

Got it. Perfect. Thanks.

And then, Marty, on the expense question, so thanks for the question. So, as Roger mentioned, we've added appropriately and modestly in Europe and we'll continue to add slowly there to support the launch, but we've built infrastructure there. You're seeing that expense in our SG&A expenses to-date already. We did see some savings this year from COVID-related. Obviously, folks aren't traveling as much and those types of things. And we will look to continue to see how can we leverage the learnings that we had in 2020 and bring those forward into 2021 as we look to keep our SG&A expenses as stable and in line as possible so that we can invest in R&D and unlock that value.

Okay guys. Appreciate the color. Thank you.

Our next question comes from the line of Stephen Willey with Stifel. Go ahead please, your line is open.

Yes, good morning. Thanks for taking the questions. I guess there were some comments made with respect to new enrollment forms. And just on the new patient starts front, just wondering if you can provide any directional qualitative commentary. I think there was previously mentioned not too long ago that you guys had started to see quarter-over-quarter growth from a monthly perspective. Is that a trend that you're continuing to see now?

So, I'll preface the answer that I'm going to give Roger the opportunity to take in a minute with the comment that, as a general rule, we're not going to dig into the weeds of items within the profile of the launch just because, at this stage, we feel like what matters the most is the ability to generate the revenue. We feel really good about what we've been able to do. We did note the shift in the concentration of COVID cases from the east to the south and the west in the second quarter to the third quarter, but there are a number of drivers that are positive that we think are going to carry us to future growth from here with regard to any trends or qualitative comments. Roger, do you want to address that? I don't know if you want to make any statements about that.

Yes. No, thanks, Will, and I think you characterized it well. So, we continue to see new prescribers and new patients and new enrollment forms, albeit not at the pre-COVID levels yet, as you might expect, and that's driven really by that regional variability. But I think, look, if I look forward, first of all, I'm really pleased with how the commercial team, and particularly our field-based personnel, have been able to adapt to the ebbs and flows of COVID and what's happening in the different regions. You really have to be quite flexible pivoting between in-person and virtual interactions, and the team has done an exceptional job. We talked about the guidelines and some of the number of catalysts that we see, going forward. We have seen, for sure, the impact of the guidelines and that clear, strong recommendation as to when to use ARIKAYCE, that has already started to have an influence, and we've seen new prescribers initiate therapy. And we believe that that will continue in the future, and also encourage existing prescribers to prescribe ARIKAYCE further. Will mentioned, and I want to just reiterate, how powerful and potential the impact of the sNDA and the update to the label could be in establishing new patients and getting new prescriptions. Adding in the sustainability and durability of culture conversion into our label and allowing us to have that conversation with physicians who are then able to relay that to the patients I think it is very powerful. And in market research, the physicians told us how important that was that they can offer that to patients, if they stick with the therapy, there is a good likelihood that they will be able to sustain culture conversion off all therapy. And so we feel very positive -- and I feel very positive about the future of the franchise moving forward. And certainly, as we monitor the in-person patient visits from a COVID perspective, that's going to be a key factor, but the long-term health of the ARIKAYCE franchise, I feel very good about.

Understood. And I totally get it on the quantitative minutiae front. I guess when you just think about Europe, right, there's obviously a big discrepancy between the addressable patient numbers that have at least 10 reported relative to the U.S. And I guess how much of that do you actually think is just implicit NTM epidemiology versus there just being a more generalized lack of awareness and diagnosis? And I guess to what extent do you feel like you can close the gap on the latter via this commercial launch?

Yes. That's at the heart of the effort we're making. Roger, do you want to dig into that a little bit?

Yes, absolutely. And I think it's a combination of both, right? So I do believe that the prevalence and the epidemiology that's been done has been quite thin prior to the launch. And given the increased intention that's now being turned to NTM, we are seeing publications where there's potentially the prevalence has been underreported. And that certainly makes sense, if you think about the characteristics and way, if you think about the prevalence of NTM, the proximity to the water, history of lung disease, elderly population. All those factors are in place in Europe as they are in the U.S. So I think it is a combination of just understanding, digging into the data a little bit better and actually looking for that, but then driving awareness. And often with rare diseases, you will see that with the approval of a therapy for the rare disease, and then actually an effective treatment option, you'll see those diagnoses of those patients rise. And certainly our efforts will be focused on driving that awareness and establishing the treatment pathways for these patients to get the medication and the treatment that they require. So it will take some time, for sure, to drive that awareness, but we believe that the opportunity is there. And with the support of the guidelines, with the support of the KOLs in Europe, we think that we have a great opportunity to impact the diagnosis of these patients in Europe and the ultimate treatment of them.

Okay. And then just one quick clinical question on brensocatib. So I know A1AT has been kind of listed as an opportunity of interest previously. Just wondering how you're thinking about where that kind of sits in the hierarchy of things to pursue post-CF. I know that there's obviously been a lot of interest in this space, and the competitive dynamic is getting a little bit more interesting on the development side. Is this an indication where you kind of feel like you need to sit back and see what happens over the course of the next couple of years before you plot a course forward? Or is this just not an opportunity that sits that high on the hierarchy for you right now?

Sorry, Steve, I missed the indication you were talking about?

It's Alpha-1 antitrypsin.

Alpha-1, yes. So I think just generally what I would tell you is we're still doing an awful lot of work on brensocatib specifically and on the DPP1 pathway generally and the ways in which we think we can exploit that for the benefit of patients in a variety of diseases. There's a lot more to be learned. I would say that, as I think we shared to a certain degree at our R&D Day and we continue to see in preclinical models, there is a lot of promising data out there for this pathway as a potential mechanism of action for treating a number of different diseases, and the early data looks good. I think there's some real opportunities here. We are going to have to make some prioritization choices. Where we stand right now is that, while more work still needs to be done. Our current thinking is that CF is probably out front. And it's important to dig into that opportunity and understand that, even with the operation of the Vertex drugs in correcting patients, those that haven't been treated before, say, the age of 16 are already bronchiectatic from the damage as a result of carrying the disease for as long as they did, and so they're going to need to be treated for some time into the future. And for those that are being treated at a much earlier age, we're hopeful that they're without any issue. But to the extent that, that is partially effective, they will need to be treated. So that suggests as an obvious patient population, alpha-1. I don't know, Kevin, if you want to talk any more detail about what we may know at this stage in that area. Are we still in the midst of doing the work?

Yes. I think as you said, nicely well, I think it's something that's worth considering and exploring as we are, and that certainly CF is, I think, out in front of everything else where our focus goes after ASPEN.

Got it. Thanks for taking questions.

And our next question comes from the line of Joseph Schwartz with SVB Leerink. Joseph Schwartz, your line is open. And our next question comes from the line of Matthew Harrison with Morgan Stanley. Go ahead, please. Your line is open.

Hi, all. Can you hear me?

Yes. Loud and clear.

Great. Thanks for coming to me. This is Connor on for Matthew. Thanks for taking the question. So just a couple from us. So the first one, I guess, is sort of like an elasticity question relating to ARIKAYCE. And you guys have touched on this with regard to the sNDA and the guidelines and whatnot. But if, for instance, the case counts and the spread is to become as bad as it was in the second quarter, would you expect similar impacts to ARIKAYCE? Or do you see the physician indication of prescribing stronger than that?

Yes. So I appreciate that question. I think, if you look back at what happened Q2 and Q3, what you see is that these were first-time, very intense surges of COVID in initially the east and then the south and the west. And I'm generalizing a bit there, but the impact was quite dramatic, and I think typified by the significant reaction that those regions had in responding to the presence of the COVID surge. What we think we're seeing now and we'll see going forward, although it's hard to predict, as you can appreciate, is that the hospitals, the physicians, the patients, we're all learning better how to deal with the arrival of a new surge in COVID. And you see that even now as people think about more targeted restriction methods and the use of better social distancing and masks and that sort of thing. And for those reasons, I don't think that necessarily what we saw in Q2 or Q3 with shutdown of major densely populated areas is going to be repeated in the future. So what we're seeing now are areas like in the middle of the U.S. that haven't seen those surges before. And even there, they're doing a better job with getting in front of the possibilities and the medical system and hospital system recognizing that they have to find a way to treat these other conditions. The patients need the treatment. These treatments are not optional. And frankly, and very practically, the medical system financially cannot support myopic focus on COVID-19. Does that answer your question?

Yes, yes. That makes sense. Thank you. And then, just two other quick ones, which are mostly on timing and just some more background detail. So could you just give some more detail on what the path forward is in CF? And you guys just mentioned that that might be your primary focus after ASPEN for Brensocatib, and so just your general plan with CF. And then, when can we expect some of the or I guess the first frontline data for ARIKAYCE?

Yes. So on CF, I would say that we're in the process right now of working up what we think would be the appropriate protocol. There's a very well-trodden path for drug development in this area. And as you may recall from our distant past, when I was at Insmed, we actually brought ARIKAYCE forward in a pan-European study of cystic fibrosis. So we know this space extremely well. I think what we want to make sure we have is the best possible and most efficient path for bringing the drug forward. And just to perhaps dig in a little bit there, the way in which the drug is metabolized in a cystic fibrosis patient is different than that of other patients. And so it's important to understand the PK elements of different doses of the drug. And so that will be a first step, we think that we want to get our arms around before we advance into a more purposeful clinical program. But more work to be done there for sure. I will say that I think an effectively treated cystic fibrosis patient who has been carrying cystic fibrosis for a while is effectively, by definition, a bronchiectasis patient. So the probability of impact here is quite high based on the strength of the WILLOW data. And that's one of the reasons why this suggests itself for use in that population. Exacerbations remain an issue for these patients even after they are effectively treated by the Vertex drugs. And I think what's exciting about that for us in terms of clear unmet medical need is that our drug is directly responsive to that need, and we believe, based on WILLOW data, can be quite helpful in really taking away one of the last remaining challenges that cystic fibrosis patients face. So I think your second question was on ARIKAYCE in the ARISE trial and when we think that data will read out. We're not giving any forward forecast yet on data availability. I think that our message today is we are off and running with ARISE, ENCORE, and ASPEN, and I am incredibly excited and, frankly, just impressed by what the team has been able to accomplish in terms of getting sites open, getting ourselves ready to enroll patients. And as we see how that unfolds in the coming months, we'll be able to understand what our enrollment rate is and then report out to the community what we think timelines are likely to be. But we're super-excited because, as you've seen from our description of the number of sites we're going to activate around the world, are resourcing this fully to try and get this done as rapidly as possible. And since we have prior experience in recruiting patients with NTM, these centers are expecting this trial. Everyone's ready for it. They're, frankly, very excited about it. And the same is true for Brensocatib in non-CF bronchiectasis, especially on the heels of the New England Journal paper.

Understood. Thanks for the clarity there.

Our next question comes from the line of John McNeil with Goldman Sachs. Go ahead please. Your line is open.

Hi. I'm actually calling in on behalf of Graig Suvannavejh. So maybe, first of all, I wanted to ask what do you think is driving the difference in sequential growth when you look at Q1 versus Q2, and then Q2 into Q3? [Indiscernible] was obviously a donut hole impact in Q1. So when you think about the trend ex-value that is that sort of what we're looking at for Q4? And then, maybe on the forward, what would you need to see to think about providing guidance for 2021?

Yeah, sure. So I think when we talk about the progression of revenue growth, what I would say is the first quarter was the arrival of COVID and everything coming to a screeching halt. Second quarter was the adaptation of some regions effectively to the presence of COVID and its threat, while other regions were completely shutdown. And we were more specific in the comments on the call to say that, it really was the East Coast largely that was driving that shutdown and the pressures we faced in the second quarter, while the south and west were performing very effectively. As we move into the third quarter, it was the south and West that shut down and the East Coast that came back.And I think, as Roger said, the degree to which a region anywhere opens up again, the patients come back rapidly. And so we see very dramatic shifts regionally, in the responsiveness to the presence of a COVID surge. And I think what's encouraging, as we look forward, just in the COVID dynamic is the adaptability of physicians and hospitals to the presence of this and realizing that they need to continue their treatment, of conditions outside of COVID. And we are as close to this as anybody. We're calling on the frontline physician in the COVID battle, pulmonologists and infectious disease specialists. And so I think we are uniquely positioned to understand how these pressures unfold. And what we saw shifting from Q2 to Q3. And, call it, modest growth or parity quarter-to-quarter, Q2 to Q3, I think, really reflects the severe arrival of COVID, in high-density population centers in the U.S. in different areas. Going forward, I'm hopeful that that will not be the case. And that what we'll be able to do is take advantage of this long list of accomplishments that we've been able to make that set us up for additional growth in the future. Remember, that we think there are 12,000 to 17,000 diagnosed refractory, population NTM population in the U.S. eligible for treatment today. And if you were to sum up, the numbers that we had stated historically would be around 3,000 patients that had initiated therapy. So there is a lot left for us to go after. And I think what we've heard from physicians that there is real interest in treating these patients. We now have the guidelines, the treatment paper and the sNDA to augment the efforts to go out and educate, so that appropriate patients get treated by the physicians.

Okay. Thanks. And if I could ask a question as well on ASPEN, could you talk more about the thought process of testing two dose levels there? And then, do you think that that might kind of give you any insight into, I mean are there other indications or whether you think multiple dose levels might be commercially viable?

Sure. So I'll ask Kevin to comment on that in some greater detail. I'll just remind you that the simple reason for going after 10 and 25 is they both worked in Phase II. But beyond that, I think there's opportunity certainly to learn of potential application in other areas, and that's something we're reflecting on. And perhaps you might comment a little bit on, as we think about other disease states.

Thanks Will. So, as Will said very nicely, we are testing both the doses that we had in the WILLOW study. And both doses were successful meeting the primary endpoint. And so we've taken the key elements from WILLOW including these doses into ASPEN, which are two very viable doses in that population. And from the efficacy relationships we've seen with the exposure in those doses in WILLOW. And we'll likely see in the ASPEN study, that information does have relevance to other indications, such as cystic fibrosis. And what we may ultimately, take into there as we understand the pharmacokinetics in that population, such as CF, that does have a unique set. So the multiple doses are what we consider highly viable doses. It's standard to take more than one dose into a Phase III like this. And so we proceed. And happy with the progress we're making and opening the sites for the study.

Great. Thank you very much.

Sure.

Our next question comes from the line of Joseph Schwartz with SVB Leerink. Go ahead please. Your line is open.

Great. Thanks for coming back to me. Can you hear me okay?

Yes, loud and clear.

Okay. Great thanks. So, two questions, one on Brensocatib and one on Europe, first of all, I know you're not giving guidance on when exactly we'll see Arise or Encore data. But I was wondering if you can speak to whether or not you'll be able to -- I know you're running these in parallel. To what extent will you be able to course-correct based on findings that you observe in Arise? And will you report data publicly on ARISE at any point before Encore data become available?

So, I'll take the second question first. I think once we have an understanding of what that trial means. And to remind everyone, it's an open-label trial, our expectation is that we'll be able to share that publicly, although I don't want to commit to that yet, because as always, when you're looking at data, you want to make sure you understand it fully before you share it. But it would be my intention to share and be transparent with that once we have an understanding of it. In regards to those two trials and their interaction, I'll ask Kevin to comment on the design, because the one is really specifically designed for Kevin.

Great. Thanks, Will. So for ARIKAYCE, so this program for ARISE and ENCORE, we've designed it in such a way that, although they're running in parallel, the ends of the studies are staggered. ARISE is through seven months and ENCORE is through 15 months. And so, to your question, we will have data at the end of ARISE that is specifically designed to decide to help inform ultimately how the primary endpoint for ENCORE will be computed. So there is that opportunity to take those data, digest it, work with the FDA to come to a final statistical analysis plan for ENCORE. And in that stepwise approach we think is the best way to take the approach to the overall program and give us the greatest chances of success at the end of the day for ENCORE.

Okay, great. Thanks. And then, my question on Europe is you guys have been very thoughtful with your use of novel tools and strategies to beat the bushes for patients in the U.S. where you had suspicions that there were patients that were not being diagnosed properly with NTM. Can you talk about the extent to which you can deploy similar or maybe different tactics in Europe, and whether, at this point, you've seen any signs that would lead you to believe that there could be some sizable pockets of NTM patients in the European Union that are being misdiagnosed or not diagnosed or otherwise overlooked? And any insights at this point into how that geographic distribution in Europe, the true geographic distribution and where patients potentially could be hiding? I guess, what I'm getting at is some of the prevalence numbers don't really look that believable, just given the overall population and coast line and other factors, which seemed important here and in places like Japan.

Yeah. Sure, appreciate that question, Joe. And I would just say -- I'll ask Roger to comment on it in a second, but remember that whatever the prevalence numbers, they have to be set against the timeline for reimbursement approval, which is uniquely European country-by-country. And so that necessarily limits the degree of aggressive ramp that might come from understated populations if we were to discover that. But the AI and machine learning and all that sort of stuff, Roger, maybe you can talk about what we've done, what we might do there and what else you've learned.

Yeah, sure. Thank you. So I think you're spot-on in asking the question and thinking about the true prevalence of NTM in Europe compared to the U.S. And I would say that, as we apply that same sort of methodology with machine learning in a slightly different way in Europe, that we are seeing the same sort of things that you might suspect. So, for example, there was a publication in the European Respiratory Journal where we looked at applying those machine learning algorithms to national databases. And it's a little different in Europe. There's different data availability, different privacy laws, so you can't really get down to the granular level that you can in the U.S. But we're doing it country-by-country, and there's different timelines associated with that. But for example, in ERJ, we looked at the population in the U.K., which seemed to indicate that there was a significant untapped NTM patient population in the U.K. We think there's probably the same in Germany, and we'll find out about other areas, as well. Now, a lot of these patients reside with the physicians who are still struggling to diagnose them, as much the same as in the U.S. So raising that awareness and providing treatment pathways and treatment options is an important part of this. But as we really see across Europe, as you might suspect, elderly populations, history of smoking and proximity to water, those risk factors are universal. And so you might expect to see the higher pockets of NTM in those areas that have those characteristics. And we think as we go through this and do the data mining, that that's bearing out. And so longer term, we think the opportunity is perhaps larger than what the initial epidemiology had indicated.

Okay. That’s helpful. Thank you.

And there are no further questions in queue at this time. And I would like to turn the call back over to Will Lewis for some closing remarks.

Thank you all again for joining us today.

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