Good day and thank you for standing by. At this time, I would like to welcome everyone to the Insmed Fourth Quarter and Full-Year 2020 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. It is now my pleasure to turn the conference over to Eleanor Barisser, Associate Director, Investor Relations. Please go ahead.

Thank you, [Lee]. Good morning, and welcome to today's conference call to discuss our fourth quarter and full-year financial results for 2020 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 Securities and Exchange Commission, 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. The information on today's call is not intended for promotional purposes and 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; Roger Adsett, Chief Operating Officer; and Sara Bonstein, Chief Financial Officer. Additionally, Dr. Eugene Sullivan, Chief Product Strategy Officer 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, Eleanor. 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’m pleased to report on what was the most transformational year in our company’s history. As Insmed enters a new phase of growth in 2021, we are carrying forward the strong momentum of a successful 2020, marked by significant accomplishments across our business. Over the past 12 months, we have matured from a single product company to a global organization advancing three substantial programs. These programs are TPIP, Brensocatib, and ARIKAYCE, and each is positioned to become potentially a cornerstone of therapy in their disease areas. With that in mind, let me dive into some of the key highlights for the fourth quarter and full-year 2020. I'll start with Treprostinil Palmitil Inhalation Powder or TPIP. We were very excited to provide an update on this program just last week, when we announced top line data from our Phase 1 Study in healthy volunteers. The results demonstrated the potential for TPIP as a once daily treatment, which may be able to unlock the full potential of the prostanoid class of therapy for pulmonary hypertension and related diseases. The detailed review is available on our website. Our second program is Brensocatib, which represents a new way to harness the DPP1 pathway for treating neutrophil-mediated diseases. In the middle of last year, we were excited to announce that the FDA had granted breakthrough therapy designation to Brensocatib for the treatment of non-cystic fibrosis bronchiectasis or NCFBE. We were also pleased to report the EMA’s decision to grant Brensocatib PRIME designation for the treatment of NCFBE. This was followed shortly thereafter by the initiation of our Phase 3 ASPEN trial, which is now well underway. Additional…

Thank you Will, and good morning, everyone. As Will mentioned, 2020 was a year of tremendous growth for Insmed. Marked five significant progress across all of our programs. Earlier today, we issued our detailed fourth quarter and full-year financial results in a press release. Let me highlight just a few of our full-year results for you now. As reported this morning, we ended the year with $532.8 million in cash and cash equivalents, which we believe will enable us to advance our three key strategic priority, ARIKAYCE, Brensocatib, and TPIP. Total net revenue for ARIKAYCE was $164.4 million for the full-year 2020. Throughout the COVID-19 pandemic in 2020, ARIKAYCE continued to have steady performance. As we look ahead to 2021, we anticipate returning to growth when the impact of the pandemic subsides. We look forward to sharing further updates later in the year. Our gross to net for the full-year 2020 were approximately 12%. Looking ahead, while gross to net historically have been highest in Q1 due primarily to the coverage gap as a result of the benefit reset at the beginning of the year. We anticipate our full-year gross to net to be in the mid-teens for 2021. This modest increase year-over-year is mainly attributed to select contracting to ensure maximum patient access. Cost the product revenues for the full-year 2020 was $39.9 million or 24% which is in the range we anticipated. As a reminder, our cost of product revenues in 2019, which was 18%, benefited more from inventory expense prior to FDA approval of ARIKAYCE. Turning to our GAAP operating expenses, for the full-year 2020, research and development expenses were $181.2 million, compared to $131.7 million for the full-year of 2019. We anticipate R&D expenses to continue to grow year-over-year, as we support our growing development pipeline. SG&A expenses were $203.6 million in 2020, compared to $210.8 million in 2019, demonstrating our focus on prudent spending. Total operating expenses for the full-year 2020 were $429.6 million, compared to $371.7 million in 2019. Looking ahead, in 2021, we will continue to invest in our core operating business, including the commercialization and clinical support of ARIKAYCE globally, the ongoing and plant development of Brensocatib and the continued advancement of TPIP. We remain laser focused on prioritizing appropriate development investment with responsible cost control. 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, 2020 was a year of remarkable achievement for Insmed underscored by advancements across our pipeline. Let me now address our progress and next steps for each of our programs. First TPIP is a novel dry powder formulation of Treprostinil Palmitil, which is a product of Treprostinil. We believe TPIP represents an opportunity to harness the full potential of the prostanoid pathway. Let me start by drawing your attention to the top line data we shared just last week from our Phase 1 single and multiple ascending close dose trials in healthy volunteers. TPIP was generally safe and well-tolerated and showed substantially lower [indiscernible] and longer half-life and currently available inhaled treprostinil therapy. These findings support the continued development of TPIP with once daily dosing in-patients with PAH. For an in-depth review of these results, I encourage you to visit our website for the detailed press release and conference call webcast. Regarding next steps, we remain on track to advance to the next stage of clinical development, which will follow two paths in parallel. First, we will gather information on the impact of TPIP on pulmonary vascular resistance, or PDR, and over a 24-hour period in a handful of patients with PAH or Group 1 in an open label study. As planned, we anticipate sharing top line patient data from this study in the second half of this year. The second path will investigate the effects of TPIP on PVR and six-minute walk distance in patients with PAH over a 16-week treatment period. We plan to initiate this trial in the fourth quarter. In addition to those two studies in PAH, we're planning to initiate a separate study for Group 3 PH-ILD patients, in addition to our work, exploring a development…

Thanks, Martina and good morning everyone. I'm pleased to report a strong fourth quarter and full-year from an operational perspective. Let me begin with ARIKAYCE in the U.S., where our commercial business remains steady, despite the challenges presented by COVID-19. Once the pandemic subsides, we anticipated return to growth. This will be driven in-part by leveraging important tools including the strong recommendation for use of ARIKAYCE in the international treatment guidelines for NTM lung disease, which includes a recommendation for ARIKAYCE as part of a multi-drug regimen for certain patients. This is in addition to the FDA approval of our supplementary new drug application in October 2020, which added important efficacy data regarding durability and sustainability of culture conversion to the ARIKAYCE label. While we have seen the impact COVID-19 has had on reducing the volume of patient visits to physician’s offices, and therefore new patient diagnoses, our team remains confident in the long-term potential of ARIKAYCE. We continue to believe that the pandemic has increased attention on the importance of respiratory health, further supporting the long-term opportunity for ARIKAYCE once patients are comfortable returning to visiting their physicians. I will focus the balance of my comments on our international commercial expansion that is currently underway, and that we anticipate will accelerate in 2021 further supported by important learning’s from a successful U.S. commercial launch. Let's start with Europe, where ARIKAYCE case was granted marketing authorization last October for the treatment of MAC lung infection in adults with limited treatment options who do not have cystic fibrosis. We launched in Germany first with initial sales occurring in Q4 2020 and full launch commencing in January with a list price that is in-line with the U.S. list price for ARIKAYCE. We are launching at a time of COVID-19 lockdowns in parts…

Thank you, Roger. I'd like to close our prepared remarks by reiterating how proud I am of the Insmed team for achieving this remarkable progress in such a challenging year. By virtue of our evolution over the past 12 months, we now enjoy the opportunity to pursue three major clinical programs built on a strong foundation of research. 2020 was by far the most transformational year in our company's history. And I would draw your attention in particular to the strength and performance of our executive team, which is an indication of the broad array of talent that makes up the global team at Insmed. Looking ahead, I truly believe we are well-positioned for an even more exciting year in 2021. We are focused on delivering exciting new data as it emerges from our pipeline in support of our ambitious vision. This vision is built upon a deep and sincere commitment to help patients and I am extremely proud of the portfolio we have developed in its pursuit. I would like to thank the entire Insmed team for its commitment to deliver as we add even more ambitious goals. With that, I'd like to open the call to questions. Operator, can we take the first question, please?

Certainly. Your first question comes from the line of Marty Auster from Credit Suisse. Your line is now open.

Will or Martina, I was curious if you could, kind of expand more? I thought Martina it's really interesting comments about the potential for Brensocatib going forward and just sort of the diversity of indications that might be available to you. How are you thinking about kind of realistically, sort of how many, kind of how many Phase 2 proof of concepts you can really kick off over the next year or two? And then, kind of what's the constraint there? Is it just going to be really careful on the science before you launch programs? Is it personnel workforce? Is it capital? And then finally, Will, sorry for such a long multi-parter, if you could maybe update us on where the discussions are with AstraZeneca around their, kind of potential to opt-in to conduct work in COPD and or asthma, and whether or not that option they have? Is there any sort of time, kind of constraints around that for them to make a decision? Thanks.

Sure. So, let me start really quickly with the second one first. On AZ, obviously we remain in contact with them and there's nothing really to update there. They're clearly interested in the drug and its potential. And I think each day as we discover more and more about the validity of not just this particular compound, but the pathway itself, it makes this area all the more attractive. So, we'll see where that takes us. I think right now we feel very well-positioned and capitalized and resourced to be able to pursue all of the opportunities that this drug may provide to us. And I'll use that to segue to your first question. I think the first thing I would frame out for everyone's understanding is that from the moment we saw the willow data; we have been at work on the DPP1 pathway. So, this is not something we're turning our attention to now. It's something we're sharing more and more as we move forward with the community. There have been a number of preclinical disease models that we look at. We've shared some of that data and I encourage folks to revisit our research and development day. We were very deliberate and what we called out on that day in terms of disease models where we had already seen progress. I think when we look at something like this cancer cell paper; it wasn't particularly surprising to us. We indicated at the research day last year that oncology was an area where we thought this could have applicability. This data obviously validates that to a much greater degree. And I think it's exciting that it is coming from a third party because that provides, I think, an extra layer of validation and support for the mechanism. Where do we go from here? I think what we have in hand is a very high probability of success for non-CF bronchiectasis. And that alone creates an enormous opportunity for this company that I would describe as disruptively positive. As we think about where to go from there, cystic fibrosis we have validated internally with our own reflection and examination has worthy of additional investment and clinical developments. Beyond that oncology is clearly one area we are looking at, but it is not alone. There are several others. And I guess what I would say is, we do see constraints on how much can be done all at once. But having said that, I don't think that's the rate limiter right now. It's a thorough examination of the science. It's an exploration of the prudent use of capital to create high probability and impactful outcomes. And as we go through the year, it is our intention to be able to reveal other areas where we think development is warranted with this compound. I hope that's responsive.

Yeah, thank you Will. Appreciate it.

Your next question comes from the line of Matthew Harrison from Morgan Stanley. Your line is now open.

Hi, all thanks for taking the question. This is Connor on for Matthew. So, a couple from us. So, you mentioned the work going on in the UK, but we were just wondering if you could comment more broadly on how you see the ramp going? I guess, in terms of what countries you're targeting next? And then, how quickly you expect uptake given the digital efforts and COVID? And Sara made a – mentioned this as well, but can you also just comment on your expectations for the growth profile in the U.S. in COVID, and do you see that being as, you know, inversely related with the vaccine rate? And then just quickly, can you just speak to 2021 expenses? Sorry, that was kind of a lot. Thanks.

Yeah. So, I just want to make sure I'm responsive to that. The first question that referenced COVID in the UK, you mean in regards to the launch?

Yeah.

I see, okay. So, for the launch, I'll ask Roger to address how that's going generally, and then we'll take your question on the impact on the U.S. and the vaccines. I think, obviously, just to put a finer point on this, because it's really a global comment. Our patients are at the frontline of receiving vaccinations. And we think that that's obviously going to afford a lot of opportunity for us in 2021, both with the existing efforts that are being made across the U.S. and in the countries where we're approved and reimbursed in Europe, but also those that will be added. And perhaps most interestingly, the timing of the Japanese launch, if approved, once again, should fall on the far side, just on the far side at the anticipated government guidance for when the vaccination program will be completed. So, we're hopeful that all of that is positive, but perhaps for more color, I'll ask Roger to comment.

Yeah, thanks Will. So, I think that, as we look at the European launch, certainly was we mentioned that the lockdown in parts of Germany have hindered some access for our sales reps and for patients actually visiting the clinic. Having said that, I think we're pleased with the progress that we've made so far. The team has been working for several years with KOLs and we know that they’ve been eagerly anticipating the launch of ARIKAYCE and that we believe that as we get on the other side, as you mentioned, the vaccinations that we will, we will be able to see that launch ramp. I think, in general in Europe, you see more of a center of excellence model than you do in the U.S. where we called quite heavily on community physicians, both IDs and pulmonologists. So, there's a natural rate limiter there, but we still expect that the Europe will be – will have a meaningful launch for us. Within the UK, as we mentioned, the central reimbursement we're anticipating that England will review that and will be the first to provide central reimbursement with the other countries within the UK following thereafter. And we expect reimbursement to continue throughout 2021 into 2022 with those European markets. So, we're pleased with the progress we've made so far. Certainly, COVID is an issue as it has been in the U.S., but we believe that the long-term opportunity within Europe is fundamentally intact. And we look forward to getting on the other side of this and seeing that growth.

And just in response to your question on expenses, I’ll ask Sara to address that.

Sure. Thanks, Connor for the question. So, on expenses while we're not providing specific guidance, what I can share is for research and development, we do expect expenses to increase year-over-year and that's primarily to support our ASPEN program ARISE ENCORE, as well as CPIP. So, what I can say is, we're laser focused on resourcing these programs to be successful. And we have done just that.

Understood. Thank you.

Your next question comes from the line of Stephen Willey from Stifel. Your line is now open.

Yeah, good morning. Thanks for taking the questions. I guess with respect to some of this and just around Brensocatib oncology, have you guys contemplated, I guess any earlier stage work to look at novel DPP1 inhibitors, maybe in an effort to try to establish some level of differential pricing, which presumably is fairly wide between something like bronchiectasis and where most oncology drugs are priced?

Yeah, so appreciate the question. I think we're, while we're at the early days of our exploration in the oncology arena, it certainly is something that we're going to be – the issue you raised, we'll be mindful of. I think first, we want to follow the science and see where it can be most impactful. And I have to say, this is one of those compounds that, as someone recently observed, you know, if you're really lucky, you come across them once in a lifetime. This pathway is really the discovery of the WILLOW study. It's not simply that it is potentially effective in bronchiectasis, it’s that we think we have unearthed a subject of study of Professor Chalmers and many other key opinion leaders and that DPP1 inhibition may have an impactful clinical consequence in many different disease areas. Oncology is one, we obviously are drawn to because there's a clear unmet medical need, the scientist was theoretically pretty strong, and now we have validation. So, it sort of demands our attention. And with that in mind, I think we're going to be looking at a lot of different directions we may travel, including some of the ones you suggest.

Okay. And then just a quick question on TPIP, I know you're going to be initiating the Phase 2 later this year. I know that the functional class of patients that have been enrolled into prior prostanoid studies has been a little bit different. I think the Tyvaso registrational study was functional Class 3, I think, other prostanoid’s have done kind of 2, 3, 4 and another some literature suggesting that the variability of a six-minute walk test is correlated to functional class. So, is that something that you care about at all in terms of how you're going to set your eligibility criteria for the Phase 2a?

So I'll ask – in regard to the development plan, Martina to address that question. And then…

Yeah. So you have functional classes, if you look at the – this is the class where you really judge patients based on the severity of the disease. And like Class 1 where they don't have a lot of symptoms yet, but in Class 2, and 3s where their most impacted, but there's also the opportunity to really improve for these patients. And that will be the class that we will be looking at from an eligibility criteria, but also to improve. When you go on through like Class 4, for example, to the patients who from a six-minute walk distance perspective would not be able to do that much anymore, because most of those patients actually are probably not mobile. So, this is the area of severity in Class, for example, 2 and the 3 that we will be looking at.

One of the most interesting things about this compound is its potential not only in PAH, but also its potential in PH-ILD and even possibly in idiopathic pulmonary fibrosis patients. It's quite extraordinary to be joining this group of programs pursuing these diseases this late in the game, right? There are a lot of approved drugs in this therapeutic area. However, it's really the dawn of the birth of the full utilization of the prostanoid class. And this compound is specifically designed over the last, you know half a decade to extract the full value of the prostanoid class. And so, I think people should understand that TPIP is purpose designed to really make a clinical impact that is very different from what has been seen with regular wait for prostanoid in its various forms of delivery.

Great. Thanks for taking the questions and congrats on the execution and what was obviously a pretty difficult year.

Thank you.

Your next question comes from the line of Graig Suvannavejh from Goldman Sachs. Your line is now open.

Hi, everyone. This is [Jack] on for Graig. Congrats on the quarter. Maybe, first off, if you could talk a little bit more about, sort of the quarterly cadence of how you see, you know, both ARIKAYCE cells recovering in the U.S., you know, to the extent you can comment and then maybe, you know, as countries come online in Europe, you know, what kind of a contribution that can be? Then as we think about the international opportunity kind of, you know, maybe five years out or sort of, you know, at peak, how do you envision kind of the breakdown and potential peak revenues between the U.S., Europe, Japan, or U.S., ex-U.S. just kind of, you know for our longer-term model considerations.

So, I'll just, it's going to be a little disappointing. I'm not going to give you a five-year forecast right now, but I will give you some color on where I think we're going. The first is that the last year saw really steady performance in the phase of incredibly challenging circumstances. And I mentioned that only as a way to share the learning’s from that experience. And the point of insight that I think is the most profound is that when COVID subsides, we saw a very rapid return of patients into the physician's offices, and consequently a return to growth. So, we think that is the harbinger of what's to come in 2021. And obviously, as we mentioned before, the vaccination is hitting our patients, first in all likelihood in all areas around the world. And so that should be helpful. I think, when we think about the international launch, in the immediate term, it's very exciting to be adding Europe and if approved, also Japan. And to remind everyone, there's a higher diagnosed prevalence of refractory MAC patients in Japan than there is in the U.S. So these are really exciting market opportunities for us, and things that we've been working on for several years up to this moment. As we think about the future beyond this first year of launch, we're also focused on the frontline approval of the drug and the full approval in the United States. And that's what ARISE and ENCORE will enable. So that study, starting at the end of last year really puts us in a position to not only create the momentum this year, build upon it next year in these different areas, but then add to it the possibility of label expansion. And just to remind everybody, frontline, MTM MAC is about five times the size of refractory MAC. So, this is a really interesting franchise in its own right, it’s been very steady through an incredibly challenging circumstance. And we think we're returning to growth in 2021, both in the U.S. and with our international launches and expansion.

And if I can maybe get a quick follow up to that, you know, how do you think about, you know, the extent to which ARIKAYCE can kind of offset some of your cash burn in the near term as you pursue all these clinical programs? And, you know, how do you kind of look at your funding requirements on like, maybe a two-year forward?

Yeah. So, I'll ask Sara to address that.

Sure. Thanks [Jack]. So, ARIKAYCE has been and will continue to be a great contribution as we think about our burn and sort of the offsetting of our burn. Maybe we provided specific guidance on runway and those types of things [indiscernible] error cases that have one of the tools we have to help fund our ongoing business and just reiterate, we, you know, ended the year with very strong cash position, $533 million in cash, so very strong cash position.

Okay, thank you.

Your next question comes from Ritu Baral from Cowen. Your line is now open.

Hi, this is [Lila] on for Ritu. Thank you for taking the question and congrats on the update. Maybe just really quickly, on the Phase 2 trial you're planning in cystic fibrosis, can you speak a little bit into how you're thinking about the program and where it might fit, at least initially into that treatment landscape? And then also how you're considering potential eligible cystic fibrosis patients for that trial? Any reason to think it'd be more refractory or in [combination use]? Thank you.

Yeah. So when we think about cystic fibrosis, one of the things that, you know drew our attention to this category initially is the notion that if you look at sort of levels of neutrophil elastase in these patients, cystic fibrosis sits above bronchiectasis in terms of your average patient profile. And we think this mechanism speaks directly to that opportunity. If you think about the impact of the Vertex drugs in this population, it's been a major advance. However, these patients still suffer from pulmonary exacerbations. And as you recall, from the WILLOW study, we saw roughly a 40% reduction in pulmonary exacerbation. And as a consequence, we think this drug is sort of purpose built to cover that last mile of need in the cystic fibrosis patient population. So, we are moving forward expeditiously to try to bring this drug to those patients because effectively once you have eradicated the baseline cause of cystic fibrosis in these patients, you know, for those that have that have had it for a long time, the damage is really already done. And so, they're going to be effectively bronchiectasis patients. So, the logic is very strong there. I think, as you know, the metabolism of these patients is a little bit different and so the PK-PD study is necessary to understand, do we need to go up in dose to treat them, but it would be our expectation and hope that if this is proven out and validated that these patients who are taking those Vertex drugs would also get our drug as a way of addressing this last unmet medical need, which is the reduction of pulmonary exacerbations.

Got it. That’s very helpful. Thank you.

[Operator Instructions] Your next question comes from the line of Joseph Schwartz from SVB Leerink. Your line is now open.

Yeah. Hi, I'm [Julie] dialing in for Joe, thanks for taking our questions. I was wondering, as for the launch prep work goes for Japan, you mentioned that you added five additional sales reps. And I was just wondering, you know, what the motivation with that was – what the motivation was that was – what that was for? Are you detecting, you know, a stronger demand from patients than initially anticipated or, you know, or is there like more launch prep work than you thought, could you provide some color there?

Sure. Appreciate the question. I'll actually ask Roger to address that.

Yeah, sure. Thanks. Will and thanks for the question. So, as we mentioned, we've actually had our 15 sales reps out in the Japanese market since the fourth quarter. And that was an effort, intentional effort as we promoted our macrolide to understand where these patients were being treated to understand the dynamic. I think the response that we've seen so far has been very strong from the KOLs. And so, as we get a greater understanding of the – where the patients [mind] the landscape, we felt that adding an additional five reps to make sure we have adequate coverage there was the prudent thing to do. So, we anticipate adding those five reps in the fourth quarter, excuse me in the first quarter of this year, and to support the launch assuming the approval.

Okay, great, thanks. And then could you just remind us the number of patients that you plan to study in ARISE and what the enrollment cadence is? I know that, you know, you said to expect for an update, you know, later this year, but I was just wondering how that was going?

So for the specifics of the study, I'll ask Martina to address it in a second, but as far as pace goes, I think you know, for ARISE ENCORE for ASPEN, what we're trying to do is really focus on opening the different sides, getting them able to enroll patients, that process is well underway, we'd like to see that play out. All of these studies are getting fully resourced from the company. We're investing a lot of money and human effort into making sure that we can move these studies forward expeditiously. And so once we have a better understanding of what the pace is like, in the current environment, right now, we don't really see any impact. But we'd like that to play out over several months before we sort of give forecasts and predictions on timing. So, I just want to address the timing question first, and then ask Martina to talk about the design of the study.

Yeah. And you know, for ARISE we're looking at newly diagnosed MAC lung disease patients, we're looking for 100 patients in the ARISE study, and 250 patients in the ENCORE study. And, yes, we started dosing with this patient and these are global studies again across the U.S., Europe, Asia, and Latin America. So, we've started initiating sites there across the globe.

Okay, great. Thanks so much.

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

Hi, thanks for taking my question. Could you tell us what U.S. sales were versus rest of world?

So, Sara, you want to address that?

Sure. Thanks, Liisa, for the question. So, we will be providing global sales. We are not going to be providing a breakdown of regional sales and sort of some of the rationale behind that is related to – we just kicked off the launch in Europe. The sales are not a material amount. And so we will not look to break out that for this year.

Okay. And then, can you maybe just talk about a little bit more in detail about the kind of work you've done to understand, sort of what the patient dynamics were this year? Where patient, you know, I guess, you know, you said fewer office visits. So, was it mainly driven by new patient ads? Was there any change in like duration of therapy or any of those other factors? Just curious on, kind of the flow of patients this year and then I guess the key things are like when do you expect that to lift this year? You know, as we kind of come out of the pandemic and what are the key levers there?

Yeah. I mean, really simply, I think we look at a broad range of metrics. Obviously, as we're tracking ARIKAYCE performance, and they have been remarkably steady on almost every front. The one thing we've been very clear about is that the new patient starts is the one metric that has been hit the hardest in those areas, in particular, where COVID has surged. And we've seen that consistently throughout the year as the regional variability has played out. As I mentioned earlier, though, I think the most important point from this and the learning is that, number one, the franchise is very resilient. And the steady performance along a lot of the metrics speaks to that. I think as we look at new patient starts, we have seen that return rapidly in those areas where COVID restrictions and surges have abated. So, our expectation is that as that plays out, we will see that be writ large for the U.S. market, and indeed, Europe’s launch as each country secures reimbursement. As to a specific timing, it's hard to say, I do think the key drivers here are number one, the vaccinations. Once those are completed, people will obviously feel a lot more comfortable going to their physician, many of them have a strong desire to do so. And importantly, many of the physicians are very keen to reach out proactively to their patients and bring them into their practices. I think there's both a need there because of the challenges of the last year, but also an opportunity, as Roger mentioned earlier, as awareness about respiratory health has grown substantially. So, you know, we don't know exactly when it's going to take place. But I do see us returning to growth, as soon as that patient returns to the office visit.

Thank you.

Your next question comes from Anita Dushyanth from Berenberg Capital. Your line is now open.

Hi, good morning. Congrats on the quarter. And thank you for taking my question. Will, I know you had, you know, sort of addressed this early on, but I just wanted to get some more clarity on it, considering the, you know launch in Europe and the different regions. Will, it's sort of known that, you know, Germany and UK are sort of, they come on board pretty quickly, compared to some other regions like maybe France or something which take time to set up the reimbursements before launch. And you'd also mentioned that, you know, there was a study in Netherlands that kind of helped accelerate, getting reimbursements in place by almost three months. So, my question is, I mean, do you expect, like majority of the regions in Europe to, sort of come on board for the launch by the end of this year or are there any specific regions that you think might generally take more time or, you know, sort of conduct these studies to establish the reimbursement for that? And then I have one more.

Yeah. Roger, do you want to address that?

Yeah, sure. Happy to. So, as we think about the European launch sequence, as you said, these countries, some countries may take longer. So, we actually – at R&D day we had a presentation that we put up and we mapped out, you know, what we think might be the sequence of the launches. So, we do think in our markets where we're focused on our core markets will have the majority, we’re anticipating reimbursement in 2021. As you pointed out, I think France could take it a little bit longer. We'll see how that plays out. In the meantime, we do have the ATU program in France, which allows access to those patients in need, and it was also reimbursed. So, we're very pleased by, as you've mentioned, the Netherlands, the pilot program we participated in, and that did allow us to accelerate the reimbursement. And so, we're hopeful that as we move forward, we'll have successful interactions with the governments in these markets. But as I said, most of the markets that we're targeting will come on in 2021. But France will – is likely to take longer, but this is all our best estimates based on [rest of them].

Yes, that's helpful. And thank you, and then just maybe some color on, you know, the expenses. I know, Sara talked about the R&D going up year-over-year, based on all the development progressing with the candidates, but as far as spend on SG&A for the year, I know you said you have plans for setting up commercialization of ARIKAYCE in the U.S. So, are we sort of supposed to expect that being increasing over the quarters or sort of maybe back-end into the year considering, you know, vaccines might be more availability of vaccines might be there towards the second half of the year?

So, I'll ask Sara to address that.

Sure. Thanks, Anita. So, while we're not providing specific guidance, what I can share on SG&A, what I can share is we've had the infrastructure in place in both Europe and Japan, throughout 2020. As Roger mentioned, there will be some modest growth in some of the sales customer facing organizations, but that infrastructure has been in place and we have key talent on the ground in both Europe and Japan to help drive these launches.

Thank you, Sara. That will all from me.

Ladies and gentlemen, that concludes our call for today. I will hand it back over to Will Lewis for any closing remarks.

Thank you all for joining us today.

Ladies and gentlemen, this concludes your call for today. Thank you for your participation. You may now disconnect.