Insmed Incorporated
Q2 2015 Earnings Call Transcript

Published: 6 Aug 2015

[Operator:]

Good day, ladies and gentlemen, and thank you for standing by. Welcome to today’s call of Insmed Second Quarter 2015 Financial Results Call. At this time, all participants are in a listen-only mode. Later, we will have a question-and-answer session, and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to introduce your host for today’s conference call, Susan Mesco, Head of Investor Relations. Ma’am, you may begin.

[Susan Mesco:]

Thank you, Marcus. And welcome to our second quarter conference call. Before we start, let me remind you that today’s call will include forward-looking statements based on current expectations. Such statements represents our judgment as of today and may involve risks and uncertainties that may cause actual results to differ from the results that’s discussed in the forward-looking statements. Please refer to our filings with the SEC, which are available from the SEC or our website for information concerning the risk factors that could affect the company. Joining me on today’s call are Will Lewis, President and Chief Executive Officer; and Andy Drechsler, Chief Financial Officer. At this time, let me pass the call over to Will.

[Will Lewis:]

Thank you, Susan. Good morning, everyone, and thank you for joining us today. During the first half of the year, we have made considerable progress advancing an ambitious wide ranging agenda that is centered on five key goals. First, fully enrolling our global Phase 3 study of ARIKAYCE in NTM lung disease, second, our advancing our European marketing application, third, bringing a second source contract manufacturer online, fourth, filing our IND and starting a Phase 1 study of INS1009, and fifth, acquiring an additional asset. I’d like to start with ARIKAYCE and our top priority for the year, achieving our enrollment objective in our global Phase 3 study, which we have branded as the CONVERT study. We are pleased with the momentum we are seeing, especially in recent months, as most of the upfront heavy-lifting associated with the global study of this scope and magnitude is now behind us. As of today, we have secured health authority clearance in 10 countries, including the U.S., in parts of Europe and Asia-Pacific. In addition, more than 50 sites are opened for enrolment and we expect this number to approach 100 by the end of September. We have taken a number of steps to improve the performance and productivity of the study. We have significantly expanded the number of CONVERT sites around the global. Whereas, we were initially targeting about 80 sites, we now expect this study to involve more than 100 centers worldwide. We are sequencing our site initiations geographically, starting with the U.S., followed by our Australia, New Zealand, Europe and finally, Japan. Sites are enrolling in all of these territories with the exception of Japan and new sites are coming online on a daily basis. The global expansion of the CONVERT study will also enable us to raise disease awareness and gain clinical experience in important markets outside of the U.S. For example, in Taiwan and Thailand, the patient numbers appear greater than our initial expectations. This will also pay dividend over the medium-term as it will accelerate the regulatory process and eventual commercial launch in more countries. To harmonize the different interest of local health authorities and scientific leaders, including the EMA’s scientific working party and Japan’s pharmaceutical and medical devices agency, we implemented a protocol amendment for the CONVERT study. These changes will allows us to capture a more robust dataset including one-year post ARIKAYCE treatment data to evaluate durability of effect. The changes are particularly relevant, given the encouraging data release today, which showed durable culture conversions out to one year from our 112 study. As part of the protocol amendment, we also added a sub-study of Japanese patients. This will be in lieu of a separate local pharmacokinetic study in Japan and should accelerate our path to approval in Japan. In addition, we have formed partnerships with patient efficacy groups, as well as insurance providers to enhance patient recruitment for the CONVERT study. Through these relationships we have quantified several 100 patients with NTM, who potentially meet the CONVERT eligibility criteria, a robust outreach from our partners is underway to channel these patients to the clinical sites. This is process with each country inside having its own questions, comments and timelines, so progress to-date is a substantial accomplishment. I give credit to our clinical and regulatory teams, as well as our EU country managers and our CRO partner, Synteract, who are making extraordinary effort to ensure that we are doing everything in our power to deliver on this study. Important enrolment metrics are coming in real time and we should know definitively by our November call where we will ultimately land with regard to number of patients and timing. We look forward to providing another update then. I want to emphasis as I have during previous presentations, it is extremely challenging to predict enrolment for any study. This study in particular is the first of its kind and the ratio of the number of centers to the number of patients needed is quite high by intention. This makes enrolment by site in a given timeframe difficult to extrapolate, quality above all else must remain our guide force from selecting sites to screening and tracking patients. This will ensure the ultimate value and utility of this study. As you know, we intent to own this disease globally and the CONVERT study will provide the foundation for us to accomplish that objective. So the bottomline is, it remains our ambition to enroll the study by the end of 2015 and we are putting extensive resources and efforts to this task. I would like now to turn to one of the reasons why we are so passionate about completing CONVERT in a high quality and timely manner. At the American Thoracic Society meeting in May we reported data from a sub-analysis noting that 20 patients had achieved culture conversion by the conclusion of the 168-day treatment phase of the 112 study. This analysis employed a more stringent definition of culture conversion in which a patient must have at least three consecutive negative monthly sputum samples. As a reminder, this is also the primary endpoint for our convert study. Today, we reported preliminary of ARIKAYCE follow-up data in which three additional patients achieved this definition of culture conversion by their 28-day follow-up evaluation. This brings the total number of patients who achieve culture conversion to 23 out of 89. Today we are also announcing that one-year follow-up data were available for 14 of the 23 patients, who achieved culture conversion. 12 of the 14 patients remained culture negative for NTM at their one-year follow-up visit and the remaining two patients cultures grew in liquid medium only and not on agar mediums. While preliminary, we are very encouraged by these robust culture conversion results in the 112 study and now the durability of treatment effect. This is significant especially since nearly half of the patients enrolled in the study were unable to achieve culture conversion despite being on a multidrug regimen for over two years. So the hurdle was quite high for showing any improvements. Given the high mortality rate associated with NTM lung disease, we also looked at the number of deaths that occurred in a 12-month follow-up period. Of the 23 patients, who achieved culture conversion, one patient died during the one-year follow-up period. For the 66 patients who are unable to achieve culture conversion, nine died during the one-year follow-up period. This drives home the need for therapy that enables patient to achieve culture conversion quickly and durably with the hope that this will yield improved patient outcomes. Turning to goal number two, advancing our European regulatory filing. As we noted in today’s release, we are preparing our responses to the EMA’s 120-day questions. The questions cover number of topics and overall I would say that we feel we are well prepared to respond as there were no surprises with respect to the topics that the agency asked us to address. We intend to improve the above-mentioned data from the 112 study when that clinical study report is completed as well as other clinical and manufacturing data that we believe will greatly augment the strength of our applications. We are on track to accomplish all of this before the end of the calendar year. Separately, the EMA has asked us to provide additional information on the difference between ARIKAYCE and the Tobi-Podhaler. The request is based on a strict reading of the regulatory definition of similarity of drugs with orphan designation. To be clear, this request relates only to the CF indication. As we have said before, our historic interest in pursuing CF was not commercially driven. Our focus has been and will continue to be the NTM indication. That being said, we have always had a desire to help patients with CF if possible. So we felt it was important to seek approval after our successful phase 3 study in Europe. We believe a strong argument can be made to overcome this similarity challenge by highlighting the differences between the treatments as well as the obvious public interest in having different kinds of antibiotics to address the very serious issue of antibiotic resistance. However, we are keen to advance our NTM indication and do not want this issue in any way to distract us from achieving that goal. We are currently evaluating our best course of action which may include postponing our pursuit of CF in Europe and focusing our application exclusively on NTM. This approach, if taken, would avoid any potential delays or distractions caused by pursuing in dispending a CF indication. Also as you know, choosing to pursue the CF indication has some important implications for the positioning of the compound in Europe, from calling efforts to pricing, which will factor into our decision making. Importantly, the outcome of this similarity assessment in no way impacts our NTM application in the EU. As the growing clinical data set continues to demonstrate efficacy and durability, we grow more confidence than ever in the potential therapeutic benefit of ARIKAYCE in the NTM population. To that end, let me highlight an important endorsement we received from the French National Agency for medicines and health products safety. Today we announced that an ATU or temporary authorization for use was branded in France. As you maybe aware, the ATU is a mechanism by which under strict conditions of medical supervision, patients may gain access to drug prior to their approval by EMA and companies who provide them are fully reimbursed. I'm pleased to report that early last month product we shipped for the first patient was authorized under this program. The patient is a CF patient with an NTM infection caused by M. abscessus, which as you know is a very serious condition. We are hopeful liposomal amikacin for inhalation will be of benefit. The government has agreed to reimburse us at a price of €4,500 for one month of therapy. This would calculate to an annualized rate of approximately US$60,000. Importantly, this authorization speaks to the recognition of the unmet need while also laying the groundwork for an appropriate financial return that will ensure our investment in Europe is justified if we secure approval for NTM. Turning now to our pre-commercial activities in Europe and U.S. In anticipation of approval, we continue to implement our market development activities with a focus on education and disease awareness. Our particular effort is being placed on programs that entail working with thought leaders to better characterize and communicate the burden of illness associated with NTM. Our non-branded disease awareness website is up and running in Germany and generating interest and feedback from physicians. Within the first four months of taking the site live, more than 600 physicians have visited the site. Similarly in the U.S., we have already begun our outreach to both KOLs and other key constituents supporting patients. Another key area, we are focusing on is building our pharmacoeconomic model. This will help build the framework for future discussions with payers who want clarity on prevalence, diagnosis and of course, the cost of treating NTM. In partnership with one of the nation's largest Medicare insurance providers, we conducted a series of studies and we expect three of these to be published this year. At AIDAC in September, claims base data will highlight increasing incidence rates for diagnosing NTM within the Medicare population. During infectious disease week in October, we’ll see data on comorbidities associated with delays in diagnosing NTM lung infections. And lastly, at the Academy of Managed Care Pharmacy Meeting in October, we expect to report results from a study that showed significantly higher cost and resource utilization patterns in patients with NTM versus well-matched controls. Based on our interactions thus far, payers are appreciative of the upfront work, we're doing to begin characterizing the NTM disease burdens. This is one of a number of factors that we will use to support the ARIKAYCE value proposition that we will present to the provider responsible for payments. All of this and future activities will enable us to define a data-driven pricing strategy that addresses the interests of all stakeholders, serving this rare disease population, including patients, physicians and payers. One final highlight to share about the NTM disease burden. We are happy to report that FDA recently selected NTM to be part of its patient focused drug development initiative. This program was rolled out under PDUFA 5 and aims to gather patients’ perspectives on their condition and available therapies. FDA is holding a limited number of meetings over the course of PDUFA 5, with each focus on a specific disease area. The NTM open public form will take place on October 15 and will include a broad array of stakeholders. This will be an important opportunity for FDA to learn more about the devastating nature of NTM, the limitations of current treatment options, clinical trial endpoints as well as patient’s challenges with current guidelines based regimens. The meeting will include patient testimonials to help regulators, healthcare providers and industry, enhanced their understanding of the personal circumstances associated with their disease. This is critical across all drug development but especially in rare diseases with unique complexities like NTM. We applaud the FDA for recognizing the need to better understand the NTM patient’s journey and we look forward to supporting this ongoing effort. With respect to disease awareness, we remain on track to launch a non-branded campaign in North America in connection with the CHEST Conference that is taking place in October. We are getting out in front of clinicians early in the U.S. because we know education is needed and we intend to take a leadership role in providing that to the community. We are bringing lessons learned in Europe from our early efforts and disease state awareness back to the U.S. to ensure even more successful campaigns. We envision these efforts picking up in earnest in the second half of this year and continuing throughout 2016 and beyond. As I have said previously, it’s Insmed ambition to own this disease on a global basis. Turning now to goal number three

[Andy Drechsler:]

Thanks, Will. Good morning, everyone. As Will just discussed, we have made notable progress across all areas of the business. On the financial front, the second quarter started with a very successful secondary offering that generated $223 million of new capital to support the advancement of ARIKAYCE and INS1009. These funds will also provide us with resources to execute other strategic growth initiatives. We were gratified by the overwhelming market response and the high-caliber investors who participated in the offering. We look forward to developing our relationship with our investors and delivering on our objectives to ensure they are awarded for their investments and trust. We now employ over 115 people in the United States and Europe. In addition to our investment in human resources, we continue to invest in manufacturing as part of our pre-commercial preparation. To that end, we have been working with Therapure, our manufacturing partner of Toronto where we produce ARIKAYCE had a 200 liter scale. This is a significant advancement over our current production at the 50 liter scale In addition, this is the state-of-the-art automated facility, so we believe we will be able to reduce turnaround times and increase the throughput. In fact, a few weeks ago, we successfully produced our first engineering batch at Therapure. We have a series of additional activities to complete in the coming months and we remain on track that two fully functioning sources of ARIKAYCE supply by the end of this year. Turning now to our quarterly results. This morning we reported a net loss of $28.6 million, or $0.47 per share, compared with a net loss of $23.2 million, or $0.59 per share, for the second quarter of 2014. For the second quarter, research and development expenses increased to $18.2 million from $14.9 million in the prior year. The increase was primarily due to the advancement of our global Phase III CONVERT study of ARIKAYCE and NTM lung disease. Second quarter G&A expenses were $9.7 million, versus $7.9 million in the prior year. The increase was driven primarily by non-cash stock-based compensation expense. We also saw an increase in cost associated with establishing our global tax structure as well as other free commercial activities, such as our European based NTM Disease Awareness campaign. With the $223 million equity offering completed in April, we ended the second quarter in a strong financial position with $335 million of cash. This gives us a substantial runway well past 2016. With regard to cash guidance, in the first half of the year our cash operating expenses were approximately $46 million, which was at the low end of our previously guided range of $46 million to $56 million. Looking ahead to the second half of 2015, we expect cash operating expenses to increase and to be in the range of $50 million to $60 million. This increase in cash operating expenses reflects spending for the global Phase III CONVERT study, additional manufacturing activities, and the continued build out of our infrastructure. With that, I will turn the call back to Will.

[Will Lewis:]

Thank you, Andy, for that overview. In closing, 2015 is the year of the deliverable for Insmed, as we focus our five corporate objectives. We’ve made great strive throughout a very busy first half of the year and I hope the accomplishments we shared with you today underscore the breadth of talent we have assembled at Insmed. We expect the balance of 2015 to be an equally productive time, as we continue to advance our strategy. We are well capitalized to do so, and we have added significant experienced personnel to ensure we accomplish these objectives. I am pleased with our progress. We will hold ourselves accountable for each objective on behalf of patients and our shareholders after all the patients are waiting. At this time, we will turn the call over for Q&A. Operator?

[Operator:]

[Operator Instructions] Our first question comes from the line of Matt Roden from UBS. Please proceed with your question.

[Matt Roden:]

Hi, guys. Good morning. Thanks very much for taking the questions and congrats on the progress. First question is on the MAA in Europe. And specifically on the 120-day questions, should we assume that if it’s taking sort of several months to address the question, just trying to understand what’s behind that? Is it that there is a lot of heavy lifting involved with responding to the various issues? Or is it just the matter of waiting up the requisite amount of time that you need to include the updated data that you talked about from the long-term follow-up in the manufacturing? Just trying to understand what’s in that? And then I guess related and follow-on question would be, if there is a material increase in the amount of information to review, could that actually increase the review time post after you resubmit the questions to the agency?

[Will Lewis:]

Thanks, Matt. Yes, the reason for the time is pretty straightforward. We want to include the CSRs from the 112 study, including the one-year follow-up data, which is fairly recent, as well as the CSR from the 110 open-label extension study, which is only just completed. So both of those need to be finalized as well as the final data from our PV batch runs at LCR. Those are the things that are rate limiting steps in terms of response. I do not anticipate that they represent bolus of data that is going to require more time for response.

[Matt Roden:]

Okay. And then my understanding of the process then is the post 120-days questions. There is about 90 days to follow to get to a CHMP decision. So should we assume that it’s going to be sometime around March or April? Is that what we’re tracking to proceed to CHMP opinion?

[Will Lewis:]

It’s always hard to know how this process is going to go because there is the clock start and stop sequence that surrounds back and forth in terms of questions. The way I like to think of it is once we’ve responded to the 120-day questions, they will provide for themselves a preliminary assessment reported Day 150 and then they will communicate to us by Day 180, which is obviously 60 days or two months after our response to the 120-day questions. At Day 180, we feel as we have always said that that’s the time we really understand what their position is and what their thoughts are. So I would anticipate that the earliest we would know anything further would be with the Day 180 response.

[Matt Roden:]

Okay. Great. And then you mentioned in the press release increased expenses related to the establishment of an improved tax structure. I am intrigued by that. Can you elaborate on the current status of the IP domicile and if there is anything further to add on the tax side?

[Will Lewis:]

I will have Andy answer that.

[Andy Drechsler:]

Hi, Matt. Good morning. During the second quarter we’ve been planning to do this for a while. We actually executed the transfer of the IP in all ex-US rights to Ireland. We also have operating subsidiaries setup in several different countries throughout Europe, and this is really just the first step of what will be many steps to make sure we take advantage and optimize our overall global tax structure.

[Matt Roden:]

Great. Thanks very much. If you allow me I will get back in the queue. Thanks very much.

[Will Lewis:]

Sure.

[Operator:]

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

[Joseph Schwartz:]

Thank you for the detailed update and operational excellence again this quarter. I was wondering how -- if you could talk a little bit more about how you are looking and focusing on balancing quality versus experience in the CONVERT study, things like patient selectivity, site training and conduct. How is the screen failure rate and baseline characteristics been trending in line with your aims for the study in order to replicate the strong results in the TARGET study?

[Will Lewis:]

Sure. So appreciate the question. I think the right way to respond to that is to say that we are being very selective in terms of where we’re going for sites, as an example, but by no means to draw a new attention to it. We’re not in Russia. I think there were as an example of the balance between quality and productivity or just the decision taken, and that’s probably not something we want to be doing. However, we are in other places around the world. And I think the central theme behind the selection of sites is, is there a sufficient number of patients there? Is there a clinician interest in participating and do they have experience in executing these kinds of trials? When we talk about quality, truly that last point is the most important. So that’s where we spend our time with our visits, which we have done for these sites to ensure that that quality is there. Is that answered your question?

[Joseph Schwartz:]

Yes. That’s definitely encouraging and helps. I think also I would be interested in hearing a little bit more about the market development work that you’re doing in terms of this non-branded campaign that you’re rolling out of the press conference. Do you expect at some point soon to start to be able to or to be able to start -- actually identifying potential candidates for therapy, similar to what other companies have done before approval in order to build a database of folks that could go on to the drug at launch?

[Will Lewis:]

It’s my view that that’s the cornerstone of best practice for launches and absolutely that is an important element of our work in the course of the next -- really starting the second half of this year. So we’re getting a jump on it, I think, a little earlier than most. But my hope is the byproduct of that will have a commanding knowledge of where the NTM patients are in many areas of the world at the time of commercial launch.

[Joseph Schwartz:]

Okay. Great. Thanks for taking my questions.

[Operator:]

And our next question comes from the line of Ritu Baral from Cowen. Please proceed with your question.

[Ritu Baral:]

Hi. Thanks for taking my question. Well, first question is on the sites in CONVERT. Where are you on site activation? Are you thinking about increasing the number of sites that you have over the original plan? And actually I wanted to follow up on Joe’s question about the screen failure rate, is it tracking with expectations or is it higher?

[Will Lewis:]

Yes. So what we tried to do today is provide the metrics that we feel we have enough data on would be helpful. And in that regard, we’ve highlighted the 10 countries where we have approval, more than 50 sites that are open to enroll patients currently. And we’re in a very steep ramp up phase where we anticipate that the number of sites open will approach a 100 by the end of September. And I think that speaks to the amount of hard work that people have been doing to get this site moving -- to get the program moving forward. I don’t know there is a lot more we can say at this time. We’re not coming specifically on things like screen failure rates. I will say just perhaps a little bit more information. We are in a place now where probably three quarters of the sites from the U.S. are open or more. All of the sites that were significant producers in the 112 study are open and up and running. And I think from that point of view, we’ve got the cornerstones laid for the successful and high quality trial.

[Ritu Baral:]

Are you considering adding even more sites?

[Will Lewis:]

We have identified all of the sites that I think we want to open. The one area of exception for that, of course, is always going to be opportunistic awareness that there are a number of patients in any given geography. Probably not additional countries would be added, but we might, for example, take a site that’s open in one country and find a way to get patients to that site from another or we might look to add an additional site in the U.S., if we feel like the patients are there to justify it. Where the country approval is already in place, it’s much easier to add additional sites. So that’s the only variable I would put there. But as far as scoping out the number of sites and where they are, that process is long completed.

[Ritu Baral:]

Okay. And then when your follow-up data, you mentioned the death, are there other clinical events that you have been tracking in these patients and was the event a specific portion of the 120-day questions from Europe?

[Will Lewis:]

Interesting, actually it’s inappropriate to comment on specific questions from the 120-day question, much as I might want to get into that discussion. I think what I would say is, the mortality associated with this disease is significant enough that it’s the logical place to go in terms of examination. Certainly, we’re tracking everything that we can. As you know, the 112 study was really not designed to take a robust look one-year post-drug exposure, so we’re somewhat limited with the data that we were collecting based on the original protocol.

[Ritu Baral:]

Okay. And last question and I’ll get back in the queue as well. What are your plans for ERS whether on a data presentation level or commercial present level?

[Will Lewis:]

So, yeah, as we now entered this next phase of non-brand disease state awareness and data presentation, I think you can expect to see more press release notifications about upcoming conferences in the specifics of what will be covered at them. And so, I guess, probably the best way to handle that is to direct you to keep your eyes out and we’ll make sure we draw attention to what our plans are for these different conferences.

[Operator:]

And our next question comes from line -- it’s a follow-up question from the line of Matt Roden from UBS. Please proceed with your question.

[Matt Roden:]

Great. Thanks very much for taking the follow-up. I wanted to ask about the long-term follow-up data, the one-year follow-up data. If I’m hearing you correctly in those two patients where you -- these sort of partial positive cultures, sounds like those patients aren’t presenting clinically as if they have NTM? I’m just trying to understand if there is evidence of reemergence of the pathophysiology or this is just a sub-clinical lab finding?

[Will Lewis:]

So, it’s a lab finding. I don’t know that we can make a lot more commentary about it than that. I think, what we will try to highlight is that if the guidelines when they look to issues like we are off positive only are really doing so with an idea saying that’s certainly not as severe as a strong growth finding on agar medium. And so from that point of view, it’s probably relevant to take note of that distinction.

[Matt Roden:]

Okay. And then I guess related to that in those two patients, was there any relationship in the time it took to get them to negative in the initial conversion to the -- the reemergence of the lab finding 12 months later?

[Will Lewis:]

It’s an interesting question. To be honest it’s not one that we’ve looked at in detail that I could innovate, that I could comment on. So, I don’t really have a good answer for that. We can go back and look at that and see if we can get back to folks with some more understanding of what this represents. I will say this data is fairly hard off depresses, in terms of being check for quality and all the risk. We would have liked obviously to collect samples on all the patients but we only had it for the ‘14. But the data even if you impute culture change to the patients where we don’t have data, it’s still quite a compelling finding.

[Matt Roden:]

Yeah. I would agree. I guess, lastly, I would imagine you contemplated maybe developing protocols for potential re-treatment of patients in case they initially convert and then sort of remerge with the lab finding. Is there anything to say there, I realize that it is probably pretty preliminary at this point, just curious about?

[Will Lewis:]

Well, we know from this available data albeit there is a lot in NTM that the re-infection or relapse rate is around 30%. It’s hard to know whether it’s caused by the original disease, in other words, a relapse or the old infection is treated and then a new one arrives. To that end, this study is designed to answer that question. We are going to use a molecular probe to examine the underlying pathogens, so that if a patient does go negative and then goes positive, we will know whether that new infection is a relapse or a new infection from different pathogens. And in the case where it’s a new infection certainly, it would be a large goal given the success of the drug in the first instance to reapply in that circumstance and treat again.

[Matt Roden:]

Okay. Great. And then, lastly, I just want to follow back up with Andy on my prior question about the tax. So, if I look at my made in large cap comps where intellectual property is downside mile and we know that the Irish tax rate is 12.5%, but it seems to meet that on -- for U.S. sales, maybe there is some transfer pricing and things like that, have to be taken in the consideration. But in most of these cases you see and interpreted global tax rate as reported on the income statement on a non-GAAP basis. Certainly, sub 20% tax, so is that -- is there anything you can say? I know it’s preliminary at this point but is there anything that you can say related to those comps, things to consider, et cetera? Thanks.

[Andy Drechsler:]

Yeah, Matt. We’ve obviously looked at those comps as well. The key variable, still to be determined is pricing, right, and exactly what impact that’s going to have. But I think you are looking at it the right way and as we get closer, we will obviously give a little more input or guidance, if you will around tax rate once we get to that point.

[Matt Roden:]

Great. Thanks so much and congrats on the progress.

[Will Lewis:]

Thank you.

[Operator:]

[Operator Instructions] Our next question is a follow-up question from the line of Ritu Baral from Cowen. Please proceed with the question.

[Ritu Baral:]

Hi, guys. Thanks for taking the follow-up and I got cut off. So if you addressed it in the question following mine, I apologize. Have you done any additional EU Care consulting work? Has there been any sort of new findings or new strategy as you approach potential reimbursement submissions and how much of that was done before you said, your extended excess price for the ATU?

[Will Lewis:]

So, we have had payer consultations in Europe. And it is fair to say that is that once aware, the opportunity commercially for NTM is certainly more attractive and is more easily supported in the mind of the payer than that of the CF indication. So, certainly that goes way on our thought process as it must, as we evaluate how we think about NTM in Europe and pricing. And it did enter into our thinking as we examine where we were with regard to the ATU pricing. So that’s probably about as much I can say at this stage.

[Ritu Baral:]

Got it. Thanks for taking the follow-up.

[Will Lewis:]

You bet.

[Operator:]

Ladies and gentlemen, that’s all the time today we have for questions and answers. At this time, I will now like to turn the call over to Mr. Will Lewis for closing remarks.

[Will Lewis:]

Thank you for your questions and participation on today’s call. We appreciate your continued interest and support and look forward to updating to you again when we report our third quarter financial results. Have a great day.

[Operator:]

Ladies and gentlemen, thank you for attending today’s program. This does conclude today’s conference. You may now disconnect. Everyone have a great day.