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William H. Lewis H. Lewis

Thank you, Brian and welcome everyone. The announcement of the positive aspen data earlier this year marked the start of a new era for Insmed one that will be defined by our ability to execute on the many opportunities we have in front of us. Our performance, this quarter demonstrated the level of execution, that level of execution sets us up for this exciting new chapter of Insmed's story.
The opportunities before us are significant, not only in terms of their potential impact on patients and our company, but also in terms of their sheer quantity. I'm proud to say that, our team across the organization have continued to show a remarkable ability to deliver simultaneously on all of them.
For example, in the third quarter, our commercial team once again, delivered double digit year over year sales growth for error case across all of our regions. At the same time, the US team was also working to build out its infrastructure by nearly tripling its sales force in preparation for the expected launch of Brenso Catib in the middle of 2025.
Similarly, our clinical development team remains on track to file the NDA for Brenso Catib in the US this quarter. While at the same time, they have been driving increased enrollment rates across our ongoing clinical trials and working to present and publish data from the Aspen trial.
Today, I intend to highlight the progress we have made across multiple ongoing initiatives at INSMED and why this progress should add to confidence in our ability to execute on the tremendous opportunities ahead.
Let's begin with Brenso Catib, earlier this month at the American College of Chest Physicians annual meeting in Boston, we presented subpopulation data from 19 prespecified categories from the Aspen trial based on baseline patient demographics, comorbidities and disease severity measures within those 19 categories existed dozens of subgroups, which emphasizes how robust and comprehensive this data presentation was in a population that is known to be very heterogeneous.
It was remarkable how broadly beneficial treatment was with Prince of Catib was observed to be across these various subgroups which is similar to what we had observed in the phase two Willow trial.
We continue to expect to file the NDA for Brenso Catib in the fourth quarter of this year. Presuming that filing is accepted, we would expect to announce the acceptance along with the expected timelines for a decision by the FDA in the first quarter of 2025.
Moving to our US commercial launch preparations. I'm pleased to report that ALL120 new US based sales reps have been trained and are currently deployed in the field, bringing our total sales reps to 184. These additional sales territories have been constructed based on claims data showing us where the diagnosed patients are being treated. Our intention is to have broad sales representation from day one, not just in the academic centers and centers of excellence, but also in the community pulmonologists offices where many of these patients receive care. In fact, the US sales force is intentionally sized to enable Insmed call on every pulmonologist in the United States. We believe that these early investments will position Brenso Catib for a strong successful launch in bronchiectasis pending FDA approval.
Let me also provide an update on the two additional indications we are currently pursuing with brenso catib chronic rhinosinusitis without nasal polyps and hydradenitis siva.
The phase two birch study in CRS without nasal polyps has been rapidly bringing new sites online in Europe and in the US and is now more than 40% enrolled with many more patients currently in screening, we continue to anticipate top line results by the end of 2025.
Our phase two HS study is also steadily progressing on schedule to its first site being opened before the end of this year. The study which will be called cedar is expected to enroll approximately 204 subjects randomized 1 to receive brenso catib 10 mg, brenso catib 40 mg or matching placebo once per day.
The primary endpoint in the study will be percent change from baseline in total abscess and inflammatory nodule count measured at week 16.
The study is then expected to continue until week 52. With those randomized to the Brenso Catib arms continuing to receive that same dose. Those who are randomized to the placebo arm would join one of the Brenso Catib arms at week 16 based on randomization which would also have occurred at baseline on a blinded basis.
As we have signaled in the past, the study will include an interim futility analysis conducted by an independent data monitoring board which will examine data from approximately half of the patient population. Once they reach week 16, this will allow us to stop the study early if the data does not look promising.
If the recommendation from that interim analysis is to continue the study, we will remain blinded to the data that is reviewed by the Monitoring board, there is no interim efficacy analysis built into the trial design. So there is no potential for early stoppage due to overwhelming efficacy. If the study continues to completion, we would read out the top line results. After all patients reach week 16, we expect more details for this trial to become available on clinicaltrials.gov before the end of this year, and we look forward to providing updates as the trial progresses.
Now turning to Erica which posted its seventh consecutive quarter of double digit year over year revenue growth in the third quarter of 2024. We have become accustomed to seeing this level of growth from Erica.
But when you remember that Erica is now in its 7th year post launch, it makes the achievement all the more unique and impressive.
In addition to strong commercial execution, we are also making great strides clinically. Last quarter, we stated our intention to stop screening new patients for the phase three encore study by the end of the third quarter. Thanks to very strong recruitment. We were able to close the screening of new patients a little ahead of that schedule, while we won't know the exact enrollment number until all patients have finished the 6 to 8 week screening process.
I'm pleased to report that we have already randomized more patients than the trial's target and of 400 participants. Importantly, this level of enrollment will mean that the study is powered at well over 90% for both the patient reported outcome, primary endpoint for US regulators, as well as for the durable culture conversion primary endpoint for the Japanese health authorities.
We plan to meet with the FDI, this quarter to discuss the possibility of an accelerated filing under subpart H using the successful phase three arise trial data. As we have previously mentioned, we feel the most likely pathway to a potential label expansion for error case will require the full data set from the ongoing encore trial which remains on schedule to read out in the first quarter of 2026.
Finally let me provide an update on TPIP, last quarter, I was excited to report that enrollment in our phase two study of patients with PAH had accelerated and that we had passed 75% of the target enrollment as of that date. Today, I'm equally pleased to share that this momentum has continued. As of last week, we had enrolled more than 90% of the target for this trial, keeping us firmly on track to report the top line results in the second half of 2025, and phd we expect to present the full results from our phase two study which had a top line readout in May of this year in early 2025 at the Pulmonary Vascular Research Institute's 2025 annual World Congress in Rio de Janeiro.
We look forward to sharing those details then, we're also working to optimize the manufacturing of TPIP so that higher doses can be delivered using the same quantity of dry powder as lower doses. This improved delivery which would allow patients to take doses up to 640 mcg in a single capsule is how we expect TPIP to be offered in a commercial setting presuming clinical and regular toy success
We are doing this work now so that our phase three program can be conducted using that same commercial ready product which would be required for a potential future NDA filing. We remain on track to kick off that phase three program for TPIP in patients with PH D using these optimized doses in the second half of 2025.
In summary, I couldn't be more pleased with where we are as an organization. I am proud of how we have been able to maintain and strengthen Insmed's culture during an unprecedented period of growth for the company. Last week, we announced that we were ranked as the number one employer in science's annual top survey of top employers for the fourth consecutive year. The only other company in the history of this survey to have earned this honor at least four years in a row was Genentech.
This external recognition validates what I see every day, which is that even as we transform as an organization, we remain grounded in our core values. The consistent progress that I have seen to date across the company, both operationally and culturally only adds to my confidence in the future of internet.
For most companies in our field. Any one of the opportunities in our late stage pipeline from the potential error case label expansion to the potential launch of a product representing a promising new mechanism of action like Brenso Catib to the chance to develop a potentially paradigm shifting medicine like TPIP would represent the single most exciting opportunity of the organization. At Insmed, We not only find ourselves in the rare position to execute on all three of these programs at once. But I'm also proud to say that we are three for three so far with each program having already demonstrated meaningful clinical success, we take the responsibility to deliver these therapies to patients very seriously and we are committed to following through on these promises.
I'll now turn it over to Sarah who will walk us through this quarter's financial results.

Sara M. Bonstein

Thank you will and good morning, everyone.
I want to start with a few words about the strength of our financial position.
When I last spoke to you in August, Insmed was in a very secure position financially. I am happy to share that today, we are in an even better position due to the deliberate steps taken in the past quarter to strengthen our balance sheet.
These actions include calling our 2025 convertible debt opportunistically utilizing our at the market equity offering program and restructuring our existing term loan.
Let me provide you some details on each of these activities. As discussed on last quarter's earnings call in August, we called our $225 million convertible notes which were set to mature in 2025 and issued approximately 5.7 million shares of stock to note holders which simultaneously lowered our ongoing interest expense burden while also improving our debt equity ratio.
Additionally, in the third quarter, we utilized our ATM to raise approximately $371 million in net proceeds at an average sales price of $75.64 per share.
As a reminder during our most recent follow on offering in May, the sale price was $51.50 per share.
Finally, as announced this morning, we were able to successfully restructure our $350 million term loan with Pharmacon.
As a reminder, the loan previously carried a variable interest rate based on the sofa rate plus 7.75% which normally put our actual rate paid in the low to mid and was set to mature in 2027 under the terms of the restructured agreement. Pharmacon will provide us an additional $150 million in proceeds to be received in the fourth quarter.
Importantly, the interest rate on the full principal amount was lowered to a fixed single digit rate of 9.6%. In addition, the maturity for the loan was pushed out to 2029 which is important because we anticipate that our cash inflows from operations during the latter part of the decade would easily support repayment of the loan balance.
As a result of these actions, our cost of capital is being reduced while our cash runway is being lengthened. As of the end of the third quarter, we had approximately $1.5 billion of cash, cash equivalents and marketable securities on our balance sheet, which represents an increase of approximately $221 million since the end of the second quarter.
As a reminder, the current quarter's cash balance does not reflect the additional $150 million of proceeds from the Pharmacon term loan previously discussed and will be reflected in the fourth quarter's financial statements. Net of cash inflows related to the ATM as well as the impact of stock option exercises, our underlying cash burn in the third quarter was approximately $166 million which as expected was somewhat higher than recent quarters.
A portion of this increase is related to the $12.5 million cash milestone payment made to astrazeneca this quarter, which resulted from the announcement of our intention to file for the approval of Brenso Catib for the treatment of patients with bronchiectasis.
The remainder of the increase is due to higher headcount and other expenses related to ongoing preparations for the potential launch of Brenso catib.
As a result, we expect our underlying cash burn to increase compared to historical levels between now and the time that Brenso begins contributing revenue assuming regulatory approval and commercialization.
Before I move on, I would like to address the subject of profitability, as I appreciate, this is an important topic for many of our shareholders. We do not yet have sufficient cash on hand to fund our business until it becomes profitable on its own, but we continue to be mindful of reaching our ambition of becoming a self sustaining biotech company. Given our progress this quarter, we are now in a position in which we can be patient and flexible as we think about our future financing needs.
I will now walk you through the highlights of our commercial performance in the third quarter of 2024 global net revenues. This quarter was $93.4 million reflecting 18% year over year growth compared to the third quarter of 2023.
This represents the highest quarterly sales for Air Case in its history and the second quarter in a row in which we have set a new record for global sales. In the US, net revenue was $66.9 million up 13% compared to the prior year period. This growth was driven by continued strength in new patient starts reflecting the volume driven growth we continue to see for a case. In Japan net revenue is $21 million up 31% compared to the prior year period. This performance was driven by higher new patient starts and a strong treatment continuation rate amongst existing patients. In Europe, and the rest of the world net revenue was $5.6 million up 45% compared to prior year period driven primarily by continued strength in Germany and the UK.
Importantly, this quarter's performance keeps us on track to achieve our full year 2024 global revenue guidance of 340 to $360 million.
Let me now turn to a few additional financial items.
Our US gross to nets this quarter were 14.2% which was consistent with our expectations, we continue to anticipate that gross to nets will settle in the mid to high for full year 2024. Cost of product revenues for the third quarter of 2024 was $21.2 million or 22.7% of revenues, which is consistent with our historical performance. Research and development expenses in the third quarter were $150.8 million and SG&A expenses were $118.9 million. Reflecting continued investment in our early and mid to late stage pipelines as well as investments in brenso catib of commercial readiness initiatives. In closing Insmed currently finds itself in a unique position of strength both financially and operationally.
We produced record setting revenue in the third quarter, keeping us on track to deliver on our full year guidance. Additionally, we have approximately $1.5 billion of cash, cash equivalents and marketable securities on our balance sheet which allows us to comfortably fund our operations as we enter this transformational period ahead, one in which we anticipate the launch of brenso catib as well as additional meaningful mid to late stage data readouts from across our portfolio.
We would now like to open the call to your questions. Jeannie, may we take the first question, please?

Question and Answer Session

Operator

Thank you. (Operator Instructions)
your first question comes from the line of Joe Schwartz with leading partner. Please go ahead.

Joseph E. Schwartz

All right, thanks so much. And congrats on the progress. I was wondering first if you could talk some more about the expanded sales force in terms of how effective it can be in launching Brenso Catib based on its size and focus as well as how much the disease state awareness activities can help you prepare for launch and whether you've looked at analyst estimates for Brenso Catib sales early on and is there anything we should keep in mind as we model the ramp?

William H. Lewis H. Lewis

So, thanks for the question, Joe. I mean, I think I would tell you, I've had the pleasure of spending some time with the people that we brought on board and they have two general dimensions that I think are worth noting, the first is they are a very experienced group of people they have done multiple launches we've got a lot of multiple Presidents, club winners in this group, I always like to remind folks that we had more than 7,000 resumes for 120 positions. So it just speaks to the volume of interest that existed for these roles. So we really got the best of the best and I would tell you hand on heart, I think I would match this sales force against any in the industry and feel like we're going to come out ahead.
The second point about these people is that they are an excellent cultural fit to a person. They are focused on patients and delivering for those patients and that's an incredibly important part of our culture as you know, as we think about the actual launch itself and what this empowers us to do, as I mentioned, we literally have the ability to call on every pulmonologist in the United States with this kind of capacity, and importantly, as we think about what they're doing right now because as we said, as of October 1st, they're in the field, fully trained, both calling about air case, but also doing disease state awareness about bronchiectasis.
And that is a model that may bring familiar to you because it is the exact same approach we took when we launched air case cases. You'll remember the street had us doing about 40 to 60 million in the 1st year and we ended up doing 100 more than 130. And that's an indication of what this kind of early stage education and relationship building can provide by way of uptake of medicine when the medicine is clearly a benefit to patients. So I couldn't be more excited about the group we've assembled. And yeah, I think, you're going to see really first in class best in class performance.

Joseph E. Schwartz

Okay. Thanks. And then does the aforementioned expected price range for brenso refer to the 10 mg dose, the 25 mg dose or both. I'm just wondering how you're thinking about whether it makes sense to use flat or graduated pricing. For example, do payers appreciate the added value that the 25 mg dose provides.

William H. Lewis H. Lewis

So, you know, we haven't made any decisions on pricing yet. It's going to be a long time before we do. But I would tell you that you know, we think the objective here in all our clinical studies is to understand what the medicine can do and that forms the basis of the value proposition. I do want to come back to your comment about earlier about what we might expect in the 1st year, I don't know Sarah if you want to, you want to take that one.

Sara M. Bonstein

Sure. Sure, Joe, thanks for the question specifically on the analyst expectations. And while we obviously haven't provided near term guidance for Brenso Catib, what we have said is we believe brenso catib, the non bronchiactisis alone is a $5 million plus peak sales opportunity, So a tremendous opportunity from a value creating perspective as well as impact on patients. What I would point you to is some analogs in the industry, you know, we study a lot of precedent here in Insmed, and so if you look at some of the first in class best in class launches in the respiratory space like DPIS and FRA aspire ofeb, you see in their first two quarters of launch, they put high double digit millions in revenue, and then if you kind of carry that forward in the next four quarters of launch, it's about 5 to 600 million, I think the best with DP was about 700 million. So very significant revenue numbers, And you know, while I can't comment on specifically what the shape of the brenso curve will look like these are best in class launches, and you know, I think analogs that any company would strive to strive to even come close to.

Joseph E. Schwartz

Thanks for all the helpful Colour.

Operator

Your next question comes from the line of Jessica Fye with JP Morgan. Please go ahead.

Jessica Fye

Hey, guys, good morning. Thanks for taking my questions. I wanted to ask on TPIP for Philb, can you talk a little bit more about what needs to happen between now and the commencement of that phase three trial in the back half of next year? Is it that manufacturing work you referenced? And if so, can you expand a little bit on what specifically is happening there? And then can you also talk about how you think about the enrollment timing for the phase three in Phild? Should we use the increased trial enrollment as a guide? Does the increased awareness with Tyba Strong launch in that setting help you or is it a headwind to enrollment to have an approved drug in the space? So like would you look to enroll me in the XU as a result of that? Just trying to kind of understand from, you know, what, what it's going to take to kick that study off and then how to think about enrollment once it does start?

William H. Lewis H. Lewis

Yeah, sure. So thanks for the questions. I think, you know, the first thing I would say about TPIP is it's probably the most underappreciated asset in our portfolio. I'm really excited about what I think this drug already has shown and what I think it will show when we look at the phase two data in PHID next year, we do intend to move forward into phase three for PHID. We have a lot of the work for that already ongoing, the second half of next year is a target. Kicking that off is really driven by both the preparation for one in that trial to go particularly well, Wanting to ensure that our dialogue with FDA clarifies the approval pathway for phase three ie one versus two, phase three studies, our expectation is we'll only need one, but we have to confirm that.
And then I would say finally and most importantly, the work being done in manufacturing, which is sort of being done in parallel to all this, specifically what we want is to make this very easy for patients, And so regardless of how much drug they intend to or need to take, we'd like it to be one capsule, And so if you're going to go up as high as 640 mcg, remember that, you know, that's a really high dose relative to what people are able to get to do that also with a single capsule makes it supremely easy to take and just smooth on the utilization of the drug. So that's the thought there, and it is the merger of all of those different forces that are shaping the launch timing for the drug. We think about enrollment. We're always frustrated in the phld space phld space generally because these are difficult trials to enroll these patients are very sick.
In a sense, we're in a little bit better position when we start PHLD and when we look at Phi and phase three as well, because the competitive landscape of other trials will have decreased in its density by that time. So I couldn't be more excited about this I'm really excited to see the PAH data in the second half of next year and also to kick off the, the ILD phase three. Hope hopefully that answers your question.

Jessica Fye

Thank you.

Operator

Your next question comes from the line of Vamil Divan with Guggenheim Securities. Please go ahead.

Vamil Divan

Hi, this is Dan today on RVO. So we've been receiving some investor questions, this morning around the general financial position, you know, with the term loan amended and it seems that you raised some additional money through the ATM. So I was wondering if maybe you could talk more generally about your financial position now and your plans going forward as you prepare for the Brenso launch next year. Thanks.

William H. Lewis H. Lewis

Yes, you bet. I'm going to turn over to Sarah in a minute, but I got to just open up by telling you I could not be happier about the breadth and depth of the strength of our balance sheet improvement this last quarter, we are now in a very strong financial position to take on the breadth of opportunities this company has and we happen to be hitting on all cylinders both in terms of commercial clinical development and preparation for next commercial launch. This resourcing is going to be helpful to that cause. But Sara maybe you want to talk about.

Sara M. Bonstein

Yeah, absolutely. Really appreciate the question just on the onset in is in the strongest financial position it's ever been since I've been at the company and probably since the company's history and could not be more proud of the achievements of, you know, everyone part of the insmed family and all the support that we continue to get from all of our partners, shareholders, note holders, debt holders, a couple of comments specifically on the actions that we took specifically on the ATM that is an opportunistic tool that pretty much every biotech company has, that is not at a profitable level we use that in a small amount it was about 2% of our overall market cap over the period of time.
But I think the most important piece there is focus on dilution and being sensitive to dilution for shareholders and as we think about the raise that we did earlier this year and the utilization of the ATM, the ATM average price was almost a 50% premium to our last raise. So we were very cognizant of dilution pricing as well as during the time of trading on the ATM, our stock price actually went up so we were very careful on that. On the Pharmacon restructure couldn't be more pleased that Pharmacann was willing to put additional monies and to push out the payment. A couple of I think really important pieces there by being able to get a fixed interest rate and being able to lower it into single digits, our interest burden on the company essentially remains the same and we have additional capital now and we will now have the benefit of having the brenso launch and need to pay back that principal amount, you know, towards the latter part of the decade, so could not be more pleased with where we are financially and we are now, you know, in a position where we want to be able to resource appropriately.
The Brenso Catib launch, this is a once in once in sort of a lifetime type of launch that we have the opportunity to be part of and the capital that we now have on our balance sheet will allow us to appropriately resource that program. Thank you.

Vamil Divan

Great. Thank you.

Operator

Your next question comes from the line of to borrow with TD cow and please go ahead.

Nicole Germino

Hi everyone. This is Nicole on the line for re two. Thank you so much for taking my question. So I was hoping to get some initial or additional color on labelling language that you expect for Brenso Catib. Do you think it's going to be more broad with treatment of bronchiectasis or do you think there might be some more specific language about the reduction of exacerbations? And then a quick second follow up question is, are you planning on including adolescence in the labelling as well? Thank you.

William H. Lewis H. Lewis

So I'm actually ask Martina to take that on first.

Martina Flammer

Yeah. Hi, Nicole. So yes, we do expect a broad label language and that would be for non bronchiectasis. We also will ask for adolescent patients. They have been part of the trial. It depends on what the FD judgment will be on that. But we expect the broad label language and usually the label language doesn't specify inclusion exclusion criteria. It speaks to the indication.

William H. Lewis H. Lewis

The only comment I would add to that is that of course, there's different audiences we have to impress. One of them is the FDA the other is market access, market access is the one that's going to be a little bit more focused on whether or not the patient has had two or more exacerbations consistent with our label. So while the FDA label language will probably be broad, the market access, at least initial interaction is probably going to be a little more focused around those two prior exacerbations and we're hoping to accomplish that through at a station, but that will of course come closer to the time of launch.

Nicole Germino

Thank you.

Operator

Your next question comes from the line of Nicole Germino with true securities. Please go ahead.

Nicole Germino

Good morning. Thanks for taking my question.
Excuse me.
We're getting questions around the CRS without nasal polyps and could potentially, and it could potentially be as big as bronchiectasis given the potential benefit and steroid non responders, patients requiring surgery.
Sorry. So, how many of those patients are seeking additional therapies beyond standard of care or getting repeat surgeries? And can you help us understand how big this opportunity is? And how could it, how big could it be and will be focused towards anti broadly or antisurgical specialists? It seems like a very small focus that wanted to get your thoughts.

William H. Lewis H. Lewis

Yeah, so I appreciate the question. I think you are right to perceive CRS without nasal polyps as a very, very substantial opportunity just to remind everybody, this is a patient population in the US alone that numbers more than 26 million people currently without anything approved to treat it. Now, when we approach a disease state of that magnitude, we look for the sickest patients and we look for our medicine to have the most material impact on them, and in that group, we sort of focus on for our initial for a, we've talked about how that is an incidence rate of about 400,000 patients a year. So not a prevalence but an incidence that's that number of patients coming in that are broadly defined as being eligible for surgery or having had repeat surgeries at a severity point that would justify the use of this medicine. It may get bigger than that, but I would just start there to sort of understand the broad opportunity that this market would represent. And next year, we're going to have a very clear understanding of whether our drug is going to be impactful on these patients with the readout of the phase two.
So I think this is you're going to hear a lot more about this indication once we know our ability to impact it, and we understand the profile of patients within the study and the nuances of what the medicine does remember that we're testing both 10 and 40 mg in this study. So that's also a distinction from what we did in bronchiectasis where we had 10 and 25 overall super excited about that program and a lot more to come in terms of specificity.

Nicole Germino

Oh and one, thanks so much and one quick follow up for brenso Catib and bronchiectasis. Can you confirm if both doses are going to be filed or how or what can you share?

William H. Lewis H. Lewis

Yes. So our intention is to file the data from both doses as we've talked about before there's some very interesting details in the 25 mg secondary endpoints that we find and other KOLS have found particularly compelling, but the ultimate decision about which dose to be selected or both doses to be selected is in the hands of the FDI based on the data that they will review, So we want to provide them all that data. The good news is both doses work, both are compelling. So whatever the FDI'S conclusion is, we'll be in a position to launch commercially and we'll have more information on that once we've heard from FDI.

Nicole Germino

Great. Thank you so much.

Operator

Your next question comes from the line of Jason Szymanski with Bank of America. Please go ahead.

Jason Szymanski

Good morning, everyone. Congratulations on the quarter and the progress. I appreciate you taking our questions. Thanks for the color on Birch. Curious what are you looking for in terms of efficacy, at least from the sinus total symptom score on the top line to be encouraged about its activity in CRS, and then maybe how translatable are these results to other non pulmonary indications in your view?

William H. Lewis H. Lewis

Yeah. So I'm going to ask Martina to address that.

Martina Flammer

Yeah. Hi Jason. So what we're looking for in CRS is that we're detecting a difference of 1.34 to 1.55. It depends on what treatment effect that we're seeing, but we are 80% power to show that if it's on the 1.34 point difference and we do that for an hour, a level of 0.05. So what if you compare that to the only other treatment really that is right now approved for that? And that is the enhanced spray nasal spray, which is basically a fluticasone, based on that they have shown a difference of 1.4 to 1.9, and that was depending on whether these patients had used steroids in addition or not. So I think we're well in that, in that range.

William H. Lewis H. Lewis

Got it. And, you know, I appreciate you haven't shared some of your broader strategies here. But assuming that there is efficacy in both CRS and HS, I mean, what makes an ideal eye and eye condition to pursue for Brenso?

Martina Flammer

Yeah, so I think it's there are two distinct diseases, both CRS without nasal polyps as well as HS and we have to see what we see in both of those indications. The reason we're testing for the 10 and to the 40 mg dose that in this both of these diseases in a way, we may see that there is an additional benefit coming from a higher dose reason being that in, for example, HS there is net formation and can when we push down NSPS even further impact that net formation and the same is true for CRS both of them are related to the intensity of neutrophil inflammation.

William H. Lewis H. Lewis

And the only thing I would add to that is of course, this relates to Brenso Catib and what we're learning from it. If we take a step back, we think about DPP one inhibition and its ability to impact neutrophil mediated diseases. What has been unlocked with the Aspen study and the Willow study and hopefully with Birch and Cedar, is this realization that there is broader applicability of this mechanism. So to that end, after the Willow study, we initiated some extensive work in our research labs and that has been able to produce hundreds of additional DPP, one candidates that we have now refined down to a smaller number and which we intend to bring into the clinic as second generation DPP one's, you'll be hearing more about this in the coming years, but let me just highlight that, you know, one of the indications that we're giving consideration to is rheumatoid arthritis.
Another one is COPD patients. These would be novel DPP one's that would go through development process but with our understanding at the beginning that the mechanism is effective in these target populations, each additional clinical study, we complete, we learn more about this mechanism and I think you are correct to assume that there will be potential applicability of it to many more diseases, and that's why this library of DPP one S is being developed each which will be hopefully more specifically targeted to the unique features of the disease we're pursuing.

Jason Szymanski

Got it. Thank you, Martin and will for the color.

Operator

Your next question comes from the line of Jennifer Kim with cantor. Please go ahead.

Jennifer Kim

Hi. Thanks for taking my question. I have one on rent. So can you remind us what's left for filing and your, what your confidence is in getting priority review and then somewhat related so you pointed to other launches and seeing high double digit millions in the first two quarters.
I think if I look at DPE in the first full quarter of launch, it was something like high 20 and based on the timing of filing this being a new drug, it, it looks to me like this could be more of a July or August launch, is that something people should also factor into the model? Thanks.

William H. Lewis H. Lewis

So the determination of priority review is made by the FDA and their first written response to us typically that is that arrives by day 74 so they have their verbal communication around day 60 then there's a written response that comes on day 74. It's important to understand that until we have that written response in hand, we won't know for sure anything right you always want to have it in writing from FDA. Well, we expect that we will and we are on track to file this quarter.
So if you do quick math, just take it from the end of the quarter to make it easy and add 74 days, that gives you some sense of when in the first quarter, we'll have greater understanding. Obviously, once we have that in hand, we will share it with you and that will hopefully indicate that we have been granted priority review. Nothing is for certain but our fingers are crossed for that and that would put the timing somewhere around the middle of the year for launch, assuming everything goes as expected, if we don't get priority review, it will be toward the end of the year. Either way we're going to be ready and I couldn't be more excited about the, about the where we are positioned and how everything is going.

Sara M. Bonstein

Yeah. And then Jennifer specifically on the question of timing as well. Just kind of walked you through on the different scenarios from a timing perspective, the analogs that I shared, I won't get into sort of the details on this call around the first quarter of each of those was it a full three months? Was it two months? But I do think that's something that as folks are building their models, they need to be thoughtful of as they're thinking about revenues for 25 versus 26 for Brent and what that curve looks like.

Jennifer Kim

Okay, that's helpful. If I could sneak a quick one for error case, I know you said you've already reached target enrollment of 400 patients. Can you give any color on how many patients are left in that 6 to 8 week screening period? Thanks again.

William H. Lewis H. Lewis

So, you know, the H1st answer to that is, I don't know off the top of my head, but I, but I know that it's going to supplement in addition to the 400. I'm just going to ask Martinez she may know, she probably does.

Martina Flammer

Yeah. So we have about an additional 40 to 45 patients that are in the screening period. And as you know, it takes about 6 to 8 weeks for the culture to come through. But I think we're highly confident that we will see that in this quarter.

William H. Lewis H. Lewis

And how many of those do you normally?

Martina Flammer

And the so normally on the screen fail from these patients, we would expect to be another 15 to 20.

William H. Lewis H. Lewis

Randomized.
There you.

Operator

Go.
Your next question comes from the line of Lisa Crotty with Evercore, please go ahead.

Lisa Crotty

Hi, this Issa on for Lisa, I have two questions on Eate (Inaudible).
So in Japan, there seems to be no growth in revenue this quarter over last quarter. So how should we think of future growth in this territory? And my second question is you are meeting with FTA this quarter to discuss the possibility of an accelerated approval to expand the label for a case in frontline, this year, Japan did not consider AR data for label extension enough because of the shorter duration of treatment.
So including like other reason of that, it did not include Japanese patients. So where do you see the possibility that FDA might agree to accelerated approval? So this my questions. Thank you.

William H. Lewis H. Lewis

Sure. So I'll take the second question first and ask her to take the first one, you know, with regard to the probability of getting accelerated approval. I think we've been pretty consistent over the years just saying that we think this is a long shot, but it's an appropriate long shot to take because the data was compelling.
There are certainly other divisions within FDA that have found data that is in this sort of realm of clear and compelling. Plus the background history here of the success of the drug, its full approval in Europe and Japan, there's a lot of reasons to believe that what we have really should be enough, but FDA has very strict rules and each division interprets them differently. So I think we think this is probably a low probability of success, but we do think it's a prudent dialogue to have and of course, if we manage to get it, we would be super excited. We are ready to pivot to a launch earlier than expected if the accelerated approval comes our way. So I want to be clear about that, but we're not expecting that this is the highest probability outcome. In fact, I'd say it's low. I'd say it's less than 25%.
So look, it's hard to put the odds on. You're right. Japan did say no, we didn't have any Japanese patients that always makes it difficult for them to want to approve in an early setting. But I do think it could be indicative of the way the FDA sees it as well just in terms of the overall data set.

Sara M. Bonstein

And then specifically on the Japan performance for the quarter. Listen, I couldn't be more pleased with the performance in Japan $21 million this quarter and if you think about that from a year, over year perspective, that was, you know, over 30% growth. So I was very pleased with the performance if you look at the specific dynamics between Q2 and Q3 and you know, we don't usually get into this level of detail, but I'm happy to share it. There was a new warehouse open in Japan with some old inventory. We needed to work down some of that inventory in Q3. So there was some favorable inventory dynamics that we mentioned in Q2. So, you know, there is some lumpiness just in general but the fundamentals of the Japanese business continue to hum and the continuation rate is really great there. The new patient starts are really great there and couldn't be more pleased by the team's performance.

Lisa Crotty

Thank you.

Operator

Your next question comes from the line of Jeff Hung with Morgan Stanley. Please go ahead.

Jeffrey Hung

Thanks for taking my questions. Just to clarify, can you just talk about the 150 million from Pharmacon four Q, given the cash that you have, is that mainly for the Brinso launch? And then can you talk about your current thinking on the TP IP phase three study and phld like the endpoints and, and any aspects of the phase two results that influence how you've been thinking about the design? Thanks.

William H. Lewis H. Lewis

Do you want to take the Question

Sara M. Bonstein

Sure, 150 million that we will receive from Pharmacon that will be reflected in our Q4 financials that's not reflected in the approximate 1.5 billion that we have on the balance sheet today. We don't specifically say, you know what money is specifically earmarked for which program programs of course, we have that latitude but as we ramp up and focus on shareholder value, Brenso CIP is top of that list and we are now resourced to ensure that we are fully able to appropriately resource brensocatib.

William H. Lewis H. Lewis

I'm sorry, your first question was on the design of the phd study.

Jeffrey Hung

Yeah, I was just curious, you know, any aspects of the phase two results that influence how you've been thinking about the design of the phase three study and the endpoints that you, you know, might be using.

William H. Lewis H. Lewis

Yes. So we're not, we're not disclosing where we are in the final design of that study yet, I think what I would say is if you think about the phase two study, which was really a safety study and had, you know, less than 40 patients randomized 3 to 1 treatment to placebo and we still saw some very compelling directional data there that suggests, you know, improvement on time to clinical worsening improvement in six minute walk. Like there were some remarkable findings for what are essentially a handful of patients and the ability of the patients to go up in dose as high as they did. All of these things are very positive.
So I think that sets us up for a lot of enthusiasm for phase three, but the specifics of the study we haven't refined yet.

Jeffrey Hung

Great. Thank you.

Operator

Your next question comes from the line of Leon Wang with Barclays. Please go ahead.

Leon Wang

Hi, thanks for taking my question, I guess one on Cedar. So you know, as you kick off this study, you mentioned earlier about using 10 mg and 40 mg dose and the endpoint at 16 weeks, that's all pretty standard for HS studies. But I just want to clarify, what are you guys thinking in terms of the primary end point? Should this, should we expect, you know, high score 75. As many of the new studies are kind of in HS are kind of heading in that direction for the primary end point and also a second question on error case. So you reiterated guidance and right now, I would say the consensus is around the high end of that, I have a 357. Can you give any pushes and polls on what might shift your number for 24 to be either in the top end of guidance or maybe on the low end?

William H. Lewis H. Lewis

Sure. So on the Cedar study, I want to make a really make it really clear. This study is an exploratory study to get a proof of concept on the mechanism in this very difficult to treat disease setting. So we are not looking for a statistically significant result with the design of the phase two study. Instead, what we're looking for is directional information that there is a benefit through this mechanism of action in this disease state. That is a very important point because as we know to get a statistically significant study would require many more patients you'd have to take conservative assumptions about everything and we really don't have the data to inform that design right now.
What we're looking to do is get that directional information, It's important to also understand that we're including this interim analysis, so once we're past about 100 patients or half of the study have reached 16 weeks, we're going to take, we're going to have a committee, take a look to see if there is real efficacy that's in evidence, and if there is, we won't learn anything more about that, we'll just continue to study. But if there isn't, we're going to shut it down so that we know we're not wasting precious resources. So, but with that, maybe Martin, you can talk a little bit more about the specifics of the primary endpoint.

Martina Flammer

So in that context and the primary endpoint, you know, we're looking for a percentage change from baseline in the absence and nodules count that is also pretty standard as you talked, we will also look at the secondary endpoint as the first key secondary for the high score is 50 as well as for the high score 75. Both of those will be informing how we would design a phase three study.

Operator

Your next question comes from,

William H. Lewis H. Lewis

I'm sorry, Hold on because there was another question there about our case and the range for the year. Sarah. Do you want to take that?

Sara M. Bonstein

Yes. Sure, Leon. Thanks for the question. So specifically on the range, we were proud to be able to reiterate our guidance of 340 to 360 from a range perspective, I'll just remind folks that we're in our 7th year after launch and at the midpoint of that range, it's a 15% year over year growth, very significant growth and we were continuingly able to put up double digit growth across each of the, each of the regions, So I couldn't be more pleased, obviously, I can't, you know, share, you know, where in that range, but we do now have the additional 120 reps in the fields. They have been deployed and are in the field as of October 1 and we feel confident to be able to reiterate the 340 to 360.

Operator

My apologies. Your next question comes from the line of Steve Worley with steel. Please go ahead.

Steve Worley

Yeah, Good morning. Thanks for taking the questions. Just with respect to the phase two PAH disclosure, curious if we should be thinking about, I guess the nature of the phase two phild disclosure is kind of proxy for how that looks like from a communication perspective and I'm just wondering if you can kind of talk a little bit about how you're thinking about the hierarchical importance of some of the endpoints that are materializing out of that PAH trial. I would imagine given the mechanism that PVR reduction is of, is of interest, but it's also a small study, six minute walk distance could be noisy. And I guess there still doesn't appear to be a lot of consensus around PVR reduction being a correlate for clinical outcomes, so just would be interested in your thoughts around the importance of the endpoints you're going to see as well. Thanks.

William H. Lewis H. Lewis

Yeah, I think, you know, one of the goals of this study is to understand that the mechanism is going to make a material difference in patients. And if we think about PAH it is not common to see spontaneous dramatic reductions in PVR, so to see that in evidence in this patient population, certainly we have on a blinded basis is very encouraging and it would lead us to believe that we would expect to see some significant impact when we unblind the study.
You're right. Six minute walk is always noisy, but you know, if we think about the PHLD study and the directional evidence we saw there different disease, but nonetheless, it was positive, and I think for those reasons, we're encouraged, I think when we see other markers like NT PRO BNP that are correlated with improvement in patients and those have, have directionally gone the right way, you know, all of this suggests a positive outcome here, but maybe Martina, you can, you can comment on how you're going to reflect on this.

Martina Flammer

Yeah. So the PVR reduction is the primary endpoint for a phase two study. I think this is important to understand the hemodynamic measures is something that you do in the phase two study, not necessarily something you do in phase three. So you do want to understand that as well as a six minute walk, you will look also we have PK that we will be looking at as well as clinical worsening and quality of life in this patient population.

Operator

Your next question comes from the line of Andrea Newkirk with Goldman Sachs. Please go ahead.

Andrea Newkirk

Hi, all this is Tala on for Andrea. Thanks for taking our questions. Just one from us now that the sale, the connected sales force is fully deployed. If you could just remind us what activities are underway with respect to both our case in the refractory and CM setting and also Brenso Catib ahead of the launch. Thank you.

William H. Lewis H. Lewis

Sure. So the additional 120 folks bringing the US sales force to 184 were deployed. October 1st, they keep they are out and detailing error case to the pulmonology community. But they are also doing disease state awareness about bronchiectasis that sets us up to build those relationships and put us in a place for a best practice launch the goal with this kind of a situation particularly when you're first in disease and in our case, that opportunity is very significant here, we draw on the experience that we had for our air case, which was also a first in disease launch.
You want to make sure that the community understands the burden of the disease and the need for treatment and that that dialogue is established and then if and when we're approved in the appropriate way, we would, we would then shift at that time to discussing about product, obviously, we're not talking about that now, but they are going to also be calling on a case and makes for a very natural conversation with the physicians' offices, many of these offices treat both patients and many of these patients have comorbidities with these two indications, so there's a logic here that is self evident to the pulmonology community when our folks are in their offices.

Operator

Your next question comes from the line of Greg Snas with Mizuho. Please go ahead.

Gregg Moskowitz

Thanks for taking my question. I've got two, please. Just maybe three the first one is just on your Opex for the quarter was a bit higher than I think we were expecting and it just as we think about the rest of the year and perhaps next year, just how to think about trending and I know you've got trials ongoing, you just expanded the sales force just if you give some general thoughts around that.
And then second, just on the earlier stage pipeline or efforts just want to know in the context of all you've got going, that's more late stage, the prioritization or importance of those early stage efforts. And then if you could just remind me, I might have missed it expectations on the readout of the Encore study for Eric case in the first line study. Thanks.

William H. Lewis H. Lewis

Sure. So I'll go take those in reverse order and leave the first one to Sarah on the readout for Encore that's expected in the early part of 2026. As we described the enrollment there is going very well, we just need to get this last group of screened patients randomized, and then, and then we're often running for the length of the trial, which as you'll recall is, is 13 months from start to finish.
When we think about the earlier stage efforts the fourth pillar, as we like to refer to it, there's a lot going on there, but there's a lot going on with the company generally, and I know that most of the investment focus is on the mid to late stage portfolio, so we haven't spent time on describing that in any detail, but please do not take that for a minute to mean that things are not progressing there.
Some of the data I've seen recently in certain disease states we're targeting is among the most compelling I've ever seen in my career. I'm super excited about what these various teams are bringing forward and again, remember the intention here is for this portion of the company to produce between one and two inds a year that will begin in the next 12 months and as that unfolds and the clinical data from that comes forward, using several different approaches to really impactful medicines and very difficult to treat diseases.
We'll be very excited to share that with the investment community and I think at that time when it's clinical data, that's when the investment community is going to pay more attention to it, but there's a lot going on there and that continues to be the answer to the, what's next behind these first three programs and also is a strong sign of what we believe is going to be a capability to produce novel medicines for the next decade or more at this company, Sarah. Do you want to take the first question?

Sara M. Bonstein

Sure, Happy to take the first question. Thanks Greg for the questions. You know, we remain committed to investing in what we truly believe will drive the most shareholder value you saw the balance sheet augmentations that we did this quarter and that was really to kind of take the financing off the table. Our strategy on spending has remained unchanged to that point specifically on the various lines, as seen as expected, we will see an increase in comp and then as we brought on the new sales force and investing in the appropriate launch readiness activities to ensure that we will have a world class launch and what we will believe will be a mega blockbuster product assuming regulatory approval, so you'll continue to see that investment on the R&D side, you know, we'll continue to invest across the portfolio case, brenso on the life cycle management programs and the additional indications TPIP getting ready into phase three, obviously, the early stage research.
So you will continue to see investment there also medical affairs, that's an important, a very important area that does come through on the R&D line and that's very important as we prepare for our launches and making sure the right education so, from an expense perspective, they're in line with our internal projections, nothing sort of different there and we continue to make thoughtful and meaningful investments.

Operator

And your next question comes from the line of Andy Chen with Wolf Research. Please go ahead.

Andy G.Chen

Hey guys, it's Tu on the phone here for Andy. Can you comment on the competitive landscape and PAH and Phiod, who do you see as strong competitors among the existing products and also upcoming pipeline products. Thank you.

William H. Lewis H. Lewis

Sure. So if we talk about PAH and Phiod, obviously the only approved therapy there is a prostanoid, if we think about what we stand to offer versus that once a day, 24 hours coverage including night time at much higher doses than what can be achieved with what's available. It's a clear and compelling opportunity for physicians to improve patient treatment assuming that the data and the regulatory path all validate that we feel very good about the competitive profile in the phiod setting.
And I think our intention for TPIP is to be the cornerstone of therapy, the prostanoid of choice, regardless of where it's deployed. When we talk about ph specifically, everyone is very familiar with Satat and the important role it's going to play in the treatment of these patients we celebrate that we think TPIP is a perfect complement to that drug and the combination of the two we think could return patients to levels of normalcy in terms of PVR and other measures, potentially inviting some remodeling in the disease state.
This would be in my opinion, a breakthrough for these kinds of patients and that's why we think our drug as the proteo of choice will change the treatment paradigm for patients with pah and phiod, the competitive landscape with respect to other programs obviously, we saw the data from two other companies that had DPP ones, I think as we review that data, a couple of takeaways for us, first of all, we know the mechanism works.
This is further validation that DPP one is a novel mechanism that is going to have an important role to play in the treatment of a broad range of neutrophil mediated diseases. We're also particularly excited about the relative strength of our data to these other programs. Obviously, there are many years behind us, but we welcome the competition. It raises awareness about the disease state and it speaks to the importance that everybody sees for this mechanism in the future.
Got it, got it. Thank you, appreciate it.

Operator

And there are no further questions at this time. Thank you everyone for joining. This concludes today's call. You may now disconnect.