Insmed Incorporated (INSM) Q3 2025 Earnings Call Transcript

Access earnings results, analyst expectations, report, slides, earnings call, and transcript.

Overview

The earnings call highlights strong financial health, upcoming product launches, and promising pipeline developments. Despite some uncertainties in data and study outcomes, the overall sentiment is positive due to expected revenue growth and strategic market expansions. The Q&A section does not reveal major concerns that would negatively impact the stock. The company's robust cash position and anticipated decrease in cash burn further support a positive outlook.

Key Financial Performance

BRINSUPRI net sales $28 million in its first partial quarter of launch, with approximately 40% of this revenue attributed to inventory stocking. This reflects about 6 weeks of revenue and patient starts, which is more than initially expected. The early days of the launch have been encouraging, with broad prescribing and strong patient and physician interest.

ARIKAYCE revenue growth 22% year-over-year increase in the third quarter of 2025, with double-digit growth in all geographic regions. U.S. revenue grew by 11%, while international revenue (Japan and Europe) grew by more than 50%. This growth demonstrates the commercial team's ability to execute effectively.

Cost of product revenues $29.4 million or 20.6% of revenues in Q3 2025, which is lower on a percentage basis than historical performance. This reflects the positive contribution of BRINSUPRI to the company's gross margin profile.

Cash position Approximately $1.7 billion in cash, cash equivalents, and marketable securities as of the end of Q3 2025. The company remains well-capitalized, with cash burn levels consistent with prior quarters. The cash burn does not yet fully reflect the benefit of BRINSUPRI revenue.

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Operating Highlights

FDA approval of BRINSUPRI: BRINSUPRI was approved by the FDA in August 2025 for bronchiectasis, marking a significant milestone for Insmed. Early launch data shows $28 million in net sales within 6 weeks, with approximately 2,550 patients starting treatment and 1,700 physicians prescribing it.

Pipeline expansion: Insmed is advancing multiple late-stage and early-stage programs, including brensocatib for CRS without nasal polyps, hidradenitis suppurativa, and TPIP for pulmonary diseases. The company is also progressing gene therapy programs for DMD and ALS.

Market expansion for brensocatib: Brensocatib received a positive opinion from Europe's CHMP for non-cystic fibrosis bronchiectasis, with potential launches in the EU, U.K., and Japan in 2026. This could expand its reach to 600,000 patients in the EU.

ARIKAYCE growth: ARIKAYCE achieved its largest quarterly revenue, growing 22% year-over-year, with strong performance in the U.S., Japan, and Europe. The anticipated label expansion could increase its addressable market from 15,000 to over 100,000 patients in the U.S.

Operational readiness for BRINSUPRI: The company achieved rapid market entry for BRINSUPRI, with broad patient access and inclusion in preliminary CHEST guidelines. Efforts are ongoing to simplify payer access and prior authorization processes.

Financial strength: Insmed reported $1.7 billion in cash and raised its 2025 ARIKAYCE revenue guidance to $420-$430 million, reflecting strong execution and financial stability.

Focus on clinical trials: Insmed plans to initiate up to six new Phase III programs in 2026, including trials for brensocatib, TPIP, and other pipeline candidates, demonstrating a strategic focus on expanding its clinical portfolio.

Gene therapy and next-gen DPP1: The company is advancing gene therapy programs for DMD and ALS and preparing next-generation DPP1 candidates for large patient populations, such as rheumatoid arthritis and inflammatory bowel disease.

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Risk or Challenges

BRINSUPRI launch challenges: The early days of the BRINSUPRI launch show broad prescribing but limited depth, as most physicians are prescribing to a small number of severe patients to test the medicine's effectiveness. This cautious approach may delay deeper adoption and broader prescribing patterns.

Market access and payer challenges: While BRINSUPRI has achieved broad patient access, formal contracts with payers are still being negotiated. There is uncertainty about future prior authorization and reauthorization requirements, which could slow down access and prescribing.

Inventory stocking impact: Approximately 40% of BRINSUPRI's revenue in the third quarter was due to inventory stocking, which will not contribute significantly in the fourth quarter. This could lead to a perceived slowdown in revenue growth.

Regulatory and clinical risks: The success of multiple late-stage and early-stage programs, including brensocatib, ARIKAYCE, and TPIP, depends on achieving positive clinical trial outcomes and regulatory approvals. Any delays or failures in these areas could impact the company's strategic objectives.

Operational execution risks: The company plans to initiate up to six new Phase III programs within the next 12 months, requiring significant resources and operational efficiency. Any missteps in execution could delay progress and strain resources.

Economic and competitive pressures: The company faces competitive pressures in the respiratory and rare disease markets, aiming to position BRINSUPRI alongside established products like DUPIXENT and Fasenra. Economic uncertainties could also impact payer decisions and patient access.

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Guidance & Outlook

BRINSUPRI Launch: The first full quarter of BRINSUPRI's launch is anticipated to be reported in early 2026, providing clearer insights into its performance. The company aims to position BRINSUPRI among the strongest respiratory launches in the industry, with revenue expectations in the high double-digit millions for the fourth quarter of 2025 and the first quarter of 2026 combined.

Pipeline Catalysts: Insmed expects a significant number of commercial and clinical catalysts over the next 18 months, including the continued U.S. launch of BRINSUPRI and potential launches in the EU, U.K., and Japan, pending approvals. The company also anticipates data readouts from multiple Phase II and Phase III studies, including those for brensocatib, ARIKAYCE, and TPIP, as well as the initiation of up to six new Phase III programs in 2026.

Brensocatib Approvals and Launches: A decision from the EMA on brensocatib is expected by the end of 2025, with potential launches in the EU in early 2026, the U.K. in the first half of 2026, and Japan in the second half of 2026. The BiRCh trial for brensocatib in CRS without nasal polyps is expected to complete by the end of 2025, with top-line results anticipated in early January 2026.

CEDAR Trial in Hidradenitis Suppurativa: The CEDAR trial is fully enrolled, and top-line results are expected in the first half of 2026. A placebo-adjusted reduction in AN count of approximately 20% is considered the bar for success, with a 40% reduction viewed as a home run.

TPIP Phase III Trials: Phase III trials for TPIP in PH-ILD, PAH, PPF, and IPF are planned, with the first trial (PALM-ILD) expected to open sites by the end of 2025. A single Phase III trial for TPIP in PAH is anticipated to start in early 2026, with additional trials in PPF and IPF likely in the second half of 2026.

ARIKAYCE Label Expansion: The Phase III ENCORE trial for ARIKAYCE is progressing on schedule, with a readout expected in the first half of 2026. Success in this trial could expand ARIKAYCE's label to include all patients with MAC lung infection, significantly increasing its addressable patient population.

Gene Therapy Programs: The Phase I ASCEND trial for DMD gene therapy is ongoing, with no concerning safety signals observed so far. A Phase I trial for ALS gene therapy is also being prepared. Both programs are expected to provide initial human data within the next 18 months.

Next-Generation DPP1 Candidates: INS1033, a next-generation DPP1 candidate, is expected to enter the clinic in 2026 for indications such as rheumatoid arthritis and inflammatory bowel disease. Additional DPP1 candidates for COPD and other indications are also in development.

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Shareholder Return Plan

The selected topic was not discussed during the call.

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Key Q&A

Q:What early feedback has been received from the field about the physician experience with BRINSUPRI?

A:The feedback has been generally positive, with enthusiasm from physicians. Physicians are in the trial phase, trying BRINSUPRI with more severe patients, and hope to move into an adoption phase. The reimbursement process has been straightforward for most patients, though criteria from payers are still being finalized. There is a 'honeymoon period' for approvals, but adjustments may be needed as criteria are enforced.

Q:What threshold for payer coverage should be kept in mind for BRINSUPRI?

A:The goal is a frictionless launch with clear and not overly burdensome approval criteria. Physicians should be able to attest to two or more exacerbations and a confirmed diagnosis of bronchiectasis without extensive documentation. Modest discounting is being used to achieve this goal, and progress has been positive so far.

Q:How has the launch of BRINSUPRI been in terms of documentation required by physicians for payers?

A:The launch has been relatively smooth. In some cases, physicians have had to provide documentation of CT scans and exacerbations, but this has not been overly burdensome. Efforts are being made to make the process easier through modest discounting.

Q:What has been the impact of DTC (direct-to-consumer) efforts on BRINSUPRI's launch?

A:There is clear enthusiasm from patients, with some posting images of themselves with the product on social media. Physicians are also aware of the medicine, but it is too early to discern the pattern of behavior for broader adoption.

Q:What investments are needed for the European launch of BRINSUPRI?

A:The strategy is to ensure reimbursement is in place before making significant investments. Some preparation has been done, and the sales force in Japan has been expanded in anticipation of future launches. Gross-to-net adjustments for BRINSUPRI are expected to be in the range of 25%-35% at launch.

Q:What is the status of the Phase III design for TPIP in IPF and PPF trials?

A:The design is still being finalized, but the goal is to overcome orphan drug exclusivity by demonstrating superiority in efficacy, safety, or patient care impact. The dosing and titration approach will be informed by previous studies.

Q:What are the expectations for the control arm TSS reduction in the BiRCh study?

A:The placebo assumptions are informed by previous trials like REOPEN and ORION. Patients in the BiRCh trial are already on stable steroid therapy, with baseline TSS scores of 5 or above. The ITT analysis will include all patients, regardless of eosinophil count.

Q:Are there any anticipated seasonality effects for BRINSUPRI in Q4 and beyond?

A:Seasonality could trigger exacerbations, but there has been no significant limitation on access to CT scans. The holidays may slow down patient visits, and Medicare resets in 2026 could impact co-pays and reauthorization criteria.

Q:What is the status of the BiRCh study data?

A:The data is still being cleaned and processed, with the majority already in-house. The final results are expected in early January, following regulatory standards for data cleaning and database lock.

Q:What has been the feedback from physicians on using BRINSUPRI for moderate patients or those with only one exacerbation?

A:The focus has been on patients with two or more exacerbations, aligning with the Phase III entry criteria. Physicians are primarily targeting moderate to severe patients, but there is potential for broader use in the future.

Q:What subgroups are being considered for CRS without nasal polyps?

A:The study is designed to identify signals and subgroups that may benefit. Eosinophil count is being examined but is not a controlling factor. The focus is on following the science to determine where the medicine is most effective.

Q:What is the EU list price for BRINSUPRI, and how does it compare to the U.S.?

A:The EU list price matches the U.S. price, consistent with the approach for ARIKAYCE. Gross-to-net discounts will vary based on negotiations with payers, but the list price reflects the medicine's value.

Q:What is the status of the Phase III PAH trial for TPIP?

A:The trial will be consistent with the Phase II study, with the addition of titration up to 1,280 micrograms based on safety data from the open-label extension study. The trial aims to leverage TPIP's strong efficacy and patient convenience.

Q:What dose of BRINSUPRI is being preferred by physicians?

A:The majority of prescriptions are for the 25 mg dose, but some physicians are starting with the 10 mg dose and may increase it as they gain experience with the medicine.

Q:How does BRINSUPRI's performance compare to launch analogs?

A:While no formal guidance has been provided, benchmarks suggest strong launches achieve high double-digit millions in the first two full quarters. The breadth of prescribing has been positive, but depth of prescribing will be monitored in Q4 and beyond.

Q:Have payers started to restrict BRINSUPRI use to patients with less than two exacerbations?

A:The focus remains on patients with two or more exacerbations, aligning with the Phase III criteria. Physicians are primarily targeting frequent exacerbators, and payer criteria are expected to reflect this focus.

Q:What subgroups are being considered for the HS study?

A:The study will examine HiSCR 50 and HiSCR 75 as secondary endpoints, with a focus on 52-week data to inform Phase III. The 16-week treatment period will provide initial insights.

Q:Review of Unclear Management Responses

A:Management avoided providing specific gross-to-net adjustments for BRINSUPRI on a quarter-to-quarter basis, only offering general analogs of 25%-35%. They also did not provide specific expectations for BRINSUPRI's performance relative to launch analogs, emphasizing caution due to limited data. Additionally, they did not specify subgroups for CRS without nasal polyps, stating that the study is exploratory. For the BiRCh study, they did not confirm whether data is fully in-house, citing ongoing cleaning and processing. Finally, they avoided detailing the Phase III design for TPIP in IPF and PPF trials, stating that it is still early in the process.

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Earnings Word Cloud

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